Basix Ar 2011-12

BASIX Social Enterprise Group
BASIX
CORPORATE OVERVIEW Vision, Mission BASIX Corporate Structure 2 3
INNOVATION & IMPACT Section I

Inclusive Financial Services 4 9 14
Section II Livelihood Promotion Services Section III Nurturing and Strengthening Institutions
in India and other Developing Countries
Section IV Knowledge Services
23
BOARD & MANAGEMENT REPORTS & FINANCIAL STATEMENTS Bhartiya Samruddhi Investments and Consulting Services Ltd. (BASICS Ltd) Bhartiya Samruddhi Finance Ltd. (BSFL) Krishna Bhima Samruddhi Local Area Bank (KBSLAB) BASIX SUB-K iTrancations Ltd. (BASIX SUB-K) BASIX Krishi Samruddhi Ltd. (BASIX Krishi) BASIX Academy for Building Lifelong Employability (B-ABLE) Indian Grameen Services (IGS) BASIX Consulting and Training Services Ltd. (BASIX Consulting) CTRAN Consulting Ltd. (CTRAN) The Livelihood School (The School) 25 41 92 115
136 147 159 172 186
BOARD & MANAGEMENT REPORTS & FINANCIAL STATEMENTS
127
INNOVATION & IMPACT
CORPORATE OVERVIEW
BASIX
| Annual Report 2011 - 2012
Our Vision
Equity for Equity - our efforts to use capital (nancial, physical, human, social, natural and intellectual) to work towards bringing equality of opportunity and social justice to all our fellow beings. The logo depicts the vision of BASIX. Inspired by the Yin-Yang duality, the logo has broadly the following meaning. The circle represents the globe, our mother Earth, half of which is dark, representing the poor, who are excluded from opportunities for better livelihoods. The white dot in the dark blue region represents an area of hope, arising from the talents and aspirations of the poor and the efforts of BASIX to promote livelihoods. The white part is the economically more prosperous world, but colourless, and it can benet from the vibrancy and talents of the dark blue part. The lines represent BASIX attempts to establish linkages between the two zones. These linkages include capital, human resources, technology, markets, institutions and policies. The environment is represented by the circular boundary, which also depicts the Earth. Anything that we do to enhance prosperity (Samruddhi), has to be sustainable for both zones together.
Our Mission
To promote a large number of sustainable livelihoods, including for the rural poor and women, through the provision of nancial services and technical assistance in an integrated manner. BASIX will strive to yield a competitive rate of return to its investors so as to be able to access mainstream capital and human resources on a continuous basis.
BASIX Corporate Structure
BASIX SOCIAL ENTERPRISE GROUP
Bhartiya Samruddhi Investments and Consulting Services Limited

(Invests equity, Provides strategic guidance)
Financial Inclusion Services
Livelihood Promotion Services
Knowledge Services
Bhartiya Samruddhi Finance Limited (Micronance and Livelihood Promotion Services)
BASIX Krishi Samruddhi Limited (Agriculture & Micro enterprise advisory)
BASIX Consulting and Training Services Limited (Global Development Consulting & Training of Micronance Professionals)
Krishna Bhima Samruddhi Local Area Bank (Full edged Micronance Bank)
BASIX Academy for Building Lifelong Employability (Skill Building / Vocational Training)
C-TRAN Consulting Limited (Sustainability)
BASIX Sub-K iTransations Limited (Enables last mile Micro transactions)
Indian Grameen Services (Incubates Innovations)
The Livelihood School (Action Research, Knowledge Building & Dissemination, and Policy Advocacy for Livelihood Promotion)
Livelihoods BASIX Inc. (US not-for-prot) for international work
INNOVATION & IMPACT
CORPORATE OVERVIEW
BASIX
SECTION I - INCLUSIVE FINANCIAL SERVICES
COMMUNITY INSTITUTION BUILDING - PROMOTING URBAN LIVELIHOODS

Banking on Change Programme
Banking on Change (BoC), a savings led micronance programme is running in 11 countries in association with the Plan International and Cooperative for Assistance and Relief Everywhere (CARE) International, United Kingdom (UK). This programme is supported by BARCLAYS Bank. The programme aims to promote access to basic nancial services to the excluded poor segment of society, through savings led community managed micronance activities. Plan India, BASIX and Baliga Trust are jointly implementing a project in Mongolpuri area of West Delhi, India over a two year period starting from February, 2011 to March, 2013. The overarching outcome of the project is that the socio-economic condition of 10,000 poor households will improve through womens access to nancial services and 3,000 of those households will have access to formal nancial linkages for undertaking micro-enterprise activities. The project area Mangolpuri is one of the oldest and largest resettlement colonies established back in 1977. In 2009 it had a total population of more than 200,000 (around 33,000 households). Majority of the population in Mangolpuri and Sultanpuri are migrants. 32% of residents belong to Uttar Pradesh, 30% are from Bihar, 25% from Rajasthan and around 13% belong to other poor states of India. The population in Mongolpuri predominantly belongs to socially excluded sections of the society essentially Dalits (also referred to as Scheduled Castes) and tribal people. 25% of the working age group in Mongolpuri is unemployed. 75% do not have decent regular income for their families. 83.5% of the labour force has education below secondary level with low levels of employable skills. 40% of the women are housewives, not engaged in any income generation activities. The BoC project has brought together three vital elements expertise and experience of Plan India to promote and train community groups, BASIX with its micronance and livelihood promotion expertise and Dr. A. V. Baliga Trust bringing the knowledge of local communities. Plan India monitors the project, BASIX plays the role of Technical Resource Agency and Dr. A V Baliga Trust implements the project on the eld. Although micronance initiatives in India have done extremely well in the rural sector, urban micronance initiatives are still in their infancy. This project is designed to draw lessons, experiences and learnings for the inclusion of women from urban poor families into formal nancial sector through micronance interventions and consequently enhance their family income ensuring womens economic empowerment through income generating activities. The following three broader components of the project are been undertaken:-.
Community institution building
Project team has mobilized around 6,000 women members from the community in Mangolpuri area of West Delhi into 400 Self Help Groups. A single Self Help Group (SHG) may consist of 3 sub-groups, with each sub-group comprising of 5 women members. The women SHGs have further federated into seven clusters. Each cluster comprises of about 50 SHGs and 800 women members approximately. These clusters will be federated into a Community Managed Micronance Finance Institution (CMMFI) in due course. The hallmark of the SHGs promoted by the BoC project team is the systematic training provided to the SHG members. On an average 2 trainings are being organised every week. This capacity building brings about qualitative changes in the attitude of the women and promotes cohesion and effective functioning of the group.
INNOVATION & IMPACT
CORPORATE OVERVIEW
BASIX
Financial services
Why am I doing monthly saving in Self-Help Group? I have taken loan of `.5000 @ `.5% (interest rate) from the money lender for auto repairing work for my husband and treatment for my daughters ear which was to be operated. We also mortgaged gold rings. At present, I am able to pay interest only. So I have started `.100 per month as regular savings to get rid of the money lender. Till date I have saved `.1200. My SHG provides loan up to three times of saving. I am waiting for another 3 months to repay the loan. With thrilled eyes she says saving in SHG is very benecial to us because of SHG I will get my mortgaged jewellery back too. -Meena, a SHG member Jai Ma Laxmi Group
Financial services are the primary services extended for the members. The services are presently available at SHG level and the project is in the process of designing the products to be offered at Federation level. The project team has included nancial literacy component in the trainings for empowering SHG members to become more effective nancial managers. Towards this, the team has distributed Financial Literacy tool kit to 135 SHGs. Also trained around 170 members on various nancial components like savings, borrowing, insurance and the importance of budgeting in the day-to-day household expenses. Besides, 261 illiterate members have learnt to write their name, basic numerical literacy and identication/ recognition of Indian Currency. Efforts were also made for bank linkage of the groups. Savings of `.26 lakh (55000 USD) has been mobilised through SHG members. The women of the SHGs have also started inter-lending within the groups from their own savings. `.13 lakhs ( 28000 USD) is in inter lending among the members. It is found that none of the groups have defaulted in repayment. Majority of the members have taken loan for consumption purpose (39%). Loans for income generating activities constitutes 31% A user friendly Management Information System (MIS) has been developed to monitor progress of the project. The data collected from eld through manual MIS (data collection sheet) have now started being entered in the web based MIS.
Micro-enterprises services
Micro-Enterprise Development (MED) services have been designed for selected trade and services. The MED services leads to enhancement in productivity, reduction in input cost, minimization of risk and exploring alternate market linkage and local level value addition. The service components are training, handholding support and exposure visit to selected entrepreneurs/ groups. Various skill development and capacity Building training programmes have been conducted for the SHG members who showed interest in MED. The activities include Food Craft and Catering Services, Articial Jewellery, Fabric Loops, Hand Embroidery, Food Preservatives, Soft Toys etc. Out of 250 MED Trained women, 25 women started their business, 223 women are involved in Job works like spring for motor bike, marketing of fabric loops, hair brush, catering, thread cutting, bead work, pressing of clothes, tuition, spring opening, button design, stitching, domestic attendant, tag making, jewellery making, beauty parlour, fast food stalls, working for shoe factory, making T.V. Parts, bangle-making, housemaid, soft toys making, involved in mehendi arts and bag making. Meet our Entrepreneur - Ms. Rekhaan Like all the resettlement colonies, Mangolpuri too is an unsafe place for women for night movement and therefore women prefer to stay at home after evening and also their families do not allow them to go outside. Ms. Rekha is a house wife whereas her son and husband work for the family. However, she is keen to learn some trade and involve in some income generating activity. project. She was allowed to attend the training with a message that the house hold work should not be ignored and that there should be no complaints from any family members. She attended the training and also put up stall in an exhibition supported by the project. During this period she did hard work and her son also supported her in the activity.
Now she is quite happy to see her family One day she shared her willingness to the supporting her in the activity which is family members to attend the Jewellery protable and easily managed from her making training organised by the BOC home.
DELIVERING MULTIPLE LIVELIHOOD PROMOTION SERVICES THROUGH COMMON SERVICE CENTRES

The year 2011-12 was the year in which the Common Services Centres [CSC] Channel moved to centre stage in BASIX. Due to the shrinking micro credit operations, post Andhra Pradesh Governments MFI Regulation Bill, the Leadership Team in BASIX decided to make CSC Channel the main channel for reaching out to our customer base and for delivering to them multiple livelihood promotion services other than micro-credit. A dedicated vertical to manage the channel was created and headquartered in Gurgaon. The team was strengthened by appointment of a head for this channel with a P&L responsibility. B-ABLE was invited to undertake recruitment and training of VLEs [Village Level Entrepreneurs] and BASIX SUB-K was engaged to provide their technology expertise support. Thus while one part of Bhartiya Samruddhi Finance Ltd. [BSFL] was downsizing its microcredit network and business, another part of BSFL went ahead with the commissioning of 1200 new CSC outlets in Punjab and Maharashtra and introducing new services during the year; the status of this channel as at the end of nancial year was as under: Rollout till March 2012 Registered CSCs to CSCs on On-line be rolled CommisMonitoring out sioned Tool [OMT] 1,361 225 1,674 829 145 4,234 527 225 991 658 145 2546* 472 144 855 609 145 2225 VLE BSFL CSC Implementation Structure
DIT NLSA SPV STATE GOVERNMENT
State Maharashtra Meghalaya Odisha Punjab Tripura Total
SDA
*Most of the remaining CSCs will be opened during the nancial year 2012-13.
The Channel is used to distribute services of BASIX Social Enterprise Group. For Example: B-ABLE has developed specic e learning modules for Digital Literacy, English Speaking, Micro Franchisee Model for delivering skill training in mobile repair, electrical repairs, etc. BASIX Sub-K leverages the CSC as Business Correspondent/ Banking Services outlets and mobile technology to provide door step transactional services. Sub-K, in collaboration with nancial institutions, is reaching the last mile Bottom of Pyramid customers.
Main Highlights of CSC channel
The Channels business model is a robust e commerce platform with prepaid wallet of a VLE to enable seamless business transactions. Technology is leveraged for collection of funds from VLE using online banking services.
INNOVATION & IMPACT
CORPORATE OVERVIEW
BASIX
BASIX Krishi commenced in Punjab the marketing of their products through the CSCs for enhancing productivity in areas like dairy, poultry and crops. They also launched weather and cattle insurance as well as advisory services. These have been very well received though earlier we had doubts whether BASIX would have any worthwhile offering to make in this advanced agricultural State. BSFL has signed a digital literacy program with IIVET, an IGNOU afliate, for providing training on basic computing to the citizens of Meghalaya through 60 CSC centers. Over 1000 students have passed out with certicates provided by IGNOU. This initiative show cases the synergy that can be leveraged between B ABLE, BSFL and BASICS Ltd. (the Service Centre Agency [SCA] in the State). Under the program, the course content and training to the VLEs is provided by B-ABLE, the BSFL team mobilizes the students from the remote villages, the VLE provides the training with the help of a e-learning module and IGNOU closes the loop by delivering certicates. IIVET pays BASICS Ltd. in excess of `.0.5 million every month for undertaking this digital literacy work. The channel in Maharashtra provides B2C services like utilities bill collection, telemedicine, mobile/ DTH top ups etc. Electricity bill collection has started in Odisha. In telemedicine, Tripura Health Department has leveraged the CSC network for providing e health treatment using Ayurvedic medicine in which the customer is consulted by a Doctor online and the VLE is advised to provide medicines (stocked by the Government at his Center) to the patient. We have strategically tied-up with Primary Agricultural Cooperative Societies (PACS) in Punjab and opened over 400 CSCs in PACS thereby creating a new rural eco system. The network of the PACS will be leveraged for providing banking and other services. The website www.basixcsc.com has received several accolades from the District Administration and Senior Government ofcials of DIT and Maharashtra State Government. Over 150,000 G2C transactions had been enabled in the very rst quarter of 2012.
The G2C initiative in Maharashtra along with our B2C earnings in other States, as well as the viability gap funding support from the Government, will ensure that the CSC Channel achieves nancial sustainability in the coming nancial year. BASIX Social Enterprise Group along with other SCAs set up the CSC Forum to make CSCs a vehicle of Inclusive Growth, to strengthen Channels credibility and to self-regulate its operations.
SECTION II - LIVELIHOOD PROMOTION SERVICES 9
INNOVATION & IMPACT
CORPORATE OVERVIEW
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BASIX
Mangalajodi Ecotourism: A perfect destination for Visitors

Now-a-days, the erstwhile poachers of Mangalajodi1 village actively patrol and protect birds in its marshes. Born in the lap of nature, they monitor the bird population, co-ordinate with the forest department, assist in research and take tourists around on birding trips. Protection has saved not only birds, but also beneted its rich biodiversity, including among others, shes, snakes, monitor lizards and the rare shing cats. Mangalajodi now hosts more than 300,000 birds in the peak season of November-December including resident and migratory (during the year 2000, come down to mere 5000 birds only). It has been designated as an Important Bird Area by Birdlife International (www.birdlife.org) for it has been a signicant global waterfowl habitat. Manglajodi is a small picturesque shing village on Chilika Lakes2 northern-western fringe, known for its marshes and water fowl congregations.
Transition stage
Dwindling bird population stimulated Orissa government and private agencies to initiate a concerted effort to reverse the situation. Transition was a continuous effort focussed on making local people involved and sensitive towards the importance of wetland3 and converting them to conservators. The community, who were sensitive towards environment and engaged in conservation and also had interest in earning livelihoods out of tourism activities, were organized and a trust named Mangalajodi Ecotourism Trust was registered. Ecotourism is dened as, an enterprise with potential positive contributions to the conservation of endangered biological resources. Contributions of ecotourism include raising local awareness about the value of biological resources, increasing local participation in the benets of biodiversity conservation (through new sources of jobs and incomes), and generating revenues toward conservation of biologically rich areas.
The Intervention
The local community are mainly shermen, are catching shes from Chilika and small-scale agriculture (when water recedes in the wetland). Some are also engaged in non-farm activities like boat making, sh-net making etc. As livelihoods of the villagers depend on nature, their earnings have strong seasonality and they struggle during lean periods. Natural events like rain, cyclone etc. affects their livelihoods (sh catching) from the Chilika lagoon. RBS Foundation, India supported Indian Grameen Services4 with a vision to establish a sustainable community owned and managed institution to ensure conservation efforts along with livelihoods were considered an integral part of the intervention. The trust is having a comprehensive conservation plan5.
Value proposition
A model has been developed so that the services of boating, guided force, hospitality, accommedation, promoting awareness on ecotourism and arranging tours for visitors and glimpse into the local culture are provided by the villagers leading to genuineness of experiences, at the same time beneting the local community and environment. It is entirely owned and operated by the local community. Presently, Mangalajodi has been able to create as a potential tourism destination and favorable biodiversity in terms of ora and faunas presence. Now the birds are returning, and each census is registering increase in their numbers. Involves community conservation initiative by Mangalajodi Ecotourism Trust, ensuring livelihoods to the local community and educates visitors on responsible tourism without hampering fragile wetland ecosystem.
1 2 3 4
Mangalajodi falls under Khurda district in the state of Odisha about 75 km distance from Bhubaneswar. Asias largest brackish water lake and designated as rst Indian wetland of International importance under ramsar convention. Wetlands generally include swamps, marshes, bogs and similar areas. Indian Grameen Services (visit to us at www.igsindia.org.in), a section 25 not for prot company of BASIX group is extending the handholding support to the eco-tourism initiatives at Mangalajodi that includes capacity building and marketing of the destination and concept as well. The protection area have been divided into 6 zones based on geographical distribution and six small team of two members each patrolling the assigned area, facilitate the awareness of shermen for protection of the marshy land.
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Intervention Strategy
The Impact
The marketing strategy and capacity building efforts has led to increased footfall of domestic and foreign visitors of around 815 to Mangalajodi in the rst year of intervention. The creation of separate service departments and delegation of responsibilities among trustees led to their active involvement and ownership in managing tourism. Participation of general villagers has increased progressively witnessing the steady growth in activities of the trust. Consequently, it has created a healthy atmosphere in the village wherein a general belief has taken hold that everyone may have their fair share in increasing economic development. During last season; the trust had generated a revenue of INR `.4,60,590 with an operational surplus of `.1,15,042(as onApril 2012). Given the nascent stage of intervention, the operational protability indicates the vast potential of the intervention in developing ecotourism as a sustainable livelihood source for the local community who are conserving the wetland.
It was a fruitful visit, and it was great to meet the community members who are doing conservation and ecotourism in the true sense of the term. - Debi Goenka, Conservation Action Trust, Mumbai
INNOVATION & IMPACT
A three-fold intervention strategy was adopted for the project to re-organize the services offered and capacitate service providers, since they were not trained, either on hospitality services or guiding during briding trips. The project team focused on capacity building, creating infrastructure and marketing support to Mangalajodi Ecotourism Trust. The operating design of the intervention was developed so that the entire set of services could be offered to visitors in a smooth manner and a systematic effort at conservation is undertaken. To ensure this, the trust was engaged in two tasks, conservation and tourism management. Teams were formed based on the skills and interests of the members. These were Conservation team, Ecoguides, Boatmen, Catering team and Hospitality team.
CORPORATE OVERVIEW
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BASIX
RURAL OPTICIAN PROGRAM

B-ABLE (BASIX Academy for Building Life-long Employability) has pioneered innovative models of reaching vocational skills to those who are un-skilled and under skilled. Innovations in the kind of courses, method of instruction and channel for reaching the training have all been areas where B-ABLE has developed innovative and new ideas. In this report, a new course that builds life-long employability is the Rural Optician Program .
Problem/Genesis
Preventable blindness is a particularly serious problem in India. Of the 37 million people across the globe who are blind, over 15 million are from India1. In fact, 75% of these cases of blindness would have been avoided with the availability of adequate eye care. According to one estimation, around half of India is suffering from refraction error problem (i.e. 469 million people) and around 1330 people are partially or fully blind because of lack of refraction treatment during early stage of their vision impairment. It is also known that advanced skills are not required for diagnosing refraction error and other basic eye related illnesses.
Optical Training
It is beyond imagination to have a free eye clinic for people facing lack of eye care facility in remote areas of India but providing the facility at door step and at a subsidized rate is something which can be looked upon as solution to this acute eye care problem in rural and urban slum areas of India. It is this thought of subsidized and door step eye care facilities which led to development of course called Optical Training whereby the youths from rural/ urban slum areas will be trained in refraction skills to provide the basic eye care facility to rural / semi urban folks at marginal cost, and more importantly, at their doorstep. B-ABLE as a part of its continued innovative efforts and unique training programs has initiated a new training program in eld of eye care, known as, Optical Trainers Program. The Optical Training Program has been designed with a participatory approach whereby the qualied students were selected from B-ABLEs Operational areas with high incidence of eye care problems and then trained by the qualied trainers as an Optical Trainer and recruited at nearby B-ABLE learning center as an Optical Trainer for imparting the training to others. Thus, the program looks upon the solution to eye care problems as well as provides employment to educated youths of remote areas. B-ABLE has partnered with Essilor, the worlds No. 1 lens manufacturing company.
Times of India report
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Case Study
Future outlook
Currently, this program is running in three centres, and planning to be started one more centre. Essilor is also keen to sponsor students with nancial assistance to setup their own centre. The plan going forward is to expand it to other centres of B-ABLE. Another powerful idea is to train Village Level Entrepreneurs (VLEs) of the Common Services Centres (CSCs) to become opticians, which would signicantly expand the potential reach of this initiative, given the 4000+CSCs under Basix Group, and many more outside.
INNOVATION & IMPACT
Ram Kumar (name changed) is a resident of Amroha town in Uttar Pradesh, and has completed education upto graduation. He does not have any formal medical education degree or diploma. For the last ve years, however, he has been practising as an RMO (Registered Medical Ofcer) in his locality for all practical purposes a quack doctor. At some level he was deeply uncomfortable with what he was doing, and feared getting caught by law enforcing agencies or be exposed in a media operation. B-ABLEs optician training program came as a strong ray of hope for him. After undergoing the three month course, he has
already started offering eye-testing services in his clinic. The tie-up with Essilor, gives him a way to practice a fully legitimate, and respected profession. This has not only resulted in a sustainable livelihood, but also helped him gain the respect and trust of his community. This course has helped me in understanding the impact of ill treatments and I feel myself more secure and well equipped as far as the eye care and vision is concerned. Now, I dont need to hide from police and feel equally respected as the well-educated youths and society members residing in nearby vicinity. says Ram Kumar.
CORPORATE OVERVIEW
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BASIX
SECTION III - NURTURING AND STRENGTHENING INSTITUTIONS IN INDIA AND OTHER DEVELOPING COUNTRIES
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Strengthening Farmer Producers Organisations (FPOs)

Vidarbha is one of the socio-economically backward regions in India, where around 70% of the rural households belong to small and marginal farmers. The farming community is in an abysmally poor nancial situation. Household cash ows exceed recurrent expenditure and for investment in agriculture; hence the farmers depend largely on moneylenders. Inspite of State and Central Governments introducing solutions for handling the situation through farmers schemes, they have not helped much to the farmers.
SRTT Initiative
Objectives
The following objectives were laid down. An entire set of services were designed and catered to the target group customers like agricultural services, agriculture extension services like market linkage, nancial services, capacity building services, hand holding support, exposure visits as part of training etc. 1 2 3 Assist in establishment of farmers groups in each village initially for providing solidarity against vulnerability and despair. Strengthening the livelihood and micronance program implementation capabilities of the NGO-MFIs through ID services. To conduct research on unmet nancial inclusion needs of the farming households, design and piloting the product, scaling up by BASIX or any other MFI.
IGS conducted multiple activities under each objective which were executed simultaneously so that the small and marginal farmers benet with on time services and maximum output.
Indian Grameen Services (IGS) came forward for extending technical support to the project - Agrarians Sustainability through Action Research (AGRASAR Project). In the year 2010, IGS secured this assignment of implementing the project in four districts of Akola, Yavatmal, Amaravati and Wardha in Maharashtra. The target groups of customers under this project are distressed marginal and small farmers, poor and women. IGS played a signicant role in the entire process starting from sharing of concept of farmers coming together to form a group, conducting group and board meetings etc upto getting the Producer Groups (PGs) and Producer Companys (PCs) registered and managing the Company successfully.
INNOVATION & IMPACT
Sir Ratan Tata Trust (SRTT) and Sir Dorabji Trust (SDTT) had started the Central India Initiative (CInI) and decided to work with the farming communities in six districts of Yavatmal, Wardha, Buldhana, Amravati, Washim and Akola of the Vidarbha region in Maharashtra. SRTT approach for addressing the challenges of these farmers included various components like agriculture, livelihoods, irrigation/water sources, community organization, micronance, market linkages, health and education. It is difcult for any one institution to work on all the challenges faced by these communities. Hence the project was planned to be implemented in a collaborative model. This meant that SRTT engaged partners who are experts - technical support, linkage partners, demonstration partners, complementary partners etc.
CORPORATE OVERVIEW
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BASIX
Institutional Development Services
Formation of Farmer Groups and Kisan Samruddhi Kendras A total of 533 producer groups were formed with a total member strength of 7192 members which includes 3403 women members since the project started till date. The groups comprise of local leaders. Producer Group members conducted regular meetings and started to save and lend internally. Inputs on good practices for growing cotton and soybean were given through special task meetings. Exposure visits for the members of the PGs were also arranged for their deeper understanding on the processes, procedures and administration etc., followed by other PGs in other states of India. The learnings from the exposure visits helped the PGs in different ways like some PGs have set up Dal Mill which is up and running successfully, deeper understanding on how a federation is formed, its working, business identication, raising capital etc. District wise data on PGs formation and its members since 2010 Akola Total PGs formed Total members Total women members 94 1060 407 Amravati 123 1614 917 Wardha 172 2254 1241 Yavatmal 144 2264 838 Total 533 7192 3403
MIS Automation
All the PGs accounts and transactions have been automated. Software was purchased for this purpose and among the PGs, a capable person was given training to operate the software, thus making MIS available for maintaining the transactions of the operations of the PC. Cluster meetings also took place and the concept of collecting share value from the group members was oated among the groups was welcomed and every farmer was came forward to buy the shares. Every PC was governed by a Board and every board member knew his roles and responsibilities very clearly. The aforesaid action research, project activities and implementation plan has resulted in formation of the following a. Akola Soya and Cotton Producer Company Limited A Producer Company in Akola district registered under Companies Act 1956 in October 2011. It has a member size of 1,015 organized in producer groups at village level. Currently the PC operates in 25 villages, established a Dal Mill in Poi village, four Agri Input Center at Bhatori, Pohi, Howara Korde and Matoda; Seed Production Program of Soya 9305 variety on 52 acres of land; dairy services to farmers; crop services; trading of soyabean; market linkage for fertilizers;
Kisan Samruddhi Kendras formed into Producer Companies (PCs)
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b.
Wardha Cotton and Soya Producer Company Ltd (WASOCA) A Producer Company in Wardha district, registered under Companies Act 1956 in December 2011. This PC has received Licenses for Agri.inputs for insecticides, seeds and fertilizers. WASOCA is currently operating in 25 villages; formed 172 PGs; with 2250 members; Agri.input center at Deoli, direct sale of 1000 quintals to Saguna Soya Solvent Plant in Hinghanghat; direct sale of Tur to Tata Chemical; WASOCA is a resource to other upcoming federations Krishi Vikas, AFARM etc.
Wardha Soya and Cotton Producers Company President Mr Saheb Rao Dhone said Without BASIX support and guidance since the beginning till date our PC could not have achieved anything. IGS is the institution who has brought us to this level. c. Amravati Soya and Cotton Producer Company Limited A producer Company in Amravati district registered under Companies Act 1956 in December 2011. This PC operates in 25 villages with 123 PGs, 1614 members of which 917 are women members. The members land area is over 9680 acres. The crops grown on the members land are cotton, chana, soybean and Tur. Yavatmal Soya and Cotton Producer Company Limited A producer Company in Yavatmal district registered under Companies Act 1956 in December 2011. This PC operates in 25 villages with member size of 1786 organized in 142 Producer groups at Village level of which 827 are women members. This PC has established one mini dal mil unit at Malkhed-Ner, provides dairy services to the farmers including animal health check up, vaccination, camp etc. They also provide crop services, organic farming, agri. input linkage etc., demonstration of new crop varieties on demo plots. They are also engaged in collective cotton supply to ginning mill.
d.
Agriculture and Business Development Support
In order to understand the prole of the villages in the selected districts and their livelihoods, a sample of 100 villages was identied. This proling helped the execution team with better understanding which formed the baseline of the project. Once the proling was completed, local youths were identied and trained with class room inputs and technical inputs required on the eld. External resource persons were also invited for educating the PGs on various aspects. For ex: Mr Shankar Reddy, Director of Koutla-B MACS was invited to impart training on Package of Practices for cotton crop, how Koutla B MACS was formed and the benets of the farmers coming together and getting organized. BASIX Livelihood Service Providers (LSPs) extended services on the Integrated Pest Management (IPM) and Integrated Nutrient Management (INM) to over 2000 farmers. They also trained them on cost reduction techniques like Vermicompost bed formation, Bio-pesticide, Vermiwash units, Jeevamrit units etc. Licenses for agri input centres were also facilitated and received by the clusters. Business of urea Fertilizer was also initiated and many farmers
INNOVATION & IMPACT
CORPORATE OVERVIEW
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BASIX
have used them for cotton crop. BASIX LSPs have also delivered veterinary services for those who are engaged in dairy activities. Market linkages were also initiated for the PCs. PCs have taken up bio-stimulants and pesticides in bulk and sold them to the farmers at their door step and that too at competitive rates. This was a win-win situation for PG and PC because PG is assured of the quality of the products and gets the services at their doorstep while PC benets with prots on bulk purchase. Some of the PGs have set up Dal Mills with dual objective of setting up of small and medium enterprise at group level and also help the local farmers by making the facility of processing and value addition for the food grains produced by the small and marginal farmers.
Financial Inclusion Services
This project supported the PGs and PCs with bank account opening, ensuring that bank give credit support to them by linking the farmers to the banks. Weather Insurance Products were also launched which was not successful due to non-availability of suitable infrastructure, gaps in insurance product design etc. The learning from this has fed into another project Small Farmers Agribusiness Consortium (SFAC)s vegetable and pulses growers initiative. Department of Agriculture has launched the programme of Integrated Development of Pulse Village in the rainfed areas during 2011-12. The task of management and technical support, including end-to-end solutions to assist the States to plan, implement, monitor, support and report on the programme, has been entrusted to Small Farmers Agribusiness Consortium (SFAC), a society promoted by Department of Agriculture and Cooperation (DAC). SFAC is leading an initiative to incubate 250 Farmer Producer Organizations (FPOs) which will aggregate 2.50 lakh farmers across the country into Farmers Interest Groups (FIGs). The purpose of aggregation is to integrate primary producers in the value chain and enhance their income through increased access to investments, technology and markets. At the same time, SFAC seeks to create networks of these Farmers Producer Organizations at each State level to leverage their collective bargaining power for backward and forward linkages. This process is expected to identify at least one million farmers who are already members of various FPOs.
Functioning of FIGs
Initially the meetings are organized fortnightly, Savings by each individual are collected and recorded. Group representative is responsible for depositing the collected money in the bank. New practices, Know how, technology related to agriculture/horticulture are communicated. The producers group collects the demand of inputs of their members and also makes arrangements/plan for their distribution after receiving the bulk inputs with the support of IGS. Group members sorts out any transportation problems, and members expectations Group members are aware about sharing of risks in operation and also work towards minimizing it. Group representative delegates the work plan among the group members Group members are responsible for actively participating in all the training programmes conducted. Participate in buying of inputs & selling of produces in the market. Governing body is appointed for every group and they are actively involved in managing, decision making and running of the group activities successfully.
A Producer Group Member Mr Gnaneshwar Diwane in Devli, shares his experience We have received timely support from both IGS and SRTT. IGS has taught the farmers group that by coming together and organizing them, the group is today condent and successful in running the business. IGS has taught us how to run the business. SRTT provided investment in setting up Dal Mill; we did not get any kind of support from the banks even after two years of continuous follow up.
19
SFAC Project Progress report Particulars No of States No. of Districts No. of FIGs formed No. of FPOs formed Total farmer members in FIGs and FPOs No. of Kisan Sabhas conducted / no. of farmers attended No. of exposure visits arranged / no. of FIG members visited No.of trainings conducted/no. of FIG members attended Inputs distribution As on Oct 31, 2012 16 Arunachal Pradesh, Bihar, Chattisgarh, Goa, Jharkhand, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Rajasthan, Sikkim, Tripura and West Bengal 39 3160 4 43,360 1264/28294 42/1590 5200/17349 83900 seedlings / 2300 plants
All the players in the projects have clear dened roles and responsibilities along which they conduct various activities. IGS plays a signicant role in Sharing of concepts and forms the Farmers Interest Groups (FIGs). The opportunities and the economic benets are also explained to the FIGs. Exposure visits are arranged for the FIGs to learn from the best practitioner who have successfully set up processes and systems to manage and run their group. Identication of experts to guide the FIGs for crop selection, advise them on best package of practices etc. Coordinate with agriculture department for extending their support on best practices, technology etc for enhancing the produce and quality etc.
Facilitates in preparation of business plan as per requirement of services of the group. Facilitates credit linkage based on the annual business plan of the group. The group passes a resolution with credit requirement for collective business/individual requirement.
In Madhya Pradesh, all the above activities have been performed in seven districts - Indore, Dewas, Ujjain, Jabalpur, Katni, Seoni and Shajapur. Two FPOs have been formed and three more are in pipeline. The FPOs have received the license of pesticide and fertilizers from district agriculture department, while the license for seed is under process and companies will be getting them very soon. Zimmedar Kisan Samruddhi Producer Company Limited Dewas and Balram Kisan Samruddhi Producer Company Limited, have been formed. Similar activities are happening in parallel in all 16 states where IGS is implementing this project. It wont be long before the benets of the project start owing to lakhs of farmers!
Facilitates the discussions over aggregating seed and fertilizer requirement and need for nutrient and pest management. IGS arranges for appointing a paid book keeper for the group (within the group or outsider as agreed by the members)
INNOVATION & IMPACT
CORPORATE OVERVIEW
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BASIX
BASIXs work with Tuba Rai Metin

Timor LEste
Timor-Leste became the rst country to gain independence in the 21st century and has just 1.1 million populations and 14,874 Square Km area with three side coastal line measuring 735Kms. Since its independence, it is advancing towards full-edged nation-building, coming out of post-conict reconstruction stage in 2006 & 2007. Its state structure and system is yet to be developed and faces problem of human resources and infrastructure in almost all sectors. It is facing key challenge of transition of economy from dependency on oil and gas revenues to thriving agriculture and vibrant private sector in rural area for inclusive prosperity. GDP growth rate is 7.3% but World ranking is 174; ination rate is 7.5% ; unemployment rate is 20% and population below poverty line is 42%; labor force is 90% in agriculture and main products are coffee, rice, corn, cassava, sweet potatoes It started as microcredit program by Save The Children in 2001 and subsequently handed over to Catholic Relief Services (CRS) in 2002. During the civil crisis of 2006 when 13 NGOMFIs wound up their operations , CRS also decided to give it up but group of employees of Tuba Rai Metin (TRM) took it forward to manage the show. It has shown great resilience during the three years phase from 2006 to 2009. Today, TRM is seen with respect by regulators and funding agencies as it is second largest NGO-MFI in Timor Leste. It has 7211 credit clients with USD 2.3 million portfolio and total assets over USD 3.2 million, over 5000 depositors, 2246 micro insurance beneciaries and HR of 114 as on Sept 2012. It is heading towards to be a regulated Other Deposit Taking Institution (ODTI) On invitation of UNCDF, BASIX has inked MoU with TRM under MicroLead program in Oct 2009 to provide Technical Assistance for holistic development. TRM had no Board and was on downward trend of growth. Formal registration to be a legal entity was also missing. It was facing problems of HR capacities and lack of systems and process in place to move forward. It had no external auditing done and there was no internal audit section also. High operating costs and no access to formal funding were also the critical issues to be tackled. No insurance provider in the county was another limitation in 2009 in the country and no operation of any life insurance company is still a concern. Limited and very costly telecommunication service was also a factor of concern. BASIX had a joint diagnostic study with TRM to work out a detailed implementation plan and got into tri party Performance Based Agreement PBA for onsite TA for three years and followed by one year distant support starting from Nov 2009. Placing active Board was the starting key of the TA work during inception stage itself in Nov 2009 and could manage a very experienced and professional Board with 5 members. TRM had rst Board meeting on 20th Nov 2009. Organization governance policy and by-laws were approved by Board followed by formal legal registration certicate in Feb 2010. Besides regular 13 quarterly Board meetings, it had ve extra meetings to resolve on certain critical matters. M-CRIL also appreciated TRM on Board and governance aspects during in its rating report in Dec 2010.
Tuba Rai Metin (TRM)
Result
Challenges during initial stages
Governance
21
Systems and Processes
TRM was managing its affairs on simple excel based MIS with unsecured and inconsistent data. It has adopted Grameen concept without much dynamics of group Methodology. Team was missing a helping hand to drag them out from the stagnated stage of business. BASIX did an early corrections and updating of on-going MIS in Jan 2010 with due protection passwords and auto generation of MIS needed. Training on group concept was intensied. Website of TRM was launched in Feb 2010 to enhance visibility and transparency in the system. Undue delay in implementation of new MIS system has given learning that if possible IT and TA should from same organization if feasible to get timely synergies. Operations of TRM was conned to only 3 branches, all were in Eastern part of the country. Products choices were also limited. After building of the capacities and condence of local team, it was decided to slowly expand branches in uncovered area and TRM has started 11 branches by end of Jan 2011. Team strength is also increased from 33 to 114 in total It was strategically decided to have extensive spread of coverage and subsequently by intensive growth. Agri Loan, livestock loan and SME loans were introduced to gain extra volumes. Micro insurance products with 2 variants were piloted and scaled up with newly entered Insurance Co and acquired 1189 clients (2378 beneciaries). Key Indicators Number of Borrowers women% of clients Gross Loan Portfolio (USD) Average Loan Balance per Borrower (USD) Portfolio at risk > 30 days Debt to Equity Ratio Capital Adequacy Ratio CAR Return on Assets Yield % Operating Expense Ratio Operational Self-Sufciency Number of Staff Number of Branches Micro Insurance clients 2009 2,838 99% 437,162 154 17.4% 0.33 92.7% 4.7% 66.2% 25.7% 116.4% 34 3 0 Sep-12 7,106 97.80% 2,147,027 306 3.9% 2.16 36.1% 3.4% 44.2% 19.8% 125.3% 114 11 1189
Operations
INNOVATION & IMPACT
CORPORATE OVERVIEW
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BASIX
Collaborations
To serve the complex task of livelihood promotion, effective collaborations are important to gain synergy in the system (as learned through experiences by BASIX), following key collaboration were worked out GoTL for Business and skills training and youth inclusion program Fundeso for Agri and Agri allied loans piloting Hivos Tridos was rst to give loan to TRM followed by Agricole (Paris), KIVA(USA), ANZ Bank, responsibility(Sydney) and Incon (Belgium) NITL for micro insurance Mercy Corp for PPI indicators and Solar Energy Loans IFC for TA grant of USD 820,000 for extended period of TA grant
Transformation to ODTI
Central bank has invited TRM to apply for ODTI license as per new law introduce to regulate leading MFIs in the country. TRM has equipped itself to qualify for that and key challenge is getting equity investments from 2 reputed institutions. Grameen Credit Agricole and IFC have expressed willingness and process is likely to take another 6 to 8 months. For the purpose a new company has been duly registered as Kaebauk Investimenus no Finansas, SA (KIF). IFC has agreed to provide grant of USD 820,000 to TRM for 30 months period (in process). TRM is aiming to be well diversied Social Enterprise Group to promote inclusive prosperity. It is on verge of rst spinning off NGO-MFI into well regulated Other Deposit Taking Institutions (ODTI). It intends to take up nancial literacy mission on larger scale and tackling of Agriculture and food related issues to generate rural employments and food security concern.
Way Forward
23
SECTION IV - KNOWLEDGE SERVICES HOW KNOWLEDGE IS BUILT : THE INNOVATIVE WRITESHOP APPROACH
Context
Have you ever had to produce written materials - agricultural extension materials, a training manual, or a set of guidelines all that span over a large geography, themes or time? No matter how arduous it may sound, The Livelihood School has a solution. As expected, there existed a lot of information but unfortunately scattered or in the wrong format, and much of it was in peoples heads rather than written down on paper. To make things worse, many of these people had moved on with the information with them. Another serious dilemma was that while staff were excellent in the eld, they foundit difcult to write; the risk is that when somebody leaves theorganisation, his or her knowledge will be lost. All such situations have certain things in common: The information exists mainly in peoples heads, but it isneeded on paper. No single person is the expert on a subject. Many different people can each contribute part of the information, and may have different ideas about the subject. Agreement is possible, but only if people come together to discuss - in an organized and structured meeting. The information has to be pulled out from a large body of data - reports, research articles, peoples memories - and then translated from one level of language (scientic jargon or farmers language) into another palatable format.
A solution: the writeshop
The information needs to be checked by several people - other experts, scientists, potential users - before it can bepublished. The Livelihood School (TLS) takes seriously the documenting of experiences / best practices in all realms of rural development and particularly around Livelihood promotion. A participatory workshop process (also known as writeshops) pioneered by the International Institute of Rural Reconstruction (Philippines) and tested for over 20 years in over a hundred workshops has led to the production of that many titles. TLS itself has engaged itself in several writeshops and has produced more than 200 case studies among other things some using the writeshop process itself.
INNOVATION & IMPACT
CORPORATE OVERVIEW
24
BASIX
What participants say...
The participatory tion in a week: six days, workshop process

twenty authors, forty one case studies and over 2,000 pages of rich documentation on Livelihood Interventions transformed into a publication. - Sachin Mardkiar, Facilitator (Mumbai) The vast knowledge gained on the subject matter is an eye opener to me. - SomnathGhosh (Kolkata), Editor The way the case study went from the thought process and covered all the requirements (draft to editor to art and then nal stage) is a huge learning. - Kaushiki (Mumbai), Editor.
From an idea to a publica-
Advantages of the workshop approach
On the request of IGS a afliate of BASIX TLS agreed to facilitate this arduous task of compiling the rich experience of 25 years. To prepare for the workshop, a small team developed a protocol on what needs to be brought as data or information from the eld to be later transformed into knowledge at the writeshop. This group also listed potential topics and invited resource persons (the workforce in the eld) to develop rst drafts on each topic based on guidelines provided in the protocol. This process is the key to the quality of the nal product. During the workshop, each participant presented his or her rst draft paper using an LCD projection. Copies of each draft were also provided to all participants, who critiqued and suggested revisions. What was unique is that the papers were read verbatim - the idea being that the reader will not have the writer to explain what he meant. It was therefore very important not to get into lengthy explanations (like usually done over a powerpoint presentation) but rather read the script word by word. At rst sight it looks odd for experienced people just reading out word by word but they eventually understood the value of sticking to this. On the other hand, the writeshop also brought in a set of English editors who were nontechnical people - the idea being that the writing should follow a laymans style rather than that of a subject matter specialist, which in turn allows people at all levels (from grassroots worker to a policy maker) to understand the concepts well. After each presentation, an editor, who was assigned to a particular author, helped revise and edit the draft based on the constructive criticism received during the rst draft deliberations. Likewise, based on the discussion and agreements during the deliberations, an artist prepared illustrations to accompany the text. In this case, the publication decided to have both artwork as well as pictures. Again, a set of experienced desktop publishers worked on the rst draft and artwork to produce a second draft - this being laid out exactly as the publication layout was envisaged to be. After a round of rst draft presentations of 41 odd papers (the publications size was eventually reduced to 34 paperswith some papers being either merged or dropped) that took us into the fourth day, each author-participant then presented the revised draft to the group again using LCD projection but this time in the format it was going to be published in. The audience once again critiqued and made further suggestions albeit the second drafts taking no more than 30 minutes of presentation plus discussion as opposed to 45 minutes for the rst drafts. The draft was thus revised further to generate the third draft. Towards the end of the workshop, the third draft was made available for all participants again for nal comments and revisions. A skilled editor then put all nal drafts together into a publication. To ensure that the wide range(of geography, time and themes) of informationgoes through a proper scrutiny, an advisory group was quickly put in place that consisted of very senior people from the BASIX group as well as some external reviewers. Finally based on the critical review of the entire publication and the valuable suggestions received by this senior group, the publication was nally ready to go to press and eventually inaugurated on a no less occasion than the celebration of 25 years of IGS. There are several benets of this painstaking, elaborate but unique process states a few. rst-hand experiences are written about by the eld workers themselves. This makes the document authentic, but simple as opposed to some academic publications that eld workers may nd difcult to understand and use; there is both peer and audience pre-testing through the process; it also allows the point of views of a variety of practitioners ranging from NGOs, academe, governments, researchers, eld practitioners, policy makers, etc. - all sitting in one workshop and collectively agreeing on principles, concepts and approaches; the above allows for non-biased publications that are very well accepted by various sectors; the process increases the ownership and eventually the readership of the publication; it takes a short time to produce such valuable publications; and nally,
The bandwidth
the diversity of skills, experiences and organizational backgrounds make for a broad mix of important ideas Other than the geography, time and thematic area a writeshop can cover, it also allows for a wide range of participants - policy makers to extension workers and even farmers (vertical range) on one hand to government staff, NGOs, academic institutions, research organisations, universities, and the civil society (horizontal range) to come together, debate, agree and contribute to the great learning opportunity.
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Bharitya Samruddhi Investments & Consulting Services Ltd.

Our Partners in Livelihood Promotion
Board of Directors
Chairman Vijay Mahajan Managing Director Vijay Mahajan Directors Bharti Gupta Ramola Deep Chandra Joshi Anoop Seth Joeseph Madiath Patricia Mukhim Mary Agnes Houghton Ekanath Dagdu Awad Investors Vijay Mahajan, Bharti Gupta Ramola, Deep Joshi, Anoop Seth, Joe Madiath, Ford Foundation, Swiss Agency for Development Co-operations (SDC) Banks The Bank of Nova Scotia State Bank of India Axis Bank Ltd Standard Chartered Bank YES Bank Punjab National Bank HDFC Bank Ltd ICICI Bank Canara Bank IDBI Bank Ltd Auditors M/s V Nagarajan & Co., Chartered Accountants Delhi
Bharti Gupta Ramola leads the Deals practice of PricewaterhouseCoopers India. She also leads the rms Sustainability practice and is a member of the Global Diversity and Inclusion Council of PricewaterhouseCoopers. The Council advises the PwC global leadership on setting and measuring priorities on Diversity and Inclusion. She is a Post Graduate Diploma in Management, Indian Institute of Management Ahmedabad, and a Bachelor Degree in Physics (Hons), from St. Stephens College, University of Delhi. She worked in the Nehru Foundation for Development and the ICICI Ltd, before joining Price WaterhouseCoopers in 1984. Deep Chandra Joshi is an independent development consultant and a member of the National Advisory Council. He worked in PRADAN in various capacities for over two decades until his retirement in 2007, the Ford Foundation in Delhi, Systems Research Institute in Pune and MNNIIT Allahabad. He was educated at MNNIT Allahabad and Massachusetts Institute of Technology. Deep was conferred the Ramon Magsaysay Award in 2009 and the Padma Shree in 2010.
Board of Directors
INNOVATION & IMPACT
CORPORATE OVERVIEW
26
BASIX
Anoop Seth, is a Masters in Management Science from the Birla Institute of Technology and Science (BITS), Pilani. He has had a career of over 29 years in the banking sector, in India and the Middle East. He worked with Bank of America, Bechtel Enterprises as Vice President, Chief Financial Ofcer of Infrastructure Development Finance Corporation (IDFC) and as the Senior Vice President, ABN Amro Bank N.V., Mumbai. Presently, he is the Managing Director of AMP Capital. Joeseph Madiath, is the co-founder and Executive Director of Gram Vikas a non-governmental organization working with the underprivileged section of rural Orissa. He works in the eld of rural development in the areas of education; health, rural energy and infrastructure, livelihood and food security, sustainable environment. Gram Vikas has received several national and international awards in recognition of their work, including the Allan Shawn Feinstein the World Habitat Award, 2003 and World Water Grand Prize, 2006, Joe Madiath was selected as outstanding social entrepreneur by Schwab Foundation, 2000 and by Skoll Foundation in 2006. Patricia Mukhim is an Independent Director. She is an educationist, activist and journalist. She is currently editor of The Shillong Times, Meghalayas oldest English language daily and a columnist for The Telegraph and The Statesman. Patricia Mukhim is a member of the National Security Advisory Board and National Foundation for Communal Harmony, under the Ministry of Home Affairs, New Delhi. Patricia Mukhim was conferred the Padmashree in March 2000. She was conferred the 2nd North East Excellence Award by The Indian Chamber of Commerce. Mary Agnes Houghton is the co-founder of ShoreBank, the largest and oldest community development bank in the U.S. Houghton, along with Milton Davis, James Fletcher, and Ron Grzywinski purchased what was then South Shore Bank to ght redlining in the Chicago neighbourhood. She retired as its president in May 2010. Houghton serves as a director of the Calvert Foundation, the Rapid Results Institute, and Womens World Banking. She is a member of the Ashoka Global Academy for Social Entrepreneurship. Ekanath Dagdu Awad is an advocate, social activist and the founder member of Rural Development Centre and also started a movement on Campaign for Human Rights during 1990. He has studied MA LLB from Dr. Babasaheb Ambedkar Marathwada University and MSW from Pune University. He was awarded the Late AnnasahebKamatkar Award, Lokshahir Annbhau Sathe Award, Dalit Mitra Award from Maharashtra Government and Chatrapati Shahu Award from Bhim Pukar Parbhani. Vijay Mahajan, 57, is the Founder and CEO of the BASIX Social Enterprise Group (www. basixindia.com), which promotes livelihoods of poor households. Established in 1996, BASIX offers nancial, agricultural, vocational training and energy and environmental services to lowincome households; and institutional development and consulting services to producer groups and development agencies. In 1983, Vijay co-founded PRADAN, a livelihood promotion NGO and between 1993-95, he co-authored a study/book The Forgotten Sector. In 2009, Vijay co-founded and was elected the President of the Micronance institutions Network. In 2010, Vijay was elected Chair of the Consultative Group to Assist the Poor (CGAP), the global body for micronance. In 2011 he was listed as one of the ve pioneers of micronance by Micronance Focus. Vijay was selected as among the 60 outstanding social entrepreneurs of the world at the World Economic Forum, Davos in 2003, listed among 50 inuential Indians by BusinessWeek, Asia in 2009 and the Financial Express named him among 20 Indians who will lead Indias reforms in the current decade. Vijay is a Distinguished Alumnus of the Indian Institute of Technology, Delhi and the Indian Institute of Management, Ahmedabad, and was a MidCareer Fellow at the Woodrow Wilson School, Princeton University, USA.
27
Directors Report
To The Members Bhartiya Samruddhi Investments and Consulting Services Ltd The Directors have the pleasure in presenting the 16th Report on our business and operations for the Company for the year ended March 31, 2012. 1. Operating Results for the Year ended March 31, 2012 (Amount `. in000) Particulars Income Management of Investments Consulting Services March 31, 2012 March 31, 2011 129,367 49146 79824 149,535 (20168) (369) (19799) (5.11) 178,615 52,425 1,26,190 172,775 5,840 173 5,667 3.34 of investments held in Bhartiya Samruddhi Finance Ltd where as there is no such transaction that has taken place in the current year. During the year the Company has promoted three new entities for taking up Consulting Business (BASIX Consulting and Training Services Ltd) , for enabling Micro Payment Transactions (BASIX Sub-K itransactions Ltd) and for Agriculture, Livestock and Enterprise Development Support Services (BASIX Krishi Samruddhi Ltd). The incubated business has been transferred to the new entities by business transfer process where business and commercial rights have been transferred to new entities to take up the business on wider scope and larger scale. Specic agreements have also been signed for allowing these entities to use the Brand name BASIX against a brand fee. Consulting Income has come down in as compared to the previous year as the new domestic consulting business is taken up in the newly incubated company, BASIX Consulting and Training and Services Ltd. The international consulting business largely remains in the Company. In pursuit of its mission to promote a large number of sustainable livelihoods for the rural poor and women, through the provision of nancial services and technical assistance in an integrated manner, BASICS Ltd, the parent company of the BASIX group has established a number of companies, which are described in the management of investments section below.
Expenditure Net loss/prot before tax Provision for tax Net Prot/loss after tax Earnings Per Share (EPS) 2.
Performance of the Company The Company has two revenue streams namely Management of Investments and Consulting Services. During the year the total revenues has declined YoY basis. During the previous year the income from Management of Investments includes secondary sale
2.1. Management of Investments The overall status of investments of the Company in BASIX Group as on March 31, 2012 is as under: EQUITY SHARES Name of the Company Associate Companies Bhartiya Samruddhi Finance Ltd Subsidiary Companies Krishna Bhima Samruddhi Local Area Bank Ltd BASIX Academy for Building Lifelong Employability Ltd BASIX Consulting and Training Services Ltd BASIX Sub K iTransactions Ltd BASIX Krishi Samruddhi Ltd C-Tran Consulting Ltd Others CSC e-Governance Services India Ltd 500,000 100 0.02% 1,000 Total 100,000 430,260,248 9,000,000 1,050,000 250,000 2,096,966 1,400,000 56,453 8,999,894 547,500 238,000 1,761,250 1,250,000 36,738 99.99% 52.14% 95.20% 83.99% 89.29% 65.08% 10 10 10 10 10 10 100,648,440 5,475,000 10,380,000 51,825,000 15,000,000 9,456,330 33,600,008 11,641,973 34.65% 10 237,375,478 Total issued, subscribed & paid up no of shares No. of shares held Extent of Holding Face Value Investment Value
INNOVATION & IMPACT
CORPORATE OVERVIEW
28
BASIX
PREFERENCE SHARES Name of the Company Associate Companies BASIX Consulting and Training Services Ltd BASIX Krishi Samruddhi Ltd Others CSC e-Governance Services India Limited 2.2. Review of Group Companies 2.2.1 Bhartiya Samruddhi Finance Limited (BSFL) The Company has been going through a very difcult period for the past 18 months, ever since the Andhra Pradesh government promulgated the Micro Finance Institutions(Money Lending) Ordinance in October 2010 and followed up with passing that into an Act in December 2010. The Company, which had `.1800 Crore of loans outstanding and a half year prot of `.30 Crore as on September 30, 2010, has seen its outstanding portfolio shrink to `.669 Crore including `.516 Crore of NPAs and posted a loss of `.545 Crore(provisional)as on 31st March 2012. The Company has reduced the staff strength by 3,650, mainly through voluntary departures, and proposes to reduce this further. The operating expenses have been brought down from `.17 Crore per month in September 2010 to `.7.5Crore per month in March 2012. After having repaid banks more than `.1200 Crore since October 2010, the company is left with outstanding borrowings of `.665 Crore. The Company has met all its obligations to its lenders up to January 31, 2012, beyond which the Companys liquidity position did not permit to service the dues to lenders. The Reserve Bank of India issued detailed guidelines on December 2, 2011 for NBFC-MFIs, among other things, requiring 100% provisioning of NPAs beyond 180 days. This implies that the company had to writeoff `.516 Crore of NPAs. Under such circumstances, there was no option but to seek Corporate Debt Restructuring (CDR) from the lenders. The management held numerous meetings with 19 lenders on this since December, 2011.The Company has sought conversion of `.500 Crore of debt into Compulsorily Convertible Preference Shares (CCPS) and stretching the balance debt of `.165 Crore over a seven year tenor. The lenders have accepted the proposal as the preliminary basis for an application for Corporate Debt Restructuring and entered Debtor Creditor Agreement with SIDBI on March 5, 2012. 1,000,000 500,000 1,000,000 500,000 100% 100% 0% 10 10 1,000 Total 10,000,000 5,000,000 15,000,000 Total issued, subscribed & paid up no of shares No. of shares held Extent of Holding Face Value Investment Value
Insurance Services: Recognizing that unmanaged risk was a major reason for many of the customers not being able to fully benet from credit, the Company has steadily built the following suite of insurance products to cover the various risks that customers face to their lives and livelihoods. Life Insurance Limited Health Insurance Livestock Insurance Weather Insurance and Micro enterprise insurance
These services are being offered in collaboration with various insurance companies like Aviva Life Insurance Company India Pvt. Ltd, Royal Sundaram Alliance Insurance Company Ltd, and ICICI Lombard etc. The company has extended rainfall insurance to farmers, also extended Micro enterprise insurance to customers. As on March 31, 2012, the revenue generated from Insurance Services stood at `. million. Agriculture and Business Development Services: Under Ag/BDS the Company was offering four sets of services that include productivity enhancement, risk mitigation (non-insurance), local value addition and alternative market linkages. These services were being offered in sub-sectors of dairy, cotton, groundnut, vegetables, lac, pulses, soya, mushroom, and handloom and bamboo crafts. However during the year the Ag/BDS is severely hit by the MFI crises. Only 33,477 new customers are registered for services in Allied, Agriculture, Non Farm and other services during FY 2011-12 booking total revenue of `.21.9 million. The active customers at the end of March 31, 2012 are 33,488. In the absence of credit service from the company the number of new registration and the resultant revenue has signicantly come down thereby resulting in operational loss to the company. Hence being compelled to close the Ag/BDS operations, the board decided to and outsourced the Ag/BDS operation to
BASICS Ltd
BASIX Krishi Samruddhi Limited effective from April 1, 2012. And no fresh enrolments will be made in by the company for Ag/BIDS services. During the FY 2011-12, the Company has enrolled and served over 1,159 common activity groups, cooperative and other nature of institution earned over `.1.3 million. Going ahead BSFL will limit to serving the existing clients either directly or through outsourcing and will not enrol new clients for IDS services. 2.2.2 Krishna Bhima Samruddhi Local Area Bank (KBS) During the year the performance of the bank is satisfactory despite of the fact that the centre of the MFI crisis and Telangana agitation; the Mahabubnagar district of Andhra Pradesh constitutes the major operational district out of four districts constituting the operational area of the bank. Timely addressing of the issue through representation at the appropriate platforms both in government and public, convening of several village meetings in the operational area to communicate the legal status of the bank being different from MFI shelled the bank - manage its position and operations in the post I crisis period. Closer monitoring and cautious approach to fresh lending has also helped in containing the damage. Though the Non-performing assets increased in the last quarter of 2012, the bank has managed to settle at gross NPAs ratio of 3.83% on March 31, 2012 from 4.79% as on December 31, 2011. As on March 31, 2012 the gross NPAs have increased by `.10,463,325 as compared to position on March 31, 2011. The total business of the Bank has increased by `.3.20 crore (1.77%) from `.180.83 crore as on March 31, 2011 to `.184.03 crore as on March 31, 2012. The total number of customers (outreach) has increased from 163,552 to 182,533 customers as on March 31, 2012, representing 11.6% growth over March 31, 2011. Deposits of the Bank crossed the milestone of `.100 crore as on March 31, 2012 which was the result of the sustained efforts over the years for deposit mobilization. The deposits stood at `.100.35 Crore as on March 31, 2012 as compared to `.92.51 Crore as on March 31, 2011 recording a growth of 8.47%. The number of active deposit accounts increased to 275,657 from 271,238 accounts as of March 31, 2011, recording an increase of 1.63%. The cumulative disbursement of the Bank for the nancial year 2011-12 amounted to `.90.42 Crore with 37,840 accounts against `.99.27 Crore with 48,484 accounts loans during previous year 2010-11. The Bank deliberately slowed down disbursements and focused on consolidation of the loan portfolio and recovery efforts in the aftermath of the ordinance
29
promulgated by the state government of Andhra Pradesh for regulating the operations of micro-nance organizations. This strategy helped in containing the growth of non-performing assets and in controlling the deterioration of recovery rate in spite of the adverse effects of the ordinance on the repayment culture in the area. The Banks over all recovery rates as on March 31, 2012 stood at 96.48% as compared 96.70% as on March 31, 2011. The deterioration was the result of the adverse effect on the repayment culture as a result of the ordinance of the A.P. government regulating micro nance operations and also because of drought conditions in the operating area. During the year under review the Authorized capital of the bank is `.25.00 Crore comprising of 2.50 Crore Equity shares of `.10.00 each. The paid up capital of the bank is `.9.00 Crore comprising of 90 Lakh Equity share of `.10.00 each. The Bank has contacted various potential investors for infusion of fresh capital to increase its net worth in view of the regulatory guidelines as also to meet the requirements of future growth. The Financial High lights and Operational result for the FY 2011-12 is given bellow: (Amount `. in 000) Particulars Total business Deposits O/s Advances O/s Income Expenditure Net Prot before Tax Provision for Tax Net Prot after Tax Reserves and Surplus Size of the Balance Sheet 31-Mar-12 1,840,227 1003,462 836,815 250,086 231,240 11847 7,045 11,802 74417 1,367,406 31-Mar-11 1,808,343 925,121 883,222 257,300 227,710 29,590 11,832 17,758 62,615 1,391,103
2.2.3 CTran Consulting Limited Ctran Consulting Limited (CTRAN) is engaged in (i) Energy Services (ii) Environmental Services (iii) Climate Change Adaptation (iv) Climate Change Risk Mitigation (E2C2) activities and (v) providing Inclusive Infrastructure for Local Livelihoods (I2L2). During last ve years, CTRAN Consulting has provided multi-disciplinary consulting services by using innovative concepts, sound research, new technologies, and indigenous knowledge, and gained
INNOVATION & IMPACT
CORPORATE OVERVIEW
30
BASIX
recognition, nationally as well as internationally. CTRAN now has been offering services in several states of India. It has more than 50 projects in different states of the country. It is consciously trying to focus on Odisha, Jharkhand, Bihar, Madhya Pradesh and North Easter States. It is also trying to gain a toe hold in LDC countries and have bagged international project in Kenya. Core Areas of Ctran operation are categorised as: E2C2 includes advisory services on Carbon Market, Energy Audit, EIA/EMP and compliance development, Biodiversity Assessment, Detailed Project Reports for energy (largely renewable), Climate Change Action Plan I2L2 includes PPP/PPCP, Decentralized Governance, Human Development Issues, and Large scale survey, Impact Assessment and M&E, Institutional Development, Policy Inputs Highlights Continued Revenue and prot growth despite slow down and setback to CDM due to international negotiation 101% achievement in Revenue High performing areas : Clean-Tech, Environment, PPP, M&V Key Achievements Starting with one, ve AMCER projects have gone on CDM cycle Have got the prestigious solar programme of activities in CDM in partnership with MNRE, the CERs are likely to grow from 30,000-50,000 ISO 9001-2008-Certied NABET Certication obtained for EIA First international Project on Forest Carbon was won in Kenya Completed State Climate Change Action Plan (Orissa, Meghalaya, Mizoram and Tripura) Completed PPCP in Health Sector Janani Express and for nutrition management Selected as advisory agency for RAY and supporting as PMU in urban governance Completed baseline for farmer producer organisations under National Vegetable Initiative Completed the District Level Human Development Report in two districts Two of the projects of Ctran that reect the deep expertise of the organisation are summarised below. 1) Afforestation/Reforestation CDM in Kenya: In Kenya the business of Carbon Credit is just breaking 2)
ground. The African Carbon Exchange has recently been launched in Kenya with a hope that the trade in carbon credits will open up investment in the generation of renewable energy and forestry projects. Kenyas government estimates that its largest forest, the Mau, has the potential to earn the country close to $2bn (1.2bn) a year over the next 15 years. In this backdrop, The Ministry of Finance, Government of Kenya has engaged CTRAN for developing A/R CDM Projects in Mau Forest Complex and Aberdare Forest Range to assist the Government in developing Project Idea Notes (PINs) and Project Design Document s (PDDs) for validation and registration as required for issuance of CERs CTRAN has identied the project area for both AR CDM and Reducing Emissions from Deforestation and Degradation + Projects from the satellite imagery. Around 20,000 ha of land have been identied for the ARCDM projects in Mau and Aberdare Forests. The remaining areas will be considered for the REDD+ Project development. Distribution of Improved cook stove: The project activity is an initiative towards promotion of improved cooking practices and thereby contributing towards reduction of drudgery in terms of cooking and fuel wood collection time, reduction of indoor air pollution and lowering of environmental degradation which occurs in traditional cooking practice. Although multiple initiatives are already being undertaken towards dissemination of cook stoves, lack of post distribution support has nullied the objective behind similar initiatives in the past. Apart from initial capital cost of the product, the major drawbacks of such programs are lack of training towards procedure of improved cook stove use, timely maintenance and post lifetime replacement. The project is conceptualized to overcome the aforesaid drawbacks and provide support in refraining from using the traditional cook stoves. The project activity covers distribution of 14,066 Improved Cook stoves to households across Maharashtra and aggregating the carbon credit there from. The Financial High lights and Operational result for the FY 2011-12 is given bellow: (Amount `. in 000) Particulars Total Income Prot on Operation Provision for tax Net Prot After Tax 31-Mar-12 40070 6658 2083 4575 31-Mar-11 32716 6605 2085 4520
2.2.4 BASIX Krishi Samruddhi Limited (BASIX Krishi) BASIX Krishi Samruddhi Limited was incorporated on 26th April, 2010 as a public limited Company under
BASICS Ltd
the Companies Act, 1956. It provides a wide range of extension services to crop and livestock farmers.) as its main line of business. The services are designed to serve the needs of farmers of both Livestock and Crop. For the year ended March12, the total no of customers registered was 25,219 against the plan of 58,120, resulting an achievement of 43% of the planned target. Since inception BASIX Krishi has cumulatively serviced 32,962 service contracts including 5,355 customers through various projects. BASIX Krishi concluded the year with 22 branches from 8 branches last year with 175% incremental growth and reaching customer base of 25,219 from 7,723 representing an incremental growth of 226%. BASIX Krishi is also extending its services to smallholders & marginal farmers in collaboration with the following institutions: 1) 2) 3) 5) 6) 7) Solidaridad National Bank for Agriculture Development (NABARD) and Rural
31
Bank Linkages is yet another critical area where BASIX Krishi, has been playing a Business facilitator role. BASIX Krishi is involved for Origination, Monitoring & Collection (OMC) of Agri and allied loans for IDBI Bank. BASIX Krishis Responsibilities include direct sourcing of the potential farmers and group of farmers for agriculture lending, assisting IDBI Bank in post sanction monitoring which includes proper utilization (end use) of the loan, any development which affects the crop produce or cash ows of the borrower(s), other risks affecting the servicing of loan(s) and assisting the Bank in repayments by following -up with the customers on a regular basis. The pilot has commenced in 16 IDBI branch locations in Maharatsra, Orissa and Karnataka. The Financial High lights and Operational result for the FY 2011-12 is given below: (Amount `. in 000) Particulars Income Expenditure Net Loss before Tax Deferred Tax Net Loss after Tax Reserves and Surplus Size of the Balance Sheet 31-Mar-12 28160 39297 (11225) 1721 (12946) (6936) 22140 31-Mar-11 3544 7534 (3989) (3989) 3510 24812 Lifelong
Govt. Of Karnataka through ICRISAT MYRADA Haryali Kisan Bazaar (HKB) Expert Bio products (EBP)
Solidaridad Better Cotton Initiative (Pre-BCI) is another example of successful collaboration. BASIX Krishi is implementing Pre-Better Cotton Initiative project sanctioned by Ford Foundation with the support of Solidaridad, a Netherland NGO with the objective of supporting 3,000 cotton farmers to grow cotton more economically, environmentally and socially sustainable in three states e.g. Andhra Pradesh, Karnataka and Madhya Pradesh. The budget sanctioned for the project is `.52.2 lakhs for one year. Till March12, received an amount of `.31.958 lakhs for the project. Capacity building is done by forming Learning groups of farmers, 38 Learning groups are formed in three states.
B-ABLE works in creating a virtuous circle of skilled workers and entrepreneurs mostly from the disadvantaged sections of society, through a system of building learning communities and supporting them with loans for their fees, and through lifelong skilling and re-skilling, while providing effective real time connects between the job providers and job seekers. In doing so it will also engage the Government and Industry to realize synergies, reduce its costs and build all India Scale. B-ABLE plans to target following sectors Rural Farm & non-farm trades, Healthcare, Tourism, Hospitality & travel trades, Food Processing, Banking Insurance & Finance, Construction and allied trades. B-ABLE currently operates in 18 States across the country. Rajasthan, Northeast and Sikkim account
The System of Rice Intensication (SRI) promotion work undertaken by Krishi is appreciated in Andhra Pradesh and Karnataka states. In AP, Krishi is the only institution which has been assigned the project for two districts Mahabubnagar and Nizamabad. With Krishis pioneering work in reaching the target of 400 farmers in rst season specially the handholding of farmers is very well appreciated by NABARD ofcials, Krishi farmers photo has been used in NABARDs Monthly magazine, further Government of AP has allotted two more clusters in Medak district to Krishi. In Karnataka, Krishi is the only agency successfully implemented SRI with 400 farmers.
2.2.5 BASIX Academy for Building Employability Limited (B-ABLE)
B-ABLE was incorporated on 14th December, 2009. B-ABLE is conceived to be an innovative, sustainable, nation-wide model for building high quality skilled workforce, and connecting workers with employment both in the unorganized and the organized sectors.
INNOVATION & IMPACT
CORPORATE OVERVIEW
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BASIX
for 66% of the students trained. Rajasthan has been driven by RMoL Program. North-East numbers are largely due to the NYKS-YES project and CSC training. In the case of Madhya Pradesh, signicant portion is driver-refresher training. B-ABLE offers a wide range of skill programs ranging from computer skills to the more industrial training in refrigeration. Training on Banking, construction continues to be the critical components of programs run. Green skills, that was introduced in 2011-12 has been a huge success and 17% of the students enrolled are in this program alone. B-ABLE has successfully met the NSDC (National Skill Development Council) target of 5,000 students to be trained for the year. It has also successfully executed YES project and RMoL projects in the year. Expanding operations through CSCs (Common Service Centres) has been a huge focus is and 107 CSCs have been operationalised so far. Domestic Household Help Vertical has been set up and has done a billing of `.1 lakh in the 1st month. Market & Skill Networks have been a key focus area. Key partnerships entered into in 2011-12 include ones with Essilor, EGMM, Gujarat government, NYKSMoYAS, CII-RIICO. In addition, Research & Content Development is a critical component of the B-ABLE model and B-ABLE constantly endeavors to keep the courses relevant and oriented to placement opportunities. New courses added in the years include: Community refractionist, retail sales and marketing, HCV/LCV Driver training, Tally, Plumbing, VLE training, Business Correspondent training, Driver refresher training. IT enablement of courses with videos and remote dissemination has been initiated. B-ABLE has s staff strength of 290 Staff including 150 trainers, 90 support staff and 40 NEC staff. B-ABLEs courses are run in both Company managed centers as well as client sites and CSCS. Around 56% of trainings in B-ABLE managed centers; 38% in clientsites and 5% in CSCs. User-funded training has been 64% of the total for the year. Operational Highlights for the year ending March 31, 2012: Aspect Enrolments Trained Placed Selfemployed 2011-12 7988 5109 2500 930 2010-11 1137 606 243 142 Cumulative 9125 5715 2743 1072
Split of total trained so far: Type of centre B-ABLE managed centres Client-site (VLE and BC Training done at client site) CSCs Grand Total User funded 1165 2194 Govtfunded 2067 Grand Total 3232 2194
289 3648 2067
289 5715
2.2.6 BASIX Sub-K iTransactions Limited (Sub-K) BASIX Sub-K iTransactions Limited was incorporated as a subsidiary of the Company on 2nd August, 2010. The main objects of Sub-K would inter alia include the following: 1) To establish, maintain and manage, electronic transaction systems comprising centralized or decentralized switches connected to network of retail service providers, business correspondent and point of sale devices at the front end and servers of e-governance service provider, banks, insurance company and other nancial services providers, mobile/xed line telecom operators and national and international payments systems, in manner which promotes nancial inclusion for all ; To undertake the designing and development of systems and applications software either for its own use or for sale in India or for export outside India and to design and develop such systems and application software for or on behalf of manufacturers, owners and users of computer systems and digital / electronic equipment in India or elsewhere in the world; To set up and run electronic data processing centers and to carry on the business of data processing, word processing, software consultancy, system studies, management consultancy, technoeconomic feasibility studies of projects, design and development of management information systems, share / debenture issues management and / or registration and share / debenture transfer agency. The Company entered in to collaboration with several banks namely Axis Bank, Syndicate Bank, The Ratnakar Bank and ING Vysya Bank and other service providers for the Business Correspondent (BC) operations as a part of nancial inclusion initiative. As of date on March 31, 2012 the company has a total BC network of 893 scattered in 15 States of India covering 86 districts serving more than 1.6 Lac customers. Sub-K has also developed a brand identity and communications package and has begun the work of reaching out to the potential customers. Local media is the primary media vehicle that has been
2)
3)
BASICS Ltd
used with the key objective of building awareness leading to customer enrolment. Financial Literacy and educating the customer on the use of nancial services is also a part of this campaign. The Financial High lights and Operational result for the FY 2011-12 is given bellow: (Amount `. 000) Particulars Income Expenditure Net Loss before Tax Deferred Tax Net Loss after Tax 31-Mar-12 16,820 89,020 72,200 1,400 73,600 31-Mar-11 3,180 7,530 4350 300 4,660
33
New support functions created for Business Development and Knowledge Management An HR Committee formed to address all matters related to Human Resource
Proactive business development efforts of BASIX Consulting under the UNCDF Micro Lead Expansion (2012) enabled the team to visit 6 African countries namely, Cameroon, Malawi, Mozambique, Rwanda, Tanzania and Ghana. Proposals submitted for 5African countries. BASIX Consulting also entered into a contract for Consulting Services of the Specialized Business Support Organization with Uttar Pradesh Bhumi Sudhar Nigam, Government of Uttar Pradesh funded by the World Bank worth `.48.5 million. New contracts were signed with Govt. of Andhra Pradesh for preparation of ve years (2012-13 to 2016-17) District Perspective and Annual Plan under the Backward Regions Grant Fund (BRGF) program for 4 districts. Govt. of Punjab assigned a project to BCTS on the preparation of SPIP under NRLM programme and NABRD has awarded Financial literacy project to BASIX in Jharkhand B-ALAMPs visibility improved through the Study Programs/Exposure Visits (International) organized for participants from Madagascar, Timor Leste, Bhutan, Ethiopia, Mali and Burkina Faso. For the rst time, two programs were offered in French and thematic areas are from outside the BASIX expertise (Watershed Management and Value chain of Milk, Fruits and Vegetables. B-ALAMP worked on rst on-site International Training Program for the PNG Micronance Ltd (PML) in partnership with the University of Papua New Guinea (UPNG)and recently launched in Port Moresby, PNG Newly created SBU, MISP working on three major projects i. IBLI (Index Based Livestock InsuranceEthiopia) ii. RES RISK project of the Swiss Development Corporation and iii. World Bank (IFC) for the scoping study of Index based insurance in Bangladesh. Total ongoing projects are worth INR 50.00 Million. IT consulting has aligned its target clients to microbanking institutions and credit co-operative societies. More than 500 institutions are contacted. 5 new contracts signed with Micro-Banking Institutions. 12 new institutions joined as IT Clients and new orders received worth INR 10.70 Million for the nancial year Web-based MIS application for HR management and business development tracking has been developed to manage the operations more efciently.
2.2.7 BASIX Consulting and Training Services Limited (Consulting) BASIX Consulting and Training Services Limited was incorporated in August 2010. Consulting had been earlier undertaken by the senior team in BASICS Ltd and as it grew in business and also forayed successfully in international consulting, it was hived off as a separate entity in August 2010. Its mission statement reads as follows: Facilitate livelihood promotion beyond BASIX direct operations through consulting and training; Provide a wider platform for the talents and experience of BASIX staff and collaborators; Channelize learning from international best practices and adopt them in BASIX and elsewhere. To provide adequate focus to the various practice areas, BASIX Consulting re-structured its operations under5 SBUs : Inclusive nance, Institutional Development, Micro Insurance, BA LAMP, IT and a support vertical for knowledge management and business development. Domestic and international SBUs were restructured as Inclusive Financial Sector Development (IFSD) and Institutional Development & Livelihood Promotion (IDLP) All SBUs will undertake both international and domestic business development and project execution New SBU Micro Insurance and Social Protection (MISP) created
INNOVATION & IMPACT
CORPORATE OVERVIEW
34
BASIX
The Financial performance summary for - the FY 2011-12 is given bellow: (Amount `. in 000) Particulars Income Expenditure Net Prot before Tax Provision for Tax Net Prot after Tax Reserves and Surplus Size of the Balance Sheet Earning Per Share 3. Basic Diluted 22.22 5.29 106.49 102.05 31-Mar-12 76,017 67912 8,105 2,550 5,555 16,887 64,014 31-Mar-11 32,387 23,602 8,784 2,953 5,831 13,831 42,869
Name of the Director Mr. Vijay Mahajan Ms. Bharti Gupta Ramola Mr. Deep Joshi Mr. Joe Madiath Mr. Anoop Seth Ms. Mary Agnes Houghton Ms. Patricia Mukhim Mr. Ekanath Awad 4.
Number of Meetings Meetings held durAttended in pering tenure son/(tele-present) 5 5 5 5 5 5 5 5 5 4 1 2 3 3/(2) 4 1/(1)
Auditors Report and appointment The report of the Statutory Auditors of the Company, M/s V Nagarajan and Company, Chartered Accountants, is attached herewith. M/s V Nagarajan and Company, being eligible, offers themselves for reappointment as Statutory Auditors of the Company and the Directors recommend to the members that the appointment may be approved.
Corporate Governance The Companys Corporate Governance Policy lays emphasis on transparency, accountability, ethical operating practices and professional management.
4.1. Directors The Board of the Company comprised eminent individuals from the elds of nance and rural development. The Board has eight directors: Vijay Mahajan Deep Chandra Joshi Joeseph Madiath Mary Agnes Houghton Bharti Gupta Ramola Anoop Seth Patricia Mukhim Ekanath Dagdu Awad
5.
Energy Conservation Measures, Technology, Absorption and R & D Efforts As your Company is engaged in activities of promoting rural livelihoods, the particulars required under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Energy Conservation, Technology Absorption do not apply. However, the Company is taking adequate measures for conservation of energy by adopting good practices.
Declarations have been received from the directors of the Company, and no director is disqualied from being appointed as a director of the Company under clause (g) of sub-section (1) of section 274 of the Companies Act. 3.3. Meetings of the Board The meetings of the Board are held once every quarter to review the performance of the company and discharge its duties. During the year, the Board met ve times on April 30, 2011, 14th June, 2011, 28th July, 2011, November 06, 2011 and 28th January, 2012.
e)
Foreign Exchange (Amount in `.) Particulars 2011-12 8,932,000 4,189,000 2010-11 8,932,000 4,189,000
Earnings Outgo 6. Particulars of Employees
In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies
BASICS Ltd
(Particulars of Employees) Rules, 1975 as amended, we have to report that during the year there were no employees whose salary is more than `.500,000 p.m. or `.60,00,000 p.a. 7. Directors Responsibility Statement Your directors would like to inform you that the audited accounts containing the Financial Statements for the year ended March 31, 2011 are in full conformity with the requirements of the Companies Act, 1956 and they believe that the nancial statements reect fairly the form and substance of transactions carried out during the year. The nancial statements, audited by the statutory auditors M/s V. Nagarajan & Co., reasonably present the Companys nancial condition and results of operations, particularly considering the unique nature of operations of the company Your Directors declare that: (i) That in the preparation of the annual accounts, the applicable accounting standards as referred to in section 211 3(C) of the Companies Act, 1956 had been followed without any material departure. The accounting policies as stated in the notes forming part of accounts have been selected and applied consistently so as to give true and fair view of the accounts of the company as at March 31, 2012. While doing so, the Directors have made necessary judgments and estimates, which are reasonable and prudent for this purpose.
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(iii) Proper and sufcient care has been taken for the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities. (iv) The accounts have been prepared on a Going Concern basis. 8. Statutory Compliance Report In accordance with the provisions of Section 383A (1) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000 a Statutory Compliance Report, by Ms. Savita Jyoti, a Company Secretary in whole-time practice is attached herewith. 9. Acknowledgements Your Directors place on record their sincere appreciation of the support of the Company has received from the Ministry of Finance and the Ministry of Rural Development, Government of India, the Reserve Bank of India, all the colleagues in BASIX, members of the Boards of all the group Companies, as also colleagues in our investor/funding institutions.
(ii)
On behalf of the Board of Directors
Date : August 4, 2012 Place : Gurgaon
sd/Vijay Mahajan Chairman
INNOVATION & IMPACT
CORPORATE OVERVIEW
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BASIX
Auditors Report
To The Members of
Bhartiya Samruddhi Investments and Consulting Services Limited

1. We have audited the attached Balance Sheet of Bhartiya Samruddhi Investments and Consulting Services Limited (the Company) as at March 31, 2012 and the statement of Prot and Loss for the year ended on that date both annexed thereto. These nancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these nancial statements based on our audit. 2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well evaluating the overall nancial statement presentation. We believe that our audit provides reasonable basis for our opinion. 3. Without qualifying our opinion, we invite attention to the following: i) Note No 9(Viii) of Notes forming part of Accounts, regarding investments in associate company aggregating to `.23,73,75,478 (Previous Year `.23,73,75,478). The accumulated losses have fully eroded the net worth of the associate company and negative net worth as at the year end is `.373.49 Crores and the corresponding diminution in the value of the investments held by the company is also Zero as against the investments value of `.23.74 Crores. However in view of the restructuring arrangement agreed upon by lenders of the Investee Company, the company is hopeful of recovery of its investments during the course of implementation of Corporate Debt Restructuring and hence chosen to a write down of the value, as stated therein, in a cautious way over a period of ve years up to its face value. In our view, this depends upon the change in the legal and political environment relating to micro nance and consequent successful implementation of the scheme, in the context of the Investee Company, viz. Bhartiya Samruddhi Finance Limited and based on the circumstances a review of the same is necessary in future years. 5. Further to our comments in the Annexure referred above we report that: a) We have 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 accounts as required by the law have been kept by the Company, so far as appears from our examination of the books maintained at the head ofce and all the branches of the company visited by us; c) The Balance Sheet and the statement of Prot and Loss dealt with by this report are in agreement with the books of account; d) In our opinion, the Balance Sheet and the statement of Prot and Loss dealt with by this report comply with the accounting standards referred to in sub section 3(C) of section 211 of the Companies Act, 1956; e) On the basis of the written representations received from the directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualied as on March 31, 2012 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; i. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;
ii. In the case of statement of Prot and Loss, of the loss of the Company for the year ended on that date. iii. In the case of Cash Flow Statement of the cash ows of the company for the year ended on that date.
for V. NAGARAJAN & Co., Chartered Accountants Sd/(V. NAGARAJAN) Partner ICAI Firm Reg. No.: 04879N M. No.: 019959 Date : Place : August 04, 2012 New Delhi
4. As required by the Companies (Auditors Report) Order, 2003 and as amended, issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanation given to us, we enclose in the annexure, a statement of matters specied in paragraphs 4 and 5 of the said Order.
BASICS Ltd
Annexure to the Auditors Report
To The members of Bhartiya Samruddhi Investments and Consulting Services Limited [the Company] [Referred to in Paragraph (3) of our report of even date] Based on the audit procedures performed for the purpose of reporting a true and fair view on the nancial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that: i. In respect of its xed assets: a) The Company has maintained proper records to show full particulars, including quantitative details and situation of xed assets. Fixed assets have been physically veried by the management during the year and no material discrepancies were identied on such verication. In our opinion, a substantial part of xed assets has not been disposed off during the year. vi.
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(b) Owing to the unique and specialized nature of the items involved and in the absence of any comparable prices, we are unable to comment as to whether the transactions made in pursuance of such contracts or arrangements have been made at prevailing market prices at the relevant time. The Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of clause 4 (vi) of the Order are not applicable.
b)
c) ii.
vii. In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business. viii. In respect of its Statutory dues: a) Undisputed statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a certain delay in remittance of income tax. As on the last date of the nancial year there are no undisputed amounts outstanding for more than six months from the date they became payable. According to the records of the company, the dues of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess on account of any dispute are as follows:
The Company does not have any inventory. Accordingly the provisions of clause 4(ii) of the order are not applicable. The Company has not either granted/availed secured or unsecured loans to/from companies, rms or other parties listed in the register required to be maintain under section 301 of the Companies act, 1956. The Company has an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of xed assets and for rendering of services. The activities of the Company do not involve purchase of inventory and the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Act have been so entered. Name of the Statutory Income Tax Act, 1961 Income Tax Act, 1961 Nature of the dues Income Tax Income Tax Amount (`.) 782,067 662,960
iii.
b)
v.
Period to which the amount relates AY 2008-09 AY 2009-10
Forum where dispute is pending Commissioner of Income Tax (Appeals V), New Delhi Commissioner of Income Tax (Appeals V), New Delhi
iv.
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BASIX
ix.
In our opinion, the Company has no accumulated losses at the end of the nancial year and it has not incurred any cash losses in the current and the immediately preceding nancial year. In our opinion, the Company has not defaulted in repayment of dues to a nancial institution or a bank during the year. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4 (xii) of the Order are not applicable.
xvi. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies act, 1956. xvii. The Company has neither issued nor had any outstanding debentures during the year. xviii. The Company has not raised any money by public issues during the year. xix. Based upon the audit procedure performed and information and explanation given by the management, we report that no fraud on or by the Company has been noticed or reported during the year. xx. The nature of the Companys business/activities during the year is such the clauses (viii) and (xiii) of paragraph 4 of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.
x.
xi.
xii. In respect of dealing in shares and other securities, the Company does not deal except by way of making investment in group companies, which are held for long term. In our opinion and according to the explanations given to us, proper records have been maintained of transactions and timely entries have been made therein. The shares have been held by the company in its own name. xiii. The Company has given guarantee for loans taken by others from banks. In our opinion, the terms and conditions prima facie do not appear prejudicial to the interest of the Company. xiv. The Company had applied term loans for the purpose for which it has been raised. xv. The Company has not utilized the funds raised on long term basis for short term purposes. However, the Company had utilized the funds raised on short term basis for long term purposes, the quantum of which is not ascertainable.
for V. NAGARAJAN & Co., Chartered Accountants
Sd/(V. NAGARAJAN) Partner ICAI Firm Reg. No.: 04879N M. No.: 019959 Date : August 04, 2012 Place : New Delhi
BASICS Ltd Balance Sheet as at

(All amounts in `. except otherwise stated) 31-Mar-12 I. EQUITY AND LIABILITIES Shareholders funds (a) Share capital (b) Reserves and surplus Non-current liabilities (a) Long-term borrowings (b) Deferred tax liability (net) (c) Long-term provisions 248,763 602 1,780 251,145 Current liabilities (a) Trade payables (b) Other current liabilities Total II. ASSETS Non-current assets (a) Fixed assets Tangible assets (b) Non-current investments (c) Long-term loans and advances 3,802 421,069 15,839 440,710 Current assets (a) Trade receivables (b) Cash and cash equivalents (c) Short-term loans and advances (d) Other current assets Total As per our report of even date for V. NAGARAJAN & CO., Chartered Accountants Sd/(V. Nagarajan) Partner ICAI Firm Reg. No.: 04879N | M. No.: 019959 Date : August 4, 2012 Place : New Delhi 2,565 8,225 2,118 2,188 15,096 455,806 3,154 74,376 77,530 455,806 5,198 121,933 127,131
39
31-Mar-11
1,100 141,590 142,690 265,084 972 267,727 11,602 40,736 52,338 462,755 1,671
10,465 423,862 13,824 448,150 2,579 4,895 3,462 3,669 14,605 462,755
for Bhartiya Samruddhi Investments and Consulting Services Limited
Sd/(Vijay Mahajan) Chairman and Managing Director
Sd/(Anoop Seth) Director
INNOVATION & IMPACT
CORPORATE OVERVIEW
40
BASIX
Statement of Prot and Loss for the year ended

(All amounts in `. except otherwise stated) 31-Mar-12 INCOME Revenue from operations Other income Total income EXPENSES Finance costs Employee benets expense Consultancy Expenses Depreciation and amortization expense Write down in value of long term investments Other operating expenses Total expenses Prot before tax Tax expense - Current tax - Deferred tax Prot/(loss) after tax Prior Period item Prot/(Loss) for the year Earning per equity share (EPS) - Basic - Diluted [Refer Note 20] Number of shares considered for - basic - diluted As per our report of even date for V. NAGARAJAN & CO., Chartered Accountants Sd/(V. Nagarajan) Partner ICAI Firm Reg. No.: 04879N | M. No.: 019959 Date : August 4, 2012 Place : New Delhi 3,877 3,877 for Bhartiya Samruddhi Investments and Consulting Services Limited 1,100 1,100 (5.11) (5.11) 3.34 3.34 (369) (19,799) 142 (19,657) 2,000 170 3,672 3,672 36,045 29,653 25,763 1,926 24,191 31,958 149,536 (20,168) 47,413 35,534 40,304 1,706 47,827 172,784 5,842 128,971 397 129,368 178,145 481 178,626 31-Mar-11
Sd/(Vijay Mahajan) Chairman and Managing Director
Sd/(Anoop Seth) Director
41
Bhartiya Samruddhi Finance Ltd.

Board of Directors
Chairman Vijay Mahajan Managing Director Manmath Kumar Dalai Directors Mary Agnes Houghton Asok Kumar Rathnam Frank Streppel Namgial Singh Investors BASICS Ltd International Finance Corporation Hivos Triodos Fonds Triodos SICAV Triodos Custory B.V India Financial Inclusion Fund Lok Capital LLC Aavishkaar Goodwell India Micronance Development company Small Industries Development Bank of India (SIDBI) Axis Bank Matrix Partners India Investments LLC Funders Andhra Bank Axis Bank Ltd Citi Bank Central bank of India Corporation Bank Fullerton India Credit Company Ltd HDFC bank Ltd HSBC IDBI Bank Ltd Indian Overseas Bank IndusInd Bank Ltd Karnataka Bank Ltd Punjab national Bank Rabo India Finance SIDBI South Indian bank Standard Chartered Bank Syndicate Bank YES Bank Auditors M/sWalker, Chandiok & Co., Chartered Accountants Hyderabad
INNOVATION & IMPACT
CORPORATE OVERVIEW
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BASIX
Board of Directors
Vijay Mahajan, Chairman, BASIX Group Mary Agnes Houghton is the co-founder of ShoreBank, the largest and oldest community development bank in the U.S. Houghton, along with Milton Davis, James Fletcher, and Ron Grzywinski purchased what was then South Shore Bank to ght redlining in the Chicago neighbourhood. She retired as its president in May 2010. Houghton serves as a director of the Calvert Foundation, the Rapid Results Institute, and Womens World Banking. She is a member of the Ashoka Global Academy for Social Entrepreneurship. Asok Kumar Rathnam is the Chairman and Managing Director of Sarvodaya Nano Finance Limited (SNFL). He is also the Chairman and Managing Director of Sarva Jana SevaKosh Ltd, an MFI belonging to ASSEFA group. He is a Post Graduate in Economics from Madras University, a Certied Associate of Indian Institute of Bankers, and also a Certied Public Accountant from USA. He has 36 years of experience in banking of which 22 years were in State Bank of India. He retired as the Executive Director of Axis Bank. Frank Streppel is the Nominee Director of Hivos-Triodos Fond, Triodos Fair Share Fund and Triodos Micronance Fund, micronance funds managed by Triodos Investment Management BV, Netherlands. Frank started his banking career in 1992 with ABN AMRO Bank, the Netherlands. In 2000 he joined Triodos Bank where he took on the responsibility for investments in the African micronance sector. As the Deputy Managing Director of Triodos Investment Management B.V., he is currently responsible for the global investment portfolio in micronance. Mr. Streppel is a (an alternate) member of the Board of Directors of ve leading micronance institutions and two micronance investment funds in Africa and India. Namgial Singh is the Nominee Director representing Small Industries Development Bank of India(SIDBI).He has over two decades of experience in various elds of banking, administration and nance. At present he is the Chief General Manager, Southern Region, SIDBI. Manmath Kumar Dalai has Masters Degree in Commerce with specialization in Business Administration from PG. Dept of Utkal University, Bhubaneswar. He is professional banker, with nearly 30 years experience in banking at various levels both in India and abroad. For two years beginning February 2005, took over as the CEO of an East African bank belonging to the Aga Khan Fund for Economic Development (AKFED), Paris. In February 07, joined a team in Dar Es Salaam, Tanzania to set up a boutique Corporate Bank. He was a Managing Director of Krishna BhimaSamruddhi Local Area Bank Ltd from October 2008 to May 17, 2011. Currently, he is the Managing Director of BhartiyaSamruddhi Finance Ltd.
43
Directors Report
To The Members Bhartiya Samruddhi Finance Limited Its with great sadness that the Directors present their 16th Annual Report and the Audited Statement of Accounts of the Company for the period ended March 31, 2012. Operating Results for the Year ending March 31,2012. (`. in million) PARTICULARS Loan Funds Out of which - Secured Loans - Unsecured Loans Loans to Rural Producers Out of Which - Owned portfolio - Managed portfolio Total Assets/Liabilities Income from Operations Out of Which - Income from Micro Credit services - Income from Insurance services - Income from Consultancy services - Other Income Interest on borrowed funds Operating Expenses excl. Depreciation Prot before depreciation, provisions and tax Depreciation Provision for non performing assets Prot / (loss) before exceptional items and tax Exceptional items Prot / (loss) before tax Provision for tax Net Prot 1. Business The Company has been going through a very difcult period for the past 18 months, ever since the Andhra Pradesh government promulgated the Micro Finance Institutions(Money Lending) Ordinance in October 2011-12 6,816 6,066 750 2,919 2,919 3,606 1,001 656 124 134 87 1,235 1,265 (1,499) 47 251 (1,798) 3,975 (5,773) 68 (5,841) 2010-11 12,307 11,545 761 12,488 11,777 711 14,409 4,296 3,663 216 276 141 1,561 1,874 861 48 138 675 497 178 76 102 2010 and followed up with passing that into an Act in December 2010.The Company, which had `.1800 Crore of loans outstanding and a half year prot of `.30 Crore as on September 30, 2010, has seen its outstanding portfolio shrink to `.669 Crore including `.516 Crore of NPAs and posted a loss of `.545 Crore(provisional)as on 31st March 2012. The Company has reduced the staff strength by 3,650, mainly through voluntary departures, and proposes to reduce this further. The operating expenses have been brought down from `.17 Crore per month in September 2010 to `.7.5Crore per month in March 2012. After having repaid banks more than `.1200 Crore since October 2010, the company is left with outstanding borrowings of `.665 Crore. The Company has met all its obligations to its lenders up to January 31, 2012, beyond which the Companys liquidity position did not permit to service the dues to lenders. The Reserve Bank of India issued detailed guidelines on December 2, 2011 for NBFC-MFIs, among other things, requiring 100% provisioning of NPAs beyond 180 days. This implies that the company had to writeoff `.516 crore of NPAs. Under such circumstances, there was no option but to seek Corporate Debt Restructuring (CDR) from the lenders. The management held numerous meetings with 19 lenders on this since December; 2011.The Company has sought conversion of `.500 Crore of debt into Compulsorily Convertible Preference Shares (CCPS) and stretching the balance debt of `.165 Crore over a seven year tenor. The lenders have accepted our proposal as the preliminary basis for an application for Corporate Debt Restructuring and entered Debtor Creditor Agreement with SIDBI on March 5, 2012. 1.1 Insurance Services Over the years, the Company has steadily built the following suite of insurance products to cover the various risks that customers face to their lives and livelihoods. Life Insurance Limited Health Insurance Livestock Insurance Micro enterprise insurance, and Weather Risk Insurance
These services are being offered in collaboration with various insurance companies like Aviva Life Insurance Company India Pvt. Ltd, Royal Sundaram
INNOVATION & IMPACT
CORPORATE OVERVIEW
44
BASIX
Alliance Insurance Company Ltd, and ICICI Lombard etc. However with the impairment of the Credit business, post the AP crisis, the business portfolio has been severely handicapped and the number of registration has sharply fallen over past 18 months, as illustrated in the following table for Group Insurance scheme. Highlights (Group Policies) (Units in Nos. / `. in `. lakhs) Particulars Credit Plus Life Outstanding Customers Premium (Inc of S.T) Credit Plus Health (GAR) Outstanding Customers Premium (Inc of S.T) As on 31st As on 31st Mar-11 Mar-12
2.
Dividend Due to inadequate prots, the directors do not recommend for payment of any dividend for the shareholders for the year 2011-12.
3.
Directors The present Board consists of six Directors namely Mr. Vijay Mahajan(Chairman), Mr. Asokkumar Rathnam(Director), Mr. Namgial (Nominee Director), Mr. Manmath Kumar Dalai( Managing Director), Mr. Franciscus Bernardus Martinus Streppel(Nominee Director) and Ms. Mary Agnes Houghton(Director). The Board met six times during the nancial year on April 29, 2011, July 29, 2011, September 19, 2011, October 29, 2011, December 06, 2011 and January 27, 2012 and reviewed the operations, position of fund management, Risk management, NPA status, compliance to the prescribed statutory requirement and limits, recommendation by the other board committees, policies of the company, nancial results and other management issue including determining the future course of action and business plan of the Company. Mr. Sajeev Viswanathan resigned from the position of Managing Director with effect from April 29, 2011 and in his place Mr. Manmath Kumar Dalai was appointed with effect from May 18, 2011. Mr. Avnish Bajaj, nominated by Matrix partner who was appointed as Nominee Director of the Company with effect from April 29, 2010 has retired on July 29, 2011. Mr. Namgial, nominated by Small Industries Development Bank of India has been appointed as Nominee Director of the Company with effect from August 11, 2011 in place of Mr. N. Raman. Mr. Vishal Mehta who was appointed as an alternate director to Mr. Donald Macinnes Peck on July 29, 2011 has ceased to be a director of the Company with effect from February 4, 2012 consequent to the withdrawal of Nomination of Mr. Donald Macinnes Peck by the appointing authority Lok Capital LLC. Mr. S. Ramachandran who was appointed as Whole-time Director on July 29, 2011 has ceased to be Director on December 6, 2011. Mr. Mahesh Kanumury Director of the Company resigned from the Board on December 6, 2011.
2,065,842 2132.46
9,51,130 1257.22
20,65,842 2460.08
9,51,130 1717.15
1.2 Agricultural and Business Development Services (Ag/BDS) and Institutional Development Services (IDS) Under Ag/BDS the Company was offering four sets of services that include productivity enhancement, risk mitigation (non-insurance), local value addition and alternative market linkages. These services were being offered in sub-sectors of dairy, cotton, groundnut, vegetables, lac, pulses, soya, mushroom, handloom and bamboo crafts. However during the year the Ag/BDS is severely hit by the MFI crises. Only 33,477 new customers are registered for services in Allied, Agriculture, Non Farm and other services during FY 2011-12 booking total revenue of `.21.9 million. The active customers at the end of March 31, 2012 are 33,488. In the absence of credit service from the company the number of new registration and the resultant revenue has signicantly come down thereby resulting in operational loss to the company. Hence being compelled to close the Ag/BDS operations, the board decided to and outsourced the Ag/BDS operation to BASIX Krishi Samruddhi Limited effective from April 1, 2012. And no fresh enrollments will be made in by the company for Ag/BIDS services. The Institutional Development Services activity is also been affected with the During the FY 2011-12, the Company has enrolled and served over 1,159 common activity groups, cooperative and other nature of institution earned over `.1.3 million. Going ahead BSFL will limit to serving the existing clients either directly or through outsourcing and will not enroll new clients for IDS services.
4.
Auditors Report and Appointment M/s Walker, Chandiok and Co., Chartered Accountants of New Delhi, the Statutory Auditors of the Company, for the nancial year 2011-12 have audited the accounts of the Company for the year and have submitted the Statutory Audit Report
BSFL
The auditors, M/s Walker, Chandiok and Co., Chartered Accountants, will retire at the conclusion of the ensuing Annual General Meeting and being eligible for re-appointment have expressed their willingness to act as auditors of the Company, if appointed, and have further conrmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956. Your Directors recommend for their re-appointment. 4.1. Qualications & Directors reply to Auditors Report Detailed explanation to qualications given in the auditors report are provided in Annexure I to this report 5. Corporate Governance A separate report on Corporate Governance is annexed 6. Non-Acceptance of Public Deposits As per the Non-Banking Finance Companies (RBI Directions, 1998), the Directors hereby report that the Company have not accepted any public deposits during the year and did not have any public deposits at the end of the year. 7. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo The particulars required under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Energy Conservation, Technology Absorption and R&D Efforts do not apply. However, the Company is taking adequate measures for conservation of energy by adopting good practices. Foreign Exchange earnings and outgo (Amount in `.) Particulars Earnings Outgo 8. Particulars of Employees In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, we have to report that during the year there were no employees in this category. Place : Mumbai Date : May 7, 2012 2011-12 Nil 6,44,709 2010-11 Nil 906,005 9. Directors Responsibility Statement
45
Your directors would like to inform you that the audited accounts containing the Financial Statements for the year ended March 31, 2012 are in full conformity with the requirements of the Companies Act, 1956 and the directors hereby declare that: 1. In the preparation of the annual accounts, the applicable accounting standards as referred to in Sec 211 (3C) of the Companies Act, 1956 have been followed without any material departure The accounting policies as stated in the notes forming part of accounts have been selected and applied consistently so as to give a true and fair view of the accounts of the Company as at March 31, 2012. While doing so the directors have made necessary judgments and estimates which are reasonable and prudent for this purpose. Proper and sufcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities. More specically, the Company has substantially revised its operating practices to ensure tighter control. They have also been reviewed by an external Internal Control specialist and a separate Operations Risk Management Department has been created. The annual accounts have been prepared on a Going Concern basis.
2.
3.
4.
10. Acknowledgements We thank our investors, nancial institutions, bankers for their continued support during the year. We place on record our sincere appreciation of the contribution made by our employees at all levels, Livelihood Service Agents and all other well-wishers. Our consistent growth was made possible by their hard work, solidarity, cooperation and support. On behalf of the Board of Directors
Sd/Vijay Mahajan Chairman
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BASIX
Annexure I
Sl. No 1. Auditors qualication During the year ended 31 March 2012, the Company has made an application to seek an exemption up to 30 September 2012 from compliance with capital to risk assets ratio norms as prescribed by the Reserve Bank of India for Non-banking nancial companies. Pending nal outcome of its application for exemption from compliance with capital to risk assets ratio norms, we are unable to comment on impact, if any, of non-compliance with such norms as at 31 March 2012 on the accompanying nancial statements. Directors response The Companys proposal for Corporate Debt Restructure (CDR) has been accepted by the CDR Cell in its meeting held on June 25, 2012. As per the CDR package lenders have agreed to convert their debt exposure to the Company in to CCPS to the extent of `.500 Crore which is eligible for Tier-I Capital. Apart from that the Companys management has committed to raise equity capital to the extent of `.25 crore by the end of FY 2012-13. This will ensure Company to comply with the capital to risk assets ratio norms. In the month of October 2010, Andhra Pradesh Government has passed an Ordinance on the MFIs, restricting the operations of MFIs in Andhra Pradesh. This resulted in the sharp decline in recovery of loans, no funding from banks and consequent reduction in disbursements. In view of this unprecedented market situation, the Company has decided to write off its entire non-performing loan portfolio in Andhra Pradesh amounting to `.378.77 crore and made a provision of `.26.3 crore to cover the credit risk of Non AP portfolio, which is in excess of the minimum provision norms prescribed by the Reserve Bank of India. The Company is condent of recovering the overdue loans outside AP, which are affected due to lack of fresh disbursements, by disbursing fresh loans once the CDR is implemented.
2.
The Company had voluntarily adopted provisioning policy which was more stringent in respect of identication of loss assets. However, during the nancial year ended 31 March 2012, the Company has discontinued with such policy, except in the case of such loan portfolios in the State of Andhra Pradesh. In our opinion, dilution of the provisioning methodology in respect of such portfolios at risk does not appropriately reect the credit risk in the current business environment. Had the Company followed its earlier provisioning methodology, the loss after tax and balance of decit for the year ended and as at 31 March 2012 would have been higher by `.481,385,697 respectively. Further, during the year ended 31 March 2012 the Company has provided for provisions aggregating to `.263,328,320 in excess of the minimum provision norms prescribed by the Reserve Bank of India in respect of credit risk associated with loan portfolio except in the State of Andhra Pradesh. In view of the existing business environment, we are unable to comment upon the appropriateness of income recognition and sufciency of the provision against such loan portfolios for the year ended and as at 31 March 2012. Trade receivables as at 31 March 2012 includes `.94,625,412, net of provision of `.20,839,575, representing insurance premium and other charges recoverable from the respective borrowers. In view of the existing business environment, we are unable to comment upon the sufciency of the provision against such receivables and its consequential impact on the reported loss for the year ended 31 March 2012. The internal control for sale of services are required to be strengthened as loans were disbursed, in few cases, without providing repayment schedules and customer pass books were not updated regularly.
3.
The Companys proposal for Corporate Debt Restructure (CDR) has been accepted by the CDR Cell in its meeting held on June 25, 2012. On implementing the CDR, the Company is condent of recovering the overdue loan linked insurance receivables in Non AP region by disbursing fresh loans in that region.
4.
The Company has taken note of such cases and reviewed the procedures in these cases. The Company has adopted the code of conduct that is prescribed by the RBI and has a closer supervision of compliance at the ground level
BSFL
47
Sl. No 5.
Auditors qualication Undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service-tax, custom duty, excise duty, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, except dues relating to contribution to employees state insurance, which have not been regularly deposited with the appropriate authorities and there have been signicant delays in a large number of cases. Dues relating to professional tax have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in few cases.Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable. The Company has defaulted in repayment of term loan dues to various banks and nancial institution during the year ended 31 March 2012. Further, the Company has deferred payment of term loan dues to various banks and nancial institutions, in view of the application for restructuring made to the Corporate Debt Restructuring Cell.
Directors response There were instances of delay in depositing professional tax due to administrative reasons as 8 Units in Maharashtra were pending for lack of PT registration code. We have now got PT code for Nasik where we can make payment regarding all the 8 units and in Gujarat and Karnataka there has been delay at Unit end in remitting the payments in local ofces. We are compliant in all other states on PT update as applicable. The management has taken note of this and shall ensure timely deposit of taxes in future.
6.
Corporate Debt Restructure (CDR) proposal made by the Company is accepted by the C Cell in its meeting held on June 25, 2012. As per the CDR package cutoff date for CDR is January 31, 2012.
7.
283 cases of cash embezzlements by the livelihood service advisors of the Company aggregating to `.19,109,455 were reported during the year. The service agreements with agents involved in such fraudulent activities have been terminated and the Company is in the process of taking legal action. The outstanding balance (net of recovery) aggregating to `.4,590,663 as at 31 March 2012 has been provided for; 18 robbery incidents amounting to `.4,029,830 were reported during the year. The outstanding balance (net of recovery) aggregating to `.3,919,030 has been provided for.
operations, subject to the inherent limitations that should be recognized in weighing the assurance provided by any such system of internal controls. These systems are reviewed and updated on an ongoing basis.
We have been informed that during the year covered by our There is an inherent risk involved in our operations audit, following cases of frauds were noticed or reported by as all the transactions at the eld are in cash. The the Company: Company has taken legal or remedial action in all the cases of embezzlement of cash. 30 cases of cash embezzlements by the employees of the Company aggregating to `.1,237,191 were reported The Companys Management has taken sufcient during the year. The services of employees involved in such and appropriate care for safeguarding the assets instances have been terminated and the Company is in the of the company and for preventing and detecting process of taking legal action. The outstanding balance (net frauds and other irregularities. To ensure this, of recovery) aggregating `.753,901 as at 31 March 2012 has the Company has enhanced internal control been provided for; systems, consistent with its size and nature of
INNOVATION & IMPACT
CORPORATE OVERVIEW
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BASIX
Corporate Governance Report

1. Philosophy on Corporate Governance: The Company is committed to the principles of Corporate Governance viz., transparency, accountability, ethical operating practices and professional management. From its inception, the Companys Board of Directors comprised of eminent individuals from the eld of nance and livelihood promotion. The role of the Board is to ensure mission compliance synergising the social impact and nancial performance. The Companys philosophy on corporate governance envisages adherence to the highest levels of transparency, accountability and responsibility, in all areas of its operations and in all its interactions with stakeholders, including customers, regulators shareholders, employees, government and other agencies, others industry players, suppliers, service providers and the wider community. The Company is committed to achieving the highest standards of corporate governance, and retaining its dynamism as world-wide events shape the macro landscape. At the core of its corporate governance practice is the Board, which oversees how the management serves and protects the long-term interests of all the stakeholders of the Company. Your Company believes that an active, well-informed and independent Board is necessary to ensure the highest standards of corporate governance. There is active participation and deliberation of Independent Directors in the Company. 2. Board of Directors:
2.1 Board Composition and Category of Directors The Companys Board has an optimum combination of Executive, Non-Executive and Independent Directors and reects diversity in terms of disciplines, professions, social groups, and gender and stakeholder interest. During the nancial year ended 31st March, 2012, the Board of Directors met on April 29, 2011, July 29, 2011, September 19, 2011, October 29, 2011, December 06, 2011 and January 27, 2012. Details of Board Composition and attendance of each Director: No. of Meetings
Name of the Director
Category
Designation
Held during the tenure 6 2 6 6 1 5 2 4 6 3 5 6
Attended 6 2 5 2 1 5 2 2 4 3 5 5
Mr. Vijay Mahajan Mr. Avnish Bajaj* Mr. Donald Peck (represented by Mr. Vishal Mehta***)* Mr. Frank Streppel Mr. Sajeev Viswanathan* Mr. Manmath Kumar Dalai** Mr. N. Raman* Mr. Namgial Singh** Ms. Mary Houghton Mr. S. Ramachandran*** Mr. Mahesh Kanumury* Mr. Asokkumar Rathnam
Promoter and NonExecutive Director Non-Executive Director Non-Executive Director Non-Executive Director Executive Director Executive Director Non-Executive Director Non-Executive Director Independent and Non-Executive Director Executive Director Independent and Non-Executive Director Independent and Non-Executive Director
Chairman Nominee Director Nominee Director Nominee Director Managing Director Managing Director Nominee Director Nominee Director Director Whole-Time Director Director Director
* ** ***
Ceased to be Directors during from 1st April, 2011 to 31st March, 2012. Details are given under Section 2.2. Appointed as Directors during the period from 1st April 2011 to 31st March, 2012. Appointed and Resigned during the period
BSFL
2.2 Changes in the Board during the period from 1st April 2011 to 31st March 2012. S. No. 1 2 3 4 5 6 7 8 9 Name of the Director Mr. Sajeev Viswanathan Mr. Manmath Kumar Dalai Mr. Avnish Bajaj Mr. Vishal Mehta Mr. S. Ramachandran Mr. N. Raman Mr. Namgial Mr. Mahesh Kanumury Mr. Donald Macinnes Peck Designation Managing Director Managing Director Nominee Director Alternate Director to Mr. Donald Peck Whole-time Director Nominee Director Nominee Director Independent Director Nominee Director Date of Appointment /Resignation Resigned on 29th April 2011 Appointed w.e.f. 18th May, 2011 Retired on 29th July, 2011 Appointed on 29th July, 2011and ceased to be director w.e.f. 4th Feb 2012 Appointed on 29th July, 2011 and ceased to be director December 6, 2011 Nomination withdrawn on 11th August, 2011
49
Resigned on 6th December, 2011 Ceased to be a director w.e.f. 4th February, 2012 The Committee met four times during the nancial year on April 28, 2011; July 28, 2011; October 28, 2011 and January 27, 2012.
2.3 Board of Directors as on 31st March, 2012: Vijay Mahajan Asokkumar Rathnam Manmath Kumar Dalai 2.4 Committees of Directors 2.4.1 Audit Committee The Audit Committee has been constituted in accordance with Section 292A of the Companies Act, 1956 and as per RBI Guidelines on Corporate Governance for Systemically important NBFCs dated May 8, 2007. The Audit committee meets every quarter to review the accounts as well as the report of the statutory auditor. The present composition of the committee is as follows: 1. Mr. Asokkumar Rathnam, Chair The Committee met four times during the nancial year on April 28, 2011; July 28, 2011; October 29, 2011 and January 27, 2012 2.4.2 Human Resources & Development Committee (HRDC) The HRDC comprehensively review the HR Policy of the company which shall describe how the HR requirements for the Operational Policy will be addressed, in terms of recruitment, induction, training and also detail out the policy for remuneration, performance incentives, promotions and procedures for disciplinary action and grievances redressal. The present composition of the committee is as follows: 1. 2. 3. Ms. Mary Agnes Houghton, Chair Mr. Vijay Mahajan Mr. Namgial Mary Houghton Frank Streppel Namgial Singh
2.4.3 Risk Management Committee The Board constituted a Risk Management Committee in compliance with the RBI Guidelines on Corporate Governance for Systemically important NBFCs dated May 8, 2007. The Risk Management Committee is responsible for reviewing and approving the risk management policies of the Company, assessment and monitoring of all risks associated with the operations of the Company and development and implementation of internal compliance and control systems and procedures to manage risk. The present composition of the committee is as follows: 1. 2. 3. Mr. Asokkumar Rathnam, Chair Mr. Namgial Mr. Vijay Mahajan
The Committee meets every quarter and has met four times during the year on April 28, 2011; July 28, 2011; October 28, 2011 and January 27, 2012. 2.4.4 Asset Liability Management Committee (ALCO) The Board constituted this Committee in compliance with the RBI Guidelines on Corporate Governance for Systemically important NBFCs dated 8th May, 2007. The Asset Liability Management Committee meets every half year to develop, review and maintain a long term funding strategy, review short term funding plans, short term deb t approvals, determine liquidity portfolio risk prole, Assess the risks in the balance sheet and Monitor structure of the Companys Assets and Liabilities. At present, ALCO has the following members:
INNOVATION & IMPACT
Appointed on 11th August, 2011
CORPORATE OVERVIEW
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BASIX
1. 2.
Mr. Vijay Mahajan, Chair Mr. Asokkumar Rathnam
1. 2.
Mr. Vijay Mahajan, Chair Mr. Asokkumar Rathnam
The Committee met four times during the year on April 28, 2011; July 28, 2011; October 28, 2011 and January 27, 2012. 2.4.5 Share Allotment & Transfer Committee Share Allotment and Transfer Committee was constituted on March 24, 2010, to consider and approve allotment of shares, issue allotment letters, share certicates, to authorize making entries in the Register of Members and Register of Shareholders, to consider and approve share transfers/ transmissions, to approve issue of duplicate share certicates and to take note of benecial owners position under demat mode. The following are the present members of the Committee: 2.5 Attendance of members at the Committee Meetings
The Committee met once during the nancial year on October 28, 2011. 2.4.6 Nomination Committee Nomination Committee also called Selection committee was constituted on May 7, 2012 to determine the `t and proper status of the existing elected Directors/proposed candidates based on the broad criteria i.e. Educational qualication, experience and eld of expertise, track record and integrity. The following are the present members of the Committee: 1. 2. 3. Mr. Vijay Mahajan Mr. Asokkumar Rathnam Ms. Mary Houghton Share Allotment & Transfer Committee (1)*
Name of the Director
Risk Human Audit Management Resources & Committee Committee Development (4)* (4)* Committee (4)* 2 3 --2 1 --1 3 2 3 1 3 2 ---
Asset Liability Management Committee (4)* 4
Mr. Vijay Mahajan Mr. Donald Peck/Mr. Vishal Mehta Mr. Avnish Bajaj Mr. Frank Streppel Ms. Mary Houghton Mr. Manmath Kumar Dalai Mr. Mahesh Kanumury Mr. Asok Kumar Rathnam Mr. Sajeev Vishwanathan *
3 3 1
1 1
Number in the bracket in the heading denotes the number of committee meetings held during the nancial year 2011-12. Number in the bracket in the information denotes tele-present. 3.1 Executive and Management Committees In 2009, the Executive and Management Committees of BSFL were constituted, in order to develop a platform for cross-regional and cross-functional decision making by the senior management of the company. The Executive Committee comprises the CEO, CFO, COO and the heads of the key functions of HR and Leadership Development, Operations and Technology, and meets at monthly intervals. The Management Committee is represented by the members of the Executive Committee, the heads of the different regions, business segments and products. Management Committee conference calls are conducted fortnightly, and are used as a forum to take decisions and respond to issues that may arise from time to time.
2.6 Sitting Fee to Directors Sitting Fee paid to the Non-executive Directors during the nancial year 2011-12: Amount in `. Name of the Director Mr. Asok Kumar Rathnam Ms. Mary Houghton Mr. Mahesh Kanumury 3. Sitting fee paid 130,000 70,000 1,40,000
Internal Committees of the Management The Management has constituted the following committees in the last year:
BSFL
3.2 Human Resources Management Committee A Human Resources Management Committee was formed to streamline key HR policy decisions within the Company. The Committee comprises the CEO, CFO, COO and key personnel from the HR team. The HRMC is convened on a monthly basis. 3.3 Internal Asset and Committee (IALCO) liability Management
51
same. The Committee comprises the MD, CFO, and key personnel from the Credit and Risk team. IALCO provides ongoing strategic oversight and management of the Companys Balance Sheet. 3.4 Audit & Risk Committee An Audit and Risk Committee of the Management has been constituted to review on a monthly basis the audit rating and trend of the various regions related to Internal Audit and Risk Management, key internal audit and risk issues, status of the audit issues and action and update on fraud / robbery and key action points. The Audit and Risk Committee meets on a monthly basis and comprises of the MD, CFO and senior management members of Risk and Legal team.
4.
General Body Meetings
4.1. The last three Annual General Meetings were held as follows: AGM Date 29-07-2011 23-07-2010 25-07-2009 Day Friday Friday Saturday Time 03.00 P.M. 12.30 P.M 1.00 P.M. Location India International Centre, Lodi Estate, New Delhi India Habitat Centre, New Delhi India Habitat Centre, New Delhi No. of Special Resolutions passed 3 -1
4.2. Extraordinary general meetings(EGM) held during the Financial year: EGM Date 29-10-2011 5. Dividend History of last three years Day Friday Time 09.30 A.M. Location BASIX Ofce, Banjara Hills, Hyderabad
2010-2011 2009-10 2008-09 Unclaimed Dividend
10% 7.5%
NA 23-07-2010 25-07-2009
NA 07-08-2010 20-08-2009
Pursuant to provisions of Section 205A of the Companies Act, 1956, the dividend declared by the Company which remains unclaimed for a period of seven years, shall be transferred to the Investor Education and Protection Fund (IEPF). The due dates for transfer of unclaimed dividend to IEPF, pertaining to different nancial years are given below: Financial Year 2009-10 2008-09 Type of Dividend Final Final Date of transfer to unpaid dividend account 30-08-2010 31-08-2009 Due date for transfer to IEPF 31-08-2017 31-08-2016
Financial Year
Rate of Dividend
Date of Declaration
Date of Payment
INNOVATION & IMPACT
Managing the Assets & Liabilities is an important function in any Financial Institution. While this function is owned by the Finance team, an Assets & Liabilities Management Committee (ALCO) comprising of senior management members from different functions provides strategic oversight and management of the
CORPORATE OVERVIEW
52
BASIX
6.
Disclosures Shareholding pattern as on 31st March 2012 Category of the Shareholder India Foreign Foreign Foreign India Foreign Foreign Foreign India India Foreign Foreign India Foreign Break-up Foreign & Indian Holding India Total Number of Equity Shares 11,641,973 5,710,033 2,562,089 2,548,306 2,465,400 2,205,212 1,976,262 1,972,334 684,837 644,499 412,031 412,031 365,001 33,600,008 17,798,298 15,801,710 33,600,008 Precentage of Paid up Equity Share Capital 34.65% 16.99% 7.63% 7.58% 7.34% 6.56% 5.88% 5.87% 2.04% 1.92% 1.23% 1.23% 1.09% 100.00% 52.97% 47.03% 100%
Name of Shareholder BASICS Limited Matrix Partners India Investments LLC Lok Capital LLC International Finance Corporation Small Industries Development Bank of India (SIDBI) Aavishkaar Goodwell India Micronance Development Company India Financial Inclusion Fund Hivos Triodos Funds Axis Bank Individuals Tridos SICAV Tridos Custody BSFL Employees Shareholding Trust Total
7.
General Shareholders Information AGM: Date and venue Financial Year August 3, 2012 at New Delhi April 1, 2011 to March 31, 2012 9. Address for Correspondence: i) For transfer/dematerialization of shares, change of address of members and other queries relating to the shares of the Company: Registrar and Share Transfer Agent: Karvy Computershare Pvt. Ltd. Plot No.17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad 500 081 Phone: +91 040 44655208 | M : +91 94416 51206 Contact Person: R. Chandra Sekher Email: chandrasekhar.r@karvy.com www.karvycomputershare.com Any queries relating to dividend, annual reports etc. Company Secretary BASIX, III Floor, Surabhi arcade, Troop Bazar, Bank Street, Koti, Hyderabad - 500001 Tel: 040-30512500/501 E-mail: companysecretary@basixindia.com
8.
Dematerialisation of Shares: The Companys demat facility was activated in NSDL on August 25, 2009 and the ISIN allotted to the Equity Shares of the Company is INE506K01017. Now, the Shareholders of the Company can convert their physical shares into Demat. As on March 31, 2012, 15,790,429 Equity shares were dematerialized representing 47% of the total paid up equity share capital of the Company. Karvy Computershare Pvt. Ltd has been appointed as the Registrar and Share transfer Agent with effect from December 16, 2011.
ii)
BSFL
Auditors Report
To The Members of Bhartiya Samruddhi Finance Limited Auditors Report 1. We have audited the attached Balance Sheet of Bhartiya Samruddhi Finance Limited (the Company) as at 31 March 2012, and also the Statement of Prot and Loss and the Cash Flow Statement for the year ended on that date annexed thereto (collectively referred as the nancial statements). These nancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well as evaluating the overall nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2003 (the Order) (as amended), issued by the Central Government of India in terms of subsection (4A) of Section 227 of the Companies Act, 1956 (the Act), we enclose in the Annexure a statement on the matters specied in paragraphs 4 and 5 of the Order. Without qualifying our opinion, we draw attention to note 3 to the nancial statements which indicate that due to operational uncertainties, the Company has reported a net loss after tax of `.5,840,863,970 during the year ended 31 March 2012 and, as of that date, the Companys reported liabilities exceeded its total assets by `.3,734,928,091. These conditions, along with other matters as set forth in note 3 of the accompanying nancial statements, indicate existence of a material uncertainty that may cast signicant doubt about the Companys ability to continue as a going concern. During the year ended 31 March 2012, the Company has made an application to seek an exemption up to 30 September 2012 from compliance with capital to risk assets ratio norms as prescribed by the Reserve
53
Bank of India for Non-banking nancial companies. Pending nal outcome of its application for exemption from compliance with capital to risk assets ratio norms, we are unable to comment on impact, if any, of non-compliance with such norms as at 31 March 2012 on the accompanying nancial statements. 6. Hitherto, the Company had voluntarily adopted provisioning policy which was more stringent in respect of identication of loss assets. However, during the nancial year ended 31 March 2012, the Company has discontinued with such policy, except in the case of such loan portfolios in the State of Andhra Pradesh. In our opinion, dilution of the provisioning methodology in respect of such portfolios at risk does not appropriately reect the credit risk in the current business environment. Had the Company followed its earlier provisioning methodology, the loss after tax and balance of decit for the year ended and as at 31 March 2012 would have been higher by `.481,385,697 respectively. Further, during the year ended 31 March 2012 the Company has provided for provisions aggregating to `.263,328,320 in excess of the minimum provision norms prescribed by the Reserve Bank of India in respect of credit risk associated with loan portfolio except in the State of Andhra Pradesh. In view of the existing business environment, we are unable to comment upon the appropriateness of income recognition and sufciency of the provision against such loan portfolios for the year ended and as at 31 March 2012. Trade receivables as at 31 March 2012 includes `.94,625,412, net of provision of `.20,839,575, representing insurance premium and other charges recoverable from the respective borrowers. In view of the existing business environment, we are unable to comment upon the sufciency of the provision against such receivables and its consequential impact on the reported loss for the year ended 31 March 2012. Further to our comments in the Annexure referred to above, we report that: a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
2.
3.
7.
4.
8.
b. 5.
INNOVATION & IMPACT
CORPORATE OVERVIEW
54
BASIX
c.
The nancial statements dealt with by this report are in agreement with the books of account; On the basis of written representations received from the directors, as on 31 March 2012 and taken on record by the Board of Directors, none of the directors is disqualied as on 31 March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act; In our opinion and to the best of our information and according to the explanations given to us and subject to our observations in paragraph 5 above the impact of which, if any, is presently not ascertainable together with our observations in paragraph 6 and 7 above, the nancial statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act and give the information required by the
d.
Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, in the case of: i) ii) iii) the Balance Sheet, of the state of affairs of the Company as at 31 March 2012; the Statement of Prot and Loss, of the loss for the year ended on that date; and the Cash Flow Statement, of the cash ows for the year ended on that date. For Walker, Chandiok & Co Chartered Accountants Firm Registration No: 001076N Sd/per Sanjay Kumar Partner Membership No.: 207660
e.
Date : 7 May 2012 Place : Mumbai
BSFL
Annexure to the Auditors Report of even date to the members of Bhartiya Samruddhi Finance Limited, on the nancial statements for the year ended 31 March 2012. Based on the audit procedures performed for the purpose of reporting a true and fair view on the nancial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that: i (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The fixed assets have been physically verified by management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets. (c) In our opinion, a substantial part of fixed assets has not been disposed off during the year. ii The Company does not have any inventory. Accordingly, the provisions of clause 4(ii) of the Order are not applicable. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(b) to (d) of the Order are not applicable. (e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable. iv Owing to the nature of its business, the Company does not maintain any physical inventories or sells any goods. Accordingly, clause 4(iv) of the Order with respect to purchase of inventories and sale of goods is not applicable. In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of fixed assets. In our opinion, internal control for sale of
55
services are required to be strengthened as loans were disbursed, in few cases, without providing repayment schedules and customer pass books were not updated regularly. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. v (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered.
vi vii
The Company has not accepted any deposits from the public. In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.
iii
ix
(a) Undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, salestax, wealth-tax, service-tax, custom duty, excise duty, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, except dues relating to contribution to employees state insurance, which have not been regularly deposited with the appropriate authorities and there have been signicant delays in a large number of cases. Dues relating to professional tax have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.
viii To the best of our knowledge and belief, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act, in respect of the services rendered by the Company. Accordingly, the provisions of clause 4(viii) of the Order are not applicable.
INNOVATION & IMPACT
(b) Owing to the unique and specialized nature of the items involved and in the absence of any comparable prices, we are unable to comment as to whether the transactions made in pursuance of such contracts or arrangements have been made at prevailing market prices at the relevant time.
CORPORATE OVERVIEW
56
BASIX
(b) There are no dues in respect of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess that have not been deposited with the appropriate authorities on account of dispute, other than those referred below: Name of the statute Nature of dues Amount (`.) 783,428 2,402,494 The Income Tax Act, 1961 3,774,442 Income Tax 1,875,381 621,204 1,456,022 x Period to which the amount relates 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Commissioner of in ome tax (Appeals) Income Tax Appellate Tribunal Forum where dispute is pending
In our opinion, the Companys accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses during the year. In the preceding financial year, the Company had not incurred any cash losses. There were no amounts became due for payment to the debenture holders as at 31 March 2012. In our opinion, the Company has defaulted in repayment of term loan dues to various banks and financial institution, as mentioned in (a) below during the year ended 31 March 2012. Further, the Company has deferred payment of term loan dues to various banks and financial institutions, as mentioned in (b) below, in view of the application for restructuring made to the Corporate Debt Restructuring Cell. (a) Defaults in repayment of term loan Due to Andhra Bank Axis Bank Term Loan Term Loan Central Bank of India Term Loan Term Loan Corporation Bank Term Loan Term Loan IDBI Bank HDFC Bank Term Loan HSBC Limited Indian Overseas Bank Punjab National Bank Karnataka Bank Small Industries Development Bank of India YES Bank IndusInd Bank South Indian Bank Term Loan 317,943 22 Term Loan Term Loan Term Loan Term Loan Term Loan Term Loan Term Loan Term Loan Term Loan Term Loan 25,000,000 12,500,000 41,666,670 36,363,636 18,998,145 78,983,870 78,798,939 67,500,000 35,310,056 33,158,524 12,500,000 9,916,815 9,241,610 8,013,733 2,597,848 21 61 10 9 67 31 48 19 23 36 16 Term Loan Term Loan 15,625,000 5,556,000 41,700,000 4,328,838 75,000,000 73,812,137 18 10 14 72 18 65 83,333,333 15,625,000 38 70 Type Term Loan Term Loan Principal (`.) 3,305,702 27,777,778 Interest (`.) Period of Delay (in days) 61 63
xi
BSFL
(b) Delay due to deferment in repayment of term loans Due to Principal (`.) 4,166,667 Andhra Bank 4,166,667 25,555,556 Axis Bank 44,285,714 15,625,000 Central Bank of India 3,782,106 Citibank 5,556,000 41,700,000 Corporation Bank 5,556,000 41,700,000 25,000,000 HDFC Bank 12,500,000 HSBC Limited 25,000,000 75,000,000 IDBI Bank 41,700,000 Indian Overseas Bank 41,666,670 33,213,673 IndusInd Bank 33,333,333 Karnataka Bank 39,090,900 Punjab National Bank 36,363,636 Rabo India Finance Limited Small Industries Development Bank of India 41,229,163 South Indian Bank 12,500,000 15,000,000 Standard Chartered Bank 15,000,000 62,213,925 Syndicate Bank 71,428,571 YES Bank 1,789,628 1 4 3,184,932 1,616,438 1 32 29 37 184,760 2,876,712 31 32 1 15 4,750,844 416,096 1 1 39 4,291,085 32 18,558,781 29,486,912 9 16 22 4,599,427 977,773 1 1 13 1,565,595 4,154,321 1 32 31 876,050 1,414,086 1 32 9 60 6,085,172 791,271 1 32 15 3,726,370 5,496,285 1 32 10 1 1,046,664 3,365,753 31 32 41 4,324,204 1,800,000 1 1 12 4 10 3,905,733 32 41 14 2,510,959 7,892,686 8,738,331 1 1 20 8 7,728,201 3,416,096 1 32 1 48 2,218,484 6,980,311 1 32 Period of delay (in days) 32 Interest (`.) 2,003,792
57
Period of delay (in days) 32
INNOVATION & IMPACT
32
CORPORATE OVERVIEW
58
BASIX
xii
The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.
xx
The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable.
xiii In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable. xiv In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable. xv The Company has not given any guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the Order are not applicable.
xxi We have been informed that during the year covered by our audit, following cases of frauds were noticed or reported by the Company: (a) 30 cases of cash embezzlements by the employees of the Company aggregating to `.1,237,191 were reported during the year. The services of employees involved in such instances have been terminated and the Company is in the process of taking legal action. The outstanding balance (net of recovery) aggregating `.753,901 as at 31 March 2012 has been provided for; (b) 283 cases of cash embezzlements by the livelihood service advisors of the Company aggregating to `.19,109,455 were reported during the year. The service agreements with agents involved in such fraudulent activities have been terminated and the Company is in the process of taking legal action. The outstanding balance (net of recovery) aggregating to `.4,590,663 as at 31 March 2012 has been provided for; (c) 18 robbery incidents amounting to `.4,029,830 were reported during the year. The outstanding balance (net of recovery) aggregating to `.3,919,030 has been provided for. For Walker, Chandiok & Co Chartered Accountants Firm Registration No: 001076N Sd/per Sanjay Kumar Partner Membership No.: 207660
xvi In our opinion, the term loans were applied for the purpose for which the loans were obtained, though idle/surplus funds which were not required for immediate utilization were invested in liquid investments, payable on demand. xvii In our opinion, no funds raised on short-term basis have been used for long-term investment. xviii During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable. xix The Company has issued unsecured, convertible debentures. Accordingly, the provisions of clause 4(xix) of the Order are not applicable.
BSFL
Auditors Report
[Pursuant to the Non-Banking Financial Companies Auditors Report (Reserve Bank) Directions, 2008] To The Board of Directors Bhartiya Samruddhi Finance Limited 1. We have audited the attached Balance Sheet of Bhartiya Samruddhi Finance Limited, (the Company) as at 31 March 2012, and also the Statement of Prot and Loss and the Cash Flow Statement for the year ended on that date annexed thereto (collectively referred as the nancial statements) and have issued a qualied opinion vide our report dated 7 May 2012. As required by the paragraphs 3 and 4 of NonBanking Financial Companies Auditors Report (Reserve Bank) Directions, 2008, issued by the Reserve Bank of India (the RBI) vide Notication No. DNBS. 201/DG(VL)-2008 dated 18 September 2008 (amended from time to time) and based on our audit, we report on the matters specied in paragraph 3 and 4 of the said directions: The Company is engaged in the business of NonBanking Financial Institution (without accepting or holding public deposits) and pursuant to the provisions of Section 45(1A) of the Reserve Bank of India Act, 1934 (as amended) it has obtained a certicate of registration vide certicate no. 14.01502 dated 19 August 1999. In our opinion, and in terms of the Companys assets and income pattern for the year ended and as at 31 March 2012, the Company is entitled to continue to hold the certicate of registration issued by the RBI. The Company is not a asset nance company as dened under the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998. The board of directors of the Company in their meeting held on 29 April 2011 has passed a resolution for non-acceptance of any public deposits during the nancial year 1 April 2011 to 31 March 2012. The Company has not accepted any public deposits during the year ended 31 March 2012. Hitherto, the Company had voluntarily adopted provisioning policy which was more stringent in respect of identication of loss assets. However, during the nancial year ended 31 March 2012, the Company has discontinued with such policy, except in the case of such loan portfolios in the State of Andhra Pradesh. In our opinion, dilution of the provisioning methodology in respect of such portfolios at risk does not appropriately reect the credit risk in the current business environment. h.
59
a.
g.
b.
The capital adequacy ratio as at 31 March 2011 as disclosed in the annual return submitted to the Bank in form NBS- 7, has been correctly arrived at and subject to qualication referred to in our report dated 29 April 2011, such ratio is in compliance with the minimum CRAR prescribed by the Reserve Bank of India for the year ended 31 March 2011.
c.
d.
i.
e. f.
The Companys application for registration as Non-Banking Finance Company Micro Finance Institution, pursuant to the requirements of the notication No. RBI/2011-12/290, DNBS.CC.PD. No.250/03.10.01/2011-12 dated 2 December 2011 is pending with the Reserve Bank of India. The ultimate outcome of such proceedings is presently not determinable and accordingly, we are unable to comment upon the classication and its consequential impact, if any, on the Companys nancial statements as at and for the year ended 31 March 2012 and its operations. For Walker, Chandiok & Co Chartered Accountants Firm Registration No: 001076N Sd/per Sanjay Kumar Partner Membership No.: 207660
As per the information furnished to us, the Company has electronically furnished the annual statement of capital funds, risk assets/exposures and risk asset ratio (NBS-7) with the RBI on 27 June 2011.
INNOVATION & IMPACT
2.
Had the Company followed its earlier provisioning methodology, the loss after tax and balance of decit for the year ended and as at 31 March 2012 would have been higher by `.481,385,697 respectively. Further, during the year ended 31 March 2012 the Company has provided for provisions aggregating to `.263,328,320 in excess of the minimum provision norms prescribed by the Reserve Bank of India in respect of credit risk associated with loan portfolio except in the State of Andhra Pradesh. In view of the existing business environment, we are unable to comment upon the appropriateness of income recognition and sufciency of the provision against such loan portfolios for the year ended and as at 31 March 2012. In our opinion and to the best of our information and according to the explanations given to us, subject to the effect of adjustments, on account of our above observations, the Company has complied with the prudential norms issued by the RBI in relation to recognition of income, accounting standards, asset classication and provisioning for bad and doubtful debts as applicable to it in terms of the Non-Banking Financial (Non-deposit accepting or holding) companies prudential norms (Reserve Bank) Directions 2007.
CORPORATE OVERVIEW
60
BASIX
Balance Sheet
(All amounts in `. unless otherwise stated) Notes Equity and liabilities Shareholders funds Share capital Reserves and surplus Non-current liabilities Long-term borrowings Other long term liabilities Current liabilities Trade payables Other current liabilities Short-term provisions Total Assets Non-current assets Fixed assets Tangible assets Intangible assets Capital work-in-progress Non-current investments Deferred tax assets (net) Loans to rural producers Long-term loans and advances Other non-current assets Current assets Trade receivables Cash and cash equivalents Loans to rural producers Short-term loans and advances Other current assets Total Notes 1 to 39 form an integral part of these nancial statements As at 31 March 2012 31 March 2011
4 5
332,466,760 (4,067,394,851) (3,734,928,091) 2,037,549,733 5,170,000 2,042,719,733 52,441,940 5,075,698,036 169,906,485 5,298,046,461 3,605,838,103
333,700,080 1,768,879,238 2,102,579,318 5,984,419,615 5,984,419,615 112,260,806 7,221,437,533 68,155,054 7,401,853,393 15,488,852,326
6 8
10 11 9
12 13 14 7 15 16 17
113,211,579 36,935,054 2,000,000 93,574,606 9,802,985 126,585,480 382,109,704 94,625,412 491,787,338 2,406,704,507 142,250,209 88,360,933 3,223,728,399 3,605,838,103
200,545,207 45,536,670 1,819,920 2,000,000 64,694,229 699,066,300 195,365,286 413,950,397 1,622,978,009 115,982,332 1,931,971,685 11,054,038,737 140,241,186 623,640,377 13,865,874,317 15,488,852,326
19 20 15 16 18
This is the balance sheet referred to in our report of even date For Walker, Chandiok & Co For and on behalf of the Board of Directors Chartered Accountants of Bhartiya Samruddhi Finance Limited Sd/per Sanjay Kumar Partner Place : Mumbai Date : 7 May 2012 Sd/Vijay Mahajan Chairman Sd/Manmath Dalai Managing Director Sd/Srinivasa Raghavan Chief Financial Ofcer
BSFL Statement of Prot and Loss

(All amounts in `. unless otherwise stated) Notes Revenue Revenue from operations Other income Total revenue Expenses Employee benet expenses Finance costs Depreciation and amortisation expense Provision for non performing assets Other expenses Total expenses Prot / (loss) before exceptional items and tax Exceptional items Prot / (loss) before tax Tax expense Current tax [Provision for contingent tax `.3,331,603 (31 March 2011: `.Nil)] Deferred tax charge/(benet) Prot / (loss) for the year Earnings per equity share [EPES] Basic Diluted Notes 1 to 39 form an integral part of these nancial statements This is the balance sheet referred to in our report of even date For Walker, Chandiok & Co For and on behalf of the Board of Directors Chartered Accountants of Bhartiya Samruddhi Finance Limited Sd/per Sanjay Kumar Partner Place : Mumbai Date : 7 May 2012 Sd/Vijay Mahajan Chairman Sd/Manmath Dalai Managing Director 27 (175.57) (175.57) 7 3,331,603 64,694,229 (5,840,863,970) 26 25 23 24 12, 13 594,275,958 1,234,771,079 46,919,557 251,409,651 671,015,077 2,798,391,322 (1,797,652,509) 3,975,185,629 (5,772,838,138) 21 22 913,443,156 87,295,657 1,000,738,813 For the year ended 31 March 2012
61
31 March 2011 4,234,932,608 60,824,709 4,295,757,317 760,409,380 1,561,371,464 137,501,434 1,113,807,321 3,621,234,051 674,523,266 496,797,546 177,725,720 127,055,810 (51,296,513) 101,966,423 3.06 3.01 48,144,452
Sd/Srinivasa Raghavan Chief Financial Ofcer
INNOVATION & IMPACT
CORPORATE OVERVIEW
62
BASIX
Cash ow statement
(All amounts in `. unless otherwise stated) For the Year ended 31 March 2012 Cash ows from operating activities Prot / (loss) before tax Adjustments for non-cash transactions Depreciation, amortisation and impairment charge Gain on sale of investments Loss on sale of xed assets (net) Loss assets written off Provision for non performing assets Bad and doubtful advances / deposits written off Allowances for (net of write offs) - bad and doubtful advances - bad and doubtful trade receivables - curtailment - other short term liabilities Provision for employee retirement benets Employee stock option compensation Other Operating prot / (loss) before working capital changes Decrease in trade payables Increase in other long term liabilites Decrease in other current liabilites Increase in trade receivables Decrease / (increase) in loans to rural producers Decrease in assigned portfolio Decrease / (increase) in long term loans and advances Decrease in short term loans and advances Decrease / (increase) in other current assets Cash generated from / (used in) operating activities Income tax paid 18,476,526 19,899,401 120,947,409 20,382,033 (17,825,216) 5,329,873 (5,143,832) (1,521,611,474) (59,818,866) 5,170,000 (602,344,836) (10,212,127) 5,793,204,112 (592,969,266) 185,562,301 231,637 516,802,918 3,714,014,399 (12,991,972) 10,020,858 24,185,642 24,992,617 16,941,973 1,026,311,956 (30,119,887) (962,865,741) (78,672,642) (3,072,974,934) (1,570,770,831) (46,010,023) 95,688,267 (534,344,456) (5,173,758,291) (178,980,697) 77,863,667 (40,193,843) 1,716,401 3,787,766,674 251,409,651 10,597,920 48,144,452 (36,918,221) 135,870 623,581,611 137,501,434 (5,772,838,138) 177,725,720 For the Year ended 31 March 2011
BSFL Cash ow statement

(All amounts in `. unless otherwise stated) For the Year ended 31 March 2012 Net cash generated from / (used in) operating activities Cash ows from investing activities Purchase of tangible assets Proceeds from sale of tangible assets Purchase of intangible assets Purchase of current investments Proceeds from sale of current investments (Increase) / decrease in other bank balances Net cash generated from / (used in) investing activities Cash ows from nancing activities Proceeds from issue of share capital Proceeds from long term borrowings Repayment of long term borrowings Repayment of nance lease obligation Dividends paid (including dividend tax) Net cash generated from / (used in) nancing activities C 100,000,000 (5,552,456,506) (3,617,775) (5,456,074,281) B (14,140,208) 2,848,051 (1,399,096) (6,677,172,486) 6,717,366,329 287,364,917 314,867,507 A 3,701,022,427
63
For the Year ended 31 March 2011 (5,352,738,988)
(93,287,114) 90,281 (22,694,759) (14,815,669,700) 14,852,587,911 (6,754,402) (85,727,783)
54,999,992 8,300,381,868 (5,605,734,278) (2,856,964) (31,269,183) 2,715,521,435
Net decrease in cash and cash equivalents (A+B+C) Cash and cash equivalents as at the beginning of the year Cash and cash equivalents as at the end of the year [Refer Note 20]
(1,440,184,347) 1,931,971,685 491,787,338
(2,722,945,336) 4,654,917,021
Note 1: Interest paid Note 2: Interest received on loans to rural producers Note 3: Interest received on xed deposits
1,150,758,009 1,090,704,483 74,325,212
1,499,135,185 2,497,527,034 55,763,211
Notes 1 to 39 form an integral part of these nancial statements This is the cash ow statement referred to in our report of even date This is the balance sheet referred to in our report of even date For Walker, Chandiok & Co For and on behalf of the Board of Directors Chartered Accountants of Bhartiya Samruddhi Finance Limited Sd/per Sanjay Kumar Partner Place : Mumbai Date : 7 May 2012 Sd/Vijay Mahajan Chairman Sd/Manmath Dalai Managing Director Sd/Srinivasa Raghavan Chief Financial Ofcer
1,931,971,685
INNOVATION & IMPACT
CORPORATE OVERVIEW
64
BASIX
Notes to the nancial statements for the year ended 31 March 2012
(All amounts in `. unless otherwise stated) 1. Company overview Bhartiya Samruddhi Finance Limited (the Company or BSFL) incorporated on 12 August 1996 in accordance with the provisions of the Companies Act, 1956 of India (the Act) is a limited liability company. Effective 19 August 1999 the Company was registered as a Non Banking Financial Company under the rules and regulations framed by the Reserve Bank of India (the RBI). In accordance with the Notication issued by the RBI vide reference no. RBI/201112/290, DNBS.CC.PD. No. 250/03.10.01/2011 - 12, dated 2 December 2011, the Company has applied for its registration as Non-Banking Financial Company Micro Finance Institutions (NBFC-MFI). The Company is primarily engaged in providing the livelihood promotion services such as micro-credit to rural customers un-reached by the formal banking systems and other allied services such as distribution of insurance products, agricultural and business development services and institutional development services. 2. Signicant accounting policies a. Basis of preparation of nancial statements The nancial statements are prepared under historical cost convention in accordance with the generally accepted accounting principles in India (Indian GAAP) and comply in all material respects with the mandatory Accounting Standards (AS) prescribed in the Companies (Accounting Standard) Rules, 2006 (as amended) and with the relevant provisions of the Act, pronouncements of the Institute of Chartered Accountants of India (ICAI) and the RBI directives and guidelines to the extent applicable to non-banking nancial companies. The nancial statements have been prepared under the historical cost convention on an accrual basis, except interest in respect of nonperforming loan assets have been accounted for on a cash basis. The accounting policies applied by the Company are consistent with those used in the previous year, except in case of change in policy relating to identication of loss assets. b. Use of estimates The preparation of the nancial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the nancial statements and reported amounts of income and expenses during the period. Examples of such estimates include provisions for doubtful loans and advances, trade receivables, future obligations under employee retirement benet plans, income taxes, employee curtailment expenses and the useful lives of xed assets. Further the classication of assets and liabilities into current and non-current is based on the estimation of the operating cycle of the Company. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods. c. Fixed assets Fixed assets are stated at cost less accumulated depreciation, amortization and impairment losses, if any. Cost comprise of purchase price, freight, non-refundable duties, taxes and any other cost attributable to bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of xed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready for its intended use. Assets retired from active use and held for disposal are stated at their estimated net realisable values or net book values, whichever is lower. d. Depreciation Depreciation is provided on straight line method (SLM) based on useful lives of the assets as estimated by management which coincides with rates prescribed under Schedule XIV to the Act, except in respect of ofce equipments which are depreciated over 14 years which is lower than the minimum rates prescribed under the Act. Assets acquired under nance lease arrangements are depreciated on a straight line basis over the useful lives, as estimated by the management, of such assets or over the lease term whichever is shorter. Depreciation on sale/deduction from xed assets is provided for up to the date of sale /deduction as the case may be. Assets individually costing for `.5,000 or less are entirely depreciated in the year of acquisition.
BSFL
e. Intangible assets Acquisition of goodwill in the form of right for use of brand name Basix and other intellectual proprietary rights in the eld of micro nance and livelihood promotion has been accounted for as intangible assets at the purchase price. These assets are amortized over a period of 10 years on a straight line method. Computer software is amortized over a period of six years from the date of purchase. f. Impairment of assets The carrying amounts of assets, both tangible and intangible, are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash ows are discounted to their present value at the weighted average cost of capital. g. Government grant Government grants relating to specic xed assets are adjusted against the cost of underlying xed assets and revenue grants are credited to statement of prot and loss on a systematic basis over the periods necessary to match them with the related costs which they are intended to compensate. h. Investments Investments that are readily realizable and intended to be held for not more than a year and current maturities of long term investments are classied as current investments. All other investments are classied as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the long term investments. i. Revenue recognition Revenue is recognised to the extent that it is probable that the economic benets will ow to the Company and the collectability is reasonably assured. Interest on loans to rural producers is recognised on accrual basis, except in the case of Non-Performing Assets (NPAs), where interest is recognised upon realisation, in accordance with the
65
directives of the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 (as amended). Loan processing fees is accounted for upfront when it becomes due. Revenue from xed priced contracts is recognized on a straight line basis over the specied period of contract. Income from service contracts is recognized on the basis of proportionate completion of the contract with reference to the stage of performance. Interest income on deposits with banks is recognized on time proportion basis taking into account the amount outstanding and the rate applicable. Dividend is recognized when the right to receive the payment is established.
j.
Asset classication and provisioning Loans to rural producers are classied as follows: Particulars Criteria Overdue < 180 days
Standard assets Non-performing assets - Sub-standard assets - Doubtful assets - Loss assets
Overdue for 180 days or more to 730 days Overdue > 730 days As identied by the Company/ internal auditors/external auditors/RBI
Note: Overdue refers to interest and/or instalment remaining unpaid from the day it became receivable. Provision for loan portfolio Provisioning (%) Standard assets Non-performing assets: - Sub-standard assets - Doubtful assets - Loss assets Note: Crop loans are considered as loss assets and are written off fully when they are past due for more than 730 days. Further, an asset is classied as loss asset when it is adversely affected by a potential threat of non-recoverability as assessed/identied by the management / auditors / RBI. 10 100 100 0.25
INNOVATION & IMPACT
CORPORATE OVERVIEW
66
BASIX
k.
Securitization of loans and advances Transactions relating to transfers of loans and advances through securitization with other nancial institutions and banks are accounted for in accordance with the Guidance Note issued by the ICAI on Accounting for Securitisation. Such transferred loans and advances are derecognised from the nancial statements and gains/losses are accounted for only where the Company surrenders rights to benets specied in the loan contract in favour of the counter parties.
m.
Earnings per equity share Basic earnings per share are calculated by dividing the net prot or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of diluted earnings per share, the net prot or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
n.
Share issue expenses Expenditure incurred in relation to issue of equity shares is adjusted against the securities premium reserve, net of corresponding tax benets, if any.
l.
Taxes Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred income taxes reect the impact of timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier periods. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufcient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is a virtual certainty supported by convincing evidence that they can be realised against future taxable prots. Unrecognized deferred tax assets of earlier years are re-assessed and recognised to the extent that it has become reasonably certain or virtually certain, as the case may be that future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufcient future taxable income will be available against which deferred tax asset can be realised. Any such writedown is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufcient future taxable income will be available.
o.
Employee benets Provident Fund The Company contributes to the provident fund maintained by the Regional Provident Fund Commissioner, in accordance with the Employees Provident Fund and Miscellaneous Provision Act, 1952. The provident fund plan is a dened contribution plan and contribution paid is recognised as an expense in the period in which it becomes due. There are no other obligations of the Company other than the contributions made to the fund. Gratuity Gratuity is a post employment dened benet obligation. An independent actuary, using the projected unit credit method calculates the dened benet obligation annually. Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions are credited or charged to the statement of prot and loss in the period in which such gains or losses arises. Employee state insurance The Company contributes to the Employees State Insurance Fund maintained by the state authorities, in accordance with Employees State Insurance Act, 1948. The plan is a dened contribution plan and contribution paid or payable is recognised as an expense in the period in which it becomes due. There are no other obligations of the Company other than the contributions made to the funds. Compensated absences The Company measures the expected cost of accumulating compensated absences as
BSFL
the additional amount expected to be paid as a result of the unused entitlement that has accumulated at the balance sheet date. An independent actuary, using the projected unit credit method calculates the dened benet obligation annually. Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions are credited or charged to the statement of prot and loss in the year in which such gains or losses arises. Employee share based payments Recognition, measurement and disclosures relating to employee stock compensation is done in accordance with the guidance note on accounting for Employee Share-based Payments (the Guidance Note), issued by the ICAI. The Company uses intrinsic value method for the purposes of measurement of compensation cost and the fair value method for the purposes of additional disclosures in the nancial statements. An independent valuer determines the intrinsic value of the underlying shares as on the date of the grant and compensation expenses, where applicable, are recognized as deferred employee stock compensation and is charged to statement of prot and loss using the straight line method over the vesting period. p. Leases Operating leases: Where the lessor effectively retains all risk and benets of ownership of the leased items, such leases are classied as operating lease. Operating lease payments are recognized as an expense in the statement of prot and loss on a straight line basis. Finance lease: All leases other than operating leases are classied as a nance lease and are capitalized as xed assets at the present value of minimum lease rentals with corresponding amount shown as lease liability. The principal component in the lease rentals is adjusted against the lease obligation and the nance charges are charged to statement of prot and loss as they arise. q. Provisions and contingent liabilities A provision is recognised when the Company has a present obligation as a result of past event 3.
67
i.e., it is probable that an outow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reect the current best estimates. A disclosure of the contingent liability is made when there is a possible or a present obligation that may, but probably will not, require an outow of resources. Going concern The accompanying nancial statements of the Company for the nancial year ended 31 March 2012 have been prepared on the assumption of the Company will be able to continue as a going concern in the foreseeable future. As at 31 March 2012, the net-worth of the Company is eroded in entirety due to exceptional losses, as further elaborated in note26, aggregating to `.3,975,185,629. In-spite of the adverse nancial, operating and other circumstances and conditions, management of the Company is condent of the Companys ability to continue as a going concern for the following reasons: In-spite of severe burden on onward lending, management complied with its debt obligation till 31 January 2012 and has repaid long term debts aggregating to `.5,552,456,506 during the year. In March 2012, the empowered group of Corporate Debt Restructuring Cell has admitted the Companys application for debt restructuring. Among the other things the proposal submitted includes conversion of long debts aggregating to `.5,000,000,000 into compulsorily convertible preference shares of BSFL. The management has initiated and is involved in active discussions with several private equity and other investors and is condent of raising equity. As a part of an overall and extensive restructuring plan, during 2011-12, management has taken serious measures to minimize operating costs by way of rightsizing its human resources, closing down non protable and non-operating units especially in the state of Andhra Pradesh. In view of the above discussions, management is not only condent of continuing as a going concern in the foreseeable future, but it is also condent that the business will sustain and grow, if not rapidly, but steadily in the years to come.
INNOVATION & IMPACT
CORPORATE OVERVIEW
68
BASIX
Notes to the nancial statements

(All amounts in `. unless otherwise stated) 4 Share capital 2012 Number Authorised share capital Equity shares of `.10 each Preference shares of `.10 each Issued, subscribed and fully paid up Equity shares of `.10 each Less: Amount recoverable from trust [Refer (d) below] a) Reconciliation of equity shares: Number Balance at the beginning of the year Add : Issued during the year Balance at the end of the year b) Shareholders holding more than 5% of the shares: Number Equity shares of `.10 each Bhartiya Samruddhi Investments and Consulting Services Limited Matrix Partners India Investments LLC Lok Capital LLC International Finance Corporation Small Industries Development Bank of India (SIDBI) Aavishkaar Goodwell India Micronance Development Company India Financial Inclusion Fund Hivos Triodos Fonds c) Rights, preferences, restrictions The Company has only one class of equity shares having a par value of `.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. d) Shares reserved for issue under options (Employee stock option schemes): In 2008, the Company, in consultation with the Board of Directors, instituted Basix Employee and Agent Stock Option Plan (Plan, or Scheme) to grant equity shares / stock options to eligible employees based on specic recommendations of Human Resources Development Committee (HRDC). Pursuant to the said objectives and in consultation with the Board, on 6 February 2010 the Company through a special resolution reserved 2,490,000 options under ESOP II scheme. In addition to the above, through a special resolution approved by the members on 19 July 2008 the Company allotted 1,000,000 equity shares of `.10 each at a premium of `.6 each to BSFL Employees Shareholding Trust (Trust) under ESOP I scheme. 353,332 (31 March 2011: 230,000) equity shares allotted to the trust and pending for grant to the eligible employees are adjusted against the outstanding equity shares of the Company. 11,641,973 5,710,033 2,562,089 2,548,306 2,465,400 2,205,212 1,976,262 1,972,334 34.65% 16.99% 7.63% 7.58% 7.34% 6.56% 5.88% 5.87% 11,641,973 5,710,033 2,562,089 2,548,306 2,465,400 2,205,212 1,976,262 1,972,334 34.65% 16.99% 7.63% 7.58% 7.34% 6.56% 5.88% 5.87% % of share holding Number % of share holding 33,600,008 33,600,008 Amounts 336,000,080 336,000,080 Number 33,243,131 356,877 33,600,008 Amounts 332,431,310 3,568,770 336,000,080 33,600,008 33,600,008 336,000,080 3,533,320 332,466,760 33,600,008 33,600,008 336,000,080 2,300,000 333,700,080 55,000,000 5,000,000 60,000,000 550,000,000 50,000,000 600,000,000 55,000,000 5,000,000 60,000,000 550,000,000 50,000,000 600,000,000 Amounts Number As at 31 March 2011 Amounts
BSFL Notes to the nancial statements

(All amounts in `. unless otherwise stated)
69
As at 31 March 2012 the stock option outstanding comprises of 116,667 (31 March 2011: 770,000) equity shares of `.10 each, fully paid-up at an exercise price of `.16 each to eligible employees, subject to progressive vesting over a period of thirty months from the date of the grant and exercise price being payable immediately and 203,000 (31 March 2011: 388,000) options issued at market value under ESOP I and ESOP II schemes respectively. Shares granted under ESOP I are accounted at intrinsic value of `.46 being the difference between the market value as estimated by the management and the grant price is accounted as stock option compensation over the vesting period, in accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by Institute of Chartered Accountants of India (ICAI). During the year ended 31 March 2012 the Company has amortized stock compensation expenses, in respect of compensation cost relating to the options granted in ESOP Plan I, amounting to `.5,329,873 (31 March 2011: `.16,941,973). The fair value of stock options, as on the date of grant, is estimated using the Black and Scholes method and based on the following assumptions: Risk free interest rate Expected life Expected volatility Expected dividend yield The exercise price and remaining contractual life of the ESOP Plans are as follows: 31 March 2012 Plan 1 Option Exercise price Weighted average remaining contractual life (in years) Plan 2 Option Exercise price Weighted average remaining contractual life (in years) 108 0.8 31 March 2012 Deferred employee stock compensation opening balance Adjustment: Reversal of accrued employee stock compensation Less: Deferred employee stock compensation amortized Deferred employee stock compensation closing balance Reconciliation of stock options: Particulars Outstanding as at 1 April 2010 Granted Forfeited Outstanding as at 31 March 2011 Exercised and vested Adjusted options Forfeited Outstanding as at 31 March 2012 Weighted average exercise price is `.16 in case of ESOP I and `.108 in case of ESOP II. ESOP - I 770,000 770,000 530,001 25,000 148,332 116,667 ESOP - II 388,000 388,000 185,000 203,000 10,374,234 (4,903,288) 5,470,946 5,329,873 141,073 108 1.7 31 March 2011 27,316,207 27,316,207 16,941,973 10,374,234 16 0.1 16 0.8 31 March 2011 6.56% 30 months 0% 0%
Effect of the employee share-based payment plans on the Prot and Loss Account and on the nancial position:
INNOVATION & IMPACT
ESOP Plan I
CORPORATE OVERVIEW
70
BASIX

(All amounts in `. unless otherwise stated) As at 31 March 5 Reserves and surplus Securities premium reserve Balance at the beginning of the year Add : Additions during the year [Refer (a) below] Less : Amount recoverable from trust [Refer note 4 (d) above] Balance at the end of the year Shares options outstanding account Balance at the beginning of the year Add : Additions during the year Less : Transferred to securities premium reserve Balance at the end of the year General reserve Balance as per last balance sheet Statutory reserve [Refer (b) below] Balance at the beginning of the year Add : Additions during the year Balance at the end of the year Surplus in the statement of prot and loss Balance at the beginning of the year Add : Prot / (loss) for the year Less : Transferred to statutory reserve Add: Excess provision for dividend including dividend distribution tax, written back Balance at the end of the year Addition to securities premium reserve: As of 31 March 2012, 530,001 stock options (31 March 2011: Nil) issued out of ESOP I plan are unconditionally vested. Consequently, the amortized cost forming part of share options outstanding account amounting to `.24,380,046 (31 March 2011: Nil) is transferred to securities premium reserve. Statutory reserve In accordance with the provision of Section 45 IC of the RBI Act, 1934 the Company being a NBFC is required to transfer at least 20% of net prot after tax for the year to a statutory reserve. As the Company has reported net loss during the year ended 31 March 2012, no amounts were transferred to the statutory reserve. 330,035,441 (5,840,863,970) (5,510,828,529) (4,067,394,851) a) 245,552,209 101,966,423 20,393,285 2,910,094 330,035,441 1,768,879,238 113,556,172 113,556,172 93,162,887 20,393,285 113,556,172 76,247,000 76,247,000 76,247,000 76,247,000 24,275,766 5,329,873 24,380,046 5,225,593 7,333,793 16,941,973 24,275,766 2012 2011
1,226,144,859 24,380,046 1,250,524,905 2,119,992 1,248,404,913
1,174,713,637 51,431,222 1,226,144,859 1,380,000 1,224,764,859
b)
6 Secured
Long term borrowings
As at 31 March 2012 Non-current Current
As at 31 March 2011 Non-current Current
Term loans From banks From other parties Long term maturities of nance lease obligations [Refer (c) below] 1,041,549,733 246,000,000 1,287,549,733 3,920,729,715 858,133,605 4,778,863,320 4,139,165,656 1,056,087,912 34,190,261 5,229,443,829 4,940,329,334 1,371,793,956 3,617,775 6,315,741,065

(All amounts in `. unless otherwise stated) 6 Long term borrowings Unsecured Debentures [Refer (a) below] Term loans From other parties [Refer (a) below] 750,000,000 2,037,549,733 a) Details of the unsecured loans 4,778,863,320 4,975,786 754,975,786 5,984,419,615 750,000,000 750,000,000 As at 31 March 2012 Non-current Current As at 31 March 2011 Non-current
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Current 6,516,916 6,516,916 6,322,257,981
b)
Details of security for each type of borrowings including terms of repayment Term loans availed from the nancial institutions and banks are fully secured by way of hypothecation of loans to rural producers and by way of the pledge of xed deposits in respect of certain loans as detailed in Note 37. Term loans are repayable on monthly and quarterly basis depending on the respective loan arrangements as detailed in Note 37.
c)
Disclosure in respect of nance lease In 2010, the Company entered into a non-cancelable lease arrangement in respect of ofce premises including furniture and xture. Lease arrangement for furniture and xture was considered as a nance lease, accordingly at the inception of the arrangement, underlying assets were recognised at their fair values together with corresponding liabilities. Effective, 31 March 2012, the lease arrangement was terminated and accordingly, such assets and corresponding liabilities as on above date are reversed.
d) Particulars of overdue of loans The details of overdue installments of principal and interest as of 31 March 2012 are mentioned hereunder. Name of the Bank/ nancial institution Andhra Bank Andhra Bank Andhra Bank Axis Bank Axis Bank Axis Bank Central Bank of India Central Bank of India Corporation Bank Corporation Bank Corporation Bank Corporation Bank Corporation Bank Citibank HDFC Bank HDFC Bank HSBC Limited HSBC Limited HSBC Limited Principal 3,305,702 4,166,667 4,166,667 27,777,778 25,555,556 44,285,714 15,625,000 15,625,000 4,328,838 5,556,000 41,700,000 5,556,000 41,700,000 73,812,137 25,000,000 12,500,000 12,500,000 25,000,000 No. of days overdue 61 32 1 63 48 20 70 8 72 41 14 12 4 65 10 61 41 10 Interest 2,003,792 2,218,484 6,980,311 7,728,201 3,416,096 3,782,106 7,892,686 8,738,331 2,510,959 3,905,733 4,324,204 1,800,000 1,046,664 No. of days overdue 32 1 32 1 32 1 32 1 1 32 1 1 31 Total 3,305,702 6,170,459 6,385,151 34,758,089 33,283,757 44,285,714 19,041,096 19,407,106 12,221,524 14,294,331 41,700,000 5,556,000 41,700,000 2,510,959 77,717,870 29,324,204 14,300,000 13,546,664 25,000,000
INNOVATION & IMPACT
Unsecured loans (including current maturities) represents loan taken from Development International Desjardins, Canada amounting to `.Nil (31 March 2011: `.11,492,702) and 750, 13.5% Unsecured subordinated redeemable non convertible debentures of `.1,000,000 each fully paid-up amounting to `.750,000,000 (31 March 2011: `.750,000,000) issued to Small Industries Development Bank of India (SIDBI). The debentures are issued on 23 September 2010, for tenure of 96 months and will be redeemed through a bullet repayment at maturity.
CORPORATE OVERVIEW
72
BASIX

(All amounts in `. unless otherwise stated) Name of the Bank/ nancial institution IDBI Bank IDBI Bank Indian Overseas Bank Indian Overseas Bank IndusInd Bank IndusInd Bank Karnataka Bank Karnataka Bank Punjab National Bank Punjab National Bank Rabo India Finance Limited SIDBI South Indian Bank South Indian Bank Standard Chartered Bank Standard Chartered Bank Syndicate Bank Syndicate Bank YES Bank YES Bank Principal 75,000,000 41,700,000 41,666,670 33,213,673 33,333,333 18,998,145 39,090,900 36,363,636 18,558,781 29,486,912 41,229,163 12,500,000 15,000,000 15,000,000 62,213,925 71,428,571 No. of days overdue 1 15 9 60 31 67 13 9 16 22 39 1 15 29 37 4 Interest 3,365,753 3,726,370 5,496,285 6,085,172 791,271 876,050 1,414,086 1,565,595 4,154,321 4,599,427 977,773 4,291,085 4,750,844 416,096 184,760 2,876,712 3,184,932 1,616,438 1,789,628 No. of days overdue 32 1 32 1 32 1 32 1 32 1 1 32 1 1 31 32 1 32 1 Total 78,365,753 3,726,370 47,196,285 47,751,842 34,004,944 34,209,383 20,412,231 1,565,595 43,245,221 40,963,063 19,536,554 29,486,912 45,520,248 17,250,844 15,416,096 15,184,760 65,090,637 3,184,932 73,045,009 1,789,628
As at 31 March 2012 7 Deferred tax asset, net Deferred tax liabilities On account of depreciation Deferred tax assets On account of provision for loan losses and derecognition of income Others Deferred tax asset, net 80,178,066 10,520,984 90,699,050 64,694,229 26,004,821 26,004,821 31 March 2011
In the absence of virtual certainity, deferred tax asset is written down to ` Nil during the year ended 31 March 2012.
As at 31 March 2012 8 Other long term liabilities Deposits 5,170,000 5,170,000 31 March 2011

(All amounts in `. unless otherwise stated) As at 31 March 2012 9 Short term provisions Provision for curtailment [Refer note (a)] Contingent tax liability [Refer note (b)] Provisions for gratity [Refer note (c)] Provisions for leave benets Contingent provisions against standard assets [Refer note (b)] Other short term liabilites [Refer note 6(c)] 120,947,409 10,913,171 334,003 13,513,797 3,816,072 20,382,033 169,906,485 a) Severance pay
73
31 March 2011 7,581,568 7,382,037 24,290,979 28,900,470 68,155,054
As a part of overall restructuring of the organisation, the HRDC in consultation with the Board of Directors have framed scheme for right sizing of its manpower and accordingly accrued short term provision for severance cost aggregating to `.120,947,409 (31 March 2011: `.Nil). b) Reconciliation of provisions Contingent tax liability as of 31 March 2012 Opening balance Additions during the year Utilization / reversal during the year Closing balance c) Employee benets The Company has taken a group gratuity policy for its employees with the Life Insurance Corporation of India (LIC). Under this policy the eligible employees are entitled to receive gratuity payments upon their resignation or death in lumpsum after deduction of necessary taxes upto a maxmium limit of `.1,000,000. The following table set out the status of the gratuity plan as required under Accounting Standard (AS) - 15 - Employee Benets and the reconciliation of opening and closing balances of the present value and dened benet obligation. As at 31 March 2012 Change in projected benet obligation Projected benet obligation at the beginning of the year Service cost Interest cost Past service cost Actuarial (gain) / loss Benets paid Projected benet obligation at the end of the year Change in plan assets Fair value of plan assets at the beginning of the year Expected return on plan assets Actuarial gain / (loss) Employer contributions Benets paid Experience adjustment Fair value of plan assets at the end of the year 9,234,322 916,241 671,752 8,454,713 2,281,086 779,244 17,775,186 9,656,268 883,549 (883,549) 421,946 9,234,322 16,616,359 4,108,999 1,329,309 (1,664,392) (2,281,086) 18,109,189 10,844,300 4,942,576 867,544 692,025 (308,140) (421,946) 16,616,359 2011 7,581,568 3,331,603 10,913,171 2011 8,835,745 1,254,177 7,581,568 Contingent provisions against standard assets as of 31 March 2012 28,900,470 25,084,398 3,816,072 2011 28,900,470 28,900,470
INNOVATION & IMPACT
CORPORATE OVERVIEW
74
BASIX

(All amounts in `. unless otherwise stated) As at 31 March 2012 Reconciliation of present value of obligation on the fair value of plan assets Present value of projected benet obligation at the end of the year Funded status of the plans Asset recognised in the balance sheet 18,109,189 334,003 16,616,359 7,382,037 17,775,186 9,234,322 2011
For the year ended 31 March 2012 Components of net gratuity costs are Service cost Interest cost Expected returns on plan assets Past service cost Recognized net actuarial (gain)/ loss Net gratuity costs Assumptions used Discount rate Long-term rate of compensation increase Rate of return on plan assets Withdrawal rate up to 30 years from 31 to 44 years above 44 years 33% 13.7% 0.6% As at 31 March 2012 10 Trade payables Payable to livelihood service providers Payable to employees 10,145,833 42,296,107 52,441,940 30,119,887 82,140,919 112,260,806 2011 19% 12% 3% 8% 7.5% 9.15% 8% 5.0% 9.15% 4,108,999 1,329,309 (916,241) (2,336,144) 2,185,923 4,942,576 867,544 (883,549) 692,025 575,409 6,194,005 31 March 2011
There are no micro and small enterprises, to whom the Company owes dues, as at the reporting date. The micro and small enterprises have been identied by the management on the basis of information available with the Company and have been relied upon by the auditors.
11 Other current liabilities Current maturities of long term debt Current maturities of nance lease obligations Interest accrued but not due on borrowings Interest accrued and due on borrowings Income received in advance Statutory liabilities Cash security Advance received towards consultancy projects Other payables
4,778,863,320 12,572,827 108,510,165 31,536,448 23,618,772 32,207,420 29,524,777
6,318,640,206 3,617,775 37,069,922 83,016,359 16,903,648 397,740,006 12,634,305
BSFL
75

(All amounts in `. unless otherwise stated) As at 31 March 2012 - payables against assigned loans - Security against assigned loans - others [Refer (a) below] 58,864,307 5,075,698,036 a) 2011 156,993,760 123,962,100 70,859,452 7,221,437,533
Includes payable towards premium collected amounting to `.24,413,666 (31 March 2011: `.26,711,266), insurance claims to be settled amounting to `.15,794,038 (31 March 2011: `.27,903,343) and other payables for expenses and services amounting to `.18,656,603 (31 March 2011:`.16,244,843)
12
Tangible assets Buildings Gross block Balance as at 1 April 2010 Additions Disposals Balance as at 31 March 2011 Additions Disposals Adjustment [Refer note 6(c) above] Balance as at 31 March 2012 Accumulated depreciation Up to 1 April 2010 Depreciation charge Reversal on disposal of assets Up to 31 March 2011 Depreciation charge Reversal on disposal of assets Adjustment [Refer note 6(c) above] Up to 31 March 2012 Impairment loss Up to 31 March 2011 Impairment charge Up to 31 March 2012 Net block Balance as at 31 March 2011 Balance as at 31 March 2012 6,661,210 6,348,123 55,051,672 5,563,004 45,348,223 93,484,102 77,097,393 200,545,207 113,211,579 22,990,820 1,212,239 12,625,251 12,625,251 18,318,859 18,318,859 30,944,110 30,944,110 144,912 112,778 257,690 113,087 370,777 11,484,899 12,492,454 23,977,353 8,229,487 1,102,035 11,618,571 19,486,234 8,480,065 5,408,840 20,803 13,868,102 4,353,513 1,111,687 17,109,928 94,555 94,555 30,328,425 21,754,744 211,100 51,872,069 24,128,203 171,268 75,829,004 50,438,301 39,768,816 231,903 89,975,214 36,918,845 2,384,990 11,618,571 112,890,498 6,918,900 6,918,900 200,000 6,718,900 66,290,904 12,742,364 4,243 79,029,025 2,198,544 2,888,080 40,665,000 37,674,489 32,484,229 26,778,106 46,010 59,216,325 3,457,998 92,397,248 53,366,723 407,800 7,973,590 403,364 198,091,281 92,887,193 458,053 290,520,421 14,140,208 6,949,442 40,665,000 257,046,187 Furniture Ofce and xtures equipment Vehicles Computers Total
- 145,356,171 -
2,661,280 1,306,794
58,419,607 1,306,794 152,926,397
a)
Assets acquired under lease The details of gross block, depreciation and net block of furniture and xtures includes assets taken on lease, are as follows: Gross block of `.Nil (31 March 2011 - `.40,665,000) Depreciation charge of `.5,809,286 (31 March 2011 - `.5,809,286) Accumulated depreciation of `.Nil (31 March 2011 - `.5,809,286) Net block of `.Nil (31 March 2011 - `.34,855,714)
INNOVATION & IMPACT
CORPORATE OVERVIEW
76
BASIX

(All amounts in `. unless otherwise stated) 13 Intangible assets Goodwill Gross block Balance as at 1 April 2010 Additions Balance as at 31 March 2011 Additions Balance as at 31 March 2012 Accumulated amortisation Up to 1 April 2010 Amortisation charge Up to 31 March 2011 Amortisation charge Up to 31 March 2012 Net block Balance as at 31 March 2011 Balance as at 31 March 2012 Computer Software 33,901,174 22,694,759 56,595,933 1,399,096 57,995,029 5,683,628 7,375,635 13,059,263 9,000,712 22,059,975 43,536,670 35,935,054 Total
10,000,000 10,000,000 10,000,000 7,000,000 1,000,000 8,000,000 1,000,000 9,000,000 2,000,000 1,000,000
43,901,174 22,694,759 66,595,933 1,399,096 67,995,029 12,683,628 8,375,635 21,059,263 10,000,712 31,059,975 45,536,670 36,935,054
As at 31 March 2012 14 Non-current investments (Valued at cost unless stated otherwise) Investments in equity instruments 200,000 (31 March 2011: 200,000) equity shares of `.10 each fully paid in Alpha Micro Finance Consultants Private Limited Aggregate amount of unquoted investments 2,000,000 2,000,000 2,000,000 2,000,000 31 March 2011
As at 31 March 2012 Non-current 15 Loans to rural producers Secured, considered good Unsecured, considered good Unsecured, considered doubtful Less: Assigned portfolio [refer (a) below] Less: Provision for loan assets 1,215,550 92,359,056 1,214,501 94,789,107 1,214,501 93,574,606 30,991,870 2,375,712,637 417,404,892 2,824,109,399 417,404,892 2,406,704,507 Current
As at 31 March 2011 Non-current 48,078,140 651,220,245 5,859,444 705,157,829 232,085 5,859,444 699,066,300 Current 473,623,966 11,173,151,952 136,265,900 11,783,041,818 592,737,181 136,265,900 11,054,038,737
As at 31 March a) Details of the assigned portfolio Loans to rural producers de-recognized Loans to rural producers assigned during the year Income from securitization recognized during the year 2012 31,694,402 2011 592,969,266 1,111,513,088 180,310,688

(All amounts in `. unless otherwise stated) As at 31 March 2012 16 Loans and advances Unsecured, considered good Deposits with public nancial institutions** Security deposits Advance tax, net Loans and advances to related parties Prepaid expenses Other loans and advances [Refer (a) below] 9,802,985 9,802,985 a) 37,601,215 53,600,036 7,469,216 15,736,154 27,843,588 142,250,209 175,101,215 20,264,071 195,365,286 Non-current Current As at 31 March 2011 Non-current
77
Current 37,500,000 5,000,000 40,608,064 2,649,762 21,606,179 32,877,181 140,241,186
** represents deposits made as margin money towards borrowings made. Includes advance premium paid amounting to `.13,481,077 (31 March 2011: 12,339,384) to insurance company and advances for expenses and services amounting to `.14,362,511 (31 March 2011: 20,537,797)
As at 31 March 17 Other non-current assets Non-current bank balances (Refer note 20) 2012 126,585,480 126,585,480 2011 413,950,397 413,950,397
As at 31 March 2012 18 Other current assets Unsecured, considered good Interest earned on loans to rural producers Interest earned but not due on xed deposits Unbilled revenue 53,102,977 17,454,235 17,803,721 88,360,933 Unsecured, considered doubtful Other receivables 28,788,439 28,788,439 Less: Allowances for doubtful advances Total 28,788,439 88,360,933 10,311,913 10,311,913 10,311,913 623,640,377 580,699,056 42,941,321 623,640,377 2011
INNOVATION & IMPACT
CORPORATE OVERVIEW
78
BASIX

(All amounts in `. unless otherwise stated) As at 31 March 2012 19 Trade receivables Unsecured, considered good Outstanding for more than six months Other debts Unsecured, considered doubtful Outstanding for more than six months Other debts Less: Provision for doubtful receivables Total 2011
55,334,843 39,290,569 94,625,412 20,546,599 292,976 20,839,575 20,839,575 94,625,412 As at 31 March 2012 Current Non- current
11,480,266 104,502,066 115,982,332 1,102,694 38,374,336 39,477,030 39,477,030 115,982,332
As at 31 March 2011 Current Non-current
20
Cash and cash equivalents Balances with banks - in current accounts - in deposit account Cash on hand Other bank balances Bank deposits [refer (a) below] Total 491,787,338 126,585,480 126,585,480 126,585,480 1,931,971,685 413,950,397 413,950,397 413,950,397 254,673,751 233,192,475 3,921,112 491,787,338 1,695,843,377 228,656,855 7,471,453 1,931,971,685 -
a)
Represents margin money towards guarantees issued by banks and cash securities against borrowings with a original maturity period of more than 12 months.
For the year ended 31 March 2012 21 I Revenue from operations Interest income Interest on loans to rural producers Interest on xed deposits Other nancial services Loan processing and service fee Income from securitization Micro insurance agency services Sale of services Agricultural, business and institutional development services Income from customer service centres Other consultancy services Total revenue from operations (I+II+III) 31 March 2011
563,108,404 48,838,126 611,946,530 11,887,040 31,694,402 123,533,676 85,684,152 46,475,533 2,221,823 134,381,508 913,443,156
2,902,001,495 80,546,010 2,982,547,505 580,296,751 180,310,688 215,708,883 272,677,221 2,926,127 465,433 276,068,781 4,234,932,608
II
III

(All amounts in `. unless otherwise stated) For the year ended 31 March 2012 22 Other income Dividend income from current investments Gain on sale of investments Recoveries from loans written off Provision no longer required, written back Miscellaneous income 40,193,843 1,243,577 10,777,182 35,081,055 87,295,657
79
31 March 2011 3,619,726 33,298,495 8,442,521 15,463,967 60,824,709
23
Employee benet expense Salaries, wages and bonus Contribution to provident and other funds Employee stock option compensation Staff welfare expenses 518,704,077 45,731,152 5,329,873 24,510,856 594,275,958 679,524,878 37,707,422 16,941,973 26,235,107 760,409,380
24
Finance costs Interest expenses Other borrowing costs 1,219,718,493 15,052,586 1,234,771,079 1,505,451,542 55,919,922 1,561,371,464
25
Other expenses Livelihood service advisor charges Travelling and conveyance Printing and stationery expenses Power and fuel Rent Repairs and maintenance Legal and professional charges Insurance Rates and taxes Communication expenses Training and recruitment expenses Auditors remuneration - As auditors - Out of pocket expenses Loss assets written off Provision for trade receivables Provision for doubtful advances Miscellaneous expenses 2,500,000 24,420 19,899,401 18,476,526 19,476,822 671,015,077 4,000,000 26,445 126,784,065 24,185,642 10,020,858 33,436,723 1,113,807,321 202,700,986 150,974,376 17,738,299 8,270,250 56,314,495 36,418,347 89,337,456 4,624,861 3,910,358 34,093,156 6,255,324 381,797,924 200,794,761 10,725,844 56,686,771 50,052,721 73,348,956 1,397,944 7,979,703 51,516,584 28,856,402 52,195,978
INNOVATION & IMPACT
CORPORATE OVERVIEW
80
BASIX

(All amounts in `. unless otherwise stated) 26 Exceptional items Recent developments including restriction imposed through a state legislation The Andhra Pradesh Micro Finance Institution (Regulation of Money Lending) Act, 2011(Act 1 of 2011), has caused severe and irreparable damage to the loan portfolios in the State of Andhra Pradesh and neighbouring States. As a result of such developments, loan recoveries in the State of Andhra Pradesh declined to less than ten percent as against over 95%, and virtually the entire loan portfolio in the State of Andhra Pradesh is now classied as non-performing assets, leaving the Company with no option other than to write-off such loan portfolio as loss assets. Further, the Company has incurred signicant cost to restructure the entire business which include retrenchment of employees, closing of units etc. Write-off of non-performing loss assets including other service charges receivable and other one-time restructuring expenditure incurred by the Company are classied and disclosed as exceptional items in the accompanying nancial statements. For the year ended Details of the exceptional items Loss assets written off Lease termination charges Severence pay Impairment charge [Refer note 12] 31 March 2012 3,787,766,674 29,099,070 127,375,775 30,944,110 3,975,185,629 31 March 2011 496,797,546 496,797,546
For the year ended 27 a) Earning per share Computation of prot for computing Net prot / (loss) for the year Basic earnings per share Diluted earnings per share b) Computation of number of shares for Reconciliation of equity shares used in computation of basic and diluted earnings per equity share Weighted average number of shares considered for computation of basic earnings per equity share Add: Effect of potential dilutive stock options* Weighted average number of shares considered for computation of diluted earnings per equity share *In view of losses incurred during the year, potential equity shares under the stock options granted are anti-dilutive in nature. c) Nominal value of shares 10 10 33,268,318 33,268,318 33,342,631 553,180 33,895,811 (5,840,863,970) (175.57) (175.57) 101,966,423 3.06 3.01 31 March 2012 31 March 2011

(All amounts in `. unless otherwise stated) 28 Related parties a) Names of related parties Relationship Entity having signicant inuence over the Company Companies in which directors of the Company are able to exercise control or have signicant inuence
81
Bhartiya Samruddhi Investments and Consulting Services Limited (BASICS Limited)
Indian Grameen Services Basix Consulting and Training Services Limited Basix Sub - K I Transactions Limited Basix Krishi Samruddhi Limited Ctran Consulting Limited
Key management personnel (KMP)
Manmath Kumar Dalai (from 18 May 2011) Vijay Mahajan S Ramachandran (from 29 July 2011 to 6 December 2011) Sajeev Viswanadhan (up to 29 April 2011)
Relatives of KMP
Mrs. Savita Mahajan
For the year ended b) Transactions with related parties Entity having signicant inuence over the Company BASICS Limited Management consultancy fees Consultancy charges for development of new product lines Shared service arrangements Brand usage charges Advance paid for expenses Reimbursement of expense Dividends paid Companies in which directors of the Company are able to exercise control or have signicant inuence Indian Grameen Services Rent Shared services arrangements Basix Consulting and Training Services Limited Consultancy fees Shared service arrangements Software license fee Basix Sub - K I Transactions Limited Rent income Shared services arrangements Sale of assets Advances (882,580) (234,117) 268,500 1,750,000 584,513 53,561 32,074 1,182,502 2,814,500 545,026 3,548,169 351,992 10,000,000 6,952,470 667,971 10,000,000 1,487,420 (1,000,000) 2,507,123 6,300,000 10,249,538 2,439,930 31 March 2012 31 March 2011
INNOVATION & IMPACT
Basix Academy for Building Lifelong Employability
CORPORATE OVERVIEW
82
BASIX

(All amounts in `. unless otherwise stated) For the year ended b) Transactions with related parties Basix Krishi Samruddhi Limited Consultancy fees Shared services arrangements Advance for services Basix Academy for Building Lifelong Employability Consultancy fees Shared services arrangements Key management personnel (KMP) Managerial remuneration Mr. Manmath Kumar Dalai Mr. Sajeev Viswanathan Mr. S Ramachandran Dividend paid Mr. Vijay Mahajan Mr. Sajeev Viswanathan Relatives of KMP Dividends paid to Mrs Savita Mahajan 1,000 Note: Out of the total 300,000 and 50,000 employee stock options granted to Sajeev Viswanathan and S Ramachandran during 2009-10, 200,000 and 33,333 options are unconditionally vested during the year respectively. 2,300 300,000 3,298,767 396,000 1,551,669 8,830,800 3,946,176 60,780 7,500,000 (168,882) 1,750,000 31 March 2012 31 March 2011
c)
Balances with related parties As at 31 March Balance (due to) / due from BASICS Limited Indian Grameen Services Basix Consulting and Training Services Limited Basix Sub - K I Transactions Limited Basix Krishi Samruddhi Limited Basix Academy for Building Lifelong Employability 2012 2,487,420 113,916 130,923 2,818,075 1,918,882 (2,894,218) 2011 (247,895) 2,513,265 136,497 -
29
Change in estimates During the year, the Company has revised its estimate in respect of identication of loss assets in the case of loan portfolios except in the State of Andhra Pradesh. Had the Company followed its earlier estimation policy, the provision against non-performing assets including loss assets written-off for the year ended 31 March 2012 would have been higher by `.481,385,697. Further, during the year ended 31 March 2012 the Company based on the credit risk associated with certain sub-standard loan portfolios has provided for provisions aggregating to `.263,328,320 in excess of the provision policy adopted by the Company for sub-standard loan portfolios.
BSFL
(All amounts in ` unless otherwise stated)
30
Segment reporting
Based on analysis of the Companys business model and considering the management structure, nancial reporting and differential risk and return of segments, the management has classied its business operations into the following operating and reportable segments viz., Micro Credit, Micro Insurance Agency Related Services, Agriculture, business and institutional development services, Customer Service Centers. Segments revenue, expense, assets and liabilities include amount of such items that can be allocated to the segment on a reasonable basis. Revenues, expenses, assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under others. The Company is primarily operating in India which is considered as a single geographical segment and hence no separate nancial disclosure provided in respect of its single geographical segment.
Business segment
For the year ended 31 March 2012 Micro credit 607,933,423 (5,678,651,852) 76,792,680 30,199,071 123,533,676 85,684,152 46,475,533 5,018,217 Micro insurance agency services Agricultural, business and institutional development services Customer service centres Others 137,112,029 132,929,875 Total 1,000,738,813 (5,433,712,008) 339,126,129 (5,772,838,138) 68,025,832 (5,840,863,970) 2,774,436,279 7,019,949,593 4,207,504 50,162,533 4,119,751,473 19,899,401 40,207,704 108,106,489 38,710,250 54,781,608 27,520,975 8,625,910 8,064,523 17,454,235 2,705,890 19,636,611 96,875,014 2,954,778,611 651,059,492 7,126,388,522 214,377,672 15,539,304 77,863,667 4,236,525,888
Particulars
External sales
Segment result
Unallocated corporate expenses
Net prot before tax
Income taxes (including deferred taxes)
Net prot
Other information
Segment assets
Unallocated corporate assets
Segment liabilities
Unallocated corporate liabilities
Capital expenditure
Depreciation, amortization and impairment
Non cash expenses other than depreciation, amortization and impairment 3,699,249,151 444,408,880
Business segment 215,708,883 165,160,972 273,142,654 128,333,020 2,926,127 (7,054,081) 104,730,502 104,730,502 4,295,757,317 835,579,293 657,853,573
External sales
Segment result
83
Unallocated corporate expenses
INNOVATION & IMPACT
CORPORATE OVERVIEW
84
BASIX
177,725,720
101,966,423
75,759,297
2,058,432,849
13,430,419,477
13,198,959,909
187,313,099
48,144,452
837,360,005
115,981,873
As at 31 March 2012 31 Contingent liabilities and commitments Contingent obligations on account of loan portfolio assigned to banks and nancial institutions Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 32 Amounts remitted during the year in foreign currency on accounts of dividends Amount remitted Number of nonresident shareholders Number of shares held by non-resident shareholders Year to which the dividends realtes 33 Expenditure in foreign currency on accrual basis Traveling expenses Staff training and reimbursement of expenses 2011
Total
261,304,838
42,941,321
Others
52,418,660
42,070,460
2,110,400
1,664,218
37,784,100
20,435,182 74,461,886
Customer service centres
4,491,773 -
Agricultural, business and institutional development services
- 12,235,068 8 8 17,798,298 17,798,298
143,885,675
54,614,609
Micro insurance agency services
24,185,642
2010-11
2009-10
588,709 56,000
672,644 221,126
13,205,808,381
13,069,883,414
Micro credit
771,103,903
43,128,031
43,652,679
644,709 34 Disclosures in respect of noncancellable operating leases Payable not later than 1 year Payable later than 1 year not later than ve years Payable later than ve years Total
893,770
Income taxes (including deferred taxes)
Unallocated corporate liabilities
11,189,918 48,516,611 13,367,454 73,073,983
Non cash expenses other than depreciation and amortization
Depreciation and amortization
Unallocated corporate assets
Particulars
Capital expenditure
Segment liabilities
Other information
Segment assets
Operating prot
Net prot
BSFL
(All amounts in `. unless otherwise stated) 35 Additional disclosures pursuant to the Reserve Bank Directions vide circular no. RBI/2010-11/18, DNBS (PD).CC.No.178/03.02.001/2010-11 dated 1 July 2010 (i) Capital to Risk-Assets ratio (CRAR) As at 31 March Particulars 2012 2011 CRAR (%) -132.03% 21.63% CRAR - Tier I capital (%) -132.03% 15.60% CRAR - Tier II capital (%) 6.03% As at 31 March 2012 2011
(ii) Exposure to real estate sector Particulars Direct Exposure A. Residential mortgages Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented B. Commercial real estate Lending secured by mortgages on commercial real estate (including non fund based limits). C. Investments in mortgage backed securities and other securitized exposures in residential and commercial real estate Indirect Exposure Fund and non fund based exposures on national housing bank and housing nance companies.
3 to 6 months 1,026,333,591 -
6 months to 1 year 1,364,614,516 -
1 to 3 years 1,275,049,733 -
3 to 5 years 12,500,000 -
5 years and above 750,000,000 -
Total 6,066,413,053 750,000,000 -
345,051,295
232,891,494
93,758,810
1,030,297
2,918,898,506
3 to 6 months 1,620,378,523 3,258,458 -
6 months to 1 year 2,990,399,494 3,258,458 -
1 to 3 years 4,964,628,568 4,975,786 -
3 to 5 years 230,625,000 -
5 years and above 750,000,000 -
Total 11,507,376,858 761,492,702 156,993,760
(iii) Asset liability management As at 31 March 2012 Maturity with in 2 to 3 1 to 30 days 1 to 2 months months Liabilities Secured loans 1,347,305,755 464,643,711 575,965,747 Unsecured loans Payable against assigned loans Assets Loans to rural 1,827,350,796 238,002,318 180,813,496 producers As at 31 March 2011 2 to 3 1 to 30 days 1 to 2 months months Liabilities Secured loans 475,613,790 380,010,451 845,721,032 Unsecured loans Payable against 156,993,760 assigned loans Assets Loans to rural producers 3,394,217,413 1,262,185,357 1,075,876,325 2,588,097,478 2,869,928,064
85
697,479,060
6,260,360
1,186,324
11,895,230,381
INNOVATION & IMPACT
CORPORATE OVERVIEW
86
36
Loans and advances
Loan to rural producers portfolio has been classied in accordance with the directives issued by the RBI vide the Non-Banking Financial (Non-deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, as amended, read with accounting policy mentioned in paragraph 2(j) above. The necessary provisions as per RBI norms have been made. The details are as follows: Loan outstanding (without provisioning) As at 31 March 2012 Amount Outstanding % 52.29 47.09 0.61 100.00 100 1,417,002 11,895,230,381 100 34,505 118,418,212 1.00 1,382,497 11,776,812,169 99 8 2,359,876 0.02 28,220 213,292,807 1.79 1,354,269 11,561,159,486 97.19 3,816,072 400,745,836 17,873,557 422,435,465 422,435,465 % Amount 1,526,428,652 1,374,596,297 17,873,557 2,918,898,506 2,918,898,506 No of accounts Amount Outstanding As at 31 March 2011 ** Upto 31 March 2012 Provision During the year Amount (25,084,398) 379,398,580 15,513,681 369,827,863 (118,418,212) 251,409,651 Upto 31 March 2011 Amount 28,900,470 21,347,256 2,359,876 52,607,602 118,418,212 171,025,814
Asset classication
Assets
No of accounts
Standard assets 1,714 -
358,401
Sub-standard assets
210,410
Doubtful assets
Sub-total
570,525
Loss assets
Total
570,525
** Amounts paid by the Company out of the obligation arised due to the assignment arrangement, up to 31 March 2011, amounting to `.118,418,212 is reclassied as loans to rural producers, pursuant to closing of the assignment arrangements during the year. Further, provision exisitng for doubtful recovery of such advances as of 31 March 2011 amounting to `. 118,418,212 is reclassied in the above mentioned provisions.
37 Outstanding balance as on 31 March 2012** 174,139,036 Interest rate as on 31 March 2012 (%)
Terms and conditions of term loans Repayment period including moratorium Type of security Specic rst charge created by hypothecating book debts pertaining to the extent of 100% of loan outstanding and pledge of xed deposit to extent of 5% of loan amount Specic rst charge created by hypothecating book debts pertaining to the extent of 110% of loan outstanding Specic rst charge created by hypothecating book debts pertaining to the extent of 110% of loan outstanding 13.25 Moratorium: 6 Month Repayable in: 24 Months Frequency : Quarterly installments of `.30,000,000 Specic rst charge created by hypothecating book debts pertaining to the extent of 110% of loan outstanding
S. No.
Name of bank/ nancial institution
BASIX
Andhra Bank
15.00 Repayable in: 5 years Frequencty: Monthly xed installment of `.4,166,666 14.40 Moratorium: 6 Month Repayable in: 24 Months Frequency : Quarterly installments of `.27,777,777 14.40 Moratorium: 6 Month Repayable in: 24 Months Frequency : Quarterly installments of `.25,555,555
Axis Bank
27,777,779
51,111,113
90,000,000
BSFL
37 Outstanding balance as on 31 March 2012** Repayment period including moratorium Type of security 416,666,667 13.25 Moratorium: 6 months Repayable in: 30 Months Frequency : Quarterly installments of `.83,333,333 12.50 Moratorium: 6 months Repayable in: 24 Months Frequency : Quarterly installments of `.14,285,714 15.00 Moratorium: 6 months Frequency : Quarterly installments of `.15,625,000 Moratorium: 3 months Frequency : Quarterly installments of `.15,625,000 13.00 One time payment on 25 May 2012 13.90 Moratorium: 1 year Frequency : Monthly installment of `.5,556,000 13.90 Moratorium: 1 year Frequency : Quarterly installment of `.41,700,000 13.90 Moratorium: 9 Months Frequency : Quarterly installment of `.41,700,000 10.50 Repayable in quarterly installments of `.25,000,000/- in 24 months 12.50 Repayable in quarterly installments of `.36,750,000/- in 24 months 12.50 Repayable in quarterly installments of `.119,500,000 in 24 months 11.75 Repayable in quarterly installments of `.12,500,000 in 36 months 11.65 Repayable in quarterly installments of `.12,500,000 in 36 months 10.50 Repayable in quarterly installments of `.25,000,000 in 36 months Interest rate as on 31 March 2012 (%)
Terms and conditions of term loans
S. No.
Specic rst charge created by hypothecating book debts to the extent of 105% of loan outstanding Exclusive hypothecation of book debts to the extent of 100% of loan outstanding Specic rst charge created by hypothecating book debts pertaining to the extent of 105% of loan outstanding
100,000,000
3 156,250,000 235,000,000 32,092,838
Central Bank of India
140,625,000
Citibank
Specic rst charge created by hypothecating book debts to the extent of 100% of loan outstanding Specic rst charge created by hypothecating book debts pertaining to Crop & Agri Allied loans to the extent of 100% of loan outstanding Specic rst charge created by hypothecating book debts pertaining to the extent of 105% of loan outstanding Specic rst charge created by hypothecating book debts pertaining to the extent of 105% of loan outstanding Specic rst charge created by hypothecating book debts to the extent of 110% of loan outstanding. Specic rst charge created by hypothecating book debts to the extent of 110% of loan outstanding. Specic rst charge created by hypothecating book debts to the extent of 110% of loan outstanding. Specic rst charge created by hypothecating book debts to the extent of 110% of loan outstanding. Specic rst charge created by hypothecating book debts to the extent of 110% of loan outstanding. Specic rst charge created by hypothecating book debts to the extent of 110% of loan outstanding.
Corporation Bank
333,200,000 374,900,000 25,000,000 73,500,000 312,812,137 37,500,000 37,500,000 125,000,000
HDFC Bank
HSBC Limited
87
INNOVATION & IMPACT
CORPORATE OVERVIEW
88
37 Outstanding balance as on 31 March 2012** Repayment period including moratorium Type of security 50,000,000 Interest rate as on 31 March 2012 (%)
S. No.
IDBI Bank
15.25 Moratorium: 8 months Repayable in quarterly Specic rst charge created by hypothecating book debts installment of `.25,000,000 pertaining to 50% Agri & Agri Allied and 50% NFS sector to the extent of 105% of loan outstanding 14.50 Moratorium: 9 months Repayable in quarterly Specic rst charge created by hypothecating book debts of `.50,000,000 pertaining to Farm and Non Farm sector to the extent of 105% of loan outstanding 15.00 Moratorium : 6 months, Repayable in quarterly installments of `.41,666,670 14.00 Moratorium : 6 months, Repayable in quarterly installments of `.41,700,000 15.50 Repayable in 18 monthly installment of `.33,333,333 12.00 Repayable in: 39 Months Frequency : quarterly installment of `.19,230,770 14.75 Repayable in quarterly installment of `.39,090,900 from the month of June 2010. 14.25 Repayable in quarterly installment of `.36,363,636 from the month of Dec 2010. Specic rst charge created by hypothecating book debts pertaining to to the extent of 105% of loan outstanding and pledge of xed deposit to extent of 5% of loan amount. Specic rst charge created by hypothecating book debts pertaining to to the extent of 100% of loan outstanding and pledge of xed deposit to extent of 5% of loan amount Specic rst charge created by hypothecating book debts pertaining to the extent of 105% of loan outstanding Specic rst charge created by hypothecating book debts pertaining to the extent of 105% of loan outstanding Specic rst charge created by hypothecating book debts pertaining to the extent of 100% of loan outstanding and pledge of xed deposit to extent of 5% of loan amount Specic rst charge created by hypothecating book debts pertaining to the extent of 100% of loan outstanding and pledge of xed deposit to extent of 5% of loan amount
250,000,000
Indian Overseas Bank
166,666,640
333,200,000
10 153,613,535
IndusInd Bank
66,547,007
11
Karnataka Bank
12
Punjab National Bank
156,363,620
BASIX
218,181,820
13
South Indian Bank
12,500,000
15.50 Moratorium: 3 Months Repayable in quarterly Specic rst charge created by hypothecating book debts installment of `.12,500,000 pertaining to Crop & Agri Allied loans to the extent of 105% of loan outstanding 14.40 Moratorium: 6 Months Repayable in quarterly Specic rst charge created by hypothecating book debts installment of `.41,667,000 pertaining to Crop & Allied loans to the extent of 105% of loan outstanding
374,561,163
BSFL
37 Outstanding balance as on 31 March 2012** Repayment period including moratorium Type of security 45,000,000 11.25 Repayable in 2 years. Frequency : quarterly installment of `.1,50,00,000 15.00 Moratorium: 15 Months Repayable in quarterly installment of `.62,500,000 14.75 Repayable in: 2 years Frequency : quarterly installment of `.71,428,571 13.00 Moratorium: 6 months Repayable in: 30 monthly installments of `.15,000,000 each and then 25 monthly installments of `.2,000,000 13.00 Moratorium: 3 months Repayable in: 30 12.75 monthly installments of `.15,000,000 each and then 25 monthly installments of `.2,000,000. 11.50 Moratorium: 6 months Repayable in: 30 monthly installments of `.52,500,000 each and then 25 monthly installments of `.7,000,000. Interest rate as on 31 March 2012 (%)
S. No.
14
Standard Chartered Bank 249,713,925
Specic rst charge created by hypothecating book debts pertaining to Non Farm Sector to the extent of 110% of loan outstanding Specic rst charge created by hypothecating book debts pertaining to to the extent of 110% of loan outstanding Specic rst charge created by hypothecating book debts pertaining to the extent of 110% of loan outstanding Specic rst charge created by hypothecating book debts pertaining to Non farm sector to the extent of 100% of loan outstanding and pledge of xed deposit receipts to the extent of 5% of loan amount The xed depsoit amount was adjusted against the overdue during the year. Specic rst charge created by hypothecating book debts to the extent of 100% of loan outstanding and pledge of xed deposit receipts to the extent of 5% of loan amount. The xed depsoit amount was adjusted against the overdue during the year.
15
Syndicate Bank
16 64,743,456
YES Bank
142,857,144
17
SIDBI
64,743,456 50,000,000
752,500,000
18
Rabo India Finance Limited
18,558,805
13.26 Repayable in: 2 years Freaquency : quarterly installment of `.31,250,000.
Specic rst charge created by hypothecating book debts pertaining to the extent of 105% of loan outstanding and pledge of xed deposit to extent of 5% of loan amount. The xed depsoit amount was adjusted against the overdue during the year.
19
Fullerton India Credit Company Limited 6,066,413,053
153,587,912
11.44 Moratorium: 9 months Frequency : Monthly installment of `.19,198,489
Specic rst charge created by hypothecating book debts pertaining to the extent of 105% of loan outstanding and pledge of xed deposit to extent of `.37,601,215
Total
89
**
Including current maturities of long term debt
INNOVATION & IMPACT
CORPORATE OVERVIEW
90
BASIX

(All amounts in `. unless otherwise stated) 38 Additional disclosures pursuant to the Reserve Bank Directions vide paragraph 13 of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (ReserveBank) Directions, 2007) Particulars Liabilities side : Loans and advances availed by the non-banking nancial company inclusive onterest accrued thereon but not paid: (a) Debentures Secured Unsecured (other than falling within the meaning of public deposits) (b) Deferred Credits (c) Term Loans, including interest accrued but not paid (d) Inter-corporate loans and borrowing (e) Commercial Paper (f) Other Loans (specify nature) Assets side : (2) Break up of Loans to rural producers: a) b) Secured Unsecured 32,207,420 2,886,691,086 6,174,923,218 1,081,454,933 750,000,000 As at 31 March 2012 Amount outstanding Amount overdue Assets side : (a) assets on hire (b) repossessed asset (iii) Other loans counting towards AFC activities (a) loans where assets have been repossessed (b) loans other than (a) above (4) Breakup of investments (long-term unquoted equity) Current Investments : 1. Quoted (i) Shares : (a) Equity (b) Preference (ii) Debentures and Bonds As at 31 March 2012 (iii) Units of mutual funds (iv) Government Securities (v) Others 2. (i) Unquoted Shares : As at 31 March 2012 -
(a) Equity (b) Preference (ii) Debentures and Bonds
(3) Break up of Leased Assets (i) Lease assets including lease rentals under sundry debtors: (a) nance lease (b) operating lease (ii) Stock on hire including hire charges under sundry debtors: -
(iii) Units of mutual funds (iv) Government Securities (v) Others Long Term investments : 1. (i) Quoted Shares :
(a) Equity (b) Preference

(All amounts in `. unless otherwise stated) As at 31 March 2012 Assets side : (a) Equity (b) Preference (ii) Debentures and Bonds
91
Assets side : (ii) Debentures and Bonds
As at 31 March 2012 2,000,000 As at 31 March 2012 2011
(iii) Units of mutual funds (iv) Government Securities (v) 2. (i) Others Unquoted Shares:
(iii) Units of mutual funds (iv) Government Securities (v) Others
(5). Borrower group-wise classication of assets nanced as in (2) and (3) Net of provision Category 1. Related parties (a) Subsidiaries (b) Companies in the same group (c) 2. other related parties Other than related parties Total 32,207,420 32,207,420 2,464,255,621 2,464,255,621 2,496,463,041 2,496,463,041 Secured Unsecured Total
(6). Investor group-wise classication of all investments (currents and long term) in shares and securities (both quoted and unquoted) Market value/ Book value Breakup or (net of fair value provisions) or NAV 2,000,000 2,000,000 2,000,000 2,000,000 As at 31 March 2012 (a) (b) (ii) (a) (b) (iii) 39 Related parties Other than related parties Net non-performing assets Related parties Other than related parties Assets acquired on satisfaction of debt Comparatives Previous year comparatives have been reclassied and regrouped wherever necessary, to conrm to current years presentation. For and on behalf of the Board of Directors of Bhartiya Samruddhi Finance Limited Sd/Vijay Mahajan Chairman Sd/Manmath Dalai Managing Director Sd/Srinivasa Raghavan Chief Financial Ofcer 973,850,461 -
Category
1. 2.
Related parties Other than related parties Total Other information
(7)
(i)
Gross nonperforming assets
Place : Mumbai Date : 7 May 2012
1,392,469,854
INNOVATION & IMPACT
CORPORATE OVERVIEW
92
BASIX
Krishna Bhima Samruddhi Local Area Bank

Board of Directors
Managing Director Vijay Nadkarni Directors B L Parthasarathy Dr Ved Prakash Gulati Sanjay Behuria Rozmin N Ajani Dr Somnath Ghosh Dr. Shamika Ravi P. Balaram Menon Investors BASICS Ltd Auditors M/s Akasam & Associates Chartered Accountants Hyderabad
Board of Directors
B L Parthasarathy holds M.Sc. (Agriculture) from Tamil Nadu Agricultural University TNAU and Post-Graduation Diploma in Management (PGDM) from Indian Institute of Management, Bangalore. Parthasarathy is an expert in the eld of rural development, rural nance and micronance. Parthasarathy has earlier worked with Syndicate Bank, Action Aid, Swiss Agency for Development and Cooperation (SDC) and BASIX. Parthasarathy was also the Managing Director of Krishna Bhima Samruddhi Local Area Bank Ltd, a subsidiary of BASIX from the year 2005 to 2008. Parthasarathy is currently functioning as the Managing Director of BASIX Consulting and Training Services. Dr Ved Prakash Gulati is a Post-Graduate in Mathematics (1974) and has done his Post Graduate Diploma in Numerical Analysis & Automated Computing (1975) from Indian Institute of Technology, Delhi. He completed his Ph.D. from IIT, Kanpur, 1982. He has a career spanning over two decades of intensive Academics, Research, resulting in quality professional output in Technology, Management, Consulting, especially in leveraging IT for excellence in the domains of Corporate Management, Public Sector Management and Banking & Financial Services. He is currently working with Tata Consultancy Services (TCS), Hyderabad as Consulting Advisor (Vice President) and Head, TCS Business Domain Academy(BDA) and Financial Technology Centre(FTC) for Business Excellence. He was the Director for RBI established Institute for Development and Research in Banking Technology (IDRBT). He was a Professor at National Institute of Bank Management (NIBM), Pune, and at Institute of Rural Management (IRMA).
93
Sanjay Behuria is a Bachelor of Arts (Hons.), from St. Stephens College, Delhi University (1976). He also holds Bachelor of Law (1988), MBA (2001) and Indian Institute of Bankers Diploma, ACI, London. He has over 20 years of experience in the eld of Financial Markets/ Banking. He is a professional banker, has worked with Riyad Bank, Saudi Arabia and Oman International Bank, Oman, State Bank of India, Bahrain. Sanjay Behuria is the chairman of the Customer service Committee. Rozmin N Ajani is FCA and worked as Deputy Chief Executive (Finance and Administration), Lepra India. Ms Ajani is currently working as an independent consultant in the development sector. Rozmin N. Ajani is the Chairperson of Audit Committee and Asset Liability Management and Investment Committee of the Bank. Dr Somnath Ghosh Ph.D, is professor in Management Development Institute, Gurgaon. Dr. Somnath Ghosh has over 30 years of experience as researcher, teacher, trainer and consultant in the elds of HR and institutional development. He was a Professor in Administrative Staff College of India, Hyderabad; IIM at Lucknow, Bangalore and Indore. He led the following projects in the development sector Gyandoot, GIAN, Integrated Watershed Project at Jhabua, MP, Operation Mojari, Tissue Culture Project, in Dhar, MP. He is the Chairman of the Executive Committee & Nomination Committee of the Bank. He has worked with livelihood promotion institutions in studying and examining ways to improve delivery of agriculture and business development services. He was World Bank consultant with respect to resettlement and rehabilitation (R&R) project of affected people. Dr. Shamika Ravi Ph.D. Economics from New York University. She is currently working with Indian School of Business as Assistant Professor of Economics and Public Policy. She is member of Technical Advisory Group, UNICEF, Institutional Review Board, IFMR, Chennai and Fellow, Micronance Management Institute Washington DC. She has written a book on Risk Management in Agriculture for Academic Foundation, commissioned by Government of India, Ministry of Agriculture. She has published research articles and written extensively on Risk & Insurance, Credit contracts and Health Insurance to low income households in India. P. Balaram Menon MA in Economics. Presently he is engaged as a Management and Financial Consultant at Bangalore. Joined as an Ofcer in State Bank of India in the year 1974, he had over 35 years of experience in banking, and held various positions directly responsible for SSI and Small business lending and well versed with wide range of banking activities. His core specialization has been SSI and other Priority sectors both in the eld level and in control functions at the headquarters. Vijay Nadkarni M.Com from University of Mumbai (1978), C.A.I.I.B. He is a professional banker, with 28 years experience with State Bank of India in various capacities covering diverse areas such as Agricultural Banking, Small Scale Industries Finance, International Banking business, Banking Technology etc. Worked with C-Edge Technologies Ltd, a joint venture of SBI & Tata Consultancy Services Ltd for providing banking technology to small banks and co-operative banks. He was associated with many voluntary organizations and volunteered for various organizations throughout the career. Worked as Deputy Director for Credibility Alliance, a consortium of voluntary organisations working for promoting the credibility of the voluntary sector. He is currently the Managing Director of the Bank.
INNOVATION & IMPACT
CORPORATE OVERVIEW
94
BASIX
Directors Report
The Directors of your Bank have pleasure in presenting the 13th Report together with the Audited Statement of Accounts for the year ended March 31, 2012. Financial Highlights: The nancial highlights for the year 2011-12 are given below: (`. in 000) The Bank deliberately slowed down disbursements and focused on consolidation of the loan portfolio and recovery efforts in the aftermath of the ordinance promulgated by the state government of Andhra Pradesh for regulating the operations of micro-nance organisations. This strategy helped in containing the growth of non-performing assets and in controlling the deterioration of recovery rate in spite of the adverse effects of the ordinance on the repayment culture in the area. The average loan size of disbursed portfolio went up from `.20,475/- to `.23,895/- when compared to previous year. The average advances stood at `.83.83 Crore as compared to `.83.74 Crore in the previous year.
Particulars Deposits Advances O/s Income Expenditure Net Prot before Tax Provision for Tax Net Prot after Tax Reserves and Surplus
Review of Operations:
Mar 31, 2012 Mar 31, 2011 1003,462 836,815 250,086 231,240 18,847 7,045 11,802 74,417 925,121 883,222 257,300 227,710 29,590 11,832 17,758 62,615
Borrowings: The decelerated pace of disbursements and the efforts for deposit mobilisation enabled the Bank to reduce the level of borrowings from `.26.50 Crore as on March 31, 2011 to `.14.44 Crore as on March 31, 2012. Credit Deposit Ratio: The Credit Deposit ratio of the Bank which has historically been at a high level, improved further to 83.39 % for the nancial year ended March 31, 2012. The corresponding ratio as on March 31, 2011 was 95.47 %. Recovery: The Banks recovery rate as on March 31, 2012 stood at 96.48% as compared 96.70% as on March 31, 2011. The deterioration was the result of the adverse effect on the repayment culture due to ordinance of the A.P. government regulating micro-nance operations and drought conditions in the operating area. Dividend: The directors do not recommend payment of any dividend to the shareholders for the year 2011-12. Capital Structure: The Authorised capital of the bank is `.25.00 Crore comprising of 2.50 Crore Equity shares of `.10.00 each. The paid up capital of the bank is `.9.00 Crore comprising of 90 Lakh Equity share of `.10.00 each. The Bank has contacted various potential investors for infusion of fresh capital to increase its net worth in view of the regulatory guidelines as also to meet the requirements of future growth. Reserves: During the year, an amount of `.0.28 Crore has been transferred to Statutory & other reserves. The Bank has `.1.07 Crore in the Share premium Account and `.6.37 Crore as General, other Reserves and surplus as on March 31, 2012.
The Bank continued with its work of providing nancial services to the underserved and promoting livelihoods in spite of various challenges. The highlights of the banks performance during 2011-12 are given below: Total Business: The total business of the Bank has increased by `.3.20 crore (1.77%) from `.180.83 crore as on March 31, 2011 to `.184.03 crore as on March 31, 2012. The total number of customers (outreach) has increased from 163,552 to 182,533 customers as on March 31, 2012, representing 11.6% growth over March 31, 2011. Deposits of the Bank crossed the milestone of `.100 crore as on March 31, 2012 which was the result of the sustained efforts over the years for deposit mobilisaton. The deposits stood at `.100.35 Crore as on March 31, 2012 as compared to `.92.51 Crore as on March 31, 2011 recording a growth of 8.47%. The number of active deposit accounts increased to 275,657 from 271,238 accounts as of March 31, 2011, recording an increase of 1.63%. The cumulative disbursement of the Bank for the nancial year 2011-12 amounted to `.90.42 Crore with 37,840 accounts against `.99.27 Crore with 48,484 accounts loans during previous year 2010-11.
Deposits:
Advances:
KBSLAB
The total of Capital and Reserves of the bank increased from `.15.26 Crore as on March 31, 2011 to `.16.44 as on March 31, 2012. The Capital Adequacy Ratio, i.e. Capital to Risk Weighted Assets Ratio stood at 19.12 % as on March 31, 2012 as compared to 16.83 % in March 31, 2011. Priority Sector Advances: The Banks Priority Sector Advances stood at `.73.06 Crore of total loan outstanding `.83.68 Crore as on March 31, 2012, which is 87.3% of total advances. The Bank continues to have a high share of priority sector advances that is well above the stipulation of 40% as prescribed by the Reserve Bank of India. Insurance Services: The Bank has a tie-up with AVIVA Life Insurance Company Pvt Ltd for providing Life insurance; Royal Sundaram Alliance Insurance Company Ltd for livestock insurance and Micro Shield Insurance. The Bank has launched Health insurance in collaboration with Royal Sundaram Alliance Insurance Company Ltd from November 2006 to provide medical benet to its customers. During the year Bank made good progress in distributing various insurance products and services for the customers of the Bank. Outlook for the Year 2012-2013: The efforts of the Bank for business growth were affected during the year 2011-12 mainly by external factors such as the ordinance of A.P. government and drought conditions. The teething issues in the implementation of the Core Banking Technology also had its impact on business growth in the initial phase. With the stabilisation of the CBS technology, crystallization of the impact of the ordinance on the portfolio and the expectation of normal monsoons, the Bank now expects to chart a healthy growth path in the year 2012-13. The deposits of the Bank are expected to grow to `.131.46 Crore during the year with an advances portfolio of `.107.52 Crore. The plans for the year 2012-13 would be mainly directed toward infusion of fresh capital; tapping new sources and exploring new avenues for deposit mobilisation; reduction in borrowings; improving the quality of the loan portfolio through better monitoring, sourcing new lending opportunities and risk mitigation through decentralization by increase in the lending to MSMEs. Emphasis will also be laid on improvement of processes, training of staff and streamlining audit procedures. In the area of technology, the recently implemented core banking system will be exploited for better customer service and improved MIS besides introduction of technological services such as ATMs etc. for rendering better service to customers. The Bank will also endeavour to improve its visibility in
95
the operating area and to take up initiatives for greater engagement with the local community. Financial Inclusion: As a part of the initiative towards nancial inclusion, the number of no-frill saving bank accounts increased from 6547 on March 31, 2011 to 12750 on March 31, 2012. The bank has 59 Business Correspondent operation locations, in under-banked areas. The bank has adopted 33 villages under its operational area for covering 100% nancial inclusion under BTD village concept. The bank has conducted around 100 village meetings & door to door campaigns during the 2011-2012. Special teams of MSAs have been recruited for mobilizing small savings. Bank is using GPRS enabled VisionTek handheld devices for cash transactions at the customers doorstep. The bank has deployed a marketing Van which includes audio visual Aids for promotion of nancial inclusion. The bank has conducted 150 campaigns through marketing van during the year. Branch Expansion: The Bank has applied to RBI for granting of licences for opening new branches. It is also exploring possibilities of expanding the BC network for reaching out to a larger population. Human Resources: The Bank gives utmost importance to enhancing the capabilities of its staff through training, mentoring and providing them with challenging roles and responsibilities for various positions. The bank had a total of 352 staff as on 31 March, 2012. The bank promoted 32 employees to higher cadres during the year. Processing of payroll and other HR related data are fully computerized. The Bank has undertaken several staff trainings (both in house and external) programs during the nancial year. Some of the important training programs are given below: External Training Programmes: The Bank has sponsored several external training programmes for staff organised by CAB-RBI during the nancial year. Some of the important external training programs are given below: Title of the Programme Training of Trainers programme on Financing MSMEs Programme on Business Continuity Planning & Disaster Recovery Workshop on Technology Trends in Banking Credit needs of women& Gender Responsive Budgeting Institution CAB-RBI No of Participants 1
CAB-RBI
CAB-RBI CAB-RBI
2 1
INNOVATION & IMPACT
CORPORATE OVERVIEW
96
BASIX
Title of the Programme Workshop on ICT based Business Models for Financial Inclusion & Financial Literacy
Institution CAB-RBI
No of Participants 3
Internal Training Programmes: Besides the above, various in-house training programmes were conducted for the staff by in-house team and also by external experts. 32 programmes were organised during the year covering various areas such as deposit mobilisation, strategic planning, team building, personal effectiveness, communication and marketing skills, basic and advanced features in excel, credit monitoring, appraisal techniques for high value loans (Growth Micro Enterprises), conduct of cash credit accounts as also induction programmes for new recruits. Risk Management: The bank has adopted an integrated approach for the management of risks. The Asset liability Management Policy, Investment Policy, Credit Policy, Credit Risk Management Policy have been formulated and reviewed from time to time in tune with the business requirements and best practices and requirements relating to various risks. The Risk Management Committee (RMC) of the bank at board level met twice on July 23, 2011 and January 28, 2012 during the year and had discussed the various risk parameters concerning the bank. The Management Risk (Management Level) committee met three times on June 27, 2012, July 21, 2011, December 30, 2011 and March 09, 2012 during the nancial year .The bank is monitoring the risk aspects on continuous basis. During the year the Asset Liability Management and Investment Committee of the board met four times on April 30, 2011, July 23, 2011, October 29, 2011 and January 28, 2012 during the year and deliberated on various issues that have a bearing on effective management of funds. The bank has complied with both the regulatory as well as the internal prudential limits set for liquidity mismatch during all fortnights of the nancial year. The asset liability management and investment committee monitors the assets, liabilities and investment portfolio of the bank to proactively identify emerging risks relating to liquidity, interest rate and investments at operational level. Information & Communication Technology: The Bank fully operates on a Core Banking System (CBS) from the 1st April, 2011, signifying a major advance in the eld of technology used by the Bank. The software for CBS is indigenously procured from PSPL, Bangalore. As the business model of the Bank involves provision of services at the door step of the customer to the extent possible, the eld staff use Visiontek hand held devices
for transactions in the eld. The transactions generated from the devices get updated online in the centralised database. The bank has procured software named MyHrsoft Pro for computerised processing and report generation for Payroll and other HR data requirements. Bank has also procured an ALM Software ALMANAC from Garnet Software, Pune for effective monitoring of assets and liabilities including maturity pattern, liquidity risk and interest risk management. The Bank plans to use the CBS to the fullest advantage for providing better customer service and for generation of MIS. Plans are also being made for rolling out additional technological services to the customers such as ATMs and RTGS. Inspection and Vigilance: Keeping in view the expansion in business and consequent need to strengthen the Inspection & vigilance machinery, the bank has widened the scope of these processes through the following: The Vigilance policy of the bank has been reviewed by the board of directors. The Vigilance machinery as per the approved policy has been organized for surveillance and detection of potential chances of fraud. Vigilance and Fraud cases, if any, are reported to and monitored by the Audit Committee and the board in each meeting. Risk based internal audit has been conducted on continuous basis at all branches and head ofce to identify irregularities and remedial measures implemented to mitigate the chances of possible fraud and misappropriations besides improving the quality. Risk based internal audit reports are reviewed by the audit committee of the board.
Inspection by RBI: The Reserve Bank of India conducted Tenth Annual Financial Inspection for the nancial year 2010-11 during the period from May 23, 2011 to June 09, 2011. The Bank has submitted detailed compliance reports to Reserve Bank of India and taken necessary steps to implement the suggestions. We record our appreciation for the understanding and guidance of the Reserve Bank of India in this regard. Customer Service: The bank gives high priority to extend highest quality service to its customers. The Customer Service committee of the board comprising of four directors monitors the implementation of customer service measures periodically. Customer Service Committees have been formed at head ofce and branch level to monitor the service quality and bring about improvements in this area on an ongoing basis. The bank has also implemented procedure for conducting
KBSLAB
customer service committee at BC locations to nd out and resolve the customer suggestions and problems at those locations. The Standing Committee on Customer Service regularly monitors the implementation of customer service measures at branches and BC locations. The bank has complied with the parameters prescribed by RBI in the area of customer service. Auditors Report: M/s. akasam & associates, Chartered Accountants, of Hyderabad, the Statutory Central Auditors of the bank for the nancial year 2011-12 have audited the accounts of the bank for the year and have submitted the Statutory Audit Report. M/s. akasam & associates, Chartered Accountants, will retire at the conclusion of the ensuing Annual General Meeting and being eligible for re-appointment have expressed their willingness to act as auditors of the Company, if appointed, and have further conrmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956. The appointment of M/s. akasam & associates, Chartered Accountants as Statutory Central auditor of the bank for the nancial year 2012-13, may be made subject to approval of the RBI and approval of the members in the ensuing Annual General Meeting. Your Directors recommend their re-appointment. Corporate Governance: The Bank strongly believes in following good Corporate Governance practices. The Board has been constituted in accordance with the Banking Regulation Act, 1949 and is represented by eight eminent personalities from the elds of banking, nance, agri-business and rural development, technology, education and research. Board of Directors as follows. Dr Somanth Ghosh Sanjay Behuria P Balram Menon Dr Shamika Ravi Dr Ved Prakash Gulati B L Parthasarathy Rozmin N Ajani Vijay Nadkarni Committees of Board: Change in Board of Directors:
97
Mr. Manmath Kumar Dalai resigned from the position of managing director of the bank with effect from May 17, 2011. The board places on record its appreciation for the valuable services rendered by Mr. Dalai and the growth in all spheres recorded by the Bank during his tenure. Ms. Lakshmi Raman, Director of the Bank resigned on July 23, 2011. The board places on record its appreciation for the valuable services and guidance rendered by her to the bank during her tenure. Mr. Vijay Nadkarni has been appointed as the managing director of the bank on August 01, 2011 with the approval of Reserve Bank of India.
In accordance with the provisions of Companies Act, 1956 and Articles of Associations of the Bank Mr. Sanjay Behuria and Dr. V.P. Gulati retire by rotation and being eligible offer themselves for reappointment. All the Directors except managing director are nonexecutive and independent directors. Number of meetings held during the year 2011-12
Ms.Rozmin N Ajani, Chair Mr.Sanjay Behuria Mr.B.L.Parthasarathy Mr.P.Balaram Menon Mr.Vijay Nadkarni Executive Committee Dr.Somnath Ghosh, Chair Mr. Sanjay Behuria Dr.Ved Prakash Gulati Mr.P.Balaram Menon Mr. Vijay Nadkarni Human Resource & Development Committee Dr.Ved Prakash Gulati, Chair Dr.Somnath Ghosh Mr.Sanjay Behuria Mr.Vijay Nadkarni Three Six
The Board met seven times during the Financial Year 2011-12 on April 30, 2011, July 23, 2011(twice), September 17, 2011, October 29, 2011, January 28, 2012 and March 24, 2012 and deliberated on specifying/ reviewing policy guidelines; operations and nancial statements; community outreach; review and consider the recommendations of the various committees; specifying/ reviewing policy guidelines for human resource and technology etc.. The proles of the directors have been veried and are in compliance with the Fit and Proper criteria guidelines issued by Reserve Bank of India.
Audit Committee
Six
INNOVATION & IMPACT
Mr. B.L. Parthasarathy and Dr. Shamika Ravi have been appointed as additional directors on July 23, 2011 and January 28, 2012 respectively to hold ofce up to the date of ensuing Annual General Meeting. Dr. Somnath Ghosh and Ms. Rozmin N Ajani on completion of their eight years tenure in the bank as directors shall retire on June 27, 2012 and July 21, 2012 respectively pursuant to the provisions of Section 10(A) of the Banking Regulation Act, 1942.
CORPORATE OVERVIEW
98
BASIX
Committees of Board:
Number of meetings held during the year 2011-12 Four
Information Technology Committee Dr. Ved Prakash Gulati, Chair Mr.Vijay Nadkarni COO of the bank Head ICT of the Bank AM ICT of the Bank Risk Management Committee Mr.Balaram Menon, Chair Mr. B.L. Parthasarathy Ms.Rozmin N Ajani Dr.V.P.Gulati Mr.Vijay Nadkarni Asset Liability Management and Investment Committee Ms. Rozmin N Ajani, Chair Mr. Sanjay Behuria Mr.Vijay Nadkarni Mr.P.Balaram Menon Head Finance & Resources Nomination Committee Dr.Somnath Ghosh, Chair Mr. Sanjay Behuria Mr.P.Balaram Menon Mr. Vijay Nadkarni Customer Service Committee Mr. Sanjay Behuria, Chair Dr. Somnath Ghosh Dr. Ved Prakash Gulati Mr. Vijay Nadkarni Statutory Disclosure:
April 2011. The eld staff use hand held devices for transactions in the eld which are updated online in the core banking database. The bank has procured a software for computerised processing and report generation for Payroll and other HR data requirements. Bank has also procured an ALM Software ALMANAC from Garnet software, Pune for monitoring of Assets and Liabilities including maturity patterns, liquidity risk and interest risk management. Foreign Exchange earning and outgo: The business of the Bank is such that there is neither earning nor outgo in Foreign Exchange.
Two
Particulars of Employees covered by Section 217(2A) of the Companies Act, 1956 There were no employees of the bank falling under the category prescribed under Section 271(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended from time to time. Directors Responsibility Statement: Your directors conrm that: In preparation of the annual accounts, applicable accounting standards have been followed along with proper explanation relating to material departure, if any. The accounting policies have been selected and applied consistently and judgments and estimates made, 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 nancial year 2012 and of the prot of the bank for year ended March 31, 2012. Proper and sufcient care was taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 and Banking Regulation Act, 1949 and other applicable laws, for safeguarding the assets of the bank and for preventing and detecting fraud and other irregularities. The annual accounts have been prepared on a going concern basis.
Four
Four
Two
The particulars required under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Energy Conservation, Technology Absorption etc. do not apply. However as matter of good practice the following are worth noting. Energy Conservation Measures: Efforts are being made to reduce the energy consumption by adopting good practices. Technology Absorption: The bank is now operating under fully computerized environment with a Core Banking System (CBS) since
Employee Relation: The employee relations have been cordial through out the year under review and the Directors place on record their sincere appreciation for the dedication, commitment and teamwork of employees at all levels, who have been instrumental in enabling the Bank achieve higher growth levels during the year. Any other information: All the Branches of the Bank are maintaining Customer Complaints Register as prescribed by Goiporia Committee on Customer Service and there were four complaints received during the year and the same were resolved.
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Acknowledgements: Your Directors place on the record their appreciation for the support the Bank has received from the Reserve Bank of India, other banks and other regulatory authorities. The directors also place on record their appreciation of the support and the trusts reposed by valued customers and solicit their continued support and cooperation.
99
Your Directors also wish to place on record their most sincere appreciation of the commitment, involvement and dedication of the Banks staff in ensuring the level of performance and growth of the Bank that was achieved during the year and look forward to their continued cooperation in realization of the corporate goals in the years ahead. On behalf of the Board of Directors Sd/Director Place : Hyderabad Date : April 28, 2012 Sd/Managing Director
INNOVATION & IMPACT
CORPORATE OVERVIEW
100
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Auditors Report
1. We have audited the attached Balance Sheet of KRISHNA BHIMA SAMRUDDHI LOCAL AREA BANK LIMITED as at March 31, 2012 and also the Prot and Loss account and the cash ow statement annexed thereto for the year ended on that date. These nancial statements are the responsibility of the Banks management. Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit including examining, on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well as evaluating the overall nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The Balance Sheet and Prot and Loss Account have been drawn up in Forms A and B respectively of the Third Schedule to the Banking Regulation Act, 1949 read with section 211 of the Companies Act 1956. We report that a) We have obtained all the information and explanations which to the best of our knowledge and belief, were necessary for the purposes of our audit and have found them to be satisfactory; The transactions of the Bank, which have come to our notice have been within the powers of the Bank; sd/(S. RAVI KUMAR) Partner M.No.28881 Place : Hyderabad Date : April 28, 2012 5. In our opinion, the Balance Sheet, Prot and Loss Account and Cash Flow Statement comply with the applicable accounting standards In our opinion, as shown by books of bank, and to the best of our information and according to the explanations given to us: i) The Balance Sheet, read with the notes thereon is a full and fair Balance Sheet containing all the necessary particulars, is properly drawn up so as to exhibit a true and fair view of affair of the Bank as at March 31, 2012 in conformity with accounting principles generally accepted in India: The Prot and Loss account, read with the notes thereon shows a true balance of prot, in conformity with accounting principles generally accepted in India, for the year covered by the account: and The cash Flow Statement gives a true and fair view of the cash ows for the year ended on that date. for akasam& associates Chartered Accountants (rm reg.No.005832S)
6.
2.
ii)
iii)
3.
4.
b)
KBSLAB Balance Sheet as on

Particulars Capital And Liabilities Capital Reserves and Surplus Deposits Borrowings Other Liabilities and Provisions Total ASSETS Balances with Banks and Money at Call and Short Notice Investments Advances Fixed Assets Other Assets Total Contingent Liabilities Bills for Collection Principal Accounting Policies Notes on Accounts 17 18 12 7 8 9 10 11 135,638 293,319 836,815 20,415 63,468 1,367,406 Cash and Balances with Reserve Bank of India 6 1 2 3 4 5 90,000 74,417 1,003,462 144,402 55,125 1,367,406 17,751 Schedule 31-Mar-12
101
` in 000 31-Mar-11
90,000 62,615 925,121 265,000 48,367 1,391,103 17,020 119,235 295,172 883,222 13,926 62,528 1,391,103 -
The schedules referred to above form an integral part of the Balance Sheet. In terms of our report of even date for Akasam & Associates Chartered Accountants sd/S Ravi Kumar Partner M.No.28881 FR No.005832 S Place : Hyderabad Date : April 28, 2012 for and on behalf of Board of Directors
sd/P A Pattnaik Company Secretary
sd/Rozmin N Ajani Director sd/Dr. Ved Prakash Gulati Director
sd/Sanjay Behuria Director sd/Vijay R Nadkarni Managing Director
INNOVATION & IMPACT
CORPORATE OVERVIEW
102
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Prot and Loss Account for the year ended

Schedule I. INCOME Interest Earned Other Income Total II. EXPENDITURE Interest Expended Operating Expenses Provisions and Contingencies Total III. PROFIT / LOSS Net Prot/(Loss) for the Year Add: Prot/(Loss) Brought Forward Total IV. APPROPRIATIONS/TRANSFERS Statutory Reserve Investment Fluctuation Reserve Government / Proposed Dividend Balance Carried Over to Balance Sheet Total Principal Accounting Policies Notes on Accounts 17 18 2,360 446 48,888 51,694 11,802 39,892 51,694 15 16 97,922 120,150 20,212 238,284 13 14 212,256 37,830 250,086 31-Mar-12
`. in 000 31-Mar-11
211,173 46,127 257,300 96,108 117,487 25,947 239,542 17,758 26,132 43,890 3,552 446 39,892 43,890
The schedules referred to above form an integral part of the Balance Sheet. In terms of our report of even date for Akasam & Associates Chartered Accountants sd/S Ravi Kumar Partner M.No.28881 FR No.005832 S Place : Hyderabad Date : April 28, 2012 for and on behalf of Board of Directors
KBSLAB Schedules to Balance Sheet as on

31-Mar-12 SCHEDULE 1:CAPITAL Authorised Capital 250,00,000 Equity Shares of `.10/- each Issued, Subscribed, and Paid-up capital 90,00,000 Equity Shares of `.10/- each Total SCHEDULE 2:RESERVES AND SURPLUS I. Statutory Reserves Opening Balance Additions during the Year Deductions during the Year Total II. Capital Reserves Opening Balance Additions during the year Deductions during the year Total III. Share Premium Opening Balance Additions during the year Deductions during the year Total IV. Investment Fluctuation Reserve Opening Balance Additions during the year Deductions during the year Total V. Revenue and Other Reserves Opening Balance Addition During the Year Deductions during the year Total VI. Balance in Prot and Loss Account Total (I to VI) SCHEDULE 3:DEPOSITS A I. Demand Deposits (i) From Banks (ii) From Others II. Savings Bank Deposits III. Term Deposits (i) From Banks (ii) From Others Total (I, II and III) B. I. Deposits of branches in India II. Deposits of branches out side India Total 250,000 90,000 90,000
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`. in 000 31-Mar-11 250,000 90,000 90,000
10,650 10,650 1,259 446 1,705 452 452 48,888 74,417
8,650 2,000 10,650 813 446 1,259 452 452 39,892 62,615
13,737 207,342 782,383 1,003,462 1,003,462 1,003,462
4,289 150,596 770,236 925,121 925,121 925,121
INNOVATION & IMPACT
10,362 2,360 12,722
6,810 3,552 10,362
CORPORATE OVERVIEW
104
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Schedules to Balance Sheet as on

31-Mar-12 SCHEDULE 4:BORROWINGS I. Borrowings in India i ii iii II. Reserve Bank of India Other Banks Other Institutions and Agencies Borrowings outside India 90,831 53,571 144,402
`. in 000 31-Mar-11
153,571 111,429 265,000
Total (Secured borrowings included in I & II above) SCHEDULE 5:OTHER LIABILITIES AND PROVISIONS I. II. III. IV. Bills Payable Inter-Ofce adjustments (net) Interest Accured Others (including provisions)
55,125 55,125
48,367 48,367
Total SCHEDULE 6:CASH AND BALANCES WITH RESERVE BANK OF INDIA I. II. Cash in hand (including foreign currency notes) Balances with Reserve Bank of India (i) in current Account (ii) in other Accounts Total - (I & II) SCHEDULE 7:BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE I. In India i. Balance with banks a. b. ii. a. b. Total II. Outside India i. ii. iii. Total Total - (I & II) In current accounts In Other deposit accounts Money at call and short notice in current accounts in other deposit accounts with banks with other institutions
7,974
7,291
9,777 17,751
9,729 17,020
53,638 82,000 135,638
32,694 86,541 119,235
Money at call and short notice
135,638
119,235
KBSLAB Schedules to Balance Sheet as on

31-Mar-12 SCHEDULE 8:INVESTMENTS I. Investments in India in i. ii. iii. iv. v. vi. Government Securities Other approved securities Shares Debentures and Bonds Subsidiaries and/or joint ventures Others 294,347 294,347 1,028 293,319 293,319
105
`. in 000 31-Mar-11
295,848 295,848 676
Total Less: Depreciation Net Investments II. Investments outside India in i. ii. iii. Government securities (including local authorities) Subsidiaries and/or joint ventures abroad Other investments
295,172
Total Total - (I & II) SCHEDULE 9:ADVANCES A i) ii) iii) B i) ii) iii) C I) i) ii) iii) iv) II) i) ii) Bills purchased and discounted Cash credits, overdrafts and loans repayable on demand Term Loans Secured by Tangible Assets Covered by Bank/Government Guarantee Unsecured Advances in India Priority Sectors Public Sector Banks Others Advances outside India Due from Banks Due from Others
7,107 829,708 836,815 829,334 7,481 836,815 730,598 106,217 836,815 836,815 31,073 9,933 385 20,206 20,415
2,864 880,358 883,222 849,446 33,776 883,222 827,088 56,134 883,222 883,222 30,866 4,977 4,770 17,147 13,926
Total
Total
Total
Total Total ( C. I & II ) SCHEDULE 10:FIXED ASSETS I II Premises Other Fixed assets (including furniture and xtures) At cost as on 31st March of the preceding year Additions during the year Deductions during the year Depreciation to date Total
INNOVATION & IMPACT
295,172
CORPORATE OVERVIEW
106
BASIX
Schedules to Balance Sheet as on

31-Mar-12 SCHEDULE 11:OTHER ASSETS I. II. III. IV. V. Inter-0fce adjustments (net) Interest accrued Tax paid in advance / Tax deducted at source Stationery and stamps Non-banking assets acquired in satisfaction of claims 0 28,109 29,074 955 133 5,197 63,468
`. in 000 31-Mar-11 27,433 26,586 1,052 606 6,851 62,528
VI. Deferred Tax Asset ( Net) VII. Others Total SCHEDULE 12:CONTINGENT LIABILITIES I. II. III. IV. V. Claims against the bank not acknowledged as debts Liability for partly paid investments Capital Commitments Liability on account of outstanding forward exchange contracts Guarantees given on behalf of constituents a. b. In India Outside India
for and on behalf of Board of Directors
VI. Acceptances, endorsements and other obligations VII. Other items for which the bank is contingently liable Total In terms of our report of even date for Akasam & Associates Chartered Accountants sd/S Ravi Kumar Partner M.No.28881 FR No.005832 S Place : Hyderabad Date : April 28, 2012
KBSLAB Prot and Loss Account for The Year Ended

31-Mar-12 SCHEDULE 13: INTEREST EARNED I. Interest/discount on advances/bills II. Income on Investments III. Interest on balances with Reserve Bank of India and other inter-bank funds IV. Others Total SCHEDULE 14:OTHER INCOME I. Prot on sale of Asset / Investments II. Miscellaneous Income Total SCHEDULE 15:INTEREST EXPENDED I. Interest on Deposits II. Interest on Reserve Bank of India/Inter-bank borrowings II. Others Total SCHEDULE 16:OPERATING EXPENSES I. Payments to and provision for employees II. Rent, taxes and lighting III. Printing and Stationery IV. Advertisement and publicity V. Depreciation on banks property VI. Directors fees, allowances and expenses VII. Auditors Fees and Expenses VIII. Law Charges IX. Postage, Telegrams, Telephones. Etc. X. Repairs and maintenance XI. Insurance XII. Other expenditure Total PROVISIONS AND CONTINGENCIES I. Provision for Non Performing Assets II. Provision on Standard Assets III. Provision for Taxation (Including Deferred and Fringe BenetTax) IV. Provision for Depreciation on Investments V. Other Provisions Total In terms of our report of even date for Akasam & Associates Chartered Accountants sd/S Ravi Kumar Partner M.No.28881 FR No.005832 S Place : Hyderabad Date : April 28th, 2012 186,999 21,280 3,977
107
`. in 000 31-Mar-11 188,991 20,060 2,122
212,256
211,173
37,830 37,830
98 46,029 46,127
71,341 26,581 97,922
59,813 36,295 96,108
12,814 7,045 353 20,212
12,585 298 11,832 283 949 25,947
for and on behalf of Board of Directors
68,569 4,112 2,619 192 3,352 710 492 2,042 1,604 1,401 35,057 120,150
58,789 4,674 3,399 335 5,343 984 445 2 2,204 2,729 1,412 37,171 117,487
INNOVATION & IMPACT
CORPORATE OVERVIEW
108
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SCHEDULE 17: PRINCIPAL ACCOUNTING POLICIES 1) General:
e) 4)
Investments are stated in the balance sheet net of depreciation. Advances: In accordance with the prudential norms prescribed by RBI from time to time advances against the security of the Intangible assets such as future crop and assets created out of such advances have been shown against the secured categories. The existence and valuation of such securities are monitored by the periodic verication conducted by the employees of the bank and certied by the management. The loans are classied as secured and un-secured after taking into consideration, the estimated value of primary security in terms of Livestock, Standing Crops and Other assets and collaterals wherever applicable. These loans and advances are also classied as Standard (arrears less than 90days), sub standard (arrears more than 90 days, but less than one year) and doubtful (arrears beyond one year), and stated for the total principal outstanding. All assets, which are not treated as standard assets are also classied as Non-performing assets. Irrespective of the above classication, where any asset, in the opinion of the management, auditors and Reserve Bank of India, is considered irrecoverable with reasonable efforts, the same is classied as loss assets. Provision on Standard Assets is made at 0.25% on advances to Agriculture and SME sectors, 2% on advances to Specic sector like Personal loans etc., and 0.40% on all other advances. Fixed Assets: Premises and other Fixed Assets have been accounted for at their historical cost. Depreciation on xed assets has been provided at the rates stipulated by Schedule XIV of the Companies Act, 1956, except for computers and vehicles where depreciation has been provided at 33.33% and 25.89% respectively on straight-line method. The bank has provided 100% depreciation for the assets costing `.5,000 or less, acquired during the year. Provisioning and Write off policy: Provisioning in respect of Non-performing assets is made as per guidelines applicable to banks, issued by Reserve Bank of India. All the loss assets are rst provided at 100% and later written off, when the management has exhausted all reasonable options for recovery of principal and interest on the loan. Pre-operative Expenditure: The Pre-operative expenditure includes expenditure incurred up to the commencement of operations of the new branches, which have enduring value. These
The accompanying nancial statements are prepared on historical cost basis, unless otherwise stated by following going concern concept and conform to the statutory provisions and practices prevailing in India. 2) Revenue, Income and Expenditure Recognition:
a)
2.1 Income: a) b) c) Income on advances classied under standard assets category is recognized on accrual basis. Income on Non-performing advances is recognized as and when realized. Interest on Investments and Bank Fixed deposits is recognized on accrual basis.
b)
c)
2.2 Expenditure: a) 3) Revenue Expenditure is accounted for on accrual basis. Investments: d) e)
3.1 The Investment portfolio of the Bank is classied into the following three categories: a) b) c) Held to Maturity (HTM) Available for Sale (AFS) Held for Trading (HFT) For disclosure purpose they are grouped and shown in the Balance Sheet under six groups. 3.2 Valuation: a) All investments held under HTM category are aggregated classication wise, and accounted for at acquisition cost. However, excess of cost over the face value being premium is amortized over the period remaining to maturity. Securities held under AFS category are valued scrip-wise, at market / estimated realisable value (worked out as per RBI guidelines) and aggregated classication wise. The net deprecation under each group of classication, if any, is fully provided for while net appreciation is ignored. Securities held under HFT category are to be valued at scrip wise at monthly intervals at market / estimated realisable value (worked out as per RBI guidelines) and aggregated classication wise. The net deprecation under each group of classication, if any, is fully provided for while net appreciation is ignored. However there are no securities under this category. The shifting of securities from one category to another is to done at the lowest of the acquisition cost, book value or market value and treated as book value in the new category. However no shifting was done among the categories during the nancial year.
f)
5) a) b)
b)
c)
c)
6) a)
b)
d)
7) a)
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are written off over a period of ve years from the year following the year of incurrence. 8) a) Staff Benets: Provident Fund: Contribution is accounted on actual liability basis and paid to Government managed Employees Provident Fund Organization. Gratuity: Gratuity is being computed as per statutory norms on actuarial valuation basis and paid into a trust created with and for this purpose, through the group schemes of Life Insurance Corporation India. Income Tax: Provision for income tax comprises current tax and Deferred tax which is reckoned, after considering items of timing differences that originate in one period and are capable of reversal in one or more subsequent period/s. 2) a. INVESTMENTS Particulars 1. Value of Investments a) Gross Value of Investments i) In India 2,943.47 Nil 31-Mar-12
109
31-Mar-11
b)
2,958.48 Nil
ii) Outside India b) Provision for Depreciation i) In India
9) a)
10.29 Nil
6.76 Nil
ii) Outside India c) Net Value of Investments i) In India
2,933.18 Nil
2,951.72 Nil
10) Net Prot: a) Net Prot is arrived at after accounting for the following Provisions and Contingencies.
ii) Outside India 2. Movement of provisions held towards Depreciation on investments: i) Opening Balance
Depreciation and amortization on Investments Provision for Taxation includes Income Tax & Deferred Tax Provision for Loan Losses Provision for Standard Assets and Other usual and necessary provisions SCHEDULE 18 NOTES ON ACCOUNTS (All Amounts are in `. Lakh unless otherwise stated) 1) CAPITAL:
6.76 3.53
3.93 2.83
ii) Add: Provision made during the year iii) Less: Write-off, write-back of excess provisions during the year iv) Closing Balance b. Repo Transactions:
10.29
6.76
Particulars i) CRAR (%) ii) CRAR - Tier I capital (%) iii) CRAR - Tier II Capital (%) iv) Percentage of the shareholding of the Government of India in nationalized banks v) Amount of subordinated debt raised as Tier II capital vi) Amount raised by issue of IPDI vii) Amount raised by issue of Upper TierII instruments
31-Mar-12 19.12 18.88 0.24
31-Mar-11 16.83 16.58 0.25 d. c.
Bank does not deal with any repo transaction. Non SLR Investment Portfolio: The total Investments held by the bank for the purpose of SLR requirement. Hence the bank does not have any Non SLR Portfolio. Sale and transfers to / from HTM Category: The bank has neither sold nor transferred to / from any HTM category investments during current year or previous year. 3) DERIVATIVES: The bank does not deal with any derivatives products.
Nil
Nil
Nil
Nil
Nil Nil
Nil Nil
INNOVATION & IMPACT
CORPORATE OVERVIEW
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4)
ASSET QUALITY i) Non Performing Asset Items (i) (ii) Net NPAs to Net Advances (%) Movement of NPAs (Gross) (a) Opening Balance (b) Additions during the year (c) (iii) Reduction during the year (d) Closing Balance Movement of Net NPAs (a) Opening Balance (b) Additions during the year (c) Reduction during the year (d) Closing Balance (iv) Movement of Provision For NPAs (excluding provisions on standard assets) (a) Opening Balance (b) Provision made during the year (c) Write-off/Write -Back of excess provisions (d) Closing Balance ii) Loan Assets subjected to Restructuring/Rescheduled 130.58 137.29 88.95 178.92 78.40 125.85 73.67 130.58 85.41 91.22 34.92 141.71 149.24 (21.31) 42.52 85.41 215.99 228.51 123.87 320.63 227.64 104.54 116.19 215.99 31-Mar-12 1.73 31-Mar-11 0.98
The bank has not restructured / rescheduled any loans assets during the current year but rescheduled Agriculture, Agri Allied and Non Form sector loans due to effect of Andhra Pradesh Ordinance on MFIs (since Bank,s core business model is Micro Finance) during the previous year. 31-Mar-12 Category No of Borrowers Standard Advances Amount outstanding Sacrice (Diminution in the face value) No of Borrowers Sub Standard Advances Amount outstanding Sacrice (Diminution in the face value) No of Borrowers Doubtful Advances Amount outstanding Sacrice (Diminution in the face value) No of Borrowers Total Amount outstanding Sacrice (Diminution in the face value) CDR SME Debt Others CDR 31-Mar-11 SME Debt Others 1334 147.28 1334 147.28 -
The bank has created provision for rescheduled advances at rate of 5% of outstanding i.e., `.7.36 lakh for the previous year.
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iii) Details of nancial assets sold to Securitisation / Reconstruction Company
111
The bank has not sold any nancial assets to Securitisation / Reconstruction Company during current year or the previous year iv) v) The bank has neither sold nor purchased any non performing nancial assets during the current year or previous year Provisions on Standard Advances: Particulars Provisions towards Standard Advances 5) Business Ratios: Particulars Interest income to Working Funds Non Interest income to Working Funds Operating Prot to Working Fund Return on Average Assets Business per employee (`. in lakh) Net Prot per Employee (`. in lakh) 6) Asset Liability Management: Maturity pattern of certain items of assets and liabilities Loans & Advances 4.97 429.30 225.52 10.18 1,681.31 1,952.02 2,581.48 1,345.52 98.93 38.92 8,368.15 Foreign Currency Assets Foreign Currency Liabilities 31-Mar-12 17.30 3.08 2.61 0.89 52.28 0.34 31-Mar-11 3.84 3.64 1.37 51.23 0.50 31-Mar-12 21.15 31-Mar-11 22.64
Period 1Day 2 to 7 Days 8 to 14 days 15 to 28 days 29 to 3 months Over 3 months and upto 6 months Over 6 months and upto 1 year Over 1 year and upto 3 years Over 3 year and upto 5 years Over 5 years Total 7) Exposures i)
Deposits 368.45 247.29 129.89 324.71 2,565.60 1,112.71 2,402.87 2,363.57 324.71 194.82 10,034.62
Investments Borrowings 143.46 42.38 807.05 1,088.21 852.09 2,933.19 77.38 154.77 432.15 464.31 315.41 1,444.02
Exposure to Real Estate Sector
The bank has provided housing loans, which are fully secured by mortgage on residential property that is or will be occupied by the borrowers or that is rented. All housing loans of bank are given to individuals only and are eligible to include under Priority Sector.
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17.57
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Category a. Direct exposure i. Residential Mortgages ii. iii. a. b. b. Included under Priority Sector Non Priority Sector
31-Mar-12
31-Mar-11
136.78 Nil Nil
114.17 Nil Nil
Commercial Real Estate Investments in Mortgage Backed Securities (MBS) and other securitized exposuresResidential Commercial Real Estate.
Nil Nil Nil 136.78 Particulars Provision for Bad & Rescheduled Assets Provision towards standard assets Provision for taxation (including Deferred Tax ) Total ii) 31-Mar-12 70.45 202.12
Nil Nil Nil 114.17 31-Mar-11 9.49 2.98 118.32 259.47
Indirect Exposure Total Exposure to Real Estate Sector
ii)
Exposure to Capital Market
The bank has not made any investment in capital market. iii) Risk category wise Country Exposure
The bank does not have any overseas operations, hence there is no risk of country exposure. iv) Details of Single Borrower Limit / Group Borrower Limit exceeded The bank has not exceeded the prudential exposure limit in the case of single borrower or Group borrower during the current year / previous year. v) Unsecured Advances Particulars General Purpose Loans Vidya Samruddhi Professional Loan Vidya Samruddhi Vocational Loans Staff Loans Total 8) i) 31-Mar-12 55.66 1.31 0.81 17.03 74.81 31-Mar-11 331.84
The bank has not having any oating provisions at the end of the previous year and has not made any additional provision or draw down the provision during the current year. The bank has not drawn down any reserves made earlier during the current year. Complaints Customer Complaints Particulars 31-Mar-12 Nil 4 4 Nil
iii) iv)
1.73 a. 2.33 1.86 337.76
No of complaints pending at the beginning of the year No of complaints received during the year No of complaints redressed during the year No of complaints pending at the end of the year b.
Amount of Provision made for Income Tax during the year: Particulars Provision for Income Tax 31-Mar-12 65.72 NIL 31-Mar-11 118.32
ii) 9)
Penalties imposed by RBI:
Awards passed by the Banking Ombudsman There were no awards were passed by the Banking Ombudsman against the bank during the current year or previous year.
Additional Disclosures: i) The details of provisions debited to Prot and Loss Account Particulars Provision for depreciation on investments Provision for Non Performing Assets 31-Mar-12 3.53 128.14 31-Mar-11 2.83 125.85 v) vi)
The bank has not issued any Letter of Comfort (LoCs) during the current year. The Provision Coverage Ratio stood at 55.80% by end of the current year and 60.45% by end of the previous year.
vii) The Bank has not received any fee/remuneration received in respect of bancassurance business.
KBSLAB
vii) Concentration of Exposures and NPAs a. Deposits, Advances, ix. Movement of NPAs Particulars Gross NPAs as on April 1, 2011 Particulars Total Deposits of twenty largest depositors Percentage of Deposits of twenty largest depositors to Total Deposits b. Concentration of Advances Particulars Total Advances of twenty largest borrowers Percentage of Advances of twenty largest borrowers to Total Advances c. Concentration of exposures Particulars Total Exposure of twenty largest borrowers/customers Percentage of Exposures of twenty largest borrowers/customers to Total Exposure on borrowers/ customers 31-Mar-12 81.87 31-Mar-12 81.87 0.98% x. Overseas Assets, NPAs and Revenue (iii) Sub-total (B) Gross NPAs as on March 31, 2012 (A-B) 31-Mar-12 586.14 5.84% Additions (Fresh NPAs) during the year Sub-total (A) Less: (i) (ii) Upgradations Recoveries (excluding recovered made from upgraded accounts) Write-offs
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Concentration of Deposits
Amount 215.99 228.51 444.50 0.75 33.86 89.26 123.87 320.63
The bank does not have any operations in the Overseas. xi. Off-balance Sheet Sponsored
The bank has not sponsored any off balance sheet items. xii. Unamortised Pension and Gratuity Liabilities - NIL 10) Disclosure under Accounting Standards: i) AS 15 Employee Benets:
0.98%
The bank has not made any investment in shares/ debentures, PSU Bonds and Commercial Papers, as such the investment exposure of the bank is nil d. Concentration of NPAs Particulars Total Exposure of Top four NPA accounts viii. Sector-wise NPAs Sl. No. 1 2 3 4 % of NPAs to Total Advances in that sector 3.82% 4.02% 2.18% 0.27% 31-Mar-12 10.94
Sector Agriculture & allied activities Industry (Micro & small, Medium and Large) Services Personal Loans
This is in compliance with the Revised Accounting Standard15 on Employee Benets notied by the Institute of Chartered Accountants of India. ii) AS 17 Segment Reporting:
Part A: Business segments The Banks operations are solely in nancial services and consisting of providing Banking services including commercial lending activities, Treasury activities etc., The Bank has identied two reportable segments viz. Domestic Banking operation and Domestic Treasury Operation, as Primary segments for disclosing the revenue / result and capital employed.
Provision has been made for employee benets viz. Gratuity (as applicable to the bank) in accordance with the Revised Accounting Standard 15. The liability of Gratuity was considered as per the statutory norms based on actuarial valuation and paid into a trust created for this purpose, through the group schemes of Life Insurance Corporation of India. As the balance amount in Gratuity Trust Fund account is more than liability, no additional amount has been charged to Prot & Loss Account towards transitional liability for the year ended March 31, 2012.
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Business Segment Particulars Revenue Result Unallocated expenses Operating prot Incometaxes Extraordinary Prot/Loss Net prot Other information Segment assets Unallocatedassets Total assets Segment liabilities Inter Segment Liability Unallocated liabilities Total liabilities Part B: Geographic segments
Treasury 2011 12 212.80 2,933.19 2,933.19 2,933.19 2,933.19 2010 11 200.60 2,951.72 2,951.72 2,951.72 2,951.72
Other Banking Operations 2011 12 2,288.06 10,740.87 10,740.87 13,674.06 (2933.19) 10,740.87 2010 11 2,372.40 10,959.31 10,959.31 13,911.03 (2951.72) 10,959.31
Total 2011 12 2,500.86 188.47 70.45 118.02 13,674.06 13,674.06 13,674.06 13,674.06 2010 11 2,573.00 295.90 118.32 177.58 13,911.03 13,911.03 13,911.03 13,911.03
There is only one segment i.e. Domestic segment iii) AS 22 Deferred Income Tax:
The major components of Deferred Tax Asset / (Liability) are Particulars Provision created in the books not claimed income tax Depreciation on Fixed Assets Amortization and Depreciation on GOI Stocks ROC Fees Net Deferred tax Asset / (Liability) 31-Mar-12 2.85 (16.27) 12.73 2.02 1.33 31-Mar-11 2.85 (9.44) 9.99 2.65 6.05
11) The previous year gures have been re-grouped / re-classied wherever necessary to make them comparable with the current years gures. 12) Wherever certain items are not relevant or applicable to the bank, the same has been omitted. As per our report of even date for Akasam & Associates Chartered Accountants sd/S Ravi Kumar Partner M.No.28881 FR No.005832 S Place : Hyderabad Date : April 28, 2012 for and on behalf of Board of Directors
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BASIX Sub-K i Transactions Ltd.

Board of Directors
Chairman Vijay Mahajan Managing Director Amit Mehta Directors Mahesh Kanumury Geeta Dutta Goel PA Kalyanasundar Babla Shamit Sharan Banks Axis Bank Ltd ING Vysya Bank Ltd Syndicate Bank Ratnakar Bank ICICI Bank Ltd The Bank of Nova Scotia Krishna Bhima Samruddhi Local Area Bank Ltd IDBI Bank LTD Auditors M/s V Nagarajan & Co., Chartered Accountants Delhi
Board of Directors
Vijay Mahajan, Chairman, BASIX Group Mahesh Kanumury has over 20 years of operating, consulting and venture capital experience. Mahesh has an MBA from Harvard Business School, an MS in Engineering from Purdue University and BS in Engineering from Indian Institute of Technology, Chennai. Mahesh is currently the Managing Director and Founder of Arivali Partners where he provides advisory and investment services to a number of social enterprises. He was a General Partner at a $260M early stage venture capital fund based out of the Silicon Valley where he invested and successfully nurtured the growth and exit of technology companies. He also worked at McKinsey in the US where he led a number of high-impact initiatives at the CXO level. Prior to McKinsey, Mahesh worked at Schlumberger Technologies and Research where he led large scale software development efforts. Geeta Dutta Goel holds Bachelors Degree from Lady Shri Ram College, Delhi and an MBA from the Indian Institute of Management of Ahmedabad. Geeta manages the Michael and Susan Dell Foundation (MSDF) micronance initiative in India, which includes a portfolio of over 20 micronance and related institutions. As part of her role, she has served on the Boards of some pioneering and leading urban micronance institutions, such as Ujjivan, Janalakshmi, Swadhaar. Prior to joining the MSDF, she spent over 12 years with the Corporate Finance Group of PricewaterhouseCoopers in India, where she advised large Indian and multi-national clients on joint ventures, mergers and acquisitions, business plans and valuations. Geeta was appointed as the Nominee Director of the Company on behalf o MSDF on November 21, 2011
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PA Kalyanasundar has over 35 years of rich experience in the banking industry. Kalyanasundar was with Bank of India from 1975 and retired as General Manager - IT in November, 2010. Kalyanasundar has rich rsthand experience of Rural banking, as also implementation of Financial Inclusion solutions in the Bank. Kalyanasundar has won several honors and awards - CIO 100 Bold IT leader award for four years and entered the Hall of Fame; CTO forum Hall of Fame award; CIO 50 powerlist award (DataQuest). Kalayanasundar is a Post graduate in Mathematics, an Associate of the Indian Institute of Bankers. Apart from a Diploma in Cyber law he also holds a Certicate in Corporate Governance in Enterprise I T (CGEIT) from ISACA. Kalyanasundar has been appointed as the Additional Director of the Company with effect from March 26, 2012. He has also served as a Director of National Payments Corporation of India (NPCI). Babla Shamit Sharan is an Engineer from BIT Mesra. He has 22 years of experience in Information Technology including as Founder and Head of Mobility Solutions and VAS and at Tata Consultancy Services (TCS). As Executive Director in charge of Operations and Transactions for BASIX Sub-K, his value focus has been on bringing innovation, predictability, quality, scale and process-driven approach to the ground implementation by putting together technology, people and processes in a seamless manner. Amit Mehta, was the co-founder of Bartronics India Limited and was with them for 14 years and has held various positions in Tata Consultancy Services, where Amit was the head of sales and marketing for the VAS and mobility solutions and also responsible for sales of RFID based solutions globally. Amit was an intrapreneur in Danlaw Technologies where he founded the Intelligent Security Solutions Group. Amit is also an active member of the Plastic & Rubber Institute as well as the AIDC and Mobile Monday Group. Amit has done his Post Graduate Degree in Business Information Technology Systems from University of Strathclyde Glasgow, and a Post Graduate Diploma in Management Studies from University of Teesside. Amit is currently functioning as the Managing Director of BASIX Sub-K iTransactions Limited
Achievements
BASIX Sub-K won the mBillionth Award South Asia 2012 for Mobile Solutions in Social Inclusion.
Basix Sub-K iTransactions wins DST-Lockheed Martin India Innovation Growth Programme for innovation in Technology.
BASIX Sub-K won two prestigious awards at the 6th India Digital Summit, held in New Delhi on 18th January, 2012. The categories of awards where BASIX Sub-K emerged as a clear winner are: Best Use of Mobile for Social and Economic Development ; and Best Digital Financial Inclusion Project
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Directors Report
To The Members BASIX Sub-K i Transactions Limited The Directors have pleasure in presenting their Second Annual Report and the Audited Statement of Accounts of the Company for the year ended March 31, 2012. 1. Operating Results for the Year ended March 31, 2012 Key Indices in ` Particulars Income Expenditure Excess of Expenditure over Income 2. March 31, 2012 19,461,275 89,526,814 (70,065,539) March 31, 2011 3,181,357 7,439,269 (4,257,912) community, became enablers for the customers to get all required transaction services within the comfort of the village. BASIX Sub-K iTransactions Limited, has shown steady progress in this nancial year. The Company has grown its revenue by 600% and has had a complete year of operations with its initial BC. The Company has retained all the BC appointed last year and our experience with Ratnakar Bank helped us understand the dynamics associated in Financial Inclusion business. This year also saw signicant intervention from the regulatory environment, which has worked to the advantage of the Company.
Key highlights Our revenues touched INR 1.94 crore. We are the TSP for all the BCs at Axis Bank. We added four new banks increasing the number of banks we are associated with to 7 banks. The Company has successfully operated in 15 states and has set up 5 regional ofces to decentralize the operations and bring better response predictability to the ground. With the Government Emphasizing on UID linked payments, we were the only BC to successfully pilot the same for Banking Interoperability with Syndicate Bank in Mewat in the state of Haryana. AMUL one of the leaders in the Dairy business, conrmed the potential for Business to farmer payments and have been publically speaking around the benets it accrued from BCOs setup by the Company. Enhanced the training ability, by creating a training facility, and dedicated training Manager to increase productivity. Sub-K is among the rst company among all BCs in India to get a pilot to do interoperability with the Banks. The only company which is the nearest on the way to be compliant to UIDAI. The company successfully serving 82,916 customers, 1,60,046 acquired customers, we are increasing efciency to reduce this gap.
Operations and Performance of the Company BASIX Sub-K iTransactions Limited was incorporated on August 02, 2010 and commenced its business from August 12, 2010. BASIX Sub-K provides technological solution to nancial inclusion of the poor through use of mobile technology. It connects the citizen with mainstream banking infrastructure through Banking Correspondents. E-Governance by the Government is also made possible e.g., NREGA payments. In the last nancial year the company moved from project mode to a full-edged operations mode, the following are the key highlights: Outreach of Sub-K This year Sub-K had a strong learning focus and the market scenarios and the ecosystem in which we operate has given us several learnings which helped us realign our strategy as a BC project mode company to a transaction oriented distribution company with prime focus on serving the underserved in this space. (Details of Learning from Pilots mentioned in section Pilots conducted by Sub-K) Sub-K has put its footprints on 81 districts and 15 states in this year and through this network it has been able to reach out with various transactional services for 1,13,607 customers who were not in the ambit of regular banking services and were underserved, with the most remote being Andaman Nicobar Islands. This was done through a creation of 893 BCO outlets and 206 SKOs who were trained and equipped to do all transactions in their
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Key Achievements The rst BC to have a real time solution at all it BC points. We have been selected as a partner by IFC to work on 3 remittance corridors along with Axis Bank, to help the migrate workers in the Surat, Ganjam, New Delhi-Muzzafarpur and in urbanNasik to improve the predictability of their money transfer in a cost effective and secure manner in these corridors Ready to do Fund transfer with the interoperability among BCSA of Sub-K and other BCs of same or other banks. Over The Air (OTA) - to control software updates for Micro-ATM kit at BCOs across India centrally Reports at Micro-ATM kit: Dissemination of relative key information to BCSAs Uptime being maintained at 99% Real-time monitoring introduced Dedicated L1/L2 Support team in place to support all IT issues To introduce 16x7 L1 Support and 12x7 L2 Support in coming Quarter Migration of Ratnakar Bank environment to CtrlS Signicant improvement in reconciliation process, seen a 3% improvement compared to previous quarter IVR Migration to CtrlS Improvement in system stability hence reduced IVR downtime,Q4 IVR uptime@ 98.6% compared to 95.5% for Q3
Media On Air T.V 5 Telugu- operation about Sub-K dt:7/4/2012 HMTV Telugu- Operation about Sub-K dt: 30/3/2012
Print Business Standard 10th April 2012 -Hyderabad
Financial Express 25th April 2012-Hyderabad
Financial Achievements We have successfully raised rst round of equity and would like to take this opportunity to thank our employees and well-wishers who have contributed 262 lakhs and our rst external investor Michael and Susan Dell Foundation, who supported us by investing 4 crores and has an option of investing further `. 3 crores and `. 2 crores in tranches
Awards and Accolades GM FI Corporate Ofce, Syndicate Bank has categorically appreciated and complimented our efforts in helping achieve the FI objectives of Syndicate Bank with the stipulated time. Received the patent for ViTranSP Sub-K winning 2 awards from IAMAI (Internet and Mobile Association of India) -Best Digital Financial Inclusion Project. -Best Use of Mobile for Social and Economic Development. Declaration by DGM (FI), Mewat (Syndicate Bank), in a Press Conference held on 13th Feb., 2012 in Nuh, that it is only BCSAs of Sub-K are doing transactions in the eld and no other Banks BCs are so active
Pilots conducted by Sub-K: G to C Payments (EBT Payment): Created the framework and implementation method to do the Pension payments for the beneciaries 3,000 in number, on successful completion, the Government of MP looks forward to give 52,000 more beneciaries to start with. The same model can be replicated in other parts of the Country.
B to C Payments Amul Project: We have tied up with Amul (WB). Amul will deposit the amount payable to dairy
BASIX Sub-K
customers in Axis Bank, post which BCSA will be disbursing the amount to the customer in the village. The company will arrange cash to be delivered at BCOs based on cash limits set up by Amul. This will be done through ViTranSP. In the similar way we are getting tied up with Dodla Dairy, Heritage Dairy, Nandini Dairy etc., In Bihar we have collaborated with an NGO called Jaiprabha where we are converting SHG (Self Help Group) to act as BCSA for a group of villages. Did a pilot in Tikamgarh in MP, to create a BCSA in the nearby villages local commodity(farm produce) selling market, where in the offered price to the farmer for his produce has been credited into the farmers account, which he need not carry and avoid risk of cash payouts. The former can collect the payments from local BCSA at his village 24/7. Similar project is being piloted in Muzzaffarpur in Bihar. Salary payments for factory workers in remote factory locations to be routed through the bank account and Sub-K to open BCSA outlets in nearby villages to facilitate nancial transactions for these employees Pilots are being planned in Bihar and Ananthapur district of AP. Create a mechanism for tea-estate workers to receive payments in their bank accounts and Sub-K to facilitate transactions by opening BSCA in these villages. To provide cheap and accessible utility transaction services to the underserved villages. We did a pilot dipstick survey in MP, to nd that the demand for following services have great demand, Electricity Bill Payment (talks started with Govt. of AP, MP and Punjab) Railway reservations (talks started with IRCTC) Mobile Topup and DTH Service (already started) MNREGA (Pilot in MP, talks started in AP, MP, MH, Punjab) Bus Ticket (Long Distance) (Discussions on with mybustickets.com) Ready for Adhaar Enabled Payments for Subsidies. On an average a villager in that area spends a whole day and travels minimum of 0.5 kms and maximum of 54 km to pay his electricity bill, and if he sends the bill through somebody he has to pay a premium of INR 10 for the services. When 3.
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asked how about having the service within the reach of the village with a very low charge, the response for such services was found to be very positive. Aligning the Business Strategy to the Vision of Sub-K In an endeavor to align the business strategy to the vision of the company, Sub-K had initiated several experiments in all its area of operations as mentioned above, which has yielded encouraging results and has given us a deep understanding about huge potential and market demand for such services which Sub-K envisages to provide to the villagers.
With this, the key verticals identied, which will drive the business for Sub-K are: Public Sector Banks Financial Inclusion projects: In this case there is xed revenue per month per outlet Payments - One to Many: Payment a core service like G2C payments, B2C payments (cooperatives), additionally Financial Inclusion Remittances - Many to Many: Migrants and other users sending money to family members Sub-K outlets - Many to One: Dense network of Sub-K outlets providing payment collection C2B, like utility payments, recharges, insurance premium,
Dairy Payments- Apart from Amul disbursements in West Bengal focusing on dairy payments like Thirumala Dairy, Aavin, Dodla, ITC Munger, Sudha, Sanchi SKO- Setting up Sub-K Outlets(SKO) to provide non-banking srvices in the areas where there are possibilities to facilitate banking transactions in near future EBT- Pilot had been successfully done in Pipariya (MP), going to start in few more locations in Chhattisgarh
4.
Corporate Governance The Companys Corporate Governance Policy lays emphasis on transparency, accountability, ethical operating practices and professional management.
4. 1 Directors The Board has been constituted in accordance with the Companies Act, 1956 and is represented
New Initiatives and Way Forward:
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To increase the revenue of our BCSA, we have started adding new services and are in the nal stage of negotiations Railway Booking, future weather and other digital services.
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by ve eminent people from the elds of banking, livelihoods, enterprise promotion, rural development and Education. The members of the Board comprise: Mr. Babla Sharan, Mr. Mahesh Kanumury, Mr S Ramachandran, Ms Geeta Goel and Mr.PA Kalyansundar were appointed as the Additional Directors. The declarations have been received from the directors of the Company, and no director is disqualied from being appointed as a director of the Company under clause (g) of sub-section (1) of section 274 of the Companies Act. 4.2 Meetings of the Board The meetings of the Board are held once every quarter to review the performance of the company and discharge its duties. During the year, the Board met twelve times on April 30, 2011, June 10, 2011, July 22, 2011, September 19, 2011, September 26, 2011, October 13, 2011, October 27, 2011, two meetings on November 9, 2011, November 21,2011, January 9,2012 and March 26, 2012 4.3 Attendance of the Directors: No. of No. of Meetings meetings Attended held in Person 12 12 3 3 8 10 10 11 3 8 1 10 12 3 1 4 8 9 8 3 7 1
6.
Auditors Report and Appointment The report of the Statutory Auditors of the Company, M/s V Nagarajan and Company, Chartered Accountants, is attached herewith. M/s V Nagarajan and Company, being eligible, offers themselves for reappointment as Statutory Auditors of the Company and the Directors recommend to the members that the appointment may be approved.
7.
Energy Conservation Measures, Technology, Absorption and R & D Efforts As your Company is engaged in activities of promoting rural livelihoods, the particulars required under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Energy Conservation, Technology Absorption and R&D Efforts do not apply.
8.
Particulars of Employees In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, we have to report that during the year there were no employees in this category. During the year, the company has made all the employee related statutory remittances such as contributions under the Employees Provident Funds and Miscellaneous Provisions Act, 1952, Payment of Gratuity Act,1972, the Employees State Insurance Act, 1948.
Name of the Director Mr. Vijay Mahajan Mr Amit Mehta Mr Sajeev Viswanathan Mr N Divakar Rao Mr Arijit Dutta Mr. Babla Sharan* Mr S Ramachandran* Mr Mahesh Kanumury* Ms Geeta Goel* Mr Manmath Kumar Dalai* Mr P A Kalyansundar* * 5.
9.
Directors Responsibility Statement Your directors would like to inform you that the audited accounts containing the Financial Statements for the year ended March 31, 2011 are in full conformity with the requirements of the Companies Act, 1956 and they believe that the nancial statements reect fairly the form and substance of transactions carried out during the year. The nancial statements, audited by the statutory auditors M/s V. Nagarajan & Co., reasonably present the Companys nancial condition and results of operations, particularly considering the unique nature of operations of the company Your Directors declare that: (i) That in the preparation of the annual accounts, the applicable accounting standards as referred to in section 211 3(C) of the Companies Act, 1956 had been followed without any material departure. The accounting policies as stated in the notes forming part of accounts have been selected and applied consistently so as to give true and fair view of the accounts of the company
Appointed as Additional Directors during the year.
Human Resources This year steps taken were decentralizing HR recruitment and operations at ground. We appointed ve regional HR teams to start regional ofces. Variable pay was implemented for all the employees. 70% of the pay coming as usual and 30% is variable pay based on performance of company and individual. Also started star of the month across various departments and incentives for special drives run on the ground. Also changed the policy on travel and travel related payouts.
(ii)
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as at March 31, 2011. While doing so, the Directors have made necessary judgments and estimates, which are reasonable and prudent for this purpose. (iii) Proper and sufcient care has been taken for the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities. (iv) The accounts have been prepared on a Going Concern basis. 10. Statutory Compliance Report In accordance with the provisions of Section 383A (1) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000 a Statutory Compliance Report, by Ms Savita Jyoti, a Company Secretary in whole-time practice is attached herewith. 11. Acknowledgements
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Your Directors place on their record their appreciation for the support the Company has received from other group companies of BASIX and from partner organizations during the year and solicit their continued support and cooperation. Your Directors also wish to place on record their most sincere appreciation of the commitment, involvement and dedication by Companys staff in ensuring the level of performance and growth of the company that was achieved during the year and looks forward to their continued cooperation in realization of the corporate goals in the years ahead.
-Sd/Amit Mehta Managing Director Date : June 11, 2012 Place : New Delhi
-Sd/Vijay Mahajan Chairman
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Auditors Report
To The Members BASIX Sub-K i Transactions Limited 1. We have audited the attached Balance Sheet of BASIX SUB-K i TRANSACTIONS LIMITED (the Company) as at March 31, 2012, the Prot and Loss statement for the year ended on that date both annexed thereto and the Cash ow statement for the year ended on that date. These nancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these nancial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well evaluating the overall nancial statement presentation. We believe that our audit provides reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2003 and as amended, issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanation given to us, we enclose in the annexure, a statement of matters specied in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred above we report that: We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; In our opinion, proper books of accounts as required by the law have been kept by the Company, so far as appears from our examination of the books maintained by the Company; d) c) The Balance Sheet, the Prot and Loss statement and the Cash ow statement dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet, the Prot and Loss Account and the Cash ow statement dealt with by this report comply with the accounting standards referred to in sub section 3(C) of section 211 of the Companies Act, 1956; On the basis of the written representations received from the directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualied as on March 31, 2012 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, in the case of: i. the Balance Sheet, of the state of affairs of the Company as at March 31, 2012; the Prot and Loss statement, of the loss of the Company for the year ended on that date; and the Cash ow statement, of the cash ows for the year ended on that date.
e)
2.
f)
3.
ii.
iii.
4.
a)
b)
sd/(V. NAGARAJAN) Partner ICAI: Firm Reg. No.04879N M. No.: 019959 Date : June 11, 2012 Place : Hyderabad
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Annexure to the Auditors report
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Referred To In Our Report Of Even Date To The Members Of Basix Sub-K i Transactions Limited (the Company) [Referred to in Paragraph (3) of our report of even date] Based on the audit procedures performed for the purpose of reporting a true and fair view on the nancial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that: i. In respect of its xed assets: a) The Company has maintained proper records to show full particulars, including quantitative details and situation of xed assets. Fixed assets have been physically veried by the management during the year and no material discrepancies were identied on such verication. In our opinion, the frequency of verication of the xed assets is reasonable having regard to the size of the Company and the nature of its business. vi. c) In our opinion, a substantial part of xed assets has not been disposed off during the year. of increasing size of operations of the Company, the system needs periodical review and upgrading. The activities of the Company do not involve purchase of inventory and the sale of goods. v. (a) Based on the information and explanations given by the management, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Act have been so entered. (b) Owing to the unique and specialized nature of the items involved and in the absence of any comparable prices, we are unable to comment as to whether the transactions made in pursuance of such contacts or arrangements have been made at prevailing market prices at the relevant time. Based on our audit and representation from management, we state that during the nancial year, the Company did not accept any deposits and hence the company did not make any contravention of the provisions of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under.
b)
ii.
vii. During the year under review the company did not have an internal audit system. viii. To the best of our knowledge and belief, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section of Section 209 of the Act, in respect of the services rendered by the company. Accordingly, the provisions of clause 4 (viii) of the Order are not applicable. ix. In respect of its Statutory dues: a) Undisputed statutory dues including provident fund, investor education and protection fund, Income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a certain delays in remittance of income tax, Provident fund and service tax. Further, an
iii.
(a) The Company has not granted any loan, secured or unsecured to companies, rms or other parties covered in the register maintained under section 301 of the Act. Accordingly the provisions of clauses 4 (iii) (b) to (d) of the Order are not applicable. (b) The company has not taken any loan, secured or unsecured from companies, rms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clauses 4 (iii) (f) and 4 (iii) (g) of the Order are not applicable.
iv.
The Company has an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of xed assets and for rendering of services. However in view
The Company does not have any inventory except Micro ATM Kits. The company has conducted physical verication and procedure followed for such verication is adequate in relation to size and nature of its business. The company has maintained proper records of inventory and no discrepancy has been noticed during physical verication.
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BASIX
amount of `. 99,982 payable towards Employee State Insurance which is pending for more than six months from the date it became payable. b) During the nancial year there has been no statutory dues payable on account of pending disputes.
xvii.
In our opinion and on an overall examination of the balance sheet of the Company, funds raised on short-term basis have, prima facie, not been used for during the period for long term investment. The Company has made preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act. In our opinion, the price at which shares have been issued was not prejudicial to the interest of the Company. The Company has not issued any debentures during the year. Accordingly, the provisions of clause 4 (xix) of the Order are not applicable. The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4 (xx) of the Order are not applicable. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.
xviii.
x.
The Company has been in existence for less than ve years. Hence, the provisions of clause (x) of the Order are not applicable. The Company has not issued any debentures during the year. In our opinion, the Company has not defaulted in repayment of dues to a bank and nancial institutions during the year. xix.
xi.
xx. xii. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4 (xii) of the Order are not applicable. xiii. In our opinion, the Company is not a chit fund or nidhi/mutual benet fund/society. Accordingly, the provisions of clause 4 (xiii) of the Order are not applicable. xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable. xv. The Company has not given any guarantee for loans taken by others from banks or nancial institutions. Accordingly, the provisions of Clause 4 (xv) of the Order are not applicable.
xxi.
xvi. In our opinion, the term loans were applied for the purpose for which the loans are obtained.
Date : June 11, 2012 Place : Hyderabad
sd/(V. NAGARAJAN) Partner Firm Regn. No.: 04879N M. No.: 01995
BASIX Sub-K Balance Sheet as at

31-Mar-12 I. Equity and Liabilities Shareholders funds (a) Share capital (b) Reserves and surplus Non-Current liabilities (a) Deferred tax liability (net) (c) Long term provisions 3,496,508 921,444 4,417,952 Current liabilities (a) Short term borrowings (b) Trade payables (d) Other current liabilities 15,679,703 20,257,624 6,196,835 42,134,162 73,635,067 II. Assets Non-current assets (a) Fixed assets (i) (ii) Tangible assets Intangible assets 3,122,939 52,418,315 2,140,368 57,681,622 Current assets (a) Trade receivables (b) Cash and cash equivalents (c) Short-term advances (d) Other current assets 4,247,747 1,779,447 3,402,744 6,523,507 15,953,445 73,635,067 As per our report on even date For V. Nagarajan & Co., Chartered Accountants sd/(V. Nagarajan) Partner Firm Regn. No.: 04879N M.No.:019959 Date : June 11, 2012 Place : Hyderabad 26,163,380 919,573 27,082,953
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` 31-Mar-11
24,125,000 2,617,088 26,742,088 308,342 308,342 5,398,316 5,271,021 10,669,337 37,719,767
2,341,949 30,364,859 1,505,685 34,212,493 220,470 762,620 289,622 2,234,562 3,507,274 37,719,767
(b) Long-term loans and advances
for BASIX Sub-K iTransactions Limited
sd/Amit Mehta Managing Director
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BASIX
Prot and Loss statement for the year ended

31-Mar-12 Revenue from operations Other income Total Revenue Expenses Employee benets expense Finance costs Depreciation and amortization expense Other operating expenses Total expenses Prot/(Loss) before tax Tax expense: - Current tax - Deferred tax Prot/(loss) for the year Earning per equity share (EPS) [refer note 3.2] - Basic - Diluted Number of shares considered for - Basic - Diluted As per our report on even date For V. Nagarajan & Co., Chartered Accountants sd/(V. Nagarajan) Partner Firm Regn. No.: 04879N M.No.:019959 Date : June 11, 2012 Place : Hyderabad 1,391,768 1,578,137 69,326 82,293 (53.00) (47.00) (61.00) (52.00) 3,496,508 (73,562,047) (4,257,912) 38,716,616 1,244,314 12,522,985 37,042,899 89,526,814 (70,065,539) 3,549,178 4,417 159,580 3,726,094 7,439,269 (4,257,912) 19,004,236 457,039 19,461,275 31-Mar-11 3,086,904 94,453 3,181,357
for BASIX Sub-K iTransactions Limited
sd/Amit Mehta Managing Director
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BASIX Krishi Samruddhi Ltd.

Board of Directors Chairman Vijay Mahajan, Managing Director Arijit Dutta Directors Sanga Amarnath B L Parthasarathy holds Dr. Sankar Datta Siddharth Tata Pravinchandra Shivram Dravid Dr Sudha Nair Banks Krishna Bhima Samruddhi Local Area Bank Ltd IDBI Bank Ltd Axis Bank Ltd State Bank of India The Bank of Nova Scotia Auditors M/s V Nagarajan & Co., Chartered Accountants Delhi
INNOVATION & IMPACT
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BASIX
Board of Directors
Vijay Mahajan, Chairman, BASIX Group Dr Sudha Nair, is a microbiologist and obtained her doctorate from the University of Madras in the year 1991. Dr Nair has eighteen years of work experience in taking the benets of Science & Technology for sustainable rural development and livelihoods and has played a signicant role in policy formulations for women in Science, Engineering and Technology. Dr Nair is currently an independent development consultant and a former Senior Director of M S Swaminathan Research Foundation. Dr Nair serves on various committees at the National (Department of Science &Technology, and Department of Biotechnology) and International (Member Executive Board Organization of Women Scientists for the Developing World, Advisory member of the Regional Ofce Asia Pacic Region, UNESCO and Member Gender Advisory Board, UNCSTD) to promote equality for Women in Science and in taking the benets of Science to Women. She is appointed as the Additional Director of BASIX Krishi Samruddhi Ltd on February 1, 2012. B L Parthasarathy holds M.Sc. (Agriculture) from Tamil Nadu Agricultural University TNAU and Post-Graduation Diploma in Management (PGDM) from Indian Institute of Management, Bangalore. Parthasarathy is an expert in the eld of rural development, rural nance and micronance. Parthasarathy has earlier worked with Syndicate Bank, Action Aid, Swiss Agency for Development and Cooperation (SDC) and BASIX. Parthasarathy was also the Managing Director of Krishna Bhima Samruddhi Local Area Bank Ltd, a subsidiary of BASIX from the year 2005 to 2008. Parthasarathy is currently functioning as the Managing Director of BASIX Consulting and Training Services. Dr. Sankar Datta is a Professor of Livelihood Initiatives in the Azim Premji University, Bengaluru. Sankar worked in various capacities in the BASIX group, including heading Indian Grameen Services and the Livelihood School. Sankar was in MP Oilseeds Coop Federation, PRADAN, IIM-Ahmedabad, and IRMA, before joining the founding team of BASIX. Sankar was a Member of Task Force on Livelihoods constituted by Planning Commission (Rural Development Division) and a Member in the Consortium for Management Training for NRLM. Sankar is a member of the Advisory Council of Centre for Management in Agriculture, of IIMAhmedabad. Sankar has a bachelors degree in Agriculture and Animal Husbandry and holds a post graduate diploma in Rural Management. Dr Datta did his PhD in Economics. Siddharth Tata has an MBA from Harvard Business School and a B.Tech from the Indian Institute of Technology, Madras, where he was awarded the Shankar Dayal Sharma prize for excellence. Siddharth joined Acumen in September 2010 to further develop the Agriculture Portfolio in India. In his last role at the Bill & Melinda Gates Foundation, he worked with nonprot organizations to help build programs in the areas of dairy development, watershed management, and creating market linkages to improve incomes of farmers in India. Previously, as a management consultant at McKinsey & Companys Mumbai ofce, Siddharth advised clients in the retail, IT, and nancial services industries. Siddharth has also assisted a Mumbai-based investment rm on its agriculture investment strategy and helped launch a turnaround program for coffee washing stations in Rwanda as a volunteer consultant with TechnoServe. Siddharth was appointed as the Nominee Director of the BASIX Krishi Samruddhi Limited on April 7, 2012.
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Pravinchandra Shivram Dravid, a Graduate of B.Tech (Hon.) in Agricultural Engineeering from Indian Institute of Technology, Kharagpur in 1972 and was awareded Presidents Silver Medal and First Rank in the Batch. Dravid has completed Certicate Program for Management in Agriculture from Indian Institute of Management, Ahmedabad in 1973 and got rst rank in the Batch. Dravid has over 39 years of experience in various capacities and functional areas viz. general management, sales & marketing, production, HR etc.. Currently, Dravid is working as the President Business Planning & Corporate Affairs, Krishidhan Group of Companies, Pune. Dravid is guiding and managing the Corporate Affairs and overall business apart from guiding overseas projects which are important for the Krishidhan from the point of view of future growth & protability. Prior to this, Dravid worked with JK Agri Genetics Ltd, Nath Seeds Ltd, Maharashtra, Maharashtra Agro Industries Development, Maharashtra State Seeds Corporation Ltd, Vidarbha Quality Seeds Ltd and Mayco Ltd. He is appointed as the Additional Director of BASIX Krishi Samruddhi Ltd on February 1, 2012. Sanga Amarnath is a graduate in science and Bachelor of Law from Osmania University. He joined BASIX as a consultant and his rst assignment on Groundnut intervention was successfully. In Adilabad, he set the ground for cotton intervention with the farmers implementing IPM practices and in the process he was instrumental in developing Koutla-B MACTS. He assumed the role of Group Vice President, AgBDS in 2007 and has been successfully steering growth in Agriculture and Business Development Services business. Arijit Dutta is the Managing Director of BASIX Krishi Samruddhi Ltd. Arijit has over 25 years of experience in the development sector with reputed national and international organizations. Arijits key skills include programme design, implementation and evaluation, and analysis of policies and institutional strategies in rural livelihoods, institutional development, micro nance and natural resource management. Arijit has been exposed to both working with cutting edge workers as well as senior and policy level professionals and institutions. Arijit studied Agricultural sciences and also attended the international training program on micronance organised by Boulder Institute. Arijit also spearheaded the team for Study and design of irrigation nance with special emphasis on small & marginal farmers; Promoting large networks of Soy Producers.
Achievements
BASIX Krishi receives Certicate of Appreciation from NABARD for successful implementation of SRI Project.
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BASIX
Directors Report
To The Members BASIX Krishi Samruddhi Ltd The Directors have pleasure in presenting the Second Annual Report and the Audited Financial Statements of the company for the period ended March 31, 2012. 1. Financial Highlights: Particulars Income Expenditure Excess of Expenditure over Income 2. `.
The performance highlights as on 31st March, 2012 is mentioned below: As on 31st March12 Particulars No. of Branches Customers registered No. of LSP Customers per LSP Customer outstanding Net revenue from customers (`.) Fee from Institutions (`.) * Business Plan 36 58,120 363 160 45,591 2,00,18,000 Achievement 22 25,219* 177 142 11,841 1,29,11,699 (Collections 1,37,82,265) 1,47,84,472 (Collections 1,40,48,230)
March 31, 2012 March 31, 2011 28,160,993 39,297,283 3,544,362 7,534,034
(11,136,290)
(3,989,672)
Operations and Performance of the Company
1,87,00,000
2.1 Business overview: The total no of customers registered was 25,219 against the plan of 58,120, resulting an achievement of 43% of the planned target for the nancial year ended March 31, 2012. Since inception, BASIX Krishi cumulatively serviced 32,962 service contracts including 5,355 customers through various projects. BASIX Krishi concluded the year with 22 branches from 8 branches last year with 175% incremental growth and reaching customer base of 25,219 from 7,723 representing an incremental growth of 226%.
Includes both Direct customers registered: 19,864 & Customers through institutional projects 5,355:
2.2 Performance at a Glance: Quarter wise performance with respect to no. of customers: Though registrations continued across the months, there is decline in the second half year compared to rst half year because of prevailing drought situation.
Quarter wise performance with respect to no of customers

1,200 1,000 1st Qrtr
No of customers registered
800 600 400 200 0
2nd Qrtr
3rd Qrtr
4th Qrtr
Kurnool
Nandyal
Nirmal
Adoni
Sangli
Khammam
Kothagudem
Vijayanagaram
Nizambad
Gulbarga
Belgaum
Nalgonda
Shigonda
Wanaparthy
Kamareddy
Ananthapur
Mahbubnagar
Branch Name
3.
Business across Channels: Institutional Collaborations BASIX Krishi is extending its services to smallholders & marginal farmers in collaboration with Solidaridad, National Bank for Agriculture and Rural Development (NABARD), Govt. Of Karnataka through ICRISAT, ATMA, MYRADA, Haryali Kisan Bazaar(HKB) and Expert Bio products (EBP). The experiences of Institutional Collaborations is very positive, which
helped BASIX Krishi to establish its operations in the local areas by establishing relationship with local government departments and research institutions apart from relationships with bankers. This was very critical to establish Krishis presence in each district to start its operations. For example, the System of Rice Intensication (SRI) promotion work undertaken by BASIX Krishi is appreciated in Andhra Pradesh (AP) and Karnataka states. In AP, Krishi is the only institution which
Ahmednagar
Ludhiana
Bagolkot
Raichur
Hindupur
Gokak
BASIX Krishi
got the project for two districts Mahabubnagar and Nizamabad. With Krishis pioneering work reaching over the target of 400 farmers in rst season specially the handholding of farmers is very well appreciated by NABARD ofcials, the pictures of BASIX farmers has been used in NABARDs Monthly magazine, further Government of AP has allotted two more clusters in Medak district to Krishi. In Karnataka, BASIX Krishi is the only agency successfully implemented SRI with 400 farmers. These institutional funds supported in purchasing of inputs which in turn brought visibility and attracted more farmers to join Krishi, and this platform helped to sell BASIX Krishis other products as well, for example out of 400 SRI farmers in Mahabubnagar, 220 farmers registered for Crop bioinput product and out of 1,000 pre-BCI farmers in one cluster 80 farmers opted for crop bio input and about 200 for backyard poultry.
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Two farmers were nominated for Awards from NABARD, the details of which are given below: Traditional SRI SRI Yield/ Yield/ acre Acreage acre (kgs) (Kgs) 0.3 0.3 2660 Kgs (38 bags) 2240 kgs (32 bags) 3640 Kgs (52 bags) 3500 kgs (50 bags) Yield Increase (%) 61% 58 % Cost in Traditional (` /acre) 6,500/Cost in SRI method (`/ acre) 5,346/Difference (cost saving ` /acre) 1,154/-
Name and Village V. Sudhaker Reddy Malleboinpally J. Ramulu Palem
New Initiatives and Way Forward: BASIX Krishi is committed for service excellence by offering value added services and striving for achieving Customer Service excellence. In the process BASIX Krishi has been undertaking various projects and also building multiple stake holders Collaborations. In order to bring in visibility to our services Customer Delight kit has been designed offering value for money to its customers. A) Input Companies: C) B)
Indian Immunological Limited for Vaccinations and other livestock medicines
Cotton Seed Production:
The relationships have been built with various input companies such as Maple orgtech (India) Ltd, a Kolkata based company which has a specialized product based on EM (Effective Microorganism) technology. The EM products improves soil quality, increase yield and quality of produce, used for seed treatment and also as a pest repellent KN Bio Sciences (India) Pvt. Limited for bio formulations such as Bio Fungicides, Biopesticides, eco friendly growth promoters and micronutrients for enhancing the productivity Pzer for livestock medicines majorly over the counter products and feed supplements, and
ICT based value added services BASIX Krishi understands that, ICT is emerging as one of the solution for cost reduction, productivity enhancement, market linkages, etc. Now, Krishi is exploring the option for collaboration with mobilebased agri-information providers, e.g. Uniphor, IFFCO Kissan Sanchar, Weather Risk Management, etc. This would also increase customer acquisition efciency and customer base for Krishi, through both mobile based information and LSP-based service delivery channels.
D)
Livestock Insurance Services As there is demand coming up from the farmers during our interactions with the villagers for insurance
Initiated discussions with four companies: Vibha seeds, US Agri Seed works Pvt Limited, Bayer Crop Sciences and JK seeds to undertake Cotton Seed production, Bayer and JK Seeds have responded positively, identied villages to undertake about 100 acres of Cotton Seed Production in Mahabubnagar and Kurnool districts in the coming Kharif season.
INNOVATION & IMPACT
Another institutional project, forming Joint Liability Groups and linking to Banks helped BASIX Krishi in registering direct customers, which has instilled trust and condence in local farmers; because of APGVB linkages in Shadnagar, this cluster registered 970 customers, which otherwise would have been 600 customers. This is very true in case of Sangli Brach of Maharashtra as well, the local relationship with Ratnakar Bank paved way to BASIX Krishi which is able to serve more than 50 customers per village in few of Banks operational villages. It is clearly evident that the projects are helping BASIX Krishi to establish its presence in local area and 25-50% of project customers have been converted to BASIX Krishi direct customers by buying multiple products of BASIX Krishi. Hence for FY 2012-13, emphasis is given to concentrate on these initiatives.
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BASIX
services, BASIX Krishi has explored the possibilities of insurance cover matching to the requirement of its customers. In the process we have designed livestock insurance up to 40,000 coverage and the owner to get accident death benet cover with TATA AIG after several rounds of discussions, we would be launching pilot in the month of May. E) Other Institutional Collaborations: There are requests coming from many organisations, like world vision, MART, Shivia etc., for BASIX Krishis expert services which can be integrated into their programs. In this way, Krishi has started offering expertise institutional services to get bulk business with MART in Orissa and have already given quotations to World Vision in multiple states. F) Bank Linkages: Krishi as Business facilitator BASIX Krishi is involved with IDBI bank for Origination, Monitoring & Collection (OMC) of Agri and allied loans. Karnataka bank also been approached and expressed interest to work for the bank as BF/BC and the bank is examining other BC/BF models. 4. Corporate Governance The Companys Corporate Governance Policy lays emphasis on transparency, accountability, ethical operating practices and professional management. The companys board of directors comprised eminent individuals from the elds of agribusiness, enterprise promotion, banking, livelihoods, rural development and nance. 4.1. Directors The Board has been constituted in accordance with the Companies Act, 1956 and is represented by nine eminent people from the elds of agribusiness, enterprise promotion, banking, livelihoods, rural development and nance. The members of the Board comprise: During the period, Mr S Amarnath resigned from the position of the Managing Director and Mr Arijit Dutta appointed as the Managing Director with effect from October 1, 2011 without any remuneration. Dr Sankar Dutta, Dr Sudhar Nair and Mr Pravinchandra Shivaram Dravid were appointed as the Additional Directors on July 22, 2011 and February 1, 2012 and Mr Siddharth Tata was appointed as the Nominee Director of Acumen Fund, Inc on April 7, 2012. The declarations have been received from the directors of the Company, and no director is disqualied from being appointed as a director of the Company under clause (g) of sub-section (1) of section 274 of the Companies Act. 5.
4.2. Meetings of the Board The Board has met six times during the last nancial year and deliberated on new systems and process implementation aspects, on the business being achieved, reviewing policy guidelines, operational and nancial statements and overall Human resource strengthening. During the year, the Board met six times on April 30, 2011; July 22, 2011; September 19, 2011; October 27, 2011; February 1, 2012 and April 7, 2012. 4.3 Attendance of the Directors: No. of meetings held 6 5 6 6 6 4 2 2
#
Name of the Director Vijay Mahajan Sanga Amarnath BL Parthasarathy Arijit Dutta K Prabhakar Dr Sankar Datta* Pravinchandra Shivaram Dravid* Dr Sudha Nair Siddharth Tata * #
Number of Meetings Attended in person/(telepresent) 6 5 5 6 5 2 1 1 -
Appointed as Additional Directors on July 22, 2011 and February 1, 2012 Appointed as the Nominee Director on April 7, 2012.
Human Resources The Company gives utmost importance to its human resources as this is the major capital for delivering the agricultural, livestock and enterprise development (AGLED) services. Thus recruitment processes, challenging assignments and periodic capacity building in-house and externally is dedicatedly carried out by the company. As on March 31, 2012, the Company had team strength of 205 comprising all levels (66 on rolls including the Managing Director, 124 Livelihood Service Providers and 15 on contract basis).
6.
Auditors Report and Appointment The report of the Statutory Auditors of the Company, M/s V Nagarajan and Company, Chartered Accountants, is attached herewith. M/s V Nagarajan and Company, being eligible, offer themselves for reappointment as Statutory Auditors of the Company and the Directors recommend to the members that the appointment may be approved.
BASIX Krishi
7. Directors Responsibility Your directors would like to inform you that the rst audited accounts containing the Financial Statements for the period ending March 31, 2012 are in full conformity with the requirements of the Companies Act, 1956 and they believe that the nancial statements reect fairly the form and substance of transactions carried out by the company during the period. The nancial statements, audited by the statutory auditors M/s V. Nagarajan & Co., Chartered Accountants reasonably present the Companys nancial condition and results of operations, particularly considering the unique nature of operations of the company Your Directors declare that: (i) That in the preparation of the annual accounts, the applicable accounting standards as referred to in section 211 3(C) of the Companies Act, 1956 had been followed without any material departure. The accounting policies as stated in the notes forming part of accounts have been selected and applied consistently so as to give true and fair view of the accounts of the company as at March 31, 2011. While doing so, the Directors have made necessary judgments and estimates, which are reasonable and prudent for this purpose. 9.
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Particulars of Employees covered by Section 217(2A) of the Companies Act, 1956 In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, we have to report that during the year there were no employees in this category. During the year, the company has made all the employee related statutory remittances such as contributions under the Employees Provident Funds and Miscellaneous Provisions Act, 1952, Payment of Gratuity Act,1972, the Employees State Insurance Act, 1948.
In accordance with the provisions of Section 383A (1) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000 a Statutory Compliance Report, by Ms Savita Jyoti, a Company Secretary in whole-time practice is attached herewith. 11. Acknowledgements Your Directors place on their record their appreciation for the support the Company has received from other group companies of BASIX and from partner organizations and funding agencies during the year and solicit their continued support and cooperation. Your Directors also wish to place on record their most sincere appreciation of the commitment, involvement and dedication by companys staff in ensuring the level of performance and growth of the company that was achieved during the year and looks forward to their continued cooperation in realization of the corporate goals in the years ahead.
(ii)
(iv) The accounts have been prepared on a Going Concern basis. 8. Energy Conservation Measures, Technology, Absorption and R & D Efforts As your Company is engaged in activities of promoting Agriculture and livestock development Services, the particulars required under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Energy Conservation, Technology Absorption and R&D Efforts do not apply.
Sd/Arijit Dutta Managing Director Date : May 9, 2012 Place : Bangalore
(iii) Proper and sufcient care has been taken for the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities.
INNOVATION & IMPACT
10. Statutory Compliance Report
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BASIX
Balance Sheet as at
(All amounts in 000 except otherwise stated) 31-Mar-12 I. EQUITY AND LIABILITIES Shareholders funds (a) Share capital (b) Reserves and surplus Non-current liabilities (a) Deferred tax liability (net) (b) Long term provisions Current liabilities Other current liabilities Total II. ASSETS Non-current assets (a) Fixed assets (i) (ii) Tangible assets Intangible assets 2,016 17,643 1,229 20,888 Current assets (a) Trade receivables (b) Cash and cash equivalents (c) Short-term loans and advances 35 692 525 1,252 Total As per our report on even date For V. Nagarajan & Co., Chartered Accountants sd/V. Nagarajan Partner ICAI Firm Reg. No.: 04879N M. No.: 019959 Date : May 09, 2012 Place : Bengaluru. 22,140 30 2,136 1,482 3,648 24,812 1,217 19,620 327 21,164 15,583 15,583 22,140 7,005 7,005 24,812 1,721 272 1,993 297 297 11,500 (6,936) 4,564 14,000 3,510 17,510 31-Mar-11
(b) Long term loans and advances
For and on behalf of the Board of Directors of BASIX KRISHI SAMRUDDHI LIMITED sd/(Vijay Mahajan) Chairman sd/(Arijit Dutta) Managing Director
BASIX Krishi Prot and Loss Statement for the year ended
(All amounts in 000 except otherwise stated) 31-Mar-12 INCOME Revenue from operations Other income Total income EXPENSES Employee benet expenses Depreciation and amortization Other operating expenses Total expenses Prot before exceptional and extraordinary items and tax Prior period expenses Prot/(loss) before tax and Adjustments Tax expense - Current tax - Deferred tax Prot/(loss) for the period Earning per equity share (EPS) - Basic - Diluted Number of shares considered for - basic - diluted As per our report on even date For V. Nagarajan & Co., Chartered Accountants sd/V. Nagarajan Partner ICAI Firm Reg. No.: 04879N M. No.: 019959 Date : May 09, 2012 Place : Bengaluru. 940,301 940,301 (0.01) (0.01) 1,721 (12,947) 15,403 2,195 21,699 39,297 (11,136) 89 (11,226) 27,696 465 28,161
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31-Mar-11 3,469 75 3,544 3,158 140 4,237 (3,990) (3,990) (3,990) (0.00) (0.00) 900,000 908,219 7,535
For and on behalf of the Board of Directors of BASIX KRISHI SAMRUDDHI LIMITED sd/(Vijay Mahajan) Chairman sd/(Arijit Dutta) Managing Director
INNOVATION & IMPACT
CORPORATE OVERVIEW
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BASIX
BASIX Academy for Building Lifelong Employability

Board of Directors
Chairman Vijay Mahajan Managing Director Sushil Ramola Directors Anoop Kaul D Sattaiah Meera Shenoy Mahmoud Khan Banks ICICI Bank Ltd HDFC Bank Ltd. Financial Lenders National Skill Development Corporation New Delhi. Auditors Adarsh Sharma & Co. Chartered Accountants New Delhi
Board of Directors
Vijay Mahajan, Chairman, BASIX Group Anoop Kaul is the Director based in Delhi, is the National Head of Financial Inclusion of BASIX Group. A post graduate from the Delhi School of Economics he worked with the State Bank of India for 35 years before joining BASIX in 2007. While in State Bank he held senior level positions in the State of Gujarat, West Bengal, Delhi and Andhra Pradesh and Banks Central Ofce and seen all aspects of Banking and Financial Sector. In BASIX, he was the Chairman of the Rajasthan Livelihood Promotion Initiative under which 4.1 million BPL families were enrolled for Financial Inclusion in just 45 days, a global record. He is a Director on the Board of B-ABLE as well as a Member of the Governing Council of BASIX Academy. He has held Director-level positions in few companies in Gujarat and Maharashtra and also been visiting faculty to Administrative Staff College of India, IIM Lucknow and ICFAI Hyderabad and to Training Institutions of various Banks. D Sattaiah is the Director. He started his career as a Technical Assistant before joining BASIX. He joined BASIX as an Field Executive and rose to the position of Director, Operations, BSFL. His contributions to BASIX began with initiating micro-credit operations, beginning microinsurance operations and setting up Corporate Human Resource Department in BASIX. He was instrumental in effecting key long-standing collaborations with insurance companies inuencing them to make substantial changes in policy to adapt to the rural micro-insurance customers needs.
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Meera Shenoy is an Independent Director. She is the Executive Director, Wadhwani Foundation. She was Executive Director, Employment Generation and Marketing Mission (EGMM). She was a pioneer in skill building programs on a large scale for bottom end jobs. Meera is an alumnus of University of Hyderabad. She worked for many years for Business India, and then joined SERP to promote employment.
Mahmoud Khan, Alumnus of IIM Ahmedabad and graduation in Agriculture is the Managing Trustee of Rasuli Kanwar Khan Trust, undertaking multiple social initiatives in Mewat region Mahmoud was the Former Global Leader of Innovation Process, Unilever, UK
Achievements
B-ABLE Winner of the prestigious award and Certicate of Merit Best Skills Provider-Bottom of the Pyramid in UK INDIA Skills Forum Awards 2011.
Mr Sushil Ramola, being awarded the Roll of Honour certicate in the Skills Champion: Emerging Warrior category in the 1st FICCILeapVault Skills Champion of India Awards.
INNOVATION & IMPACT
Sushil Ramola is the promoter CEO of B-ABLE. Former President and CEO, SRF Limited, a Deming Prize winning company. He is a chemical engineer and IIM Ahmedabad alumnus, has 30 years experience where he set up and led innovation driven green eld projects in India and abroad both in industry and service organizations. He brings in competencies in creating successful value and performance driven organizations using the full potential of technology and partnerships and building people potential. He has been on the board of international companies, a few well established NGOs, and on the National Committees of CII on Education, CSR and Industry-NGO partnerships. For over 10 years he has been involved in the eld of education and has guided SRF Foundation and The Shri Ram School, rated amongst the best schools in India.
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Directors Report
Dear B-ABLE Shareowner, Your Directors take pleasure in presenting the 3rd Annual Report along with the audited statement of accounts for the nancial year ended March 31, 2012. Financial Results The highlights of your Companys nancial results for the nancial year April 1, 2011 to March 31, 2012 are as follows: (All Amount in `.) Particulars Income from Business Other Income Total Income Total Expenditure Prot / (Loss) before depreciation and taxes Depreciation& Amortization Exceptional Items Provision for Taxes including Deferred Tax Liability/(Asset) Net Loss for the period Net (Loss) Brought Forward Net Loss Basic EPS (`.) Review of Operations This was the Second full year of your Companys operation. The Company has embarked on objects that are transformational in nature. Your Company believes that skill development and training shall transform life of millions of youth in India. The Company increased its total income to `.255.31 lacs (Previous Year `.52.45 lacs). The cash loss during the year of `.451.29 lacs (Previous Year `.194.99 Lacs) was projected as expenses on human resources were required to scale up operations, and many centres are yet to become viable given the nascent nature of the sector and challenges in getting students to pay for vocational training. Signicant operational expenditure was under the heads of Employee Benets `. 202.39 lacs (Previous Year `.83.98 lacs; Consultancy Charges `.260.69 lacs (Previous Year `.70.10 lacs); Travelling Expenses `.61.28 lacs (Previous Year `.25.61 lacs); Rent `.40.52 lacs (Previous Year `.15.23 lacs). Your For the period 1.4.2011 to 31.03.2012 2,55,31,636 14,99,254 2,70,30,890 7,21,76,495 For the period 1.4.2010 to 31.03.2011 52,45,108 12,93,323 65,38,431 2,60,37,159 Company believes its human resources and talent pool is an asset that shall deliver robustly in the years to come. The Company has signicantly invested in developing a comprehensive, state-of-the-art ERP system (christened as E-VOC), to enable it to achieve its goals of scale, sustainability and excellence, in the long term. Your Company has also built an operational asset base across states in India that can enable it to scale operations at a marginal build up cost. With a Fixed Asset spend of over `.222.86lacs in just two years since incorporation and a Content Development Capitalization of `.34.34lacs during the last two years, your company has an infrastructure for reporting of better operational results in the years to come. Your company expects to demonstrate the full potential of its assets, content development, human resources and talent pool, management capabilities, transparent technology driven systems, high quality of pedagogy and training and access to areas of Indias hinterland in the coming years. Your Company is pleased to inform you that it has; i) ii) iii) a team in place to deliver the plans of the company; expanded reach to far ung areas pan India; successfully trained more students that it had committed to date to its lending partner National Skill Development Corporation ; signed multi-purpose training and employability Memorandum of Understandings / Agreements with leading corporates; autonomous State Government bodies for their skill development programmes and initiatives etc.; has created a robust MIS and an operating system that shall ensure efcient operations, and enable the team to be systematic and achieve optimum efciency levels as also to ensure transparency to all stakeholders; has IGNOU as its certication partner for its Courses in North East;
(4,51,45,605) (1,94,98,728) (36,79,014) 16,700 60,562 (3,94,109) 55,795
(4,87,47,357) (1,98,37,042) (1,97,92,907) 44,135
iv)
(6,85,40,264) (1,97,92,907) v)
vi)
Future Plans As the Company consolidates its all India presence in Skill Development through course based education and training by introducing vocational training courses and customizing the same for specic sectors and regions, the company shall during the nancial year 2012-13 work in cohorts with Central and State Government Agencies and Corporates who are looking to build human resources across industry and service sectors in an economy that yearns for trained manpower.
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The Company expects to train over 20,000 students in the year under way; to ensure comprehensive adoption and usage of the ERP system; to roll out more training programmes to make use of synergies of its holding company and group associates to extend its reach and spread its wings pan India. Besides, the Company shall manage and operate on a holistic basis, centres of Skill Development for different states or autonomous state undertakings in India. The Company is pleased to inform you that it has made favorable headway and is expected to ink MOUs / Agreements with many State Governments/ autonomous government undertakings in India in nancial year 2012 13. Share Capital During the year under review the paid up capital of your Company stands increased from `.1,05,00,000/- at the start of the year to `.1,35,00,000/- as at 31.03.2012 with existing shareholders subscribing at the face value of `. 10/- per share of a partially subscribed rights issue. The Company expects to augment its Paid Up Capital in the year under way as also, in the near future, to have an Employee Stock Option Plan that ensures alignment of individual human resource aspirations with the growth imperatives of the Company. Secured Loans As reported in the earlier year communications to you, your Company has signed an agreement on 25-02-2010 to take a long Term (7 year) Secured Loan from National Skill Development Corporation, New Delhi aggregating `.3030 Lacs. The loan had a moratorium for repayment and interest for a period of two years. The Company is pleased to inform you of the extension of the loan period to 10 years with an increase in moratorium for repayment and interest to three years. The Second and the Third tranche of the Loan was disbursed during the year and the total outstanding of the Secured Loan from National Skill Development Corporation as at 31.2.2012 stood at `.1221.99 Lacs (`.346.50 lacs as at 31.03.2011). The timely disbursement of Loan installments under the Agreement with National Skill Development Corporation in the coming years shall enable the company to achieve its expansion target as per its plans. Dividend There being a cash loss during the year under review and in accordance with the provisions of Section 205 of the Companies Act, 1956, your Directors do not recommend any dividend. Corporate Governance Your Companys philosophy on Corporate Governance envisages the attainment of the highest levels of
Directors In accordance with the provisions of the Companies Act, 1956, and Article 94 of the Articles of Association of your Company, Mr. Sattaiah Devarakonda, Ms. Meera Shenoy, and Mr. Anoop Kaul, Directors of your Company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. Directors Responsibility Statement Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with Respect to Directors Responsibility Statement, it is hereby conrmed that: (i) in the preparation of the annual accounts for the year ended March 31, 2012, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same; the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the prot of the Company for the year ended on that date;
(ii)
(iii) the Directors have taken proper and sufcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and (iv) the Directors have prepared the annual accounts of the Company on a goingconcern basis. Information relating Energy, Technology to Conservation of Absorption, Research
INNOVATION & IMPACT
transparency, accountability and equity in all facets of its operations as well as in all interactions with its Stakeholders including Shareholders, Lenders and Regulatory Authorities. In order to enhance customer satisfaction and stakeholder value, your Company shall benchmark its Corporate Governance practices in line with international norms. Corporate Governance is a set of systems and practices to ensure that the affairs of the company are being managed in a way which ensures accountability, transparency, fairness in all its transactions in the widest sense and meet its stakeholders aspirations and societal expectations. At B-ABLE Corporate Governanceis a journey for constantly improving value creation that is prudent and sustainable. The Company is committed to a more robust Internal audit structure as also to have an Audit Committee as two prime steps as we commit further to meeting the aspirations of all our stakeholders.
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and Development, Exports, Foreign Exchange Earnings and Outgo and other information forming part of the Directors Report in terms of Section 217(1)(e) of the Act, and the Rules made there under. a) Conservation of energy The operations of your Company are low energy intensive. However, appropriate measures, wherever possible, shall be initiated to conserve energy, if warranted. b) Technology absorption In todays world, perpetually evolving technologies and increasing competition dene the global market space. In order to maintain its position of leadership, your Company shall continuously develop stateof-the-art methods for absorbing, adapting and effectively deploying new technologies. Though no technology was developed or absorbed during the year under review, as reported earlier the Company is on course to acquire technology and software to build a robust MIS and operational reporting system during the rst quarter of current year. The company shall report on the cost, impact and the contribution to efciency attributable to this acquisition in the quarters and years to come. c) Research and Development The Company believes that content obsolescence is a reality. Only progressive content development will help us to measure up to future challenges and opportunities. During the year under review the Company made a conscious effort to develop content for courses that are relevant in the domain of skill development and that are being embraced by the students and their prospective employers as the need of the hour. A capital expenditure on content development of `.34.34lacsduring the last two years as reported earlier is expected to yield good dividends for the Company in the years to come. d) Exports During the year under review the Company did not export any services. The Company though plans to develop contents in a multitude of subjects for high potential geographies as a part of its expansion plans in the long term. e) Foreign exchange earnings and outgo There was no Foreign Exchange earnings during the nancial year ended March 31, 2012. There was an outgo of Foreign Exchange of USD 6200 (INR `. 3.21
Lacs) on account of acquiring Software Development Rights and of GBP 324 (INR 0.25 lacs) for Travel on UKEIRI Project). Auditors and Auditors Report M/s. Adarsh Sharma & Co., Chartered Accountants, Statutory Auditors of the Company, hold ofce until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received letters from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualied for reappointment within the meaning of Section 226 of the said Act. The Notes on Accounts referred to in the Auditors Report are self-explanatory and do not call for any further comments. Particulars of Employees Particulars of employees as required under Section 217 (2A) of the Act, read with the Companies (Particulars of Employees) Rules, 1975: The Company had no employee drawing a salary in excess of `.5,00,000/- per month if employed for part of the year or `.60,00,000/- per annum if employed for the whole of the year. Compliance Certicate The Company has obtained the necessary Compliance Certicate required under proviso to sub-section (1) of section 383A of the Companies Act, 1956 and the same is attached herewith. Acknowledgements Your Directors take this opportunity to thank all investors, nancial institutions, banks, regulatory and governmental authorities, for their valuable support and encouragement during the year under review. Your Directors take this opportunity to place on record their deep sense of appreciation for the commitment and services of all executives, ofcers and staff of the Company.
For and on behalf of the Board Sd/Sushil Ramola CEO & Managing Director Date : May 5, 2012 Place : New Delhi Sd/Vijay Mahajan Director
B-ABLE
Auditors Report
To The Share-Holders BASIX Academy for Building Lifelong Employability 1. We have audited the attached Balance Sheet of BASIX ACADEMY FOR BUILDING LIFELONG EMPLOYABILITY LIMITED as at 31st March 2012 and the Prot and Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto, which we have signed under reference to this report. These Financial Statements are the responsibility of the companys management. Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material mis-statement. An audit includes examining, on a test basis, evidence supporting the accounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by the management as well as evaluating the overall nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specied in paragraphs 4 and 5 of the said Order. Further to our comments in paragraph 3 above: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; In our opinion, proper books of account as required by Law have been kept by the Company, so far as appears from our examination of those books ; Date : May 5, 2012 Place : New Delhi d) c)
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The Balance Sheet, Prot and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; In our opinion the Balance Sheet, Prot and Loss Account and Cash Flow Statement referred to in our this report comply with the applicable Accounting Standards referred to in sub-section 3(c) of Section 211 of the Companies Act, 1956. In our opinion and to best of our information and according to the explanations given to us, the said nancial statements read together with the Signicant Accounting Policies and notes thereon give in the prescribed manner the information required by the Companies Act, 1956 and, give a true and fair view in conformity with the accounting principles generally accepted in India, i) in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; in the case of Prot and Loss Account, of the Loss for the year ended on that date; and in the case of the Cash Flow Statement, of the cash ows for the year ended on that date.
e)
2.
ii)
iii)
3.
5.
4.
For Adarsh Sharma & Co. Chartered Accountants
sd/(Adarsh Sharma, FCA)

Proprietor M. No: 082527 Firm Regn No.: 017661N
b)
On the basis of the written representations made by all the Directors of the company and taken on record by the Board of Directors, we report that none of the Directors is disqualied as on 31.3.2012 from being appointed as a Director in terms of clause (g) of sub - section (1) of Section 274 of the Companies Act, 1956.
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(Referred to in paragraph 3 of our report of even date) BASIX ACADEMY FOR BUILDING LIFELONG EMPLOYABILITY LTD. (i) In respect of its Fixed Assets (a) The company has maintained proper records showing full particulars including quantitative details and situation of xed assets. (b) As explained to us, all the xed assets have been physically veried by the management during the year and there is a regular programme of verication which in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verication. (c) During the year the company has not disposed off a substantial part of its Fixed Assets and the going concern status of the company is not affected. (c) The principal amount of the Loan is repayable together with interest due thereon at the close of a contract obtained by the said company of which the Company is an operational partner.
(d) In respect of the said loans and interest thereon, there are no overdue amounts as at March 31, 2012. (e) The company has not taken any loan secured / unsecured to / from Companies, rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the requirements of Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not applicable. (iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of xed assets and with regard to the rendering of services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the company. (v) (a) According to the information and explanations given to us, the purchases and arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section have been so entered. (b) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 as exceed the value of `. Five Lacs in respect of each party during the year have been made at terms which appear reasonable as per information available with the Company. (vi) The Company has not accepted any deposits from the public during the year. Therefore, the provisions of clause (vi) of the Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the Company. (vii) The Company had a paid up capital in excess of `.50 lacs on 1.4.2011. The Average Annual Turnover
(ii)
In respect of its Inventories (a) The company has no inventory. It does not deal in purchase, sale or manufacturing of goods. (b) The company is engaged is rendering consultancy service and skill development training and courses. As explained to us, but for small purchases of Lab Consumables and Printed Material which were charged as expense, during the year the nature of business did not warrant any purchase or sale of any goods and hence no records on inventory were necessitated.
(iii) In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956: (a) The Company has given interest bearing advances to a company covered in the register maintained under Section 301 of Companies Act, 1956. In respect of the said loan the maximum amount outstanding at any time during the year was `.19,74,001/- and the year-end balance is `.19,74,001/- (including interest of `.71,521/net of Tax deducted at Source). (b) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions of the loans given by the Company, are not prima facie prejudicial to the interest of the Company.
B-ABLE
of the Company during the two consecutive nancial years immediate preceding this nancial year (this being the third year of the operations of the Company) was less than `.5.00 Crores. During the year the Company did not have a separate Internal Audit Department nor did it appoint an Internal Auditor. During the course of the year the Company appointed personnel to work on internal audit. In our opinion the company needs to strengthen its internal audit system to be commensurate with the size and nature of its business. (viii) The Company is not engaged in production, processing, manufacturing or mining activities. Accordingly it is not required to maintain cost records under section 209 (1) (d) of the Companies Act, 1956. Accordingly the provisions of clause (viii) of the Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the Company. (ix) (a) According to the records of the Company, undisputed statutory dues of Income Tax, (Tax Deducted at Source), Service Tax, and any other material statutory dues, to the extent applicable and as determined payable by the Company, have been deposited with the appropriate authorities. The outstanding statutory dues as at March 31, 2012 were as follows : i) ii) iii) Tax Deducted at Source: `.8,69,378.00 Service Tax: `.4,162.00 Provident Fund `.1,44,465.00 (Employer & Employee):
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to the concerned authority to grant permission to so deposit the deducted amount of the employees for their share of Provident Fund, together with the employers contribution through the establishment code of its related party, Indian Grameen Services which is a registered entity under the Provident Funds & Miscellaneous Provisions Act, 1952 (and the amounts were so paid in the said code), was turned down by the authorities and the Management is taking adequate steps to take a new establishment code under the Provident Funds & Miscellaneous Provisions Act, 1952 and to transfer the proceeds of its earlier deposits to the new code as and when obtained. The Management has also conrmed that till such time as a fresh application is made all Provident Fund dues as determined deductible by it shall be so deducted and together with the Employer Contribution and other allied dues of administration etc., the same shall be continued to be deposited through the establishment code of its related party, Indian Grameen Services which is a registered entity under the Provident Funds & Miscellaneous Provisions Act, 1952. Though the Company had more than 20 (twenty) Employees on its rolls at any time during the year ended March 31, 2011 and it was reported that the Management had been informed that as a private educational institute (it is a skill development training enterprise) the provisions of Employees State Insurance Act, 1948 as amended are not applicable to the Company. However, with judicial pronouncements and clarications having since conrmed the applicability the Management applied for registration under the Employee State Insurance Act, 1948 and obtained the same with applicability with effect from 1.4.2011. We have to report that during the course of the year, both the Employer and Employee Contribution of Provident Fund and the dues of Employee State Insurance Corporation (ESIC) have generally been paid late (i.e. beyond the due date). (b) According to the information and explanations given to us, no undisputed amount payable in respect of income tax and service tax were in arrears, as at 31.03.2012 for a period of more than six months from the date they became payable. (c) (d) According to the information and explanation given to us, there are no dues of income tax, cess and service tax which have not been deposited on account of any dispute.
iv)
Employee State Insurance (ESIC) (Employer & Employee): `.71,566.00 EDLI Provident Fund : `.8,938.00 Undisputed statutory dues of Provident Fund, Employee State Insurance (ESIC), Income Tax Deducted at Source and Service Tax as determined payable by the Company have not generally been regularly deposited on due dates with the appropriate authorities. As reported in the previous year, the Company opted to deduct and comply with all requirements of Provident Funds & Miscellaneous Provisions Act, 1952 and deposit the dues under the said Act through the establishment code of its related party, Indian Grameen Services which is a registered entity under the Provident Funds & Miscellaneous Provisions Act, 1952. As explained to us, an application made
v)
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Since the Central Government has till March 31, 2012 not notied the amount of cess payable under section 441A of the Companies Act,1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same; (x) The Company was incorporated on 14.12.2009 and hence the provisions of clause 4(x) of Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the Company. We have, however, to report that the accumulated loss as at the end of the year i.e. on 31.3.2012, is more than the net worth of the Company and that the Company has incurred cash losses in the year under report and in the immediately preceding nancial year.
Corporation, New Delhi as per Agreement dated 25.02.2010 as amended. As certied by the Management, and on examination of the Balance Sheet of the Company, to the extent that the Loan received has been applied, the same has been for the purpose of Capital and Operating Expenditure for which it has been obtained. There is a moratorium on the repayment of loan for three years and repayment commences from the end of the rst quarter of third nancial year i.e. 2013-14. (xvii) According to the information and explanations given to us and on overall examination of the Balance Sheet of the company, there are no funds raised on short term basis during the year under audit and hence the question of using the same for long term investment does not arise. No longterm funds have been used to nance short-term assets except the revenue expenses to the extent of the accumulated losses as shown in the Balance Sheet.
(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a nancial institution or bank. The Company has not issued any debentures. (xii) In our opinion and according to explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities. (xiii) In our opinion, the company is not chit fund or nidhi / mutual benet fund/society. Therefore, the provisions of clauses 4 (xiii) of the Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the company. (xiv) In our opinion, the Company is not dealing in or trading shares, securities, debenture and other investment. Accordingly the provision of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the Company. (xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks for nancial institutions. (xvi) According to the information and explanations given to us, the Company has as at March 31, 2012 received a part disbursement aggregating `.12,21,99,000/- (Rupees Twelve Crore Twenty One Lacs Ninety Nine Thousand only ) against a ten year loan of `.30,30,00,000/- (Rupees Thirty Crore Thirty Lacs only) sanctioned by National Skill Development
(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under Section 301 of the Act. (xix) According to the information and explanations given to us the Company has not issued any Debentures during the year under audit. The Company has not raised any monies by way of a public issue during the year. According to the information and explanations given to us by the management and based on audit checks performed, we report that no material fraud on or by the company has been noticed or reported during the course of our audit.
(xx)
(xxi)
For Adarsh Sharma & Co. Chartered Accountants
Date : May 5, 2012 Place : New Delhi
sd/(CA. Adarsh Sharma,) Proprietor M. No: 082527 Firm Regn. No. 017661N
B-ABLE Balance Sheet as at March 31, 2012

Particulars I. EQUITY AND LIABILITIES (1) Shareholders Funds (a) Share Capital (b) Reserves and Surplus (2) Non-Current Liabilities (a) Long-Term Borrowings (b) Long Term Provisions (3) Current Liabilities (a) Short-Term Borrowings (b) Trade Payables (c) Other Current Liabilities (d) Short-Term Provisions Total Equity & Liabilities ASSETS (1) Non-Current Assets (a) Fixed Assets (Tangible) (i) Gross Block (ii) Depreciation (iii) Net Block (b) Fixed Assets (Intangible) (i) Gross Block (ii) Depreciation (iii) Net Block (c) Capital Work- in -Progress (i) Software Development (ii) Advance for Capital Equipment (iii) Content ( Intangible) (d) Deferred Tax Assets (Net) (e) Long Term Loans and Advances (f) Other Non-Current Assets (2) Current Assets (a) Current Investments (b) Trade Receivables (c) Cash and Cash Equivalents (d) Short-Term Loans and Advances Total Assets Figures as at the end of current reporting period
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` Figures as at the end of previous reporting period
13,500,000 (68,540,264) 122,199,000 358,099 12,398 1,323,879 7,433,242 1,606,003 77,892,357
10,500,000 (19,792,907) 34,650,000 217,714 734,545 3,292,528 759,200 30,361,080
II.
22,285,088 1,992,058 20,293,030 3,433,740 235,552 3,198,188 1,331,940 65,284 68,357 3,639,125 2,740,000 25,931,291 9,158,918 5,455,385 6,010,839 77,892,357
10,294,565 356,895 9,937,670 1,361,603 33,400 1,328,203 177,852 568,109 7,795 1,390,575 4,563,000 5,800,000 2,913,152 2,377,167 1,297,556 30,361,080
This is the Balance Sheet referred to in our Report of even date. As per our report of even date For Adarsh Sharma & Co. Chartered Accountants sd/(CA. Adarsh Sharma) Proprietor Membership No. : 082527 Firm Reg. No.: 017661N Date : May 5, 2012 Place : New Delhi
FOR BASIX ACADEMY FOR BUILDING LIFELONG EMPLOYABILITY LTD.
sd/Vijay Mahajan Chairman & Director
sd/Sushil Ramola Managing Director
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BASIX
Prot and Loss Account for the year ending March 31, 2012
Particulars I II III IV Revenue from operations Other Income Total Revenue (I+II) Expenses: Employee Benet Expense Financial Costs Depreciation and Amortization Expense Other Administrative Expenses Total Expenses (IV) V VI Prot before exceptional and extraordinary items and tax (III-IV) Exceptional Items ( Write Back of Amortization Due to Change in Accounting Policy of Amortization of Content Development) 20,239,424 48,081 3,679,014 51,888,990 75,855,509 (48,824,619) 8,398,183 26,912 394,109 17,612,064 26,431,268 (19,892,837) Figures as at the end of current reporting period 25,531,636 1,499,254 27,030,890
Figures as at the end of previous reporting period 5,245,108 1,293,323 6,538,431
16,700 (48,807,919) (48,807,919) (60,562) (48,747,357) (48,747,357) (46.25) -
(19,892,837) (19,892,837) (19,892,837) (19,892,837) (28.38) -
VII Prot before extraordinary items and tax (V - VI) VIII Extraordinary Items IX X Prot before tax (VII - VIII) Tax expense: (1) Current tax (2) Deferred tax Asset XI Prot(Loss) from the period from continuing operations (IX-X)
XII Prot/(Loss) for the period XIII Earning per equity share: (1) Basic (2) Diluted This is the Balance Sheet referred to in our Report of even date. As per our report of even date For Adarsh Sharma & Co. Chartered Accountants sd/(CA. Adarsh Sharma) Proprietor Membership No. : 082527 Firm Reg. No.: 017661N Date : May 5, 2012 Place : New Delhi
FOR BASIX ACADEMY FOR BUILDING LIFELONG EMPLOYABILITY LTD.
sd/Vijay Mahajan Chairman & Director
sd/Sushil Ramola Managing Director
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Indian Grameen Services

Board of Directors
Chairman Vijay Mahajan Managing Director Mihir Sahana Directors Anoop Seth Dr. Sankar Datta N V Ramana Dr Sudha Nair Yves Lafond Arvind Gupta Hersh Haladker Arijit Dutta International Donors United Nations Development Program Michael & Susan Dell Foundation Fundacion Solidaridad Latinoamerica RBS Foundation Ford Foundation Rabobank Foundation Shore Bank International Swiss Agency for Development Cooperation Developpment International Desjardins, Canada Indian Donors Small Farmers Agribusiness Consortium Sir Ratan Tata Trust ITC Rural Development National Bank for Agricultural and Rural Development Jamsetji Tata Trust Indian council of Agricultural Research Auditors M/s V Nagarajan & Co., Chartered Accountants Delhi
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Board of Directors
Vijay Mahajan, Chairman, BASIX Group Anoop Seth, is a Masters in Management Science from the Birla Institute of Technology and Science (BITS), Pilani. He has had a career of over 29 years in the banking sector, in India and the Middle East. He worked with Bank of America, Bechtel Enterprises as Vice President, Chief Financial Ofcer of Infrastructure Development Finance Corporation (IDFC) and as the Senior Vice President, ABN Amro Bank N.V., Mumbai. Presently, he is the Managing Director of AMP Capital. Dr. Sankar Datta is a Professor of Livelihood Initiatives in the Azim Premji University, Bengaluru. Sankar worked in various capacities in the BASIX group, including heading Indian Grameen Services and the Livelihood School. Sankar was in MP Oilseeds Coop Federation, PRADAN, IIM-Ahmedabad, and IRMA, before joining the founding team of BASIX. Sankar was a Member of Task Force on Livelihoods constituted by Planning Commission (Rural Development Division) and a Member in the Consortium for Management Training for NRLM. Sankar is a member of the Advisory Council of Centre for Management in Agriculture, of IIMAhmedabad. Sankar has a bachelors degree in Agriculture and Animal Husbandry and holds a post graduate diploma in Rural Management. Dr Datta did his PhD in Economics. N V Ramana is an Independent Director. He is a graduate in Dairy Technology from National Dairy Research Institute, Karnal and holds a Post Graduate Diploma in Management from Indian Institute of Management, Ahmedabad with specialisation in Agriculture. He worked with ITC Group for 20 years, handling a wide range of agri-business responsibilities. He joined BASIX as Senior Vice President (Strategic Initiatives) in 2001 and was the Managing Director of KBSLAB from 2003 to 2005 before his appointment as Managing Director of Bhartiya Samruddhi Finance Limited. Dr Sudha Nair, is a microbiologist and obtained her doctorate from the University of Madras in the year 1991. Dr Nair has eighteen years of work experience in taking the benets of Science & Technology for sustainable rural development and livelihoods and has played a signicant role in policy formulations for women in Science, Engineering and Technology. Dr Nair is currently an independent development consultant and a former Senior Director of M S Swaminathan Research Foundation. Dr Nair serves on various committees at the National (Department of Science &Technology, and Department of Biotechnology) and International (Member Executive Board Organization of Women Scientists for the Developing World, Advisory member of the Regional Ofce Asia Pacic Region, UNESCO and Member Gender Advisory Board, UNCSTD) to promote equality for Women in Science and in taking the benets of Science to Women. She is appointed as the Additional Director of BASIX Krishi Samruddhi Ltd on February 1, 2012. Yves Lafond, Director, holds a Masters in Commercial Science and has 28 years of experience related to the management and development of international organizations and projects. His main areas of expertise include: Development of strategies and methodologies for management of organizations and projects; micro nance and micro credit; small enterprises systems development and management; organizational development; facilitate the execution of strategic plans. He is associated with BASIX, directly or indirectly, since 1998 and is currently an associated consultant. Arvind Gupta is an Independent Director. He is Fellow from Indian Institute of Management, Ahmedabad with specialization in Marketing and Agri business, has 25 years hands-on industry experience, with focus on rural livelihoods, Agriculture & Allied industries. He was Professor at the Institute of Rural Management, Anand and involved with many national/ international studies. Prior to his joining at IRMA, Arvind has worked with reputed companies like NDDB. At present he is Visiting Faculty for two National level Institutions viz. VAMNICOM, Pune and MANAGE, Hyderabad.
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Hersh Haladker has masters in Innovation Design from the Royal College of Art, London and Masters in innovation engineering from Imperial College, London. Hersh looked at innovation from three different aspects. He was awarded the design London fellowship for a joint MBA in innovation entrepreneurship in Imperial College, Business school. His work has involved innovations in products, services and processes. He has partnered with companies such Swarovski, Sharp, mc laren, Britannia, GMR group, Pepsi Cp., Marico etc., in the past. Positions currently held - Founder and director - instillmotion consulting pvt. ltd. - www. instillmotion.net ; Head of innovation cell - spring.board - Symbiosis International University - www.springboard.org.in ; Member Secretary - Research and Innovation council, Symbiosis International University. Arijit Dutta is the Managing Director of BASIX Krishi Samruddhi Ltd. Arijit has over 25 years of experience in the development sector with reputed national and international organizations. Arijits key skills include programme design, implementation and evaluation, and analysis of policies and institutional strategies in rural livelihoods, institutional development, micro nance and natural resource management. Arijit has been exposed to both working with cutting edge workers as well as senior and policy level professionals and institutions. Arijit studied Agricultural sciences and also attended the international training program on micronance organised by Boulder Institute. Arijit also spearheaded the team for Study and design of irrigation nance with special emphasis on small & marginal farmers; Promoting large networks of Soy Producers. Mihir Sahana, Managing Director of IGS. Mihir of agriculture and postgraduate degree in rural management from IRMA and a mid career post Graduation Degree in Development Studies from The University of Manchester, UK. He shifted to the livelihood sector and joined an international and corporate NGO, IDE International, with a mission to promote livelihoods of small and marginal farmers to achieve scale and sustainability. In BASIX he is involved in developing a host of innovative products, processes and developing linkage with corporate and technology provider like Pepsico, ITC, ICAR institutions etc and institutional development services in collaboration with various Government Department.
Achievements
Indian Grameen Services won the Inclusive India Awards 2012 in the category Access to Finance organized by ICICI Foundation and CNBC-TV18
Manglajodi project winner of Earth Hero Award in Earth Guardian category RBS Foundation; Bandhavgarh Project winner of Earth Hero Award in Green Warrior category organized by RBS Foundation.
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Directors Report
To The Members Indian Grameen Services The Directors have the pleasure in presenting their Annual Report and the Audited Statement of Accounts of the Company for the year ended March 31, 2012. 1 Operating Results for the year ending March 31, 2012 `. in 000s Particulars Contributions and Grants Fees from Development Services Other receipts Total Receipts Total Expenses Surplus 2 Performance of the Company The year 2011-12, witnessed good progresses in all the strategic interventions of the Company. The details are as follows. 3 Livelihood Financial Services During the year, the Company was engaged in the following projects in the Livelihood Financial Services segment: Business Correspondence (BC): Business Correspondence initiative with Krishna Bhima Samruddhi Local Area Bank Ltd (KBS Bank). The BC initiative with KBS Bank has the of providing nancial inclusion services (e.g. savings, credit, insurance) to the rural and urban poor population in the most backward districts namely Mahabubnagar, Kodangal in Andhra Pradesh; Raichur and Gulbarga in Karnataka. The operation covers 562 villages in the four districts. The performance of BC operations during the year is summarized below Parameter Deposits outstanding (`. in 000s) Advances outstanding (`. in 000s) Disbursements (Mar12) (`. in 000s) Disbursements (`. in 000s) (Cumulative from Apr11- Mar12) Actual 223,306 317,466 29,350 332,606 March 31, 2012 79,312 38,571 22,216 140,099 147,882 (7,783) March 31, 2011 66,406 29,109 20,486 116,361 114,041 2,320 Parameter No of BCSA appointed No of BCSA transaction enabled No of BCSA transacted in given period No of SB A/C apps submitted to Bank No of Transaction enabled Customers Total Deposits (In `.) Total Withdrawals (In `.) Amount of Banking Transactions (In `.) Amount of Savings collected (In `.) Till Mar 2012 end 374 232 187 92,639 58,004 1,01,60,777 39,76,904 1,41,37,681 61,83,873 Business Correspondence Syndicate bank. initiative with
IGS is also a Business Correspondent for the Syndicate bank. BASIX Sub-K iTransactions Limited provides the technology platform, infrastructure management, adherence to Syndicate bank operating guidelines and transactions support for all the transactions done through Syndicate Bank BC outlets. The Project completes in three phases i.e. Phase I Pilot, Phase II- RFP allocation and Phase III Densication covering Andhra Pradesh, Karnataka, Haryana, Madhya Pradesh, Bihar, Jharkhand, Andaman & Nicobar Islands and Maharastra.Under the project the total number of SLBC (State Level Bankers Committee) mandated villages with population more than 2000 allotted to IGS are 330 and villages of population less than 2000 are 111. Operations Status:
Livelihood & Micronance Promotion Fund (LAMP Fund): The objective of the programme is to promote livelihood in rural India, especially for the disadvantaged sections of the society, by providing grant and loan support to small CBOs/ MFIs/NGOMFIs so as to build their institutional capacity as a micro-nance organization and build livelihood perspective in their operations so as to enable the organization to take up the task of promoting livelihoods of disadvantaged/poor beyond microcredit. The programme is operational in 15 states of India covering 139 districts and 5588 villages with 32,990 household. The various livelihood initiatives piloted through the fund are - Dairy, Vegetable, Zari work, Tasar, Piggery, and Bangle making. As on March 2012 LAMP Fund has supported 106 small MFIs / NGO-MFIs and has disbursed 137 numbers of loans to a tune of `. 229.49
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million along with `. 31.13 million development supports (returnable grant and grants). The total loan outstanding of LAMP fund stands at `. 80.9 millions with 95.8 % OTRR. `. 110.5 million loan was sanctioned to 34 institutions out of which 60.2 million has been disbursed as loan to 31 institutions. `. 9.19 million has been released as grant for livelihood promotion & capacity development to eighteen (18) LAMP partners. For micronance capacity building support, 10 MACS promoted by Ankuram Sangamam Porum (ASP) in 4 district of AP has been sanctioned 3 million. BASIX Consulting & Training Services (BCTS) has been assigned as the service provider to these MACS. In addition, LAMP Fund has sanctioned 14 million as loan to 8 of the above 10 MACS. Bandhavgarh Livelihood Finance Project: The objective of the project is to promote sustainable livelihoods in fringe villages of Bandhavgarh National Park through a comprehensive approach of Livelihood nance, Institutional development and Technical support services. The project covers 8 fringe villages i.e. Bijhariya, Damna, Gata, Kathli, Deori, Lakhumar, Ghagod and Rakhi near Bandhavgarh Tiger Reserve in Manpur block in Umaria district covering 481 households. 4 Agriculture, Livestock & Enterprise Development Services (Agleds): The objective of Ag/BDS is to enhance livelihood options for rural households through focused attention on identifying livelihood opportunities and conducting action research on various sub-sectors, which are supporting maximum numbers of rural households or have the potential to support in the future. During the year, the Company was engaged with the following projects: Agrarian Sustainability through Action Research: This project aims at undertaking action research for restoring agrarian sustainability in the Vidarbha region through promotion / strengthening of local institutions, which enable farmers to enhance their livelihoods and reduce vulnerability through the provision of nancial inclusion services and agricultural, livestock and business development services. The project is carried out in 100 villages among 6,023 (3062 women) organized into 478 Farmers groups 4 distress prone districts (Akola, Amravati, Wardha, and Yavatmal) of Vidarbha region in the state of Maharashtra. Kisan Samruddhi Kendras (KSKs, is federation of Farmers group at village level and planned to be registered as Producer Company) have been formed in all the four clusters and registration process is underway. Livelihood Enhancement in Melghat:
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This project is aimed towards to develop a livelihood enhancement approach for 3 resettled villages of Bori, Koha and Kund in Akot tehsil of Akola District by providing skills, material and nancial access for development of agriculture, livestock and micro enterprise activities The project activities have been withdrawn from Bori, Koha and Kund villages. However, need based technical support services in Agriculture and Dairy is being provided to farmers in these 3 villages. The project activities are ongoing in Ghatladki village while Apex body promoted in Bori, Koha and Kund is being capacitated Comprehensive Livestock Development Program -MP: The objective of the project is to enhance the income of dairy farmers through improved Livestock Management practices, capacity building of farmers and breed up gradation of milch animals through Articial Insemination services at the farmers door steps. This project is being implemented in Hoshangabad District, Madhya Pradesh. At present through 10 Livestock centers, breed improvement program and improved Animal Husbandry practices training is offered to dairy farmers in more than 300 villages in Hosangabad district in Madhya Pradesh. Simplipal Livelihood Project, Odhisa The objective of the project is to enhance the living standard of 1,000 tribal and non-tribal households in the fringe/buffer and in the Simlipal biosphere region. Till date, the project activities are ongoing in 21 villages (19 revenue villages and 2 hamlets). During the last 9 months various livelihood interventions such as System of Rice Intensication, Poultry, Apiary, Mahua aggregation, Medicinal plant cultivation and vegetable cultivation were initiated. Ecotourism at Manglajodi, Odhisa: The project aims to strengthen the Ecotourism Committee to facilitate ecotourism initiatives at Manglajodi and create sustainable earning sources for the community through eco-tourism. During the quarter, the conservation team was able to rescue an injured Black tailed Godwit and Marsh Harrier, treated. From time to time, they also sensitise the shermen on conservation and responsible livelihoods at wetland. During last quarter, total 329 tourists visited Mangalajodi as a result of effective marketing effort and promotion of the destination as compared to only 343 tourists during the previous entire season.
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Livelihood Enhancement of Agrarian Communities in Murshirabad district in West Bengal: The project objective is to enhance the livelihoods of 1,000 farmers in 30 villages in Murshidabad district in West Bengal. The farmers are being provided technical support for Vegetable cultivation and SRI method of Paddy cultivation and collectivization of farmers into Producer groups. The project also intends to promote 4 Agri-Business Centers, with each center covering 250 farmers. These Centers would be run on prot basis and would procure inputs from ITC and sale it among members. The project implementation is ongoing in 35 villages and covers over 1,115 farmers as of now. Around 27 farmers have agreed to do SRI in Rabi season at SUTI I block. As of now, the nursery raising activity has been started. Promotion of Community based institutions in West Bengal under NAIP: The objective of the project is to increase food security and enhance income through increased productivity in Amman Rice, to ensure irrigation through harvesting water, to trigger entrepreneurship among small and marginal farmers and landless laborers through commercial seed production, to trigger entrepreneurship among women community and landless laborers. Under National Agriculture Innovation Promotion-Component 3, ICAR has sanctioned the project for implementation in 3 districts of West Bengal through consortium partners. IGS is one of the 3 consortium partners in the project Promoting Integrated Livelihood Services for Rag Pickers and Other Poor communities through Waste Management in Urban Areas: The project aims at enabling the rag pickers to improve their income, become more organised and participate in a new business model of waste management. The project is implemented in urban slums in Indore, Madhya Pradesh. A total of 1899 rag pickers have been involved in this project. Completed three batches of vocational training and 13 vocational training members have been linked to the market then running ve vocational training centers with 68 women in ve communities with support of B-able and other individual trainers. Formed 25 Groups in respect of Institution formation. Conducted 30 community meetings and one ofce meeting with community leaders regarding to Institution formation Promoting Responsible Soy Supply Chain -MP: The project aims to enhance the Soy productivity by adopting RTRS production principle and institutionalizing small and marginal farmers into
producers group. During the project period, the Company will develop standard agriculture business development service considering RTRS responsible soy production principle and design services delivery methodology for soy farmers. After project period BASIX will provide these services to smallholders on reasonable fee basis across all potential districts to ensure the sustainability of farmers. Promotion of Sustainable Livelihoods through Agarbatti Rolling and Scenting: The project objective is to improve the socio-economic status of poor families by means of sustainable livelihoods through provision of market linkage. The project involves establishing 2 Production units and a Scenting unit to provide employment to women from poor families. The total number of project beneciaries would be 100 members. The project operates at Munger district in Bihar. Food Security through System Intensication Khunti, Jharkhand: of Rice
The objective is to Ensure Food security among 600 farmers in 16 villages through System of Rice Intensication (SRI) in Khunti district in Jharkhand. The early pilots and eld trials by Government and Non-Government Organizations have so far demonstrated effectiveness of the method to signicantly enhance Paddy productivity. Considering the cost effectiveness and productivity potential of the method and compatibility of the method with existing production processes, it is proposed to initiate a rapid spread of SRI method among small and marginal farm holders. NABARD proposed to support processes of wider adoption of technology by ways of awareness generation, capacity building of farmers, organizing in-situ pilot demonstrations, and supporting farmers to access critical farm implements such as Weeder and Sprayers. Development of Dairy and Agri-business for Small and Marginal Farmers in Munger district in Bihar: The project objective is to improve socio-economic status of 3,000 households through Livestock development and Extension services and 1,000 farmers through improved agricultural practices such as System of Rice Intensication, System of Wheat Cultivation, and adoption of high value crops. The project operates at Munger district in Bihar. Among the others projects such as Promoting Responsible Soy Supply Chain, Promoting Integrated Livelihood Services for Rag Pickers and Other Poor communities through Waste Management in Urban Areas, Simlipal Livelihood Project, Odisha,
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MELGHAT, Ecotourism at Mangalajodi, Odisha, Livelihood Enhancement of Agrarian Communities in Murshidabad district in West Bengal, Promotion of Community based institutions in West Bengal under NAIP, Project: Food Security through System of Rice Intensication- Khunti, Jharkhand etc. re in the pipe line of the company. 5 Institutional Development Services: The objective of IGS institutional development is to promote grassroots level community based institutions with a long-term vision of evolving into self controlled institutions capable of accessing all resources and services necessary for their livelihood promotion, b) improve NGO MFI / CB MFIs capacities on commercial orientation and skills required for economic activities, to attract mainstream commercial collaborators for scaling-up of their services, and c) help government and other agencies in improving the effectiveness of their programmes on micro nance & livelihoods. The following projects were implemented under this strategy: Promotion and Bank Linkage of 1025 SHGs in 9 districts of Madhya Pradesh. Bandhavgarh Livelihood Project: The project aims at promoting sustainable livelihoods in 8 fringe villages of Bandhavgarh National Park through a comprehensive approach of Livelihood nance, Institutional development and Technical support services. The goal of the project is to pilot the concept of Livelihood nance. To initiate the concept of Livelihood nance credit requirement of 292 households have been identied and village level interventions in Land and water are also being planned. The process of Village development Committee formation has also been initiated. RABO CBMFI Project in Madhya Pradesh: The Project has the objective of Capacity building of the 12 community based micronance organization in extending the need based nancial services to the poor, to upscale the micronance program and support the livelihood program, Strengthen the micronance systems, Capacity building of the promoting agencies for promotion of community owned institutions Network the assisted NGO-MFI/ CBMFI for monitoring, peer review, sharing best practices and, raising and setting higher standards in these States Small Farmers Agriculture Consortium Promotion of Farmer Producer Organization and Market aggregation to link small and marginal 6
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producers: The purpose of the project is to collectivize farmers, especially small producers at various levels across several states to foster technology penetration, improve productivity, enable improved access to inputs and services and increase farmer incomes thereby strengthening their sustainable agriculture based livelihoods. Finance Total income for the year ended March 31, 2011 was `.140.99 million. Major heads of income included `.79.31million as grants and `.38.57 million as fees from development services. Total expenses for the year amounted to `.147.88 million resulting in a decit of `.7.78 million. 7 Directors The Board comprises of eminent individuals from the eld of rural development and nance. It has ten directors: Vijay Mahajan N V Ramana Sankar Datta Arvind Gupta Mihir Sahana During the year Mr. Mihir Shana joined as Managing director of the company as a successor to Mr. Arijit Dutta, who retired from the Managing Director position on the same date as on October1, 2011. Anoop Seth Yves Lafond Sudha Nair Arijit Dutta
Meetings of Board of Directors Five meetings were held during the year ended May 7, 2011; July 27, 2011; September 12, 2011; November 1, 2011 and February 1, 2012. The attendance of the directors was as follows: Name of Director Mr. Vijay Mahajan Mr. Anoop Seth Ms. Lakshmi Raman Mr. N V Ramana Mr. Yves Lafond Dr. Sankar Datta Mr. B.L. Parthasarathy Mr. Arvind Gupta Dr. Sudha Nair Mr. Arijit Dutta Mr. Mihir Sahana Number of Meetings attended 5 2 2 5 4 4 5 3 2 5 2
Hersh Haladker
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Committees of the Board The Audit Committee meeting was held on November 1, 2011 during the year ending on March 31, 2012. The Audit Committee has been reconstituted, comprising of following members: Mr. NV Ramana, Chairman Mr. Arvind Gupta Mr. Yves Lafond Mr. Mihir Sahana, Managing Director 13
contributions under the Employees Provident Funds and Miscellaneous Provisions Act, 1952, Payment of Gratuity Act,1972, the Employees State Insurance Act, 1948. Directors Responsibility Statement Your directors would like to inform members that the audited accounts containing the Financial Statements for the year ended March 31, 2012 are in full conformity with the requirements of the Companies Act, 1956 and they believe that the nancial statements reect fairly the form and substance of transactions carried out during the year. The nancial statements audited by the statutory auditors M/s V. Nagarajan & Co., reasonably present the Companys nancial condition and results of operations, viz. giving technical assistance and support services to the clients of Group Companies, Community Financial Institutions and other Micro-Finance Institutions. Your Directors declare that: (i) In the preparation of the annual accounts, the applicable accounting standards as referred to in section 211 3(C) of the Companies Act, 1956 had been followed without any material departure. The accounting policies as stated in the notes forming part of accounts have been selected and applied consistently so as to give true and fair view of the accounts of the company as at March 31, 2012. While doing so, the Directors have made prudent judgments and estimates, which are reasonable and prudent for this purpose.
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Auditors Report and Appointment M/s V. Nagarajan, Chartered Accountants, of New Delhi, the Statutory Auditors of the company for the nancial year 2011-12 have audited the accounts for the year and have submitted the Statutory Audit Report. M/s V. Nagarajan, Chartered Accountants, will retire at the conclusion of the ensuing Annual General Meeting and being eligible for re-appointment have expressed their willingness to act as auditors of the Company, if appointed, and have further conrmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956. The appointment of M/s V. Nagarajan, Chartered Accountants as Statutory auditor of the Company for the nancial year 2012-13, may be made subject to approval of the RBI and approval of the members in the ensuing Annual General Meeting.
(ii)
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Energy Conservation Measures, Technology, Absorption and R & D Efforts As your Company is engaged in activities of promoting rural livelihoods, the particulars required under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Energy Conservation, Technology Absorption and R&D Efforts do not apply. However, various projects e.g. waste management, soya cultivation, System of Rice Intensication are addressing towards environment and energy issues.
(iii) Proper and sufcient care has been taken for the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities. (iv) The annual accounts have been prepared on Going Concern basis. 14 Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo a) The Company uses electric energy for its equipment such as Air Conditioners, Computer terminals, Lighting and utilities in the work premises. All possible measures have been taken to conserve energy. There was no technology absorption.
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Particulars of Employees In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended; we have to report that during the year there were no employees in this category. During the year, the company has made all the employee related statutory remittances such as
b)
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c) Foreign Exchange (Amount in `.) Particulars Earnings Outgo 15 Acknowledgements Your Directors place on record their sincere appreciation of the support the Company has received from the Ministry of Rural Development, Government of India, Sir Rattan Tata Trust, Sir Dorabjee Tata Trust, the Ford Foundation, the Swiss Agency for Development and Cooperation, Development international Desjardins, RABO Bank 2011-12 1,991 2,094 2010-11 2,641
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Foundation, Solidaridad, Intermon OXFAM, Michael and Susan Dell Foundation, Safe water network, Women Development Corporation, National Bank for Agriculture & rural Development, ITC Rural Development Trust, United Care Development Services, Indian Council of Agricultural Research, and all other well-wishers.
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Place : Hyderabad Date : May 12, 2012
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Auditors Report
(A Company registered under Sec 25 of the Companies Act, 1956) To The Members Indian Grameen Services We have audited the attached Balance Sheet of INDIAN GRAMEEN SERVICES [the Company] incorporating accounts of the Livelihood and Finance Innovation Fund as at March 31, 2012 and the Income and Expenditure account for the year ended on that date both annexed thereto. These nancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these nancial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well evaluating the overall nancial statement presentation. We believe that our audit provides reasonable basis for our opinion. Since the Company is registered under section 25 of the Companies Act 1956, hence the Companies (Auditors Report) Order, 2003, issued by the Company Law Board in terms of section 227(4A) of the Companies Act, 1956 is not applicable. On the basis of our audit we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit; In our opinion, proper books of accounts as required by the law have been kept by the company, so far as appears from our examination of the books maintained at the Head ofce and all the branches of the company visited by us; the company also has maintained separate set of books for the Livelihood and Finance Innovation Fund, a fund bestowed upon the company, in trust, which is engaged in certain activities which are in the nature of business. for V. NAGARAJAN & Co., Chartered Accountants c) The Balance Sheet and the Income and Expenditure account dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet and the Income and Expenditure Account comply with the accounting standards referred to in sub section 3(C) of section 211 of the Companies Act, 1956. On the basis of the written representations received from the directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualied as on March 31, 2012 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet and the Income and Expenditure Account read together with the notes on accounts attached thereto, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view: In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012; In the case of the Income and Expenditure Account, of the excess of expenditure over income for the year ended on that date;
d)
e)
f)
b)
sd/(V. NAGARAJAN) Partner Firm Regd. No. 004879N M. No. 019959
Date : May 12, 2012 Place : Hyderabad
IGS Balance Sheet as at

31-Mar-12 I. EQUITY AND LIABILITIES Shareholders funds (a) Share capital (b) Corpus fund (c) Capital grant/subsidy (d) Reserves and surplus Non-current liabilities (a) Long-term borrowings Current liabilities (b) Committed project based grants (c) II. Other current liabilities Total ASSETS Non-current assets (a) Fixed assets Tangible assets (b) Non-current investments (c) Long term loans and advances Current assets (a) Trade receivables (b) Cash and cash equivalents (c) Short-term loans and advances (d) Other current assets Total As per our report of even date for V. NAGARAJAN & Co., Chartered Accountants sd/(V. NAGARAJAN) Partner Firm Regn. No.: 04879N M.No: 019959 Date : May 12, 2012 Place : Hyderabad for INDIAN GRAMEEN SERVICES 5,129 130,913 2,366 21,699 286,114 509 94,190 31,308 95,824 16,195 286,114 (a) Trade payables 92,110 7,015 83 44,854 9,396 20,637
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31-Mar-11
83 56,247 1,162 18,065 92,110 2,357 92,412 7,675 270,111
42,847 509 70,428 3,206 134,735 3,932 14,454 270,111
sd/(Vijay Mahajan) Chairman
sd/(Arijit Dutta) Managing Director
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Statement of Consolidated Income and Expenditure for the year ended

31-Mar-12 INCOME Contributions from Foreign and Indian agencies Revenue from development services Other income Total EXPENDITURE Employee benet expense Financial cost Depreciation expense Bad and doubtful debts written-off Provision for non-performing assets Other operating expenses Total Prot before tax Less: provision for income tax Surplus/(Decit) for the year Appropriation Balance brought down Transfer to exchange uctuation reserve (Ford Foundation) Balances transferred to fund and reserves as per Note 23 DID LAMP Fund FF LAMP Fund Committed Project Grants Indian Grameen Services As per our report of even date for V. NAGARAJAN & Co., Chartered Accountants sd/(V. NAGARAJAN) Partner Firm Regn. No.: 04879N M.No: 019959 Date : May 12, 2012 Place : Hyderabad for INDIAN GRAMEEN SERVICES (7,783) 3,684 (11,467) (11,467) (3,789) (0) (4,010) (3,668) 2,320 2,368 (48) (48) 712 3,487 (4,247) 35,218 921 2,055 2,035 4,991 102,662 147,882 (7,783) (7,783) 28,831 925 2,888 3,295 632 77,470 114,041 2,320 2,320 79,312 38,571 22,216 140,099 66,406 29,109 20,846 116,361 31-Mar-11
sd/(Arijit Dutta) Managing Director
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Board of Directors
Chairman Vijay Mahajan Managing Director B L Parthasarathy Directors Ashok Kumar Singha Arijit Dutta Dr. SL Narayana ID Prasad Auditors M/s V Nagarajan & Co., Chartered Accountants Delhi
Board of Directors
Vijay Mahajan, Chairman, BASIX Group Ashok Kumar Singha is the Managing Director. He is a graduate in agriculture and a Post Graduate in Management from XIMB, Bhubaneswar. He has more than 18 years of experience in managing and executing development programmes in various capacities for Government, International Development organizations and Private Sector. His expertise in this eld include Climate change policy, implementation of the Kyoto Protocol, development and implementation of energy efciency and renewable energy policy, sustainable development in relation to energy and climate change, capacity building in JI and CDM. He was a special invitee to the Green India Programme. Ashok is the co-author of a book The Forgotten Sector (Oxford IBH) with Thomas Fisher and Vijay Mahajan, Chariman, BASIX. Arijit Dutta is the Managing Director of BASIX Krishi Samruddhi Ltd. Arijit has over 25 years of experience in the development sector with reputed national and international organizations. Arijits key skills include programme design, implementation and evaluation, and analysis of policies and institutional strategies in rural livelihoods, institutional development, micro nance and natural resource management. Arijit has been exposed to both working with cutting edge workers as well as senior and policy level professionals and institutions. Arijit studied Agricultural sciences and also attended the international training program on micronance organised by Boulder Institute. Arijit also spearheaded the team for Study and design of irrigation nance with special emphasis on small & marginal farmers; Promoting large networks of Soy Producers.
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Dr. SL Narayana PhD in Macro-Monetary Economics and started his career as Economic Analyst in Reserve Bank of Indias Department of Economic Analysis and Policy and Andhra Bank as Economist. Dr Narayana was on the Senior Management Staff of Institute of Chartered Financial Analysts of India (ICFAI) and ICFAI Business School (IBS) and Managing Editor of the ICFAI Journal of Applied Finance during 1994-96. Before joining BASIX, Dr Narayana was on UNDP-funded assignments for a decade as Associate Professor of Economics at Mekelle University, Mekelle, Ethiopia, initiated for setting up of Micronance Program. Joined BASIX in 2007, Dr Narayana is the Director of the BASIX Academy for Livelihoods and MicroBanking Practice (B-A-LAMP), Division of BASIX Consulting and Training Services Ltd. ID Prasad has Post-graduation in Economics from one of the most reputed Indian Universities; Diploma in Management and Diploma in Marketing Management. Prasad has over 40 years post-qualication experience in the areas of entrepreneurship development; cluster development; technology facilitation of small and medium enterprises; project appraisal; marketing research; export marketing and industry analysis with leading public sector consulting organizations and export development agencies in India. Prasad worked with Andhra Pradesh Industrial and Technical Consultancy Organisation Limited (APITCO) as Chief Consultant and Advisor for 17 years. Prasad is currently engaged with Seamless Consultancy Services (Private) Limited as Director. B L Parthasarathy holds M.Sc. (Agriculture) from Tamil Nadu Agricultural University TNAU and Post-Graduation Diploma in Management (PGDM) from Indian Institute of Management, Bangalore. Parthasarathy is an expert in the eld of rural development, rural nance and micronance. Parthasarathy has earlier worked with Syndicate Bank, Action Aid, Swiss Agency for Development and Cooperation (SDC) and BASIX. Parthasarathy was also the Managing Director of Krishna Bhima Samruddhi Local Area Bank Ltd, a subsidiary of BASIX from the year 2005 to 2008. Parthasarathy is currently functioning as the Managing Director of BASIX Consulting and Training Services.
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Directors Report
To The Members BASIX Consulting and Training Services Ltd. The Directors of your Company have pleasure in presenting the second report together with the audited statement of accounts for the year ended March 31, 2012. 1 Operating Results for the year ended 31 March, 2012 Particulars Income Expenditure Net prot before tax Provision for tax Net Prot after tax Earnings Per Share - Basic - Diluted 2. 18.00 4.44 106.5 102.1 March 31, 2012 76.0 67.9 8.1 2.6 5.6 March 31, 2011 32.4 23.6 8.8 3.0 5.8 Strategic Business Units The operations of the company are performed through its ve strategic business units, (SBUs) which are as follows: Inclusive Financial Sector Development (IFSD) Institutional Development and Livelihood Promotion (IDLP) Training and Capacity Building (BASIX Academy for Livelihoods and Micro-banking Practice or B-A-LAMP) Information Technology and Management Information System (IT-MIS) B-A-LAMP. Study, assessment and evaluation also contribute towards 10% of assignments undertaken by various SBUs. The contribution of designing and planning, long term handholding and training are 8%, 7% and 12% respectively.
Operations and Performance of the Company During the year, the Company has undertaken 60 consulting projects and assignments worth `. 195 Millions and 32 projects worth `.164 Million are presently undergoing. The Company has catered/ worked with 102 clients through various assignments both in domestic and international. The clients are spread across 15 states in India and seven other countries (Bangladesh, Bhutan, Sri Lanka, Timor, PNG, Ethiopia and Cameroon).
In addition to these, the new support functions were created for Business Development and Knowledge Management. The following are some of the highlights of the Company during the year: The Company entered into a contract for Consulting Services of the Specialized Business Support Organisation with Uttar Pradesh Bhumi Sudhar Nigam, Government of Uttar Pradesh funded by the World Bank worth `. 48.5 million. New contracts were signed with Govt. of Andhra Pradesh for preparation of ve years (2012-13 to 2016-17) district perspective and annual plan under the Backward Regions Growth Fund (BRGF) programme for four districts. The Government of Punjab assigned project to BASIX Consulting on the preparation of SPIP under NRLM programme and NABRD has awarded Financial literacy project to BASIX in Jharkhand.
Out of the total assignments, 42% assignments were handholding support to the organization for less than one year, undertaken majorly by IT and MIS SBU; 29% of the total assignments undertaken by the Company fall under trainings, study tours and exposure visits which are mainly contributed by
Micro Insurance and Social Protection (MISP)
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B-A-LAMP visibility improved through the Study Programs/Exposure Visits (International) organized for participants from Madagascar, Timor Leste, Bhutan, Ethiopia, Mali and Burkina Faso. For the rst time, two programs were offered in French and thematic areas are from outside the BASIX expertise (Watershed Management and Value chain of Milk, Fruits and Vegetables). Worked on rst On-site International Training Program for the PNG Micronance Ltd (PML) in partnership with the University of Papua New Guinea (UPNG)and recently commenced in Port Moresby, PNG Newly created SBU, MISP working on three major projects i. IBLI (Index Based Livestock InsuranceEthiopia) ii. RES RISK project of the Swiss Agency for Development and Cooperation and iii. World Bank (IFC) for the scoping study of Index based insurance in Bangladesh. Total ongoing projects are worth INR 50 Million. IT consulting has aligned its target clients to micro-banking institutions and credit co-operative societies. More than 500 institutions were contacted. 5 new contracts were signed with Micro-Banking Institutions. 12 new institutions joined as IT Clients and new orders received worth INR 10.70 Million for the nancial year. Proactive business development efforts of BASIX Consulting under the UNCDF Micro Lead Expansion (2012) enabled to visit 6 African countries Cameroon, Malawi, Mozambique, Rwanda, Tanzania and Ghana. Proposals submitted for 4 African countries. Dividend on Preference Shares As per the term sheet the company has provided for 9% dividend on the reference shares to Bhartiya Samruddhi Investments and Consulting Services Ltd for the year ending March 31 2012.
collaborators in different countries that will enable it to bid for contracts requiring contextual experience and network. Consulting will continue to identify new collaborators and professionals on call in different countries. The newly created Livelihood Basix Inc will help in the process of business development with greater vigour. 6. Corporate Governance The Companys Corporate Governance Policy lays emphasis on transparency, accountability, ethical operating practices and professional management. 6.1. Directors The Board has been constituted in accordance with the Companies Act, 1956 and is represented by ve eminent people from the elds of banking, livelihoods, enterprise promotion, rural development and Education. The members of the Board comprise: Mr Ashok Kumar Singha was appointed as the Additional Director of the Company on Nov 12, 2011. The declarations have been received from the directors of the Company, and no director is disqualied from being appointed as a director of the Company under clause (g) of sub-section (1) of section 274 of the Companies Act. 6.2 Meetings of the Board During the year, the Board met four times on April 30, 2011, July 22, 2011, November 12, 2011, and February 8, 2012. Board reviewed the performance of the company and assisted in developing effective indicators of performance. It also deliberated on the performance of senior management team and provided inputs on business development in India and other countries. 6.3 Attendance of the Directors No. of meetings held 4 4 4 4 2 4 Number of Meetings Attended in person 4 3 4 4 2 4 Director on
3.
4.
Dividend on Equity Shares In recognition of the nancial performance during this nancial year, the directors pleased to recommend for the rst time a dividend of `. 5/- (Rupee Five Only) per equity share for the nancial year ended March 31, 2012, This dividend shall be subject to tax on dividend to be paid by the Company.
Name of the Director Mr. Vijay Mahajan Dr. SL Narayana Mr Arijit Dutta Mr ID Prasad Mr Ashok Kumar Singha* Mr. BL Parthasarathy *
New Initiatives and Way Forward The Consulting will continue its geographic focus, apart from India, in Asia, Pacic and Africa. Africa is providing more opportunities going forward. Consulting has substantially enhanced its capability and is regularly bidding for larger contracts (over US$ 1 Million). Consulting has identied several new
Appointed as the Additional November 12, 2011.
BASIX Consulting
7 Human Resources The Company gives utmost importance to its human resources as this is the major resource for delivering the consultancy services. The company has instituted systems and processes for recruitment and periodic capacity building, both in-house and sourced externally. As on March 31, 2012, BASIX Consulting had team strength of 50, with diverse range of expertise. BASIX Consulting introduced Performance Assessment and Review (PAR) process for all its staff. A three day PAR workshop was conducted in Hyderabad wherein all the staff prepared Key Responsibility Area and Key Performance Indicators (KRA-KPI) for the Financial Year 2011-12. The exercise included performance targets of SBUs and individual performance targets for the nancial year. Personal effectiveness review with a key incident and preparation of professional improvement plan was the part of the exercise. Scores were given by individuals and SBU head/reporting ofcers reviewed the scores and plans. Managing Director conducted the exercise for SBU heads. 8 Projections for the year 2012-13 The Company has aggressive growth plans to enhance its client base and corresponding number of consultancy assignments to be undertaken. The business is expected to cross INR 250 mn in 201213. For achieving the same, the company plans to implement diverse strategies for acquiring and delivering assignments. 9 Auditors Report and Appointment The report of the Statutory Auditors of the Company, M/s V Nagarajan and Company, Chartered Accountants, is attached herewith. M/s V Nagarajan and Company, being eligible, offers themselves for reappointment as Statutory Auditors of the Company and the Directors recommend to the members that the appointment may be approved. 10 Directors Responsibility Your directors would like to inform you that the audited accounts containing the Financial Statements for the year ended March 31, 2012 are in full conformity with the requirements of the Companies Act, 1956 and they believe that the nancial statements reect fairly the form and substance of transactions carried out during the year. The nancial statements, audited
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by the statutory auditors M/s V. Nagarajan & Co., reasonably present the Companys nancial condition and results of operations, particularly considering the unique nature of operations of the company Your Directors declare that: (i) That in the preparation of the annual accounts, the applicable accounting standards as referred to in section 211 3(C) of the Companies Act, 1956 had been followed without any material departure. The accounting policies as stated in the notes forming part of accounts have been selected and applied consistently so as to give true and fair view of the accounts of the company as at March 31, 2012. While doing so, the Directors have made necessary judgments and estimates, which are reasonable and prudent for this purpose.
(ii)
(iii) Proper and sufcient care has been taken for the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities. (iv) The accounts have been prepared on a Going Concern basis. 11 Energy Conservation Measures, Technology, Absorption and R & D Efforts As your Company is engaged in activities of promoting Consulting and Training Services, the particulars required under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Energy Conservation, Technology Absorption and R&D Efforts do not apply. 12 Particulars of Employees covered by Section 217(2A) of the Companies Act, 1956 In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, we have to report that during the year there were no employees in this category. During the year, the company has made all the employee related statutory remittances such as contributions under the Employees Provident Funds and Miscellaneous Provisions Act, 1952, Payment of
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Gratuity Act,1972, the Employees State Insurance Act, 1948. 13 Statutory Compliance Report In accordance with the provisions of Section 383A (1) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000 a Statutory Compliance Report, by Ms Savita Jyoti, a Company Secretary in whole-time practice is attached herewith. 14 Acknowledgements Your Directors place on their record their appreciation for the support the Company has received from other group companies of BASIX and from partner organizations and funding agencies during the year and solicit their continued support and cooperation. Your Directors also wish to place on record their most
sincere appreciation of the commitment, involvement and dedication by companys staff in ensuring the level of performance and growth of the company that was achieved during the year and looks forward to their continued cooperation in realization of the corporate goals in the years ahead.
Sd/BL Parthasarathy Managing Director
Date : May 8, 2012 Place : Bengaluru
BASIX Consulting
Auditors Report
To The Members BASIX Consulting and Training Services Limited 1. We have audited the attached Balance Sheet of BASIX Consulting and Training Services Limited (the Company) as at March 31, 2012 and the Statement of Prot and Loss for the year ended on that date both annexed thereto. These nancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these nancial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well evaluating the overall nancial statement presentation. We believe that our audit provides reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2003 and as amended (the Order), issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specied in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred above we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; In our opinion, proper books of accounts as required by the law have been kept by the Company, so far as appears from our examination of the books maintained at the head ofce and all the branches of the company visited by us; d) c)
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The Balance Sheet and the Statement of Prot and Loss dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet and the Statement of Prot and Loss dealt with by this report comply with the accounting standards referred to in sub section 3(C) of section 211 of the Companies Act, 1956; On the basis of the written representations received from the directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualied as on March 31, 2012 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; i. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012; In the case of Statement of Prot and Loss, of the prots of the Company for the year ended on that date.
e)
2.
f)
3.
ii.
4.
for V. NAGARAJAN & Co., Chartered Accountants sd/(V. Nagarajan) Partner ICAI Firm Reg. No.: 04879N M. No.: 019959 Date : May 08, 2012 Place : Bengaluru
b)
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Annexure to the Auditors Report of even date

To The members BASIX Consulting and Training Services Limited [the Company] [Referred to in Paragraph (3) of our report of even date] Based on the audit procedures performed for the purpose of reporting a true and fair view on the nancial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that: i. In respect of its xed assets: a) The Company has maintained proper records to show full particulars, including quantitative details and situation of xed assets. Fixed assets have been physically veried by the management during the year and no material discrepancies were identied on such verication. In our opinion, no part of xed assets has been disposed off during the year. in pursuance of such contracts or arrangements have been made at prevailing market prices at the relevant time. vi. The Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of clause 4 (vi) of the Order are not applicable.
vii. In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business. viii. According to the information and explanations given to us in respect of its Statutory dues: a) The Company has been generally regular in depositing undisputed statutory dues including provident fund, Income Tax and other material statutory dues with the appropriate authorities during the year except delay in remittance of Service Tax and Professional Tax. The Company has not remitted service tax for the entire nancial year aggregating to `. 51,65,206, which was remitted subsequent to the balance sheet date. The Company is in the process of registration for Employee State Insurance. There were no undisputed amounts payable in respect of provident fund, ESI, Income Tax, Service Tax and other material statutory dues in arrears as at March 31, 2011 for a period of more than six months from the date they became payable. During the nancial year there has been no statutory dues payable on account of pending disputes.
b)
c)
ii.
The Company does not have any inventory. Accordingly the provisions of clause 4(ii) of the order are not applicable. The Company has not either granted/availed secured or unsecured loans to/from companies, rms or other parties listed in the register required to be maintain under section 301 of the Companies act, 1956. The Company has an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of xed assets and for rendering of services. The activities of the Company do not involve purchase of inventory and the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Act have not been entered. (b) Owing to the unique and specialized nature of the items involved and in the absence of any comparable prices, we are unable to comment as to whether the transactions made
b)
iii.
iv.
c)
ix.
v.
The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4 (xii) of the Order are not applicable. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. In our opinion and according to the information and explanations given to us, The Company has not given any guarantee for loans taken by others from bank or nancial institutions.
x.
xi.
BASIX Consulting
xii. According to the information and explanations given to us, during the year covered by our audit report, the Company has not made any preferential allotment of equity shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. xiii. The Company has neither issued nor had any outstanding debentures during the year. xiv. The Company has not raised any money by public issues during the year. xv. Based upon the audit procedure performed and information and explanation given by the management, we report that no fraud on or by the Company has been noticed or reported during the year. Date : May 08, 2012 Place : Bengaluru
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xvi. The nature of the Companys business/activities during the year is such the clauses (viii), (x), (xi), (xiii), (xvi) and (xvii) of paragraph 4 of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.
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sd/(V. NAGARAJAN) Partner ICAI Firm Reg. No.: 04879N M. No.: 019959
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BASIX
Balance Sheet as at
(All amounts in `. except otherwise stated) 31-Mar-12 I. EQUITY AND LIABILITIES Shareholders funds (a) Share capital (b) Reserves and surplus Non-current liabilities (a) Deferred tax liability (net) (b) Long term provisions Current liabilities Other current liabilities Total II. ASSETS Non-current assets (a) Fixed assets i) ii) Tangible assets Intangible assets 694 26,453 6,237 33,384 Current assets (a) Trade receivables (b) Cash and cash equivalents (c) Short-term loans and advances Total As per our report of even date For V. Nagarajan & Co., Chartered Accountants 18,288 1,656 10,686 30,630 64,014 1,934 3,823 5,940 11,697 42,869 457 29,409 1,306 31,172 27,856 27,856 64,014 12,806 12,806 42,869 2,254 4,517 6,771 1,203 2,528 3,731 12,500 16,887 29,387 12,500 13,832 26,332 31-Mar-11
(b) Long term loans and advances
For and on behalf of the Board of Directors of BASIX CONSULTING AND TRAINING SERVICES LIMITED
sd/V.Nagarajan Partner ICAI Firm Reg. No.: 04879N M.No. 019959 Date : May 08, 2012 Place : Bengaluru
sd/(B.L. Parthasarathy) Managing Director
BASIX Consulting Statement of Prot and Loss for The year ended
(All amounts in `. except otherwise stated) 31-Mar-2012 INCOME Revenue from operations Other income Total Revenue EXPENSES Employee benets expense Professional and consultancy expenses Depreciation and amortization expense Other operating expenses Total Expenses Prot before exceptional and extraordinary items and tax Exceptional and extraordinary items Prot before tax Tax expense - Current tax - Deferred tax Prot/(Loss) for the year Earning per equity share (EPS) - ` - Basic - Diluted Number of shares considered for - Basic - Diluted As per our report of even date For V. Nagarajan & Co., Chartered Accountants 250 1,250 18 4.44 1,500 1,051 5,554 32,119 12,413 3,023 20,357 67,912 8,105 8,105 75,884 133 76,017
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31-Mar-2011
32,387 32,387 11,628 5,838 142 23,602 8,785 8,785 1,750 1,203 5,832 106.50 102.06 55 57 5,994
sd/V.Nagarajan Partner ICAI Firm Reg. No.: 04879N M.No. 019959 Date : May 08, 2012 Place : Bengaluru
sd/(B.L. Parthasarathy) Managing Director
For and on behalf of the Board of Directors of BASIX CONSULTING AND TRAINING SERVICES LIMITED
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Signicant Accounting Policies forming part of Balance Sheet and Prot & Loss Account for the year March 31, 2012
1) ACCOUNTING POLICIES: a) Business Operation: The company has various business services namely, Providing Information Technology solutions including transaction automation for MicroFinance Institutions and Livelihood Promotion Organizations. Providing holistic development consulting and training services NGO-MFIs /CB-MFIs/ APEX organizations including Rural Financial Institutions, which are supporting poor and livelihoods, to help build their capacity on various systems and procedures including governance, operations, funds management, HR, automated Management information systems etc., to transform them into strong organizations capable of managing expansion and scale. Identifying potential individuals, including from rural poor and socially disadvantaged communities, training them in building their competencies (knowledge, skill and attitude) and deploy as required by the livelihood sector from time to time, which is known as BASIX Academy for Livelihood and Micronance Promotion (B-A-LAMP). Basis of preparation of nancial statements: The nancial statements are prepared under the historical cost convention and comply in all material aspects with the applicable accounting principles in India, accounting Standards notied under sub-section (3C) of Section 211 of the Companies Act, 1956 and the other relevant provisions of the Companies Act, 1956. c) Use of Estimates: The preparation of nancial statements in conformity with Indian Generally Accepted Accounting Policies requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of nancial statements and reported amounts of revenue and expenses during the reported period. Although such estimates are made on a reasonable and prudent basis taking into account all available information, actual results could differ from those estimates. ii) iii) ii) d) i) Revenue Recognition: In respect of service contracts income is recognized on the basis of proportionate completion of the contract with reference to the stage of performance and corresponding income. Interest income on deposits with banks is recognized on time proportion accrual basis taking into the account, the amount outstanding and rate applicable. Fixed Assets: Fixed assets are stated at cost net of depreciation. The cost of an asset comprises its purchase price (net of capital grants) and any cost directly attributable for bringing the asset to its working condition and location for its intended use. Fixed Assets includes Intangible Assets for the value of the Business Transfer made from Bhartiya Samruddhi Investments and Consulting Services Limited which will be charged off over four years from the year on which surplus generated. f) i) Depreciation: Depreciation is provided on the Straight-line method at the following stated rates specied under Schedule XIV of the Companies Act, 1956: Class of xed assets Furniture & Fixtures Ofce Equipment Computers & Peripherals Intangible Assets Rate 6.33% 7.07% 16.21% 10.00%
e)
b)
Depreciation is provided on the pro-rata basis from the date the asset is being put to use. In view of the nature business and the enduring nature for exploitation of intangible assets, the same is written off over 10 years, with depreciation rate of 10% Employee Benets: Short term employee benets including salaries, social security contributions, short term compensated absences (such as paid annual leave) where the absences are expected to occur with-
g) i)
BASIX Consulting
in twelve months after the end of the period in which the employees render the related service, prot sharing and bonuses payable within twelve months after the end of the period in which the employees render the related services and non monetary benets (such as medical care) for current employees are estimated and measured on an un-discounted basis. ii) Dened Contribution Plan Companys contributions paid / payable during the year to Provident Fund and Pension fund are recognized in the Prot and Loss Account. iii) Dened Benet Plan: Liabilities for gratuity funded in terms of a scheme administered by the Life Insurance Corporation of India, are determined by Actuarial Valuation on Projected Unit Credit Method made at the end of each nancial year. Provision for liabilities pending remittance to the fund is carried in the Balance Sheet. Actuarial gains and losses are recognized immediately in the statement of Prot and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash ows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds. h) Income Taxes & Deferred Taxes: Provision for current year tax is made after taking into consideration benets /disallowances admissible under the provisions of the Income Tax Act, 1961. Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognized, on timing difference, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets on unabsorbed depreciation and carried forward business losses, are recognized only if there is virtual certainty that they will be realized and are reviewed every year. The tax effect is calculated on the accumulated timing differences at the end of the year based on enacted or substantially enacted tax rates. i) Earnings per share: Basic earnings per share are calculated by dividing the net prot or loss for the period attributable to equity shareholders by the weighted
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average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net prot or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. j) Provisions and contingent liabilities: The Company creates a provision when there is a present obligation as a result of past event that probably requires an outow of resources and reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made, when there is a possible obligation or a present obligation that will probably not require outow of resources or where reliable estimate of the obligation cannot be made. k) i) Foreign Currency Transactions: Initial Recognition: Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction. Conversion: Foreign currency monetary items are reported using the exchange rate prevailing at the close of the nancial year. Exchange Difference: Exchange differences arising on the settlement of monetary items, or on reporting monetary items of the Company at rates different from those at which they were initially recorded during the year, or reported in previous nancial statements, are recognized as income or as expenses in the year in which they arise.
ii)
iii)
As per our report of even date for V. Nagarajan & Co., Chartered Accountants
For and on behalf of the Board of Directors of Basix Consulting and Training Services Limited
Sd/(V. Nagarajan) Partner ICAI Firm Reg. No.: 04879N M.No. 019959
Sd/(Vijay Mahajan) Chairman (B.L. Parthasarathy) Managing Director
Date : May 08, 2012 Place : Bengaluru
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CTRAN Consulting Ltd.

Our Partners in Livelihood Promotion Board of Directors
Chairman Vijay Mahajan Managing Director Ashok Kumar Singha Directors B L Parthasarathy S Ramachandran Prabhat Panda N V Ramana Dr. Runa Sarkar Major Funding Sources and Other Clients World Bank, DFID, UNDP, USAID, UNICEF, UNIDO, IFAD, ADB, State and Central Govt. Departments and Ministries, State Government etc. Auditors M/s B C Banka & Associates Chartered Accountants Bhubaneswar
Board of Directors
Vijay Mahajan, Chairman, BASIX Group B L Parthasarathy holds M.Sc. (Agriculture) from Tamil Nadu Agricultural University TNAU and Post-Graduation Diploma in Management (PGDM) from Indian Institute of Management, Bangalore. Parthasarathy is an expert in the eld of rural development, rural nance and micronance. Parthasarathy has earlier worked with Syndicate Bank, Action Aid, Swiss Agency for Development and Cooperation (SDC) and BASIX. Parthasarathy was also the Managing Director of Krishna Bhima Samruddhi Local Area Bank Ltd, a subsidiary of BASIX from the year 2005 to 2008. Parthasarathy is currently functioning as the Managing Director of BASIX Consulting and Training Services. S Ramachandran is a qualied Chartered Accountant from Institute of Chartered Accountants of India (ICAI). Ramachandran has 21 years of post-qualication work experience across nance, accounting systems, audit and compliance in nancial services industry. He joined BASIX in 1999 and worked in CXO roles in nance, operations, HR and technology functions. Prior to BASIX, he worked in two large NBFCs and a manufacturing company. He also serves on the Board of CTRAN Consulting Limited, BASIX Group Company. He was appointed as the Additional Director on July 22, 2012. Prabhat Panda is a Director and co-founder of CTRAN. He is a Chartered Accountant a fellow and a gold medalist from the Institute of Chartered Accountants of India. He has experience of over 15 years in the eld of nancial and operational review and structuring of back ofce functions. He has rich experience in the elds of direct and indirect taxes. He has worked extensively on institutional and nancial risk assessment for several agencies such as Action AID, UNDP, DFID, and The World Bank.
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N V Ramana is an Independent Director. He is a graduate in Dairy Technology from National Dairy Research Institute, Karnal and holds a Post Graduate Diploma in Management from Indian Institute of Management, Ahmedabad with specialisation in Agriculture. He worked with ITC Group for 20 years, handling a wide range of agri-business responsibilities. He joined BASIX as Senior Vice President (Strategic Initiatives) in 2001 and was the Managing Director of KBSLAB from 2003 to 2005 before his appointment as Managing Director of Bhartiya Samruddhi Finance Limited. Dr. Runa Sarkar is an Independent Director. She received her BE (Hons) from BITS Pilani; M.Sc. (Environmental Engineering) from University of North Carolina, USA. She has done her Fellow Programme in Management from IIM Calcutta. Her area of specialization is Environment Economics, Environment Financing, Economic Instruments for pollution control, and costbenet analysis. She has extensive experience in economic analysis of environmental and social impacts of major projects and has conducted numerous training courses on specic topics in environmental economics and cost-benet analysis. She regularly works to support the environmental economics activities of bilateral (including CIDA, DANIDA, the European Union, and USAID), and multilateral institutions (including the Asian Development Bank, the United Nations Development Program and the World Bank). Ashok Kumar Singha is the Managing Director. He is a graduate in agriculture and a Post Graduate in Management from XIMB, Bhubaneswar. He has more than 18 years of experience in managing and executing development programmes in various capacities for Government, International Development organizations and Private Sector. His expertise in this eld include Climate change policy, implementation of the Kyoto Protocol, development and implementation of energy efciency and renewable energy policy, sustainable development in relation to energy and climate change, capacity building in JI and CDM. He was a special invitee to the Green India Programme. Ashok is the co-author of a book The Forgotten Sector (Oxford IBH) with Thomas Fisher and Vijay Mahajan, Chariman, BASIX.
INNOVATION & IMPACT
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Directors Report
To The Members CTRAN Consulting Limited The Directors have pleasure in presenting their 5thAnnual Report and the Audited Statement of Accounts of the Company for the year ended March 31, 2012.During these ve years, CTRAN Consulting has provided multidisciplinary consulting services by using innovative concepts, sound research, new technologies, and indigenous knowledge, and gained recognition, nationally as well as internationally. The fruits of CTRANs efforts are amply clear in the pages of this report.
CTRAN is = Sustainability
Operating Results for the year ending March 31, 2012 Figures in `.000 Income From Operation Other Income Total Income From Operation Prot on Operation Provision for Income tax including deferred tax Net Prot After Tax Return on Equity EBITDA Margin CTRAN Consulting at a Glance CTRAN stands for complete transformation of value to its clients, through in-depth study and careful analysis, into products and services designed to meet the growing requirements of its discerning clients. The company is dedicated to providing sustainable solutions to the problems faced by them. The core competence of CTRAN lies in its unimpeachable credibility, unmatched analytical rigor and perceptible value addition. Our Strategic Space 39518 553 40070 6658 2083 4575 26% 18%
CDM Climate Change Adaptation
Energy DSCO
E2C2
Delivery Areas
Inclusive Infrastructure (PPP/PPCP R&R) Cross Cutting ID/Policy Work For Local Livelihood
I2L2
Environment CSR
Highlights Continued Revenue and prot growth despite slow down and setback to CDM due to international negotiation 101% achievement in Revenue High performing areas : Clean-Tech, Environment, PPP, M&V
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Key Achievements Starting with one, ve AMCER projects have gone on CDM cycle Have got the prestigious solar programme of activities in CDM in partnership with MNRE, the CERs are likely to grow from 30,000-50,000 ISO 9001-2008-Certied NABET Certication obtained for EIA First international Project on Forest Carbon was won in Kenya Completed State Climate Change Action Plan (Orissa, Meghalaya, Mizoram and Tripura) Completed PPCP in Health Sector Janani Express and for nutrition management Selected as advisory agency for RAY and supporting as PMU in urban governance Completed baseline for farmer producer organisations under National Vegetable Initiative Completed the District Level Human Development Report in two districts Core Areas E2C2 Advisory services on Carbon Market Energy Audit EIA/EMP and compliance development Biodiversity Assessment Detailed Project Reports for energy (largely renewable) Climate Change Action Plan I2L2 PPP/PPCP Decentralized Governance Human Development Issues Large scale survey, Impact Assessment and M&E Institutional Development, Policy Inputs Our Presence CTRAN now has been offering services in several states of India. It has more than 50 projects in different states of the country. It is consciously trying to focus on Odisha, Jharkhand, Bihar, Madhya Pradesh and North Eastern States. It is also trying to gain a toe hold in LDC countries and have bagged international project in Kenya. Performance of the company The CDM team made herculean effort to structure and aggregate micro-CERs to meet the December 2012 deadline. As a result now, we have AMCERs in solar water heaters, vermi-compost, y ash bricks, improved cook-
stoves and also forest carbon. The idea once conceived by our chairman Mr Vijay Mahajan to deepening the carbon market is a reality now and the team has delivered. The baseline energy audit has been completed in the iron and steel sector and it is now under gazette notication under perform achieve and trade scheme. We have two registered projects and most of the projects are now under the advanced stages of the CDM cycle. In climate change action planning we have completed the rst state level action plan on climate change and subsequently, done it in Mizoram, Meghalaya and Tripura. We have also started working on bio-diversity assessment and other projects relating to adaptation planning. We have successfully completed the District Human Development Report in Kalahandi which is going to be released by Chief Minister. The PPCP model in health sector has been accepted in Jannai Express and also on the nutrition management. We have also been assigned the role of Project Management Organisation in Water and Sanitation and Low Carbon City Planning. Empanelment Empanelment with OERC Empanelment - SFAC Publication/Papers Presentation Submitted concept paper on Water Mission Meghalaya to Meghalaya Govt.
E2C2 Operational Result [2011-12] Applied worth: 4799.88 Lakh Won: 130.47 Lakh Lost: 3126.91 Lakh Undecided:1542.5 Lakh This year was quite challenging for the E2C2 Unit specially the CDM unit. The bids have remained indecisive, cutback in production has also made CER-lot
INNOVATION & IMPACT
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size unviable for several corporate. The Company has been impacted in the Iron and Steel sector. The CER assets have grown especially after we signed up the Program of Activities (PoA) under solar water heater in partnership with MNRE.There has been a slowdown of activities in energy audit as the position of India on cutting emission is getting renegotiated. The process of CDM project validation, host country approval and registration has been difcult over the past year and continues to be challenging. However, the Group expects to register all its projects by the end of 2012. We have also aggregated about two million AMCERs under cookstove (16 projects). CTRAN announced the formation of new business unit to focus on important forest carbon themes related to Reduced Emissions from Deforestation and forest Degradation (REDD), Improved Forest Management (IFM), and Afforestation/Reforestation (A/R). Our REDD themed work involves REDD Projects and REDD Policy and Architecture. Targeted inputs for IFM and A/R activities include assessing how these project activities can provide synergy with other development goals whether driven by the public sector, private investment, or community development. Substantial headway was made in developing new markets in Africa. . The team is already working on A/R CDM in Mau and Aberedare ecosystem, Kenya, Africa and has a few projects in pipeline. The Environment Unit successfully completed the OFSDP ANR impacts on Biodiversity (Study I & II) which is the rst of its kind project in India.
with Ministry of New and Renewable Energy. It has been engaged with the Ministry in the Monitoring and Evaluation of SPV system and Stand Alone Power plants installed during 2010-11. Another important engagement with MNRE is the project on Solar Water Heater Market Development in Select Urban Clusters under UNDP/ GEF and evaluation of the SWH program. The unit has successfully completed the baseline energy audit of 5 Sponge Iron Units under Perform, Achieve and Trade (PAT) Scheme. Based on the study outcomes, BEE has nalized the energy consumption norms and standards for all DCs with an individual target set for the period from 2012-13 to 2014-15 The E2C2 Unit submitted 64 Techno Commercial proposals to various clients out of which most of them were of very high Value bids. However due to very high completion the company was not successful in bagging these projects despite collaboration with international agencies of high repute. Activities Sl. No Name of the Project State
Climate Change 1 Knowledge Management UPNRM -GIZ for All India
Clean Development Mechanism 1 2 3 4 5 6 CDM PoA Project Improved cook stove project 1MW Solar Power Project Patapur under RPSSGP 1MW Solar Power Project Patrapada under RPSSGP in in All India All India Orissa Orissa Orissa Orissa Orissa AP
1 MW solar Power Project under RPSSGP-Pan Time DSL2010 Solar PoA Bundled CDM Project development on Fly Ash Brick Manufacturing process Phase-II
Ashok Kumar Singha with two Nobel Laureates Joseph Stiglitz and Robert Solow The Study Report is likely to be published in one National Journal & One international journal. The unit has also successfully completed 1 EIA projects of Cement grinding unit in West Bengal, and another EIA project of Oil terminal of a subsidiary company of IOCL (rst of its kind in Chhattisgarh) and submitted to State PCB.CTRAN has successfully completed the Climate Change Action Plan supported by GIZ in all the three North Eastern states of India. The unit is presently in the process of synergizing these efforts and improving recognition for funding possibilities. The Energy Unit is working closely
7 8
9 10 11 12
18 MW Biogases based cogen Maharashtra project for SSSSKL Methane Recovery and utilization Maharashtra project for SSSSKL, Methane Recovery and utilization Maharashtra project for Karmayogi SSKL Bundled CDM Project development Orissa, on Fly Ash Brick Manufacturing Maharashtra, process Phase-I AP
CTRAN
Sl. No 13 Sl. No
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Name of the Project CDM Project development on Rice husk based 1.2 MW captive power generation at rice mill CDM Project development on 8 MW waste heat recovery captive power generation in sponge iron industry CDM Project Development on Composting of MSW in Meghalaya CDM Project Development Vermicomposting project Chhattisgarh
State Orissa
Name of the Project
State
ENVIRONMENT 01 Environmental Impact Assessment (EIA) and Environmental Management for common user pool Terminal for IOT Infrastructure & energy Service Ltd/ for Sonar Bangla Environment & Exports Social Cost Benet analysis of Rural Household Bio-Gas system in Orissa-SANDEE, Nepal Orissa
14
Orissa
15 16
Meghalaya
02
Orissa
on Chhattisgarh in Orissa
03
17
CDM Project development on 2 MW waste heat recovery captive power generation in sponge iron industry CDM Project development for waste heat recovery captive power project of sponge iron industry in Western Orissa. CDM Project development for waste heat recovery based captive power project of sponge iron industry of Dhenkanal
04 Orissa
18
Environmental Impact Assessment West Bengal (EIA) and Environmental Management Plan (EMP) for expansion of Cement grinding unit in Jalpaiguri, West Bengal Managing forest for species revival A case study of Cane in Khurdhadist, Orissa Orissa
19
Orissa
05
FORESTRY 01 A/R CDM in Mau and Aberedare ecosystem , Kenya Kenya
20
CDM Project Development Maharashtra Aggregated solar water heater for housing complex 1MW CDM Power project-Mahavir Alloys Orissa
21
Review of Operations [I2L2] in `.000 [2011-12] Applied worth: 1345.84 Won: 434.38
ENERGY 01 Gujarat, Field Evaluation study on Solar Thermal Energy Programme& Tamil Nadu, Technologies in implementation Maharashtra under off-Grid Scheme of JNNSM Monitoring and Evaluation of SPV AP, HP, WB, Gujarat, systems and stand alone power plants in standalone power plants Chhattisgarh, MP, installed in the eld during the year Uttarakhand 2010-11 Energy Audit of Madhya Pradesh SadakVikasPradhikaran under MPUVNL MP
Undecided:716.45 I2L2 Performance [2010-11] During the year 2011 -2012 the company applied for bids worth 1345.84 lakhs. The average contract size is around 42 lakhs. Overall projects won are around 32%. The major projects that came through were in the area of decentralized governance, Urban Development and health sector. The team has managed to get reasonable success in operating PMUs /technical cells in urban water and sanitation in all the three major municipal corporations. It has also completed the producer company registration under NAIP and started formality for carbon neutrality validation. In review by SFAC the Odisha groups have been rated highly as category A.
02
03
04
Field Evaluation study of Solar Karnataka, Energy Programme& Technologies Maharashtra, in implementation under Off-grid Chhattisgarh, Uttarakhand JNNSM.-MNRE EESL-PAT Study Consultancy assignment on programme for SWH market development in the selected urban clusters- MNRE Maharashtra, Goa All India
05 06
Lost: 195.01
INNOVATION & IMPACT
Environmental Impact Assessment West Bengal (EIA) and Environmental Management Plan (EMP) for Ferro Alloys Manufacturing unit in Bankura
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Activities I2L2 Segment The following activities were serviced by the I2L2 Segment Sl. No 1 Projects Improved Sanitation Services and Low Carbon Strategy under RAY PMU in Twin City Rapid Assessment of Vulnerability and Communication Needs to Address Adolescent Anaemia in Four DTA Districts Rapid Assessment of under 2 Strategy in Six Districts where the DTA is Functional Rapid Assessment of Climate Change and its Implication on Health & Nutrition status A Situational Analysis of 6 DTA Districts of Orissa Socio-economic study for slum dwellers - RAY Supported by BDA, Orissa Voucher Management study-TMST Comprehensive District Plan 2012-13- Ganjam Baseline Survey SFAC FPO - SFAC Location Orissa
Orissa
Orissa
Orissa
of Finance, Government of Kenya has engaged CTRAN for developing Afforestation /Reforestation CDM (A/R CDM) Projects in Mau Forest Complex and Aberdare Forest Range to assist the Government in developing Project Idea Notes (PINs) and Project Design Document s (PDDs) for validation and registration as required for issuance of CERs. During the last few months CTRAN has achieved many milestones and is progressing towards meeting the desired objectives with the planned timeline of the assignment. CTRAN has identied the project area for both AR CDM and REDD+ Projects from the satellite imagery. Around 20,000 ha of land have been identied for the ARCDM projects in Mau and Aberdare Forests. The remaining areas will be considered for the REDD+ Project development. The Company has already submitted Draft PDD to NEMA. Government of Kenya is keen for a long term association with CTRAN for other CDM Projects.
Orissa
6 7 8 9
Orissa Orissa Orissa, Jharkhand Orissa, Jharkhand Orissa Orissa Orissa Orissa Orissa Jharkhand
10 Comprehensive District Plan 2012-13- Kalahandi 11 Comprehensive District Plan 2012-13- Nuapada 12 Comprehensive District Plan 2012-13- Sundergarh 13 District Human Development Report Sundergarh 14 Project on Carbon Neutrality in Ginger Value Chain, NAIP 15 Change Management and Convergence Process Some of our Innovative Projects A/R CDM in Kenya
Distribution of Improved cook stove The project activity is an initiative towards promotion of improved cooking practices and thereby contributing towards reduction of drudgery in terms of cooking and fuel wood collection time, reduction of indoor air pollution and lowering of environmental degradation which occurs in traditional cooking practice. Although considerable initiative are already being undertaken towards dissemination of cook stoves, but lack of post distribution
In Kenya the business of Carbon Credit is just breaking ground. The African Carbon Exchange has recently been launched in Kenya with a hope that the trade in carbon credits will open up investment in the generation of renewable energy and forestry projects. Kenyas government estimates that its largest forest, the Mau, has the potential to earn the country close to $2bn (1.2bn) a year over the next 15 years. In this backdrop, The Ministry
CTRAN
support has nullied the objective behind similar initiatives in the past. Apart from initial capital cost of the product, the major draw-backs of such program are lack of training towards procedure of improved cook stove use, timely maintenance and post lifetime replacement. The project is conceptualized to overcome the aforesaid drawbacks and provide support in refraining from using the traditional cook stoves. The project activity is an aggregation of households involved in improved cooking practices through use of improved cook stoves and thereby replacing traditional cook stoves. The project activity covers dissemination of 14,066 Improved Cook stoves to households across Maharashtra.
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Rapid Assessment of Climate Change and its Implication on Health & Nutrition status Climate change affects human health both directly and indirectly. People are exposed directly to changing weather patterns (temperature, precipitation, sea-level rise and more frequent extreme events) and indirectly through changes in the quality of water, air and food, and changes in ecosystems, agriculture, industry, human settlements and the economy. These direct and indirect exposures can cause death, disability and suffering. Health problems increase vulnerability and reduce the capacity of individuals and groups to adapt to climate change. In the backdrop of existing climate change scenario, a study was conducted on climate change linked health aspects to understand the issue from micro perspective. The specic objective of the study was understanding climate change impacts from peoples perceptive, identify areas of intervention for adaptation & mitigation and thirdly to identify possible strategies that can integrate health and nutrition issues. The methodology adopted was participatory in nature and based upon both primary and secondary information. The study was conducted with the help of semi-structured PRA tools and interview schedule. Business Outlook Outlook: CDM (-ve)
The objectives of the project is dissemination and promote usage of efcient cook stove with thermal efciency of 29.88% and thereby replacing traditional stoves with default thermal efciency of around 10%. The project is implemented in rural areas and amongst the families living under at lower strata of the society in terms of economics stability and expenditure capacity. The project household through use of efcient cook stove will help in reducing deforestation by means of reduced re-wood consumption, decreasing black carbon emission, reducing drudgery for women and children by addressing the issues of health risks due to indoor air pollution.
The aim is either to reduce the amount of EUAs through a set-aside created in the context of the Auctioning regulation or to delay the volumes of EUAs to be auctioned in Phase 3 while keeping the overall Phase 3 volume of EUAs untouched. Both alternatives are thought to support EUA prices in order to incentivize investments to clean technologies.
INNOVATION & IMPACT
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The price for CERs still continues to be depressed. In our long term outlook we have taken our fresh originated projects at 3 Euro per CER. The number of registered projects is likely to increase. In fact due to the intransigence in EU-India dialogue, there is a possibility of India CERs not being eligible after post 2012 registration. Therefore, we have galvanised all our resources to make sure most of our projects are cleared before this deadline. Impact on Company: Our long term positions are protected as they were forward contracts some deals signed even at 12 euros. However this will remain active where we are dealing with the compliance buyers, for high value forward contracts with pure carbon traders are high risk too as they themselves are going bust. Our fresh originations have been limited without risk fund as the trading desks are asking for higher percentage linked to market and with a very low success fee and these are not very remunerative for us. Outlook: Climate Change (Neutral) Adaptation market continues to be bullish. Country is changing its stance from additional funds from developed nations to have its own climate budget. Large amount of such work will be in the Government Domain especially looking at the health issues, water-sanitation and agriculture. Outlook: Environment (+ve) There is increased demand for environmental remediation services and we have strengthened the environment team to cover additional sectors under NABET. We have had success in the construction sector and now trying to get projects from the iron and steel segment. We have focused on the EIA and EMP in Waste management projects also. Outlook Energy (+ve) Barring solar thermal, renewable energy market is depressed. The bio-mass based plants are running under low PLF or mixed fuel. Energy efciency market is picking up. Key focus We have identied consulting and ID work in the following areas Focus on the adaptation market in climate change that looks at Natural Resource Management in rural areas. Forestry and Bio-diversity planning
Focus on health issues and climate change impact and vulnerability in different segments (National Black Carbon Initiative) Focus on city resilience plan (water and sanitation, energy efciency and renewable and city biodiversity)
Key Challenge Key challenge for CTRAN is to raise the fund for its next stage of growth Monetization of the carbon asset Retention of the core human resources
Quality Certication/NABET CTRAN has obtained ISO-9001:2008 quality certication that will help CTRAN in delivering environmental management plan and process oriented environmental solutions. First such project has come from a prestigious port company. Additional sectors under NABET is being applied and team built Human resources The current staff strength of CTRAN Consulting is 50 inclusive of Mr. Ashok K Singha and Mr. Prabhat Panda. The budgeted staff strength is 53 for this nancial year. Positions COO AVP Sr. Consultants Consultants Associate Consultants Assistant Manager Project Staffs Executives Support staffs TOTAL Directors The following changes took place in the directorship of the Company: No changes of directorship took place during the Financial Year. In total, the Board now has seven directors, Mr. Vijay Mahajan (Chairman), Mr. Ashok Kumar Singha, Managing Director, CA Prabhat Panda, (Director), Mr. N V Ramana (Director), CA. S. Ramchandran (Director), Mr. B.L Parthasarathy (Director), Ms. Runa Sarkar (Director) Budget 01 04 06 10 04 02 12 04 10 53 Actual 00 02 12 05 02 02 15 03 07 48 Variance 01 02 -6 05 02 00 -3 01 03 05
CTRAN
Directors responsibility statement Pursuant to the requirement under Section 217 (2AA) of the Companies Act 1956, with respect to Directors Responsibilities Statement, it is hereby conrmed: that in the preparation of the Annual Accounts for the nancial year ended 31.3.2012, the applicable Accounting Standards have been followed along with proper explanation relating to material departures that the Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that were 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 nancial year and of the Prot or Loss of the Company for the year under review that the Directors have taken proper and sufcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities that the Directors have prepared the Annual Accounts for the nancial year ended 31st March, 2011 on a going concern basis. Particulars Of Employees
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As far as the information required under Section-217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees - Amend.) Rules 2002 is concerned; none of the employees was in receipt of emoluments of more than `.2 lakh per month or `.24 lakh per year during the year under review. Acknowledgement The Board of Directors acknowledge with gratitude the unstinted support and guidance that the Company has received from the BASIX Group Hyderabad. The Company expresses its gratitude to, its Bankers, Auditor, Collaborators and Clients for their co-operation extended. The Board is especially proud of the loyal and dedicated service of all its employees and offers its deepest thanks.
Auditors M/s. B. C. Banka & Associates, Chartered Accountants were appointed as Statutory Auditors for auditing the Accounts of the Company for the year ended 31st March 2012 the observations of Statutory Auditors together with the reply thereto are enclosed to this Report.
INNOVATION & IMPACT
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BASIX
Auditors Report
To The Members of Ctran Consulting Limited We have audited the attached Balance Sheet of CTRAN CONSULTING LIMITED as at March 31, 2012 and the Prot & Loss Account for the year ended on that date annexed thereto. These nancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these nancial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well evaluating the overall nancial statement presentation. We believe that our audit provides reasonable basis for our opinion. On the basis of our audit we report that: As required by The Companies (Auditors Report) Amendment Order, 2004 issued by the Company Law Board in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanation given to us, we state in the annexure, a statement of matters specied in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred above we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit; In our opinion, proper books of accounts as required by the law have been kept by the company, so far as appears from our examination of the books maintained at the Head ofce of the company visited by us; c) The Balance Sheet and the Prot & Loss Account dealt with by this report are in agreement with the books of account; In our opinion, the Prot & Loss Account and the Balance Sheet comply with the accounting standards referred to in sub section 3(C) of section 211 of the Companies Act, 1956. On the basis of the written representations received from the directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualied as on March 31, 2012 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet and the Prot and Loss Account read together with the notes on accounts attached thereto, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view: i. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012 and In the case of prot & loss account, of the prots of the company for the year ended on that date.
d)
e)
f)
ii.
For & on behalf B. C. Banka & Associates. Chartered Accountants (FRN: 326935E)
b)
Date : May 8th 2012 Place : Bhubaneswar
sd/B. C. Banka ICAI M.No : 058531
CTRAN
Annexure to the Auditors Report Referred to in our Report of Even Date
[Pursuant to the Companies (Auditors Report) Amendment Order, 2004] I. 1. In respect of items stated in Paragraph 4 of the Order: The company has maintained proper records to show full particulars including quantitative details and situation of xed assets. The management has carried out physical verication of xed assets during the year and found no discrepancies. No xed assets has been disposed off by the Company during the year. The company has not granted or taken any secured or unsecured loans to the company, rms or other parties listed in the register required to be maintained under section 301 of the Companies Act, 1956. In our opinion and according to the explanations given to us, the company has adequate internal control procedures commensurate with the size and nature of the business for the purchase of Fixed Assets and Sale of Services. The contracts and arrangements, which need to be entered in to register maintained under section 301 of the Act is maintained and According to the information given to us the contracts are not prejudicial to the interest of the company.. The company has not accepted any deposits from the public. The company has an internal audit system commensurate with the size of the company and nature of its business. The company has generally been regular in depositing statutory dues with appropriate authorities. As on the 31st March 2012 there are no undisputed dues outstanding for more than six months.
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12. The company has availed a overdraft limit of `.80,00,000/- from HDFC Bank against pledge of its xed deposit amounting to `.63,23,678/- and there has been no default in respect of repayment of principal or interest. 13. The company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.
2.
4.
15. The company has not given any guarantee for loans taken by others from bank or nancial institutions. 16. Based on our examination of accounts of the company as at 31st March 2011 we report the company has utilized all the long term fund raised only for long-term investments as per the contract and obligations. 17. The company has not made any preferential allotment of shares to companies covered in the register maintained under Sec 301 of the Companies Act 1956. 18. The company has not issued any debentures during the year. 19. The company during the year has not raised any money through public issue of shares.
5.
6.
7. 8.
9.
21. Other clauses of the order are not applicable to the Company.
10. According to the information given to us there are no unpaid statutory dues for over six months as on March 31, 2012. 11. The company does not have any accumulated losses at the end of the year. The company has not incurred any cash losses during the nancial year covered by our audit and in the immediately preceding nancial year.
For & on behalf B. C. Banka & Associates. Chartered Accountants (FRN: 326935E)
Date : May 8th 2012 Place : Bhubanaeswar
sd/B. C. Banka ICAI M.No : 058531
20. Based upon the audit procedure performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during this year.
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3.
14. The company does not deal or trade in shares or debentures or other investments.
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Balance Sheet as on
(All amounts in `.000 except otherwise stated) 31-Mar-12 EQUITY & LIABILITIES SHAREHOLDERS FUNDS Share Capital Reserves and Surplus NON CURRENT LIABILITIES Defferred Tax Liability Debentures CURRENT LIABILITIES Short Term borrowings (Secured Loans) Current Liabilities Provisions 6,729 6,103 1,985 14,817 36,302 ASSETS NON CURRENT ASSETS FIXED ASSETS Gross Block, at cost Less: Depreciation Net Block CURRENT ASSETS Trade receivables Cash and cash equivalents Short-term loans and advances Other current assets Total As per our report of even date for & on behalf B. C. Banka & Associates. Chartered Accountants (FRN: 326935E) sd/B. C. Banka ICAI M No : 058531 Date : May 08, 2012 Place : Bengaluru 12,772 6,618 1,310 13,355 34,055 36,302 for Ctran Consulting Limited 11,678 4,513 648 8,972 25,812 28,391 3,356 1,110 2,246 3,292 713 2,579 3,159 5,644 1,950 10,753 28,391 276 39 314 249 103 352 565 20,606 21,170 500 16,785 17,285 31-Mar-11
sd/Ashok K Singha Managing Director
sd/Prabhat K Panda Director
CTRAN Prot and Loss Account for the year ended

(All amounts in `.000 except otherwise stated) 31-Mar-12 REVENUE Revenue from Operation Management Consulting Fee Increase /(Decrease) in stock of work in progress Other Income Total Income EXPENSES 35,729 3,789 553 40,070
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31-Mar-11
31,509 990 216 32,716
Administrative Overheads Project Implementation Expenses Travelling & Conveyance Depreciation Total Expenditures Prot before exceptional and extraordinary items and tax Exceptional and Extraordinary Items Prot before tax Current Tax Deferred Tax Prot/(Loss) for the period Transfer to General Reserve Dividend on Equity Share Capital Dividend Distribution Tax Prot/(Loss) for the period Earning per equity share (EPS) - `. Basic Diluted Number of shares considered for Basic Diluted As per our report of even date for & on behalf B. C. Banka & Associates. Chartered Accountants (FRN: 326935E) sd/B. C. Banka ICAI M No : 058531 Date : May 08, 2012 Place : Bengaluru
5,676 8,325 4,496 398 33,565 6,505 6,505 2,006 27 4,472 3,000 565 87 820
3,368 7,113 3,703 320 26,111 6,605 6,605 1,990 95 4,520 -
79.22 74.16
90.41 74.96
56,453 60,305
50,000 60,305
for Ctran Consulting Limited
sd/Ashok K Singha Managing Director
sd/Prabhat K Panda Director
4,520
INNOVATION & IMPACT
Salary & Other Benets
14,670
11,606
CORPORATE OVERVIEW
186
BASIX
The Livelihood School

Board of Directors
Chairman Lalit Mathur Dean Vijay Mahajan, Chairman, Basix Group Vice Dean Dr. S S T Tabrez Nasar Directors Deep Chandra Joshi Dr. Somnath Ghosh N V Ramana Dr. Vidya Rao Prem Das Rai Prof. Jeemol Unni Dr. Nisha Srivastava Girish Godbole Dilip Kumar Funding Partners Ford Foundation Institute of Fiscal Studies Xavier Institute of Management (XIMB) Auditors M/s. V. Nagarajan & Company Chartered Accountants Hyderabad
Board of Directors
Vijay Mahajan, Dean Lalit Mathur (Chairman): He is retired, Indian Administrative Service (IAS) Ofcer. He has served as Director General of National Institute of Rural Development, Hyderabad, and has been involved in various Government rural development programs, including leading CAPART in its early days. Deep Chandra Joshi is an independent development consultant and a member of the National Advisory Council. He worked in PRADAN in various capacities for over two decades until his retirement in 2007, the Ford Foundation in Delhi, Systems Research Institute in Pune and MNNIIT Allahabad. He was educated at MNNIT Allahabad and Massachusetts Institute of Technology. Deep was conferred the Ramon Magsaysay Award in 2009 and the Padma Shree in 2010. Dr. Somnath Ghosh Ph.D, is professor in Management Development Institute, Gurgaon. Dr. Somnath Ghosh has over 30 years of experience as researcher, teacher, trainer and consultant in the elds of HR and institutional development. He was a Professor in Administrative Staff College of India, Hyderabad; IIM at Lucknow, Bangalore and Indore. He led the following projects in the development sector Gyandoot, GIAN, Integrated Watershed Project at Jhabua, MP, Operation Mojari, Tissue Culture Project, in Dhar, MP. He is the Chairman of the Executive Committee & Nomination Committee of the Bank. He has worked with livelihood promotion institutions in studying and examining ways to improve delivery of agriculture and business development services. He was World Bank consultant with respect to resettlement and rehabilitation (R&R) project of affected people.
187
N V Ramana is an Independent Director. He is a graduate in Dairy Technology from National Dairy Research Institute, Karnal and holds a Post Graduate Diploma in Management from Indian Institute of Management, Ahmedabad with specialisation in Agriculture. He worked with ITC Group for 20 years, handling a wide range of agri-business responsibilities. He joined BASIX as Senior Vice President (Strategic Initiatives) in 2001 and was the Managing Director of KBSLAB from 2003 to 2005 before his appointment as Managing Director of Bhartiya Samruddhi Finance Limited. Dr. Vidya Rao (Director): She has retired as Professor of Social Work from Tata Institute of Social Sciences (TISS), Mumbai, and has been actively engaged in building collaborations with TISS with other institutions.
Prof. Jeemol Unni (Director): She is Director of Institute of Rural Management, Anand (IRMA). She also worked with Gujarat Institute of Development Research, Ahmadabad. She is life time member for Indian Association of Womens Studies, Mumbai and Indian Society of Labour Economics, New Delhi. She is a Member of Advisory Committee, Society for Rational Thinking (SPRAT), Ahmadabad, Editorial Board, Indian Journal of Labour Economics, New Delhi. She is also member of Statistics and Social Protection Advisory Group Women in Informal Employment and Globalizing and Organizing (WIEGO) an international coalition of academics, activists, trade unions and NGOs, SEWA, UNIFEM, HIID, Harvard University, since 2002. Dr. Nisha Srivastava (Director): She is Professor of Economics at the University of Allahabad, India. She has earlier worked with the UN World Food Programme (WFP), New Delhi, where, as Head of the Vulnerability Analysis, and Monitoring and Evaluation unit she led the WFP team to collaborate with the MSSRF in publishing the Report on Food Security for Rural India. She was the co-author of the rst Human Development Report for Uttar Pradesh. She is deeply involved in working with organisations that seek to empower women and marginalised social groups. Girish Godbole (Director) - He has been a development professional for the last 30 years. He is a graduate in Agriculture Sciences from Indore and Masters in Social Work from the Tata Institute of Social Sciences, Mumbai. He had worked with L&T, PRADAN and Save the Children Fund, Canada. He became a freelance development consultant facilitating developmental organisations.
Dilip Kumar A sheries / aquaculture professional with over 35 years of exposure and experience while working with national (Indian Council of Agricultural Research, India) and International / Regional organizations (FAO, UNDP, IFAD,UNOPS, NACA) in India, South and Southeast Asian countries and briey in East African countries in various capacities (Scientist, Project Leader, Associate, Head of Division, Aquaculture Extension and Training Expert, Chief Technical Advisor / Team Leader and Director / Vice Chancellor). Major assignments and activities ranged from conceptualization, planning and execution of laboratory and eld based aquaculture research projects; formulation / execution of sheries sector-specic development projects covering small-scale aquaculture, community empowerment; etc.,
INNOVATION & IMPACT
Prem Das Rai (Director): He is Member of Parliament from Sikkim. He was educated at IIT Kanpur and at IIM Ahmedabad. He was awarded Eisenhower Fellowship (USA) for his contribution to Sikkims economic and industrial growth. He served as the Deputy Chairman of the State Planning Commission of the Government of Sikkim; Senior Executive at Bank of America, Managing Director of Sikkim Milk Union, Sikkim Flour Mills, Chairman of Sikkim Industrial Development and Investment Corporation (SIDICO) and Sikkim Scheduled Tribes and All Other Backward Classes Financial Development Corporation (SABCO), founding Chairman of the Ecotourism and Conservation Society of Sikkim (ECOSS), and CEO of BASIX-ONE.
CORPORATE OVERVIEW
188
BASIX
Management Report
During the year the Livelihood School has conducted 13 livelihood education programs and trained 445 practitioners of Government departments and non-Government agencies involved in livelihood promotion in various states. The School has developed four case studies and 12 cases on various models of livelihood promotion initiatives adapted by Bihar, Andhra Pradesh, Madhya Pradesh and Odisha. The study was undertaken on the functioning of different organizational forms in these states that are the implementing agencies of National Rural Livelihood Mission in the respective states. The World Bank supported the development of the cases and propose to use them as teaching cases in training of project staff of State Rural Livelihood Missions across the country. The School has conducted ve case writeshops with Government and Non Government organizations The School has been engaged by the Azim Premji Foundation for design and delivery of one credit core course on Livelihoods and Livelihood promotion and four credit elective course on Livelihoods: Policies, Practices and Challenges for students of MA in Development Action at Azim Premji University. The Schools foray into international market Kenya and Uganda. The School recommended establishing one Livelihood School like institution in each of these countries. The School was identied as a mentoring institute by the Small Farmers Agri Business Consortium to provide mentoring support to Resource Institutions involved in promoting Farmers Producer Organizations in seven states. The School was inducted as a member in the management institutes consortium called MANTHAN (Management Academic Network For Transforming Human Resources Through Action and Knowledge) constituted by Ford Foundation along with TISS, XLRI, XIMB, MDI, EDII, Chaitanya to develop curriculum for training of project staff of State Rural Livelihood Mission in Bihar and Chhattisgarh states and provide handholding support required for implementation of NRLM in these states. The School faculty has developed three research papers which are accepted for publication. The paper titled Crisis in Indian Micronance: A Tale of Growth and (No) Regulation was presented in the 86th Annual Conference of Western Economic Association International in San Diego. Two papers titled Challenges of Promoting Pro-Poor Based Value Chain of NTFPs in Chhattisgarh State and Livelihoods of internally displaced persons in Khammam district in Andhra Pradesh were presented at a Seminar on Development and Discontent in Contemporary Tribal India organized by Madhya Pradesh Institute of Social Science Research
commenced during the year where it undertook a scoping study to help design an appropriate livelihood support institutions which will provide necessary support to various Government and non-government agencies engaged in livelihood promotion in four African countries viz South Africa, Mozambique,
TLS
Auditors Report
(A Society registered under Andhra Pradesh Societies Registration Act, 2001) To The Members The Livelihood School We have audited the attached Balance Sheet of THE LIVELIHOOD SCHOOL as at March 31, 2012 and the Income and Expenditure account for the year ended on that date annexed thereto. These nancial statements are the responsibility of the Societys management. Our responsibility is to express an opinion on these nancial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well evaluating the overall nancial statement presentation. We believe that our audit provides reasonable basis for our opinion. On the basis of our audit we report that: a) We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit; in our opinion, proper books of accounts as required by the law have been kept by the Society, so far as appears from our examination of the books maintained at the Head Ofce and all the Regional Centres of the Society; d)
189
c)
the Balance Sheet and the Income and Expenditure account dealt with by this report are in agreement with the books of account; In our opinion, the Income and Expenditure Account and the Balance Sheet comply with the accounting standards issued by The Institute of Chartered Accountants of India. In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet and the Income and Expenditure Account read together with the notes on accounts attached thereto. i. In the case of the Balance Sheet, of the state of affairs of the Society as at March 31, 2012 and; In the case of Income and Expenditure account, the excess of expenditure over income for the year ended on that date.
e)
ii.
for V. Nagarajan & Co., Chartered Accountants
b)
sd/V. Nagarajan Partner M. No.: 019959 ICAI Firm Reg. No.: 04879N
INNOVATION & IMPACT
CORPORATE OVERVIEW
190
BASIX
Balance Sheet as at
31-Mar-12 SOURCES OF FUNDS Committed project based grant Livelihood education/research programs Reserves and surplus General reserve Assets acquisition fund 903 5,382
` in 000s 31-Mar-11
6,478
857
Total
6,285
7,335
APPLICATION OF FUNDS Fixed Assets (at cost) Current assets, loans and advances Cash and bank balances Advances and other recoverables 4,753 3,117 7,870 Less: Current liabilities and provisions Net current assets 4,613 3,257 5,086 3,607 8,692 3,444 5,248 903 857
Miscellaneous expenditure Opening Balance (decit at the end of last year) Decit during the year 1,230 895 1,230
Total
6,285
7,335
As per our report of even date for V. NAGARAJAN & CO., Chartered Accountants sd/V. Nagarajan Partner ICAI Firm Reg. No.: 04879N M. No.: 019959 Date : May 12, 2012 Place : Hyderabad
for THE LIVELIHOOD SCHOOL
sd/(Lalit Mathur) Chairman
sd/(Vijay Mahajan) Dean
TLS Income and Expenditure Account for the Year ended on

31-Mar-12 INCOME Program Service Revenue from livelihood education/research programs Other Income from Seminars and conferences on livelihoods Bank Interest Total EXPENDITURE Personnel cost Professional Charges Travelling expenses Other Administrative Expenses Total Surplus/(decit) for the period Add: transferred to/(from) general reserve Transferred to Balance sheet As per our report of even date for V. NAGARAJAN & CO., Chartered Accountants sd/V. Nagarajan Partner ICAI Firm Reg. No.: 04879N M. No.: 019959 Date : May 12, 2012 Place : Hyderabad 5,866 1,569 1,028 1,186 9,649 (889) (6) (895) 8,268 473 18 8,760
191
`. in 000s
31-Mar-11
9,130 355 54 9,538
6,964 1,875 1,841 1,730 12,410 (2,872) 1,642 (1,230)
for THE LIVELIHOOD SCHOOL
sd/(Lalit Mathur) Chairman
sd/(Vijay Mahajan) Dean
INNOVATION & IMPACT
CORPORATE OVERVIEW
192
BASIX
BASIX Social Enterprise Group Ofces:

Bhartiya Samruddhi Investments and Consulting Services Ltd., Bhartiya Samruddhi Finance Ltd., BASIX Krishi Samruddhi Ltd., 3rd Floor, Surabhi Arcade, Troop Bazar, Bank Street, Koti, Hyderabad-500 001. Tel : + 91-40-66585800 / 66585801 / 66585300 Fax : +91-40-66585802 E-mail: info@basixindia.com Website: www.basixindia.com Krishna Bhima Samruddhi Local Area Bank H.No:7-5-108/B/1, I Floor, Venkateshwara Colony, Mahabubnagar-509 002. Andhra Pradesh. Tel: +91-8542-273 383 / 84 E-mail: info@kbsbankindia.com Website: www.kbsbankindia.com BASIX Sub-K iTransactions Limited II Floor, 4-1-317 to 319, Troop Bazar, Abids Road, Hyderabad-500 001, India. Tel: +91-40-66375600 E-mail: info@subk.co.in Website: www.subk.co.in BASIX Academy for Building Lifelong Employability 315/274, 2nd Floor, Above Bibs n Cribs, Garden of Five Senses Road, Behind Saket Metro Station, Saidulajaib, New Delhi-110 030. Ph: +91-11-6465 8480, 6465 8380 E-mail: info@b-able.in Website: www.b-able.in Indian Grameen Services M-20, Road No. 25, Near Bank of India, S K. Nagar, Patna-800 001, India Tel: +91-612-2521028 Website: www.igsindia.org.in BASIX Consulting and Training Services Limited No. 365, 5th Main, 14th Cross, Upper Palace Orchards, Sadashivanagar, Bengaluru-560 080, India.Tel:+91-80-2361 0700/4123 720 E-mail:consulting@basixindia.com Website: www.basix-consulting.com CTRAN Consulting Ltd. (ISO 9001:2008) A1-A2,3rd Floor, Lewis Plaza Lewis Road, BJB Nagar, Bhubaneswar-751 014. Tel: +91-674-2430041 Fax: +91-674-2432695 Website: www.ctranconsulting.com The Livelihood School 2nd Floor, Auroras Business School 6-3-456/18&19, Dwarakapuri Colony, Beside NIMS, Panjagutta, Hyderabad-500 082. Tel: +91-40-2335 0531 Fax No: +91-40-2335 0631 E-mail : ho@thelivelihoodschool.org Website : www.thelivelihoodschool.in
BANGLADESH BHUTAN BURKINA FASO CAMBODIA CAMEROON CHINA
ETHIOPIA FIJI GHANA INDIA INDONESIA KENYA
LAOS MALAWI MALDIVES MOZAMBIQUE NEPAL PAPUA NEW GUINEA
RWANDA SAMOA SOLOMON ISLANDS SOMALIA SOUTH AFRICA SRI LANKA
TANZANIA TIMOR-LESTE UGANDA VANUATU VIETNAM
Spreading the livelihood principles across the globe
Head Office : 3rd Floor, Surabhi Arcade, Bank Street, Troop Bazar, Koti, Hyderabad-500 001. Phone : +91-40-6658 5800 / 6658 5801 Fax : +91-40-6658 5802 Registered Office : D 9, First oor, Greater Kailash Enclave-1, New Delhi - 110048 Ph : 011-41730252, 41730540 Website : www.basixindia.com e-mail : info@basixindia.com

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What is BASIX's vision and mission?

What is BASIX's vision and mission?

What are the different groups and services under BASIX?

What are the different groups and services under BASIX?

BASIX Social Enterprise Group

CORPORATE OVERVIEW Vision, Mission BASIX Corporate Structure 2 3

INNOVATION & IMPACT Section I

Section IV Knowledge Services

136 147 159 172 186

BOARD & MANAGEMENT REPORTS & FINANCIAL STATEMENTS

INNOVATION & IMPACT

| Annual Report 2011 - 2012

BASIX Corporate Structure

BASIX SOCIAL ENTERPRISE GROUP

Bhartiya Samruddhi Investments and Consulting Services Limited

Financial Inclusion Services

Livelihood Promotion Services

Bhartiya Samruddhi Finance Limited (Micronance and Livelihood Promotion Services)

BASIX Krishi Samruddhi Limited (Agriculture & Micro enterprise advisory)

C-TRAN Consulting Limited (Sustainability)

BASIX Sub-K iTransations Limited (Enables last mile Micro transactions)

Indian Grameen Services (Incubates Innovations)

Livelihoods BASIX Inc. (US not-for-prot) for international work

BOARD & MANAGEMENT REPORTS & FINANCIAL STATEMENTS

INNOVATION & IMPACT

| Annual Report 2011 - 2012

SECTION I - INCLUSIVE FINANCIAL SERVICES

COMMUNITY INSTITUTION BUILDING - PROMOTING URBAN LIVELIHOODS

Community institution building

BOARD & MANAGEMENT REPORTS & FINANCIAL STATEMENTS

INNOVATION & IMPACT

| Annual Report 2011 - 2012

DELIVERING MULTIPLE LIVELIHOOD PROMOTION SERVICES THROUGH COMMON SERVICE CENTRES

State Maharashtra Meghalaya Odisha Punjab Tripura Total

BOARD & MANAGEMENT REPORTS & FINANCIAL STATEMENTS

Main Highlights of CSC channel

INNOVATION & IMPACT

| Annual Report 2011 - 2012

SECTION II - LIVELIHOOD PROMOTION SERVICES 9

BOARD & MANAGEMENT REPORTS & FINANCIAL STATEMENTS

INNOVATION & IMPACT

| Annual Report 2011 - 2012

Mangalajodi Ecotourism: A perfect destination for Visitors

BOARD & MANAGEMENT REPORTS & FINANCIAL STATEMENTS

INNOVATION & IMPACT

| Annual Report 2011 - 2012

RURAL OPTICIAN PROGRAM

Times of India report

BOARD & MANAGEMENT REPORTS & FINANCIAL STATEMENTS

INNOVATION & IMPACT

| Annual Report 2011 - 2012

Strengthening Farmer Producers Organisations (FPOs)

BOARD & MANAGEMENT REPORTS & FINANCIAL STATEMENTS

INNOVATION & IMPACT

| Annual Report 2011 - 2012

Institutional Development Services

Kisan Samruddhi Kendras formed into Producer Companies (PCs)

Agriculture and Business Development Support