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CreditAccess Grameen Ltd.

BSE: 541770 Sector: Financials
BSE 00:00 | 24 Apr 2020 CreditAccess Grameen Ltd
NSE 05:30 | 01 Jan 1970 CreditAccess Grameen Ltd

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OPEN 463.30
VOLUME 15867
52-Week high 1000.80
52-Week low 305.75
P/E 15.84
Mkt Cap.(Rs cr) 6,036
Buy Price 419.30
Buy Qty 19.00
Sell Price 419.20
Sell Qty 745.00
OPEN 463.30
CLOSE 441.25
VOLUME 15867
52-Week high 1000.80
52-Week low 305.75
P/E 15.84
Mkt Cap.(Rs cr) 6,036
Buy Price 419.30
Buy Qty 19.00
Sell Price 419.20
Sell Qty 745.00

CreditAccess Grameen Ltd. (CREDITACC) - Director Report

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Company director report


The Members

CreditAccess Grameen Limited

(formerly known as Grameen Koota Financial Services Private Limited)

The Directors have pleasure in presenting the 28th Board's Report of Credit AccessGrameen Limited (the “Company”) together with the Audited Statements of Accountsfor the year ended March 31 2019.


Financial Results

(Rs in million)
Particulars 2018-19* 2017-18
Total Income 12833.16 8715.32
Total Expenses 7855.82 5433.06
Profit Before Tax 4977.44 3282.17
Tax Expense 1759.82 1157.43
Profit After Tax 3217.61 2124.83
Other Comprehensive income -99.26 -13.87
Total Comprehensive income 3118.35 2110.96
Basic Earnings Per Share (EPS)
(in rupees) 23.37 20.91
Diluted Earnings Per Share
(DPS) (in Rupees) 23.14 20.65

*The financials for FY 2018-19 were drawn as per Ind-AS as per the requirement of thelaw hence the previous year's numbers have been accordingly redrawn.

a) Business Growth

The Company witnessed all-round growth during the year opened more branches acquiredsignificant numbers of customers and served them through 670 branches across 157 districtsin eight States (Karnataka Maharashtra Tamil Nadu Chhattisgarh Madhya Pradesh OdishaKerala and Goa) and one Union Territory (Puducherry). The Company was able to raise thenecessary resources all through the year to match the business and operationalrequirements leveraging its relationships with banks and financial institutions as wellas of forming new lender relationships.

The Company's overall performance during the year was robust resulting in improvementin all operational and financial parameters.

Your Company's organizational highlights for Financial Year (“FY”) 2018-2019are as follows:

Year Ended 2019 2018
Branches 670 516
States/Union Territories 9 9
Districts 157 132
Kendras 172173 130608
Borrowers 2469837 1851324
Loans Disbursed (Rs in million) 82211.63 60817.22
Gross AUM (Rs in million) 71593.30 49746.61

b) Profitability

The total income of the Company increased from Rs 8715.32 million to Rs 12833.16million in FY 2018-19. The total expenditure for the FY 2018-19 increased from Rs 5433.06million to Rs 7855.82 million. The Company achieved an all-time high profit after tax(PAT) of Rs 3217.61 million for FY 2018-19 while the same was Rs 2124.83 million in FY2017-18.

c) Other material events during the year:

i. Initial Public Offer (IPO)

The Initial Public Offer (IPO) of the Company for subscription opened from August 82018 to August 10 2018. The IPO of 26805394 equity shares of the Company at the issueprice of Rs 422/- per share (consisting of 14928909 fresh issue of equity shares and11876485 equity shares under offer for sale) was subscribed 2.2 times by the Public.Consequently the paid-up share capital of the Company increased to 143356246 equityshares of Rs 10/- each. The equity shares have been listed on the National Stock Exchangeof India Limited and BSE Limited on August 23 2018. The Company has fully utilised theIPO proceeds in line with the objectives mentioned in the Prospectus.

ii. Direct Assignment and Securitisation

The Company has completed 7 (seven) Securitization and 4 (four) Direct Assignmenttransactions totaling Rs. 16670.5 million during the year under review.


The Board of Directors aim to grow the business lines of the Company and enhance therate of return on investments of the shareholders. With a view to financing the long-termgrowth plans of the Company that requires substantial resources the Board of Directorsdid not recommend a dividend for the year under review.


The Company has transferred Rs 643.52 million to reserves out of the net profit offinancial year 2018-19 and an amount of Rs 5448.47 million is the accumulated balance inRetained Earnings Account (Profit and Loss account and comprehensive income).


The paid-up Equity Share Capital as at March 31 2019 stood at Rs 1435.52 million.During the year under review the Company has issued 196015 shares to the employees whoexercised their stock options granted under GKFSPL Employee Stock Option Plan - 2011. Ason March 31 2019 except as mentioned below none of the Directors of the Company holdinstruments convertible into equity shares of the Company.

As on March 31 2019 455000 stock options are held by Mr Udaya Kumar Hebbar MD &CEO and which are convertible into equity shares upon exercise of the same.


As on March 31 2019 the Board of your Company consists of nine Directors. Theirdetails are as follows:

Category Name of Directors
Executive Director Mr Udaya Kumar Hebbar Managing Director & CEO
Non-Executive Mr Paolo Brichetti
Nominee Directors Mr Massimo Vita
Mr Sumit Kumar
Non - Executive Independent Directors Mr M N Gopinath
Mr Prabha Raveendranathan
Mr Anal Kumar Jain
Mr George Joseph
Ms Sucharita Mukherjee

The composition of the Board is in line with the requirements of the Companies Act2013 and the Securities Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (“SEBI (LODR) Regulations 2015”). All theDirectors have vast knowledge and experience in their relevant fields and the Company hadbenefitted immensely by their presence on the Board.

The skills/ expertise / competence of the Board of directors identified by the Board asrequired in the context of business of the Company is mentioned in the CorporateGovernance Report.

On June 14 2019 Mr B R Diwakar CFO was appointed as Director Finance & CEO. Theappointment was for a period of 3 years from June 14 2019 which is subject toshareholders approval. The Board recommends his appointment.

a. Changes in Directors and Key Managerial Personnel (KMP) during the FY 2018-2019

During the year under review there were no changes in the Directors and KMP.

Mr Udaya Kumar Hebbar Managing Director & CEO Mr B R Diwakar Chief FinancialOfficer and Mr Syam Kumar R Company Secretary are the KMPs of the Company as on March31 2019.

b. Woman Director

In terms of the provisions of Section 149 of the Companies Act 2013 and Regulation17(1)(a) of the SEBI (LODR) Regulations 2015 the Company shall have at least one WomanDirector on the Board. The Company has Ms. Sucharita Mukherjee as Independent WomanDirector on the Board.

c. Director retiring by Rotation

Mr Sumit Kumar Nominee Director (DIN: 07415525) is liable to retire by rotation interms of provisions of the Companies Act 2013 at the ensuing Annual General Meeting ofthe Company and being eligible offers himself for reappointment. The Board recommends hisreappointment.

As stipulated under Reg 36 (3) of the SEBI (LODR) Regulations 2015 a brief resume ofMr. Sumit Kumar proposed to be reappointed will be given in the notice of the 28th AGM ofthe Company.

d. Declaration by Independent Director(s) and re-appointment if any

The Company has five Independent Directors on the Board. The Company has receiveddeclaration from each Independent Director of the Company under section 149(7) of theCompanies Act 2013 that they meet the criteria of independence as laid down in Section149(6) of the Companies Act 2013 and subsequently the same was placed at the BoardMeeting held on May 08 2019.

A declaration by Managing Director & CEO confirming the receipt of this declarationfrom Independent Directors is annexed to this report as Annexure I.

There is no change in the Independent Directors nor has the Company reappointed anyIndependent Director during the year under review.

e. Policy on Board Diversity

The Policy on Board Diversity approved and adopted by the Company is as follows:

a) Diversity is ensured through consideration of a number of factors including but notlimited to skills industry experience background and other qualities.

b) The Company takes into account factors based on its own business model and specificneeds from time to time.

c) The Nomination & Remuneration Committee leads the process of identifying andnominating candidates for appointment as Directors on the Board.

d) The benefits of diversity continue to influence succession planning and to be thekey criteria for the search and nomination of Directors to the Board.

e) Board appointments are based on merit and candidates are evaluated against objectivecriteria having due regard to the benefits of diversity on the Board including that ofgender.

f. Policy on Nomination & Remuneration

The Policy on Nomination and Remuneration sets out the criteria for determiningqualifications positive attributes and independence of Directors.

It also lays down criteria for determining qualifications positive attributes of KMPsand senior management and other matters provided under Section 178 (3) of the CompaniesAct 2013 and Regulation 19 of LODR.

The Policy on Nomination and Remuneration of the Company as approved and adopted by theBoard is available on the website of the Company at

g. Formal Annual Evaluation of Board and its Committees

The Board has carried out an annual evaluation of its own performance its Committeesand Independent Directors.

A note on the annual Board evaluation process undertaken in compliance with theprovisions of the Companies Act 2013 and SEBI (LODR) Regulations 2015 is given in theReport on Corporate Governance which forms a part of this Report.

h. Meetings of the Board

The Board met 10 (ten) times during the financial year. Details of the meetings of theBoard during FY 2018-2019 is provided in the Report on Corporate Governance which forms apart of this Report.

i. Committees of the Board

The details of the Committees of the Board namely the Audit Committee CSR CommitteeRisk Management Committee Nomination and Remuneration Committee Stakeholders'Relationship Committee ALM Committee and IT Strategy Committee their composition termsof reference and the activities during the year under review are elaborated in the Reporton Corporate Governance which forms a part of this Report.

Further there are no instances where the Board has not accepted recommendations ofAudit Committee.


a. Statutory Auditors

M/s S. R. Batliboi & Co LLP (FRN: 301003E/ E300005) 14th Floor The Ruby 29Senapati Bapat Marg Dadar (West) Mumbai 400028 were appointed as the Statutory Auditorsof the Company at the AGM held on June 29 2016 for four financial years 2017 to 2020.

The Board has duly examined the Statutory Auditors' Report to the Annual Accounts2018-2019 which is self-explanatory. Clarifications wherever necessary have beenincluded in the Notes to the Accounts. Further the Directors confirm that there are noqualifications reservations adverse remarks or disclaimers in the Independent Auditor'sReport provided by Statutory Auditors for the FY 2018-2019.

b. Secretarial Auditors

The Board had appointed CS C Dwarakanath Company Secretary in practice (FCS 7723 andCP 4847) as Secretarial Auditor to conduct the Secretarial Audit for the year ended March31 2019 in compliance with the provisions of Section 204 of the Companies Act 2013.

The Secretarial Audit Report in form MR-3 submitted by the Secretarial Auditors forthe FY 2018 - 2019 is enclosed to this report as Annexure II. The Directors of theCompany confirm that there are no qualifications reservations or adverse remarks ordisclaimers in Secretarial Audit Report for the year under review.

c. Cost Auditors

The provisions of Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 relating to Cost Audit and maintaining cost audit recordsis not applicable to the Company.


The Company has no subsidiary/joint venture/ associate company and hence consolidationand the provisions relating to the same under the Companies Act 2013 and Rules madethereunder are not applicable to the Company.


During the year under review there was no change in the nature of business of theCompany. Further the Company on March 15 2019 has obtained registration from InsuranceRegulatory and Development Authority of India (IRDAI) to act as Insurance Corporate Agent(Composite).


The Credit Rating of different instruments of the Company as on March 31 2019 is asgiven below:

Credit Rating Agency Instrument Rating as on March 31 2019 Migration during the FY 2018-19
ICRA Bank Facilities [ICRA]A+ (Stable) Revised from [ICRA]A (Positive)
ICRA Non- Convertible Debentures [ICRA]A+ (Stable) Revised from [ICRA]A (Positive)
ICRA Subordinated Debt [ICRA]A+ (Stable) Revised from [ICRA]A (Positive)
ICRA Commercial Papers [ICRA]A1+ Revised from [ICRA]A1

Highest rating issued by ICRA for long-term credit facilities is [ICRA] AAA and forshort-term facilities is [ICRA]A1+

Comprehensive Microfinance Grading by CRISIL as on March 31 2019 is ‘M1C1'.CRISIL's Comprehensive Microfinance Capacity signifies highest capacity of the MFI tomanage its operations in a sustainable manner and Excellent performance on Code of Conductdimensions. The grading is assigned on an eight-point scale with respect to MicrofinanceCapacity Assessment Grading with ‘M1' being the highest grading and ‘M8' thelowest and on a five-point scale with respect to Code of Conduct Assessment with‘C1' being excellent performance and ‘C5' the weakest.


The Directors confirm that there were no significant and material orders passed by theregulators courts or tribunals that impacted the going concern status and the Company'soperations in future.


The Company maintains appropriate systems of internal financial controls includingmonitoring procedures. Company policies guidelines and procedures are well documented andprovide for adequate checks and balances and are meant to ensure that all transactions areauthorised recorded and reported correctly. An independent internal audit system is inplace to conduct audits of all branches regional offices as well as the HO. The internalaudit department reviews the effectiveness and efficiency of these systems and proceduresto ensure that the financial and operational information is accurate and complete in allrespects. The Audit Committee reviews and approves audit plans for the year. Audits areconducted on an ongoing basis and significant deviations are brought to the notice of theAudit Committee. The Audit Committee of the Board is updated on significant internal auditobservations compliance with statutes and effectiveness of working of the control systemsevery quarter.


The Company has integrated risk management practices into governance and operations andhas developed a strong risk culture within the organisation. Appropriate systems and toolsare in place for identification measurement reporting and managing risks. The Boardcomprises of professional directors with relevant experience and who are well placed tounderstand risks specific to the Company and the microfinance sector in general. TheBoard oversees the implementation of the risk management plan principally through the RiskManagement Committee. All the strategies with respect to managing major risks aremonitored by the Management Level Risk Committee and reported to the Risk ManagementCommittee of the Board of Directors. The Annual Risk Management Plan covers the majorrisks that identified by management as needing particular focus and close monitoring. TheRisk Management Plan forms the basis for implementation of risk management practices indetail. The risk assessments are carried out regularly at all levels of the organisationto ensure appropriate management actions in a timely fashion. Risk reviews addressescredit operational IT financial political regulatory and reputational risks.


In pursuance of the provisions of Section 135 and schedule VII of the Companies Act2013 the Company has a CSR Committee of the Board which recommends (a) the policy onCorporate Social Responsibility (CSR) and (b) Oversees implementation of the CSR Projectsor Programmes to be undertaken by the Company as per CSR Policy. Accordingly the Companyhas contributed Rs 29.32 million during FY 2018-19 as part of its CSR contribution.

The Annual Report on CSR activities is enclosed herewith as Annexure III.

Apart from this statutory contribution the Company has additionally contributed Rs8.36 million by way of a donation for CSR activities in FY 2018-2019.


The Company has established a whistle blower mechanism for the Directors and employeesto report any genuine concerns through Employees are alsoencouraged to report any unethical behaviour actual or suspected fraud or violation ofthe Codes of Conduct or policy or illegal activity occurring in the organisation. Inexceptional cases directors or employees can raise their concerns directly to theChairman of the Audit Committee by sending an e-mail to '. Thecases reported will be investigated and resolved within strict timelines. The identity ofthe whistleblower will be kept confidential and protection from retaliatory actions isalso provided for in the policy. Quarterly reports in this regard are reviewed by theAudit Committee.


The Company has not made any investments in other companies beyond two layers ofInvestment companies as stipulated under section 186(1) of the Companies Act 2013. TheCompany being an NBFC-MFI registered with RBI and predominantly in to lending by way ofmicro finance loans and hence the other provisions of Section 186 of the Companies Act2013 are not applicable to the Company.


There were no related party transactions during the year under review.

The Company has in place a Board approved Related Party Transaction Policy which isavailable on the website of the Company at


The role of human capital in any organisation is of utmost importance. More so in anorganisation like ours where a majority of employees are customer-facing to facilitate asmooth delivery of our financial services. There is a fine balance between customerservice and achievement of performance targets. The Company aims to provide a suitablework environment that encourages a positive attitude and superior performance.

Policies relating to Human Resources are employee friendly and support an environmentof accomplishment and satisfaction. The Company aims to provide the best of traininginputs and seamless growth opportunities ensuring that the culture of the organisation istranslated into business performance.

The Company also facilitates performance-linked incentives that will help themotivational levels of the workforce thereby sustaining growth and achievement targets.


The ratio of the remuneration of the MD & CEO to the median employee's remunerationand other details in terms of Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014have been annexed herewith as Annexure IV to the Directors' Report

The details of employee remuneration as required under provisions of Section 197 (12)of the Companies Act 2013 read with Rule 5 (2) and 5 (3) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and second proviso to Sec 136 of theCompanies Act 2013 are available for inspection at the Registered Office of the Companyduring working hours 21 days before the Annual General Meeting and shall be madeavailable to any shareholder on request. None of these employees is a relative of anyDirector of the Company.

Further the Independent Directors were paid commission aggregating to Rs 3.95 millionfor FY 2017-18 based on the Shareholders' approval by way of a special resolution datedNovember 21 2018. Apart from the above none of the directors including the ManagingDirector & CEO is in receipt of any commission from either the Company or its HoldingCompany during the year under review.


There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of this report.


The Company has utilised the net proceeds from the issue towards augmenting its capitalbase to meet the capital requirements of the Company. Details of IPO fund utilisation isgiven in the table below:

Particulars Proposed utilisation of funds as stated in prospectus Actual utilisation of funds as on March 31 2019 Balance amount available
(Rs in million) (Rs in Million)
Augmentation of Capital 6300 6300 NIL


The Company has taken adequate steps to adhere to all the stipulations laid down inRegulation 27 read with Part E of Schedule II and Schedule V of the SEBI (LODR)Regulations 2015 on Corporate Governance. The detailed Report on Corporate Governancealong with certificate on Corporate Governance from CS C Dwarakanath Practicing CompanySecretary forms a part of this Report.


The Management Discussion and Analysis Report for the year under review is included asa separate section and forms a part of this Report.


The Business Responsibility Report for the year under review has been annexed as Annexure- V to the Directors' Report.


The Company has 611 women employees in various cadres as on March 31 2019. The Companyhas in place a Policy on Prevention Prohibition and Redressal of Sexual Harassment ofWomen at Workplace and an Internal Complaint Committee in line with the requirements ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 and Rules made thereunder for reporting and conducting inquiry into the complaintsmade by the victim on the harassments at the workplace. The functioning of the Committeeswas carried out as per letter and spirit of the provisions of the Act.

During FY 2018 - 2019 the Company received one complaint of sexual harassment. Thematter was referred to Prevention of Sexual Harassment Committee and based on the reviewand decision of the Committee and the case has been disposed. There are no complaintspending for redressal as on March 31 2019.


The Company has in place a Fair Practice Code (FPC) approved by the Board in compliancewith the guidelines issued by RBI to ensure better service and provide necessaryinformation to customers to take informed decisions. The FPC is available on the websiteof the Company at

The Board also reviews the FPC every year to ensure levels of adequacy andappropriateness.


The Company has a dedicated Customer Grievance Cell for receiving and handling customercomplaints/ grievances and ensuring that the customers are treated fairly and without anybias at all times. All issues raised by the customers are dealt with courtesy andredressed expeditiously.


Pursuant to sub-section (3)(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the Annual Return as at March 31 2019 is available at


a. Information Relating to Conservation of Energy Technology Absorption

Sl No Particulars Remarks
A Conservation of energy The provisions of Section 134(3) (m) of the Companies Act 2013 relating to conservation of energy and technology absorption do not apply to the Company. The Company has however used information technology extensively in its operations and continuously invests in energy- efficient office equipment at all office locations.
(i) the steps taken or impact on conservation of energy;
(ii) the steps taken for utilising alternate sources of energy;
(iii) the capital investment on energy conservation equipments;
B Technology absorption
(i) the efforts made towards technology absorption;
(ii) the benefits derived like product improvement cost reduction product development or import substitution;
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-
a. the details of technology imported;
b. the year of import;
c. whether the technology been fully absorbed;
d. if not fully absorbed areas where absorption has not taken place and the reasons thereof; and
(iv) the expenditure incurred on Research and Development.

b. Foreign Exchange Earnings and Outgo

During the year the foreign exchange inflow was NIL and outflow was equivalent to Rs97.59 million towards term loan interest payments and procurement of a software licence.


The Company is a non-deposit taking Non-Banking Financial Company Micro FinanceInstitution (NBFC-MFI) and has not accepted any deposit as defined by the Companies Act2013.


At present stock options have been granted or shares have been issued under GKFSPLEmployee Stock Option Plan - 2011. During the financial year 196015 options wereexercised by employees. The Company accordingly made an allotment of 196015 equityshares. No options were granted during the year under review.

Total outstanding options as on March 31 2019 is 1828535.


a. During the year under review the Company has not allotted any equity shares withdifferential voting rights.

b. No frauds were reported by the auditors under sub-section 12 of section 143 of theAct.

c. The Company has complied with applicable Secretarial Standards for Board and GeneralMeetings held during the year under review.

d. The Company has not revised Financial Statements as mentioned under section 131 ofthe Companies Act 2013.

e. The Company has not issued Sweat Equity shares during the year under review.


In pursuance of Section 134(5) of the Companies Act 2013 the Directors hereby confirmthat:

a. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;

b. the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit and loss of the Company for that year;

c. the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d. the directors have prepared the annual accounts on a going concern basis;

e. the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

f. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


The Directors wish to place on record their appreciation and sincerely acknowledge thecontribution and support from shareholders customers debenture holders Central andState Governments Bankers Reserve Bank of India Registrar of Companies Securities andExchange Board of India Insurance Regulatory and Development Authority of India BSELimited National Stock Exchange of India Limited Registrar & Share Transfer AgentsCredit Rating Agencies and other Statutory and Regulatory Authorities for the kindcooperation and assistance provided to the Company. The Directors also extend theirspecial appreciation to the employees for their continuing support and unstinting effortsin ensuring an excellent all-round operational performance and also for their continuedcommitment dedication and cooperation.

For and on behalf of the Board of Directors
M N Gopinath
Place: Bengaluru Chairman
Date: June 14 2019 DIN: 00396196

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