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Directors Report of Indus Finance Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present this 24th Annual Report of the Company together with the Audited Accounts for the year ended 31st March 2015.

FINANCIAL HIGHLIGHTS AND PERFORMANCE Rs. in Million)

PARTICULARS 2014-15 2013-14

IncomefromOperations 36.83 44.35

Otherlncome 13.49 16.77

GrossReceipts 50.32 61.12

Expenses 38.66 44.88

Depreciations Amortization 0.13 4.42

Total Expenses 38.79 49.30

PBT 11.53 11.82

TAX 3.95 3.99

PAT 7.58 7.83

Proposed Dividend / Dividend 3.70 4.63

Proposed Dividend Tax / Dividend Tax 0.90 0.79

Transfer to Statutory Reserve 1.51 1.57

FINANCIAL PERFORMANCE

The profit after tax achieved by your company during the period under review is almost same as that of the previous year though the gross receipts is also less than previous year. For the fourth year in succession, your Directors are pleased to recommend 4% dividend i.e. INR. 0.40 for every equity share of Rs.10/- each fully paid up for the year 2014-15. The Dividend, if approved by the Shareholders at the ensuing Annual General Meeting will be paid to the equity share holders, whose names appear in the Register of Members, as per the provisions of the Companies Act 2013. In which case, the dividend out go would be INR. 3.70 Mn. and the dividend tax to be paid by the company would be INR.0.90 Mn.

ECONOMIC SCENARIO AND OUTLOOK:

India's growth story is expected to dominate the headlines in the years ahead with both the World Bank and the International Monetary fund predicting robust expansion for Asia's Third Largest economy on the back of reform, initiatives launched by the government and the impact loweroil prices.

The fact that India will take over China as the fastest growing economy by 2015-16 is well acknowledged. The World Bank in a report on South Asian economies said India's economy is expected to a accelerate to 8%in 2017-18 after growth of 7.6% in 2015-16.ln 2014-15 growth is expected to be 7.2% the World Bank said in its South Asia Economic Focus Spring 2015 titled 'Making the most of Cheap Oil'

The IMF in its World Economic Outlook (WEO) update said India's growth is expected to strengthen from7.2% in 2014 to 7.5% in 2015. 'Growth will benefit from recent policy reforms, a consequent pick up in investment, and lower oil prices. Lower Oil prices will raise disposable incomes, particularly among poorer house hold and help drive down inflation' the IMF said.

It said in China, growth fell to 7.4% in 2014 and is expected to fall further to 6.8% in 2015as previous excesses in real estate credit and investment continue to unwind. 'Ongoing implantation of structural reforms and lower commodity prices are expected to expand consumer oriented activities partially buffering the slowdown' IMF said.

Indian Government expects the economy to grow 8.1-8.5% in the current financial year while RBI has forecast 7.8% growth. Economic indicators have signaled sign of green shoots and policy makers expect the momentum to be sustained on the back of reform measures that unfold in the months ahead.

'Higher production capacity, commensurate with accumulating capital and increase in factor productivity and continued but targeted fiscal consolidation will help curb domestic and external imbalances in the face of rising domestic demand in medium term' the World Bank report said. It further said that acceleration on real GDP growth will be driven largely by higher investments, which are expected to grow at an average of 12% during 2015-2017.

The report said inflationary pressures are likely to ease gradually on account of lower crude prices, and an improved production capacity will prevent overheating in the medium-term.

The Government has abolished MAT from April 1,2015 and no retrospective Tax law has brought in by the Government and the Government is hopeful of Goods and Services Tax (GST) getting passed in the coming session of Parliament and the new tax regime would be put in place from April 1,2016 which would be a 'single biggesttax reform since independence.

FUTURE OUTLOOK

The Non- Banking Finance Company [NBFC] sector despite operating mostly in the area under served by the fast growing banking Industry in India, has grown considerably in terms of technological sophistication as well as size. They are exposed all kinds of risks like interest rate movement, liquidity, counter party failures .recession etc. like any other player in the financial sector. During the Year, RBI while undertaking a review of the entire regulatory framework for the NBFC Sector, issued prudential guidelines for NBFCs. Key measures introduced are classification of NPA recognition norm, standard asset provisioning norms and change in capital adequacy norms. Though the migration to new norms will strengthen the governing standards ofthe NBFCs, it is likely to increase volatility and uncertainty in the earning over next 3 years. However this does not change the actual credit flow or the margins over the cycle as there is enough liquidity in the system and hence the return ratios are likely to remain same over the cycle. These regulatory measures will make NBFCs tightly regulated, almost at par with banks.

With most ofthe players being very cautious during the concluded financial year, the sector concentrated much on risk analysis, mitigation and strengthening the governing standards. However for asset / infra financing NBFCs, FY16 will be a transition year wherein they will start recognizing NPAs and doing provisioning as per RBI's guidelines of 90 days NPA recognition and 0.4% standard asset provisioning by FY18.The proposal to extend the provisions of the SARFAESI Act to the NBFC s with asset size of Rs. 500.00 crores and above sector will go a long way towards the orderly growth and development of the sector. However non-inclusion of all NBFCs [with lesser size] will not enable the growth of the other disciplined players in the sector.

OPPORTUNITIES & THREATS

Now it has become a proven fact that only those NBFCs which fall under the regulatory norms and serious about being in the finance business survived. To survive and constantly grow, NBFCs have to focus on their core strengths while improving on weaknesses. The SARFAESI Act move for NBFCs is a great piece of news. With the economy showing signs of revival the NBFCs are likely to be very aggressive in funding particularly sunrise sectors like housing and other retail business. The automobile sector, an all-time favorite NBFCs which is back in news is likely add for the good show of the sector in the coming years. The fact that NBFCs with a size of over Rs 500 crores can be brought under the SARFAESI Act, helps maintain the asset quality management and speedy recovery. However non-inclusion of small size NBFCs who have played a pivotal role in filling the gap once again leaves behind a 'no level playing field.

Though most of the NBFCs have found alternate methods for additional resources, the Regulatory guidelines to the NBFCs to reduce the dependence on public deposit has already curtailed the capacity of the sectorto raise funds and in turn sustained growth.

Your Company operating only in major cities and having not accepted any public deposit has not ventured into any riskiersegments. Proper systems and procedures are in place to analyze and mitigate the threats.

Due to a slowdown in economic activity in past couple of years and aggressive lending by some of the NBFCs many loans have turned non-performing. Restructuring of assets means loans whose duration has been increased or the interest rate has been decreased. This happens due to inability of the loan taking company/individual to pay off the debt. Both of these have impacted the profitability of NBFCs as they are required to have a higher provisioning amount which directly eats into the profitability. Increasing the loan portfolio and effectively managing the NPAs is the key challenge, going forward for NBFCs

RISK & CONCERNS

Your Company being a NBFC is subjected to both Business and Financial risk. While the business risk associated with operating environment, ownership structure, Management, System & Policy and Corporate Governance, the financial risk lies in Asset Quality, Liquidity, Profitability and Capital Adequacy. IFL recognizes these risks and makes best effort to mitigate them in time.

One of the major concerns for the sector is the deteriorating asset quality in the banking sector which has certain indirect impact on the asset qualities of NBFCs also. Any negative growth of the Industry, irrespective of the sector has some adverse effect on the workings of the NBFCs. IFL has always kept in mind the uncertainties and their mitigation while conducting the business.

NUMBER OF MEETING OF BOARD

Indus Finance Ltd, held 4 Board Meetings during the year ended 31st March 2015. These were on 30th May 2014,11th August 2014,11th November 2014 and 30th January 2015

DIRECTORS

Mr. Bala V. Kutti is retiring in the forth coming 24th AGM of the company and being eligible offers himself for re-appointment. Your company has received a notice from a member proposing Mr. T.S. Raghavan as Independent Director for the period of five years. Ms. Alice Chhikara was appointed as additional director with effect from March 30, 2015. She holds of his up to the date of 24th Annual General Meeting. Your company has received a notice from a member proposing Ms. Alice Chhikara as Director of the Company and the information regarding their appointment and reappointment are provided in the notice convening the 24th AGM of the company.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTOR UNDER SECTION 149 (61 OF COMPANIES ACT2013

The Company has obtained declaration from the Independent Directors that they meet the criteria of Independence has provided in section 149 (6) of the Companies Act 2013

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors hereby state that;

1. In the presentation of the Annual accounts, applicable standards have been followed and there are no material departures.

2. The Directors have selected such accounting policies and apply 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 31st March 2015 and profit for the Company for the year ended 31st March 2015.

3. The Directors have taken proper and sufficient care in the maintenance of adequate accounting records in accordance with the provisions of the Act for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the annual accounts on a going concern basis; and

5. The Directors, in the case of listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and

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.

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORSAND THEIR REMUNERATION

The Nomination and Remuneration (N&R) Committee has adopted a Charter which, inter alia, deals with the manner of selection of Board of Directors and CEO & Managing Director and their remuneration. This policy is accordingly derived from the said charter.

1. Criteria of Selection of Non-Executive Directors

a. The Non-Executive Directors shall be of high integrity with relevant expertise and experience so as to have a diverse Board with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management.

b. In case of appointment of Independent Directors, the N&R Committee shall satisfy itself with regard to the independent nature of the Directors vis-a-vis the Company so as to enable the Board to discharge its function and duties effectively.

c. The N&R Committee shall ensure that the candidate identified for appointment as a Director is not disqualified for appointment under Section 164 of the Companies Act, 2013.

d. The N&R Committee shall consider the following attributes / criteria, whilst recommending to the Board the candidature for appointment as Director.

I. Qualification, expertise and experience of the Directors in their respective fields.

ii. Personal, Professional or business standing:

iii. Diversity of the Board.

e. In case of re-appointment of Non-Executive Directors, the Board shall take into consideration the performance evaluation of the Director and his engagement level.

2. Remuneration:

The Non-Executive Directors shall be entitled to receive remuneration by way of sitting fees, reimbursementof expenses for participation in the Board/Committee meetings.

i. A Non-Executive Director shall be entitled to receive sitting fees for each meeting of the Board or Committee of the Board attended by him, of such sum as may be approved by the Board of Directors within the overall limits prescribed under the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel Rules, 2014).

ii. The Independent Directors of the Company shall not be entitled to participate in the Stock Option Scheme of the Company, if any, introduced by the Company.

3. CEO, Managing Director/Whole Time Director Criteria for selection I appointment

For the purpose of selection of the CEO, Managing Director / Whole Time Director, the N&R Committee shall identify persons of integrity who possess relevant expertise, experience and leadership qualities required for the position and shall take into consideration recommendation, if any, received from any memberof the Board.

The Committee will also ensure that the incumbent fulfills such other criteria with regard to age and other qualifications as laid down under the Companies Act, 2013 or other applicable laws.

Remuneration forthe CEO, Managing Director/Whole Time Director

i. At the time of appointment or re-appointment, the CEO, Managing Director/Whole Time Director, shall be paid such remuneration as may be mutually agreed between the Companies (which includes the N&R Committee and the Board of Directors) and the CEO, Managing Director / Whole Time Director, within the overall limits prescribed undertheCompaniesAct, 2013.

ii. The remuneration shall be subject to the approval of the Members ofthe Company in General Meeting.

iii. The remuneration ofthe CEO, Managing Director/Whole Time Director, component comprises salary allowances, perquisites, amenities and retrial benefits.

Remuneration Policy for the Senior Management Employees

1. In determining the remuneration of the Senior Management Employees (i.e. KMPs and Executive Committee Members)the N&RCommittee shall ensure/considerthefollowing:

i. The relationship of remuneration and performance benchmark is clear;

ii. The remuneration component comprising salaries, perquisites and retirement benefits;

iii. The remuneration including annual increment is decided based on the criticality of the roles and responsibilities, the Company's performance vis-a-vis the annual budget achievement.

iv. N&R Committee will carry out the individual performance review based on the standard appraisal matrix and shall take into account the appraisal score card and other factors, whilst recommending the annual increment.

AUDIT COMMITTEE

A qualified and independent Audit Committee of the Board of the company is functioning. It monitors and supervises the Management's financial reporting process with a view to ensure accurate and proper disclosure, transparency and quality of financial reporting. The committee reviews the financial and risk management policies and also the adequacy of internal control systems and holds discussions with Statutory Auditors and Internal Auditors. This is enhancing the credibility of the financial disclosures of the company and also provides transparency.

The company continued to derive immense benefit from the deliberation of the Audit Committee comprising of three Directors, Mr. T.S. Raghavan, Dr. K.R. Shyamsundar & Mr. Bala V. Kutti who are highly experienced and having knowledge in project finance, accounts and company law. Mr. T.S. Raghavan is the Chairman of the Audit Committee. The Company Secretary acts as the Secretary of the Audit Committee. The minutes of each Audit Committee meeting are placed before, and discussed in the full by the Board.

THE RATIO OF THE REMUNERATION OF EACH DIRECTORS TO THE MEDIAN REMUNERATION OF THE EMPLOYEES OF THE COMPANYFORTHE FINANCIAL YEAR 2014-15ARE GIVEN BELOW

Name of the Directors Ratio to Median Employee remuneration

Mr. Bala V. Kutti - Executive Chairman 2.40

Mr. T.S. Raghavan - Independent Director 0.05

Dr. K.R. Shyamsundar - Independent Director 0.04

Ms. Alice Chhikara - Additional Director* ----

* w.e.f. 30th March 2015

THE PERCENTAGE INCREASE IN REMUNERATION OF DIRECTORS. KMP AND MEDIAN EMPLYEE FOR THE FINANCIAL YEAR 2014-15

There is no increase in remuneration to the Directors, KMP and median employee during the financial year2014-15

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

Ms. Alice Chhikara was appointed as Additional Director of the Company effect from 30th March 2015 and there is no new appointment or resignation of KMP of the Company during the under review.

PARTICULARS OF LOANS. GUARANTEE OR INVESTMENTS:

Detailed information is provided in respect of loans under long term loans and advances in notes No. 10 (d) of Notes forming part of the financial statements, similarly detailed information is provided under NonCurrent investments in Note No. 9 of Notes forming part of the financial statements. As regards guarantee, the Company has not provided any guarantee to any person or Bodies Corporates.

BUSINESS RISK MANAGEMENT:

The Company has developed a Risk Management Policy by identifying the elements of risk which are mentioned below. The risk management approach at various levels inclining documentation and reporting seeks to create transparency, minimize adverse impact on the business objectives and enhance the company's competitive advantage.

The Business risk is associated with operating environment, ownership structure, Management, System & Policy and Corporate Governance

The Financial risk lies in Asset Quality, Liquidity, Profitability and Capital Adequacy. IFL recognizes these risks and makes best effort to mitigate them in time.

One of the major concerns for the sector is the deteriorating asset quality in the banking sector which has certain indirect impact on the asset qualities of NBFCs also. Any negative growth of the Industry, irrespective of the sector has some adverse effect on the workings of the NBFCs. IFL has always kept in mind the uncertainties and their mitigation while conducting the business.

BOARD EVALUATION:

Pursuant to the provisions of the companies Act 2013, and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance the directors individually as well as the evaluation ofthe of its Audit, nomination and remuneration and compliance committees. The manner in which the valuation has been carried out has been explained in the Corporate Governance report.

DEPOSITS:

During the year under review the company has not accepted any deposits from the public with in the ambit of section 73 ofthe companies Act, 2013 and The companies (Acceptance of Deposits) Rules, 2014.

There is no significant/ material order passed by the Judicial / Regulatory authorities during the year under review.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY ANY COURTS DURING THE UNDER REVIEW.

None

WHISTLE BLOWER POLICY

The Company has a whistle blower policy to deal with instance of fraud and mismanagement if an any. The detail of the policy is explained in the Corporate Governance Report and posted on the website of the company.

FINANCIAL STATEMENTS OF THE SUBSIDIARY COMPANY IF ANY

None

INDUSTRIAL RELATIONS AND PARTICULARS OF EMPLOYEES

As of 31st March 2015, Your Company has 6 employees on its rolls. The employees will be inducted in to permanent services of the Company after training; to fill up vacancies as when arises. Your company has not issued any shares under Employees' Stockoption Scheme during the year under review.

VARIATIONS IN THE MARKET CAPITALISATION OF THE COMPANY. PRICE EARNINGS RATIO AS AT THE CLOSINGDATE OF THE CURRENT FINANCIAL YEAR AND PREVIOUS FINANCIAL YEAR:

Particulars March 31.3.2015 March 31.3.2014 % Change

Market Capitalization Rs. 19,58,13,045/- 49,25,41,560/- (60.24)

Price earnings ratio 25.48 62.58 (59.28)

PERCENTAGE OF INCREASE OR DECREASE IN THE MARKET QUOTATION OF THE SHARES IN COMPARISON TO THE RATE AT WHICH THE COMPANY CAME OUT WITH THE LAST PUBLIC OFFER:

Price of Public offer Rs. 30, Market Price as on 31.3.2015-Rs. 21.15, difference (Rs.8.85) (29.50%)

THE KEY PARAMETERS FOR ANY VARIABLE COMPONENT OF REMUNERATION AVAILED BYTHE DIRECTORS:

None.

THE RATIO OF THE REMUNERATION OF THE HIGHEST PAID DIRECTOR TO THAT OF THE EMPLOYEES WHO ARE NOT DIRECTORS BUT RECEIVE REMUNERATION IN EXCESS OF THE HIGHEST PAID DIRECTOR DURING THE YEAR:

None.

LIST OF EMPLOYEES WHO ARE IN RECEIPT OF REMUNERATION MORE THAN THE STIPULATED AMOUNT MENTIONED UNDER RULE 5 (2) OF COMPANIES (APPOINTMENT AND REMUNERATION) RULES2014

None.

AFFIRMATION THAT THE REMUNERATION IS AS PER THE REMUNERATION POLICY OF THE COMPANY:

The Company affirms remuneration is as per the remuneration policy of the Company.

CORPORATE GOVERNANCE

Your Company has complied with the requirements regarding Corporate Governance as required under revised clause 49 of the Listing agreement entered in with the Stock exchanges where the Company's shares are listed. A Report on the Corporate Governance in this regard is made as a part of this Annual Report and a certificate from the Auditors of Your Company regarding compliance of the conditions of the Corporate Governance is attached to this report.

LISTING OF EQUITY SHARES

Your Company's equity shares are continued to be listed on the Bombay Stock Exchange Ltd, Mumbai during the year under review.

AUDITORS

M/s.V.Ramaratnam & Co. retires at the conclusion of this Annual General Meeting and are eligible for reappointment.

EXTRACT OF ANNUAL RETURN

As provided in Sec 92 (3) of the Act the extract of annual return is given in Annexure (I) of this report in the format Form MGT 9, which forms part of this report.

TRANSACTIONS WITH RELATED PARTIES

Detailed information is provided with respect to the list of Related parties and transactions with them are provided in note No. 18.4 of Notes forming part of the financial statements and also in the form no. AOC 2 underAnnexure II.

SECRETARIAL AUDIT

Mr. R. Kannan, PCS is the secretarial auditor of the company for the year under review and his report is attached with this report underAnnexure III.

ADEQUACY OF INTERNAL CONTROL

Your Company has effective and adequate internal control systems in combination with delegation of powers. The control system is also supported by internal audits and management reviews with documented policies and procedures.

M/s. S. Vasudevan& Associates are the Internal Auditors to continuously monitor and strengthen the financial control procedures in line with the growth operations of the Company.

PARTICULARES REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT. 2013 AND ITS COMPANIES (ACCOUNTS) RULES 2014

The particulars required to be given in terms of section 134 of the Companies Act, 2013 and its Companies (Accounts) Rules, 2014, regarding conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Foreign Exchange outgo are not applicable to Your Company.

ACKNOWLEDGEMENT

The Directors wish to place on record their sincere thanks and gratitude to all its Bond holders, Share holders, Bankers, State Governments, Central Government and its agencies, statutory bodies, suppliers, and customers, for their continued co-operation and excellent support extended to the Company from time to time.

Your Directors place on record their utmost appreciation for the sincere and devoted services rendered by the employees at all levels.

For and on behalf of board of directors of INDUS FINANCE LIMITED (formerly known as Indus Finance Corporation Ltd)

Place: Chennai - 600 034. Bala V. Kutti Date:5th August2015. Chairman










Mar 31, 2014

Dear Shareholders

The Directors are pleased to present this, 23rd Annual Report of the Company along with the Audited Accounts of the Company for the year ended 31st March 2014.

FINANCIAL RESULTS (Rs. in Million)

PARTICULARS 2013-14 2012-13

Income from Operations 44.35 52.45

Other lncome 16.77 20.82

Gross Receipts 61.12 73.27

Expenses 44.88 42.62

Depreciations Amortization 4.42 24.76

Total Expenses 49.30 67.38

PBT 11.82 5.89

TAX 3.99 1.33

PAT 7.83 4.56

Dividend 4.63 3.24

Dividend Tax 0.79 0.53

Transfer to Statutory Reserve 1.57 0.91

FINANCIAL PERFORMANCE

The profit after tax achieved by your Company during the period under review is almost double than that of the previous year though the gross receipts are less than previous year. Therefore for the third year in succession, your Directors are pleased to recommend 5 % dividend i.e. Rs. 0.50 for every equity share of Rs.10/- each fully paid up for the year 2013-14. The Dividend, if approved by the Shareholders at the ensuing Annual General Meeting will be paid to the equity share holders, whose names appear in the Register of Members, as per the provisions of the Companies Act 2013. In which case, the dividend out go would be Rs. 4.63 Mn. and the dividend tax to be paid by the Company would be Rs. 0.79 Mn.

FUTURE OUTLOOK

NBFCs in India have played a significant role in financing various sectors of the economy, particularly those that have been underserved by the banks. Non-banking finance companies (NBFC) which operated mostly in unorganized sectors and under-serviced segments of the economy have been regulated to a large extent post reforms. Close Customer Interaction, deep understanding of the client, specialized field expertise and low cost infrastructure are the typical features of a NBFC business model. NBFCs supplement the role of the banking sector in meeting the increasing financial need of the corporate sector, delivering credit to the unorganized sector and to small local borrowers.

The fact that NBFCs as a whole account for more than 12.5% [for 2012-13 it was 12.7%as per economic survey] of the assets of the total financial system indicate the significant role NBFCs have in the financial sector. However the frequent restrictive regulations for the sector seem to be imposing regulatory burdens and causing jerks to the growth of the segment. Owing to the regulatory uncertainty and general macroeconomic lull, NBFC segment has witnessed a slower growth, slow-down in construction equipment, commercial vehicle and gold loan portfolios and building of delinquencies and lowering of interest margins. The significant change in the Regulatory frame work in the last few years has helped us to be very prudent resulting in achieving the desired goal. While your Company has maintained a perfect record of compliance of regulatory norms, as assured in the earlier years maintained a healthy credit portfolio consisting of a select number of clients. Though the outstanding credit as on 31.03.2014 declined by 10% compared to corresponding period, the reduction is attributed to timely closure of certain borrowal accounts as per contract. With the Regulator having classified the NBFCs based on their nature of business, your Company falls under the category "Loan Company" and the activities are restricted to lending only. IFCL being non-deposit accepting, loan company and having decided to continue the status further ,will be looking for alternate resources available within the regulatory framework to meet the growing demand of the credit portfolio.

OPPORTUNITIES & THREATS

The role of NBFCs has become increasingly important from both the macroeconomic perspective and the structure of the Indian financial system. It is a proven fact, that only those NBFCs which fall under the regulatory norms and serious about being in the finance business survived. To survive and constantly grow, NBFCs have to focus on their core strengths while improving on weaknesses. They have to either constantly search for new products and services in order to remain competitive or exhibit highest ethical standards in conducting their business. The coming years will be testing ground for the NBFCs and only those who will face the challenge and prove themselves will survive in the long run.

There have been several committees in the past acknowledging the role and importance of NBFCs in India and their complimentary role to banks in financial intermediation. Yet there being no level playing field, it is likely that the NBFCs will be very cautious and concentrate much on the secured transaction. Any sudden spurt in the growth depends upon the monetary policies of the new Government at the Center. Since there are several credit starved and under-serviced segments in the economy, the NBFCs have a definite long term role, the beginning of which is expected during 2014-15. NBFCs have immense business potential from the segment untapped by the commercial banks.

Consolidation of business by the public sector banks, fast expansion by the new generation banks and further banking license being issued by the Regulator appear to push the NBFCs to a corner. Non-availability of a level playing field on account of absence of a strong & effective recovery tool like the SARFAESI act (available to the banks) made the NBFCs less effective compared to commercial banks though both are engaged in similar activities. The activity oriented classification & definition and in turn the restrictions has forced the NBFCs to live with only one activity thus restricting to only few select products. The Regulatory guidelines to the NBFCs to reduce the dependence on public deposit has already curtailed the capacity of the sector to raise funds and in turn sustained growth.

Your Company operating only in major cities and having not accepted any public deposit has not ventured into any riskier segments. Proper systems and procedures are in place to analyse and mitigate the threats.

RISK & CONCERNS

Your Company being a NBFC is subjected to both Business and Financial risk. While the business risk is associated with operating environment, ownership structure, Management, System & Policy and Corporate Governance, the financial risk lies in Asset Quality, Liquidity, Profitability and Capital Adequacy. Your Company recognizes these risks and makes best effort to mitigate them in time.

One of the major concerns for the sector is the deteriorating asset quality in the banking sector which has certain indirect impact on the asset qualities of NBFCs also. Any negative growth of the Industry, irrespective of the sector has some adverse effect on the workings of the NBFCs. Your Company has always kept in mind the uncertainties and their mitigation while conducting the business.

THE RBI NORMS AND ACCOUNTING STANDARDS

To comply with RBI directions, Your Company closed its accounts for the full year ending March 2014, and your Company continues to comply with the directives issued as well as the norms prescribed by Reserve Bank of India for NBFCs.

INFORMATION AS PER SECTION 217 (1)(e) OF THE COMPANIES ACT. 1956

Your Company is a Non-Banking Finance Company and is not engaged in manufacturing activity of any kind. The disclosure of information relating to conservation of energy and technology absorption are therefore not applicable to your Company. There were no foreign exchange earnings or outgo for your Company during the year.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to provisions under section 134(5) of the Companies Act, 2013, the Board of Directors hereby state that;

1. In the preparation of Annual Accounts for the year ended 31st March 2014, all the applicable accounting standards have been followed along with proper explanation relating to material departures.

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2014 and of the Profit or Loss of the Company for the year under review.

3. The Directors have 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.

4. The Directors have prepared the Annual Accounts for the current financial year on a ''going concern'' basis.

5. The Directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

6. The Directors have devised proper systems to ensure complaints with the provisions of all applicable laws and that such system were adequate and operating effectively.

DIRECTOR

Mr. Bala V. Kutti, retires at the end of this meeting and being eligible, offers himself for reappointment.

CORPORATE GOVERNANCE

Your Company provides considerable importance to good Corporate Governance and complying with the Code of Corporate Governance introduced by SEBI. A detailed report on Corporate Governance together with a certificate from the Statutory Auditors in compliance of Clause 49 of the Listing Agreement has been annexed as part of the Annual Report.

Management Discussion and Analysis Report highlighting the performance of the Company is attached forming part of the Directors'' Report.

AUDITORS

M/s.V.Ramaratnam & Co. retire at the conclusion of this Annual General Meeting and are eligible for reappointment. Necessary resolutions are placed before the Shareholders for their approval.

ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation and gratitude to the bankers of the company and various Government agencies for their support, assistance and co-operation and look forward for their continued support.

For and on behalf of Board of INDUS FINANCE CORPORATION LTD

K.V. Bala Chairman

Place: Chennai - 600 034.

Date: 30th May 2014.


Mar 31, 2013

To The Shareholders

The Directors are pleased to present this, 22nd Annual Report of the Company along with the Audited Accountsof the Company for the yearended31"March 2013.

FINANCIAL RESULTS (Rs. in Lacs)

PARTICULARS 2012-13 2011-12

Total Income 732.74 1074.97

Profit before Depreciation and Tax 436.54 866.86

Depreciation 247.58 811.19

Tax expense 16.41 26.10

Deferred Tax Asset (3.08) (9.22)

Profit after Tax 45.63 38.79

Amount available for appropriation 45.63 38.79

Transfer to Statutory Reserve 9.13 7.76

Transfer to Profit and Loss Account 36.50 31.03

FINANCIAL PERFORMANCE

The total income achieved by your company for the period under review is Rs.732.74 lacs as against the total income of Rs. 1074 .97 lacs in the previous year. The income was higher during the previous year due to the settlement proceeds received in respect of the dispute with ICICI Bank ltd which was Rs.594 lacs Excluding this income, the total income achieved by your company during the year under review shows 52% rise as compared to the previous year. The depreciation for the period under review is Rs.247.58 as against Rs.811.19 lacs for the previous year. Your company has registered a net profit of Rs .45.63 lac for the period under review as against Rs.38.79 lacs of previous year. DIVIDEND

For the third year in succession, your Directors are pleased to recommend 3.5% dividend i.e. Rs. 0.35 for every equity share of Rs.10/- each fully paid up for the year 2012-13.The Dividend, if approved by the Shareholders at the ensuing Annual General Meeting, will be paid to the equity share holders, whose names appear in the Register of Members, as per the provisions of the Companies Act 1956. In which case, the dividend out go would be Rs.32.40 lacs and the dividend tax to be paid by the company would be Rs.5.25lacs. FUTURE OUTLOOK

While NBFCs have witnessed substantial growth over the years, they have played an important role by providing finance to activities which are not served by the organized banking sector. NBFCs supplement the role of the banking sector in meeting the increasing financial need of the corporate sector, delivering credit to the unorganized sector and to small local borrowers. With NBFC regulations having undergone tremendous refinement over the past decade, there emerged a large number of non-deposit taking companies having inter-linkage with the broader financial system. The regulator termed this NBFCs Systemically important and brought in sharper supervision with introduction of capital adequacy and exposure norms.ThissignificantchangeintheRegulatoryframeworkinthelastfewyears has helped us to be very prudent resulting in achieving the desired goal While your company has maintained a perfect record of compliance of regulatory norms, as assured in the earlier years maintained a healthy credit portfolio consisting of a select number of clients. IFCL has achieved modest gains in terms of Gross Income. Your company is in the process of obtaining credit rating from a leading, recognized rating agency.

IFCL being a non deposit accepting, loan company having decided to continue the status further, will be looking for alternate resources available within the regulatory framework to meet the growing demand of the creditportfolio.

Although considerable improvement has been witnessed during the last decade in the functioning and survival of the NBFC sector, particularly after global financial crisis and stringent regulatory norms, the overall growth of this sector may remain subdued, considering the significant slowdown in the economy, structural challenges such as increased refinancing risk, declining margins. The Company is planning to counter its challenges through quality advance portfolio and committed workforce, tight control on liquidity and margins, cost effective resources and working towards creating better value for all the stakeholders in the most competitive manner.

OPPORTUNITIES & THREATS

Non-banking financial companies constitute an important segment of the financial system. They play very crucial role in channelizing the scare financial resources to capital formation. NBFCs have more flexible structure than banks, can take quickdecisions and take greater risks.

NBFC undertake a wide range of activities like hire-purchase finance, vehicle financing, equipment lease finance, personal loans, working capital loans, consumer loans, housing loans, loans against shares and investment, etc. While NBFC s have immense business potential from the segment untapped by the commercial banks, the organised sector particularly the infrastructure development companies seem to be very comfortable with NBFC sector for their project funding. With the successive Governments aiming better infrastructure in the country, there is tremendous scope and opportunity for the NBFCs for their activities in theform of both lending and equipmentfinancing.

Though the functions of NBFCs are almost similar to that of banks, there are few differences between both the institutions.

1. NBFCs do not have access to public demand deposit.

2. NBFCsarenotpartofpayment&settlementsystem

3. There is no insurance cover like DICGC cover available to banks.

The increasing number of existing bank branches and the new banking license being issued by the RBI will further increase the competition in the financial market. Banks are bound to expand their horizon particularly the rural area which is now subjected to expansion. While these banks are expected to grab a major share of NBFC business in the so far unbanked area, the latest advice of the RBI to NBFCs to reduce dependence on the public deposit will have adverse impact on their capacity to mobilize resources and cater the demand, thus having severe impact on the profitability.

Non availability of a level playing field on account of absence of a strong & effective recovery tool like the SARFAESI act (available to the banks) made the NBFC s less effective compared to commercial banks though both are engaged in similar activities.

Your Company has not ventured into riskier segments such as unsecured loans, purchase finance for used commercial vehicles, capital market lending, etc. which could have adverse impact on the financial health. RISKS AND CONCERNS

An RBI working group has recommended higher capital norms for non-banking financial companies (NBFCs), increased risk weights for NBFC lending to commercial real estate and capital markets sectors. The group has also recommended that accounting norms and provisions that are currently applicable to banks be applied to NBFCs also in a phased manner. The working group has also recommended that the NBFCs may be given the benefit under SARFAESI Act, 2002.

IFCL being a NBFC is subjected to both Business and Financial risk. While the business risk is associated with operating environment, ownership structure, Management, System & Policy and Corporate Governance, the financial risk lies in Asset Quality, Liquidity, Profitability and Capital Adequacy. IFCL recognizes these risks and makes best effort to mitigate them in time.

THE RBI NORMS AND ACCOUNTING STANDARDS

To comply with RBI directions, your company closed its accounts for the full year ending March 2013, and your Company continues to comply with the directives issued as well as the norms prescribed by Reserve BankoflndiaforNBFCs.

INFORMATION AS PERSECTION217f1)fe)OFTHECOMPANIESACT. 1956

Your Company is a Non-Banking Finance Company and is not engaged in manufacturing activity of any kind. The disclosure of information relating to conservation of energy and technology absorption are therefore not applicable to your company. There were no foreign exchange earnings or outgo for your Company during the year.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuanttosection217(2AA)of the Companies (Amendment) Act2000, the Directors confirm that;

1. In the preparation of Annual Accounts for the year ended 3rt March 2013 all the applicable accounting standards have been followed along with proper explanation relating to material departures.

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March 2013 and of the Profit or Loss of the company for the year under review.

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the Annual Accounts for the current financial year on a ''going concern'' basis.

DIRECTOR

Mr. T.S. Raghavan, retires at the end of this meeting and being eligible, offers himself for reappointment. DELISTING OF SHARES FROM MADRAS STOCK EXCHANGE LTD AND COIMBATORE STOCK EXCHANGE LTD.:

You are aware that pursuant to the approval of the shareholders for voluntary delisting of 2009 of SEBI in their Annual General Meeting held on 30-9-2011, the company has submitted the application fordelisting of shares to the respective stock exchanges in February 2012, MSE has intimated their approvals for delisting of shares from MSE. However no reply has been received from CSE. As per the said regulation, it is deemed to have been approved, on the expiry of thirty working days from the date of submission of the such application.

CORPORATEGOVERNANCE

Your Company provides considerable importance to good Corporate Governance and complying with the Code of Corporate Governance introduced by SEBI. Adetailed report on Corporate Governance together with a certificate from the Statutory Auditors in compliance of Clause 49 of the Listing Agreement has been annexed as part of the Annual Report. Management Discussion and Analysis Report highlighting the performance of the company is attached forming part of the Directors'' Report.

PERSONNEL

Your company does not have any employee drawing salary in excess of the amount stipulated under

Section217(2A)of the CompaniesAct, 1956.

AUDITORS

M/s.V.Ramaratnam & Co. retire at the conclusion of this Annual General Meeting and are eligible for reappointment.Necessary resolution sareplacedbe fore the Shareholders for their approval.

ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation and gratitude to the bankers of the company and various Government agencies for their support, assistance and co-operation and look forwardfortheircontinued support.

For and on behalf of Board of

INDUS FINANCE CORPORATION LTD

Place: Chennai Bala V.Kutti

Date: 10th August 2013. Chairman


Mar 31, 2010

The Directors have great pleasure in presenting the 19th Annual Report of the Company along with the Audited Accounts of the Company for the year ended 31st March 2010.

FINANCIAL PERFORMANCE Rs.in Lakhs

PARTICULARS 2009-10 2008-09

Total Income 52.85 50.66

Profit before Depreciation, Bad debt and Tax 26.58 25.07

Depreciation 11.19 11.05

Tax provision 1.33 3.72

Deferred Tax Asset 3.36 -

Profit after Tax 17.10 10.82

Amount available for appropriation 17.10 10.82

Transfer to Statutory Reserve 3.42 2.16

Transfer to Profit and Loss Account 13.86 8.66



FINANCIAL PERFORMANCE:

Your Companys income has marginally increased from Rs.50.66 lacs to Rs 52.85 lacs for the period under review. Similarly PBT has increased by 6% to Rs 26.58 lacs for the period under review from Rs. 25.07 lacs of previous financial year. Your company has registered a Net Profit of Rs.17.10 lacs for the year under review against the Net profit Rs.10.82 lacs of the previous year. Rs.3.42 lacs has been transferred to Statutory Reserve and transferred Rs13.86 lacs to Profit and Loss Account for the year under review. The Board does not recommend dividend for the year under review with a view to consolidate and improve the future performance of your company.

FUTURE OUTLOOK:

Your Company is set to begin the upcoming financial year on a positive note, with its appeal in High Court against the Income Tax demand is expected to be sorted out at the earliest. Leveraging on the groups strength, Your Company is set to establish itself as major investment vehicle in promoting already existing and newly formed group companies. It is also looking at diversifying into areas of Micro Finance, and other avenues of Project funding by mobilising funds in range of Rs. 80 to 100 crores through private placements from PE investors. With favorable economic condition & huge opportunities in NBFC industry, your company is expected to increase its customer base, Net profit and Net worth in the upcoming FY 2010-11.

OPPORTUNITIES & THREATS:

The NBFC industry holds immense potential and the Government of Indias increased focus towards Financial Inclusion has created various opportunities for existing NBFCs to leverage on their established customer base in rural areas. The recent steps by the Government of India to create Infrastructure NBFC and to provide banking license for NBFCs is a positive signal and the emergence of REMF & REIT has brought new scope for funding in Real Estate Sector. The above opportunities have made the Industry highly competitive with the emergence of new category of systematically important NBFCs, along with existing local and Multinational players leading to tough competition within the industry.

RISK AND CONCERNS:

As an NBFC, your Company is subjected to both external risk and internal risk. External risk due to interest rate fluctuation, slowdown in economic growth rate, political instability, market volatility, decline in foreign exchange reserves, etc. Internal risk is associated with your Companys business which includes deployment of funds in specific projects, diversification into other business operations, retention of talented personnel, managing effective growth rate, volatility in interest rate, NPAs in portfolio, changes in compliance norms and regulations, contingent liabilities and other legal proceedings. Your Company recognizes the importance of risk management and has invested in people, process and technologies to effectively mitigate the above risks.

THE RBI NORMS AND ACCOUNTING STANDARDS

To comply with RBI directions, your company closed its accounts for the full year ending March 2010, and your Company continues to comply with the directives issued as well as the norms prescribed by Reserve Bank of India for NBFCs.

INFORMATION AS PER SECTION 217 (1)(E) OF THE COMPANIES ACT, 1956

Your Company is a Non-Banking Finance Company and is not engaged in manufacturing activity of any kind. The disclosure of information relating to conservation of energy and technology absorption are therefore not applicable to your company. There were no foreign exchange earnings or outgo for your Company during the year.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 217 (2A) of the Companies (Amendment) Act 2000, the Directors confirm that;

1. In the preparation of Annual Accounts for the year ended 31st March 2010, all the applicable accounting standards have been followed along with proper explanation relating to material departures.

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March 2010 and of the Profit or Loss of the company for the year under review.

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the Annual Accounts for the current financial year on a going concern basis. DIRECTORS:

Shri.K.V.Bala retires at the end of this meeting and being eligible, offers himself for re-appointment.

Shri. A. Rajasukumar resigned as director effective 18th March 2010 the Board places on record his services to the Company during his tenure as Director of the Company.

Shri.T.S. Raghavan who was appointed as Additional Director during the financial year 2009-10, retires at the end of this meeting. A proposal has been received from a member signifying his candidature for the office of the Directors. Necessary Resolutions are placed before the Shareholders for their approval in this regard.

CORPORATE GOVERNANCE

Your Company provides considerable importance to good Corporate Governance and complying with the Code of Corporate Governance introduced by SEBI. A detailed report on Corporate Governance together with a certificate from the Statutory Auditors in compliance of Clause 49 of the Listing Agreement has been annexed as part of the Annual Report. Management Discussion and Analysis Report highlighting the performance of the company is attached forming part of the Directors Report.

PERSONNEL

Your company does not have any employee drawing salary in excess of the amount stipulated under Section 217 (2A) of the Companies Act, 1956.

AUDITORS

M/s.S.Vasudevan & Associates, Chartered Accountants, Chennai retires at the ensuing Annual General Meeting and are being eligible for re-appointment. Necessary resolutions are placed before the Shareholders for their approval.

ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation and gratitude to the bankers of the company and various Government agencies for their support, assistance and co-operation and look forward for their continued support.

For and on behalf of Board of SUBUTHI FINANCE LIMITED Place: Chennai K.V. Bala T.R.Jayaraman

Director Director

 
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