Your Directors have pleasure in presenting the Eighth Annual Report of your Companytogether with the audited statement of accounts for the year ended March 31, 2011.
Initial Public Offering
During the year under review, your Company successfully completed its Initial PublicOffering (IPO) of equity shares and has achieved a rare distinction of becoming the firstmicrofinance institution in India to be listed on the Bombay Stock Exchange and theNational Stock Exchange on August 16, 2010.
Your Company completed an IPO of 1,67,91,579 equity shares of Rs. 10 each for cashconsisting of a fresh issue of 74,45,323 equity shares at a premium of Rs. 975 each toQualified Institutional Buyers and Non-Institutional Buyers and at a premium of Rs. 925each to Retail Individual Buyers as well as an offer for sale of 93,46,256 equity sharesat a premium of Rs. 975 each to Qualified Institutional Buyers and Non-InstitutionalBuyers and at a premium of Rs. 925 each to Retail Individual Buyers. The IPO was done inaccordance with the terms of your Companys prospectus dated August 5, 2010.
Utilization of IPO Proceeds
As on March 31, 2011, the amount raised through the IPO has been utilized by yourCompany towards the following objectives of the Issue:
| ||(Rs. in Crore) |
|Particulars ||Amount |
|Total fresh Issue proceeds ||722.20 |
|Utilization for onward lending (business operations) ||682.80 |
|Retained for IPO expenditure ||39.40 |
The financial performance for the fiscal ended March 31, 2011 is summarized in thefollowing table:
| || ||(Rs. in Crore) |
|Year ended March 31 ||2011 ||2010 |
|Total revenue ||1,269.54 ||958.51 |
|Less: total expenditure ||1,097.11 ||690.81 |
|Profit Before Tax (PBT) ||172.43 ||267.70 |
|Profit After Tax (PAT) ||111.63 ||173.95 |
|Surplus brought forward ||220.00 ||80.84 |
|Amount available for appropriation ||331.63 ||254.79 |
|Appropriation has been made as under: || || |
|Transfer to statutory reserve ||22.33 ||34.79 |
|Surplus carried to balance sheet ||309.30 ||220.00 |
|EPS (Rs.) ||16.10 ||32.82 |
|Diluted EPS (Rs.) ||15.24 ||27.33 |
- The Companys total revenue for the year ended March 31, 2011 has increased toRs. 1,269.54 crore from Rs. 958.51 crore in the previous year registering an increase of32.4%.
- Net profit after tax for the year decreased by 36% to Rs. 111.63 crore from Rs.173.95 crore in the previous year.
- An amount of Rs. 22.33 crore was transferred to the Statutory Reserve Fund pursuantto Section 45-IC of the Reserve Bank of India Act, 1934.
The following table summarizes the operational performance of your Company for the yearended March 31, 2011:
|Year ended March 31 ||2011 ||2010 ||Percentage change |
|Number of branches ||2,379 ||2,029 ||17.25% |
|Number of borrowers (in Lakh) ||73.07 ||67.80 ||7.77% |
|Number of employees ||22,733 ||21,154 ||7.46% |
|Amount disbursed (Rs. in Crore) ||7,831 ||7,618 ||2.79% |
|Portfolio outstanding (Rs. in Crore) ||4,111 ||4,321 ||(4.85%) |
During the year under review, your Companys borrower base has increased to 73.07lakh (7.31 million) as compared to 67.80 lakh (6.78 million) for the previous year whichdemonstrates a growth of 7.77%, resulting in a 2.79% increase in loans disbursed to Rs.7,831 crore from Rs. 7,618 crore.
Even as it continued to grow, your Company has displayed leadership in thought andaction. Your Companys leadership position in the microfinance sector enhancedSKS reputation and credibility with various stakeholders. SKS continues to financeits expansion by accessing multiple sources of capital, both debt and equity, includinglisted debentures, priority sector qualifying loans from banks and equity investments.Additionally, your Company could sell/ assign its portfolio loans to banks to improve itsfinancial position and finance its growth. Your Company continued to capitalize on itsstrengths on various parameters like superior asset quality, pan-India distributionchannels, development of an Information Technology platform, strategic business alliancesand an experienced management team.
Microfinance Situation in the State of Andhra Pradesh
The industry had its share of uncertainty with the Andhra Pradesh Governmentpromulgating the Microfinance Institutions (Regulation of Money Lending), Ordinance 2010in October 2010. The Ordinance which later became an Act when the State Assemblypassed the Andhra Pradesh Microfinance Institutions (Regulation of Money Lending), AP Act1 of 2011 (AP MFI Act) hindered microfinance operations in the State, which untilthen was the role model state and accounted for nearly 40% of the industry. The hindrancesfrom the new Act resulted in reduction in total MFI disbursement in Andhra Pradesh fromRs. 5,035 crore in first half of the year to a meager Rs. 8.5 crore in the second half ofthe year. While the Act had an impact on SKS, your Company is geographicallywell-diversified with a presence in 18 other states and Andhra Pradesh contributed only28% of the portfolio when the AP MFI Ordinance was promulgated.
The AP MFI Act, which was aimed at curbing irresponsible players in the sector, raiseda regulatory conundrum for NBFC-MFIs, such as SKS, which are registered with the RBI, asit was not clear whether the NBFC-MFIs should follow the State Government Act or the RBIguidelines. The RBI had set up the Malegam Committee to look into all aspects ofmicrofinance. The Malegam Committees Report (MCR) effectively addressed all concernsregarding microfinance as it suggested that the RBI be the sole regulator for NBFC-MFIs,re-emphasized the priority sector status for microfinance and laid out detailed guidelineson operational aspects as well. In its monetary policy statement on May 3, 2011, the RBIaccepted the broad framework of regulations recommended by the MCR, ending the regulatoryuncertainty.
Your Company is currently reaching over one lakh (1,00,000) villages in India with apresence in 19 states and 2,379 branches. Your Company has begun leveraging this extensivebranch network and its financing ability to provide more financial services to the bottomof the pyramid. In this direction, your Company undertook initiatives like mobile handsetfinancing, financing loans against gold collateral and lending to kirana stores (Sangamstores).
Mobile Financing Program
India has a high potential in the mobile telephony market, but the high cost of mobilehandsets is a key deterrent for rural borrowers of SKS. Considering this, your Company haslaunched a mobile finance program that offers its borrowers mobile phones at a relativelylower price with the option of paying in small, easy installments. Your Company haspartnered with Nokia India Pvt. Ltd. to supply quality handsets to its borrowers. A loanproduct has been designed to facilitate finance for handset purchases. Under this program,your Company has disbursed 3.5 lakh mobile loans to its borrowers in six states of India.This initiative has instilled confidence in its borrowers and improved their businessthrough better access to communication.
A Sangam store is a kirana store run by an SKS borrower. The objective of yourCompanys Sangam store lending initiative is to enable Sangam store owners to buy from a wholesale vendor fast-moving consumer goods and groceries which theywould then resell in their retail kirana stores. This will give them access to qualityproducts at competitive prices. It also saves the borrower time and transport costs. About8% of the total borrower base of SKS is running kirana stores (i.e 5 lakh kirana stores).With SKS providing finance and the wholesaler facilitating delivery to kirana stores, SKSand their partner wholesaler can both enhance the volume of business done by Sangam storesand meet working capital needs of Sangam store owners.
A suitable credit product has been designed to meet this specific need. SKS partneredwith one of the worlds most reputed wholesalers, Metro Cash and Carry (India) Pvt.Ltd., in Hyderabad. SKS enrolled 3,500 stores and is now planning to expand this programgeographically (to Bengaluru and Kolkata) as well as to different customer segments(non-borrowers). SKS is building new relationships to extend the non-borrower programacross the country. SKS has also developed a mobile based MIS system to collect andconsolidate orders and track the loan portfolio. The enhanced software system will helpSKS in scaling the program in multiple locations working with multiple partners. Thisprogram can act as the first step in creating distribution channels for a wide range ofother non-financial products. Your Company believes that it can offer profitable productsthat benefit its approximately 5 lakh Sangam store owners and which have trickle-downbenefits to its broader borrower base.
Currently, the gold loan market is predominantly operated by usurious pawn-brokers withplayers in the organized sector having limited reach in the rural markets. To bridge thisgap, your Company has initiated the Gold Loan pilot project. The objective is to enableborrowers to get loans at competitive rates to increase their business, to fulfillpersonal needs and to address other emergencies. Your Company plans to target its currentborrowers as well as new ones with the product. A pilot project has been launched in threelocations in Karnataka and in two centres in Gujarat to test the product and processes.
Your Directors have not recommended any dividend during the year as the Board is of theview that the Company should retain capital in order to maintain a healthy capitaladequacy ratio and to support future growth opportunities, such as taking advantage ofpotential opportunities for consolidation of borrowers of other MFIs.
Management Discussion & Analysis
The Management Discussion & Analysis Report for the year under review is presentedin a separate section on Page 29 in this Annual Report.
Your Company adopts corporate best practices and is committed to conducting itsbusiness in accordance with applicable laws, rules and regulations. Your Company followsthe highest standards of business ethics. A report on Corporate Governance is provided onPage 35 in this Annual Report.
Resources and Liquidity
Your Company, being a Systemically Important Non-deposit Accepting NBFC, is subject tothe capital adequacy requirements prescribed by the RBI. Your Company needs to maintain aminimum ratio of 15% as prescribed under the Non-Banking Financial (Non-Deposit Acceptingor Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 (as amended fromtime to time) based on total capital to risk weighted assets. Your Company maintained aCapital to Risk Asset Ratio (CRAR) of 45.4% and 28.3% respectively, as on March 31, 2011and as on March 31, 2010, which is higher than the statutory 15% requirement for the FY2010-11 and 12% for the FY 2009-10 respectively.
During the year, your Company has received ratings for various instruments to raisefunds and a summary of the ratings is presented in the following table
|Agency ||Item ||Rating |
|CARE Ratings ||Short Term Debt ||PR1+ |
|CRISIL Ratings^ ||Short Term Debt ||P1+ |
|CARE Ratings ||Assignment ||PR1+ (SO) |
|CRISIL Ratings ||Securitization ||P1+ (SO) |
|ICRA Ratings ||Securitization ||A1 (SO) |
^ Rating withdrawn
Further, CARE has revised its rating assigned to the Short Term Debt Program of Rs. 500crore of your Company from PR1+ (One plus) to PR1 (One) and the rating has been kept underCredit Watch since October 2010 following the implementation of the Andhra PradeshMicrofinance Institutions (Regulation of Money Lending) Ordinance, 2010 by the StateGovernment of Andhra Pradesh.
Your Company accessed an incremental borrowing of Rs. 2,783 crore in debt includingCommercial Paper for Rs. 245 crore, term loan of Rs. 1,727 crore and Asset Assignment/Securitization of Rs. 811 crore in the financial year 2010-11 and sanctioned limits of Rs.5,338 crore.
Your Company has not accepted any fixed deposits and, as such, no amount of principalor interest was outstanding in the fiscal.
Increase in Share Capital
During the year under review, 74,45,323 equity shares were issued as part of the IPOand 3,51,368 equity shares were issued under SKS ESOP (Independent Directors) 2008 and SKSESOP 2009 Plans.
Thus, the issued, subscribed and paid-up equity share capital increased from6,45,27,219 to 7,23,23,910 as on March 31, 2011.
Your Company is registered with the Reserve Bank of India, as a non-deposit acceptingNBFC (NBFC-ND) under Section 45-IA of the RBI Act, 1934. As per Non-Banking FinanceCompanies RBI Directions, 1998, the Directors hereby report that the Company did notaccept any public deposits during the year and did not have any public depositsoutstanding at the end of the year.
In October 2010, the Reserve Bank of India has set up a sub-committee of the CentralBoard of Directors of the Reserve Bank of India, headed by Mr. Y H Malegam to study theissues and concerns of the microfinance sector, including ways and means of makinginterest rates charged by MFIs reasonable. The committee was set up after the AndhraPradesh Government issued an Ordinance making registration of MFIs with the StateGovernment compulsory.
On January 19, 2011, the sub-committee made the following recommendations afterstudying the issues and concerns in the MFI sector:
i. Creation of a separate category of NBFCs operating in the microfinance sector to bedesignated as NBFC-MFIs, with an NBFC-MFI defined as a company which provides financialservices to pre-dominantly low-income borrowers, with loans of small amounts, forshort-terms, on unsecured basis, mainly for income-generating activities, with repaymentschedules which are more frequent than those normally stipulated by commercial banks.
ii. The NBFC-MFI will hold not less than 90% of its total assets (other than cash andbank balances as also money market instruments) in the form of qualifying assets, withrestrictions on total outstanding loan per household and household income, among otherrestrictions, constituting what is deemed as qualifying.
iii. There are limits of an annual family income of Rs. 50,000 and an individualceiling on loans to a single borrower of Rs. 25,000.
iv. Not less than 75% of the loans given by the MFI should be for income-generatingpurposes.
v. There is a restriction on the other services to be provided by the MFI, which has tobe in accordance with the type of service and the maximum percentage of total income asmay be prescribed.
vi. The interest chargeable to the borrower has been recommended with an average margincap of 10% for MFIs having a loan portfolio of Rs. 100 crore and of 12% for smaller MFIsand a cap of 24% for interest on individual loans. vii. MFIs can levy only three charges -
(a) processing fee
(b) interest and
(c) insurance charge.
However, based on the recommendation of the Malegam Committee Report (MCR) on the MFIsector, the RBI has notified that all MFIs, including NBFCs working as MFIs on or afterApril 1, 2011, would be eligible for classification for Priority Sector Loans underrespective category of indirect finance, provided:
MFI loans are eligible only for a household with an annual income not exceedingRs. 60,000 in case of rural areas (relaxation of MCR which recommended Rs. 50,000) andRs.1,20,000 in case of urban areas.
The maximum interest rate charged by MFIs is 26% (relaxation of MCR whichrecommended 24%).
MFI loans must not exceed Rs. 35,000 in the first cycle and Rs. 50,000 insubsequent cycles.
Total indebtedness of the borrower must not exceed Rs. 50,000 at any point.
Credit Bureau for MFIs
In order to address the issue of multiple lending or over indebtedness, variousmicrofinance institutions/ NBFCs have come together to invest in a Credit InformationBureau, High Mark Credit Information Services Private Limited ("High Mark") viaAlpha Micro Finance Consultants Private Limited ("Alpha"). In order tofacilitate the collective investment in High Mark, as well as undertake other collectivesteps for building the technology infrastructure for credit information-sharing amongthemselves, and to educate their staff in ensuring good customer protection principles arefollowed, 25 NBFC-MFIs have established Alpha as a collective entity. These NBFC-MFIstogether have about 70% of the total portfolio of the microfinance loans. In Alpha, yourCompany has invested Rs. 20 lakh. The RBI has issued a Certificate of Registration to HighMark on November 25, 2010 and SKS has started sharing its borrowers information withthe credit bureau.
Self-regulation for MFIs
Your Company endorses the view that the existence of strong and effectiveSelf-Regulatory Organizations (SROs) will result in development of best practices invarious areas in which Microfinance Institutions (MFIs) work. These best practices willevolve through self-regulation/ self-discipline and eventually complement regulatoryprescriptions or Government intervention by way of legislation.
In that spirit, your Company along with 43 other Non-Banking Financial Companies(NBFC-MFIs) is a member of and is duly represented on the Board of MicrofinanceInstitutions Network (MFIN), a self-regulatory organization of NBFC-MFIs that aims to workwith regulators to promote microfinance to achieve larger financial inclusion goals.
MFIN has set forth a Code of Conduct ("Code") upholding good governance andtransparency. This Code broadly focuses on fair practices with borrowers includingpromoting transparency in communicating interest rates (on reducing balance method) andfees to borrowers in vernacular language, fixing overall lending limits at a borrowerlevel, data sharing, recruitment practices, whistle-blowing, enforcement and anOmbdusperson mechanism for redressing grievances. Your Company has agreed to implement andfollow the MFIN Code of Conduct in addition to adhering to the Fair Practice Code as laiddown by the RBI.
During the year under review, as the microfinance sector witnessed the phase ofregulatory ambiguity and for other reasons, MFIN concerted its efforts towards positioningitself as the primary representative body for the microfinance sector, developing aself-regulation policy, and advocating on sectoral issues to both regulatory bodies aswell as to the media.
Lastly, your Company believes that steps towards self-regulation would bring the focusback to the borrowers, improve public trust, help guarantee long-term sustainability, andsupplement the regulatory regime.
Information Technology Initiatives
The Information Technology (IT) team has focused on streamlining the cost of operationswhile improving service to end-users. In fiscal 2011, your Company adopted newtechnologies and launched initiatives to identify and eliminate unnecessary costs.Collaboration, consolidation and centralization are key objectives as SKS continues toutilize technology in order to further improve the performance of the Company.
Human Resource Management
Human resources is one of the key elements of your Companys growth.
The Human Resource (HR) function has over the years fully developed its capabilitiesand set up a scalable recruitment and human resources management process, which enables usto attract and retain higher calibre employees.
HR has played a critical role in supporting the business goals during the variouschanges in the sector as well as in the Company. HR has made changes in various policies,processes and systems to strengthen the effectiveness of operations and to keep pace witha rapidly changing business scenario. In the last year, your Company has undertakenvarious industry first initiatives in the areas of talent adequacy, capability enhancementand growing leaders from within.
The total manpower of your Company stood at 22,733 as on March 31, 2011 as compared to21,154 as on March 31, 2010, a growth of 7.5%.
Employee Stock Option Plans (ESOP) and Employee Share Purchase Scheme (ESPS)
Presently, stock options have been granted or shares have been issued under thefollowing schemes: A. SKS Microfinance Employee Share Purchase Scheme 2007 ("ESPS2007")
B. SKS Microfinance Employee Stock Option Plan 2007 ("ESOP 2007")
C. SKS Microfinance Employees Stock Option Plan 2008 (Independent Directors)("ESOP 2008 (ID)") D. SKS Microfinance Employee Stock Option Plan 2008("ESOP 2008") E. SKS Microfinance Employee Stock Option Plan 2009 ("ESOP2009")
The disclosures with respect to each of the Companys above-mentioned EmployeeShare Purchase Scheme (ESPS) and Employee Stock Option Plans (ESOP) as required by theSecurities and Exchange Board of India (Employee Stock Option Scheme and Employee StockPurchase Scheme), Guidelines, 1999 are appended as Annexure - 1 and form part of thisreport.
Further, it is proposed to ratify all pre-IPO SKS Microfinance Employees Stock OptionSchemes in the ensuing Annual General Meeting.
Particulars of Employees
Pursuant to the provisions of Section 217(2A) of the Companies Act, 1956, read with theCompanies (Particulars of Employees) Rules, 1975, as amended, the names and otherparticulars of employees are set out in Annexure - 2 to the Directors Report.
During the year under review, Mr. M R Rao was appointed Additional Director underSection 260 of the Companies Act, 1956 with effect from October 4, 2010 on the Board ofthe Company as the Managing Director and Chief Executive Officer in place of Mr. SureshGurumani. Mr. M R Rao holds his office up to the date of the ensuing Annual GeneralMeeting. The Company has received notice together with deposit as required under Section257 of the Companies Act, 1956, proposing his appointment as Director of the Company.
Mr. M R Raos appointment as Managing Director and Chief Executive Officer for aperiod of three years with effect from October 4, 2010 is proposed to be ratified in theensuing Annual General Meeting.
Mr. Sumir Chadha, Mr. Geoffrey Tanner Woolley and Dr. Tarun Khanna retire by rotationand are eligible to offer their services for reappointment. A brief profile of the aboveDirectors is given in the Notice of the Eighth Annual General Meeting.
Appointment of Dr. Vikram Akula as Executive Chairman (designated as Chairman) of theCompany with effect from April 1, 2011 for a period of five years, subject to review bythe Board after three years, is also proposed to be ratified in the ensuing Annual GeneralMeeting.
Based on recommendations of the Nomination Committee and the Remuneration andCompensation Committee, the Board recommends the above appointments/ re-appointments foryour approval.
Further, the following changes were effected during the year:
Mr. Ashish Lakhanpal resigned with effect from October 4, 2010 from the Board ofDirectors of the Company in order to comply with the requirements of Clause 49 of theListing Agreement with the stock exchanges on composition of Independent andNon-Independent Directors by the Company.
Mr. Suresh Gurumani, vide his letter dated May 27, 2011, tendered his resignation as aDirector from the Board of Directors of the Company with immediate effect.
The Board placed on record their appreciation for the contribution made by them to theCompany during their tenure.
Directors Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, yourDirectors confirm as under: i) In the preparation of the annual accounts, theapplicable accounting standards read with requirements set out under Schedule VI to theCompanies Act, 1956 had been followed and there are no material departures from the same.ii) Your Company has selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year 2010-11 andof the profit of the Company for that year. iii) Your Company has taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act, 1956 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities. iv) Your Company has prepared theannual accounts of the Company on a going concern basis.
The Statutory Auditors of the Company, M/s. S R Batliboi & Co, CharteredAccountants, Mumbai, retire at the ensuing Annual General Meeting and have confirmed theireligibility and willingness to accept office of the Auditors, if appointed. The AuditCommittee and the Board of Directors recommend reappointment of M/s. S R Batliboi & Coas Statutory Auditors of the Company for the financial year 2011-12 for your approval.
Response of the Board to the Auditors Comments
In terms of the provisions of Section 217(3) of the Companies Act, 1956, the Boardwould like to place on record an explanation to the Auditors comments in their AuditReport dated May 6, 2011.
|S. No. ||Auditors Comments ||Response |
|1. ||One hundred and fifty six cases of cash embezzlements by the employees of the Company aggregating Rs. 16,018,106 were reported during the year. The services of all such employees involved have been terminated and the Company is in the process of taking legal action. We have been informed that fifty two of these employees were absconding. The outstanding balance (net of recovery) aggregating Rs. 9,634,467 has been written off. ||Employee fraud is an inherent risk in the business in which the Company operates, since all the transactions are cash based. The Company has recovered from employees Rs. 53,41,192 towards cash embezzled and Rs. 10,42,447 under the insurance cover. Cash embezzlement is 0.02% of disbursement during the year. |
| || ||To mitigate this risk to a large extent, the management has put in place several preventive control measures as under: |
| || ||- Procuring an indemnity bond from every field staff, with personal guarantee of a third person. |
| || ||- Every bank transaction (deposit/ withdrawal) is to be executed by minimum of 2 staff comprising a bank signatory and a confirmed staff. |
| || ||- The cash safe at every branch is controlled by two keys and the keys are held by two employees in the branch. |
| || ||- Surprise visits are conducted by managerial level staff, at the time of carrying out cash/ bank transactions by field-level staff. |
| || ||- Minimizing the cash balances at various branches to the lowest level possible (Rs 50,000 + next day disbursement). |
| || ||There are also several detective controls like |
| || ||- Staff wise daily reconciliations of cash balances by the managerial level staff at each branch. |
| || ||- Frequent surprise visits by accountants and the internal auditors, which covers verification of physical cash and bank balances. |
| || ||The following is the action taken in such cases |
| || ||- Terminating services of all the employees involved in cash embezzlement and taking legal action against them. |
| || ||- Recovering money from such employees. |
| || ||- Also, the Company has taken fidelity insurance to minimize the losses from cash embezzlement. |
|2. ||Two hundred and five cases of loans given to non-existent borrowers on the basis of fictitious documentation created by the employees of the Company aggregating Rs. 45,177,531 were reported during the year. The services of all such employees involved have been terminated and the Company is in the process of taking legal action. The outstanding loan balance (net of recovery) aggregating Rs. 35,417,295 has been written off. ||The Company has recovered an amount of Rs. 65,11,492 against these cases and Rs. 32,48,744 under insurance cover. These cases are 0.06% of disbursement during the year. |
| || ||The following are the various preventive control measures included in the loan process to mitigate the risk of loans to non-existent borrowers/ fictitious borrowers: |
| || ||- All the loans disbursed have a maker/ checker control, wherein all the loans processed by Sangam managers are approved by branch managers/ assistant branch managers. |
| || || The Sangam managers are not deployed in their home towns, so as to prevent collusion with local people. |
| || || Employee rotation takes place every six months, wherein the Sangam managers handle different centres at the end of six months. |
| || || Transfer of Sangam manager/ branch manager to different branches in a span of 9 to 12 months. |
| || ||- Developed internal processes to restrict the loan disbursements to inactive members. |
| || ||Detective controls |
| || ||- The branch managerial staff performs a loan utilization check for every loan disbursed. |
| || ||- The internal audit staff, on a test basis, verifies the loan documents and performs a loan utilization check for the loans disbursed. |
| || ||Actions taken |
| || ||- Terminating services of all the employees involved in fake loan transactions and taking legal action against them. |
|3. ||Forty seven cases of loans taken by certain borrowers, in collusion with and under the identity of other borrowers, aggregating Rs.13,786,130, were reported during the year. The Company is pursuing the borrowers to repay the money. The outstanding loan balance (net of recovery) aggregating Rs. 6,386,267 has been written off. ||- Recovering money from such employees. These frauds are largely concentrated in a specific region and the corrective measures taken by the Company have yielded positive results. The Company has recovered an amount of Rs. 73,99,863 against these cases which range from 17% to 100% on individual case basis. Average recovery against these cases is above 50%. These cases are 0.02% of disbursement during the year. |
| || ||Preventive controls |
| || ||- The branch managerial staff performs thorough screening of the loan applications and the groups by physically visiting the centre. |
| || ||Detective controls |
| || ||- The branch managerial staff performs a loan utilization check for every loan disbursed. |
| || ||- The internal audit staff, on a test basis, verifies the loan documents and performs loan utilization checks for the loans disbursed. |
| || ||Actions taken |
| || ||- Recovering money from such borrowers. |
| || ||- Drop out such borrowers from the group and ensure that no fresh loans are given to such borrowers in future. |
| || ||Also, since the business is carried out on a joint liability model, the Company would be indemnified from such fraudulent cases. |
The net impact of frauds comes to around 0.070% of the total amount disbursed duringthe year. The Company is working towards reducing this percentage by making processimprovements, covering the loss by having an adequate insurance policy and by increasingopportunities for direct contact with our borrowers. During the year, the Company hasrecovered an amount of Rs. 0.96 crore against fraud amount written off in previous years.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars required to be furnished under sub section (1) (e) of Section 217 ofthe Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Reportof Board of Directors) Rules, 1988, are set out in the Annexure - 3 to this report.
Your Directors express their sincere appreciation of the co-operation and assistancereceived from Sangam members, shareholders, bankers, and other stakeholders during theyear under review. Your Directors also wish to place on record their deep sense ofappreciation for the commitment displayed by all executives, officers and field staffresulting in the successful performance of the Company during the year.
| ||For and on behalf of the Board of Directors || |
|Place: Hyderabad ||SD/- ||SD/- |
|Date: June 2, 2011 ||Vikram Akula ||M R Rao |
| ||Executive Chairman ||Managing Director |
Annexure - 1 to the Directors Report
Employee Share Purchase Scheme (ESPS) and Employee Stock Option Plans (ESOPs)
The disclosures with respect to your Companys Employee Share Purchase Scheme(ESPS) and Employee Stock Option Plans (ESOP) are set out hereunder:
A. SKS Microfinance Employee Share Purchase Scheme 2007 ("ESPS 2007")
The Company instituted ESPS 2007 pursuant to a special resolution dated February 9,2007 passed at an EGM of the Company. The ESPS 2007 was implemented by the CompensationCommittee and the SKS Microfinance Employee Welfare Trust (EWT). The EWT was constitutedon March 28, 2007 pursuant to a resolution passed by the Board of Directors dated March 5,2007. The effective date of the ESPS 2007 was March 31, 2007 and it shall be in effecttill March 31, 2020.
Under ESPS 2007, 18,49,750 equity shares were issued for the benefit of eligibleemployees and in the event the employee is terminated or has resigned from the service ofthe Company, then the unreleased equity shares to the said employee stand transferred tothe EWT. The same is used for the other eligible employees of the Company.
The following table sets forth the particulars of the equity shares granted under theESPS 2007 as on March 31, 2011:
|Particulars ||Details of Tranche I ||Details of Tranche II ||Details of Tranche III |
|Shares issued ||8,18,000 ||5,14,250 ||5,17,500 |
|Date of issue ||March 31, 2007 ||November 20, 2007 ||August 25, 2008 |
|Allotment price of share (Rs.) ||10.00 ||49.77 ||70.67 |
|Person wise details of shares granted to || || || |
|i) Directors and key managerial employees || ||Refer below || |
|ii) Any other employee who was allotted equity shares amounting to 5% or more of the equity shares allotted during the year ||Not Applicable ||Not Applicable ||Not Applicable |
|iii) Identified employees who were allotted equity shares, during any one year equal to exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of allotment Fully diluted EPS ||Not Applicable ||Not Applicable ||Not Applicable |
| ||Rs. 15.24 as on March 31, 2011 || || |
|Difference between employee compensation cost using the intrinsic value method and the employee compensation cost that shall have been recognized if the Company had used fair value and impact of this difference on profits and EPS of the Company ||Not Applicable ||Not Applicable ||Not Applicable |
Details regarding equity shares allotted/ transferred to Directors and key managerialemployees are set forth below:
|Name of Director/ key managerial personnel ||Number of equity shares ||Date of Allotment/ Transfer |
|Mr. M R Rao ||4,56,666 ||2,00,000 equity shares allotted on March 31, 2007. 1,63,750 equity shares allotted on August 25, 2008. 86,250 equity shares have been transferred from EWT on August 25, 2008. 6,666 equity shares transferred from EWT on July 29, 2009. |
|Mr. S Dilli Raj ||1,02,666 ||1,00,000 equity shares have been transferred from EWT on February 1, 2008. 2,666 equity shares transferred from EWT on July 29, 2009. |
* Out of the 4,56,666 equity shares, 1,00,000 equity shares have been transferred toEWT on July 29, 2009 at a price of Rs.300.00 per equity share and 62,500 equity shareshave been transferred to Tree Line on April 16, 2010 at a price of Rs. 636.72 per equityshare.
** Out of the 1,02,666 equity shares, 25,000 equity shares have been transferred toTree Line on April 16, 2010 at a price of Rs. 636.72 per equity share.
B. SKS Microfinance Employees Stock Option Plan 2007 ("ESOP 2007")
The Company instituted ESOP 2007 pursuant to a special resolution dated September 8,2007 passed at an AGM of the Company. The total number of shares (equity shares of theCompany and securities convertible into equity shares) that may be issued under ESOP 2007are 18,52,158 equity shares. The ESOP 2007 came into effect on September 8, 2007 and isvalid up to September 7, 2011, or such other date as may be decided by the Board ofDirectors. The ESOP 2007 was implemented by the Board of Directors and the CompensationCommittee. Unless otherwise specified, the vested options were to be exercised prior tothe expiry of 48 months from the date of vesting.
The Company has granted 18,52,158 options convertible into 18,52,158 equity shares offace value of Rs.10 each on various dates as tabulated below and the following table setsforth the particulars of the options granted under ESOP 2007 as on March 31, 2011:
|Particulars ||Details |
|Options granted ||18,52,158 |
|Date of grant ||October 15, 2007 |
|Exercise price of options (in Rs.) ||49.77 |
|Options vested ||18,52,158 |
|Options exercised ||9,45,424 |
|Total No. of shares arising as a result of exercise of option ||9,45,424 |
|Options forfeited/ lapsed ||- |
|Variation in terms of options ||- |
|Money realized by exercise of options (in Rs.) ||4,70,53,753 |
|Total No. of options in force ||9,06,734 |
|Details of options granted to senior managerial personnel - Directors and key managerial employees ||18,52,158 |
|Any other employee who received a grant in any one year of options amounting to 5% or more of the options granted during that year ||- |
|Identified employees who are granted options, during any one year equal to exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant ||- |
|Diluted EPS on issue of shares on exercise calculated in accordance with AS 20 ||Rs. 15.24 as on March 31, 2011 |
|Method of calculation of employee compensation cost ||Fair Value Method |
|Weighted average exercise price of options ||Rs. 246.64 |
|Weighted average fair value of options ||Rs. 7.28 |
Details regarding options granted to Directors and key managerial employees are setforth below:
|Name of Director / key managerial personnel ||Total No. of options granted under ESOP 2007 ||No. of options exercised under ESOP 2007 ||Total No. of op- tions outstanding under ESOP 2007 ||No. of equity shares held ||Plan |
|Dr. Vikram Akula ||18,52,158 ||9,45,424 ||9,06,734 ||- ||ESOP 2007 |
C. SKS Microfinance Employees Stock Option Plan 2008 (Independent Directors)("ESOP 2008 (ID)")
The Company instituted ESOP 2008 (ID) pursuant to a special resolution dated January16, 2008 passed at an EGM of the Company. The Stock Option Plan 2008 was amended pursuantto the Board resolution dated January 5, 2010 and EGM held on January 8, 2010 and the namehas been changed to SKS Microfinance Employees Stock Option Plan 2008 (IndependentDirectors).
The total number of equity shares that may be issued under ESOP-2008 (ID) are 1,95,000equity shares (as amended, pursuant to a resolution of the shareholders dated January 8,2010). The ESOP-2008 (ID) came into effect on January 16, 2008 and is valid up to January15, 2015, or such other date as may be decided by the Board of Directors. The ESOP 2008(ID) was implemented by the Board of Directors. Unless otherwise specified the vestedoptions were to be exercised prior to the expiry of 60 months from the date of vesting.
The following table sets forth the particulars of the options granted under the ESOP2008 (ID) as on March 31, 2011:
|Particulars ||Details of Tranche I ||Details of Tranche || |
Details of Tranche
|Details of Tranche |
| ||A ||B ||II || |
|Options granted ||30,000 ||15,000 ||6,000 || |
|Date of grant ||February 1, ||February 1, ||November 10, || |
July 29, 2009
|February 1, 2010 |
| ||2008 ||2008 ||2008 || || |
|Exercise price of options (in ||70.67 ||70.67 ||70.67 || |
|Rs.) || || || || || |
|Options vested ||30,000 ||15,000 ||6,000 || |
|Options exercised ||30,000 ||15,000 ||1,000 || |
|Total No. of shares arising as ||25,000 ||15,000 yet to ||1,000 || |
|a result of exercise of options ||(5,000 yet to be allotted) ||be allotted || || || |
|Options forfeited/ lapsed ||- ||- ||- || |
|Variation in terms of options ||- ||- ||- || |
|Money realized by exercise of options (in Rs.) ||21,20,100 ||10,60,050 ||70,670 || |
|Total No. of options in force Details of options granted to senior managerial personnel ||- ||- ||5,000 || |
|i) Directors and key managerial employees ||30,000 ||15,000 ||6,000 || |
|ii) Any other employee who received a grant in any one year of options amounting to 5% or more of the options granted during the year ||- ||- ||- || |
|iii) Identified employees who are granted options, during any one year equal to exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant ||- ||- ||- || ||- |
|Diluted EPS on issue of shares on exercise calculated in accordance with AS 20 || || ||Rs. 15.24 as on March 31, 2011 || || |
|Method of calculation of employee compensation cost. || || ||Fair Value Method || || |
|Weighted average exercise price of options (Rs.) ||1,266 ||- ||1,266 || |
|Weighted average fair value of options (Rs.) ||15.28 ||17.72 ||52.14 || |
Details regarding options granted to Independent Directors are set forth below, as onMarch 31, 2011:
|Name of Director ||Total No. of options granted under ESOP 2008 (ID) ||No. of options exercised under ESOP 2008 (ID) ||Total No. of options outstanding under ESOP 2008 (ID) ||No. of equity shares held ||Plan |
|Mr. Gurcharan Das* ||15,000 ||15,000 ||- ||- ||ESOP 2008 (ID) -Tranche I |
|Mr. P H Ravi Kumar ||15,000 ||15,000 ||- ||- ||ESOP 2008 (ID) -Tranche I |
|Dr. Tarun Khanna ||15,000 ||15,000 ||- ||- ||ESOP 2008 (ID) -Tranche I |
|Dr. Tarun Khanna ||3,000 ||- ||3,000 ||- ||ESOP 2008 (ID) -Tranche II |
|Mr. P H Ravi Kumar ||3,000 ||1,000 ||2,000 ||- ||ESOP 2008 (ID) -Tranche II |
|Mr. Geoffrey Tanner ||18,000 ||- ||18,000 ||- ||ESOP 2008 (ID) -Tranche III |
|Mr. P H Ravi Kumar ||18,000 ||- ||18,000 ||- ||ESOP 2008 (ID) -Tranche IV |
|Dr. Tarun Khanna ||18,000 ||- ||18,000 ||- ||ESOP 2008 (ID) -Tranche IV |
|Mr. Geoffrey Tanner ||18,000 ||- ||18,000 ||- ||ESOP 2008 (ID) -Tranche IV |
|Mr. Pramod Bhasin ||36,000 ||- ||36,000 ||- ||ESOP 2008 (ID) -Tranche IV |
* Resigned with effect from January 5, 2010
D. SKS Microfinance Employee Stock Option Plan 2008 ("ESOP 2008")
The Company instituted ESOP 2008 pursuant to a special resolution dated November 8,2008 passed at an EGM of the Company.
The total number of shares (which mean equity shares of the Company and securitiesconvertible into equity shares) that may be issued under ESOP 2008 are 26,69,537 equityshares. The ESOP 2008 came into effect on November 10, 2008 and is valid up to November 9,2014, or such other date as may be decided by the Board of Directors. The ESOP 2008 wasimplemented by the Board of Directors and the Compensation Committee. Unless otherwisespecified, the vested options were to be exercised prior to the expiry of 60 months fromthe date of vesting.
The following table sets forth the particulars of the options granted under ESOP 2008as on March 31, 2011:
|Particulars ||Details of Tranche I ||Details of Tranche II |
|Options granted ||17,69,537 ||9,00,000 |
|Date of grant ||November 10, 2008 ||December 8, 2008 |
|Exercise price of options (in Rs.) ||300.00 ||300.00 |
|Options vested ||17,69,537 ||2,25,000 |
|Options exercised ||- ||2,25,000 |
|Total No. of shares arising as a result of exercise of options ||- ||2,25,000 |
|Options forfeited/ lapsed ||- ||- |
|Variation in terms of options ||- ||- |
|Money realized by exercise of options (in Rs.) ||- ||6,75,00,000 |
|Total No. of options in force ||17,69,537 ||6,75,000 |
|Details of options granted to senior managerial personnel ||17,69,537 ||9,00,000 |
|i) Directors and key managerial employees || || |
|ii) Any other employee who received a grant in any one year of options amounting to 5% or more of the options granted during the year ||- ||- |
|iii) Identified employees who are granted options, during any one year equal to exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant ||- ||- |
|Diluted EPS on issue of shares on exercise calculated in accordance with AS 20 ||Rs. 15.24 as on March 31, 2011 || |
|Method of calculation of employee compensation cost. ||Fair Value Method || |
|Weighted average exercise price of options (Rs.) ||Nil ||333.33 |
|Weighted average fair value of options (Rs.) ||2.92 ||1.81 |
Details regarding options granted to Directors and key managerial personnel are setforth below:
|Name of Director / key managerial personnel ||Total No. of options granted under ESOP 2008 ||No. of options exercised under ESOP 2008 ||Total No. of options outstanding under ESOP 2008 ||No. of equity shares held ||Plan |
|Dr. Vikram Akula ||17,69,537 ||- ||17,69,537 ||- ||ESOP 2008 - Tranche I |
|Mr. Suresh ||9,00,000 ||2,25,000 ||6,75,000* ||- ||ESOP 2008 - Tranche II |
* Mr. Suresh Gurumani resigned as Director with effect from May 27, 2011. Hence,4,50,000 unvested options shall lapse/ be forfeited.
E. SKS Microfinance Employees Stock Option Plan 2009 ("ESOP 2009")
The Company instituted ESOP 2009 pursuant to a special resolution dated September 30,2009 and as amended pursuant to a special resolution dated December 10, 2009 passed at anEGM of the Company.
The total number of equity shares that may be issued under ESOP 2009 (as amended,pursuant to a resolution of shareholders dated December 10, 2009) are 24,99,490 equityshares. The ESOP 2009 came into effect on September 30, 2009 and is valid up to November30, 2014, or such other date as may be decided by the Board of Directors. The ESOP 2009was implemented by the Board of Directors and the Compensation Committee. The vestedoptions were to be exercised prior to the expiry of six years from the date of grant ofthe options as may be determined by the Board/ Compensation Committee.
The following table sets forth the particulars of the options granted under ESOP 2009as on March 31, 2011:
|Particulars ||Details of Tranche I ||Details of Tranche II ||Details of Tranche III |
|Options granted ||5,14,750 ||18,81,160 ||10,340 |
|Date of grant ||November 3, 2009 ||December 16, 2009 ||May 4, 2010 |
|Exercise price of options ||Rs. 300.00 ||(a) 13,13,160 at Rs. 150.00 per option; and ||(a) 4,340 at Rs. 150 per option; and |
| || ||(b) 5,68,000 at Rs. 300.00 per option ||(b) 6,000 at Rs. 300 per option |
|Options vested ||1,85,900 ||3,11,450 ||- |
|Options exercised ||1,44,910 ||1,80,458 ||- |
|Total No. of shares arising as a result of exercise of options ||1,44,910 ||1,80,458 ||- |
|Options forfeited/ lapsed ||50,000 ||(a) 2,23,910 @ Rs. 150.00 per option; and ||(a) 350 @ Rs. 150.00 per option; and |
| || ||(b) 1,00,000 @ Rs 300.00 per option ||(b) 3,000 @Rs. 300.00 per option |
|Variation in terms of options ||- ||- ||- |
|Money realized by exercise of options (in Rs.) ||4,34,73,000 ||3,71,18,700 ||- |
|Total No. of options in force ||3,19,840 ||(a) 9,75,792 at Rs. 150.00 per option; and ||(a) 3,990 at Rs. 150.00 per option; and |
| || ||(b) 4,01,000 at Rs. 300.00 per option ||(b) 3,000 at Rs. 300.00 per option |
|Details of options granted to senior managerial personnel ||- ||- ||- |
|(i) Directors and key managerial employees ||- ||- ||- |
|ii) Any other employee who received a grant in any one year of options amounting to 5% or more of the options granted during the year ||- ||- ||- |
|iii) Identified employees who are granted options, during any one year equal to ex- ceeding 1% of the issued capital (exclud- ing outstanding warrants and conversions) of the Company at the time of grant ||- ||- ||- |
|Diluted EPS on issue of shares on exercise calculated in accordance with AS 20 ||Rs. 15.24 as on March 31, 2011 || || |
|Method of calculation of employee compensation cost || ||Fair Value Method || |
|Weighted average exercise price of options ||690.46 ||i) 642.96 ||- |
|(Rs.) || ||ii) 634.98 || |
|Weighted average fair value of options ||41.18 ||i) 115.30 ||i) 233.75 |
|(Rs.) || ||ii) 69.29 ||ii) 152.53 |
Apart from the above disclosures, the details related to the method and significantassumptions used during this year to estimate the fair values of options granted ismentioned in clause 10 of Schedule 20: Notes to Accounts.
Apart from the options granted under the ESOP 2007, ESOP 2008, ESOP 2009 and ESOP 2008(ID) there are no outstanding financial instruments or any other rights which wouldentitle the existing promoters or shareholders or any other person any option to acquireour equity shares after the Issue.
| ||For and on behalf of the Board of Directors || |
|Place: Hyderabad ||SD/- ||SD/- |
|Date: June 2, 2011 ||Vikram Akula ||M R Rao |
| ||Executive Chairman ||Managing Director |
Annexure - 2 to the Directors Report
Information under Section 217(2A) of the Companies Act, 1956, read with the Companies(Particulars of Employees) Rules, 1975, and forming part of the Directors Report forthe Financial Year ended March 31, 2010.
A. Employed throughout the year and in receipt of remuneration of Rs. 60,00,000/- andabove:
|S No. ||Employee Name ||Designation ||Qualification ||Age ||Exp. (Years) ||Joining Date ||Gross Re- muneration (Rs.) ||Previous Employment & Designation |
|1 ||M R Rao* ||MD & CEO ||MMS ||47 ||25 ||Oct. 24, 06 ||1,47,76,648 ||ING Vysya Life Insurance, Head- Alternate Channels |
|2 ||S Dilli Raj ||CFO ||B.Com, MBA ||43 ||21 ||Jan. 28, 08 ||1,01,30,744 ||First Leasing Company of India Ltd, CFO |
* Appointed as MD & CEO with effect from October 4, 2010.
B. Employed partly during the year and in receipt of remuneration of Rs. 5,00,000/- permonth and above:
|S No. ||Employee Name ||Designation ||Qualification ||Age ||Exp. (Years) ||Joining Date ||Gross Remuneration (Rs.) ||Previous Employment & Designation |
|1 ||Atul Takle ||EVP - Communications ||Diploma, MMM ||54 ||26 ||May 18, 10 ||44,23,056 ||Pantaloon Retail, Head-Corporate Communications |
|2 ||Srinivas Reddy Vudumula ||EVP - Human Resources ||BE, PGD PM&IR (XLRI) ||43 ||19 ||June 7,10 ||35,69,682 ||IL&FS Engineering & Construction Company Ltd., Head - HR |
|3 ||A V Sateesh Kumar ||VP - Member Services ||PGDM (IIM) ||46 ||21 ||July 8,10 ||27,17,855 ||India Infoline, President of Life Insurance Distribution |
|4 ||Suresh Gurumani ||MD & CEO# (up to October 4, 2010) ||B.Com, CA ||48 ||24 ||Dec. 8,08 ||1,81,40,353* ||Barclays, Director - Retail Banking |
* Includes payment of Rs. 46,87,500/- made towards Non-compete Agreement fees. # Ceasedto be MD & CEO with effect from October 4, 2010.
1. Only Managing Director & Chief Executive Officers appointment iscontractual.
2. No Director is related to any other Director or employee of the Company listedabove.
3. Remunerations received/ receivable includes Gross Salary (Fixed), EmployersContribution to PF, actual bonus and special incentive paid.
4. None of the employees listed above, individually or along with his/ her spouse anddependent children holds 2 percent or more of the equity shares of the Company.
Annexure - 3 to the Directors Report
Particulars pursuant to Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988:
|A. ||Conservation of energy || |
|(a) ||Energy conservation measures taken. ||Installed 50 roof-top solar photovoltaic panels at an equal number of locations of the Company across India |
| || ||Distributed 5,394 D-Light solar lanterns this year among the Companys Sangam managers across regional offices. With this, the total number of solar lanterns deployed has gone up to 15,394 units |
|(b) ||Additional investments and proposals, if any, being implemented for reduction of consumption of energy. ||Rs. 91,67,333 incurred for installation of above measures in this year. Cumulative expenditure on this till date is Rs. 2,53,98,953 |
|(c) ||Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods. ||Saving of 120.8 MW energy per year. |
|(d) ||Total energy consumption and energy consumption per unit of production as per Form A of the Annexure in respect of industries specified in the Schedule thereto. ||- Not applicable - |
|B. ||Technology absorption || |
|(e) ||Efforts made in technology absorption as per Form B of the Annexure: ||- Refer Form B - |
|C. ||Foreign exchange earnings and outgo: || |
|(f) ||Activities relating to exports; initiatives taken to increase exports; development of new export markets for products and services; and export plans; ||- Not applicable - |
|(g) ||Earnings ||Rs. Nil |
|(h) ||Outgo ||Rs. 43,23,917 |
|1. Efforts, in brief, made towards technology absorption, adaptation and innovation ||The Company designed specific tools, rules, and discipline for the organization, creating a unique identity in the microfinance industry, and helping the organization in terms of improving efficiency and productivity with low-cost valued solutions. Key areas of improvement are: |
| ||1) Developing enterprise core applications and business reporting & intelligence systems in managing the application portfolio for different products |
| ||2) Setting up advanced data center and business continuity solutions for the organization and designing hybrid connectivity in connecting SKS branches across India |
| ||3) Email - Messaging solutions with integrated knowledge and content management helping employees in different dimensions across head office and regional offices. |
|2. Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product development, import substitution, etc. ||Cost and time reduction in the operations of the Company. |
|3. In case of imported technology (imported during the last five years reckoned from the beginning of the financial year), following information may be furnished: ||- Not applicable - |
|(a) Technology imported. || |
|(b) Year of import. || |
|(c) Has technology been fully absorbed? || |
|(d) If not fully absorbed, areas where this has not taken place, reasons there for and future plans of action. || |
| ||For and on behalf of the Board of Directors |
|Place: Hyderabad ||SD/- ||SD/- |
|Date: June 2, 2011 ||Vikram Akula ||M R Rao |
| ||Executive Chairman ||Managing Director |