Annual Report 2019-20 - Machine Loan

[Pages:132]Financing growth for a greener and cleaner tomorrow!

GREEN ENERGY

GREEN BUILDINGS

GREEN LENDING

ENERGY EFFICIENT MACHINES

ELECTRONICA FINANCE LIMITED

SOLAR LOANS

30th ANNUAL REPORT

2019-2020

Annual Report 2019-20

CONTENT

Section 1 CORPORATE IDENTITY

Corporate Information Letter from the Managing Director Snapshot of Company Performance

Section 2 BOARD AND MANAGEMENT REPORTS

Director's Report Annexure Report on Corporate Governance

Section 3 FINANCIAL STATEMENT

Independent Auditor's Report Balance Sheet Statement of Prot and Loss Statement of Changes in Equity Cash Flow Statement Notes to Financial Statements

01 03 05

07 - 18 19 - 38 39- 46

47 - 56 57 58 59 60

61 - 117

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Annual Report 2019-20

CORPORATE INFORMATION

BOARD OF DIRECTORS

1. Mr. Shrikant Raghunath Pophale 2. Ms. Shilpa Pophale 3. Mr. Sujit Natekar 4. Mr. Thallapaka Venkateswara Rao 5. Mr. Milind Limaye 6. Mr. Venkatesh Srinivasan

Chairman Emeritus Managing Director Additional Director Independent Director Independent Director Independent Director

Chief Financial Officer

Mr. Mayank Thatte

Company Secretary & Compliance Officer Ms. Khwahish Rawal

STATUTORY AUDITORS

For S. R. BATLIBOI & CO. LLP, Chartered Accountants 14th Floor, The Ruby, 29 Senapati Bapat Marg, Dadar (West), Mumbai 400 028, India

OUR FINANCERS

4 State Bank of India 4 Indian Bank 4 Syndicate Bank ( Now Canara Bank) 4 Bank Of India 4 Bank Of Maharashtra 4 United Bank of India ( Now Punjab National Bank) 4 HDFC Bank Limited 4 Federal Bank Limited 4 SBM Bank (India) Limited 4 Saraswat Co-Operative Bank Ltd. 4 Tata Capital Financial Services Limited 4 Aditya Birla Finance Ltd 4 Global Climate Partnership Fund SA SICAV SIF 4 Unifi AIF

4 Union Bank of India 4 Corporation bank (Now Union Bank of India) 4 Allahabad bank ( Now Indian bank) 4 Vijaya Bank (Now Bank of Baroda) 4 IDBI Bank Ltd. 4 SIDBI 4 CSB Bank Limited 4 The South Indian Bank Ltd. 4 ICICI Bank Limited 4 Bajaj Finance Limited 4 Nabsamruddhi Finance Limited 4 Fedbank Financial Services Ltd 4 AAV SARL 4 A K Capital Finance Pvt. Ltd.

OFFICE ADDRESS

Electronica Finance Limited Regd Office : 101/1, Erandwane, Audumbar, Dr Ketkar Road, Pune 411004, Maharashtra, India Email : secretarial@efl.co.in | efl.co.in | (O) : +91-20-67290700 Corporate Identification Number of EFL : U65910PN1990PLC057017

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Annual Report 2019-20

LETTER FROM THE MANAGING DIRECTOR

Dear Shareholders, Your company has always been proud of the fact that it is seen as a trusted nancial partner of MSMEs and the remarkable work done over the last 3 decades in this regard is a testimony to that. Our endeavor has always been to bring about meaningful change to the MSMEs and stay true to our vision of "Creating success stories for businesses". The nancial year 2019-20 started out with us continuing on these endeavors as also our journey of change which had begun in the year before that. We appropriately chose a theme of "Evolve-Change 2.0" for the year. You would be glad to note that your company has managed to successfully execute multiple areas of change as under: l Re-organizing the sales team in a vertical structure for higher growth l Stabilizing and growing the Emerging Enterprise Loan franchise across Gujarat and then Rajasthan with 37 branches l Launching the rooftop solar nance business l Launching EFL Connections ? a marketplace focused exclusively on and for MSMEs l Use digital tools like Customer Portal to serve the customer seamlessly l Shifting your company's Head Ofce to a spanking new "green building" While all these areas of change are laudable in themselves, one change stands out, which is the successful equity raise from Encourage Capital. Encourage Capital was formed through a partnership of Wolfensohn Fund Management, LP (founded by former World Bank President, Mr. James Wolfensohn) and EKO Asset Management Partners, LLC. Your company was able to raise Rs.107 crores through ESF Holdings, which is an impact fund oated by Encourage Capital. Your company was also able to successfully transition to Indian Accounting Standards (Ind AS), the new accounting methodology, which brought about signicant changes to the entire accounting process. You would be happy to note that despite the economic turmoil experienced in the last nancial year, your company was able to keep its NPA gures under 2% despite the industry average crossing double digits. Your company has been able to increase its capital base to more than Rs.250 crores ensuring a capital adequacy ratio of 27.16%. The end of the last year was marked by the onset of a global pandemic, the likes of which have not been seen in over a century. The COVID-19 crisis effectively washed out the last month of business for your company. The present times are unprecedented with the pandemic taking lakhs of lives, impacting millions of livelihoods and also the way we live. On behalf of your company, let me take this opportunity to salute all the COVID warriors who have been serving our country tirelessly. Your company also did its own bid to alleviate those effected by the pandemic. As a part of our Corporate Social Responsibility initiative we contributed towards procuring ventilators as well as providing food for the needy. As we all know that every dark cloud has a silver lining, your company was successfully able to implement its Business Continuity Plan to be able to adapt to the new normal. We did this by implementing "work from home" for employees and provide training to them during the lockdown period and using digital assets to provide our customers efcient and contactless service. The year 2020 is a major landmark in the life of your company as it successfully completed 30 years of what has been a remarkable journey. During these 3 decades the world and indeed your company has changed drastically and I feel extremely proud to be a part of this legacy. I also feel humbled that I have been given the opportunity to lead the company into the future. As mentioned earlier, these are unprecedented times and the effect of the pandemic cannot be underestimated. Your company continues to be cautiously optimistic in these times. As such in the new nancial year, your company plans to do the following: l Green lending with an aggressive push in the rooftop solar nance business. l Launch a new technology platform comprising of a feature oriented CRM module, efcient Loan Origination and Loan

Management Systems l Invest in identifying technology trends which will aid in future growth l Grow the digital initiative of providing marketplace services for MSMEs through EFL Connections l Explore new business areas and products keeping in mind our philosophy of customer centricity and also to capitalize

on the maxim "Every crisis is an opportunity"

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Annual Report 2019-20

LETTER FROM THE MANAGING DIRECTOR

In the end, I wish to thank all our stakeholders (customers, employees, investors, banking partners, growth partners and shareholders) for their continuous support, commitment and engagement. Together we will overcome these challenges and emerge stronger so as to create long term value for all stakeholders. Shilpa Pophale Managing Director

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