Srei Infrastructure Finance Limited A n n u a l R e p o r t 2 0 1 2 - 1 3

Principles People Performance

Board of Directors Mr. Salil K. Gupta Chief Mentor

Mr. Hemant Kanoria Chairman & Managing Director

Mr. Sunil Kanoria Vice Chairman

Mr. Saud Ibne Siddique Mr. S. Rajagopal Mr. Shyamalendu Chatterjee Dr. Satish C. Jha Mr. Sujitendra Krishna Deb Dr. Martin Czurda Dr. Punita Kumar Sinha

Mr. Anil Agrawal

Company Secretary Mr. Sandeep Lakhotia

Auditors Messrs Haribhakti & Co. Chartered Accountants

Principal Banker

Audit Committee Mr. Salil K. Gupta - Chairman

Mr. Sunil Kanoria Mr. S. Rajagopal Mr. Sujitendra Krishna Deb Mr. Shyamalendu Chatterjee Mr. Sandeep Lakhotia Secretary

Committee of Directors Mr. Hemant Kanoria Chairman

Mr. Sunil Kanoria Mr. Salil K. Gupta Mr. Sandeep Lakhotia Secretary

Share Transfer and

Committee Mr. Salil K. Gupta Chairman

Mr. Hemant Kanoria Mr. Sunil Kanoria Mr. Sandeep Lakhotia Secretary

Asset Liability Management Committee Mr. Sunil Kanoria Chairman

Mr. Shyamalendu Chatterjee Mr. Sanjeev Sancheti Mr. P. C. Patni Mr. Sandeep Lakhotia Mr. S. B. Tiwari Secretary

Credit Committee Mr. Hemant Kanoria Chairman

Mr. Sunil Kanoria Mr. Sujitendra Krishna Deb Mr. S. B. Tiwari Secretary

Investment Committee Mr. Hemant Kanoria Chairman

Mr. Sunil Kanoria Dr. Punita Kumar Sinha Mr. Anjan Mitra Secretary

Mr. Shyamalendu Chatterjee Chairman

Mr. Sunil Kanoria Mr. Sujitendra Krishna Deb Mr. S. B. Tiwari Secretary

Nomination Committee Mr. Salil K. Gupta Chairman

Mr. Sunil Kanoria Mr. Shyamalendu Chatterjee Mr. Sandeep Lakhotia Secretary

Compensation Committee Mr. Salil K. Gupta Chairman

Mr. Sunil Kanoria Mr. Shyamalendu Chatterjee Mr. Sujitendra Krishna Deb Mr. Sandeep Lakhotia Secretary

‘Vishwakarma’ 86C, Topsia Road (South) Kolkata – 700 046 Telephone : 91-33-6160 7734

E-mail : corporate@srei.com Website : www.srei.com

Listing

BSE Limited

Limited

Depository Receipts

Depositories National Securities Depository Limited Central Depository Services (India) Limited

Contents Corporate identity 02 Chairman and Managing Director’s message 04 Vice Chairman’s message 08 Sustainability 12

Believing Oneself 14 Risk Mitigation 16 Partnership 18 Enhancing Value 20 Transparency 22 Thinking Long-term 24 Social 26 Group structure 28 Infrastructure report 29 38

42 Risk management 44 48 Directors’ report Report on corporate governance 86 Shareholders’ information 99 111 168

1 billion = 100 crore, 1 million = 10 lakh

At Srei, we have always believed that the values we hold inevitably infl uence the value we create.

Values like ethical business practices. Long-term strategy over short-term opportunism. Principles before profi ts. People before business. Performance before growth.

The result has been our ability to retain our independent identity in a sector marked by mergers, acquisitions and absorption. Sustained growth in a sector marked by high changeover. Enhanced competitiveness across industry cycles. And the capacity to grow assets and competencies while gaining respect in a sustainable way.

CORPORATE IDENTITY

Legacy: Srei (established in 1989 as an

infrastructure-focused NBFC) is headed by

Mr. Hemant Kanoria (Chairman and Managing

Director) and Mr. Sunil Kanoria (Vice Chairman)

and supported by experienced professionals.

The Company has been funded by renowned

global institutions like FMO, FINFUND, KFW,

Austrian Development Bank, DEG and BIO,

among others.

Presence: Headquartered in Kolkata (India),

Srei has 99** branch offi ces across India and

two international offi ces (Russia and Germany).

Its securities are listed on the Bombay Stock

Exchange, National Stock Exchange, Calcutta

Stock Exchange and London Stock Exchange

(becoming one of the fi rst Indian NBFCs to list

GDRs on this exchange)

** Does not include offi ces of associates

CORPORATE PILLARS

Vision: To be the most inspiring global

holistic infrastructure institution.

Mission: To be an Indian multinational

company providing innovative

integrated infrastructure solutions.

₹3,110 crore

Revenues

In 2012-13

₹15,667 crore

Disbursements

In 2012-13

2.30% Net NPA

As on March 31, 2013

₹33,330 crore

AUM

As on March 31, 2013

21.68%

Capital-to-Risk Assets Ratio*

As on March 31, 2013

*Standalone

2

CORE VALUES

INFRASTRUCTURE BUSINESS

Customer partnership: At Srei, customer satisfaction is

the benchmark for success. Srei delights its customers

through a comprehensive range of personalised, fast,

reliable, convenient, quality-driven and yet cost-effective

fi nancial services.

Integrity: Business integrity is a way of life at Srei; it

stands by integrity in all its dealings and ensures strict

adherence to the highest standards of business ethics.

Passion for excellence: Srei’s passion for excellence is

instrumental in its positioning as India’s most innovative

infrastructure solutions provider.

Respect for people: Srei acknowledges that its people

are its most valuable assets and accordingly provides

them with the best possible work environment and treats

them like family. The Company rewards excellence and

initiative.

Stakeholder value enhancement: Srei is committed to

earning the trust and confi dence of all its stakeholders.

Its growth focus, ability to constantly enlarge its product

basket while controlling risk and reducing cost of services

has resulted in enhanced value for all stakeholders.

Professional entrepreneurship: Srei’s in-depth

knowledge of the infrastructure fi nancing business in

India, coupled with its spirit of entrepreneurship, helps it

overcome obstacles and complexities with professional

expertise.

Fund-based Fee-based Strategic investments

Equipment fi nancing Project advisory Transportation

Project fi nancing Project development Telecom infrastructure

Equipment leasing (Russia) Insurance broking Power

Investment banking Rural IT infrastructure

Alternative investment funds Rentals (Construction, Oil & Gas, Energy)

SEZ and industrial parks

Environment (Water management / Waste

management)

Annual Report 2012-13

3

Chairman and Managing Director’s message

Hemant Kanoria, Chairman and Managing Director, Srei Infrastructure Finance Limited

4

Y our Company will turn

twenty-fi ve, next year,

which is a quarter century,

seems a very long time

which has fl own away so soon. Many

of you may recollect the Initial Public

Offering of your Company in 1992-93

which was for a nominal amount of

₹2.24 crore when our asset base was just about ₹5 crore. Now your Company’s consolidated net worth

stands at over ₹3,000 crore and the consolidated total assets under

management is at ₹33,330 crore. Some of you have been part of this

journey all through, some joined

later. I take this opportunity to thank

you all for the support you have

provided and the faith you have

reposed in us.

The global economic scenario

continues to remain uncertain.

Growth in India has slowed down

too. After a 6.2 per cent GDP growth

in 2011-12, growth has further

moderated to 5 per cent in 2012-13.

With the fi rst year of the Twelfth Five

Year Plan (2012-17) experiencing

such low growth, until and unless

quick steps are taken, the nation

may miss the Twelfth Plan targets.

However, the good news is that

infl ation seems to be coming under

control. Therefore, the Reserve Bank

of India (RBI) has been reducing

the repo rates in a structured way,

which will hopefully pave the path

for increasing investments in the

infrastructure sector as the sector is

highly sensitive to interest rates.

Optimists that we are, in spite of

almost miniscule action by the

Government, we are sanguine

that India will be able to maintain

its growth of above 5 per cent.

Some positive measures aimed at

improving the domestic scenario

were announced during the latter

half of 2012-13. I expect that

momentum to continue. Many

initiatives are in ‘work-in-progress’

stage presently. Besides announcing

several Bills and getting some of

them approved in the Parliament, it

is imperative that the Government

looks at creating an enabling

environment. The tax laws, capital

market regulations and other

regulatory guidelines have become

so complicated and draconian that

both the domestic and overseas

investors / businessmen have

become scared to invest in India. It