UTKARSH VOICE Q1 [FY 16-17]: Volume-8, Issue-1

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1 Q1 FY Highlights The closure of Q1, FY 16-17, saw further expansion of business operations of the company and also development towards transition into a Small Finance Bank. The microfinance outreach of the company reached to over 100 districts (102 districts as on Jun 30, 2016) of the country for offering different financial & non-financial services to clients and other beneficiaries. The company crossed the portfolio outstanding landmark of 1,500 Mn in the month of May As at the close of the Q1, the company had 1,074,988 Microfinance outreach (JLG) clients and 15,689 Micro Enterprises Loan clients. In the process of transition to Small Finance Bank our company in now a public limited company. The name of the company is now Utkarsh Micro Finance Limited (in place of Utkarsh Micro Finance Private Limited) since Jun 24, Also, to align with the branding for CSR initiatives, the name of Samutkarsh Welfare Services has been changed to Utkarsh Welfare Foundation w.e.f. May 26, As per the audited financials for the financial year , the company achieved a Profit Before Tax (PBT) of Mn for the quarter ended Jun 30, 2016 as against the PBT of Mn for Q1 FY The company continued to have an excellent portfolio quality with reduction in operating cost, lower cost of fund, efficient cash management practice, steady growth and improvement in process. The microfinance outreach (JLG Business) of the company had 1,074,988 active client base with a portfolio outstanding of 14,982.4 Mn, and the Micro Enterprises Loan Business and Housing Loan Business (pilot project) had 15,689 and 97 active clients base respectively with portfolio outstanding of Mn and 25.5 Mn respectively. Under the Credit Plus initiatives, the company continued to take up its activities focused on Education (Financial Awareness), Health (Branches and also Mobile Poly Clinic vans) and Goodwill gestures. Incrementally, the company launched the second Mobile Van Poly Clinic at 5 branches in Satna Division, Madhya Pradesh during Q1, FY Along with all business activities, the quarter was marked special with new incumbents joining in the Senior Management. Mr. Adhip Ranjan Syamroy, joined the company as Chief Operating Officer (COO), Mr. Malkit Singh Didyala, Business Head - MSME and Agri Loans, Mr. Rajeev Bhatia as Head - Information Technology, Mr. Alok Pathak as Head Risk, Mr. S.S. Ramanathan as Head Compliance and Mr. Anirban Dastidar as Head Third Party Product. 1

2 In recognition of the performance through Annual Performance Appraisal, the company sent the 1 st and 2 nd batch of 84 employees (representing operations and non-operations employee from branches and administrative officers) for Reward and Recognition Tour to Jaipur from June 9, to 13, 2016 and June 23 to 27, 2016 respectively. New Incumbents in the Senior Management Adhip Ranjan Syamroy - Chief Operating Officer (COO) He has over 25 years of experience in Banking and Financial sectors. Prior to joining Utkarsh, he was with Axis Bank for nearly 21 years in senior leadership roles handling Customer Service, Corporate Real Estate, Employee Experience and HR Operations. He has also worked with SBI Home Finance Ltd. for about 4 years handling assignments in the area of housing loans to individuals and real estate developers. He is an engineer from Indian Institute of Engineering, Science and Technology. S.S. Ramanathan, Head - Compliance He has 18 years of banking experience spread across Branch Banking, Operations, Branch Sales Management, Governance and Compliance. Prior to joining Utkarsh, he was heading the compliance functions relating to Retail Banking, Control Functions and additionally handled the Subsidiary Governance in Axis Bank. He is a founding member of UBL Sales Ltd (Now Axis Securities Ltd.,) a subsidiary of Axis Bank and has been instrumental in setting up of the various departments of the subsidiary. He has been involved in implementation of projects of high importance in Axis Bank. Prior to Axis Bank, he has worked with IDBI Bank and ICICI Bank in various capacities in branch banking. He is graduate from University of Madras and ICWAI (Inter) and has also completed a certificate course from The Strategy Academy, Kolkatta. Rajeev Bhatia, Head - Information Technology He has over 13 years of experience in technology and banking sector. Prior to joining Utkarsh, he was with Axis Bank as Group Head CBS and Digital Banking, responsible for implementing and managing Core Banking System, Internet Banking, Mobile Banking and Wallet Systems of Axis Bank from IT perspective. Prior to Axis, he was with Infosys as Project manager, responsible for Implementing Finacle CBS in various banks projects across India and Overseas. As part of Infosys, he has worked for all major banks projects during various stages of core banking implementation. He holds Post Graduate Certificate in General Management from IIM, Indore. 2

3 Alok Pathak, Head - Risk He has over 18 years of experience in Banking and Financial Sector in the domain of Risk Management, Corporate Lending, Liabilities, Forex, Treasury, Trading in Govt Securities, Equities and Maintenance of SLR and CRR. Prior to joining Utkarsh, he was with Yes Bank Ltd. as Executive Vice President and in various capacities with Axis Bank, Oriental Bank of Commerce and State Bank of Mysore. He is a Science Graduate from Kanpur University, PGDCA from Aptech Computers, CAIIB from IIBF, Mumbai and a Certified Banking Compliance Professional (a course conducted by IIBF & CS jointly). Malkit Singh Didyala, Business Head - MSME and Agri Loans He holds a Post Graduate Diploma in Rural Management (PGDRM) from IRMA. He is a seasoned finance and banking professional with over 12 years of experience across various roles and organizations. He also brings a deep understanding of the rural / informal economy due to his stint in the co-operative dairy sector. He started his career in Banking at ICICI Bank Ltd. with the microfinance business of the Bank and handled roles across product and credit. He graduated to a larger role in ICICI Bank in the Financial Institutions Group handling relationships with domestic financial institutions and undertaking credit sell-down of underwritten loans. Post ICICI Bank, he joined Bajaj Finance Ltd as Zonal Head for Infrastructure Finance and also handled large ticket mortgage and LRDs. In the last role at BFL he set-up the Financial Institutions Group engaged in lending to other domestic financial institutions. Anirban Dastidar, Head Third Party Product He is an MBA from National Institute of Management Kolkata. He has over 13 years of experience in life insurance industry and financial sector all throughout his career. Prior to joining Utkarsh, he has worked with ICICI Prudential Life Insurance, Max Life Insurance, HDFC Life in the bancassurance space, agency vertical and corporate agencies channel at senior leadership role. He is a Commerce graduate from Calcutta University and PGDBA from Annamalai University. Employee Speak I joined Utkarsh as Manager Account on November 1 st Currently, I am working as AVP Finance & Accounts. These six years of journey with Utkarsh were full of learning and I got many opportunity to explore my knowledge and ability in growth of the organization. Here, I have always been groomed and developed to be an effective and efficient employee and more than that a responsible human being. I can really say that Utkarsh is one of the Best Places to work and realize one s potential. Excerpts from a talk with Mr. Jugal Kishor Pandey, Finance & Accounts Department, Corporate Office, Varanasi. 3

4 OPERATIONAL HIGHLIGHTS The outreach of the company grew to newer operational geographies in 10 states viz. Uttar Pradesh, Bihar, Jharkhand, Delhi-NCR, Uttarakhand, Himachal Pradesh, Haryana, Maharashtra, Madhya Pradesh and Chhattisgarh. The total districts being covered in 10 states grew to 102. The branch network expanded to 357 [334 JLG Branches and 23 MEL Branches] with (2 MEL Branches having Housing Loan pilot business also) for serving more than 10 lakh active clients. At the close of Q1, FY the JLG portfolio stood at 14,982.4 Mn with 1,074,988 lakh Active Clients, the MEL portfolio was Mn with 15,689 active clients and the Housing Loan pilot reached 97 active clients with 25.5 Mn portfolio outstanding. The total portfolio of the Company was 15,927.2 Mn as on June 30, A comparative summary of the operational highlights of the company is as below: Particulars As on June 30, 2016 As on Mar 31, 2016 As on June 30, 2015 MICROFINANCE OUTREACH No. of States No. of Districts Total No. of Branches No. of Branches in Uttar Pradesh No. of Branches in Bihar No. of Branches in Maharashtra No. of Branches in Madhya Pradesh No. of Branches in Delhi - NCR No. of Branches in Uttarakhand No. of Branches in Himachal Pradesh No. of Branches in Haryana No of Branches in Jharkhand No of Branches in Chhattisgarh Total No. of Centers 65,722 60,484 41,957 Total No. of Groups 292, , ,807 Total No. of Members 1,143,978 1,061, ,226 Total No. of Clients 1,074, , ,810 Total Disbursement Cumulative ( in Mn) 38, , ,339.2 Loan Outstanding ( in Mn) (Own+ Managed) 14, , ,685.2 Total No. of Loan Disbursed 2,290,129 2,054,248 1,344,113 Total No. of Credit Officers 1,611 1,520 1,066 No. of Client Per Credit Officer Repayment Rate (%) 99.4% 99.8% 99.8% Par > 30 Days No. of Clients 2,125 1, Amount ( In Mn)

5 Particulars As on June 30, 2016 As on Mar 31, 2016 As on June 30, 2015 MICRO ENTERPRISES LENDING No. of States No. of Districts Total No. of Branches Total No. of Loan Disbursed 18,816 17,463 9,333 Total No. of Clients 15,689 14,326 8,100 Total Disbursement Cumulative ( in Mn) 1, , Loan Outstanding ( in Mn) (Own +Managed) No. of Relationship Officer (RO) No. of Clients /RO PAR > 90 Days No. of Clients Amount (In Mn) AFFORDABLE HOUSING LOAN No of States No. of Districts Total No of Branches Total no of Loan Disbursed Total No. of Clients Loan Outstanding ( in Mn) NATIONAL PENSION SYSTEM (NPS) No. of States No. of Districts Total No. of Branches No. of Accounts 34,143 34,143 34,151 Total Subscription-Cumulative ( in Mn) EMPLOYEES Operational Employees 2,592 2, Total Employees 2,853 2, EMPLOYEE DETAILS Particulars As on Jun. As on Mar As on Jun. 30, , , 2015 JLG Operation MEL Team & AHL Support and Control Team TOTAL 2,853 2,636 1,973 5

6 FINANCIAL PERFORMANCE The Company achieved a PBT of Mn for the FY Important financial parameters are as below: Particulars As on Jun. 30, As on Mar 31, As on Jun. 30, 2016(Unaudited) 2016 (Audited) 2015 (Unaudited) Income ( in Mn) Expenses ( in Mn) Profit Before Tax ( in Mn) Net Worth ( in Mn) Key indicators Q1 FY Key Indicators As on Jun. 30, As on Mar 31, As on Jun. 30, 2016 (Unaudited) 2016 (Audited) 2015 (Unaudited) CRAR 19.25% 20.68% 31.8% Operating Self Sufficiency 131.2% 133.3% 133.7% (OSS) ROA 3.35% 3.29% 2.6% ROE 19.77% 15.88% 13.1% Debt Equity 4.74% Operating Expense Ratio 7.53% 7.16% 7.0% Cost of Borrowing 12.91% 13.48% 14.5% On Time Repayment Rate 99.4% 99.8% 99.9% SOCIAL INTERVENTIONS (Credit Plus Activities) HEALTH INITIATIVES In order to provide primary health care services in Company s operational area where medical facilities are limited, Utkarsh Welfare Foundation (UWF) has tied up with Ram Krishna Sewashram Hospital and GV Meditech Group. In association with them, UWF organizes Poly Clinics at Branches and also through Mobile Vans. These Poly Clinics are organized fortnightly every month in 8 branches. The beneficiaries are given free medical consultation and medicines. A total of 47 Poly Clinics were Organized during Q1 FY , benefiting 3,475 patients. The company is presently operating its Mobile Van facility in 10 branches; 5 in Satna Division, Madhya Pradesh and 5 in Gorakhpur Division, Uttar Pradesh. Till date, a total of 150 Mobile Van Poly Clinics have been organized and patients have benefitted with medical services. In the Q1 FY , a total of 10,717 patients have been provided with Primary Medical Health Care services across 18 branches. 6

7 FINANCIAL AWARENESS In association with Swiss Capacity Building Facility (SCBF) ACCION This project was launched in May 2015, in 5 branches and during Q1 FY , a total of 3,186 beneficiaries received Financial Literacy training. Cumulatively a total of 14,875 beneficiary has been trained so far. The SCBF project is currently operated in Azamgarh, Bhojpur, Brahmpur, Chota Jamalpur and Harahua. Utkarsh Welfare Foundation Financial Literacy Program UWF Financial Literacy Program was launched in October 2015 across 9 branches in Bihar and Madhya Pradesh. During Q1 FY , a total of 5,252 beneficiaries had completed financial literacy training through 9 branches viz. Amarpattan, Bara Chakia, Bettiah, Gyanbabu Chowk, Maihyar, Motihari, Narkatiyaganj, Rewa and Satna. Cumulatively a total of 11,094 beneficiary has been trained so far. Dialogue on Business The project has been launched in June, 2016 for MEL Varanasi Branch. The training is for MEL clients on self-management, cash management and enterprises management. Till Jun 30, 2016, 20 clients have been trained. In association with FMO Project- The project has been launched in June, 2016 across 5 branches of Uttar Pradesh. Till Jun 30, 2016, a total of 371 beneficiaries had completed financial literacy training across 5 branches viz Ashok Vihar, Madiyahoo, Naupedwa, Panchkoshi, and Parmanantpur. In the Q1 FY , the Financial Literacy Education Program reached 8,829 beneficiaries. Mass Awareness Program Community Mass Awareness Camps were also conducted at village level, wherein 6,792 beneficiaries participated across 19 camps. 7

8 Success Stories as clients speak I am a resident of Kudra in Kaimur district of Bihar. I still remember the early days of hardships when we were struggling to meet our daily needs with our limited means my husband s irregular wages and negligible income from our small General Store. Things changed when I met an Utkarsh official who motivated me to take an income generating loan and scale up my small business. Now I am an active member of a JLG group, and have utilized the credit facility extended by Utkarsh effectively. With the initial loan of 10,000, I renovated the shop and with the subsequent loan of 15,000 increased the stock available at shop. Gradually the business grew and also the income. With this change in economic status, we are able to live a comfortable life and our children are attending a good convent school. Recently, I have availed a loan of 22,500 and expanded the business of selling vegetables also. We have employed a helper to assist in the shop thereby also generating employment for others. The financial assistance from Utkarsh has not only brought an economic change in my life, it also helped me to build a respectable position in the society. I am economically and hence socially also empowered now. I would like to express my gratitude towards Utkarsh for supporting me when I needed it the most. This assistance has made it possible for me to gain my present status. 8

9 UTKARSH in NEWS Mr. Trilok Nath Shukla, Head - JLG Business (1 st from left) as the panel member in the Seminar on "Banks role in Financial Inclusion in rural India" at Patna, Bihar on June 15, Mr. Trilok Nath Shukla, Head - JLG Business (sitting 2nd from right) as the panel member in the seminar on Fostering the Financial Inclusion Agenda at Rudrapur, Uttarakhand on March 16,

10 Utkarsh Participation in 'Fostering Financial Inclusion Agenda' Seminar Client Meet at Baniyarpur Branch of Utkarsh Micro Finance Limited on Jun 11, Client Meet at Mokama, Jabalpur on May 14,

11 Client Meet at Kushinagar, Gorakhpur on May 17, 2016 Client Meet at Sihora, Patna on May 28, 2016 Client Meet at Booty More, Ranchi on June 11,

12 1 st Batch Reward & Recognition Tour to Jaipur from June 9 to 13, nd Batch Reward & Recognition Tour to Jaipur from June 23 to 13, 2016 Your feedback is important to us. Please write to us at: Manager, Corporate Communication, Utkarsh Micro Finance Ltd. S2/639-56, Varuna Vihar Colony, J.P. Mehta Road, Cant., Varanasi , Uttar Pradesh 12 ID publications@utkarshmfi.com website