CONTENTS

Corporate Overview

[2] Building a customer-centric microfinance institution [3] About microfinance & the Company [5] Building momentum for long-term growth [6] Governance [11] Financial & Operational Highlights [12] Products & Services [13] Our Collaborators & Professional Associates

Statutory Reports

[14] Board Committees & Meetings [15] Directors’ Report [19] Report from Statutory Auditors & Financial Statements

Registered & Head Office

No. 8/19, 2nd Floor, 8 th Cross, 1st Main, Ganesha

Block, Nandini Layout Post, Bangalore – 560096

Statutory Auditors

M/S Pissay & Co Abid Road, Hyderabad

Company Secretary

M/S NG Joshi & Co Rajajinagar, Bangalore

1

Building a customer-centric microfinance institution…

Nirantara FinAccess Private Limited believes in creating a customer-centric business. We aim at mass-based services and our objective is to balance needs of the customer with fair business practices.

The fatal crisis in the microfinance sector has made us strong. We are determined to grow beyond limits and have started building a firm foundation that will be responsive and transparent. We have just started creating significance in the lives of our stakeholders.

We are presenting our Annual Report for the

FY 2012-13.

Niranjan SheelavantFounder & Managing Director

2

CORPORATE OVERVIEW

About Microfinance

Microfinance is the provision of a broad range

of financial services such as – small savings,

loans, insurance, pension, remittance and

allied services to low-income and vulnerable

households that would help them in their

micro enterprises and small businesses which

in turn would improve their living standards.

The concept of microfinance originated in the

1970s in India and Bangladesh through a

pioneering work of SEWA, MYRADA and

GRAMEEN BANK (of Bangladesh). There are

two popular models of Group Lending that

are being practiced in India. One is NABARD

promoted SHG Bank Linkage Model and

Grameen Bank pioneered JLG Model.

Nirantara & its microfinance initiative

Nirantara Community Services was

conceived in early 2006 by Mr. Niranjan

Sheelavant and couple of his professional

associates. Their experience in the

development sector, exposure to the

microfinance domain and instinctive social

entrepreneurial zeal resulted in the

establishment of a not-for-profit Society

called Nirantara Community Services (NCS)

during December 2006. NCS was registered

as a Society under Karnataka Societies

Registration Act of 1960. NCS has been

focused on applying microfinance as the

propelling tool for poverty alleviation and it

supports livelihoods of socio-economically

backward families through provision of small

loans ranging from Rs. 10,000 to Rs. 25,000,

especially focused to women who are

grouped into mutual self-helps such as Joint

Liability Groups.

Genesis of Nirantara FinAccess Private Limited

During the year 2008-09, Mr. Niranjan

Sheelavant & Mr. Hassan Mulla preferred a

company format over society format for

furthering financial services. The new vehicle

for next stage of growth is a Non-Banking

Finance Company (NBFC) titled Shri

ShivGayatri Infin Private Limited. The

requisite legal & regulatory tasks were

undertaken since 2010. Name of the NBFC

was changed to Nirantara FinAccess Private

Limited that reflects the identity of our group

of social enterprises. The Company is

registered under Indian Companies Act of

1956 and has a Non-Banking Finance

Company registration with Reserve Bank of

India as per Section 45-IA of the RBI Act,

1934.

Since 2009-10, Shri ShivGayatri Infin Private

Limited (Now Nirantara FinAccess Private

Limited) has been providing loans ranging

from Rs. 12,000 to Rs. 25,000 to women

organized in to Joint Liability Groups. The

Company also provides micro-insurance

services to the borrowers that cover their

ABOUT MICROFINANCE & THE COMPANY

3

spouse/ fami ly members . Ni rantara

Community Services has continued its

operations in the form of providing

microf inance serv ices through BC

arrangement with various banks.

The objective of Nirantara FinAccess is to be

able to provide affordable products and

services to people in transparent manner.

Presently Nirantara FinAccess is working in 3

districts of Karnataka state, India. The

operations are predominantly in rural areas

(70%) as of date. The Nirantara FinAccess

plans to expand its operations horizontally

and to deepen its presence within Karnataka

State. Nirantara FinAccess will continue with

direct lending and build its own portfolio.

However, NCS will involve in indirect lending

and build portfolio for commercial banks as

Banking Correspondent. NCS will also

involve in financial literacy and related

economic development activities.

Operating Model:

Nirantara FinAccess is replicating pioneering

Grameen Bank System with local

modifications. The MFI facilitates formation

of Joint Liability Groups (JLGs) of 5 members

and such 4-8 JLGs form a Centre. The Centre

meets on weekly/bi-weekly basis in a fixed

place, day and time to do financial and non-

financial transactions. The MFI provides all

the financial services at the doorstep of the

clients.Social Performance & Impact

Nirantara FinAccess strongly believes in and

practices Social Performance Management

(SPM). The MFI has imbibed best practices of

SPM since its inception.

The SPM range from enrolment to their exit,

we follow ethical and transparent practices.

Progress can be measured based on

betterment in economic status & living

standard of clients. Their income graph

should show positive curves and year by year

there should be progress in terms of

production, productivity and net income of

customer's family.

Social Benefits to clients & their families:

? Improvement in standard of living:

Impact of microfinance leads to access

to better health, education & other basic

needs. For example, customers would

admit their children for higher classes in

better schools.

? Create credit history for members:

Transaction in our MFI and their credit

history in credit bureau help customers

to create a history for themselves for

availing services at formal financial

institutions such as banks.

? Encourage micro-enterprises and help

clients to reach mainstream: Customers

with good transaction history would be

preferred by commercial banks. Support

by mainstream financial organizations

opens up new world of possibilities for

them.

4

? Financial inclusion through various

financial literacy and linkage programs:

Financially excluded customers get

awareness on financial discipline. They

start saving money for various life-cycle

needs and help themselves in crisis.

? Door step financial services: Hassle-free

service at the door-step saves time &

opportunity-cost for our customers

BUILDING MOMENTUM FOR LONG-TERM GROWTH

Since its inception, Nirantara Community

Services and now Nirantara FinAccess Private

Limited have undergone many ups and

downs. Challenges such as AP Microfinance

Crisis have nearly killed us and many small

and upcoming MFIs in India. We could survive

such crisis due to our process driven

approach and nearness to customers.

To face such threats and challenges, we are

building Nirantara FinAccess with a caution

while being true to ourselves. We will remain

close to our customers and strengthen our

processes. We will closely work with regulator

of the microfinance sector, i.e., RBI,

network/s of Microfinance Institutions,

operating Microfinance Institutions, like-

minded partners, other financial institutions

and all the stakeholders and to build a good

community. Nirantara FinAccess, will,

therefore, never run behind numbers. Rather,

we will take practical steps in scaling up and

focus on creating impactful products &

services for our customers. For us long-term

qualitative growth matters most. The year

2013-14 will be, therefore, a year of building

momentum as we mobilize required

resources and start rebuilding the

microfinance institution of significance for

customers.

For this we will focus on identifying growth

opportunities, creating a customer centric

technology, building prudent governance,

bringing right people and creating right social

impact for our community.

Objectives for FY 2013-14For the FY 2013-14, the management of Nirantara FinAccess has set following objectives:? Infusion of INR 5 Cr paid-up capital? Get recognized as NBFC-MFI category with Reserve Bank of India? Raise INR 15 Crores of debt capital? Build a portfolio asset size of INR 10 Crores? Build a customer base of 6,000? Strengthen operations in 3 branches? Strengthen processes, policies and risk management systems

5

GOVERNANCE

Nirantara FinAccess believes in transparent and effective governance as it helps in healthy escalation of our Company. The Company is planning its geographical expansion to reach over one hundred thousand socio-economically backward families in coming five years. Achieving this big goal is possible only through right people governing and managing it. The Company, therefore, continuously upgrades standards and works on improvement of quality of people.

Founders

The Company was founded by Mr. Niranjan Sheelavant, a development practitioner. Mr. Sheelavant is also founder of Nirantara Community Services, Nirantara Foundation, JanaNidhi Credit Souharda Cooperative Limited and Nirantara Livelihood Resources Private Limited.

Investors

Major investors of the Company are NavaJyothi Foundation, Amrut Dairy Trust and Mr. Niranjan Sheelavant.

Advisors to the Board

The panel of Advisors of Nirantara FinAccess consists of exceptionally recognized personalities of microfinance sector. The Advisory panel consistently guides Board of Directors and Senior Management of the Company.

Mr. N. Srinivasan

Mr. Srinivasan (b 1954) is a well known and recognized personality of Indian Microfinance Sector. He studied Post-Graduation in Economics apart from

other key courses in India & UK. After a long and productive career in Reserve Bank of India and National Bank for Agriculture & Rural Development (1983-2007, resigned as Chief General Manager), he started working as a freelance consultant to numerous national & international organizations such as the World Bank, IFAD, DFID, UNDP, SRTT, Frankfur t School o f F inance and Management, GTZ, ADB, MicroSave, Access Development Services, EDA Rural Systems, Bill and Melinda Gates Foundation and CGAP. He has also worked with many Ministries of Government of India apart from very significant Policy Making Participation, in banking, farm-sector, cooperatives and financial inclusion, in India. Mr. Srinivasan is a prolific writer and has many publications to his credit. He has been closely associated with Indian Microfinance Sector as author of the Annual State of the Sector Report during 2008 and 2011.

Mr. Raghav Narayan

Mr. Raghav Narayan (b1983) is a Corporate Finance and Strategy Consultant with a special interest in rural India,

6

Financial product design, Start-ups, Social enterprises, Financial services policy and Policy issues in general. He consults for organisations operating in multiple industries and also serves on the Boards of several of them.

He has financial services and corporate finance experience of over 7 years in multiple roles and a track record for taking on and successfully managing challenging turn-key initiatives. He has intimate familiarity with domestic regulation, finance eco-system and markets, Spear-headed 4 NBFC acquisitions and collaborations for geography and business line expansion.

At IFMR Rural Finance, Raghav was an actively involved in various company-wide initiatives and led teams on critical initiatives including set-up of Pudhuaaru, the first KGFS, creation and acquisition of several companies (including NBFCs), new product development, setup of a unique pilot for farmer commodity finance etc. He was directly responsible for Accounting and Finance, Compliance and Strategy functions at different points of time. Towards the end of his stint he was principally responsible for the conceptualisation and roll out of a unique project based organisation structure at IFMR Rural Finance. Prior to IFMR Rural Finance Raghav worked at ICICI Bank from October 2005 to February 2008 in the Government Banking Group as a relationship manager handling large public sector clients and other state and central government entities.

Raghav is a Chartered Accountant and is an Associate member of the Institute of Chartered Accountants of India. He has a Bachelor of Commerce degree from Bangalore University.

Board of Directors

The Board consists of professionals with exper ience microf inance, banking, agriculture and social entrepreneurship.

Mr. RK Mukherjee, Director

Mr. RK Mukherjee (b1956) is engaged in governance a n d i n s t i t u t i o n a l development of several development finance and

livelihood support institutions and in developing business process and training systems with Micro Insurance Academy. He started his career with Union Bank of India where he worked for 17 years in credit, inspection, vigilence, computerisation and branch banking. He thereafter worked with several NGOs in initiating microfinance and in development of systems and processes. He worked with Sa-Dhan, a National association of community development finance institutions, in various capacities, on Standards work on performance of MFIs and SHGs; as faculty to microfinance education programmes; initiating sector reports (Side by Side and Quick reports) and as a member of Governing board. He served The Institute of Chartered Accountants of India as a

7

member of Technical Group that prepared Guidenlines on Accounting norms for Microfinance Institutions in India for members of ICAI. His professional qualifications are MBA, CAIIB, CA-inter and in ISO systems. He has been guest speaker to IFMR Chennai, IIM Lucknow, IIM Kolkata and to various other management education institutions. He is associated with PHD Chamber of Commerce in their banking & finance initiatives. He has over 275 articles published in newspapers including 'The Pioneer' and 'Economic Times' on financial markets and in banking journals on microfinance. He has authoured two books, 'Marketing of Bank Services' sponsored by Union Bank of India and 'Accounting for Self Help Groups'. RK has been supporting Nirantara FinAccess since its initial days and he will continue to guide the company in its growth.

Key Expertise: Banking, Microfinance,

Accounts, Sectoral work, Strategy,

Institutional Development, Governance

Mr. Niranjan Sheelavant, Managing Director

Mr. Niranjan Sheelavant (b1977), a gruaduate of University of Agricultural Sciences-Dharwad & a

post-gradute in Social Work from Gulbarga University, has over 12+ years of experience in development & microfinance sectors. He worked in participatory projects on natural

resources management including watershed and sustainable agriculture management. He was a faculty member in Bidar DCC Bank's training center and involved deeply in training on SHG-Bank Linkage Program. Later, he became an Institutional Development Consultant to clients of IGS-BASIX and as an independent consultant for many start-up microfinance institutions in Karnataka and Andhra Pradesh. He has been in to economic development projects since beginning of his development sector career. He has undergone many national & international trainings on leadership & microfinance management. He founded Nirantara Social Enterprises for Value Added Services (Sevas) group. Niranjan is committed for poverty reduction through Nirantara FinAccess. As MD & CEO of Nirantara FinAccess, he closely works with the Board and management to achieve the mission of the Company.

Key Expertise: Micro-Banking, NGO

Management, Microfinance, Institutional

Development, Social Entrepreneurship,

Cooperatives, Livelihood Promotion

Mr. Hassan Mohiddin Mulla, Director

Mr. Hassan Mulla (b1975) is an Agr i Bus iness Management Graduate from XIMB-Bhubaneshwar with 14+ years of banking, microfinance & livelihood

promotion experience. He worked with

8

BASIX's KBS Local Area Bank Limited in its initial years and established operations of the bank in Karnataka. Hassan is a social entrepreneur as he established Manjara Agritech Private Limited, an agribusiness & extension services company in Karnataka. Apart from that, he is an education entrepreneur as he established management institutions for youth from smaller towns. Through management education, full-time MBA courses, in collaboration with Punjab Technical University, he is creating social impact through value based education. Hassan has been supporting Nirantara FinAccess as a Director since its inception. Hassan's vision is to create appropriate opportunities to socio-economically deprived through need-based interventions. He is keen to create such opportunities through Nirantara FinAccess.

Key Expertise: Micro-Banking, Livelihood

Promotion, Social Entrepreneurship,

Management Education.

Mr. Nagendra V Mali , Director

Mr. Nagendra V. Mali (b1974) holds a Degree in Science and a Diploma in J o u r n a l i s m f r o m Karnataka University. He is

the Founder Director of both Navachetana Foundation (NCF) and Navachetana Microfin

Services Private Limited (NMSPL). His flair for serving poor and development of rural area, made him to join a NGO soon after his graduation. He has more than a decade of experience and exposure to NGO activities. His passion for serving the rural community and especially the poor kindled him to start a NGO 'Navachetana Foundation' during August, 1999. With an intense missionary zeal a number of activities aimed at rural/agricultural development works have been taken up involving local community. In 2005, he felt the need for starting microfinance for poverty alleviation and it resulted in amendment of bye-laws of NCF and started in collaboration with the ICICI Bank through their Partnership Model. Also took part in BC Model of HDFC Bank. Based on this background he could able to convince the Indian Overseas Bank, ICICI Bank, SIDBI and FWWB who have sanctioned Term loan recently for on-lending to the poor. His aspirations to go for a large scale poverty alleviation program through microfinance resulted in acquisition of a NBFC for the purpose. He now holds the reigns of management of NMSPL as the Managing Director.

Key Expertise: Microfinance, NGO

Management, Social Entrepreneurship,

Cooperatives, Micro-Banking, Natural

Resources Management

9

Core Management Team

Mr. Niranjan Sheelavant: He is currently steering Nirantara FinAccess as MD & Chief Executive Officer. As CEO, he takes part in vision building and strategic decision making. He invo lves h imsel f

actively in operations management, recruitment of human resources, risk management, accounts supersvision and general administration of the organization.

Mr. Manjappa HL: He has got over 12 years of e x p e r i e n c e i n microfinance. He worked with a leading NBFC-MFI for over 10 years from Field Executive level to Operations Manager level.

In his stint with the microfinance company he was managing 108 branches and was looking after training and operations of Karnataka region. At Nirantara Community Services, since 2010, Manjappa is heading operations and is overall in-charge of business deve lopment inc lud ing - new are identification, product marketing, customer recruitment, customer training, loan sourc ing, loan proposal approval , disbursement, loan repayment management, recovery management, staff recruitment and training.

Mr. Nandakishore AR: He worked as Customer contract officer in ICICI and Home loans for 1 year, Accountant in Minerva Education Society for 5 years, Secretary-cum-Accoun tan t i n AME

Foundation for 5 years, Accountant in Outreach NGO for 1 year and Casual Announcer in All India Radio for 1 year. Since 2007, he is working as Accounts Manager and is in-charge of day to day accounting responsibilities, legal compliance (with IT, ESI, EPF and other authorities). Currently is also in-charge of HR and Administration at Nirantara FinAccess Private Limited.

Mr. Srinivasa Rao Yedida: He worked as Accounts Off icer in a leading Hyderabad based NBFC-MFI for 3 years before j o i n i n g N i r a n t a r a Communi ty Serv ices dur ing 2008. He i s

currently working as MIS and Finance Manager and is responsible for managing portfolio tracking software (MifosX). He generates routine reports for staff and senior management. Apart from that, Srinivas monitors cash flows and advise accounts and operations team on fund management. He prepares business projections for funders and other agencies.

10

FINANCIAL AND OPERATIONAL HIGHLIGHTS

Sr PARTICULARS As on 31-03-2013

As on 31-03-2012

1 No. oOf Villages /Area Covered 38 38 2 No. of Centres 44 54 3 No. of Groups 174 207 4 No. of Members Enrolled 1,040 1,020 5 No. of Members-Active 862 1,009 6 No. of Active Borrowers 261 1,000 7 Cumulative No. of Loans 1,041 1,021 8 Cumulative Loan Disbursement 1,23,86,000 1,21,24,000 9 Loan Amount Outstanding 6,41,067 59,73,337 10 Current Loan Amount 31,22,000 1,18,74,000 11 No. of Field Executives 1 2 12 Total Staff 1 3 13 Current Repayment Rate (%) 100% 100% 14 Portfolio At Risk [Par] % (>30days) 0% 0% 15 Avg. Loan Size 11,962 11,874 16 Avg. Members per FE 862 505 17 Avg. Active Borrowers per FE 261 500 18 Avg. Disbursement per FE 1,23,86,000 60,62,000 19 Avg. Members in a Centre 20 19 20 Avg. Outstanding per FE 6,41,067 29,86,668 21 Avg. Disbursement per FE 1,23,86,000 61,86,000 22 Avg. Members in a Centre 20 19 23 Avg. Outstanding per FE 6,41,067 29,86,668 24 Avg. Outstanding per Borrower 2,456 5,885 25 Avg. Centres per FE 44 27 26 Avg. Centres in a Village/Area 1 1 27 Number of Active Borrowers per Staff 261 338 28 Members Vs Borrowers 30 99

11

PRODUCTS AND SERVICES

Micro-Credit

Nirantara FinAccess is offering micro-loans for legal income generation activities. Loans are given

broadly under Agriculture-allied, Production, Trading and Services (including transportation)

sectors.

Product Particulars IGL – 50 (Weekly Repayment) IGL – 26 (Bi-weekly Repayment) Loan Size Rs. 15,000 to 25,000 Rs. 15,000 to 25,000 Term 50 weeks 1 year (26 bi-weekly installments) Installment Frequency Weekly Bi-weekly (Once in 14 days) No. of Installments 50 26 Interest Rate Charged 24% Declining Balance 24% Declining Balance Loan Processing Fee 1% 1% One-time Enrolment Fee Rs. 100 Rs. 100 Pre-payment, advance-payment and advance-settlement

Allowed & no penalty charged

Loan insurance fee

0.6% on the Loan repayment

Micro-Insurance

The Company has tied up with Life Insurance Corporation of India for loan assurance. The

product covers all borrowers and their spouses with life insurance. The claim arises in the event of

the death of borrowers / spouse.

Financial Literacy Service

Nirantara FinAccess organizes financial literacy programs on a regular basis for all the members

and customers. Undergoing a Continuous Group Training (CGT) is mandatory for all the new

members, just before loan disbursement. During the CGT, we cover financial literacy modules

such as – Life Cycle Needs, Crisis Management, importance of savings & deposits, investment

options, basic account keeping, investment in education of children, best utilization of loan,

managing multiple loans and creating good customer history for future.

Apart from the CGT, we also organize periodic Community Contact Programs for selected

customers, group and center representatives.

12

1 We have approached AKMi and Sa-Dhan for membership. Our parent organization – Nirantara Community Services is member in both the network organizations

OUR COLLABORATORS AND PROFESSIONAL ASSOCIATES:

Investors NavaJyothi Foundat ion Amrut Dairy Trust

Technology Mifos web based online software for portfolio tracking (supported by the Mifos Initiativee & Conflux Technologies Private Limited ) Tally ERP -09 for Accounting

Credit Bureau HighMark, Equifox and Experian Insurance Life Insurance Corporation of India Auditors M/S Pissey & Company, Hyderabad Company Secretary M/S NG Joshi & Company, Bangalore Legal Advisors M/S Vin Juris, Bangalore Banking Transactions Axis Bank Limited Communication Ementrix Technologies Private Lim ited Microfinance Network1 AKMi & Sa-Dhan

13

STATUTORY REPORTS

Sub-Committees and their functioning

Sr. Name of the Sub-Committee Members Number of meetings held during 2012-13

1 Audit Sub-Committee Mr. Hassan Mulla Mr. RK Mukherjee

2

2 Capital Raising Committee Mr. Niranjan Sheelavant Mr. Hassan Mulla

4

Board Meetings and attendance

The Board of Nirantara FinAccess met 6 times during the FY 2012-13. A detail of board meetings and attendance is given below:

Sr. Name of the Director Designation Number of Board Meetings held

Number of Board Meetings attended

1 Mr. Niranjan Sheelavant Managing Director 5 5 2 Mr. Hassan Mulla Additional Director 5 5 3 Mr. RK Mukherjee Additional Director 5 3

Board Meetings were held on following dates:

Sr. Type of Board Meeting Number of meetings Board Meeting Dates 1 AGM 1 01/08/2012 2 EGM - - 3 Board Meeting 4 16/05/2012

12/07/2012 09/11/2012 29/03/2013

14

DIRECTORS' REPORT

Particulars For the Current Year

ended 31st March 2013 (Rs.)

For the Previous Year ended

31st March 2012 (Rs.)

Total Income 973151 1895122

Total Expenditure before Depreciation 919065 1760179

Profit/(Loss) before Depreciation & Taxes 54086 134943

Depreciation 24585 25561

Profit after Depreciation But before Tax 29501 109382

Provision for Taxation 9134 35444

Profit After Tax 20367 73938

Balance Carried Forward 20367 73938

Basic and Diluted EPS 0.56 2.02

Dear Members,

We, the Board of Directors of your Company, are delighted to present this Annual Report of the Company together with the Audited Statement of Accounts for the financial year ended 31st March 2013.

FINANCIAL STATISTICS

Key aspects of your Company's financial performance for the fiscal 1st April 2012 to 31st March 2013 are tabulated below:

FINANCIAL AND OPERATIONAL PERFORMANCE

During the fiscal year your Directors report that your Company has performed well and showed a better spurt, overall augmentation and momentum in operational activities.

The Total Income during the year was Rs. 973151 (Previous Year Rs. 1895122) as against an Expenditure of Rs. 919065 (Previous Year Rs. 1760179), resulting in Net Profit of Rs. 20367 (Previous Year Rs. 73938) after providing for Depreciation, Provision for Income-Tax & Deferred Tax.

The financial performance of the Company is depicted in the form of a chart below for the convenience of the Members.

15

0

500000

1000000

1500000

2000000

Income 973151 1895122

Expenditure 919065 1760179

NET Profit 20367 73938

BUSINESS STRATEGIES / OUTLOOK

The business plans and strategies are designed by the management in such a way that the products and services offered by the Company leave a better impact on our customers, so that a strong, vibrant and definite market is established locally. This plan of the management is really a booster to the sales people who take the products and services of the Company forward with confidence and create a potential market.

DIVIDEND

With a view to strengthen the Company's financial position in order to meet the future expansion requirement programme in the business operations, your Directors are not recommending any dividend for the current year. However, they are positive that in future years; dividend would be declared out of the profits earned by Company.

FIXED DEPOSITS

Your Company has not accepted any fixed deposit from the public within the meaning of section 3(1)(iii)(d) and 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit) Rules, 1975 made there under.

HUMAN RESOURCE MANAGEMENT

Your corporation recognizes Human Resources Development function as a business strategy and as a key element for sustained growth of business. Having ventured into several new growth areas, it has fine – turned the criteria for recruitment and induction into the organization to suit new skill sets required. Training and development is also being redefined with varied inputs on job knowledge as well as soft skills.

The company has institutionalized employees, participation and consultation on corporate issues at all levels. This approach facilitates development of new ideas and concepts then add value to the business, promoters are building and corporate environment.

16

REPORT ON CORPORATE GOVERNANCE

Your Company believes in very strong, transparent and effective governance as it helps in healthy escalation of our company. As a Sevas - Social Enterprises for Value Added Services. Your Company is planning its geographical expansion to reach over one hundred thousand socio-economically backward families in coming years. In this connection, our governance plays a significant role in achieving mission & vision of the company. We have formed an Advisory Panel which has considerable experience & expertise in banking, microfinance & development sectors.

INTERNAL CONTROL SYSTEMS & ADEQUACY

The effectiveness of the internal control system is reflected while preparing the financial statements

of the Company which is normally prepared based on the generally accepted accounting practices

and that it reflects the true and fair view of the financial position of the Company. The process of

implementing the internal control system also ensures that the Company's assets are being put at the

best use and are properly safeguarded against misuse or being put at loss.

DIRECTORS' RESPONSIBILITY STATEMENT

As required by the Companies (Amendment) Act, 2000, your Directors declare that:

I. In the preparation of the Annual Accounts, the applicable accounting standards had beenfollowed along with proper explanation relating to material departures, wherever applicable;

ii. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities;

iv. The Directors had prepared the annual accounts on a going concern basis.

STATUTORY AUDITORS

M/S. PISSAY & COMPANY, Chartered Accountant, Hyderabad, retires at this Annual General Meeting., and has expressed their willingness to continue in office, if re-appointed.

Your Directors propose their re-appointment for the current year for the approval of members since the proposal is in the best interest of the Company.

COMPLIANCE CERTIFICATE OR SECRETARIAL COMPLIANCE REPORT

Compliance Certificate issued by Mr. N G Joshi, Company Secretary in Practice, in compliance with the provisions of Proviso to Sub-section (1) of Section 383A of Companies Act, 1956, has been attached hereto and forms an integral part of this Report.

17

DISCLAIMER

As on the date of this Report, your Directors are not aware of any circumstances not otherwise dealt with in this Report or in the financial statements of the Company, which would render any amount stated in the Accounts of the Company misleading.

In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report, which would affect substantially the results, or the operations of the Company for the financial year in respect of which this report is made.

GRATIFICATION

It is our strong belief that caring for our business constituents has ensured our success in the past and will do so in the future. Your directors expresses their deep sense of appreciation to the employees, who have continued to display outstanding professionalism and commitment in your company for sustained growth and profitability and look forward to their contribution in scaling greater heights.

Your directors place on record their gratitude to the central government, state government, Reserve Bank of India and company's bankers for the assistance co-operation and encouragement they extended to the company. For the continuing support and unstinting efforts of Investors, venders, other business associates and employees in ensuring an excellent all around operational performance, your directors also wish to place on record their sincere thanks and appreciation of the hard work, dedication and commitment of the employees .The enthusiasm and unstinting efforts of the employees has enabled the company to maintain its position in the industry in spite of increased competition. Industrial relationship continued to be cordial for whole year. Your directors warmly appreciate the valuable contribution and the dedicated services of the associates of the company.

For and On behalf of the Board of Directors of SHRI SHIVGAYATRI INFIN PRIVATE LIMITED

Niranjan SheelavantManaging Director

Place: BangaloreDate :05/09/2013

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32