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Directors Report of Sakthi Finance Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present their 58th Annual Report together with the audited accounts of the company for the financial year ended 31st March 2015.

FINANCIAL PERFORMANCE (Rs. lakhs)

Particulars 2014-15 2013-14

Profit before tax 2128.96 2278.66

Less: Provision for Taxation

- Current Tax 806.18 780.17

- Deferred tax (259.09) 82.76

- Net Provision for tax (2.77) - (earlier years)

Profit after tax 1584.64 1415.73

Surplus brought forward from last year 1567.12 1136.52

Amount available for appropriation 3151.76 2552.25 Appropriations

Transfer to Statutory Reserve 316.93 283.15

Dividend on Preference Shares 100.76 100.00

Tax on preference Dividend 20.15 17.00

Proposed Dividend on Equity Shares 500.00 500.00

Tax on Proposed Equity Dividend 101.81 84.98

Balance carried over to Balance Sheet 2112.11 1567.12

Total 3151.76 2552.25

BUSINESS

During the year, the company disbursed Rs. 50266 lakh in hire purchase operations as against Rs. 48629 lakh during the previous financial year. The collection efficiency continues to be very good. Your directors are hopeful of better business volumes and profitability in the years to come.

There is no change in the Company's nature of business.

DIVIDEND Preference Shares

The Board of Directors have, at their meeting held on 31st March 2015, declared an interim dividend of 10% (Rs. 10 per share) on 10% Redeemable Cumulative Preference Shares of Rs. 100 each for the financial year ending 31st March 2015 amounting to Rs. 100 lakh.

Further, the Board of Directors at their meeting held on 30th May 2015 recommended a pro rata dividend @ 10% on the 10% Redeemable Cumulative Preference Shares (new) allotted during the year (Rs. 0.14 on 4,29,550 Preference shares and Rs. 0.05 on 3,18,000 preference shares) amounting to Rs. 0.76 lakh.

Equity Shares

Your Directors are pleased to recommend a dividend of Rs. 1 per equity share (10% on the face value of equity share of Rs. 10 each) for the year ended 31st March 2015.

ISSUE OF PREFERENCE SHARES (NEW)

During the current year, 7,47,550 10% Redeemable Cumulative Preference Shares of Rs. 100 each have been issued on private placement basis aggregating to Rs. 747.55 lakh. Further 6,90,300 10% Redeemable Cumulative Preference Shares of Rs. 100 each which were issued on private placement basis on 31st March 2012 aggregating to Rs. 690.30 lakh has been redeemed out of the proceeds of the fresh issue of preference shares.

As at 31st March 2015, the company has a paid-up preference capital of 10,57,250 10% Redeemable Cumulative Preference Shares of Rs. 100 each aggregating to Rs. 1057.25 lakh.

DEPOSITS

The total deposits with the company as at 31st March 2015 stood at Rs. 16513 lakh as against Rs. 12880 lakh for the corresponding previous year.

As at the end of the financial year, 923 public deposits amounting to Rs.467.24 lakh were due for repayment but remained unclaimed. The Company has been reminding the depositors regularly about the maturity and out of the said deposits, 428 deposits amounting to Rs. 256.08 lakhs have since been claimed and repaid / renewed as per their instructions.

PUBLIC ISSUE OF SECURED, REDEEMABLE, NON-CONVERTIBLE DEBENTURES FOR Rs. 100 CRORE

During the year, the Company made a public issue of Secured, Redeemable, Non-Convertible Debentures (NCDs) of Rs. 100 each aggregating to Rs. 100 crore. The NCD issue opened on 27th February 2015 and closed on 19th March 2015. The Company made allotment of 1,00,00,000 NCDs to the applicants on 1st April 2015. The NCDs have been listed and admitted for trading on BSE Limited with effect from 7th April 2015.

VOLUNTARY DELISTING FROM MADRAS STOCK EXCHANGE LIMITED

At present, our company's equity shares are listed on BSE Limited.

Madras Stock Exchange Limited (MSE) by its letter dated 12th June 2014 informed that SEBI had proposed to issue order for the de-recognition of MSE as MSE failed to achieve the prescribed trading turnover of Rs.1000 crore on a continuous basis at any time for the past two years. In view of this, MSE requested all Companies whose equity shares are listed on its exchange, to delist the equity shares from MSE.

In view of the above, the Board of Directors at their meeting held on 9th August 2014 approved the proposal for voluntary delisting of its equity shares from MSE, by complying with SEBI (Delisting of Equity Shares) Regulations 2009.

On our application, the MSE approved to remove the name of the company from the list of Listed Securities of the MSE with effect from 5th December 2014. The equity shares of the Company will continue to be listed on BSE.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

1. Dr.N.Mahalingam, Promoter of the Company passed away on 2nd October 2014. He was the Chairman of the Company for more than 3 decades. His advice and guidance immensely benefitted the company in its growth and adherences to good corporate practices. His overall contribution is immeasurable to the group as a whole and our company in particular. We pledge to follow his high standards in conduct of the business and in all activities.

2. Sri S Ragothaman, Independent Director resigned from the Board with effect from 14th January 2015. The Board wish to place on record the very valuable contributions made by him during his tenure of office.

3. Retiring by rotation

In accordance with the provisions of Section 152(6), Sri M Srinivaasan (DIN: 00102387) will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer himself for reappointment. The Board recommends his reappointment.

4. Appointment

Smt. Priya Bhansali (DIN:00195848) has been appointed as an Additional Director (Non-executive Independent Director) under Section 161 of the Companies Act 2013 with effect from 31st March 2015.

Similarly, Sri K P Ramakrishnan (DIN:07029959) has been appointed as an Additional Director (Non-executive Independent Director) under Section 161 of the Companies Act 2013 with effect from 30th May 2015.

As Additional Directors, they hold office up to the date of the ensuing Annual General Meeting. The Company has received notices as per Section 160(1) of the Companies Act 2013 from members proposing their appointment as Independent Directors for a period of 5 years commencing from the conclusion of the forthcoming Annual General Meeting. The Board recommends their appointment as Independent Directors.

5. Reappointment of Sri M Balasubramaniam as Managing Director

The present term of office of Sri M Balasubramaniam, Managing Director is valid up to 28th September 2015. Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors at their meeting held on 7th August 2015, approved his reappointment for a further period of 5 years with effect from 29th September 2015. A resolution relating to his reappointment is placed before the members for their approval at the ensuing Annual General Meeting.

The profiles of the Director's retiring by rotation, Additional Directors and the Managing Director, as required under Clause 49 of the Listing Agreement entered into with Stock Exchange, is given in the Annexure to the Notice of the 58th Annual General Meeting.

6. Changes in Key Managerial Personnel

Sri M K Vijayaraghavan, Chief Financial Officer (CFO) of the Company resigned with effect from 30th September 2014. The Board placed on record its appreciation for the valuable services rendered by him during his tenure as CFO.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors appointed Dr S Veluswamy, Senior President (Operations) as CFO of the Company with effect from 1st October 2014.

Pursuant to Section 203 of the Companies Act 2013, Sri M Balasubramaniam, Managing Director, Dr S Veluswamy, Chief Financial Officer and Sri S Venkatesh, Company Secretary were appointed as Key Managerial Personnel (KMP) of the Company.

AUDIT COMMITTEE

The Audit Committee has been functioning with the following three non-executive directors of which two are Independent Directors.

1. Dr A Selvakumar, Chairman

2. Sri A Shanmugasundaram, Member

3. Sri M Srinivaasan, Member

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Clause 49 of the Listing Agreement, a report on Management Discussion and Analysis Report forms part of this report.

CORPORATE GOVERNANCE REPORT

As required under Clause 49 of the Listing Agreement, a report on Corporate Governance and a certificate from the auditors of the company regarding compliance of the conditions of Corporate Governance as stipulated under the listing agreement forms part of the Annual Report. The details of policy on remuneration is given in the Corporate Governance Report.

DISLCOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013

The company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 and the rules framed under it.

During the financial year 2014-15, the company has not received any complaint on sexual harassment.

DISCLOSURES REQUIRED UNDER THE COMPANIES ACT 2013 AND THE LISTING AGREEMENT

The information required to be disclosed under the Companies Act 2013 and the Listing Agreement is set out in the Annexure-I and forms part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act 2013, your directors confirm, to the best of their knowledge and belief, that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b. they have selected such accounting policies and applied 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 at the end of the financial year and of the profit of the company for the financial year;

c. they 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;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR Policy of the Company and the details about the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed in Annexure-II. Further details of composition of the Corporate Social Responsibility Committee and other details are provided in the Corporate Governance Report which forms part of this report.

BOARD EVALUATION

The performance evaluation of the Board, its Committees and individual directors was conducted and the same was based on questionnaire and feedback from all the Directors on the Board as a whole, Committees and self-evaluation.

Directors, who were designated, held separate discussions with each of the Directors of the Company and obtained their feedback on overall Board effectiveness as well as each of the other Directors.

Based on the questionnaire and feedback, the performance of every director was evaluated in the meeting of the Nomination and Remuneration Committee (NRC). The meeting of NRC also reviewed performance of the Managing Director on goals (quantitative and qualitative) set at the beginning of the year in April 2015.

A separate meeting of the Independent Directors ("Annual ID meeting") was convened, which reviewed the performance of the Board (as a whole), the non-independent directors and the Chairman. Post the Annual ID meeting, the collective feedback of each of the Independent Directors was discussed by the Chairman of the NRC with the Board's Chairman covering performance of the Board as a whole, performance of the non-independent directors and performance of the Board Chairman.

Some of the key criteria for performance evaluation are as follows:

Performance evaluation of Directors:

* Attendance at Board / Committee Meetings

* Contribution at Board / Committee Meetings

* Guidance to management outside of Board / Committee meetings

Performance evaluation of Board and Committees:

* Degree of fulfilment of key responsibilities

* Board structure and composition

* Establishment of Committee's responsibilities

* Effectiveness of Board processes and information

* Efficacy of communication with external stakeholders

AUDITORS

1. Statutory Auditors

M/s P N Raghavendra Rao & Co (ICAI Reg.No.003328S) were appointed as statutory auditors of the Company at the 57th Annual General Meeting to hold office up to the conclusion of the 60th Annual General Meeting, subject to the annual ratification of the appointment by the members. They have confirmed their eligibility under Section 141 of the Companies Act 2013 and the rules framed under the Act for continuation of their term.

2. Secretarial Auditors

The Company appointed M/s. S Krishnamurthy & Co, Practising Company Secretaries, Chennai to carry out Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year 31st March 2015 is enclosed as Annexure- III.

The clarification to the observations in the Secretarial Audit Report is given below:

The Company had gone in for change of accounting software from the earlier software developed in-house, to newly bought-out software. On account of the migration to the new software, the checks and balances with regard to verification of veracity of accounting figures generated with the new software took additional time. This has caused the delay in compilation of the various returns in Form Nos. NBS-1, NBS-2, NBS-3, NBS-6 and ALM being submitted to RBI periodically. The company is making efforts to stabilize the accounting operations under the new software during the current year and expects to submit the aforesaid returns within the time lines prescribed by RBI prospectively.

The Board has appointed M/s. S Krishnamurthy & Co, Practising Company Secretaries, Chennai as the Secretarial Auditors for the financial year 2015-16. Necessary consent has been received from them to act as Secretarial Auditors.

PARTICULARS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT 2013

As required under Section 134(3)(m) of the Companies Act 2013 read with Companies (Accounts) Rules 2014 are given below:

a. The Company has no activity involving conservation of energy or technology absorption;

b. The Company does not have any Foreign Exchange Earnings; and

c. Foreign Exchange Outgo : Rs. 49.68 lakh

The company has no employee drawing remuneration more than the limits prescribed under Section 197 of the Companies Act 2013.

ACKNOWLEDGEMENT

Your Directors wish to place on record the valuable assistance and excellent co-operation extended by the members, banks, financial institutions, rating agencies, Reserve Bank of India and other regulatory authorities. The Board of Directors wish to convey their sincere thanks to the depositors and debenture holders of the company for their continued patronage. They also wish to appreciate the excellent services rendered by the employees of the company.

We pray the Goddess SAKTHI to continue to shower Her blessings and to guide us in all our endeavours.

For and on behalf of the Board 7th August 2015 M Manickam Coimbatore Chairman






Mar 31, 2014

Dear members,

The Directors are pleased to present their Fifty Seventh Annual Report together with the audited accounts of the company for the financial year ended 31st March 2014.

FINANCIAL PERFORMANCE (Rs. lakhs)

Particulars 2013-14 2012-13

Profit before tax 2278.66 2133.04 Less: Provision for:

- Current Tax 780.17 691.66

- MAT credit utilization - 31.13

- Deferred tax 82.76 (4.61)

Net Provision for Income Tax (earlier years) - 15.01

Net Profit after tax 1415.73 1399.85

Add : Surplus brought forward from 1136.52 711.95 previous year

Amount available for appropriation 2552.25 2111.80 Appropriations

Transfer to Statutory Reserve 283.15 279.97

Interim Dividend on Preference Shares 100.00 94.93

Tax on Interim Dividend on Preference Shares 17.00 15.40

Proposed Dividend on Equity Shares 500.00 500.00

Tax on Proposed Equity Dividend 84.98 84.98

Surplus carried to balance sheet 1567.12 1136.52

Total 2552.25 2111.80

BUSINESS

During the year, the company disbursed Rs. 48629 lakhs in hire purchase business as against Rs. 47,038 lakhs during the previous financial year. The collection efficiency continues to be at its best. Your directors are confident of achieving better business volumes and profitability in the years ahead.

RESERVES AND SURPLUS

As required under Section 45IC of the Reserve Bank of India Act 1934, the Company has transferred 20% of the net profit after tax to Statutory Reserve.

DIVIDEND

Preference Shares

The Board of Directors have, at their meeting held on 25th March 2014, declared an interim dividend of 10% (Rs. 10 per share) on 10% Redeemable Cumulative Preference Shares of Rs. 100 each for the financial year ending 31st March 2014. The preference dividend involved a cash outflow of Rs. 117 lakhs including dividend distribution tax.

Your Directors have confirmed the interim dividend paid on preference shares for the financial year ended 31st March 2014 as final dividend on preference shares.

Equity Shares

Your Directors are pleased to recommend a dividend of Rs. 1 per equity share (10% on the face value of equity share of Rs. 10 each) for the year ended 31st March 2014. Further, the equity dividend, which is subject to the approval of members at the forthcoming annual general meeting, would involve a cash outflow of Rs. 584.98 lakhs including dividend distribution tax.

DEPOSITS

The total deposits with the company as at 31st March 2014 stood at Rs. 12880 lakhs as against Rs. 5,477 lakhs for the corresponding previous year.

As at the end of the financial year, 561 public deposits amounting to Rs. 223.21 lakhs were due for repayment but remained to be claimed or renewed. The Company has been reminding the depositors regularly about the maturity and out of the said deposits, 128 deposits amounting to Rs. 77.88 lakhs have since been claimed and repaid / renewed as per their instructions.

DIRECTORS

Sri A Shanumgasundaram and Sri S Ragothaman, Directors are liable to retire by rotation at the ensuing Annual General Meeting. In terms of Section 149 of the Companies Act 2013, the Company has proposed to appoint Sri A Shanmugasundaram, Sri S. Ragothaman, Dr A Selvakumar and Sri P S Gopalakrishnan as independent directors at the ensuing Annual General Meeting.

The profile of Directors, as required under Clause 49(IV)(G) of the Listing Agreement are given in the Annexure to the Notice of the 57th Annual General Meeting.

AUDIT COMMITTEE

The Audit Committee has been functioning with the following three non-executive directors of which two are Independent Directors.

1. Dr A Selvakumar, Chairman

2. Sri A Shanmugasundaram, Member

3. Sri M Srinivaasan, Member

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Clause 49 of the Listing Agreement, a report on Management Discussion and Analysis Report forms part of this report.

CORPORATE GOVERNANCE REPORT

As required under Clause 49 of the Listing Agreement, a report on Corporate Governance and a certificate from the auditors of the company regarding compliance of the conditions of Corporate Governance as stipulated under the listing agreement forms part of the Annual Report.

PARTICULARS REQUIRED UNDER SECTION 217 OF THE COMPANIES ACT 1956

As required under Section 217(1)(e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988:

a. The Company has no activity involving conservation of energy or technology absorption;

b. The Company does not have any Foreign Exchange Earnings; and

c. Foreign Exchange Outgo : Rs. 44.50 lakhs

The company has no employee drawing remuneration more than the limits prescribed under Section 217(2A) of the Companies Act 1956.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act 1956, your directors confirm, to the best of their knowledge and belief, that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departure has been made from it;

b. the Company has selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the financial year;

c. the Company has 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; and

d. the annual accounts of the Company has been prepared on a going concern basis.

AUDITORS

M/s P N Raghavendra Rao & Co (ICAI Reg.No:003328S) Chartered Accountants, Coimbatore retire at the conclusion of the ensuing Annual General Meeting. It is proposed to re-appointment them as statutory Auditors of the Company from the conclusion of the forthcoming Annual General Meeting till the conclusion of the 60th Annual General Meeting, subject to ratification of their appointment at every Annual General Meeting. The company has obtained a confirmation from the auditors that their reappointment, if made, at the forthcoming annual general meeting would be within the conditions specified under Section 139 of the Companies Act 2013.

The Members, year on year, will be requested to ratify their appointment of Auditors and to authorize the Board of Directors to fix their remuneration. In this connection, the attention of the Members is invited to Item No.4 of the Notice.

ACKNOWLEDGEMENT

Your Directors wish to place on record the valuable assistance and excellent co-operation extended by the members, banks, financial institutions and government authorities. Your Directors wish to convey their sincere thanks to the depositors and debenture holders of the company for their continued patronage. They also wish to appreciate the excellent services rendered by the employees of the company.

We pray the Goddess SAKTHI to continue to shower her blessings and to guide us in all our endeavours.

For and on behalf of the Board Coimbatore M Manickam 9th August 2014 Chairman


Mar 31, 2013

To the Members

The Directors are pleased to present their Fifty Sixth Annual Report together with the audited accounts of the company for the financial year ended 31st March 2013.

FINANCIAL PERFORMANCE

(Rs. lakhs)

Particulars 2012-13 2011-12

Profit before tax 2133.04 1717.05

Less: Provision for:

- Current Tax 691.66 451.26

- MAT credit (Entitlement) / Utilization 31.13

- Deferred tax (4.61) 105.38

Net Provision for Income Tax (earlier years) 15.01 (1.29)

Net Profit after tax 1399.85 1161.70

Add : Surplus brought forward from previous year 711.95 363.92

Amount available for appropriation 2111.80 1525.62

Appropriations

Transfer to Statutory Reserve 279.97 232.34

Interim Dividend on Preference Shares 94.93 0.19

Tax on Interim Dividend on Preference Shares 15.40 0.03

Proposed Dividend on Equity Shares 500.00 500.00

Tax on Proposed Equity Dividend 84.98 81.11

Surplus carried to balance sheet 1136.52 711.95

Total 2111.80 1525.62

BUSINESS

During the year'' the company disbursed Rs. 47''038 lakhs in hire purchase business as against Rs. 42''133 lakhs during the previous financial year. The collection efficiency continues to be at its best. Your directors are hopeful of better business volumes and profitability in the coming years.

RESERVES AND SURPLUS

As required under Section 45IC of the Reserve Bank of India Act 1934'' the Company has transferred 20% of the net profit after tax to Statutory Reserve.

DIVIDEND

a. Preference Shares

The Board of Directors have'' at their meeting held on 30th March 2013'' declared an interim dividend of Rs. 10 per share (10% per share'' including pro rata) on 10% Redeemable Cumulative Preference Shares of Rs. 100 each for the financial year ending 31st March 2013. The preference dividend involved a cash outflow of Rs. 110.33 lakhs including dividend distribution tax.

Your Directors have confirmed that the interim dividend paid on Redeemable Cumulative Preference Shares for the financial year ended 31st March 2013 be treated as final dividend.

b. Equity Shares

Your Directors are pleased to recommend a dividend of Rs. 1 per equity share (10% on the face value of equity share of Rs. 10 each) for the year ended 31st March 2013. Further'' the equity dividend'' which is subject to the approval of members at the forthcoming annual general meeting'' would involve a cash outflow of Rs. 584.98 lakhs including dividend distribution tax.

ISSUE OF PREFERENCE SHARES

The Allotment Committee of Directors at their various Meetings held during the financial year 2012-13 have allotted 3''09''700 10% Redeemable Cumulative Preference Shares of Rs. 100 each on private placement basis aggregating to Rs. 309.70 lakhs. As on 31st March 2013'' the company has a paid up preference share capital of 10''00''000 10% Redeemable Cumulative Preference Shares of Rs. 100 each aggregating to Rs. 1000 lakhs.

DEPOSITS

The total deposits with the company as at 31st March 2013 stood at Rs. 5477 lakhs as against Rs. 2''773 lakhs for the corresponding previous year.

As at the end of the financial year'' 634 public deposits amounting to Rs. 248 lakhs were due for repayment but remained to be claimed or renewed. The Company has been reminding the depositors regularly about the maturity and out of the said deposits'' 106 deposits amounting to Rs. 75 lakhs have since been claimed and repaid / renewed as per their instructions.

DIRECTORS

The following directors retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment.

1. Dr A Selvakumar

2. Sri P S Gopalakrishnan

The profiles of Directors'' as required under Clause 49(IV)(G) of the Listing Agreement are given in the Annexure to the Notice of the 56th Annual General Meeting.

AUDIT COMMITTEE

The Audit Committee has been functioning with the following three non-executive directors of which two are Independent Directors.

1. Dr A Selvakumar'' Chairman

2. Sri A Shanmugasundaram'' Member

3. Sri M Srinivaasan'' Member

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Clause 49 of the Listing Agreement'' a report on Management Discussion and Analysis forms part of this report.

CORPORATE GOVERNANCE REPORT

As required under Clause 49 of the Listing Agreement'' a report on Corporate Governance and a certificate from the auditors of the company regarding compliance of the conditions of Corporate Governance as stipulated under the listing agreement form part of the Annual Report.

PARTICULARS REQUIRED UNDER SECTION 217 OF THE COMPANIES ACT 1956

As required under Section 217(1)(e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988:

a. The Company has no activity involving conservation of energy or technology absorption;

b. The Company does not have any Foreign Exchange Earnings; and

c. Foreign Exchange Outgo : Rs. 61.58 lakhs

The company has no employee drawing remuneration more than the limits prescribed under Section 217(2A) of the Companies Act 1956.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act 1956'' your directors confirm'' to the best of their knowledge and belief'' that:

a. in the preparation of the annual accounts'' the applicable accounting standards have been followed and that no material departure has been made from it;

b. the Company has selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the financial year;

c. the Company has 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; and

d. the annual accounts of the Company has been prepared on a going concern basis.

AUDITORS

M/s P N Raghavendra Rao & Co (ICAI Reg.No:003328S)'' Chartered Accountants'' Coimbatore retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The company has obtained a confirmation from the auditors that their reappointment'' if made'' at the forthcoming annual general meeting would be within the limits specified under Section 224 (1B) of the Companies Act 1956.

Members are requested to appoint M/s P N Raghavendra Rao & Co'' as Statutory Auditors of the company and to fix their remuneration for the financial year 2013-14.

ACKNOWLEDGEMENT

Your Directors wish to place on record the valuable assistance and excellent co-operation extended by the members'' banks'' financial institutions and government authorities. Your Directors wish to convey their sincere thanks to the depositors and debenture holders of the company for their continued patronage. They also wish to appreciate the excellent services rendered by the employees of the company.

We pray the Goddess SAKTHI to continue to shower Her blessings and to guide us in all our endeavours.

For and on behalf of the Board

Coimbatore M Manickam

29th May 2013 Chairman


Mar 31, 2012

The Directors are pleased to present their Fifty Fifth Annual Report together with the audited accounts of the company for the financial year ended 31st March 2012.

FINANCIAL PERFORMANCE (Rs. lakhs)

Particulars 2011-12 2010-11

Profit before tax 1717.05 1093.20

Less: Provision for:

- Current Tax 451.26 255.43

- MAT credit entitlement - (131.86)

- Deferred tax 105.38 160.64

Net Provision for Income Tax (earlier years) (1.29) 15.40

Profit after tax 1161.70 793.59

Add : Surplus brought forward from previous year 363.92 1578.96

Amount available for appropriation 1525.62 2372.55

Appropriations

Transfer to Statutory Reserve 232.34 158.72

Transfer to General Reserve - 1500.00

Proposed Dividend on Preference Shares (pro rata) 0.19 -

Tax on Proposed Preference Dividend 0.03 -

Proposed Dividend on Equity Shares 500.00 301.07

Tax on Proposed Equity Dividend 81.11 48.84

Surplus carried to balance sheet 711.95 363.92

1525.62 2372.55

BUSINESS

During the year under review, the company's disbursement touched in excess of Rs. 400 crores.

The company disbursed Rs. 42133 lakhs in hire purchase business as against Rs. 35127 lakhs during the previous financial year. The collection efficiency continues to be at its best. Your directors expect even higher business volumes and profitability in the years to come.

RESERVES AND SURPLUS

As required under Section 45IC of the Reserve Bank of India Act 1934, the Company has transferred 20% of the net profit after tax to Statutory Reserve.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 1 per equity share (10% on the face value of equity share of Rs. 10/- each) for the year ended 31st March 2012 and a pro rata dividend of Rs. 0.027 per 10% Redeemable Cumulative Preference Shares from the date of allotment. 1,98,93,019 equity shares of Rs. 10 each allotted on 31st March 2012 on preferential basis are eligible for full dividend for the year ended 31st March 2012. Further, the dividends, if approved by the members, would involve a cash outflow of Rs. 581.33 lakhs including dividend tax.

PREFERENTIAL ISSUE

During the year, your Company made a preferential issue of 1,98,93,019 equity shares of Rs. 10 each at Rs. 11.10 per share aggregating to Rs. 2208.13 lakhs to promoter group companies and a non-promoter company in terms of the approval of members obtained at their meeting held on 19th March 2012 and the in-principle approval of Stock Exchanges. The Allotment Committee of Directors at their meeting held on 31st March 2012 have allotted the shares to the respective allottees. Consequently, the equity share capital of the company stands increased to Rs. 50 crores from Rs. 30.11 crores.

The Allotment Committee of Directors at their Meeting held on 31st March 2012 have allotted 6,90,300 10% Redeemable Cumulative Preference Shares of Rs. 100 each on private placement basis.

The Company has received listing approval from Bombay Stock Exchange Limited and Madras Stock Exchange Limited for listing of 1,98,93,019 equity shares allotted on preferential basis. Steps are being taken to comply with the formalities for listing.

As required under Clause 43 of the Listing Agreement regarding the utilization of issue proceeds of preferential equity issue, the company makes the following statement:

"Against the receipt of preferential equity issue proceeds of Rs. 2208.13 lakhs from the allottees, the company has utilized the entire issue proceeds for the purpose of increasing the Net worth, Capital Adequacy Ratio of the company as stated in the Notice of the Extraordinary General Meeting".

DEPOSITS

The total deposits with the company as at 31st March 2012 stood at Rs. 2773 lakhs as against Rs. 4,829 lakhs for the corresponding previous year.

As at the end of the financial year, 655 public deposits amounting to Rs. 208.57 lakhs were due for repayment but remained to be claimed or renewed. The Company has been reminding the depositors regularly about the maturity and out of the said deposits, 562 deposits amounting to Rs. 180.24 lakhs have since been claimed and repaid / renewed as per their instructions.

DIRECTORS

The following directors retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment.

1. Sri A Shanmugasundaram

2. Sri M Srinivaasan

The profiles of Directors, as required under Clause 49(IV)(G) of the Listing Agreement are given in the Annexure to the Notice of the 55th Annual General Meeting.

AUDIT COMMITTEE

The Audit Committee has been functioning with the following three non-executive directors of which two are Independent Directors.

1. Dr A Selvakumar, Chairman

2. Sri A Shanmugasundaram, Member

3. Sri M Srinivaasan, Member

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Clause 49 of the Listing Agreement, a report on Management Discussion and Analysis Report forms part of this report.

CORPORATE GOVERNANCE REPORT

As required under Clause 49 of the Listing Agreement, a report on Corporate Governance and a certificate from the auditors of the company regarding compliance of the conditions of Corporate Governance as stipulated under the listing agreement forms part of the Annual Report.

PARTICULARS REQUIRED UNDER SECTION 217 OF THE COMPANIES ACT 1956

As required under Section 217(1)(e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988:

a. The Company has no activity involving conservation of energy or technology absorption;

b. The Company does not have any Foreign Exchange Earnings; and

c. Foreign Exchange Outgo : Rs. 44.50 lakhs

The company has no employee drawing remuneration more than the limits prescribed under Section 217(2A) of the Companies Act 1956.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act 1956, your directors confirm, to the best of their knowledge and belief, that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed and that no material departure had been made from it;

b. the Company has selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the financial year;

c. the Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

d. the annual accounts of the Company has been prepared on a going concern basis.

AUDITORS

M/s P N Raghavendra Rao & Co (ICAI Reg.No.003328S) Chartered Accountants, Coimbatore retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The company has obtained a confirmation from the auditors that their reappointment, if made, at the forthcoming annual general meeting would be within the limits specified under Section 224 (1B) of the Companies Act 1956.

Members are requested to appoint M/s P N Raghavendra Rao & Co, as Statutory Auditors of the company and to fix their remuneration for the financial year 2012-13.

ACKNOWLEDGEMENTS

Your Directors wish to place on record the valuable assistance and excellent co-operation extended by the members, banks, financial institutions and government authorities. The Board of Directors wish to convey their sincere thanks to the depositors and debenture holders of the company for their continued patronage. They also wish to appreciate the excellent services rendered by the employees of the company.

We pray the Goddess SAKTHI to continue to shower Her blessings and to guide us in all our endeavours.

For and on behalf of the Board Coimbatore M Manickam

29th May 2012 Chairman


Mar 31, 2010

The directors are pleased to present their Fifty Third Annual Report together with the audited accounts of the company for the financial year ended 31st March 2010.

FINANCIAL PERFORMANCE (Rs lakhs)

Particulars 2009-10 2008-09

Profit before tax 1052.62 806.13

Less: Provision for:

- Current Tax 175.61 121.43

- Deferred tax 249.97 146.13

- Fringe Benefit Tax - 9.55

Net Provision for Income Tax (earlier years) (1.15) 7.65

Profit after tax 628.19 521.37

Add : Surplus brought forward from previous year 1076.41 659.31

Amount available for appropriation 1704.60 1180.68

Appropriations:

Transfer to Statutory Reserve 125.64 104.27

Surplus carried to balance sheet 1578.96 1076.41

BUSINESS

During the year under review, the companys disbursement touched a new record level. The company disbursed Rs.29,609 lakhs in hire purchase business as against Rs 25,637 lakhs during the previous financial year. The collection efficiency continues to be good. Your directors are hopeful of higher business volumes and profitability in the coming years.

RESERVES AND SURPLUS

As required under Section 45IC of the Reserve Bank of India Act, 1934, the Company has transferred 20% of the net profit after tax to Statutory Reserve.

DIVIDEND

With a view to conserve resources for future requirements, the Board of Directors have not recommended dividend on equity shares for the year ended 31st March 2010.

DEPOSITS

The total deposits with the company as at 31st March 2010 stood at Rs.5,239 lakhs as against Rs.3,692 lakhs for the corresponding previous year.

As at the end of the financial year, 743 public deposits amounting to Rs.207.24 lakhs were due for repayment but remained to be claimed or renewed. The Company has been reminding the depositors regularly about the maturity and out of the said deposits, 252 deposits amounting to Rs. 77.15 lakhs have since been claimed and repaid / renewed as per their instructions.

DIRECTORS

The following directors retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment:

1. Sri P. S. Gopalakrishnan

2. Dr A Selvakumar

The present term of office of Sri M Balasubramaniam, Managing Director is valid upto 28th September 2010. On the recommendation of Nomination and Remuneration Committee, the Board of Directors

have at their meeting held on 5th August 2010, approved his re-appointment for a further period of 5 years with effect from 29th September 2010. A resolution relating to his re-appointment is placed before the members for their approval at the ensuing Annual General Meeting.

The profiles of these directors, as required under Clause 49 (IV) (G) of the Listing Agreement entered into with stock exchanges are given in the Annexure to the Notice of the 53rd Annual General Meeting.

AUDIT COMMITTEE

The Audit Committee is functioning with the following non-executive directors:

1. Sri S A Murali Prasad, Chairman

2. Sri A Shanmugasundaram, Member

3. Dr A Selvakumar, Member

SUBSIDIARY COMPANY

As required under Section 212 of the Companies Act 1956, the audited financial statements for the year ended 31st March 2010 of Sakthi Properties (Coimbatore) Limited, a wholly owned subsidiary, along with the Schedules and the reports of the Directors and Auditors and also the statement under the said section are attached.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of the Company and its subsidiary prepared in accordance with the Accounting Standard (AS-21) forms part of the Annual Report.

CORPORATE GOVERNANCE REPORT

As required under Clause 49 of the Listing Agreement, a report on Corporate Governance (including the Management Discussion and Analysis Report) and a Certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under the Listing Agreement form part of the Annual Report.

PARTICULARS REQUIRED UNDER SECTION 217 OF THE COMPANIES ACT 1956

As required under Section 217(1)(e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988:

a. The Company has no activity involving Conservation of Energy or Technology Absorption;

b. The Company does not have any Foreign Exchange Earnings; and

c. Foreign Exchange Outgo : Rs.9.38 lakhs

The company has no employee drawing remuneration more than the limits prescribed under Section 217(2A) of the Companies Act 1956.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act 1956, your directors confirm, to the best of their knowledge and belief, that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed and that no material departure had been made from it;

b. the Directors had selected such accounting policies and applied them consistently and made judge- ments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the financial year;

c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. the Directors had prepared the annual accounts on a going concern basis.

AUDITORS

M/s P N Raghavendra Rao & Co, (Firm Registration No.:003328S) Chartered Accountants, Coimbatore retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The company has obtained a confirmation from the auditors that their reappointment, if made, at the ensuing Annual General Meeting would be within the limits specified under Section 224 (1B) of the Companies Act 1956. Members are requested to appoint M/s P N Raghavendra Rao & Co, as Statutory Auditors of the company and fix their remuneration for the financial year 2010-11.

ACKNOWLEDGEMENTS

Your Directors wish to place on record the valuable assistance and co-operation extended by the members, banks, financial institutions and government authorities. The Board of Directors wish to convey their sincere thanks to the depositors and debenture holders of the company for their continued patronage. They also wish to appreciate the excellent services rendered by the employees of the company.

We pray the Goddess SAKTHI to continue to shower Her blessings and to guide us in all our endeavours.



For and on behalf of the Board

Coimbatore M Manickam

5th August 2010 Chairman

 
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