SKS Microfinance has announced a net loss of Rs 70 crore for the period ended on March 31 because of annulment of processes in many parts of Andhra Pradesh.

For the fiscal 2010-11, the net profit of the country's first listed public company in the microfinance sector dropped 36% to Rs 111.63 crore as against Rs 173.95 crore during the previous year.

SKS had registered a net profit of Rs 63 crore in the fourth quarter of 2009-10, before going to the market rising massive funds in its first initial public offering (IPO).

But in just two quarters, the company's income dropped to Rs 170.93 crore as against Rs 281.93 crore last year.

The company said that its credit cost surged to Rs 317 crore in FY'11 owing to provisioning, higher than Rs 51 crore during the last financial year.

SKS Chief Financial Officer S Dilliraj stated, "We could have merely followed provisioning norms as per RBI norms, which would have resulted in profit for Q4. However, we took more stringent provisioning norms."

At the end of the financial year, the net worth of the company stood at Rs 1,781 crore with a cash and bank balance of Rs 558 crore.

During FY'11, SKS disbursed loans worth Rs 7,831 crore as against Rs 7,618 crore in FY'10.

The problem started in 2010 when mounting suicides in AP on the allegements of high rates of interest charged by microfinance institutions hit their strong-arm recovery plans and the state administration suppressed them with strict Micro Finance Institutions (Regulation of Money Lending) Bill, 2010 shaping their recovery rules and operations.