financial inclusion empowering communities

RGVN (NORTH EAST) MICROFINANCE LIMITED / ANNUAL REPORT 2018-19 1

Financial Inclusion

EmpoweringCommunities

RGVN (North East) Microfinance Limited

RGVN (NORTH EAST) MICROFINANCE LIMITED / ANNUAL REPORT 2018-192

Mission

“ Provide financial and other support services to the

unprevileged households in the North-East to improve their quality of life.”


CONTENT

1. An Almanac 04

2. Composition of Board of Directors 06

3. Key Managerial Personnel 10

4. Equity Investors 11

5. Director’s Report 13

6. Statutory Auditor’s Report 32

7. Notice 93


1995The Micro Credit Wing titled “Credit & Saving Programme” [RGVN-CSP] was initiated as a pilot project of RGVN- Society with fund assistance from SIDBI.

2006For the first time, the programme registered a profit of Rs. 3.35 Lakh through a network of 22 branches and the loan outstanding stood at Rs. 615.21 Lakh.

2008RGVN (North East) Microinance Limited [the Company transformed from RGVN-CSP] was established and registered as a Public Limited Company to carry out Microinance activities in North East India.

2010RGVN (North East) Microinance Limited, uponreceipt of certiicate Registration from RBI, obtained the status of an NBFC and commenced operations as a microinance provider and expanded its operation to other 5 states of North East India.

2012With portfolio touching Rs. 102 crore covering 95 branches and serving more than 2 lakh clients, RGVN (NE) MFL upgraded as Systemically Important (SI) NBFC with more than Rs 100 crore portfolio.

2013Covered ive states of NE India catering to around 2.49 lakh clientele with Rs. 117 crore portfolio outstanding and good quality portfolio with PAR>30 days being a negligible 0.52%

2014Despite fund constraints hampering the expansionary phase, the year 2014 remained eventful with higher proits earned portfolio outstanding was Rs 124 crore and quality of portfolio was maintained at PAR>30days being 0.50%. RBI certiied the organization as an NBFCMFI.

2015Infusion of fresh equity by NMI Fund III KS, Norway, Oiko Credit Ecumenical Development Co-Operative Society UA, Netherlands, Dia Vikas Capital Pvt. Ltd. and conversion of OCPS into equity by SIDBI had enabled a strong capital base for the Company.

The key highlights during the year includes:1. An Application was sent to RBI for grant of

RBI Licence for Small Finance Bank.2. The company touched a portfolio of Rs 229

crore.3. Active borrower base was over 2 lakh.4. Quality portfolio with PAR(>30 days) being

0.19%

2016• Received the in-principal approval from the Reserve Bank of India in October 2015 to set up a Small Finance Bank within 18 months in order to complete the transformation process.

• Awarded the pestigiuos “Microinance Organization of the Year 2015 (Small & Medium)” from Access Assist and “The NEDFI Award 2015”, recognizing our contribution towards inancial inclusion and development of entrepreneuer through micro credit.

• Operating in 131 branches spread across the six North Eastern States of Arunachal, Assam, Meghalaya, Nagaland, Tripura and Sikkim touching and improving the lives of over 2.9 Lakh clients with a portfolio outstanding of Rs. 488 crores, an increase of 112% over the last previous inancial year.

AN ALMANAC


2017• We registered a Public Limited Company by thename, North East Small Finance Bank Limited on 25th July, 2016.

• We have extended our operations into North Bengal with three branches in Birpara, Jalpaiguriand Mynaguri thus covering a total of seven stateswith six Northeastern States (Assam, Meghalaya, Arunachal Pradesh, Nagaland, Tripura, Sikkim) and West Bengal. At the end of the financial year 2016-17, the total number of branches stood at 139.

• Inlow of funds through term loans and NCDs hasmade it possible for us to assist more than 4 lakhclientele.

• Equity amounting to Rs. 97.34 crores was infused into RGVN(NE)MFL by SIDBI Venture Capital (Rs. 40 Cr), RNT Associates (Rs. 28.33 Cr), Pi Ventures (Rs. 20 Cr) and NMI (Rs. 9 Cr). The ratio of domestic to foreign shareholding post the fresh equity infusion is 52.16% and 47.84% respectively, which makes us a domestically owned organization.

• Although our disbursements and collections received a huge setback with the sudden demonetization announcement by the Government of India, however we could

successfully achieve an annual disbursement of Rs.679.87 crore with loan outstanding at Rs. 688.32 crore. The on-time repayment rate stands at 98.20% and PAR>30 days being 1.09% for the FY 2016-17 thereby implying that inspite of the demonetization drive all our operational parameters except the on-time repayment rate and PAR(>30 days) have shown a steep rise.

• Total staff strength stood at 772 as on 31st March, 2017.

• Received the Small Finance Bank License from RBI on 31st March, 2017

2018• Equity amounting to Rs. 76.30 Crores was infused into RGVN(NE)MFL by SIDBI (Rs. 1.99 Cr), RNT Associates (Rs. 13.66 Cr), Pi Ventures (Rs. 2.89 Cr), NMI (Rs. 5.99 Cr), Dia Vikas (Rs. 16.99 Cr) Bajaj Allianz (Rs. 34 Cr) and RGVN ESOP Trust(Rs. 65 Lakh).The ratio of domestic to foreign shareholding post the fresh equity infusion is 54.10% and 45.90% respectively, which makes us a domestically owned organization.

• All the assets and liabilities of RGVN(NE)MFL was transferred to North East Small Finance Bankthrough a process of Slump Sale.


COMPOSITION OF THE BOARD OF DIRECTORS AS ON 31.03.2019

Sl. No Name Designation

1 Dr. Abhijit Sharma Independent Director

2 Ms. Suvalaxmi Chakraborty Nominee Director

3 CA. Kaberi Bhuyan Independent Director

4 Mr. Manas Kumar Bid Nominee Director

5 Mr. Srijib Kumar Baruah Nominee Director

6 Mr. Njord Andrewes Nominee Director

7 Mr. Mohit Verma Nominee Director

8 Mr. Manish Thakkar Nominee Director

9 Mr. Ranganathan Varadarajan Dilip Kumar

Nominee Director

10 Mr. Anand Prakash Srivastava Nominee Director

Dr. Abhijit Sharma is presently engaged as Director, Indian Institute of Entrepreneurship (IIE) under the Ministry of Skill Development and Entrepreneurship. Dr. Sharma is a Ph.D from

Guwahati University. Prior to joining IIE, he was the Associate Professor at Indian Institute of Bank Management, Guwahati. He also worked as a Lecturer in Guwahati University. He has vast experience as a trainer in the field of Microfinance, Group Mode of Financing, Financial Inclusion and Rural Livelihoods.

He represented the NER as the member of the working group set up by Planning

Commission on National Rural Livelihood Mission. He is also associated with several studies and consultancies on microfinance and livelihood in the North East in collaboration with Microsave, CESS and Livelihood School, Hyderabad, Tufts University, Boston, USA etc. He was a renowned mentor for the upcoming entrepreneurs under the Bharat Yuva Shakti Trust programme in Assam. His interests and expertise include Micro-Enterprises and their promotion, Rural Financial Markets, Financial Systems and Livelihoods in the remote and mountain areas including microfinance and financial inclusion and urban development issues. He has numbers of publications published globally on the above-mentioned areas of work. [DIN- 08185287]

Dr. Abhijit Sharma Independent Director


Suvalaxmi Chakraborty is a Chartered Accountant by profession. Having spent over 17 years with ICICI Bank, she has been exposed to diverse set of businesses, including Project and

Corporate Finance, Treasury and Integrated Multicurrency Fund & Asset Liability Management, Corporate Banking, Rural / Agri & Micro Banking. Thereafter, she had joined Barclays Bank in 2007 as the Commercial Banking Director to launch the Commercial Banking business in India which achieved a break even in a record time of 11 months and had thereafter grown exponentially and profitably month on month. During 2010, she joined State Bank Of Mauritius (SBM) where she led their India

operations as the Chief Executive Officer for more than three years. She is presently the Founder Director of Espandere Advisors Pvt Ltd which provides Business Advisory and Transaction Advisory services in Banking & Finance, Agriculture & Rural, Infrastructure & Manufacturing sectors. She is also an Advisor to Fullerton India Credit Company Ltd, an NBFC engaged in lending to retail and Micro & Small Enterprises. She works with Fullerton in strategic initiatives in the areas of treasury, rural and new business initiatives. She also serves as an independent director on the board of Caspian Impact Investment Ltd. She has been associated with RGVN since March 2016.[DIN- 00106054]

CA. Kaberi Bhuyan passed her ICSE examination from Shillong and thereafter completed her graduation from Guwahati Commerce College holding the second rank position in

the University. She qualified as a Chartered Accountant in the year 1989 as the first lady CA from Guwahati. She has been practicing together with her husband who is also a Chartered Accountant under the firm name Bhuyan & Associates for the past 29 years. She also qualified for the DISA degree in the

year 2004.

She was the Chairperson of the Guwahati Branch of the Institute of Chartered Accountants of India for the year 2013-14 and emerges as the 1st Lady Chairperson from the whole of Eastern Region, including the states of West Bengal, Orissa, Sikkim, besides the North Eastern States.

She is a “Paul Harris Fellow” member of the Rotary Club of Guwahati South & has also served as the Treasurer of that Club. [DIN- 07001635]

CA. KABERI BHUYAN Independent Director

Ms. Suvalaxmi Chakraborty Nominee Director (Oikocredit Ecumenical Development Co-Operative Society UA)


Manas holds a postgraduate degree in Rural Management from Xavier Institute of Social Service, Ranchi. He has over 20 years of experience in the

microfinance sector, including with CARE India’s microfinance program in Tamil Nadu and West Bengal. His areas of expertise include sourcing and screening suitable

equity investment opportunities in India, perform due diligence, analysing financial statements, risk assessments and equity valuations and monitoring equity investment portfolio. He is also proficient incapacity building need assessment of MFIs, training design and delivery, development of resource materials etc. He also represents Dia on the board of few Dia investees.[DIN-02493180]

Mr. Manas Kumar Bid Nominee Director (Dia Vikas Capital Private Limited)

Sri S.K. Baruah, M.B.A., LL.B. and Associate Member of the Institute of Company Secretaries of India (ICSI), is the Executive Director of North Eastern Development Finance Corporation Ltd.

(NEDFi). He has vast experience of more

than 21 years in diverse and varied areas of financial systems. Sri Baruah has worked in operations all throughout his career and has vast knowledge and experience in the field of Project Finance, MSME & Micro Finance, NPA Recovery & Monitoring, Human Resource Development, Legal and Advisory & Consultancy.[DIN-03591721]

Njord Andrewes is Investment Director in NMI. Prior to joining NMI, Mr. Andrewes was a Senior Equity Research Analyst at Lazard Capital Markets. Before Lazard, Mr. Andrewes was

an Equity Research Analyst at Janney

Montgomery Scott, LLC. He began his career at Robertson Stephens in Sales and Trading. Mr. Andrewes received an MBA in Finance from Kelley School of Business at Indiana University, and a B.A. in Economics from Hope College.He has been associated with RGVN since July 2014.[DIN-06520457]

Mr. Njord Andrewes Nominee Director (Nordic Microfinance Initiative Fund III KS)

Mohit Verma is a Masters in Financial Management (M.F.M.) from Jamnalal Bajaj Institute of Management Studies, Mumbai. He started his career in financial sector as a Probationary

Officer with SBI and has around 24 years

of experience working in different roles and capacities, with specialisation in Debt Markets. He is working with Narotam Sekhsaria Family Office since March 2009. He has been Managing Director and Chief Executive Officer of Siddhesh Capital Market Services Pvt Ltd, a registered NBFC, since December 2009.[DIN-02647080]

Mr. Srijib Kumar Baruah Nominee Director (North Eastern Development Finance Corporation Ltd)

Mr. Mohit Verma Nominee Director (pi Ventures LLP)


He has around 27 years of experience in MSME financing and development, covering a variety of industrial sectors. Besides, he has acquired extensive experience in NPA

management and follow up and monitoring of MSME exposures. He is known for developing a criticality based monitoring

system which is known as Simplified Monitoring System for monitoring MSME exposures. Having served in North East, Maharashtra, Gujarat, Uttar Pradesh, Delhi, Rajasthan, Punjab, Haryana and other states, Mr. Srivastava has wide and enriched experience of developmental and financing initiatives across varied geographies.

Sr. VP & CFO, Samridhi In-Charge Dilip has been with SVCL since its inception in 1999 and was part of the core team which had set up SIDBI Ventures, SIDBI Trustee Company and NFSIT. He

represents SVCL on the Boards of some

portfolio companies, where he has played an active role in building up systems and processes. Prior to joining SVCL in 1999, Dilip was with SIDBI for nearly 8 years with experience in credit appraisal, accounts and audit functions. He is a Post Graduate in Commerce and Economics, AICWA, CS (Inter), PGDBA and CAIIB.[DIN-01060651]

Mr. Ranganathan Varadarajan Dilip Kumar Nominee Director (SIDBI Trustee Company Limited A/c Samridhi Fund)

Manish has more than 23 years of experience in financial services, specializing in investment banking, private equity, mergers and acquisitions, deal negotiation and

transaction structuring. After more 17 years in investment banking with KPMG Corporate Finance, ICICI Securities and Nomura, he turned entrepreneur and angel

investor. Manish has expertise in financial services and investment banking space and has advised corporations, investors and governments on several transactions over the years. Manish is currently working with Avanti Finance a FinTech start-up promoted by Mr Ratan N Tata and Mr. Nandan Nilekani. Manish is a commerce graduate and a Chartered Accountant.[DIN- 03233206]

Mr. Manish Thakkar Nominee Director (RNT Associates Private Limited)

Mr. Anand Prakash Srivastava Nominee Director (Small Industries Development Bank of India)


Mr. Phukan has worked for 36 years in various departments of SBI including Inspection & Audit Department and have held various positions like Chief

Manager, Loans, SMECC, Credit Officer at Zonal Office and as an auditor for LDR Rural Bank & RRBs. He was also working in the Branch Inspection & Audit department at SBI Corporate Centre, Hyderabad for more than 5 years. He has also visited branches in Andhra Pradesh, Karnataka, Kerala, Gujarat, Maharashtra and West Bengal. He has in depth understanding of microfinance clients during field visit as

Internal Auditor at RGVN(NE)- MFL. He also gained experience in HR management in the course of interaction with the cross section of employees. He has extensively travelled to all parts of North East in connection with Audit of branches of RRBs sponsored by SBI while working as an auditor in RRB Department at local Head Office, Guwahati.

Shri Phukan is heading Internal Audit Department and HR Department of the Company for 7 years from September, 2009 to September, 2016. He is instrumental in establishment of Internal Audit Department of the company. He has joined as the CEO of RGVN (North East) Microfinance Limited on 15th September, 2017.

Mr. Shiva Prasad Phukan Chief Executive Officer

Mr. Nitul Boruah is a qualified Company Secretary from the Institute of Company Secretaries of India, New Delhi and holds a Bachelor’s degree

in Science. He has also received NSE’s Certification in Financial Markets (NCFM) Module. He has a corporate experience of over 7 years and prior to joining RGVN(NE)MFL, he worked with Allied Strips Limited as an Assistant Company Secretary. He played

a significant role in the IPO and listing of the Company and subsequently in the restructuring. He was associated with Titan Group till September, 2010. Since then he has been re-locating to various destinations and worked as a Company Secretary in Whole Time Employment with corporates in Delhi and Gurgaon. He has also worked with companies like SGT Medical College, SAIL and VIRGO Group previously.

Mr. Nitul Boruah Company Secretary

Ms. Richa Agarwal is a qualified Chartered Accountant by profession and holds a Masters Degree in Finance. She also held 9th Rank in the entire state of Assam in

her Senior Secondary Examination. She

has an experience of over 3 years in the field of accounting, taxation and auditing. She has worked under reputed Chartered Accountant firms in Guwahati. She is presently the Chief Financial Officer of RGVN (North East) Microfinance Ltd. and looks after all the financial matters of the organization.

Ms. Richa Agarwal Chief Financial Officer

KEY MANAGERIAL PERSONNEL


BCDT

EQUITY INVESTORS


DIRECTOR’S REPORT


DIRECTOR’S REPORT

To,The Members,

Directors of RGVN (North East) Microfinance Limited have the pleasure in presenting their 11th Annual Report on the business and operations of the Company together with Audited Statement of Accounts (Both Standalone and Consolidated) for the financial year ended 31st March, 2019.

1. FINANCIAL HIGHLIGHTS -During the year under review, performance of your Company is as under:

CONSOLIDATED FINANCIAL STATEMENT Amt( in Rs) Particulars FY 2018-19 FY 2017-18 Continuing Operations Revenue from Operation 2,866,031,487 1,932,410,769 Other income 4,994,019 9,239,553 Total Income 2,871,025,506 1,941,650,322 EXPENDITURE Finance Cost 1,270,201,125 1,051,300,201 Employee Cost 531,322,643 326,280,941 Operating Expenses 381,222,419 136,604,616 Provisions 87,293,563 26,346,918 Depreciation 36,111,514 15,938,190 Total Expenditure 2,305,151,204 1,556,470,867 Profit/(Loss) before prior period/ Exceptional Items 564,874,302 385,179,455 Expenses for Small Finance Bank - 43,995,070 Prior Period Expenses - 10,000,000 Profit/(Loss) before Tax 564,874,302 351,184,385 Tax Expense: Current Tax 190,228,099 156,997,061 Tax Expense of earlier years 1,558,409 Deferred tax expenses/(benefit) (6,466,922) (27,025,126) Total Tax Expense 185,319,586 129,971,935 Profit/(loss) transferred to Balance Sheet 379,554,716 221,212,450 Profit Attributable to minority shareholders - 4,567 Profit Attributable to RGVN (North East) Microfinance Ltd 379,554,716 221,207,883


STANDALONE FINANCIAL STATEMENT Amt ( in Rs) Particulars FY 2018-19 FY 2017-18 Continuing Operations Revenue From Operation 9,979,894 1,903,163 Other Income 46 - Total Income 9,979,940 1,903,163 EXPENDITURE Finance Cost - - Employee Cost 1,615,160 2,935,832 Operating expenses 5,929,462 2,243,961 Provisions - - Depreciation 22,452 - Total Expenditure 7,567,074 5,179,793 Profit/(Loss) before prior period/ Exceptional Items 2,412,866 (3,276,630) Prior Period Income 6,000 Profit/Loss before Tax 2,418,866 Expenses for Small Finance Bank - - Prior Period Expenses - - Profit/(Loss) before tax 2,418,866 (3,276,630) Tax Expense : Current Tax 1,126,622 1,794,047 Tax Expense of earlier years 1,558,409 Deferred Tax Expenses/(benefit) (9,876) - Total Tax Expense 2,675,155 1,794,047 Profits from Continuing operations (256,289) (5,070,677) Profit before gain on transfer of business attributable to the discontinued operations - 102,872,482 Gain on transfer of business attributable to the discontinued operations - 52,013,836 Profit before tax from discontinued operations

- 154,886,318 Tax Expenses

(a) Current tax expenses on discontinued operations - 64,244,516

(b) Current tax expenses on transfer of business - 12,000,632

(c) Deferred tax - 28,402,739

Profit after tax from discontinued operations - 50,238,430

Profit/(Loss) transferred to Balance Sheet (256,289) 45,167,753


2. OPERATIONAL HIGHLIGHTS The entire Microfinance business of RGVN (North East) Microfinance Limited was transferred to North East Small Finance Bank Limited (NESFB) through a Business Transfer Agreement (Slump Sale) on 16th October, 2017 pursuant to the approval of the Shareholders and under the RBI stipulation. Company had transferred the business to NESFB on a slump sale basis for a consideration of Rs. 183 Crores.

After the transfer of lending business, RGVN(NE) MFL discontinued their Microfinance Business and there are no business operations as on date. RGVN(NE) MFL has applied to Reserve Bank of India for converting itself into Core Investment Company Status (CIC) as per the RBI Licensing Conditions. Reserve Bank of India has approved the said Application for CIC Status and issued a Fresh Certificate of Incorporation as Core Investment Company (CIC) w.e.f., 29.05.2019.

3. DIVIDENDWith a view to preserve its reserves, your Directors are not recommending any dividend for the year under review.

4. AMOUNT TRANSFERRED TO RESERVES It has not transferred any amount to Statutory Reserve Fund in accordance with the provisions of Section 45 - IC of The Reserve Bank of India Act 1934 as the Company has suffered a loss of Rs. 2,56,289/- for FY 2018-19.

5. CONSOLIDATED FINANCIAL STATEMENTSThe Consolidated Financial Statements have been prepared in accordance with the Act and the relevant Accounting Standards.

6. SHARE CAPITALAUTHORIZED SHARE CAPITALDuring the year under review no change has been made in the Authorized Share Capital of the Company. The Authorized Share Capital of the Company as on 31st March, 2019 stands at Rs. 10,00,000,000 divided in to 100,000,000 equity Shares of Rs. 10/- each.

PAID UP SHARE CAPITALDuring the financial year 2018-19 there was no change in the paid up share capital of the Company. The Paid-Up Share Capital of the Company stood at Rs. 7,03,380,910 as on 31st March, 2019.

7. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSIT- ION OF THE COMPANY

There are no material changes and commitments, that would affect financial position of the Company from the end of the financial year of the Company to which the financial statements relate and the date of the Directors Report.

However, RBI has classified RGVN (NE) MFL as a Core Investment Company w.e.f 29.05.2019 as per Small Finance Bank Licensing Conditions

8. FUTURE OUTLOOKRGVN(NE) MFL has folded its Lending Business into ’’North East Small Finance Bank Limited’’ a subsidiary company, which is being operational in all over the North-Eastern states and West Bengal. RGVN(NE) MFL as a parent company has registered as NBFC-CIC (Core Investment Company) and it is regulated by Reserve Bank of India.


9. EXTRACT OF ANNUAL RETURNAnnual Return of the Company, is being available in the website of the Company as compliance to the provisions of the Section-134 and 92 of the Companies Act, 2013 in compliance with the Companies Amendment Act, 2017 by Ministry of Corporate Affairs w.e.f July 31, 2018.

Website Link: http://rgvnnemfl.com/Annual-Reports.html

10. AUDITORSSTATUTORY AUDITORSAt the 10th Annual general Meeting held on September 25, 2018 the Members approved appointment of M/s MSKA & Associates, Chartered Accountants (Firm Registration No. FRN-105047W) as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of that AGM till the conclusion of the 15th AGM. The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing AGM.

SECRETARIAL AUDITORAs required under Section 204 of the Companies Act, 2013 and Rules thereunder the Board appointed M/s Biman Debnath and Associates, Practicing Company Secretaries as Secretarial Auditor of the Company for the fiscal 2019.

11. STATUTORY AUDIT OBSERVATIONS: The comments made by M/s MSKA & Associates, Chartered Accountants, Statutory Auditors are self explanatory in nature and as such, no comments are necessary.

There are no qualifications in the standalone financials of RGVN (North East) Microfinance Limited as on 31.03.2019. However, the standalone financials of the subsidiary company, “North East Small Finance Bank” are subject to some qualifications which has impacted the consolidated financials of RGVN (North East) Microfinance Limited as on 31.03.2019.

The management’s reply for the qualifications in the financials of the subsidiary has been received from the appropiate management of the subsidiary, North East Small Finance Bank as follows. As per Statutory Audit report there are few qualifications, as under:1. The calculation of ‘days past due’ was not accurate for existing loans in CBS post migration. This has led to incorrect classification of advances by the CBS.

2. Certain material weaknesses in the design and operating effectiveness of both manual and automated controls, as under:

a. Ineffective information technology general controlsb. Migration of incorrect balances from old system to core banking systemc. Absence of monthly preparation of Bank reconciliation statementsd. Incorrect classification of non-performing assets by the core banking systems by the existing loans.

Management Explanations on qualifications:The Bank post evolving from NBFC environment, migrated the entire customer data along with other relevant data to new Core Banking Solution [CBS] environment. To provide continuity to the existing Business environment, the migration of 149 branches happened in truncated manner between October 2017 and October 2018.

To enable smooth migration process, some of the control aspect of Core Banking Solution was diluted, with close supervision control. The diluted control aspects of CBS have since been reinstated post migration exercise.


Incorrect Balances migrated identified by the Management and Independent Auditor conducting the “Migration Audit” exercise, followed by generation of rectification entries. Identified rectification entries were validated by the Statutory Auditors followed by passing of rectification entries.

During the Migration exercise due to change in system process flow there was disruption in the perpetual reconciliation of Bank statements. Post migration exercise the reconciliation process backlog was cleared off with passing of adjustment entries, post validation by Statutory Auditors.For a section of delinquent accounts migrated, were with wrong Days past due (“DPD”) to CBS, resulting in incorrect classifications of non-performing assets. Wrong DPD in delinquent accounts were identified by the Independent Migration Auditors. Management accordingly updated the DPD in identified delinquent accounts in CBS during July 2019. Since then CBS is able to provide automated classification of non-performing assets.

Post rectification of stated gaps, Management continues to do sample test of ongoing trajectories which have since been noted as adequate with no apparent gaps hitherto observed, confirming internal controls in place.

12. SECRETARIAL AUDIT REPORTPursuant to Section 204 of the Act, the Secretarial Audit Report for the Financial year ended 31st March, 2019 given by M/s. Biman Debnath & Associates, Practising Company Secretaries is annexed to this Report. The Report given by the Secretarial Auditor is annexed as Annexure–1 and forms integral part of this Report.

Secretarial Audit Report has no qualification however one observations are there for which we are given herewith the reply of the same.

13.FRAUD REPORTINGNo fraud as prescribed under Section 143(12) of the Companies Act, 2013 has been reported by the Auditors during the year under Review.

14. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES COMPANIESThe Company has only one subsidiary company i.e. North East Small Finance Bank Limited as on March, 2019. There are no associates or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 (“Act”). There has been no material change in the nature of the business of the subsidiary. Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Company’s subsidiary in Form AOC-1 is attached to the financial statements of the Company and with this Report (Annexure-2). Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of the subsidiary is available on the website of the company http://rgvnnemfl.com/Annual-Reports.html.

Observations Management Reply

During the year under review the MGT-7 (Annual Return) of the Company for the Financial Year 2017-18 which was filed on 31.12.2019 was not signed by the whole time Company Secretary of the Company whereas the authority for signing the same was obtained vide item no. 12 in the 70th meeting of the Board of Directors held on 25/08/2018.

Due to technical glitch of Digital Signature of the Company Secretary and non-linking of PAN No between ICSI and Ministry of Corporate Affairs portal and due to urgency of filling the form MGT-7 the same was certified by Company Secretary in Practice and accordingly it was accepted and approved by the Registrar of Companies, Shillong.


15. DISCLOSURE REQUIREMENTSThe Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

16. ANNUAL GENERAL MEETINGThe Company’s 10th Annual General Meeting was held on 25th September, 2018 in Guwahati.

17. PARTICULARS OF LOAN, GUARANTEE & INVESTMENT U/S SECTION 186 OF THE COMPANIES ACT, 2013

The particulars of Loans, guarantees and investments have been disclosed in the Financial Statements.

18.PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

There are no Related Party Transactions to be Reported during the year under review,

19.RBI REGULATIONAs per Non-Banking Finance (Not Deposite Taking Systemitacally Importance) Companies RBI Directions, the Director hereby Report that the Company has not accepted any Public Deposits during the year and do not have any public deposits outstanding at the end of the year. However as per the RBI Licensing conditions Company has been converted into Core Investment Company (CIC) w.e.f 29.05.2019.

20.CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Our operations are not energy intensive. However the company is taking proper steps at every level of operation for conservation of Energy. There is no technology absorption and total Foreign Exchange outgo during the year ending on 31st March 2019 is Nil.

21. RISK MANAGEMENTThe company has an in-built risk management mechanism to identyfy, assess and monitor risks. After transferring of Lending business to its subsidiary company “North East Small Finance Bank Limited” on October 16, 2017, there are no business operations as on date.

22. VIGIL MECHANISMThe Company’s Vigil mechanism consists of three lines of defence before October 16, 2017 i.e., during the business Operations.

(i) First line of Defence consists of functions that own and manage risk which in the MFI consists of the business unit and support function heads through adherence to the laid down procedures

(ii) Second Line of Defence consists of functions that oversee risks which in the MFI consist of the Risk Management department. They ensure that the First Line of Defence of the MFI is properly designed, in place and operating as intended through regular reporting to RMCB and Board.

(iii) Third Line of Defence consists of functions that provide independent assurance which in the MFI is provided by Internal Audit which provides the highest level of independent Assurance on the effectiveness of governance, risk management, internal controls and the manner in which the First and Second Lines of Defence achieve risk management and control objectives, achieved through audit of all departments and reporting to the Board.


After transferring of Lending business to its subsidiary company “North East Small Finance Bank Limited on October 16, 2017, there are no business operations and it has converted itself into Core Investment Company (CIC) w.e.f., 29.05.2019.

23. PARTICULARS OF EMPLOYEESThe Company did not employ any such person whose particulars are required to be given under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Management Personnel) Rules, 2014.

24. DETAILS OF DIRECTORS/KMP AS ON 31/03/2019During the year under review Company appointed following persons as a Director/KMP

SR. NO

NAME DESIGNATION DATE OF APPOINTMENT

1 Dr. Abhijit Sharma Independent Director 25.08.2018

2 Mr. Manish Thakkar Nominee Director (RNT Associates Pvt. Ltd) 25.05.2018

3 Mr. Saneesh Singh Nominee Director (Dia Vikas Capital Pvt. Ltd) 25.08.2018

4 Mr. Manas Kumar Bid Nominee Director (Dia Vikas Capital Pvt. Ltd) 02.11.2018

5 Mr. Anand Prakash Srivastava Nominee Director (SIDBI) 25.05.2018

6 Ms. Kaberi Bhuyan Independent Director 14.02.2019

7 Mr. Nitul Boruah Company Secretary 02.04.2018

8 Ms. Richa Agarwal Chief Financial Officer 15.02.2019

Following Directors and KMP have resigned from the Company during the year under review

SR. NO

NAME DESIGNATION DATE OF RESIGNATION

1 Mr. Saneesh Singh Nominee Director (Dia Vikas Capital Pvt. Ltd) 02.11.2018

2 Mr. Ugen Tashi Nominee Director (IDBI) 15.10.2018

3 Mr. Brij Mohan Independent Director 25.08.2018

4 Mr. Robert Douglass Dunn Nominee Director (Dia Vikas Capital Pvt. Ltd) 25.08.2018

5 Mr. Bhaskar Jyoti Sarma Independent Director 25.08.2018

6. Mr. Pinak Bhattacharya Chief Financial Officer 30.01.2019


COMPOSITION OF THE BOARD MEMBERS AS ON 31.03.2019

DETAILS OF KEY MANAGERIAL PERSONNEL AS ON 31.03.2019

25. REMUNERATION PAID/PAYABLE TO DIRECTORS / KMP DURING THE YEAR

SR NO DIN FULL NAME DESIGNATION DATE OF

APPOINTMENT 1 00106054 Ms. Suvalaxmi

Chakraborty Nominee Director (Oikocredit, Ecumenical Development Cooperative Society, U.A.)

11/03/2016

2 02493180 Mr. Manas Kumar Bid Nominee Director (Dia Vikas Capital Private Limited)

02/11/2018

3 01718000 Mr. Anand Prakash Srivastava

Nominee Director (Small Industries Development Bank of India)

25/05/2018

4 01060651 Mr. Ranganathan Varadarajan Dilip Kumar

Nominee Director (SIDBI Trustee Company Limited)

12/04/2017

5 02647080 Mr. Mohit Verma Nominee Director (pi Ventures LLP)

30/06/2017

6 03591721 Mr. Srijib Kumar Baruah Nominee Director (North Eastern Development Finance Corporation Limited)

28/07/2011

7 06520457 Mr. Njord Andrewes Nominee Director (Nordic Microfinance Initiative Fund III KS)

15/07/2014

8 08185287 Dr. Abhijit Sharma Independent Director 25/08/2018

9 03233206 Mr. Manish Purshottam Thakkar

Nominee Director (RNT Associates Private Limited)

25/05/2018

10 07001635 Ms. Kaberi Bhuyan Independent Director 14/02/2019

SR NO NAME DESIGNATION DATE OF APPOINTMENT

1 Mr. Shiva Prasad Phukan Chief Executive Officer 15/09/2017

2 Mr. Nitul Boruah Company Secretary 02/04/2018

3 Ms. Richa Agarwal Chief Financial Officer 15/02/2019

NAME DESIGNATION TOTAL REMUNERATION PAID INCLUDING ALLOWANCES AND INCENTIVES (In Rs.)

Mr. Shiva Prasad Phukan Chief Executive Officer 576,000/-

Mr. Pinak Bhattacharjee Chief Financial Officer 350,000/-

Mr. Nitul Boruah Company Secretary 420,000/-

Ms. Richa Agarwal Chief Financial Officer 90,000/-




11/03/2016


02/11/2018



25/05/2018



12/04/2017


30/06/2017


28/07/2011


15/07/2014




25/05/2018














11/03/2016


02/11/2018



25/05/2018



12/04/2017


30/06/2017


28/07/2011


15/07/2014




25/05/2018












26.DIRECTOR’S RESPONSIBILITY STATEMENT As required under Section 134 of the Companies Act, 2013, the Directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

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

(c) the Directors have 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 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 had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

27.POLICY ON SEXUAL HARASSMENTThe Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and Redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2018-19, no complaints have been registered till close of the fiscal under review.

28.DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE .....REGULATORS OR COURTS OR TRIBUNAL

As per RBI Licensing Conditions RGVN(NE) MFL has converted itself from NBFC-NDSI to NBFC-CIC w.e.f., 29.05.2019. RBI has issued a Fresh Certificate of Registration as a Core Investment Company (CIC) on May 29, 2019.

29.STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CON- TROL WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place adequate internal financial controls to be followed by the Company with reference to financial statements. The company has devised proper system of internal financial control which is commensurate with size and nature of business. The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

30. PUBLIC DEPOSITSThe Company has not accepted any deposit from public during the year and there is no deposit outstanding on 31st March 2019.

31. BOARD EVALUATION The Independent Directors of the Company carried out an annual performance evaluation of the performance of the entire Board, performance of the Chairman, the Directors individually as well as the evaluation of the working of its Committees and in accordance with the parameters prescribed by the Nomination and Remuneration Committee of the Board.


32. A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013.

33. DISCLOSURE PURSUANT TO RBI MASTER DIRECTIONThe disclosure pursuant to Non- Banking Financial Company- Systemically Important Non-deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016, is annexed as Annexure-3.

34. NUMBER OF BOARD MEETINGS HELD DURING THE FINANCIAL YEAR 2018-19

During the Financial Year 2018-19, Six (6) meetings of the Board of Directors of the Company were held: -

Attendance of each Director at the Board Meeting held on during the Financial Year 18-19

No. of Board meeting

Date Place

67th 25.05.2018 Board Room, 3rd Floor, Fortune Central Basistha Road, Basisthapur Bye Lane No. 3, Beltola Guwahati, Assam-781028



70th 25.08.2018 Conference Room, Hotel Lily, Sixmile, Khanapara, Guwahati, Assam-781022

71th 12.12.2018 Conference Room, Hotel Shoolin Grand, G.S Road, Opp Indian Oil Petrol Pump, Rukmini Gaon, Guwahati, Assam- 781022

72th 14.02.2019 Conference Room, Radisson Blue Hotel, Near IOCL Petrol Pump, NH-37, Gotanagar, Guwahati, Assam-781033

Sl. No. Name Total meetings to be attended Meetings attended

1 Mr. Brij Mohan 4 4 2 Mr. Srijib Kumar Baruah 6 2 3 Mr. Njord Andrews 6 4 4 Mr. Ugen Tashi 4 3 5 Ms. Suvalaxmi Chakraborty 6 4 6 Mr. Manish Thakkar 5 4 7 Mr. Mohit Verma 6 4 8 Mr. R. V Dilip Kumar 6 4 9 Mr. Bhaskar Jyoti Sarma 4 3 10 Mr. Robert Douglas Dunn 3 2 11 Mr. Anand Prakash Srivastava 6 5 12 Mr. Manas Kumar Bid 1 1 13 Mr. Saneesh Singh 1 1 14 Dr. Abhijit Sharma 2 1

No. of Board meeting

Date Place




70th 25.08.2018 Conference Room, Hotel Lily, Sixmile, Khanapara, Guwahati, Assam-781022

71th 12.12.2018 Conference Room, Hotel Shoolin Grand, G.S Road, Opp Indian Oil Petrol Pump, Rukmini Gaon, Guwahati, Assam- 781022

72th 14.02.2019 Conference Room, Radisson Blue Hotel, Near IOCL Petrol Pump, NH-37, Gotanagar, Guwahati, Assam-781033

Sl. No. Name Total meetings to be attended Meetings attended

1 Mr. Brij Mohan 4 4 2 Mr. Srijib Kumar Baruah 6 2 3 Mr. Njord Andrews 6 4 4 Mr. Ugen Tashi 4 3 5 Ms. Suvalaxmi Chakraborty 6 4 6 Mr. Manish Thakkar 5 4 7 Mr. Mohit Verma 6 4 8 Mr. R. V Dilip Kumar 6 4 9 Mr. Bhaskar Jyoti Sarma 4 3 10 Mr. Robert Douglas Dunn 3 2 11 Mr. Anand Prakash Srivastava 6 5 12 Mr. Manas Kumar Bid 1 1 13 Mr. Saneesh Singh 1 1 14 Dr. Abhijit Sharma 2 1


35. COMMITTEES OF THE BOARD

AUDIT COMMITTEE The Audit Committee of the Board of Directors functions with the following main objectives: -

i) To provide direction and to oversee the operation of the audit function of the Company.ii) To review the internal audit system with special emphasis on its quality and effectiveness.iii) To discuss matters related to frauds.iv) To discuss and follow up for issues related to RBI Inspection Report(s).v) To oversee the financial reporting process and the disclosure of its financial information and also ensure that the financial statements are correct, sufficient and credible.vi) To recommend to the Board, the appointment, re-appointment, and if required, the replacement or removal of the Statutory Auditor and to fix their audit fees.vii) To review the annual financial statements with the management, before submission to the Board for its approval with particular reference to: • Changes, if any, in accounting policies & practices and reasons for the same.

• Major accounting entries involving estimates based on the on the exercise of judgment by the management.• Significant adjustments made in the financial statements arising out of audit findings.

viii) To review, with the management, the quarterly financial statements before submission to the Board for its approval.ix) To review the performance of statutory and internal auditors, and adequacy of the internal control systems with the management. x) To review the adequacy of the internal audit function, if any, including the structure of the internal audit department, reporting structure, coverage and frequency of internal audit.xi) To discuss with internal auditors any significant audit findings and follow up thereon.xii) To review the finding of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity of a failure of internal control systems of a material nature and reporting the matter to the Board.xiii) To discuss with Statutory Auditors, before the commencement of audit, the nature and scope of audit and also conduct post-audit discussion to ascertain any area of concern.

COMPOSITION OF THE AUDIT COMMITTEE (From 01.04.2018 to 25.05.2018)

SR.NO NAME OF THE MEMBER DESIGNATION 1 Mr. R V Dilip Kumar Nominee Director 2 Mr. Njord Andrewes Nominee Director

(From 26.05.2018 to 25.08.2018 (Reconstituted on 25.05.2018)

SR.NO NAME OF THE MEMBER DESIGNATION 1 Mr. Brij Mohan Independent Director 2 Mr. Bhaskar Jyoti Sarma Independent Director 3 Mr. R V Dilip Kumar Nominee Director


SR.NO NAME OF THE MEMBER DESIGNATION 1 Mr. Manas Kumar Bid Nominee Director 2 Dr. Abhijit Sharma Independent Director 3 Mr. R V Dilip Kumar Nominee Director

SL. NO NAME OF THE MEMBER NO OF AC MEETING ATTENDED 1 Mr. R V Dilip Kumar 4 2. Mr. Bhaskar Jyoti Sarma 2 3 Mr. Brij Mohan 3 4 Mr. Manas Kumar Bid 1 5 Dr. Abhijit Sharma 1 6. Mr. Njord Andrewes 1


During the period under review, the Audit Committee had 5 (Five) meetings which were held on 25th May 2018, 18th June, 2018, 30th June, 2018, 25th August, 2018 and 14th February, 2019.

The attendance of the Audit Committee members at such meetings are as follows:

NOMINATION & REMUNERATION COMMITTEEThe role of the Nomination Committee is to identify, research and recommend candidates for the appointed Board of Directors positions involving “specific expertise” and its objective is to assist the Board to fulfill its oversight responsibility to shareholders to ensure that remuneration policy and practices reward fairly and responsibly with a clear link to corporate and individual performance, and having regard to legal requirements and sound corporate governance.

The principal responsibilities and functions of the Nomination Committee are as follows:• To help the Board analyze its current skills and areas for improvement, as well as to help it anticipate its future needs;• To be familiar with the RGVN (North East) Microfinance Ltd’s policies, mission, vision, values and goals, and other important information;• To develop selection criteria to be used in the recruitment process, including capability, expertise, availability, and other relevant factors;• To research and screen potential candidates according to the selection criteria, and recommend the most suitable candidates to the Board;• To ensure new “specific expertise” Board members receive proper orientation and any other necessary training/inputs;• To periodically support the Board in other Board development processes, as requested;• To brief and orient its successors on the Nominating Committee in future years;

During the period under review, 1 (One) meeting of the Nomination & Remuneration Committee were convened on 14th February 2019, We provide hereunder details of the attendance of the Nomination & Remuneration Committee members at such meeting:

• To be familiar with the RGVN (North East) Microfinance Ltd's policies, mission, vision, values and goals, and other important information;

• To develop selection criteria to be used in the recruitment process, including capability, expertise, availability, and other relevant factors;

• To research and screen potential candidates according to the selection criteria, and recommend the most suitable candidates to the Board;

• To ensure new “specific expertise” Board members receive proper orientation and any other necessary training/inputs;

• To periodically support the Board in other Board development processes, as requested; • To brief and orient its successors on the Nominating Committee in future years

COMPOSITION OF THE NOMINATION AND REMUNERATION COMMITTEE:

SR. NO NAME OF THE

MEMBER DESIGNATION

1. Dr. Abhijit Sharma Independent Director 2. Mr. Manas Kumar Bid Nominee Director 3. Mr. Anand Prakash Srivastava Nominee Director


Sl. No. Name of the member No. of NRC meeting attended 1 Dr. Abhijit Sharma, Chairman 1 2 Mr. Manas Kumar Bid, Member 1 3 Mr. Anand Prakash Srivastava,

Member 1

36. CORPORATE GOVERNANCE

The Company is committed to achieve high standards of Corporate Governance and the Company’s philosophy on Corporate Governance is aimed at supporting the top management to efficiently conduct its business operations and meet its obligations towards various stakeholders. Constitution of the Board of Directors The Board of Directors is constituted in accordance with the provisions of the Companies Act, 2013 (The CA 2013) and the Articles of Association of the company. The Board consists of eminent persons with considerable professional expertise in Banking, Finance, Administration, HR, Technology, Strategy, Compliance, Audit, Risk and other related fields. Their experience and professional credentials have helped the company to gain insights for strategy formulation, monitoring Control framework and direction setting for the company, thus adding value to set a strong foundation enabling the overall growth objectives of the company. The Board comprises of Ten (10) Directors consisting of Two (2) Independent, Eight (8) Nominee Director.

• To be familiar with the RGVN (North East) Microfinance Ltd's policies, mission, vision, values and goals, and other important information;

• To develop selection criteria to be used in the recruitment process, including capability, expertise, availability, and other relevant factors;

• To research and screen potential candidates according to the selection criteria, and recommend the most suitable candidates to the Board;

• To ensure new “specific expertise” Board members receive proper orientation and any other necessary training/inputs;

• To periodically support the Board in other Board development processes, as requested; • To brief and orient its successors on the Nominating Committee in future years

COMPOSITION OF THE NOMINATION AND REMUNERATION COMMITTEE:

SR. NO NAME OF THE

MEMBER DESIGNATION

1. Dr. Abhijit Sharma Independent Director 2. Mr. Manas Kumar Bid Nominee Director 3. Mr. Anand Prakash Srivastava Nominee Director


Sl. No. Name of the member No. of NRC meeting attended 1 Dr. Abhijit Sharma, Chairman 1 2 Mr. Manas Kumar Bid, Member 1 3 Mr. Anand Prakash Srivastava,

Member 1

36. CORPORATE GOVERNANCE

The Company is committed to achieve high standards of Corporate Governance and the Company’s philosophy on Corporate Governance is aimed at supporting the top management to efficiently conduct its business operations and meet its obligations towards various stakeholders. Constitution of the Board of Directors The Board of Directors is constituted in accordance with the provisions of the Companies Act, 2013 (The CA 2013) and the Articles of Association of the company. The Board consists of eminent persons with considerable professional expertise in Banking, Finance, Administration, HR, Technology, Strategy, Compliance, Audit, Risk and other related fields. Their experience and professional credentials have helped the company to gain insights for strategy formulation, monitoring Control framework and direction setting for the company, thus adding value to set a strong foundation enabling the overall growth objectives of the company. The Board comprises of Ten (10) Directors consisting of Two (2) Independent, Eight (8) Nominee Director.

(From 01.04.2018 to 25.05.2018) SR.NO NAME OF THE MEMBER DESIGNATION 1 Mr. R V Dilip Kumar Nominee Director 2 Mr. Njord Andrewes Nominee Director


SR.NO NAME OF THE MEMBER DESIGNATION 1 Mr. Brij Mohan Independent Director 2 Mr. Bhaskar Jyoti Sarma Independent Director 3 Mr. R V Dilip Kumar Nominee Director


SR.NO NAME OF THE MEMBER DESIGNATION 1 Mr. Manas Kumar Bid Nominee Director 2 Dr. Abhijit Sharma Independent Director 3 Mr. R V Dilip Kumar Nominee Director

SL. NO NAME OF THE MEMBER NO OF AC MEETING ATTENDED 1 Mr. R V Dilip Kumar 4 2. Mr. Bhaskar Jyoti Sarma 2 3 Mr. Brij Mohan 3 4 Mr. Manas Kumar Bid 1 5 Dr. Abhijit Sharma 1 6. Mr. Njord Andrewes 1

.

.

.

.

...


36. CORPORATE GOVERNANCE The Company is committed to achieve high standards of Corporate Governance and the Company’s philosophy on Corporate Governance is aimed at supporting the top management to efficiently conduct its business operations and meet its obligations towards various stakeholders.

Constitution of the Board of DirectorsThe Board of Directors is constituted in accordance with the provisions of the Companies Act, 2013 (The CA 2013) and the Articles of Association of the company.

The Board consists of eminent persons with considerable professional expertise in Banking, Finance, Administration, HR, Technology, Strategy, Compliance, Audit, Risk and other related fields. Their experience and professional credentials have helped the company to gain insights for strategy formulation, monitoring Control framework and direction setting for the company, thus adding value to set a strong foundation enabling the overall growth objectives of the company.

The Board comprises of Ten (10) Directors consisting of Two (2) Independent, Eight (8) Nominee Director.

37. CORPORATE SOCIAL RESPONSIBILTYThe Company has constituted a CSR Committee of Board in its 45th Board Meeting held on 7th May, 2016 to meet the requirement of Section 135 the Companies Act, 2013. However in the Last Financial year i.e., 2017-18 Company has not earned any Profit due to Transfer of Business to its Subsidiary Company, Hence Section 134 of the Companies Act, 2013 is not applicable to the company w.e.f., 31.03.2019. Therefore, BOD of the Company has withdrawn the CSR Committee w.e.f., 25.08.2018.

It is further informed that the Company has folded its Lending Business to its Subsidiary Company i.e North East Small Finance Bank Limited w.e.f., 16.10.2017 on account of the RBI Licensing Condition. Therefore, there are no operations in the Company and it has converted itself into Core Investment Company (CIC). Company has incurred Losses in the year 2017-18 and 2018-19 due to operational costs involved with no business operations.

Due to the aforesaid reasons, there is a short fall (Rs.19,25,619) in CSR expenditure, in the financial year 2017-18. However the company has spent the last years shortfall in the current Financial year 2018-19. As on 31.03.2019 there are no Short fall in CSR Expenditure as per Section 135 of the Companies Act, 2013.

Manner in which the amount spent (last years Shortfall) during the financial year is detailed below

37. CORPORATE SOCIAL RESPONSIBILTY The Company has constituted a CSR Committee of Board in its 45th Board Meeting held on 7th May, 2016 to meet the requirement of Section 135 the Companies Act, 2013. However in the Last Financial year i.e., 2017-18 Company has not earned any Profit due to Transfer of Business to its Subsidiary Company, Hence Section 134 of the Companies Act, 2013 is not applicable to the company w.e.f., 31.03.2019. Therefore, BOD of the Company has withdrawn the CSR Committee w.e.f., 25.08.2018.

It is further informed that the Company has folded its Lending Business to its Subsidiary Company i.e North East Small Finance Bank Limited w.e.f., 16.10.2017 on account of the RBI Licensing Condition. Therefore, there are no operations in the Company and it has converted itself into Core Investment Company (CIC). Company has incurred Losses in the year 2017-18 and 2018-19 due to operational costs involved with no business operations. Due to the aforesaid reasons, there is a short fall (Rs.19,25,619) in CSR expenditure, in the financial year 2017-18. However the company has spent the last years shortfall in the current Financial year 2018-19. As on 31.03.2019 there are no Short fall in CSR Expenditure as per Section 135 of the Companies Act, 2013. Manner in which the amount spent (last years Shortfall) during the financial year is detailed below

Sl. No

CSR Project or activity identify

Sector in which project is covered

Projects or Programmes 1. Local area or other 2. Specify the State and district where projects or programs was undertaken

Amount Outlay (Budget) project or programme wise (in Rs.)

Amount spent on project/ programme Sub-heads: 1.Direct expenditure on projects or programs 2.Overheads

Cumulative expenditure upto the reporting period (in Rs.)

Amount spent: Direct or through implementing agency*

1 Conducting free Health Camp

Promoting healthcare; Schedule VII, Sector- 1

Assam: Dibrugarh, Lakhimpur, Golaghat

Direct Expenditure.

Rs1,17,597/- Direct

2 Free Cataract surgeries to under-privileged population

Promoting healthcare; Schedule-VII Sector-1

Assam: Kamrup (R),Baihata, Nalbari, Morigaon,Dhemaji, kamrup (M)

Rs.5900/- per cataract surgery.

Direct Expenditure

Rs.10,14,800 /- Direct

3 Contribution to NGO’s

Various sectors covered by Schedule VII of the Companies Act, 2013

North Eastern States

Rs.8,00,000 Direct Expenditure

Rs.8,00,000/- Direct

Total Rs. 19,32,397/-


38. GREEN INITIATIVEElectronic copies of the Annual Report for the FY 2018-19 and the Notice of AGM is being sent to all the members whose email addresses are registered with the Company. For members who have not registered their email address, physical copies are sent in the permitted mode.

ACKNOWLEDGEMENTYour Directors place on record their sincere thanks to the Central and State Governments, Reserve Bank of India, Ministry of Corporate Affairs, SEBI and all other Regulatory Authorities, employees of the company, and all stakeholders of the company for their continuous support and contribution. Directors would also like to thank our associates and other partners of the company for their assistance and co-operation extended. The Directors also express their gratitude to the Shareholders for extending their support. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Sd/- Sd/- CA Kaberi Bhuyan Dr. Abhijit Sharma Independent Director Independent Director (DIN: 07001635) (DIN: 08185287) Place: Guwahati Date: 20.09.2019


BIMAN DEBNATH & ASSOCIATES Company Secretaries

BIMAN DEBNATH B. Com.., LLB, DTL., FCS.Flat No- 402, Block-C, Prasanti Pride, Prakash Choudhury Housing Complex,Tarun Nagar, ABC, Guwahati-781005 Assam, IndiaTele : 9365313716(O), 9864028145(M)8472815679(M) Email:[email protected],[email protected]

To, The Members, M/s. RGVN (North East) Microfinance LimitedHouse No. 02, Padma Path, 8th Bye-lane, Zoo Road Tiniali, R.G Baruah Road Guwahati-781024, Assam

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s RGVN (NORTH EAST) MICROFINANCE LIMITED (CIN: U65923AS2008PLC008742) (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on our verification of books, papers, minute books, forms and returns filed and other records main-tained by M/s RGVN (North East) Microfinance Limited and also the information provided by the Compa-ny, its officers and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2019 complied with the statutory provisions listed hereunder and also that the Company has prop-er board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minute books, forms and returns filed and other records maintained by M/s RGVN (North East) Microfinance Limited (“the Company”) for the financial year ended on 31st March, 2019 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder; (ii) The Memorandum and Articles of Association of the Company.(iii) Other Acts or Guidelines:

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by the Institute of Company Secretaries of India with respect to Board & General Meetings.

We further report that, having regard to the compliance system prevailing in the Company and on the ex-amination of the relevant documents and records in pursuance thereof on test-check basis, the Company has complied with the following laws applicable specifically to the Company:

Regarding the compliance of other applicable laws, the Company Secretary of the Company have reported that there is no non compliance on the part of the Company:

(i) The Employees’ Provident Funds And Miscellaneous Provisions Act, 1952 (ii) The Securities Contracts (Regulation) Act, 1956 (iii) The Depositories Act, 1996

ANNEXURE - 1


(iv) Foreign Exchange Management Act, 1999

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. except the following:

1. During the year under review the MGT-7 (Annual Return) of the Company for the Financial Year 2017-18 which was filed on 31.12.2019 was not signed by the whole time Company Secretary of the Company whereas the authority for signing the same was obtained vide item no. 12 in the 70th meeting of the Board of Directors held on 25/08/2018.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Direc-tors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance expect two Board meetings dated 18/06/2018 and 30/06/2018 which are issued at shorter notice, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

The decisions of the Board were unanimous and no dissenting views have been recorded as per the minutes of the meetings, the minutes were duly recorded and signed by the Chairman.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that after the audit period:

i) The Company has converted itself into Core Investment Company on 29th day May, 2019 as per the RBI Licensing conditions.

Based on the representation of the management, during the audit period, there are no specific events/actions having a major bearing on the Company Affairs in pursuance of the laws, rules, reg-ulations, guidelines, standards etc. referred above.

For Biman Debnath & AssociatesCompany Secretaries

CS Biman Debnath(Proprietor)C.P. No.5857 FCS No. 6717

Date: 02/09/2019Place: Guwahati


RGVN(NORTHEAST)MICROFINANCELIMITED

(CIN-U65923AS2008PLC008742);REGD.OFF:HOUSENO.02,PADMAPATH,8THBYELANE,ZOOROADTINIALI,R.GBARUAHROAD

GUWAHATI,ASSAM,KAMRUP(M)-781024FORMAOC-1

(Pursuanttofirstprovisotosub-section(3)ofSection129readwithRule5ofCompanies(Accounts)Rules,2014)Statementcontainingsalientfeaturesofthefinancialstatementofsubsidiaries/associate

companies/jointventures

Part“A”:Subsidiaries(InformationinrespectofeachsubsidiarytobepresentedwithamountsinRs.)Sl.No. Particulars Details

1. Nameofthesubsidiary NORTHEASTSMALLFINANCEBANKLIMITED

2. Reportingperiodforthesubsidiaryconcerned,ifdifferentfromtheholdingcompany’sreportingperiod

01.04.2018TO31.03.2019

3. ReportingcurrencyandExchangerateasonthelastdateoftherelevantFinancialyearinthecaseofforeignsubsidiaries

N.A

4. Sharecapital 29,33,849,9505. Reserves&surplus 592,960,8786. Totalassets 17,699,177,8807. TotalLiabilities 17,699,177,8808. Investments 1,653,052,6879. Turnover/RevenuefromOperation 2,871,019,46010. Profitbeforetaxation 552,051,97011. Provisionfortaxation 182,644,43112. Profitaftertaxation 369,407,53913. ProposedDividend N.A14. %ofshareholding 100%

Notes:Thefollowinginformationshallbefurnishedattheendofthestatement:1.Namesofsubsidiarieswhichareyettocommenceoperations2.Namesofsubsidiarieswhichhavebeenliquidatedorsoldduringtheyear.

Part“B”:AssociatesandJointVentures

Statementpursuant toSection129(3)of theCompaniesAct,2013relatedtoAssociateCompaniesandJointVentures-N.ASl.No. Particulars Details

1. Nameofassociates 2. LatestauditedBalanceSheetDate 3. SharesofAssociateheldbythecompanyattheyearend I AmountofInvestmentinAssociates II ExtendofHolding% 4. Descriptionofhowthereissignificantinfluence 5. Reasonwhytheassociateisnotconsolidated 6. Networthattributabletoshareholdingasperlatestaudited

BalanceSheet

7. Profit/Lossfortheyear I ConsideredinConsolidation II NotConsideredinConsolidation 1.Namesofassociatesorjointventureswhichareyettocommenceoperations.2.Namesofassociatesorjointventureswhichhavebeenliquidatedorsoldduringtheyear.

Note:ThisFormistobecertifiedinthesamemannerinwhichtheBalanceSheetistobecertified.

ANNEXURE - 2


FORANDONBEHALFOFTHEBOARDOFDIRECTORSRGVN(NORTHEAST)MICROFINANCELIMITEDDr.AbhijitSharmaCAKaberiBhuyanDirectorDirectorDin-08185287Din-07001635 Place-Guwahati Date-20.09.2019


ANNEXURE-3

Disclosures pursuant to Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 (“said Master Direction”) dated September 01, 2016.

RELATED PARTY TRANSACTIONS

(Pursuant to Clause 4.3 of Anne XII of the said Master Direction)

1) Details of all materials transaction with related parties are disclosed at Standalone Financial Statements and Consolidated Financial Statement;

--------------------------------------------------

ANNEXURE - 3


STATUTORY AUDITOR’S REPORT


INDEPENDENT AUDITORS’ REPORT To the Members of RGVN (North East) Microfinance Limited.Report on the Audit of the Standalone Financial Statements

Opinion We have audited the standalone financial statements of RGVN (North East) Microfinance Limited. (“the Company”), which comprise the Balance Sheet as at March 31, 2019, and the Statement of Profit and Loss and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, and its loss and its cash flows for the year ended on that date.

Basis for Opinion We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors’ Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information Other than the Standalone Financial Statements and Auditors’ Report Thereon

The Company’s Board of Directors is responsible for the other information. The other information comprises the Director’s report but does not include the financial statements and our auditors’ report thereon. The Director’s report is expected to be made available to us after the date of this auditors’ report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged With Governance for Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the


Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Standalone Financial Statements Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

We give in “Annexure A” a detailed description of auditors’ responsibilities for Audit of the Standalone Financial Statements.

Other Matter The standalone financial statements of the Company for the year ended March 31, 2018, were audited by another auditor whose report dated June 18, 2018 expressed an unmodified opinion on those statements.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements.

As required by the Companies (Auditors’ Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

As required by Section 143(3) of the Act, we report that: a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b.In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c. The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

1.

2.


e. On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure C”.

g. With respect to the other matters to be included in the auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements – Refer Note 27 to the standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

As required by The Companies (Amendment) Act, 2017, in our opinion, according to information, explanations given to us, the remuneration paid by the Company to its directors is within the limits laid prescribed under Section 197 of the Act and the rules thereunder.

For MSKA & Associates Chartered AccountantsICAI Firm Registration No. 105047W

Puneet AgarwalPartnerMembership No. 064824UDIN No.

Place: GuwahatiDate: September 20, 2019

3.


ANNEXURE A TO THE INDEPENDENT AUDITORS’ REPORT ON EVEN DATE ON THE STANDALONE FINANCIAL STATEMENT OF RGVN (NORTH EAST) MICROFINANCE LIMITED.

Auditors’ Responsibilities for the Audit of the Financial StatementsAs part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.

• Conclude on the appropriateness of Management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.


Puneet AgarwalPartnerMembership No. 064824UDIN No. Place: Guwahati Date: September 20, 2019


ANNEXURE B TO INDEPENDENT AUDITORS’ REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF RGVN (NORTH EAST) MICROFINANCE LIMITED. FOR THE YEAR ENDED MARCH 31, 2019

[Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ in the Independent Auditors’ Report]

i. (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets (Property, Plant and Equipment).

(b) All the fixed assets (Property, Plant and Equipment) have not been physically verified by the Management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The Company does not have any immovable property and hence provisions stated in paragraph 3(i)(c) of the Order are not applicable to the Company.

ii. The Company is in the business of rendering financial services, and consequently, does not hold any inventory. Therefore, the provisions stated in clause 3(ii) of the Order are not applicable to the Company. iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to Companies, Firms, Limited Liability Partnerships (LLP) or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’). Accordingly, the provisions stated in paragraph 3 (iii) (a) to (c) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, the Company has not either directly or indirectly, granted any loan to any of its directors or to any other person in whom the director is interested, in accordance with the provisions of section 185 of the Act and the Company has not made investments through more than two layers of investment companies in accordance with the provisions of section 186 of the Act. Accordingly, provisions stated in paragraph 3(iv) of the Order are not applicable to the Company.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under. Accordingly, provisions stated in paragraph 3(v) of the Order are not applicable to the Company.

vi. The provisions of sub-section (1) of Section 148 of the Act are not applicable to the Company as the Central Government of India has not specified the maintenance of cost records for any of the products of the Company. Therefore, the provisions of clause 3(vi) of the Order are not applicable to the Company. vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, undisputed statutory dues including provident fund, employees’ state insurance, income-tax, goods and service tax, duty of customs, cess and any other statutory dues have not been regularly deposited with the appropriate authorities and there has been a delay in few cases. No undisputed statutory dues were in arrears, as at March 31, 2019 for a period of more than six months from the date they became payable except dues of Income Tax amounting to Rs. 300,225 which however have been paid subsequent to the Balance Sheet date.


(b) According to the information and explanation given to us and examination of records of the Company, there are no outstanding dues of income-tax, GST, customs duty, cess and any other statutory dues on account of any dispute. The Company has an outstanding due in respect of Service Tax as follows:

vii. The Company does not have any loans or borrowings from any financial institution, banks, government or debenture holders during the year. Accordingly, the provision stated in paragraph 3(viii) of the Order is not applicable to the Company.

viii. According to the information and explanations given to us, the company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, the provisions stated in paragraph 3 (ix) of the Order are not applicable to the Company.

ix. During the course of our audit, examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees.

x. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/ provided for managerial remuneration in accordance with the provisions of section 197 read with Schedule V to the Act.

xi. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the provisions stated in paragraph 3(xii) of the Order are not applicable to the Company.

xii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions stated in paragraph 3 (xiv) of the Order are not applicable to the Company.

xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, provisions stated in paragraph 3(xv) of the Order are not applicable to the Company.

Name of the statute

Nature of dues Amount Rs.

Period to which the amount relates

Forum where dispute is pending

Finance Act. 1994

Service Tax Demands

19,769,122 2010-11 to 2014-15

CESTAT, Kolkata


xv. The Company is required to and has been registered under Section 45-IA of the Reserve Bank of India Act, 1934 as Non-Banking Financial Company - Micro Finance Institutions (NBFC-MFI). However, subsequent to the Balance Sheet date, the company has been converted from NBFC-MFI to NBFC-Core Investment Company w.e.f. May 29, 2019.





ANNEXURE C TO THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF RGVN (NORTH EAST) MICROFINANCE LIMITED.[Referred to in paragraph 2(f) under ‘Report on Other Legal and Regulatory Requirements’ in the Independent auditors’ Report of even date to the Members of RGVN (North East) Microfinance Limited on the Financial Statements for the year ended 31st March 2019]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls with reference to financial statements of RGVN (North East) Microfinance Limited (“the Company”) as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI) (the “Guidance Note”). These responsibilities include the design, implementation and maintenance of internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors’ ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls with reference to financial statements.

Meaning of Internal Financial Controls With reference to Financial StatementsA Company’s internal financial control with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting


principles. A Company’s internal financial control with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With reference to financial statementsBecause of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial control with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OpinionIn our opinion, the Company has, in all material respects, an internal financial controls with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2019, based on the internal control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note.

For MSKA & AssociatesChartered AccountantsICAI Firm Registration No. 105047W




(Amount in Rs.)Particulars Notes 31-Mar-19 31-Mar-18

I. EQUITY AND LIABILITIES Shareholders' funds

Share capital 3 703,380,910 703,380,910 Reserves and surplus 4 2,355,102,299 2,355,358,588

3,058,483,209 3,058,739,498

Share Application Money Pending allotment - 143

Non-Current LiabilitiesLong-term provisions 5 12,213 -

Current liabilitiesTrade payables

Total outstanding due of micro enterprises and small enterprises - -

Total outstanding dues of creditors other than micro enterprises

and small enterprises

Other current liabilities 7 74,970,635 2,738,247 Short-term provisions 8 2,611 -

75,285,459 2,926,622

3,133,768,668 3,061,666,120

II. ASSETS

Non-current assets Property, Plant and Equipment

Tangible Assets 9 239,232 - Non-current investments 10 2,933,849,950 2,933,843,950

Deferred Tax Asset 11 9,876 - Other Non-Current assets 12 75,000,000 40,000,000

3,009,099,058 2,973,843,950 Current assets

Cash and Bank Balances 13 107,357,635 80,000,000 Other current assets 14 17,311,975 7,822,170

124,669,610 87,822,170

3,133,768,668 3,061,666,120

Summary of significant accounting policies 2

The accompanying notes are an integral part of the standalone financial statements

As per our report on even date attached For and on behalf of the Board of Directors ofFor MSKA & Associates RGVN (NORTH EAST) MICROFINANCE LIMITEDChartered AccountantsFRN: 105047W

Kaberi Bhuyan Abhijit SharmaDirector DirectorDin: 07001635 Din: 08185287

Puneet AgarwalPartner

Membership No. 064824Richa Agarwal S.P PhukanChief Financial Officer Chief Executive Officer

Nitul BoruahPlace : Guwahati Company SecretaryDate: September 20, 2019 M.No:ACS 45582

RGVN (NORTH EAST) MICROFINANCE LIMITED

Total

Standalone Balance Sheet as at March 31, 2019

Total

6 300,000 188,232


(Amount in Rs.)Particulars Notes 31-Mar-19 31-Mar-18 Income

Revenue from Operation 15 9,979,894 1,903,163 Other Income 16 46 -

Total Income 9,979,940 1,903,163

ExpensesEmployee Benefits Expenses 17 1,615,160 2,935,832 Other Operating Expenses 18 5,929,462 2,243,961 Depreciation 9 22,452 -

Total Expenses 7,567,074 5,179,793

Profit/(Loss) before Prior Period/Exceptional Items 2,412,866 (3,276,630) Prior Period income 6,000 - Profit/(Loss) before tax 2,418,866 (3,276,630)

Tax expensesCurrent tax

For current year profits 1,126,622 1,794,047 Tax Expenses of Earlier Year 1,558,409 - Deferred tax expense/(benefit) (9,876) -

Total Tax Expense 2,675,155 1,794,047

Profits for the period from Continuing operations (256,289) (5,070,677)

Profit before Gain on transfer of business attributable to the discontinued operations - 102,872,482 Gain on transfer of business attributable to the discontinued operations - 52,013,836 Profit before tax from discontinued operations - 154,886,318 Tax Expenses

(a) Current tax expenses on discontinued operations - 64,244,516 (b) Current tax expenses on transfer of business - 12,000,632 (c) Deferred tax - 28,402,739 Profit after tax from discontinued operations - 50,238,430 Profit/(Loss) for the year (256,289) 45,167,753

Earnings per Equit Share: face value Rs. 10 each(a) Basic 21 (0.01) 0.70 (b) Diluted 21 (0.01) 0.70

Summary of significant accounting policies 2


As per our report on even date attached For and on behalf of Board of DirectorsFor MSKA & Associates RGVN (NORTH EAST) MICROFINANCE LIMITED

Chartered Accountants

FRN: 105047WKaberi Bhuyan Abhijit SharmaDirector DirectorDin: 07001635 Din: 08185287

Puneet AgarwalPartnerMembership No. 064824 Richa Agarwal S.P Phukan

Chief Financial Officer Chief Executive Officer

Nitul BoruahPlace : Guwahati Company SecretaryDate: September 20, 2019 M.No:ACS 45582


Standalone Profit and Loss Account for the year ended March 31, 2019


(Amount in Rs.)CASH FLOW STATEMENT FOR THE YEAR ENDED 31-Mar-19 31-Mar-18

CASH FLOW FROM OPERATING ACTIVITIES

Profit before tax 2,418,866 151,609,688 Adjustment for:Depreciation 22,452 7,027,457 Long term provision written back - (78,741,456) Prior period income (6,000) - Share money pending allotment written back (46) - Operating Profit before Working Capital Changes 2,435,272 79,895,689

Changes in working capital(Increase)/Decrease in Current Assets (7,349,806) 272,198,028 (Increase)/Decrease in loans disbursed - 6,883,180,224 (Decrease)/Increase in Current Liabilities 72,344,157 (214,421,023) (Decrease)/Increase in Provisions 14,824 - Cash generated from Operations: 67,444,446 7,020,852,919

Income tax paid (4,825,030) (78,039,196) Net Cash Flow from Operating Activities (A) 62,619,416 6,942,813,723

CASH FLOW FROM INVESTING ACTIVITIES:(Purchase) / Sale of Fixed Assets (261,684) 31,902,792 (Purchase) / Sale of Investments - (1,830,000,000) Investment in fixed deposits (18,615,647) (120,000,000) Net Cash Flow from Investing Activities (B) (18,877,331) (1,918,097,208)

CASH FLOW FROM FINANCING ACTIVITIES:Increase/(Decrease) in Share Capital & securities premium (97) 763,020,163 Increase/(Decrease) in Secured Loans - (6,754,932,246) Net Cash Flow from Financing Activities (C) (97) (5,991,912,083)

Net Increase or (Decrease) in Cash or Cash Equivalents (A+B+C) 43,741,988 (967,195,568)

Opening Cash and Cash Equivalents - 967,195,568 Closing Cash and Cash Equivalents at the end of the year 43,741,988 -

Cash and cash equivalents comprise (Refer note 13)Balances with banks On current accounts 8,740,619 - Deposits with original maturity of less than three months 35,000,000 - Cash in hand 1,369 - Total cash and bank balances at end of the year 43,741,988 -

Notes :


As per our report on even date attached For and on behalf of the Board of Directors of

For MSKA & AssociatesChartered Accountants

Kaberi Bhuyan Abhijit SharmaDirector Director

Puneet Agarwal Din: 07001635 Din: 08185287PartnerMembership No. 064824

Richa Agarwal S.P PhukanChief Financial Officer Chief Executive Officer

Place : Guwahati Company SecretaryDate: September 20, 2019 M.No:ACS 45582

Nitul Boruah



1. Cash comprises cash on hand, Current Accounts and deposits with banks. Cash equivalents are short term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of change in value.

Standalone Cash Flow Statement for the year ended March 31, 2019


Notes forming part of the Financial Statements for the year ended 31st March , 201931-Mar-19 31-Mar-18

3 Share Capital

Authorized:850,000,000 850,000,000

15,000,000 Preference Share of Rs.10 Each 150,000,000 150,000,000 1,000,000,000 1,000,000,000

Issued, Subscribed and paid up:

703,380,910 703,380,910

703,380,910 703,380,910

(a)

Equity sharesNumber Amount Number Amount

Shares at the beginning of the year 70,338,091 703,380,910 59,512,780 595,127,800 Shares issued during the year - - 10,825,311 108,253,110 Outstanding at the end of the year 70,338,091 703,380,910 70,338,091 703,380,910

(b) Rights, preferences, restrictions of Equity Share Capital

(c)

Equity shares

% of holding No.of shares % of holding No.of sharesDia Vikas Capital (p) Ltd 19.98% 14,050,962 19.98% 14,050,962 Nordic Microfinance Initiative Fund III KS 15.02% 10,561,682 15.02% 10,561,682

SIDBI Trustee Company Limited A/c Samridhi Fund 12.19% 8,572,653 12.19% 8,572,653

Oiko Credit Ecumenical Development Cooperative Society

10.91% 7,673,469 10.91% 7,673,469

RNT Associates Private Limited 12.48% 8,778,583 12.48% 8,778,583

Small Industries Development Bank of India-IMEF7.11%

5,000,000 7.11% 5,000,000

Pi Ventures LLP 6.52% 4,584,925 6.52% 4,584,925 Total 84.21% 59,222,274 84.21% 59,222,274

of shares.

The Company has only one class of equity shares of the par value of Rs. 10 each. Each Shareholder is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amount. The distribution will be in proportion to the number of equity shares held by shareholders.

Details of shareholders holding more than 5% shares in the Company

70,338,091 Equity Shares (PY 70,338,091 Equity Shares of Rs.10/- each fully paid up in cash )

Name of the Shareholder31-Mar-19 31-Mar-18

Total

Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period:

March 31,2019 March 31,2018

As per records of the Company, including its registers of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership

There was no issue of bonus shares/buy back of shares during the period of 5 years immediately preceding the Balance Sheet date.


(All amounts in Rs. unless otherwise stated)

Particulars

85,000,000 Equity Share of Rs.10 Each

Total


4 Reserves and Surplus 31-Mar-19 31-Mar-184.1 Share premium

Balance at the beginning of the year 1,692,097,203 1,037,330,150 Add : Additions during the year - 654,767,053

(a) 1,692,097,203 1,692,097,203

4.2Statutory reserve (Created pursuant to Section 45-IC of the Reserve Bank of India, 1934)Balance at the beginning of the year 138,372,004 129,338,453 Add : Profit / (Loss) for the year - 9,033,551

(b) 138,372,004 138,372,004 4.3 Surplus/(Deficit) in the statement of Profit & Loss

Balance at the beginning of the year 524,889,381 488,755,178 Add: Profit/(Loss) during the year (256,289) 45,167,753

Less: Adjustment / reversal during the yearTransfer to Statutory Reserve - 9,033,551

(c) 524,633,092 524,889,381

Total (a+b+c) 2,355,102,299 2,355,358,588

5 Long-term provisionsProvision for Gratuity (Refer Note 28) 6,464 - Provision for Leave Encashment 5,749 - Total 12,213 -

6 Trade payablesTotal outstanding due of micro enterprises and small enterprises (Refer note 26) - -

Total outstanding dues of creditors other than micro enterprises and small enterprisesTotal 300,000 188,232

7 Other current LiabilitiesStatutory liabilities 66,355 65,156 Other Payables (Refer note 22) 74,904,280 2,673,091 Total 74,970,635 2,738,247

8 Short-term provisionsProvision for Gratuity (Refer Note 28) 1,519 - Provision for Leave Encashment 1,092 - Total 2,611 -

10 Non-Current Investments 31-Mar-19 31-Mar-18Unquoted equity sharesInvestment in North East Small Finance Bank Ltd. 2,933,849,950 2,933,843,950

Total 2,933,849,950 2,933,843,950

11 Deferred Tax AssetsOn timing differences between WDV of assets as per IT Act and Companies Act, 2013

6,022 -

On expenses allowable in future on payment basis 3,854 - Total 9,876 -

12 Non-Current AssetsTerm Deposits (Deposits with maturity more than 12 months from reporting date) 75,000,000 40,000,000 Total 75,000,000 40,000,000


(All amounts in Rs. unless otherwise stated)Notes forming part of the Financial Statements for the year ended 31st March , 2019

293,384,995 Equity shares of North East Small Finance Bank Ltd. Rs 10 each,fully paid up (As at 31 March 2018- 293,384,995)

300,000 188,232



(All amounts in Rs. unless otherwise stated)Notes forming part of the Financial Statements for the year ended 31st March , 201913 Cash and bank balances

Cash and cash equivalents On current accounts 8,740,619 - Deposits with original maturity of less than three months 35,000,000 - Cash in hand 1,369 - Total 43,741,988 - Other bank balances-Current maturities

Deposits with maturity less than 12 months from reporting date 63,615,647 80,000,000 Total current maturities of other bank balances 63,615,647 80,000,000 Total Cash and bank balances 107,357,635 80,000,000

14 Other Current AssetsInterest Accrued But Not Due on Fixed Deposits 12,897,585 1,637,923 Advance tax [Net of provision for income tax Rs. 14,26,847 (31-March-2018 Rs. 7,40,19,057)] 4,049,998 1,909,999 North East Small Finance Bank Ltd. (Refer note 22) - 4,274,248 Balance with Government Authorities 316,565 - Advance to Vendors 40,452 - Pre-Paid Insurance 7,375 - Total 17,311,975 7,822,170

15 Revenue from operations 31-Mar-19 31-Mar-18Interest on Deposits 9,979,894 1,903,163 Total 9,979,894 1,903,163

16 Other IncomeShare Application Money Pending Allotment written back 46 - Total 46 -

17 Employee Benefit ExpensesEmployee Salaries & Incentives 1,567,121 2,935,832 Employee Gratuity (Refer note 28) 7,983 - Employee Leave Encashment 6,841 - Contribution to Provident Fund 33,215 - Total 1,615,160 2,935,832

18 Other Operating ExpensesRent, Rates and taxes 842,294 611,382 Repairs & Maintenance 27,592 - Prepaid Insurance 22,125 - Consultancy & Professional Fees Expenses 1,509,044 - Travelling and Conveyance Expenses 121,370 10,460 Auditor's remuneration (Refer note 18.1) 340,000 150,000 Meeting Expenses 733,674 85,000 Annual Custody Fees 123,751 - Telephone Expenses 14,282 - Listing Expenses 60,900 - General Expenses 4,452 343,500 Corporate Social Responsibility Expenses (Refer note 25) 1,932,397 1,036,489 Bank Charges 9,684 - Printing & Stationery 94,543 - Loss on sale of assets - 7,130 Miscellaneous Expenses 93,354 - Total 5,929,462 2,243,961

18.1 Auditor's remunerationStatutory Audit 300,000 150,000 Other services 40,000 - Total 340,000 150,000


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Notes forming part of Standalone Financial Statements for the year ended March 31, 2019

1. CORPORATE INFORMATIONRGVN (North East) Microfinance Limited is a Limited Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. RGVN (North East) Microfinance Limited was engaged in microfinance lending activities for providing financial services to poor specially Woman (referred as ‘members’) in the rural areas of North east who are organized as Self Help Groups (SHG) and Joint Liability Groups (JLG).

Pursuant to an agreement executed between the Company and North East Small Finance Bank Limited dated October 16, 2017, the business undertaking of RGVN (NE) Microfinance Limited was transferred to North East Small Finance Bank Limited w.e.f. October17, 2017. Consequent to transfer of business undertaking, the Company has applied for registration as NBFC - Core Investment Company to Reserve Bank of India and received the approval w.e.f. May 29, 2019.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1. Basis of Preparation The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared to comply in all material respects with accounting standards notified under section 133 of the companies Act , 2013, read together with paragraph 7 of the companies (Accounts) Rules, 2014 as amended and applicable guidelines as issued by the RBI in respect of NBFCs. The financial statements have been prepared under historical cost convention and on accrual basis. The accounting policies adopted in the preparation of financial statements are consistent with those used in the previous year.

2.2. Use of EstimatesThe preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liability) and the reported income and expenses during the period. The management believes that the estimates used in preparation of financial statements are prudent and reasonable. Future results could differ from actuals and the differences between the actual results and the estimates are recognized prospectively in which the results are known. Any revision to accounting estimates is recognized prospectively in current and future periods.

2.3. Cash Flow StatementThe Cash Flows are reported using Indirect Method whereby Profit/(Loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from Operating, Financing & Investing Activities are segregated based on available information.

Cash & Cash Equivalents (For the purpose of Cash Flow Statements) comprise cash in hand and cash at bank.

2.4. Property, Plant and Equipment Tangible & Intangible AssetsTangible assets, capital work in progress are stated at cost, less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price, borrowing costs, if capitalization criteria are met and any cost attributable to bringing the assets to its working condition for its intended use which includes taxes, freight, and installation and allocated incidental expenditure


during construction/ acquisition and exclusive Input tax credit (IGST/CGST and SGST) or other tax credit available to the Company.

When parts of an item of tangible assets have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Subsequent expenditure relating to tangible assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

2.5. Depreciation and AmortizationBased on management’s evaluation, useful life prescribed in Schedule II of the Companies Act, 2013 represent actual useful life of property, plant and equipment. The Company uses Straight Line Method and has used following useful lives to provide depreciation of different class of its property, plant and equipment.

Depreciation on addition to tangible assets is provided on pro-rata basis from the date the assets are ready for intended use. Depreciation on sale/discard from tangible assets is provided for upto the date of sale, deduction or discard of tangible assets as the case may be.

2.6. Impairment of AssetsThe carrying amount of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets’ net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

After impairment, depreciation/amortization is provided on the revised carrying amount of the asset over its remaining useful life.

2.7. InvestmentsAccounting treatmentInvestments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.

Current investments are carried in the financial statements at lower of cost or fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds

Particulars Year ended March 31, 2019 (Useful life In years)

Computer 3 Furniture and fixtures 10 Office equipment 3-5


is charged or credited to the Statement of Profit and Loss.

2.8 Revenue RecognitionRevenue is recognised to the extent, that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

i. Interest Income on loans given is recognized under the accrual basis.

ii. Interest income on fixed deposits with banks is recognized on a time proportion accrual basis taking into account the amount outstanding and the rate applicable.

iii. All other income is recognized on an accrual basis.

2.9 Retirement & Other Employee BenefitsThe Details of Employee benefits are as given below:

Defined Contribution PlanThe Company makes defined contribution to Government Employee Provident Fund which is recognized in the Statement of Profit and Loss on accrual basis. The Company has no further obligations under these plans beyond its monthly contributions.

Defined Benefit Plan- GratuityThe Company provides for retirement benefits in the form of Gratuity. Benefits payable to eligible employees of the company with respect to gratuity, a defined benefit plan is accounted for on the basis of an actuarial valuation as at the Balance Sheet date. In accordance with the Payment of Gratuity Act, 1972, the plan provides for lump sum payments to vested employees on retirement, death while in service or on termination of employment an amount equivalent to 15 days basic salary for each completed year of service. Vesting occurs upon completion of five years of service. The present value of such obligation is determined by the projected unit credit method and adjusted for past service cost and fair value of plan assets as at the balance sheet date through which the obligations are to be settled. The resultant actuarial gain or loss on change in present value of the defined benefit obligation or change in return of the plan assets is recognised as an income or expense in the Statement of Profit and Loss. The expected return on plan assets is based on the assumed rate of return of such assets.

Other long-term benefitsLeave encashment – Provision for compensated absences is made based on actuarial valuation as at the Balance Sheet date. The actuarial valuation is carried out using the Projected Unit Credit Method. Actuarial losses/ gains are recognized in the Profit and Loss Account in the year in which they arise.

2.10. Cash and cash equivalentsCash and cash equivalents include cash in hand, demand deposits with banks, other short term highly liquid investments with original maturities of twelve months or less.

2.11. Income taxesTax expense for the period comprises of current tax, deferred tax and Minimum alternate tax credit.

Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income-tax Act, 1961.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts, and there is an intention to settle the asset and the liability on a net basis.


The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the reporting date.

Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the period. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each balance sheet date and are written-down or written up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realised.

At each reporting date, the Company reassesses the unrecognized deferred tax assets, if any.

Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the Statement of Profit and Loss and shown as “MAT Credit Entitlement.” The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

2.12 Earning Per ShareBasic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period.

The weighted average numbers of equity shares are adjusted for events such as bonus issue, bonus element in the rights issue, share split and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares

2.13. Contingent Liabilities, Provisions and Contingent AssetsThe Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.

2.14. Segment ReportingThe Company is into single business segment and the principal geographical segment is in India. Accordingly, no separate disclosure is required to be made Accounting Standard-17, ‘Segment Reporting’.


RGVN(NORTHEAST)MICROFINANCELIMITEDNotesformingpartofstandalonefinancialstatementsfortheyearendedMarch31,2019Additional Information to the financial statements 19.Discontinued Operations During the financial year 2017-18, pursuant to the approval of the Shareholders and the Reserve Bank of India, the Company had transferred the business to North East Small Finance Bank Limited (NESFB) on a slump sale basis with effect from October 17, 2017 for a consideration of Rs. 183 Crores. (i) Cash flows attributable to Discontinued Operations (Rs.)

Particulars For the year ended March 31, 2019

For the year ended March 31, 2018

Operating Activities - 8,50,78,113 Investing Activities - (4,37,74,801) Financing Activities - 4,268,022,061

(ii) Profit /(Loss) before Tax from discontinued operations:

Particulars

31-Mar-19 31-Mar-18

Rs. Rs.

Continuing Operations

Revenue from Operation - 892,522,634

Other Income - 2,425,170

Total - 894,947,804

EXPENDITURE

Finance Cost - 523,145,173

Employee Benefits Expenses - 162,588,810

Other Operating Expenses - 38,259,205

Depreciation 7,027,457

Provisions - 27,059,607

Total - 758,080,252

Profit/(Loss) before Prior Period/Exceptional Items - 136,867,552

Expenses for Small Finance bank - 43,995,070

Prior Period Income - 10,000,000

Profit/(Loss) before gain on transfer of business attributable to discontinued operation and before tax

(a) - 102,872,482

Gain on transfer of business attributable to discontinued operation (b) - 52,013,836

Profit before tax from discontinued operations (a+b) - 154,886,318


RGVN(NORTHEAST)MICROFINANCELIMITEDNotesformingpartofstandalonefinancialstatementsfortheyearendedMarch31,201920. Additional information as far as applicable pursuant to part II of schedule III of the Companies Act, 2013

(Rs.)

Particulars 2018-19 2017-18

(i) Value of Imports NIL NIL

(ii) Expenditure in Foreign Currency NIL NIL

(iii) Earning in Foreign Currency NIL NIL

21. Earnings Per Share

(Rs.) Particulars 2018-19 2017-18

Net Profit after tax as per Profit and Loss A/c (256,289) 45,167,753

Weighted average equity -Basic (nos.) 70,338,091 64,556,357

Weighted average equity -Diluted (nos.) 70,338,091 64,556,357

Basic earnings per share (0.01) 0.70

Diluted earnings per share (0.01) 0.70

22.Related Party Disclosure

In accordance with the requirement of Accounting Standard (AS)- 18 on “Related Party Disclosures’ the names of the related parties where control exists /able to exercise significant influence along with the aggregate transactions/year end balances with them as identified and certified by the management are given below:

(a) Names of the Related Parties and Related Party Relationship

i. Parties that exercise Common Control: Relationship Name of Party Ultimate holding company - Holding company -

ii. Other related parties with whom transactions have been taken place during the period

Relationship Name of Party Key Management Personnel and their relative

1. Shiva Prasad Phukan, Chief Executive Officer

2. Richa Agarwal, CFO (from 15.02.2019 )

3. Nitul Boruah, Company Secretary (from 02.04.2018)

4. Pinak Bhattacharjee, CFO (from 17.01.2018 to 31.01.2019)

(a) Names of the Related Parties and Related Party Relationship

i. Parties that exercise Common Control:

Relationship Name of Party Ultimate holding company - Holding company -

ii. Other related parties with whom transactions have been taken place during the

period Relationship Name of Party Key Management Personnel and their relative 1. Shiva Prasad Phukan, Chief Executive

Officer 2. Richa Agarwal, CFO (from 15.02.2019

) 3. Nitul Boruah, Company Secretary

(from 02.04.2018) 4. Pinak Bhattacharjee, CFO (from

17.01.2018 to 31.01.2019)


RGVN(NORTHEAST)MICROFINANCELIMITEDNotesformingpartofstandalonefinancialstatementsfortheyearendedMarch31,2019

(b) Transactions with the Related Parties (Amount in Rs.)

Particulars 31 March 2019 31 March 2018 North East Small Finance Bank - - Income Interest Income on Term Deposits with NESFB 99,78,162 18,20,000 Asset Term Deposit with North East Small Finance Bank 22,492,000 120,000,000 Equity Investment - 1,830,000,000 Expenses Reimbursement of expenses - 25,725,752 Key Managerial Personnel-Expense Remuneration: Shiva Prasad Phukan 5,76,000 2,46,667 Richa Agarwal 80,944 - Nitul Boruah 2,41,874 - Pinak Bhattacharjee 3,50,000 70,000 Rupali Katila - 21,35,482 Pragati Mour - 3,25,977

(c) Outstanding balances (Amount in Rs.)

Particulars 31 March 2019 31 March 2018 Term Deposits North East Small Finance Bank 144,130,000 121,638,000 Current Liabilities North East Small Finance Bank 74,904,280 - Other Current Assets North East Small Finance Bank - 42,74,247

23. Capital Ratios

Disclosure Pursuant to Reserve Bank of India Notification DNBS.200/CGM (PK)-2008 dated 1st August 2008.

Capital to Risk Asset Ratio

Particulars 2018-19 2017-18

Tier I Capital 11,97,53,023 12,48,95,548

Tier II Capital - -

Total 11,97,53,023 12,48,95,548

Total Risk Weighted Assets 4,37,04667 2,62,37,583

Capital Ratios: - -

Tier I Capital as a percentage of Total Risk Weighted Assets (%)

274% 476%

Tier II Capital as a percentage of Total Risk Weighted Assets (%)

- -

TOTAL CRAR (%) 274% 476%


RGVN(NORTHEAST)MICROFINANCELIMITEDNotesformingpartofstandalonefinancialstatementsfortheyearendedMarch31,2019 Note:

Pursuant to an agreement executed between the Company and North East Small Finance Bank Limited dated October 16, 2017, the business undertaking including all the assets and liabilities of RGVN (NE) Microfinance Limited was transferred to North East Small Finance Bank Limited on slump sale basis w.e.f. October17, 2017. As such RGVN (NE) Micro Finance Limited as on March 31, 2019 had no Loans & Advances (Microfinance Assets) in its books.

24. Exposure to Real Estate Sector, Both Direct & Indirect

The Company does not have any direct or indirect exposure to the Real Estate Sector as at March 31, 2019 and March 31, 2018.

25. Corporate Social Responsibility

For the Financial 2018-19, the company is not required under Section 135 of the Companies Act 2013 to incur CSR expenditure. The unspent amount of Rs.1,932,397 pertaining to earlier year has been spent in current year.

26. The Company did not have any dues to any micro, small and medium enterprises as defined under Micro, Small and Medium Enterprise Development Act 2006 at any point during the year that were outstanding for a period of more than 45 days from the date of acceptance. 27. Contingent Liabilities

(Amount in Rs.) Particulars 31 March, 2019 31 March, 2018

Claims against the Company not acknowledged as debt – Service Tax Demand*

19,769,122 -

*Pursuant to the transfer of business, liability relating to service tax matters of the Company was disclosed as contingent liability in the financial statements of the wholly owned subsidiary of the Company, North East Small Finance Bank Limited for the year ended March 31, 2018 amounting to Rs.19,769,122. However, as Service Tax Authorities acknowledges this Liability as pertaining to the Company and the Company is bound to honor this liability as per Service Tax Regulations, the Governing Board of Company has decided to disclose the demand amounting to Rs. 19,769,122 as Contingent liabilities in these financial statements for the year ended 31st March 2019.

28. In accordance with the Accounting Standard-15 'Employee Benefits', the Company has calculated the various benefits provided to employees as under:

A. Defined contribution plans Retirement benefit in the form of provident fund is a defined contribution scheme. The Company

has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.

During the period the Company has recognized the following amounts in the Statement of profit and

loss:-

Particulars 31st March, 2019 31st March, 2018 Employers Contribution to Provident fund 33,215 -

Total 33,215 -



B. Defined benefit plans and Other long-term benefits a) Contribution to gratuity funds – Employee’s gratuity fund (Defined benefit plan) b) Leave Encashment (Other long-term benefit) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. This is an unfunded plan. This being the first year of actuarial valuation, corresponding comparative figures of previous year is not provided. In accordance with Accounting Standard 15, an actuarial valuation was carried out in respect of the aforesaid defined benefit plans based on the following assumptions.

i. Actuarial assumptions

Particulars Gratuity

31 March 2019 Discount rate (per annum) 7.70% Expected Rate of increase in compensation levels

5.00%

Expected Rate of return on plan assets.

NA

Mortality Rate 100% Retirement age 60 Years Withdrawal Rate(based on age)

Upto 30 Years 5.00% 31-44 Years 6.00% Above 44 Years 12.00%

The discount rate assumed is 7.7% per annum which is determined by reference to market yield at the Balance Sheet date on government bonds. The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

ii. Changes in the present value of the defined benefit obligation in respect of Gratuity are as

follows:

Particulars 31 March 2019 Present value obligation as at the beginning of the year

-

Interest cost - Current service cost(Vested Employees) 7,231 Past service cost(Un-Vested Employees) 752 Benefits paid - Acquisition cost - Actuarial loss/(gain) on obligations - Present value obligation as at the end of the year 7,983

iii. Changes in the fair value of plan assets As the Company’s Gratuity obligation is unfunded, disclosures related to plan assets and its reconciliation to present value of defined benefit obligation are not applicable.

iv. Expenses recognized in Statement of profit and loss



Particulars 31 March 2019 Current service cost (including risk premium for fully insured benefits)

7,231

Past service cost(Un-Vested Employees) 752 Interest cost - Deficit in acquisition cost recovered - Expected return on plan assets - Net actuarial loss/(gain) recognized during the year - Total expense recognised in Statement of profit and loss.

7,983

29. In accordance with the RBI notification no. RBI/DNBR/2016-17/44- Master Direction DNBR. PD.007/03.10.119/2016-17 dated September 1, 2016- Master Direction – Non Banking Financial Company- Non Systemically Important Non Deposit Taking Company(Reserve Bank) Direction, 2016 (the “Master Direction”), refer Annexure-1 for additional NBFC disclosure. 30. The Company is operating into single business as well as geographical segment and hence no separate segment information has been disclosed. 31. Previous year figures have been regrouped/ reclassified, where necessary, to conform to this year’s classification. 32. The figures for previous year were audited by a firm of Chartered Accountants other than MSKA & Associates. For MSKA & Associates For and on behalf of the Board of Directors of Chartered Accountants RGVN (NORTH EAST) MICROFINANCE LIMITED ICAI Firm Registration No. 105047W Kaberi Bhuyan Abhijit Sharma Director Director Puneet Agarwal Din: 07001635 Din: 08185287 Partner Membership No.064824 UDIN:

Richa Agarwal S. P Phukan Chief Financial Officer Chief Executive Officer Nitul Boruah Place: Guwahati Company Secretary Date: September 20, 2019 M.No: ACS 45582



Annexure-1 Schedule to the Balance Sheet as on March 31, 2019

Assets side : Amount outstanding

(2) Break-up of Loans and Advances including bills

receivables [other than those included in (3) below] :

(a) Secured (b) Unsecured

Nil Nil

(3) Break up of Leased Assets and stock on hire and other assets counting towards asset financing activities

Particulars (Rs in Lacs)

Liabilities side :

(1) Loans and advances availed by the NBFC inclusive of interest accrued thereon but

not paid:

(a) Debentures : Secured : Unsecured (other than falling within the meaning of public

deposits*)

(b) Deferred Credits (c) Term Loans (d) Inter-corporate loans and borrowing (e) Commercial Paper (f) Other Loans (specify nature) * Please see Note1 below

Amount outstanding

Nil

Nil Nil Nil Nil Nil Nil

Amount Overdue Nil








Nil Nil



Liabilities side :


not paid:


deposits*)



Nil


Amount Overdue Nil








Nil Nil



Liabilities side :


not paid:


deposits*)



Nil


Amount Overdue Nil








Nil Nil



Liabilities side :


not paid:


deposits*)



Nil


Amount Overdue Nil




(i) Lease assets including lease rentals under

sundry debtors :

(a) Financial lease (b) Operating lease (ii) Stock on hire including hire charges under

sundry debtors:

(a) Assets on hire (b) Repossessed Assets (iii) Other loans counting towards AFC activities (a) Loans where assets have been repossessed

(b) Loans other than (a) above

The company does not have any leased assets and stock on hire in the current and previous years.

(4) Break-up of Investments : Current Investments : 1. Quoted : (i) Shares : (a) Equity (b) Preference (ii) Debentures and

Bonds (iii) Units of mutual funds

(iv) Government Securities (v) Others (please specify) 2. Unquoted : (i) Shares : (a) Equity

Nil

(b) Preference

(ii) Debentures and Bonds



(iii) Units of mutual funds (iv) Government Securities (v) Others (please specify) Long Term investments : 1. Quoted : (i) Shares : (a) Equity (b) Preference (ii) Debentures and

Bonds (iii) Units of mutual funds (iv)

Government Securities (v) Others

(please specify)

2. Unquoted : (i) Shares : (a) Equity-293,384,395 shares of NESFB of Rs. 10 each (b) Preference (ii) Debentures and

Bonds (iii) Units of mutual funds

(iv) Government Securities (v) Others (please specify)

Nil 29,338

29,338

(5) Borrower group-wise classification of assets financed as in (2) and (3) above : Please see Note 2 below

Category Amount net of provisions

Secured Unsecured Total

1. Related Parties **

(a) Subsidiaries Nil Nil Nil

(b) Companies in the same group Nil Nil Nil

(c) Other related parties Nil Nil Nil

2. Other than related parties Nil Nil Nil

Total Nil Nil Nil



(6) Investor group-wise classification of all investments (current and long term)

in shares and securities (both quoted and unquoted): Please see note 3

below

Category Market Value / Break up or fair value or NAV

Book Value (Net of Provisions)

1. Related Parties ** Nil Nil

(a) Subsidiaries- 29,3384,995 shares of NESFB of Rs.10 each

34,569 29,338

(b) Companies in the same group Nil Nil

(c) Other related parties Nil Nil

2. Other than related parties Nil Nil

Total Nil Nil

** As per Accounting Standard of ICAI (Please see Note 3)

(27) Other information

Particulars Amount

(i) Gross Non-Performing Assets

(a) Related parties Nil

(b) Other than related parties Nil

(ii) Net Non-Performing Assets

(a) Related parties Nil

(b) Other than related parties Nil

(iii) Assets acquired in satisfaction of debt Nil

Notes: 1. As defined in paragraph 2(1)(xii) of Chapter-2 of Master Directions. 2. Provisioning norms shall be applicable as prescribed in the Master Directions. 3. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long term or current in (4) above.


RGVN (NORTH EAST) MICROFINANCE LIMITED (CIN-U65923AS2008PLC008742);

REGD. OFF: HOUSE NO. 02, PADMA PATH, 8TH BYELANE, ZOO ROAD TINIALI, R.G BARUAH ROAD GUWAHATI, ASSAM, KAMRUP (M) - 781024

FORM AOC-1

(Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries/associate

companies/joint ventures

Part “A”: Subsidiaries (Information in respect of each subsidiary to be presented with amounts in Rs.) Sl. No. Particulars Details

1. Name of the subsidiary NORTH EAST SMALL FINANCE BANK LIMITED

2. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

01.04.2018 TO 31.03.2019

3. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries

N.A

4. Share capital 29,33,849,950 5. Reserves & surplus 592,960,878 6. Total assets 17,699,177,880 7. Total Liabilities 17,699,177,880 8. Investments 1,653,052,687 9. Turnover/Revenue from Operation 2,871,019,460 10. Profit before taxation 552,051,970 11. Provision for taxation

182,644,431 12. Profit after taxation 369,407,539 13. Proposed Dividend N.A 14. % of shareholding 100%

Notes: The following information shall be furnished at the end of the statement: 1. Names of subsidiaries which are yet to commence operations 2. Names of subsidiaries which have been liquidated or sold during the year.

Part “B”: Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures- N.A

Sl. No.

Particulars Details

1. Name of associates 2. Latest audited Balance Sheet Date 3. Shares of Associateheld by the company at the year end I Amount of Investment in Associates II Extend of Holding% 4. Description of how there is significant influence 5. Reason why the associate is not consolidated 6. Net worth attributable to shareholding as per latest audited

Balance Sheet

7. Profit/Loss for the year I Considered in Consolidation II Not Considered in Consolidation 1. Names of associates or joint ventures which are yet to commence operations. 2. Names of associates or joint ventures which have been liquidated or sold during the year.


Note: This Form is to be certified in the same manner in which the Balance Sheet is to be certified.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS RGVN (NORTH EAST) MICROFINANCE LIMITED Dr. Abhijit Sharma CA Kaberi Bhuyan Director Director DIN-08185287 DIN-07001635 Place-Guwahati Date-20.09.2019


INDEPENDENT AUDITOR’S REPORT To the Members of RGVN (North East) Microfinance Limited.Report on the Audit of the Consolidated Financial Statements

Qualified Opinion We have audited the accompanying consolidated financial statements of RGVN (North East) Microfinance Limited. (hereinafter referred to as the “Holding Company”) and its subsidiary (Holding Company and its subsidiary together referred to as “the Group”), which comprise the consolidated Balance Sheet as at March 31, 2019, and the consolidated statement of Profit and Loss and the consolidated cash flows Statement for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies (hereinafter referred to as “the consolidated financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of their consolidated state of affairs of the Group at March 31, 2019, consolidated profit and its consolidated cash flows for the year then ended.

Basis for Qualified Opinion a. During the year, the Subsidiary Company (“the Bank”) migrated from old system to Core Banking System (CBS) for 149 branches at different dates. Further, we observed that the calculation of ‘Days Past Due’ was not accurate for existing loans in CBS post migration. This has led to incorrect classification of advances by the CBS. Consequently, the Non Performing Asset calculation was done manually by the Bank. In view of this we cannot comment on classification of advances, adequacy of provision and its consequential impact arising thereof for recognition of interest income on Non Performing Assets.

b. During the performance of audit of internal financial controls with respect to financial statements for the year ended March 31, 2019 of the Bank, we have come across certain material weaknesses in the design and operating effectiveness of both manual and automated controls, which need to be strengthened to ensure appropriate financial reporting.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in India in terms of the Code of Ethics issued by Institute of Chartered Accountants of India (“ICAI”) and the relevant provisions of the Act and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Information Other than the Consolidated Financial Statements and Auditor’s Report ThereonThe Holding Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report but does not include the consolidated financial statements and auditor’s report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.


In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. As described in the Basis for Qualified Opinion section above, we are unable to conclude whether or not the other information is materially misstated with respect to this matter.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial StatementsThe Holding Company’s Board of Directors is responsible for the preparation and presentation of these consolidated financial statements in term of the requirements of the Act that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The respective Board of Directors of the companies included in the Group are responsible for overseeing the financial reporting process of the Group.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing (“SAs”) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

We give in “Annexure A” a detailed description of Auditor’s responsibilities for Audit of the Consolidated Financial Statements.

Other Matters a.The consolidated financial statements of the Group for the year ended March 31, 2018, were audited by another auditor whose report dated June 30, 2018 expressed an unmodified opinion on those statements.

Report on Other Legal and Regulatory Requirements 1.As required by Section 143(3) of the Act, we report, to the extent applicable, that: a.We have sought and, except for the possible effect of the matter described in the Basis for


Qualified Opinion above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.

b.Except for the effects of the matter described in Basis for Qualified Opinion section above, in our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.

c. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.

d. Except for the effects of the matter described in Basis for Qualified Opinion section above, in our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. The matter described in Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Group.

f. On the basis of the written representations received from the directors of the Holding Company and Subsidiary Company as on 31st March, 2019 taken on record by the Board of Directors of the respective companies, none of the directors of the Group companies is disqualified as on 31st March, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.

g. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion.

h. With respect to the adequacy of internal financial controls with reference to financial statements of the Group and the operating effectiveness of such controls, refer to our separate report in “Annexure B”.

i. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group– Refer Note 28 to the consolidated financial statements.

ii. The Group did not have any material foreseeable losses on long-term contracts including derivative contracts.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company, and its subsidiary company, incorporated in India.

2. As required by The Companies (Amendment) Act, 2017, in our opinion, according to information, explanations given to us, the remuneration paid by the Group to its directors is within the limits laid prescribed under Section 197 of the Act and the rules thereunder.


Puneet AgarwalPartnerMembership No. 064824UDIN: Place : GuwahatiDate : September 20, 2019


ANNEXURE A- TO THE INDEPENDENT AUDITOR’S REPORT ON EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF RGVN (NORTH EAST) MICROFINANCE LIMITED.Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the consolidated financial statements of which we are the independent auditors. For the other entities included in the consolidated financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

We communicate with those charged with governance of the Holding Company and such other entities included in the consolidated financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.


Puneet AgarwalPartnerMembership No. 064824UDIN:



ANNEXURE B- TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF RGVN (NORTH EAST) MICROFINANCE LIMITED.[Referred to in paragraph 2(h) under ‘Report on Other Legal and Regulatory Requirements’ in the Independent Auditors’ Report of even date to the Members of RGVN (North East) Microfinance Limited on the Financial Statements for the year ended March 31, 2019]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended March 31, 2019, we have audited the internal financial controls with reference to financial statements of RGVN (North East) Microfinance Limited (hereinafter referred to as “the Holding Company”) and its subsidiary company which are companies incorporated in India, as of that date.

Management’s Responsibility for Internal Financial ControlsThe respective Board of Directors of the Holding company and its subsidiary company which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control with reference to financial statements criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors’ ResponsibilityOur responsibility is to express an opinion on the internal financial controls with reference to financial statements of the Holding company and its subsidiary company which are companies incorporated in India, based on our audit conducted in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the ICAI and the Standards on Auditing prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls.

Because of the matter described in Disclaimer of Opinion paragraph below, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on internal financial controls with reference to financial statements of the Holding company and its subsidiary company which are companies incorporated in India.

Meaning of Internal Financial Controls With reference to Financial StatementsA company’s internal financial control with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial


statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Disclaimer of OpinionWe observed the following material weakness with respect to internal control over financial reporting in the Subsidiary Company during the year;

a) Ineffective information technology general controls;b) Migration of incorrect balances from old system to Core Banking System which was rectified post year end;c) Absence of monthly preparation of bank reconciliation statements which was rectified post year end; andd) Incorrect classification of non performing asset by the core banking system for existing loans

In view of the above, the system of internal financial controls with reference to financial statements with regard to the Holding company and its subsidiary company which are companies incorporated in India, were not made available to us to enable us to determine if the Holding company and its subsidiary company which are companies incorporated in India have established internal financial control with reference to financial statements and whether such internal financial controls were operating effectively as at March 31, 2019.

We have considered the disclaimer reported above in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements of the Company, and the disclaimer has affected our opinion on the consolidated financial statements of the Company and we have issued a qualified opinion on the consolidated financial statements.

For MSKA & AssociatesChartered AccountantsICAI Firm Registration No. 105047W

Puneet AgarwalPartnerMembership No. 064824UDIN:Place: GuwahatiDate: September 20, 2019


Amount in Rs.

Particulars Notes 31-Mar-19 31-March-18

I. EQUITY AND LIABILITIES

1. Shareholders' fundsa. Share capital 3 70,33,80,910 70,33,80,910 b. Reserves and surplus 4 2,91,11,79,485 2,53,16,24,769 c. Minority interest - 10,567

3,61,45,60,395 3,23,50,16,246

2. Share Application Money Pending allotment - 143

3. Non-current liabilities a. Long-term borrowings 5 11,00,98,75,188 10,76,91,10,652 b. Long term provisions 6 7,70,17,392 10,42,08,898

11,08,68,92,580 10,87,33,19,550 4. Current liabilities

a. Trade Payablesa. total outstanding dues of micro enterprises and small enterprises; and - - b. total outstanding dues of creditors other than micro enterprises and small enterprises 7 18,21,14,316 6,91,36,526

b. Other Current Liabilities 8 2,75,22,23,070 1,40,37,02,518 c. Short-term Provisions 9 1,092 4,63,19,008

2,93,43,38,478 1,51,91,58,052

17,63,57,91,453 15,62,74,93,991

II. ASSETS

1. Non-current assetsa. Property, Plant and Equipment

i. Tangible Assets 10 16,59,36,560 8,20,23,849 ii. Intangible assets 10 3,30,57,521 3,50,80,054 iii. Capital Work In Progress - 23,18,334

b. Non-Current Investments 11 24,21,27,500 - c. Deferred tax assets (Net) 12 6,18,94,787 5,54,27,865 d. Other Non-Current assets 13 - 9,59,79,939

50,30,16,368 27,08,30,041

2. Current assetsa. Current Investment 11 1,41,09,25,687 1,69,10,23,681 b. Cash and Bank Balances 14 1,58,39,16,734 2,64,22,18,209 C. Loans and advances 15 13,85,63,37,673 10,88,68,79,282 d. Other current assets 16 28,15,94,991 13,65,42,778

17,13,27,75,085 15,35,66,63,950

17,63,57,91,453 15,62,74,93,991 Summary of significant accounting policies 1-2


Puneet Agarwal Abhijit Sharma S.P.PhukanPartner Chief Executive OfficerM.No. 064824

Place: Guwahati Nitul Boruah Richa AgarwalDate: September 20, 2019 Company Secretary Chief Financial Officer

M.No: ACS 45582

DIN: 08185287Director

The accompanying notes are an integral part of the consolidated financial statements


Consolidated Balance Sheet as at 31st March 2019

Total

Total


Amount in Rs. Particulars Notes 2018-19 2017-18

I. Revenue from Operations 17 2,86,60,31,487 1,93,24,10,769

II. Other Income 18 49,94,019 92,39,553 III. Total Revenue (I+II) 2,87,10,25,506 1,94,16,50,322

IV. ExpensesEmployee Benefit Expenses 19 53,13,22,643 32,62,80,941 Finance Cost 20 1,27,02,01,125 1,05,13,00,202 Depreciation and amortization 10 3,61,11,454 1,59,38,190 Other Expenses 21 46,85,15,982 16,29,51,534 Total Expenses 2,30,61,51,204 1,55,64,70,867

V. Profit before exceptional and extraordinary items and tax (III - IV) 56,48,74,302 38,51,79,455 VI. Exceptional and Extraordinary items

Expenses for Small Finance bank 22 - 4,39,95,070 Prior Period Gain 23 - 1,00,00,000

- 3,39,95,070

VII. Profit before tax (V - VI) 56,48,74,302 35,11,84,385

VIII. Tax expense:- Current Tax 19,02,28,099 15,69,97,061 -Tax Expenses of Earlier years 15,58,409 - - Deferred tax expense/(benefit) (64,66,922) (2,70,25,126)

Total Tax Expenses 18,53,19,586 12,99,71,935

IX. Profit/(Loss) for the year (VII-VIII) 37,95,54,716 22,12,12,450 Profit Attributable to minority Shareholders - 4,567 Profit Attributable to RGVN (North East) Microfinance Ltd 37,95,54,716 22,12,07,883

X. Earnings per Equity Share(a) Basic 5.40 3.43 (b) Diluted 5.40 3.43

Summary of significant accounting policies 1-2


Puneet Agarwal S.P.PhukanPartner Chief Executive OfficerM.No. 064824

-

- Place: Guwahati Richa AgarwalDate: September 20, 2019 Company Secretary Chief Financial Officer

M.No: ACS 45582

DIN: 08185287

Abhijit Sharma

Nitul Boruah


Consolidated Statement of Profit and Loss for the year ended 31st March 2019


Director


Amount in Rs.

CASH FLOW STATEMENT FOR THE YEAR ENDED 2018-19 2017-18

CASH FLOW FROM OPERATING ACTIVITIES

Net Profit/(Loss) 56,48,74,302 38,51,79,455 Add: Non Cash Expenditure:

Provision written off 8,72,93,563 2,63,46,918 Depreciation 3,61,11,454 1,59,38,190 Liability written back (6,046) - Loss/(gain) on sale of Investments (6,05,671) (1,21,234) Prior Period Gain - (1,00,00,000) Operating Profit before Working Capital Changes 68,76,67,602 41,73,43,329

Adjustments for:(Increase)/Decrease in Current Assets (8,95,87,428) (4,40,20,873) (Increase)/Decrease in Advances (3,05,38,31,021) (4,00,50,45,005) (Decrease)/Increase in Trade Payables 11,29,77,790 3,01,09,758 (Decrease)/Increase in Current Liabilities 1,34,85,20,552 (1,88,40,62,403) (Decrease)/Increase in Provisions (2,71,91,506) 2,39,06,973 Cash generated from Operations: (1,02,14,44,011) (5,46,17,68,221) Income tax paid (29,35,70,301) (10,67,19,389) Net Cash Flow from Operating Activities (A) (1,31,50,14,312) (5,56,84,87,610)

CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets (Net) (11,80,01,632) (11,94,69,332) Maturity proceeds from deposits 19,07,85,000 8,40,00,000 Purchase of Investments 3,79,70,494 (1,69,10,23,681) Investment in deposits 9,59,79,939 (12,45,84,921) Net Cash Flow from Investing Activities (B) 20,67,33,801 (1,85,10,77,934)

CASH FLOW FROM FINANCING ACTIVITIES:Increase/(Decrease) in Share Capital & securities premium - 76,30,20,163 Increase/(Decrease) in Borrowings (Net) 24,07,64,536 7,23,17,18,819 Net Cash Flow from Financing Activities (C) 24,07,64,536 7,99,47,38,982

Net Increase or (Decrease) in Cash or Cash Equivalents (A+B+C) (86,75,15,975) 57,51,73,438

Opening Cash and Cash Equivalents 2,28,23,42,709 1,70,71,69,271 Closing Cash and Cash Equivalents at the end of the year 1,41,48,26,734 2,28,23,42,709 Break up of Cash and Cash Equivalent

Cash in hand 9,28,77,357 1,08,98,160 Balance with Reserve Bank of India 63,16,82,217 28,80,34,907 Balance with other Banks* 40,52,67,160 1,98,34,09,642 Deposits with Original maturity of less than three months 3,50,00,000 - Money at Call and short notice 25,00,00,000 -

1,41,48,26,734 2,28,23,42,709

*Fixed deposit of Rs. 169,090,000 (Previous year Rs. 279,875,000) held under lien, not considered as Cash and Cash Equivalents.

Summary of significant accounting policies 1-2

Consolidated Cash Flow Statement for the period ended 31st March 2019



Notes

2. Figures in bracket indicate cash outflow

As per our report on even date attached For and on behalf of the Board of Directors ofFor MSKA & Associates RGVN (NORTH EAST) MICROFINANCE LIMITEDChartered AccountantsFRN: 105047W Abhijit Sharma S.P.Phukan

Director Chief Executive OfficerDIN: 08185287

Puneet Agarwal Nitul Boruah Richa AgarwalPartner Company Secretary Chief Financial Officer M.No. 064824 M.No: ACS 45582



1. The above cash flow Statement has been prepared under the indirect method as set out in Accounting Standard 3- "Cash Flow Statement"


Notes forming part of the Consolidated Financial Statements as at and for the year ended 31st March, 20192018-19 31-Mar-18

3 Share Capital - Authorized:

85,00,00,000 85,00,00,000 15,000,000 Preference Share of Rs.10 Each 15,00,00,000 15,00,00,000

1,00,00,00,000 1,00,00,00,000

Issued, Subscribed and paid up:70,33,80,910 70,33,80,910

70,33,80,910 70,33,80,910

(a)

Equity sharesNumber - Number Amount

Shares at the beginning of the year 7,03,38,091 70,33,80,910 5,95,12,780 59,51,27,800 Add: Shares issued during the year - - 1,08,25,311 10,82,53,110 Outstanding at the end of the year 7,03,38,091 70,33,80,910 7,03,38,091 70,33,80,910

There was no issue of bonus shares/buy back of shares during the year and in the previous year.

(b) Rights, preferences, restrictions of Equity Share Capital

(c)

Equity shares

% of holding No.of shares % of holding No.of sharesDia Vikas Capital (p) Ltd 19.98% 1,40,50,962 19.98% 1,40,50,962 Nordic Microfinance Initiative Fund III KS 15.02% 1,05,61,682 15.02% 1,05,61,682

SIDBI Trustee Company Limited A/c Samridhi Fund 12.19% 85,72,653 12.19% 85,72,653

Oiko Credit Ecumenical Development Cooperative Society

10.91% 76,73,469 10.91% 76,73,469

RNT Associates Private Limited 12.48% 87,78,583 12.48% 87,78,583

Small Industries Development Bank of India-IMEF7.11%

50,00,000 7.11%

50,00,000

Pi Ventures LLP 6.52% 45,84,925 6.52% 45,84,925 Total 84.21% 5,92,22,274 84.21% 5,92,22,274

(70,338,091 Equity Shares of Rs.10/- each fully paid up in cash )



Particulars

85,000,000 Equity Share of Rs.10 Each

Total

Name of the ShareholderMarch 31,2019 March 31,2018

Total

Reconciliation of the number of shares outstanding at the beginning and at the end of the year:

March 31,2019 March 31,2018

The Company has only one class of equity shares of the par value of Rs. 10 each. Each shareholder is entitled to one vote per share held.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Details of shareholders holding more than 5% shares in the company


4 Reserves and Surplus 31-Mar-19 31-Mar-184.1 Share premium

Balance at the beginning of the year 1,69,20,97,203 1,03,73,30,150 Add : Additions during the year - 65,47,67,053

Closing balance (a) 1,69,20,97,203 1,69,20,97,203 - -

4.2 Statutory reserveBalance at the beginning of the year 19,42,49,065 12,93,83,662 Add : Additions during the year 9,23,51,745 6,48,65,403

Closing Balance (b) 28,66,00,810 19,42,49,065 4.3 Surplus in the statement of Profit & Loss

Balance at the beginning of the year 64,52,78,501 48,89,36,018 Add: Additions during the year 37,95,54,716 22,12,07,886

1,02,48,33,217 71,01,43,904 Less: Adjustment / reversal during the year

Transfer to Statutory Reserve 9,23,51,745 6,48,65,403 Transfer to Investment Fluctuation Reserve 2,82,18,504

Closing Balance (c) 90,42,62,968 64,52,78,501 4.4 Investment Fluctutation Reserve

Balance at the beginning of the year - - Add: Additions during the year 2,82,18,504 -

Closing Balance (d) 2,82,18,504 - Total (a+b+c+d) 2,91,11,79,485 2,53,16,24,769

5 Long-term Borrowings (Refer Note No.. 40) 31-Mar-19 31-Mar-18Secured

a Non-Convertible Reedemable Debentures (Refer note below) 98,00,00,000 1,80,59,33,332 b Term Loan

From Banks 36,95,27,833 1,92,99,28,680 From other Institutions and Agencies 65,95,19,853 1,52,73,28,900

Less: Current maturities of long-term debt (from Banks, NBFCs and DFIs) - 4,49,23,347

Unsecureda Term Loan

From Banks 29,93,96,302 89,81,54,054 From other Institutions and Agencies 8,70,14,31,200 4,65,26,89,033

Total 11,00,98,75,188 10,76,91,10,652

6 Long Term Provisions 31-Mar-19 31-Mar-18

Provision for Standard Assets 5,54,53,458 8,95,52,771 Provision for Leave Enchasement 2,15,63,934 1,46,56,127 Total 7,70,17,392 10,42,08,898

7 Trade Payables 31-Mar-19 31-Mar-18a. total outstanding dues of micro enterprises and small enterprises; and - -

b. total outstanding dues of creditors other than micro enterprises and small enterprises 18,21,14,316 6,91,36,526

18,21,14,316 6,91,36,526

8 Other current liabilities 31-Mar-19 31-Mar-18a Current maturities of long term-debt - 4,49,23,347 b Interest accrued but not due on borrowings 21,45,03,050 10,08,77,727 c Statutory liabilities 25,99,044 47,96,534 d Deposits

Demand Deposit from Others 3,43,05,730 21 Savings Bank Deposits 55,44,11,314 3,93,36,607 Term Deposits 1) From Banks 20,21,85,160 57,78,61,363 2) From Others 1,74,42,18,772 63,59,06,919

Total 2,75,22,23,070 1,40,37,02,518

9 Short-term Provisions 31-Mar-19 31-Mar-18 Provisions for Income Tax (Net of Advance tax of Rs. 7,61,57,915 as on 31st March 2018) - 4,63,19,008

Provision for Leave Encashment 1,092 - 1,092 4,63,19,008


Notes forming part of the Consolidated Financial Statements as at and for the year ended 31st March, 2019

Note: During the current financial year NESFB has repaid all the listed Non convertible reeedemable debentures, accordingly Regulation 52 (1) of SEBI (LODR), regulations 2015 is not applicable to the Bank.

The Group has not received any information from vendors regarding their status under the Micro, Small and Medium EnterprisesDevelopment Act, 2006 and accordingly, there are no amounts unpaid as at the year end.





11 Investments 31-Mar-19 31-Mar-18Non-Current (Quoted)

Investment in Government Securities 24,21,27,500 - 24,21,27,500 -

- Current (Quoted)

Investment in Government Securities (Treasury Bills) 1,11,08,29,162 1,69,10,23,681 Investment in Mutual Funds

a. DSP Liquid Fund - Direct Fund-Growth (Units : 59,114.239) 15,00,00,000 - b. ICICI Prudential Liquid Fund - Direct Fund-Growth (Units : 5,73,389.972 15,00,96,525 -

1,41,09,25,687 1,69,10,23,681 Total 1,65,30,53,187 1,69,10,23,681 Aggregate value of Quoted Investments 1,65,30,53,187 1,69,10,23,681

11.1 Aggregate market value of Quoted Investments is Rs. 1,67,78,59,039 (PY : Rs. 1,69,10,23,681)

12 Deferred Tax Assets 31-Mar-19 31-Mar-18

On timing differences between WDV of assets as per IT Act and Companies Act, 2013

6,022 -

On expenses allowable in future on payment basis 6,18,88,765 5,54,27,865 Total 6,18,94,787 5,54,27,865

13 Other Non-Current Assets 31-Mar-19 31-Mar-18 Security Deposits - 30,51,835 Term Deposits (Deposits with maturity more than 12 months from reporting date)

- 9,29,28,104

Total - 9,59,79,939

5,59,79,939

14 Cash and Bank Balances 31-Mar-19 31-Mar-18

Cash and Cash Equivalents Cash in hand 9,28,77,357 1,08,98,160 Balance With Reserve Bank of India 63,16,82,217 28,80,34,907 Deposits with Original maturity of less than three months 3,50,00,000 -

Balances with Banks - - In Current Accounts 38,52,66,660 32,34,09,642 In Other Deposit Accounts* 18,90,90,500 2,01,98,75,500

Money at Call and short notice - i. with Banks - - ii. With other institutions 25,00,00,000 -

Total 1,58,39,16,734 2,64,22,18,209

2,68,22,18,209 * Include fixed deposit of ₹ 16,90,90,000 (Previous year ₹ 27,98,75,500) held under lien 4,00,00,000

15 Loans and Advances 31-Mar-19 31-Mar-18

Unsecured, considered goodLoans to Microfinance customers 13,80,41,47,353 10,85,29,40,077 Loan to Branch premises owners - 48,33,471 Other Loans 1,65,99,984 1,65,99,984 Cash Credit, Overdraft and Loans repayable on demand 2,12,52,248 - Staff Loans and Advances 1,43,38,088 1,25,05,750

Total 13,85,63,37,673 10,88,68,79,282

16 Other Current Assets 31-Mar-19 31-Mar-18

Interest Accrued but Not Due on Fixed Deposits 65,04,465 9,78,11,830 Advance Tax (Net of Provision for income tax of Rs. 18,66,12,060) 5,54,64,785 - Balance with Government Authorities 3,16,566 Gratuity 2,80,45,702 1,73,43,499 Others 19,12,63,473 2,13,87,449 Total 28,15,94,991 13,65,42,778




17 Revenue from operations 2018-19 2017-18Interest Income 2,63,91,71,896 1,77,87,35,732 Administrative Charges 12,18,21,461 11,24,83,960 Other Financial Services 10,50,38,130 4,11,91,077 Total 2,86,60,31,487 1,93,24,10,769

18 Other Income 2018-19 2017-18Miscellanous Receipts 43,88,348 78,56,602 Interest on employee loans - 11,63,507 Recovery of Prior Period Written off amount - 98,210 Profit on Sale of Investments 6,05,671 1,21,234 Total 49,94,019 92,39,553

19 Employee Benefit Expenses 2018-19 2017-18 Employee Salaries & Incentives 46,97,17,720 29,35,32,216 Contribution to Provident Fund and others 3,01,11,466 1,53,37,893 Leave Encashment 99,80,251 60,83,386 Gratuity Expenses 89,43,157 41,67,075 Staff Welfare Expenses 1,25,70,049 71,60,371 Total 53,13,22,643 32,62,80,941

20 Finance Cost 2018-19 2017-18

Interest Expenses 1,24,33,37,732 1,00,93,52,227 Other Borrowing Costs 2,68,63,393 4,19,47,975 Total 1,27,02,01,125 1,05,13,00,202

21 Other Expenses 2018-19 2017-18 Travelling and Conveyance Expenses 2,50,66,146 1,60,57,616 Rent, Rates and taxes (Refer Note 30) 6,69,35,651 5,44,42,264 Audit Fees (Refer Note 26) 61,99,729 19,25,000 Meeting Expenses 76,08,186 64,43,764 Printing & Stationery 1,26,70,565 68,18,013 Telephone Expenses 1,91,37,787 13,38,535 Electricity Expenses 66,05,394 25,71,522 Listing and Delisting Expenses 3,60,900 1,42,449 Repairs & Maintenance 1,70,30,607 65,81,011 Advertisement & Publicity 1,96,86,737 43,84,882 Annual Custody Fees 1,23,751 - Insurance 26,35,809 6,86,748 Directors Fees, Allowances & Expenses 10,15,750 3,20,500 Professional & Consultancy Fees 16,76,894 1,57,68,879 Corporate Social Responsibility Expenses 19,32,397 33,00,322 Provisions written off 8,72,93,563 2,63,46,918 Software Maintenance Expenses 11,93,77,389 3,84,475 Office Maintenance & General Expenses 7,31,58,727 1,54,38,636 Total 46,85,15,982 16,29,51,534

22 Expenses for Small Finance Bank 2018-19 2017-18Professional Fee - 2,46,36,703 Travelling expenses - 14,94,477 Accomodation & Refreshments - 1,07,74,020 General Expenses - 57,34,145 Training - 47,912 Recruitment Expenses - 13,07,813

Total - 4,39,95,070

23 Prior Period Gain 2018-19 2017-18 Small Finance Bank- Software Expenses ( Reversal of CBS Cost) - 1,00,00,000

Total - 1,00,00,000


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24 Earnings Per Share

Particulars 2018-19 2017-18Net Profit after tax as per Profit and Loss A/c 379,554,716 221,212,450 Weighted average equity -Basic (nos.) 70,338,091 64,556,957 Weighted average equity -Diluted (nos.) 70,338,091 64,556,957 Basic earnings per share 5.40 3.43 Diluted earnings per share 5.40 3.43

25 Related Party Disclosure

(a) Names of the Related Parties and description of Relationship

RelationshipChief Executive OfficerChief Financial Officer

Company Secretary

RelationshipManaging Director & Chief Executive OfficerChief Financial Officer

Company Secretary

b. Transactions with the Related Parties

Particulars 31-Mar-19 31-Mar-18Remuneration:Shiva Prasad Phukan 576,000 246,667 Richa Agarwal 80,944 - Nitul Boruah 241,874 - Pinak Bhattacharjee 350,000 70,000 Pragati Mour - 325,977 Rupali Kalita 4,665,600 4,420,966 Surya Narayan Patro 233,333 1,211,465 Nipun Bhatia 1,272,725 - Mukesh Singh Verma 2,387,064 1,060,000

26 Details of payment made to auditors

Particulars 2018-19 2017-18Statutory Audit 4,800,000 1,650,000 Tax Audit 300,000 - Other Services 40,000 275,000 Reimbursement of Expenses 1,059,729 -

6,199,729 1,925,000

27 Corporate Social Responsibility

28 Contingent Liabilities

Particulars 31-Mar-19 31-Mar-18Claims against the Company not acknowledged as debt – Service Tax Demand 19,769,122 19,769,122

29 Employee BenefitsIn accordance with the Accounting Standard-15 'Employee Benefits', the Group has calculated the various benefits provided to employees as under:

A.Defined contribution plansDuring the period the Group has recognized the following amounts in the Statement of Profit and Loss towards contributions to Provident Fund and Other Funds:

Particulars March 31, 2019 March 31, 2018Contribution to Provident fund 26,193,981 15,337,893 Contributions towards ESIC 3,917,000 - Total 30,110,981 15,337,893

B.Defined benefit plans and Other long-term benefits

a)Contribution to gratuity funds – Employee’s gratuity fund (Defined benefit plan)

In accordance with the requirement of Accounting Standard (AS)- 18 on “Related Party Disclosures’ the names of the related parties where control exists /able to exercisesignificant influence along with the aggregate transactions/year end balances with them as identified and certified by the management are given below:

The Group has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than theprovisions of The Payment of Gratuity Act, 1972.

In accordance with Accounting Standard 15, an actuarial valuation was carried out in respect of the aforesaid defined benefit plans based on the following assumptions.


Nitul Boruah, (from April 02, 2018)

Rupali KalitaSurya Narayan Patro (From October 17, 2017 to May 29, 2018).

Nipun Bhatia, (From August 24, 2018 to February 13, 2019).

Mukesh Singh Verma (From October 17, 2017).

Key Managerial Personnel of Subsidiary i.e. North East Small Finance BankName of Related Party

Shiva Prasad PhukanPinak Bhattacharjee, Chief Financial Officer (From January 17, 2018 to January 31, 2019)Richa Agarwal, (from February 15, 2019 )

Key Managerial Personnel of Holding Company i.e. RGVN (North East) Microfinance LimitedName of Related Party

For the Financial 2018-19, the Group is not required under Section 135 of the Companies Act 2013 to incur CSR expenditure. The unspent amount of Rs.1,932,397 pertainingbeen spent in current year.




i.Actuarial assumptions

March 31, 2019 March 31, 2018Discount rate (per annum) 7.70% 7.80%Expected Rate of increase in compensation levels 5.00% 5%Expected Rate of return on plan assets. 7.70% 7.80%Retirement age 60 Years 60 YearsWithdrawal Rate(based on age)Upto 30 Years 5.00% 5.21%31-44 Years 6.00% 1.65%Above 44 Years 12.00% 3.39%

Particulars March 31, 2019 March 31, 2018Present value obligation as at the beginning of the year 25,390,351 31,682,822 Interest cost 1,979,000 1,897,650 Current service cost(Vested Employees) 5,853,231 2,745,700 Past service cost(Un-Vested Employees) 752 - Benefits paid (808,000) (1,112,000)Acquisition cost - - Actuarial loss/(gain) on obligations 4,060,000 (9,824,000)Present value obligation as at the end of the year 36,475,334 25,390,172

iii.Changes in the fair value of plan assets

Particulars March 31, 2019 March 31, 2018

Plan assets acquired under BTA - 22,773,000 Expected return on plan assets 3,330,036 761,000 Actual Company Contributions 19,645,000 20,243,000 Benefits paid (808,000) (1,112,000)Actuarial gain/(loss) return on plan assets (381,000) 70,000

iv.Expenses recognized in Statement of profit and loss

Particulars March 31, 2019 March 31, 2018Current service cost (including risk premium for fully insured benefits) 5,852,405 2,746,113 Past service cost(Un-Vested Employees) 752 860,300 Interest cost 1,979,000 1,037,899 Deficit in acquisition cost recovered - - Expected return on plan assets (3,331,000) (760,396)Net actuarial loss/(gain) recognized during the year 4,442,000 (9,894,520)Total expense recognised in Statement of profit and loss. 8,943,157 (6,010,604)

30 Leases

i.

ii.

Future Lease payments March 31, 2019 March 31, 2018Not later than one year 10,021,000 9,777,000 Later than one year but not later than five years 20,612,000 29,582,000

31 Segment Reporting

As at 31st March 2019

Particulars Treasury Retail Banking TotalSegment Revenue 200,107,630 2,670,917,876 2,871,025,506 Unallocated Revenue - - - Less: Inter Segment Revenue - - - Total Revenue 200,107,630 2,670,917,876 2,871,025,506 Segment Expenses 5,464,250 2,229,744,020 2,235,208,270 Segment Results 194,643,380 441,173,856 635,817,236 Unallocated Expenses - - 70,942,934 Operating Profits 564,874,302 Provisions and Contingencies other than Tax expenses - - - Tax Expenses(including Deferred Tax) - - 185,319,586 Extraordinary Profit/Loss - - - Net Profit - - 379,554,716 Other Information:Segment Assets 2,730,724,160 14,787,707,720 17,518,431,880 Unallocated Assets - - 117,359,573 Total Assets 2,730,724,160 14,787,707,720 17,635,791,453 Segment Liabilities - 14,021,231,058 14,021,231,058 Unallocated Liabilities - - - Total Liabilities - 14,021,231,058 14,021,231,058

Minimum lease payments for non-cancellable lease are as follows:

Particulars Gratuity

Opening balance of fair value of plan assets 42,735,000 -

The discount rate assumed is 7.7% per annum which is determined by reference to market yield at the Balance Sheet date on government bonds. The estimates of future salary increase, considered in actuarial valuation, takeaccount of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Bank's Branch premises for period ranging from 11 months to 120 months. The rental agreements are cancellable after given one month notice and the agreement provides for an annual increase from 5% to 10% on a yearly basis.The Group has taken on lease the following:For the reporting year, the rental expense amounts to Rs. 4,22,61,774 (31-Mar-18-Rs.1,32,39,699) included in Rent, Rates and Taxes under Note 21 (Other Expenses).

Premises for two corporate offices: one for 9 years having lock-in period of 5 years and the other for 2 years with renewal option (for further 3 years with enhancement of 20% rent) included in the Agreement. The latterAgreement is cancellable after giving 3 months notice.

ii.Changes in the present value of the defined benefit obligation in respect of Gratuity are as follows:

Closing balance of fair value of plan assets 64,521,036 42,735,000



Particulars March 31, 2019 March 31, 2018Present value obligation as at the beginning of theyear

25,390,351 31,682,822

Interest cost 1,979,000 1,897,650 Current service cost(Vested Employees) 5,853,231 2,745,700 Past service cost(Un-Vested Employees) 752 - Benefits paid (808,000) (1,112,000)Acquisition cost - - Actuarial loss/(gain) on obligations 4,060,000 (9,824,000)Present value obligation as at the end of the year 36,475,334 25,390,172

iii. Changes in the fair value of plan assets


Plan assets acquired under BTA - 22,773,000 Expected return on plan assets 3,330,036 761,000 Actual Company Contributions 19,645,000 20,243,000 Benefits paid (808,000) (1,112,000)Actuarial gain/(loss) return on plan assets (381,000) 70,000

iv. Expenses recognized in Statement of profit and loss

Particulars March 31, 2019 March 31, 2018Current service cost (including risk premium for fullyinsured benefits)

5,852,405 2,746,113

Past service cost(Un-Vested Employees) 752 860,300 Interest cost 1,979,000 1,037,899 Deficit in acquisition cost recovered - - Expected return on plan assets (3,331,000) (760,396)Net actuarial loss/(gain) recognized during the year 4,442,000 (9,894,520)Total expense recognised in Statement of profit andloss.

8,943,157 (6,010,604)

30 Leases

i.

ii.

Future Lease payments March 31, 2019 March 31, 2018Not later than one year 10,021,000 9,777,000 Later than one year but not later than five years 20,612,000 29,582,000

31 Segment Reporting


Particulars Treasury Retail Banking TotalSegment Revenue 200,107,630 2,670,917,876 2,871,025,506 Unallocated Revenue - - - Less: Inter Segment Revenue - - - Total Revenue 200,107,630 2,670,917,876 2,871,025,506 Segment Expenses 5,464,250 2,229,744,020 2,235,208,270 Segment Results 194,643,380 441,173,856 635,817,236 Unallocated Expenses - - 70,942,934 Operating Profits 564,874,302 Provisions and Contingencies other than Tax expenses - - - Tax Expenses(including Deferred Tax) - - 185,319,586 Extraordinary Profit/Loss - - - Net Profit - - 379,554,716 Other Information:Segment Assets 2,730,724,160 14,787,707,720 17,518,431,880 Unallocated Assets - - 117,359,573 Total Assets 2,730,724,160 14,787,707,720 17,635,791,453 Segment Liabilities - 14,021,231,058 14,021,231,058 Unallocated Liabilities - - - Total Liabilities - 14,021,231,058 14,021,231,058


Particulars Treasury Retail Banking TotalSegment Revenue 155,522,000 1,786,128,322 1,941,650,322 Unallocated Revenue - - -

Less: Inter Segment Revenue - - -

Total Revenue 155,522,000 1,786,128,322 1,941,650,322 Segment Expenses 2,889,000 1,520,325,867 1,523,214,867 Segment Results 152,633,000 265,802,455 418,435,455 Unallocated Expenses - - 33,256,000 Operating Profits - - 385,179,455 Provisions and Contingencies other than Tax expenses - - - Tax Expenses(including Deferred Tax) - - 129,971,935 Extraordinary Profit/Loss - - 33,995,070 Net Profit - - 221,212,450 Other Information:Segment Assets 3,966,950,000 11,605,116,126 15,572,066,126 Unallocated Assets - - 55,427,865 Total Assets 3,966,950,000 11,605,116,126 15,627,493,991 Segment Liabilities - 12,346,158,594 12,346,158,594 Unallocated Liabilities - - 46,319,008 Total Liabilities - 12,346,158,594 12,392,477,602

Minimum lease payments for non-cancellable lease are as follows:

Opening balance of fair value of plan assets 42,735,000 -

Bank's Branch premises for period ranging from 11 months to 120 months. The rental agreements are cancellable after given one month notice and the agreement provides for an annualincrease from 5% to 10% on a yearly basis.

The Group has taken on lease the following:For the reporting year, the rental expense amounts to Rs. 4,22,61,774 (31-Mar-18-Rs.1,32,39,699) included in Rent, Rates and Taxes under Note 21 (Other Expenses).

Premises for two corporate offices: one for 9 years having lock-in period of 5 years and the other for 2 years with renewal option (for further 3 years with enhancement of 20% rent) included inthe Agreement. The latter Agreement is cancellable after giving 3 months notice.

ii. Changes in the present value of the defined benefit obligation in respect of Gratuity are as follows:

Closing balance of fair value of plan assets 64,521,036 42,735,000




Total Liabilities - 14,02,12,31,058 14,02,12,31,058


Particulars Treasury Retail Banking TotalSegment Revenue 15,55,22,000 1,78,61,28,322 1,94,16,50,322 Unallocated Revenue - - -


Total Revenue 15,55,22,000 1,78,61,28,322 1,94,16,50,322 Segment Expenses 28,89,000 1,52,03,25,867 1,52,32,14,867 Segment Results 15,26,33,000 26,58,02,455 41,84,35,455 Unallocated Expenses - - 3,32,56,000 Operating Profits - - 38,51,79,455 Provisions and Contingencies other than Tax expenses - - - Tax Expenses(including Deferred Tax) - - 12,99,71,935 Extraordinary Profit/Loss - - 3,39,95,070 Net Profit - - 22,12,12,450 Other Information:Segment Assets 3,96,69,50,000 11,60,51,16,126 15,57,20,66,126 Unallocated Assets - - 5,54,27,865 Total Assets 3,96,69,50,000 11,60,51,16,126 15,62,74,93,991 Segment Liabilities - 12,34,61,58,594 12,34,61,58,594 Unallocated Liabilities - - 4,63,19,008 Total Liabilities - 12,34,61,58,594 12,39,24,77,602

32 Asset Liability Management

Maturity Pattern of certain liabilities as at March 31, 2019

Maturity Buckets Loans & Advances Investments Deposits Borrowings1 day - 61,98,57,000 87,20,000 - 2 days to 7 days 2,30,629 1,00,46,000 1,95,76,000 - 8 days to 14 days 6,14,335 57,32,000 10,02,79,000 - 15 days to 30 days 15,90,529 7,78,97,400 21,70,07,000 - 31 days to 2 months 1,10,65,660 2,01,79,400 2,54,17,000 - Over 2 months to 3 months 3,17,65,236 3,42,01,000 9,36,64,000 - Over 3 to 6 months 29,83,62,236 5,25,37,400 9,74,39,000 64,36,16,965 Over 6 to 12 months 3,40,81,50,426 21,11,17,000 45,81,00,000 63,06,22,910 Over 1 to 3 years 10,05,81,81,622 23,82,80,000 1,64,83,87,623 2,59,06,35,313 Over 3 to 5 years 4,63,77,000 21,06,78,000 45,19,000 6,14,50,00,000 Over 5 years - 17,25,27,987 6,28,000 1,00,00,00,000

13,85,63,37,673 1,65,30,53,187 2,67,37,36,623 11,00,98,75,188

Maturity Pattern of certain liabilities as at March 31, 2018

Maturity Buckets Loans & Advances Investments Deposits Borrowings1 day - 19,37,78,000 3,93,000 - 2 days to 7 days 11,47,000 - 24,52,000 - 8 days to 14 days 15,36,000 - 5,08,37,000 53,57,000 15 days to 30 days 84,78,000 1,09,16,000 5,70,07,000 - 31 days to 2 months 4,20,19,000 1,26,56,000 11,06,25,000 2,25,00,000 Over 2 months to 3 months 10,23,75,000 1,89,96,000 28,85,22,000 1,18,44,000 Over 3 to 6 months 34,76,54,000 10,14,78,000 51,00,97,000 18,65,74,000 Over 6 to 12 months 2,09,97,08,000 19,39,25,000 13,71,61,000 88,51,32,346 Over 1 to 3 years 8,23,74,62,282 94,57,69,000 9,58,98,910 7,27,75,50,000 Over 3 to 5 years 4,65,00,000 21,34,99,681 81,000 1,22,00,00,000 Over 5 years - 6,000 31,000 1,25,00,00,000

10,88,68,79,282 1,69,10,23,681 1,25,31,04,910 10,85,89,57,346

1.The maturity of “Loans and Advances” has been determined on the basis of ultimate maturity date of the loans rather than on the basis of monthly installments due.

3.The bank has no foreign currency assets and liabilities as on 31st March 2019.

33 Exposure

a. ExposureThe Group does not have exposure to the following areas for years ended 31st March 2019 and 31st March 2018.

i. Real Estate Sectorii. Capital Marketiii. Risk Category wise Country Exposure

b. Details of Single Borrower Limit (SBL)/ Group Borrower Limit

c. Unsecured Advances

34 Concentration of deposits, advances, exposures and NPAs:

a.Concentration of Deposits:


2. The bucketing is made as per the guidelines issued by the Reserve Bank of India on the basis of initial data received by Asset Liability Management team from finance and accountsdepartment, any adjustment/revision in the figures is adjusted proportionately in all the buckets.

During the year ended March 31, 2019 and March 31, 2018 there are no instances of Single Borrower Limit(SGL)/Group Borrower Limit(GBL)exceeding the sanctioned limit or outstanding orentire outstanding whichever is higher.

There are no unsecured advances for which intangible security such as charge over the rights, licenses; authority etc. are accepted as collateral by the Bank during the year ended March31, 2019 and March 31, 2018.




Particulars Treasury Retail Banking TotalSegment Revenue 155,522,000 1,786,128,322 1,941,650,322 Unallocated Revenue - - -


Total Revenue 155,522,000 1,786,128,322 1,941,650,322 Segment Expenses 2,889,000 1,520,325,867 1,523,214,867 Segment Results 152,633,000 265,802,455 418,435,455 Unallocated Expenses - - 33,256,000 Operating Profits - - 385,179,455 Provisions and Contingencies other than Tax expenses - - - Tax Expenses(including Deferred Tax) - - 129,971,935 Extraordinary Profit/Loss - - 33,995,070 Net Profit - - 221,212,450 Other Information:Segment Assets 3,966,950,000 11,605,116,126 15,572,066,126 Unallocated Assets - - 55,427,865 Total Assets 3,966,950,000 11,605,116,126 15,627,493,991 Segment Liabilities - 12,346,158,594 12,346,158,594 Unallocated Liabilities - - 46,319,008 Total Liabilities - 12,346,158,594 12,392,477,602






Particulars March 31, 2019 March 31, 2018Total deposits of twenty largest depositors 994,399,000 1,191,904,000 Total Deposits 2,535,120,976 1,253,104,910 Percentage of twenty largest depositors of the bank 39% 95%

b.Concentration of Advances:

Particulars March 31, 2019 March 31, 2018Total advances of twenty largest customers 44,099,000 1,979,000 Total Advances 13,856,337,673 10,886,879,282 Percentage of twenty largest borrowers to total advances of the bank 0.32% 0.02%

Advances are computed as per the definition of Credit Exposure including derivatives as prescribed in Master Circular on Exposure Norms DBR.No.DirBC.12/13.03.00/2015-16 dated July 1, 2015

c.Concentration of Exposures:

Particulars March 31, 2019 March 31, 2018Total exposure to twenty largest borrowers/customers 44,099,000 1,979,000 Total Borrowings 11,009,875,188 10,858,957,346 Percentage of exposures of twenty largest customers to total exposure of the Bankborrowers/customers

0.40% 0.02%

Exposures are computed as per the definition in Master Circular on Exposure Norms DBR.No.DirBC.12/13.03.00/2015-16 dated July 1, 2015.Fixed deposits, Balance in Current Account and Call Money have not been considered in computation of exposures.

d. Concentration of NPA's:

Particulars March 31, 2019 March 31, 2018Total Exposure to top four NPA Accounts 310,000 194,000

35 Unhedged foreign currency exposure The Group does not have any foreign currency exposure for the year ended March 31, 2019 and March 31, 2018

36 Priority sector lending certificatesThe Group has sold the following scheme type-

ParticularsPSLC Purchased PSLC Sold PSLC Purchased PSLC Sold

PSLC Agriculture - 500,000,000 - -

37 Movement in provision for frauds included under other liabilities

Particulars March 31, 2019 March 31, 2018Opening Provision 546,000 - Provision during the year 2,267,000 546,000 Utilization/Write back of provision - - Closing Provision 2,813,000 546,000

38 Capital Commitments

Particulars March 31, 2019 March 31, 2018Estimated amount of contracts remaining to be executed (Net of advances) and not provided for 71,498,000 46,814,000

The Capital commitments are unconditionally cancellable at any time by the Bank.

Year ended March 31, 2019 Year Ended March 31, 2018











Particulars March 31, 2019 March 31, 2018Total deposits of twenty largest depositors 994,399,000 1,191,904,000 Total Deposits 2,535,120,976 1,253,104,910 Percentage of twenty largest depositors of the bank 39% 95%

b.Concentration of Advances:

Particulars March 31, 2019 March 31, 2018Total advances of twenty largest customers 44,099,000 1,979,000 Total Advances 13,856,337,673 10,886,879,282 Percentage of twenty largest borrowers to total advances of the bank 0.32% 0.02%

Advances are computed as per the definition of Credit Exposure including derivatives as prescribed in Master Circular on Exposure Norms DBR.No.DirBC.12/13.03.00/2015-16 dated July 1, 2015

c.Concentration of Exposures:

Particulars March 31, 2019 March 31, 2018Total exposure to twenty largest borrowers/customers 44,099,000 1,979,000 Total Borrowings 11,009,875,188 10,858,957,346 Percentage of exposures of twenty largest customers to total exposure of the Bankborrowers/customers

0.40% 0.02%

Exposures are computed as per the definition in Master Circular on Exposure Norms DBR.No.DirBC.12/13.03.00/2015-16 dated July 1, 2015.Fixed deposits, Balance in Current Account and Call Money have not been considered in computation of exposures.

d. Concentration of NPA's:

Particulars March 31, 2019 March 31, 2018Total Exposure to top four NPA Accounts 310,000 194,000

35 Unhedged foreign currency exposure The Group does not have any foreign currency exposure for the year ended March 31, 2019 and March 31, 2018




37 Movement in provision for frauds included under other liabilities

Particulars March 31, 2019 March 31, 2018Opening Provision 546,000 - Provision during the year 2,267,000 546,000 Utilization/Write back of provision - - Closing Provision 2,813,000 546,000

38 Capital Commitments

Particulars March 31, 2019 March 31, 2018Estimated amount of contracts remaining to be executed (Net of advances) and not provided for 71,498,000 46,814,000

The Capital commitments are unconditionally cancellable at any time by the Bank.



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41 Previous year figures have been regrouped/ reclassified, where necessary, to conform to this year’s classification.

42 The figures for previous year were audited by a firm of Chartered Accountants other than MSKA & Associates.


Puneet Agarwal Abhijit Sharma S.P.PhukanPartner Director Chief Executive OfficerM.No. 064824 DIN: 08185287

Place: Guwahati Nitul Boruah Richa AgarwalDate: September 20, 2019 Company Secretary Chief Financial Officer

M.No: ACS 45582



1 Corporate Information

2 Summary of Significant Accounting Policies

2.1 Basis of Preparation

2.2 Basis of Consolidationa.

b.

c.

d.

e.

f.

2.3 Use of Estimates

2.4 Cash Flow Statement

2.5 Property, Plant and Equipment

2.6 Depreciation and Amortization

ParticularsYear ended March31, 2019 ((Usefullife in years))

Computer 3Office Equipment 3-5Softwares 5Motor vehicles 8

Furniture and fixtures 10

Leasehold Premises 10


RGVN (North East) Microfinance Limited (‘the Company’) is a Limited Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. RGVN(North East) Microfinance Limited was engaged in microfinance lending activities for providing financial services to poor specially Woman (referred as ‘members’) in therural areas of North east who are organized as Self Help Groups (SHG) and Joint Liability Groups (JLG). The Company received approval from the Reserve Bank of India (RBI)to set up a Small Finance Bank.

Pursuant to an agreement executed between the Company and North East Small Finance Bank Limited dated October 16, 2017, the business undertaking of RGVN (NE)Microfinance Limited was transferred to its wholly owned Subsidiary, North East Small Finance Bank Limited w.e.f. October17, 2017. Consequent to transfer of businessundertaking, the Company has applied for registration as NBFC - Core Investment Company to Reserve Bank of India and received the approval w.e.f. May 29, 2019.

The Consolidated financial statements comprise the financial statements of RGVN (North East) Microfinance Limited and its wholly owned subsidiary North East SmallFinance Bank (NESFB) (collectively referred herein as the ‘Group’).

The Consolidated Financial Statements of the Group have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financialstatements have been prepared to comply in all material respects with accounting standards notified under section 133 of the companies Act, 2013, read together withparagraph 7 of the companies (Accounts) Rules, 2014 as amended and applicable guidelines as issued by the RBI in respect of NBFCs. The financial statements have beenprepared under historical cost convention and on accrual basis. The accounting policies adopted in the preparation of financial statements are consistent with those used inthe previous year.

The financial statements of the company and its subsidiary have been combined on a line by line basis by adding together like items of assets, liabilities, revenue andexpenses as per the respective financial statements. Inter-Company transactions, balances and unrealized gains on transactions between group companies are eliminated.The financial statements of the subsidiary company used in the consolidation are drawn up to the same reporting dates of the company as that of the Company i.e. March31, 2019.

The difference between the cost of investments in the subsidiary over the net assets at the time of acquisition of shares in the subsidiary is recognized in the financialstatements as Goodwill or Capital Reserve, as the case may be.

The Cash Flows are reported using Indirect Method whereby Profit/(Loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals oraccruals of past or future cash receipts or payments. The cash flow from Operating, Financing & Investing Activities are segregated based on available information.

Cash and cash equivalents include cash in hand, balance with Reserve Bank of India and other banks, demand deposits with banks, other short term highly liquid investmentswith original maturities of three months or less and money at call and short notice.

Tangible assets, capital work in progress are stated at cost, less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price, borrowingcosts, if capitalization criteria are met and any cost attributable to bringing the assets to its working condition for its intended use which includes taxes, freight, andinstallation and allocated incidental expenditure during construction/ acquisition and exclusive Input tax credit (IGST/CGST and SGST) or other tax credit available to theGroup.

Based on management’s evaluation, useful life prescribed in Schedule II of the Companies Act, 2013 represent actual useful life of property, plant and equipment. TheGroup uses written down value method and has used following useful lives to provide depreciation of different class of its property, plant and equipment.

Depreciation on addition to tangible assets is provided on pro-rata basis from the date the assets are ready for intended use. Depreciation on sale/discard from tangible assets is provided for upto the date of sale, deduction or discard of tangible assets.

Minority interest in the net assets of consolidated subsidiaries consist of the amount of equity attributable to the minority shareholders at the date on which investments aremade by the Company in the subsidiary companies and further movements in their share in the equity, subsequent to the dates of investments as stated above.

Minority Interest’s share of net profit of consolidated subsidiaries for the year is identified and adjusted against the income of the group in order to arrive the net incomeattributable to shareholders of the Company.

Minority Interest’s share of net assets of consolidated subsidiaries is identified and presented in the consolidated balance sheet separate from liabilities and the equity of theCompany’s shareholders.

As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the Company’s separate financial statements.

The preparation of consolidated financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in thereported amounts of assets and liabilities (including contingent liability) and the reported income and expenses during the period. The management believes that theestimates used in preparation of financial statements are prudent and reasonable. Future results could differ from actuals and the differences between the actual resultsand the estimates are recognized prospectively in which the results are known. Any revision to accounting estimates is recognized prospectively in current and futureperiods.





b.

c.

d.

e.

f.






























b.

c.

d.

e.

f.



























2.7 Impairment of Assets

2.8 Revenue Recognition

2.9 InvestmentsAccounting treatment

Categorization of Investments

Classification of Investments

Acquisition Cost

Transfer Between Categories

Valuation of Investmentsi.

ii.

iii.

iv.

v.

vi.

vii.

viii.

ix.

The carrying amount of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss isrecognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets’ net selling price and value inuse. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.

Interest Income is recognized in the statement of profit and loss on accrual basis, except in the case of non-performing assets. Interest on non-performing assets isrecognized upon realization as per the prudential norms of the RBI.

Processing fees collected on loans disbursed, along with related loan acquisition cost are recognized as upfront at inception of loan.

Interest on Government Securities, debentures and other fixed income securities is recognized on a period proportion basis. Income on discounted instruments is recognizedover the tenor of the instrument on a constant Yield to Maturity method.

All other income is recognized on an accrual basis.

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as currentinvestments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees andduties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If aninvestment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value ofthe investment acquired, whichever is more clearly evident.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carriedat cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

Classification and valuation of the Bank’s Investments are carried out in accordance with the RBI guidelines which are as follows:

The Bank classifies its investment at the time of purchase into one of the following three categories:

i.Held To Maturity (HTM)-Securities acquired with the intention to hold till maturity. ii.Held for Trading (HFT)- Securities acquired with the intention to trade. iii.Available for Sale (AFS)-Securities which do not fall within the above two categories.

Subsequent shifting amongst the categories is done in accordance with the RBI Guidelines.

For the purpose of disclosure in the Balance Sheet, investments are classified under six groups viz. (i) Government Securities, (ii) Other Approved Securities, (iii) Shares, (iv)Debentures & Bonds, (v) Investments in Subsidiaries and Joint Ventures, and (vi) Other Investments.

i). Broken period interest on debt instruments is treated as revenue item.(ii). Brokerage, Commission etc. pertaining to Investments, paid at the time of acquisition is charged to Profit & Loss Account.(iii). Cost of investments is computed based on the First in First Out basis.

Transfer between categories is done at the lower of the acquisition cost / book value / amortized cost / market value on the date of the transfer and depreciation, if any,on such transfer is fully provided for, in accordance with the RBI guidelines.

Held to Maturity- Each security in this category is carried at acquisition cost. Any premium on acquisition of the security is amortized over the balance period to maturity.The amortized amount is classified under Interest earned- Income on Investments (Item II of Schedule 13). The book value of the security is reduced to the extent of amountamortized during the relevant accounting period. Diminution, other than temporary, is determined and provided for each investment individually.

Held for Trading- Securities are valued scrip-wise and depreciation /appreciation is aggregated for each classification. Net appreciation in each classification is ignored,while net depreciation is provided for.

Available for Sale- Securities are valued scrip-wise and depreciation /appreciation is aggregated for each classification. Net appreciation in each classification is ignored,while net depreciation is provided for.

Market value of government securities (excluding treasury bills) is determined on the basis of the prices / YTM declared by Primary Dealers Association of India (PDAI) jointlywith Fixed Income Money Market and Derivatives Association (FIM- MDA).

Treasury bills are valued at carrying cost, which includes discount amortized over the period to maturity

Purchase and sale transaction in securities are recorded under Settlement Date method of accounting, except in the case of the equity shares where Trade Date Method ofaccounting is followed.

Provision for non-performing investments is made in conformity with RBI guidelines.

In the event, provisions created on account of depreciation in the AFS or HFT categories are found to be in excess of the required amount in any year, the excess is creditedto the profit & loss account and an equivalent amount(net of taxes, if any, and net of transfer to Statutory Reserves as applicable to such excess provisions) is appropriatedto an Investment Reserve Account(IRA). The balance in IRA account is used to meet provision on account of depreciation in AFS and HFT categories by transferring anequivalent amount to the Profit and Loss Appropriation Account as and when required.

Unquoted equity shares are valued at their break-up value which is ascertained from the Group latest balance sheet. In case the latest balance sheet is not available theshares are valued at Rs. 10 per share.


Disposal of Investment

2.10 Loans/Advances and Provision thereon

Classification:Advances are classified as per RBI guidelines into standard, sub-standard, doubtful and loss assets after considering subsequent recoveries to date.

Provision:

2.11 Retirement & Other Employee Benefits

The Details of Employee benefits are as given below:Defined Contribution Plan

Defined Benefit Plan- Gratuity

Other long-term benefits

2.12 Borrowing Costs

2.13 Income taxes

2.14 Leases

2.15 Investment Fluctuation ReserveIn accordance with the RBI guidelines banks are required to create an Investment Fluctuation Reserve (IFR) equivalent to 2% of IIFT and AFS investment portfolio, within aperiod of three years starting from fiscal year 2019. Accordingly, during the year ended March 31, 2019 subsidiary ‘the Bank’ has made an appropriation of Rs. 28,218.504,to the investment fluctuation reserve from the Profit and Loss account.

Lease rentals under operating lease are charged to the Profit and Loss Account on straight line basis over the lease term. Lease arrangements where risk rewards incidentalto ownership of an assets substantially vest with the lessor are recognized as operating leases.

Tax expense for the period comprises of current tax, deferred tax and Minimum alternate tax credit.

Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income-tax Act, 1961.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts, and there is an intention to settle theasset and the liability on a net basis.

The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted asof the reporting date.

Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the period. The deferred tax charge or creditand the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date.Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbeddepreciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewedat each balance sheet date and are written-down or written up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.

Borrowing cost includes interest, other cost incurred in connection with borrowings and exchange differences arising from foreign currency borrowings to the extent they areregarded as an adjustment to the interest cost.

Borrowing costs that are directly attributable to the acquisition, construction or production of an qualifying asset that takes a substantial period of time to get ready for itsintended use are capitalized. All other borrowing costs are recognized as an expenditure in the period in which they are incurred.

Leave encashment – Provision for compensated absences is made based on actuarial valuation as at the Balance Sheet date. The actuarial valuation is carried out using theProjected Unit Credit Method. Actuarial losses/ gains are recognized in the Profit and Loss Account in the year in which they arise.

The Group provides for retirement benefits in the form of Gratuity. Benefits payable to eligible employees of the Group with respect to gratuity, a defined benefit plan isaccounted for on the basis of an actuarial valuation as at the Balance Sheet date. In accordance with the Payment of Gratuity Act, 1972, the plan provides for lump sumpayments to vested employees on retirement, death while in service or on termination of employment an amount equivalent to 15 days basic salary for each completed yearof service. Vesting occurs upon completion of five years of service. The present value of such obligation is determined by the projected unit credit method and adjusted forpast service cost and fair value of plan assets as at the balance sheet date through which the obligations are to be settled. The resultant actuarial gain or loss on change inpresent value of the defined benefit obligation or change in return of the plan assets is recognized as an income or expense in the Statement of Profit and Loss. Theexpected return on plan assets is based on the assumed rate of return of such assets.

The Group makes defined contribution to Government Employee Provident Fund which is recognized in the Statement of Profit and Loss on accrual basis. The Group has nofurther obligations under these plans beyond its monthly contributions.

Specific loan loss provisions are made for NPAs based on management’s judgement of the degree of impairment of the loan subject to the minimum requirements as per theextent guidelines prescribed by the RBI. The provisions towards Standard Assets is made as per the extent RBI notifications and shall not be netted from gross advances butshall be shown separately as ‘Contingent Provisions against Standard Assets’ under “Other Liabilities and Provisions’.

Apart from the general provision made on standard assets as above, the Bank may also maintain additional general provisions to cover potential credit losses which areinherent in any loan portfolio but not identified.

Amounts recovered during the year against bad debts written off in earlier years are recognized in the Profit and Loss Account.

Provision no longer considered necessary in the context of the current status of the borrower as a performing asset, are written back to the Profit and Loss Account to theextent such provisions were charged to the Profit and Loss Account.

Investments classified as HFT or AFS - Profit or loss on sale or redemption is recognized in the Profit and Loss Account.

Profit in respect of sale or redemption of investments from HTM category is included In the Profit from Sale of Investments and an equivalent amount (net of taxes, if any,and net of transfer to Statutory Reserves as applicable to such profits) is appropriated from the Profit and Loss Appropriation account to Capital Reserve account. Loss onsale or redemption is recognized in the Profit and Loss Account.

At each reporting date, the Group reassesses the unrecognized deferred tax assets, if any.

Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The Group recognizes MAT credit available as an asset only to theextent that there is convincing evidence that the Group will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carriedforward. In the year in which the Group recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of MinimumAlternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the Statement of Profit and Loss and shown as “MAT Credit Entitlement.” TheGroup reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the Group does not have convincing evidence that it willpay normal tax during the specified period.


2.16 Segment Reporting

2.17 Earnings per Share

2.18 Contingent Liabilities, Provisions and Contingent AssetsThe Group creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can bemade of the amount of obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that probably will not require anoutflow of resources or where a reliable estimate of the obligation cannot be made.

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends andattributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share tothe extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period.

The weighted average numbers of equity shares are adjusted for events such as bonus issue, bonus element in the rights issue, share split and reverse share split(consolidation of shares) that have changed the number of equity shares outstanding, without corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of sharesoutstanding during the period are adjusted for the effects of all dilutive potential equity shares.

In accordance with the guidelines issued by the RBI vide DBOD.No.BP.BC.81/21.01.018/2006-07 dated April 18, 2017 and accounting standard 17 (AS-17) on "SegmentReporting", the Group business has been segregated into Treasury and Retail banking segments, the Group has adopted Segment Reporting as under:

Treasury includes all investment portfolios, Profit / Loss on sale of Investments, income from money market operations. The expenses of this segment consist of depreciation/ amortization of premium on Held to Maturity category investments.

Retail Banking includes interest expenses on funds borrowed from external sources as well as internal sources, lending to and deposits from retail customers and identifiedearnings and expenses of the segment.

Unallocated includes Capital and Reserves and other un-allocable assets, liabilities, income and expenses.



CIN-U65923AS2008PLC008742

NOTICE Notice is hereby given that the 11thAnnual General Meeting of RGVN (North East) Microfinance Limited will be held on 27thday of September, 2019 at 3rdFloor,Fortune Central Basistha Road, Basisthapur, Bye Lane No. 3, Beltola Guwahati Kamrup, Assam- 781028 at 12:00 Noon, to transact the following businesses: ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Financial Statements (including Consolidated Statements) & Directors Report for the year ended 31st March, 2019 and Auditor’s Report and the comments thereupon.

SPECIAL BUSINESS:

2. To consider and if thought fit to pass with or without modification(s) the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 (Act) and the Rules framed thereunder, read with Schedule IV to the Act, as amended from time to time, Ms. Kaberi Bhuyan (DIN 07001635), who was appointed by the Board of Directors of the Company as an Independent Director (Additional) of the company w.e.f 14.02.2019 and who has submitted a Declaration that she meets the criteria for Independence as provided in Section 149(6) of the Act and who is eligible for appointment, be and is hereby appointed as an Independent Director of the Company with effect from February 14, 2019 for a period of 5(five) years.”

By order of the Board of Directors For RGVN (NORTH EAST) MICROFINANCE LIMITED

Place: Guwahati Nitul Boruah Date: 21.09.2019 Company Secretary & Compliance officer

Contact Details Phone: +91 8876633121 Email: [email protected] Website: www.rgvnnemfl.com

Registered Office House No. 02, Padma Path, 8th Byelane, Zoo Road Tiniali, R.G Baruah Road Guwahati, Kamrup Assam- 781024


NOTES

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE 11TH ANNUAL GENERAL MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF / HERSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE PROXY FORM, TO BE VALID AND EFFECTIVE, SHOULD BE LODGED AT THE REGISTERED OFFICE OF THE COMPANY, DULY COMPLETED AND SIGNED, NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE AGM.

2. A PERSON CAN ACT AS A PROXY ON BEHALF OF MEMBERS NOT EXCEEDING FIFTY AND HOLDING

IN THE AGGREGATE NOT MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE COMPANY CARRY VOTING RIGHTS. A MEMBER HOLDING MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS MAY APPOINT A SINGLE PERSON AS PROXY AND SUCH PERSON SHALL NOT ACT AS A PROXY FOR ANY OTHER PERSON OR SHAREHOLDER.

3. CORPORATE MEMBERS INTENDING TO SEND THEIR AUTHORISED REPRESENTATIVE(S) TO ATTEND THE MEETING ARE REQUESTED TO SEND TO THE COMPANY A CERTIFIED COPY OF RELEVANT BOARD RESOLUTION TOGETHER WITH THE SPECIMEN SIGNATURE(S) OF THE REPRESENTATIVE(S) AUTHORISED UNDER THE SAID BOARD RESOLUTION TO ATTEND AND VOTE ON THEIR BEHALF AT THE MEETING.

4. FOR SECURITY REASONS AND FOR PROPER CONDUCT OF AGM, ENTRY TO THE PLACE OF THE AGM WILL BE REGULATED BY THE ATTENDANCE SLIP, WHICH IS ANNEXED TO THIS NOTICE. MEMBERS/ PROXIES ARE REQUESTED TO BRING THEIR ATTENDANCE SLIP IN ALL RESPECTS AND SIGNED AT THE PLACE PROVIDED THERE AT AND HAND IT OVER AT THE ENTRANCE OF THE VENUE. THE ROUTE MAP OF THE AGM VENUE IS ALSO ANNEXED TO THIS NOTICE.

5. ALL DOCUMENTS REFERRED TO IN THE NOTICE AND THE EXPLANATORY STATEMENT REQUIRING THE APPROVAL OF THE MEMBERS AT THE AGM AND OTHER STATUTORY REGISTERS SHALL BE AVAILABLE FOR INSPECTION BY THE MEMBERS AT THE REGISTERED OFFICE OF THE COMPANY DURING OFFICE HOURS ON ALL WORKING DAYS BETWEEN 11.00 A.M. AND 1.00 P.M. FROM THE DATE HEREOF UP TO THE DATE OF ENSUING ANNUAL GENERAL MEETING.

6. THE ANNUAL REPORT FOR THE FINANCIAL YEAR 2018-19 OF THE COMPANY IS ALSO AVAILABLE ON THE COMPANY’S WEBSITE AT WWW.RGVNNEMFL.COM.

7. MEMBER DESIROUS OF OBTAINING ANY INFORMATION CONCERNING THE ACCOUNTS AND

OPERATIONS OF THE COMPANY ARE REQUESTED TO ADDRESS THEIR QUESTIONS IN WRITING TO THE COMPANY AT LEAST 10 DAYS IN ADVANCE BEFORE THE DATE OF ANNUAL GENERAL MEETING, SO THAT THE INFORMATION REQUIRED MAY BE AVAILABLE AT THE MEETING.

8. SHAREHOLDERS ARE REQUESTED TO KINDLY BRING THEIR COPIES OF ANNUAL REPORT TO THE

MEETING.

9. THE EXPLANATORY STATEMENT AS REQUIRED UNDER SECTION 102(1) OF THE COMPANIES ACT, 2013, IS ANNEXED HERETO AND ALL DOCUMENTS REFERRED TO IN THE SAME WILL BE OPEN FOR INSPECTION BY MEMBERS, AT THE REGISTERED OFFICE OF THE COMPANY DURING NORMAL WORKING HOURS UP TO THE DATE OF THE ANNUAL GENERAL MEETING.

10. THE ANNUAL GENERAL MEETING OF THE SHAREHOLDERS OF THE COMPANY TO BE HELD ON 27TH DAY OF SEPTEMBER, 2019 ON A SHORTER NOTICE SUBJECT TO THE CONSENT OF NOT LESS THAN 95% OF THE MEMBERS WHO ARE ENTITLED TO VOTE IN SUCH MEETING ARE AVAILED BY THE COMPANY.

By order of the Board of Directors

For RGVN (NORTH EAST) MICROFINANCE LIMITED

Place: Guwahati Nitul Boruah Date : 21.09.2019 Company Secretary & Compliance officer


Explanatory Statement (Pursuant to Section 102 of the Companies Act, 2013) Item No. 2:Pursuant to the provisions of Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 (Act) and the Rules framed thereunder, read with Schedule IV to the Act, company has appointed Ms. Kaberi Bhuyan as an Independent Director in their meeting held on 14.02.2019. Ms. Bhuyan have given a Declaration to the Board that she meet the criteria of Independence as provided under Section 149(6) of the Act. In the opinion of the Board, Ms. Bhuyan fulfil the conditions specified in the Act and the Rules framed thereunder for appointment as Independent Director. In compliance with the provisions of Section 149 read with Schedule IV of the Act, her appointment as Independent Directors is now being placed before the Members for their approval. The terms and conditions of appointment of the above Director shall be open for inspection by the Members at the Registered Office of the Company during normal business hours on any working day. A brief profile of Ms. Kaberi Bhuyan is given below:

Ms. Kaberi Bhuyan passed her ICSE examination from Shillong and thereafter completed her graduation from Guwahati Commerce College holding the second rank position in the University. She qualified as a Chartered Accountant in the year 1989 as the first lady CA from Guwahati. She has been practicing together with her husband who is also a Chartered Accountant under the firm name M/s Bhuyan & Associates for the past 29 years. She has also qualified for the DISA degree in the year 2004. She was the Chairperson of the Guwahati Branch of the Institute of Chartered Accountants of India for the year 2013-14 and emerges as the 1st Lady Chairperson from the whole of Eastern Region, including the states of West Bengal, Orissa, Sikkim, besides the North Eastern States.

By order of the Board of Directors For RGVN (NORTH EAST) MICROFINANCE LIMITED

Place: Guwahati Nitul Boruah Date : 21.09.2019 Company Secretary & Compliance officer


: No. of Shares held : :

Folio/DP ID- Client ID : NO.* :

Name of the member(s) & : Registered address :


(CIN: U65923AS2008 PLC 00 8742) Registered Office: House No.2, Padma Path, Zoo Road Tiniali, Bye-Lane

No.8, Guwahati-781024, Assam, India Website: www.rgvnnemfl.com, Email: [email protected]

Phone No: +91 9716518086

11TH ANNUAL GENERAL MEETING

27TH DAY, SEPTEMBER 2019 AT 12:00 NOON

VENUE- 3RD FLOOR, FORTUNE CENTRAL BASISTHA ROAD, BASISTHAPUR, BYE LANE NO. 3, BELTOLA GUWAHATI KAMRUP,

ASSAM- 781028

ATTENDANCE SLIP

*Applicable for the member(s) holding shares in Electronic Form.

I being a member/proxy for the member of the Company, hereby record my presence at the 11th

Annual General Meeting of the Company on 27th day of September, 2019 at 3rd Floor, Fortune Central Basistha Road, Basisthapur, Bye Lane No. 3, Beltola Guwahati Kamrup, Assam- 781028 at 12:00 Noon.

Name of the Member/Proxy# Signature of the Member/Proxy#

#Stikeout whichever is not applicable.

1. Please hand over the attendance slip at the entrance of the meeting venue.

2. This attendance is valid only in case shares are held on the date of the meeting.

3. As per section 118(10) of the Companies Act, 2013 read with the Secretarial Standards for General Meeting issued by Institute of Company Secretaries of India “No gifts, gift coupons or cash in lieu of gifts shall be distributed to members at or in connection with the meeting”.


FORM NO. MGT-11

PROXY FORM

[Pursuant to Section 105(6) of the Companies (Management and Administration) Rules,2014.]

RGVN (NORTH EAST) MICROFINANCE LIMITED (CIN:U65923AS2008 PLC 00 8742)

Registered Office: House No.2, Padma Path, Zoo Road Tiniali, Bye-Lane No.8, Guwahati-781024, Assam, India

Website: www.rgvnnemfl.com, Email: [email protected] No: +91 8876633121

Name of the member(s)

Registered Address: Email Id: Folio No./Client Id DP ID: I / We, being the member (s) of _______________shares of the above named company, hereby

1. Name: …………………………………………………………………………………………………………………… Email Id: ……………………………………………………………………………………………………………….. Address: ……………………………………………………………………………………………………………….. Signature: …………………………………………or failing him/her.

2. Name: ………………………………………………………………………………………………………………….. Email Id: ……………………………………………………………………………………………………………….. Address: ……………………………………………………………………………………………………………….. Signature: ………………………………………. or failing him/her.

3. Name: ………………………………………………………………………………………………………………….. Email Id: ……………………………………………………………………………………………………………….. Address: ……………………………………………………………………………………………………………….. Signature: ………………………………………. or failing him/her.

As my/our Proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 11th Annual General Meeting of the Company on 27th day of September, 2019 at 3rd Floor, Fortune Central Basistha Road, Basisthapur, Bye Lane No. 3, Beltola Guwahati Kamrup, Assam- 781028 at 12:00 Noon and at any adjournment thereof in respect of such resolution as are indicated overleaf.

Resolution No. Resolution Vote (See Note 3) For Against

Ordinary Business 1. To receive, consider and adopt the Audited

Financial Statements (including Consolidated Statements) & Directors Report for the year ended 31st March, 2019 and Auditor’s Report and the comments thereupon.


Special Business

2. To approve the Appointment of Ms. Kaberi Bhuyan as an Independent Directors of the Company for a period of 5 Years w.e.f., 14.02.2019.

Signed this……………………………………………. day of…………………… 2019

Signature of Shareholder

Note: -

1. This form of Proxy in order to be effective should be duly completed and deposited at Registered office: House No.2, Padma Path, Zoo Road Tiniali, Bye-Lane No.8, Guwahati-781024, not less than 48 hours before the schedule time of the meeting.

2. A person can act as Proxy on behalf of members not exceeding fifty(50) and holding in the aggregate not more than ten percent of the total share capital of the Company. A member holding more than ten percent of the total share capital of the company may appoint a single person as a Proxy and such person cannot act as a Proxy for any other person or shareholder.

3. It is optional to put a “X” in the appropriate column against the Resolutions indicated in the Box. If you leave the “For” or “Against” column blank against any or all resolutions, your proxy will be entitled to vote in the manner as he/she may deem appropriate.

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RGVN (NORTH EAST) MICROFINANCE LIMITED House No. 02, Padma Path, 8th Byelane, Zoo Road Tiniali, R.G Baruah Road, Guwahati, Kamrup, Assam- 781024

Phone: 8876633121Email: [email protected]

www.rgvnnemfl.com

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