Bharat Financial Inclusion Ltd (formerly known as SKS Microfinance Ltd) is the largest NBFC-MFI in India by Gross Loan Portfolio (as per MFIN March 2018 Report) and the first MFI to be publicly listed in India. The company is primarily engaged in providing microfinance to households belonging to Economically Weaker Section of India. The company focuses its operations in 16 states (excluding Andhra Pradesh and Telangana) in India and has 1567 branches and 16021 employees as on March 31 2018.The core business of the company is to provide small value unsecured loans and certain other basic financial services to its members (Women from economically weaker section households who are clients of the company are classified as Members and those Members whose loans are outstanding are classified as Borrowers). The Members are predominantly located in rural areas in India and the company extends loans to them mainly for use in small businesses or for other income-generating activities and not for personal consumption. In addition to its core business of providing micro-credit the company uses its distribution channel to provide certain other financial products and services that its Members may need. The company offers loans for the purchase of products which help its borrowers to enhance their productivity such as mobile phones solar lamps sewing machines and bicycles among other products. The company also operates a number of pilot programs that may be gradually converted into separate business verticals subject to satisfactory results of pilot programs.SKS Microfinance Ltd was incorporated on September 22 2003 as a private limited company with the name as SKS Microfinance Pvt Ltd. In January 20 2005 the company obtained a certificate of registration from the RBI to commence the business of a non-banking financial institution without accepting public deposits.In September 1 2005 the company transferred all assets and properties pursuant to a MoU including the existing loans and receivables in relation to micro finance activities from SKS Society. SKS Society was earlier engaged in microfinance. In May 2 2009 the company was converted into a public limited company and the name was changed to SKS Microfinance Ltd. In January 18 2010 the company entered into an agreement with HDFC Technology license and service usage for undertaking housing finance activities.In February 3 2010 the company made a tie up with State Bank of India State Bank of Hyderabad and State Bank of Mysore for online integration of 585 branch bank accounts of the company through CMS. In February 10 2010 they entered into an MoU with Future Group for purchase of supplies by kirana stores on a wholesale basis located in and around New Delhi.The company completed its Initial Public Offering (IPO) and its equity shares were listed on the Bombay Stock Exchange (BSE Limited) and the National Stock Exchange of India Limited in August 2010. In January 2011 the then Government of the erstwhile undivided Andhra Pradesh state enacted the Andhra Pradesh Micro Finance Institutions (Regulation of Money Lending) Act 2011 (the AP MFI Act) promulgated as an ordinance in October 2010 to regulate the activities of the microfinance institutions in the State of Andhra Pradesh. The AP MFI Act imposed significant restrictions on the business and operations of microfinance companies in the erstwhile undivided State of Andhra Pradesh and several companies including Bharat Financial Inclusion challenged the validity of the AP MFI Act. The proceedings are pending before the Supreme Court of India and pursuant to the interim orders of the Supreme Court in March 2013 the company is required to comply with only Sections 9 and 16 of the AP MFI Act to carry on its business in the erstwhile undivided Andhra Pradesh. These provisions limit the amount of interest recoverable on loans to no more than the principal amount loaned as well as prohibit coercive actions in connection with the conduct of microfinance business. The company's financial condition deteriorated in the aftermath of events in Andhra Pradesh and the company incurred losses during FY12 and FY13. Nevertheless the company satisfied all its debt repayment obligations during the Andhra Pradesh microfinance situation that is in FY12 and FY13.During the financial year ended 31 March 2011 the company raised Rs 722.2 crore through its IPO. During the financial year ended 31 March 2013 the company raised Rs 263.5 crore by a Qualified Institutional Placement (QIP) and preferential allotment. In November 2013 the RBI re-classified the company as an NBFC-MFI permitting it to carry on the business of a Non-Banking Financial Company - Micro Finance Institution a separate category of Non-Deposit Taking Non-Banking Financial Companies engaged in microfinance activities.The company further raised Rs 397.6 crore in May 2014 and Rs 750 crore in September 2016 through Qualified Institutional Placement.During the financial year ended 31 March 2017 the company raised a sum of Rs 6900.2 crore by way of short-term long-term loans and commercial papers which was 5.7% lower as compared to Rs 7317.4 crore raised during FY16 but 45.8% higher as compared to Rs 5019.9 crore during FY15.The Government of India demonetized Rs.500 and Rs.1000 bank notes effective November 9 2016. This severely affected the growth and collection of all MFIs (including Bharat Financial Inclusion) for almost six months. The company's operations started to move towards to normalcy in Q1-FY18.The company redeemed 11.48% Series 1 secured non-cumulative redeemable taxable listed rated non-convertible debentures of face value Rs.10 lakh each aggregating to Rs.100 crore and 11.48% Series 2 secured non-cumulative redeemable taxable listed rated non-convertible debentures of face value Rs.10 lakh each aggregating to Rs. 50 crore on April 28 2017 and remaining Rs.50 crore on October 31 2017.The Board of Directors of Bharat Financial Inclusion after evaluating several options for the organic and inorganic growth of the company approved the Composite Scheme of Arrangement (Scheme) between the company IndusInd Bank Limited (Bank) and the wholly owned subsidiary of the Bank (Subsidiary) and their respective shareholders and creditors under Section 230-232 of the CA 2013 subject to receipt of applicable regulatory approvals on October 14 2017. The Scheme provides for the voluntary amalgamation of Bharat Financial Inclusion with IndusInd Bank and dissolution of the company without winding up and the consequent issuance of equity shares of IndusInd Bank to the shareholders of Bharat Financial Inclusion. The share exchange ratio for the amalgamation of the company with the Bank shall be 639 (six hundred thirty nine) equity shares of the Bank for every 1000 (one thousand) equity shares of the company. Pursuant to the Scheme after the amalgamation the business correspondent activities of the Company shall be transferred to the Bank and then as a going concern on a slump sale basis from the Bank to the Subsidiary in exchange for the equity shares of the Subsidiary to the Bank. The amalgamation was approved by the Competition Commission of India on December 19 2017 and no objection has been issued by the Reserve Bank of India the National Stock Exchange of India Limited and the BSE Limited on March 13 2018 June 1 2018 and June 4 2018 respectivelyThe amalgamation of Bharat Financial Inclusion with IndusInd Bank would create meaningful value for all stakeholders through increased scale wider product diversification lower funding cost stronger balance sheet and ability to synergies across revenue opportunities operating efficiencies and underwriting efficiencies. The amalgamation will help materially realizable synergies for the benefit of a large common shareholder base and stable market perception. It will provide access to a growing customer base and outlets to increase opportunities of various main-stream banking products to financially underserved customers in rural India.During the financial year ended 31 March 2018 Bharat Financial Inclusion disbursed 95% of the loan amount directly to the bank account of its borrowers. As part of the company's endeavour to move to Cashless Collections the company piloted the Retail Distribution Service Points (RDSP) model under the Business Correspondent arrangement with IndusInd Bank Limited to offer its members basic banking services like cash deposits and loan repayments through a retail store (For e.g. RDSP-Kirana store). During the year under review the company continued to diversify its sources of funds and raised a sum of Rs.9977.2 crore by way of short-term loans long-term loans and commercial papers which was 44.6% higher as compared to Rs.6900.2 crore raised during FY17. FY18 saw loan clients grow by 16% YoY at 61.9 lakhs.The company redeemed 11.95% Series 3 secured non- cumulative redeemable taxable listed rated non-convertible debentures of face value of Rs. 10 lakh each aggregating to Rs 100 crore (1000 debentures); and 11.95% Series 4 secured non- cumulative redeemable taxable listed rated non-convertible debentures of face value of Rs. 10 lakh each aggregating to Rs 100 crore (1000 debentures) on May 15 2018.