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Notes to Accounts of Sakthi Finance Ltd.

Mar 31, 2016

b) The rights, preferences and restrictions attached to each class of shares:

The Company has two classes of shares namely, Equity Shares and Redeemable Cumulative Preference Shares. The rights, preferences and restrictions attached to each class of shares are given below:

Equity Shares

The equity share has a par value of Rs. 10. Each holder of equity share is entitled to one vote per share. An equity shareholder has got a right to attend the General Meetings convened by the company and to receive dividend when declared. The company declares and pays dividend in Indian rupees. The dividend recommended by the Board of Directors is subject to the approval of members at the ensuing Annual General Meeting.

The Board of Directors at their meeting held on 28th May 2016, have recommended a dividend of Rs.1 per share (10% of the par value of Rs. 10) for the year ended 31st March 2016. The dividend recommended is subject to the approval of members at the ensuing Annual General Meeting. The amount of per share dividend recognized as distribution to equity shareholders is Rs.1 per share (Rs. 1 per share).The total dividend appropriation for the year ended 31st March 2016 amounts to Rs.601.79 lakhs, including corporate dividend tax of Rs.101.79 lakhs.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the member. Redeemable Cumulative Preference Shares

The Redeemable Cumulative Preference Shares have a par value of Rs 100. These shares carry a fixed cumulative dividend of 10% per annum. These shares would be redeemable at par at the end of 3 years from the various dates of allotment.

During the year, 3,02,450 Redeemable Cumulative Preference Shares of Rs.100 each aggregating to Rs.302.45 lakhs were allotted on 18th May 2015, 16th June 2015, 6th July 2015, 31st August 2015 and 25th September 2015. 3,09,700 Redemable Cumulative Preference Shares of Rs.100 each aggregating to Rs.309.70 lakhs were redeemed during the year.

The Redeemable Cumulative Preference Shares (RCPS) have the following preferential rights over the equity shareholders:

a. The payment of dividend at a fixed rate; and

b. The return of capital on winding up of the company.

The preference shareholders can enforce their right of getting dividend in priority over the equity shareholders only if there are profits and the Directors decided to distribute them by way of dividend.

Preference shareholders have no voting rights and except when dividend is outstanding for more than 2 years in case of cumulative shares. But they have the right to vote on any resolution for winding up of the company or for the reduction or repayment of capital.

The Board of Directors have at their meeting held on 12th March 2016, declared an interim dividend of Rs.10 per share, (10% on a par value of Rs.100) for the year ending 31st March 2016. The total Preference Dividend comes to Rs.125.58 lakhs, including a Corporate Dividend Tax of Rs.21.24 lakhs.

Nature of security and terms of repayment for Debentures

a) 70,38,17,427 Secured Redeemable Non-Convertible Debentures of the face value of Rs.1 each and redeemable at par are secured by specified Hire Purchase receivables and a building situated at Mumbai. The rate of interest varies from 9% to 12%; the date of redemption is reckoned at 12 to 36 months from the date of first allotment in relation to each of the series allotted up to 14th November, 2015 and 15 to 36 months in relation to each of the series allotted from 1st August 2010 onwards. Out of the debentures mentioned above, Rs.2,707.94 lakhs (Rs.9,559.03 lakhs), is classified as short-term borrowings and is shown under Note 7.

b) 1,00,00,000 Secured Redeemable Non-Convertible Debentures of Rs.100 each aggregating to Rs.100 Crores are secured by specified Hire purchase receivables and a building situated at Madurai. The rate of interest varies from 11% to 11.50%. The date of redemption is reckoned at 24 to 48 months from the date of allotment i.e 01.04.2015.

d) Repayment Terms for Deposits

Deposits are repaid on maturity. The period of deposit ranges from 12 to 36 months.

e) The period of Subordinated Debt is 61 months.

f) There is no default in repayment of loans and interest thereon.

Nature of security and Terms of repayment for Cash Credit and Working Capital Demand

Loans:

a) Cash Credits and Working Capital Demand Loans from Scheduled Banks aggregating to Rs.24,100 lakhs are repayable on demand and are secured by hypothecation of hire purchase receivables along with personal guarantee of 2 or 3 directors of the company.

b) Loan from Financial Institutions / Other Lenders is secured on hypothecation of specified HP receivables along with personal guarantee of a Director.

c) There are no over dues in the above accounts.

a) Provision as per RBI Norms

(i) Provision for Non Performing Assets

Provision for non-performing assets, doubtful debts, loans and advances have been made as per the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007.

(ii) Contingent Provision against Standard Assets

The RBI by its Notification No.DNBR-011/CGM(CDS)-2015 dated 27th March 2015 has issued directions to all Non-Banking Financial Companies to make a provision of 0.30% on the Standard Assets as on 31st March 2016. Accordingly, necessary provision has been made. The company has made an incremental provision of Rs.52.45 lakhs as at 31st March 2016.

Non-Current investments

In accordance with the Reserve Bank of India Circular no. RBI/2006-2007/225/DNBS(PD)C.C No.87/03.02.004/ 2006-07 dated 4th January 2007, the Company has created a floating charge on the statutory liquid assets comprising (both current & non-current) investment in Government Securities on the above investments in favour of IDBI Trusteeship Services Ltd, trustees representing the fixed deposit holders of the company.

Current investments

In accordance with the Reserve Bank of India Circular no. RBI/2006-2007/225/DNBS(PD)C.C No.87/03.02.004/ 2006-07 dated 4th January 2007, the Company has created a floating charge on the statutory liquid assets comprising (both current & non-current) investment in Government Securities on the above investments in favour of IDBI Trusteeship Services Ltd, trustees representing the fixed deposit holders of the company.

1. The Company has also extended collateral security of company''s Building and Land belonging to a Director for Cash Credit/Working Capital Demand Loans availed from a bank.

2. SEGMENT REPORTING

The Company is primarily engaged in the business of asset financing. This, in the context of Accounting Standard -17 on Segment Reporting, notified by the Companies (Accounting Standards) Rules 2006, is considered to constitute a single primary segment.

3. LEASES

In case of assets taken on lease:

The Company has taken various office premises under operating lease. The lease payments recognized in the Statement of Profit and Loss is Rs.89.04 Lakhs (Rs.80.81 Lakhs).

4. Public Issue of Secured Redeemable Non-Convertible Debentures (NCDs)

The Company made a public issue of Secured, Redeemable, Non-Convertible Debentures (NCDs) of Rs.1000 each for an amount of Rs.100 crore with an option to retain over-subscription for Rs.100 crore, aggregating to Rs.200 crore. The NCD issue opened on 7th April 2016 and closed on 6th May 2016. The Company made allotment of 16,48,708 NCDs to the eligible applicants on 18th May 2016. The NCDs were listed and admitted to dealings on the BSE Limited with effect from 23rd May 2016.

5. Note on Expenditure on Corporate Social Responsibility

The following is the information regarding projects/programmes undertaken and expenses incurred on CSR activities during the year ended 31st March 2016

I. Gross amount required to be spent by the company during the year: Rs.44.52 Lakhs

II. Amount spent during the year on:(by way of contribution to the trusts and the projects undertaken)

6. Previous year figures have been regrouped, reclassified and rearranged, wherever necessary, to conform to current year presentation.


Mar 31, 2015

1. Company Overview

Sakthi Finance Limited ("SFL" or "the Company") is a public limited Company having its Registered Office in Coimbatore, Tamilnadu. The equity shares of the Company are listed on BSE Limted.

The Company is a deposit-taking Non-Banking Financial Company (NBFC) registered with Reserve Bank of India (RBI). The Company has been classified as an Asset Financing Company by RBI. The Company is engaged in the business of Hire Purchase Financing of Commercial Vehicles, Infrastructure Equipments, Machineries etc.

2. The rights, preferences and restrictions attached to each class of shares:

The Company has two classes of shares namely, Equity Shares and Redeemable Cumulative Preference Shares. The rights, preferences and restrictions attached to each class of shares are given below:

Equity Shares

The equity share has a par value of Rs. 10. Each holder of equity share is entitled to one vote per share. An equity shareholder has got a right to attend the General Meetings convened by the company and to receive dividend when declared. The company declares and pays dividend in Indian rupees. The dividend recommended by the Board of Directors is subject to the approval of members at the ensuing Annual General Meeting, except in the case of interim dividend.

The Board of Directors at their meeting held on 30th May 2015, have recommended a dividend of Rs. 1 per share (10% of the par value of Rs. 10) for the year ended 31st March 2015. The dividend recommended is subject to the approval of members at the ensuing Annual General Meeting. The amount of per share dividend recognised as distribution to equity shareholders is Rs. 1 per share (Rs. 1 per share).The total dividend appropriation for the year ended 31st March 2015 amounts to Rs. 601.81 lakhs including corporate dividend tax of Rs. 101.81 lakhs.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the member.

Redeemable Cumulative Preference Shares

The Redeemable Cumulative Preference Shares have a par value of Rs. 100. These shares carry a fixed cumulative dividend of 10% per annum. These shares would be redeemable at par at the end of 3 years from the various dates of allotment.

During the year 7,47,550 Redeemable Cumulative Preference Shares of Rs. 100 each aggregating to Rs. 747.55 lakhs were allotted on 27/03/2015 and 30/03/2015. 6,90,300 Redeemable Cumulative Preference Shares of Rs. 100 each aggregatting to Rs. 690.30 lakhs were redeemed during the year. The Redeemable Cumulative Preference Shares (RCPS) have the following preferential rights over the equity shareholders:

a. The payment of dividend at a fixed rate; and

b. The return of capital on winding up of the company.

The preference shareholders can enforce their right of getting dividend in priority over the equity shareholders only if there are profits and the Directors decided to distribute them by way of dividend.

Preference shareholders have no voting rights and except when dividend is outstanding for more than 2 years in case of cumulative shares. But they have the right to vote on any resolution for winding up of the company or for the reduction or repayment of capital.

The Board of Directors have at their meeting held on 31st March 2015, declared an interim dividend of Rs. 10 per share, (10% on a par value of Rs. 100) for the year ending 31st March 2015. The Board of Directors at their meeting held on 30th May 2015 recommended a pro rata dividend (Rs. 0.03 per share) of 10% on RCPS of Rs. 100 allotted during the year, which is subject to the approval of members at the ensuing Annual General meeting. The total Preference Dividend including interim dividend is Rs. 120.91 lakhs, including a Corporate Dividend Tax of Rs. 20.15 lakhs.

d) Repayment Terms for Deposits

Deposits are repaid on maturity. The period of deposit ranges from 12 to 36 months. The period of Subordinated Debt is 61 months.

e) There is no default in repayment of loans and interest thereon.

Nature of security and Terms of repayment for Cash Credit and Working Capital Demand Loans:

a) Cash Credits and Working Capital Demand Loans from Scheduled Banks aggregating to

Rs. 22,600 lakhs are repayable on demand and are secured by hypothecation of hire purchase receivables along with personal guarantee of two or three directors of the company.

b) Loan from Financial Institutions / Other Lenders is secured on hypothecation of specified HP recivables along with personal guarantee of a director.

c) There are no overdues in the above accounts.

a) Provision as per RBI Norms

(i) Provision for Non Performing Assets

Provision for non-performing assets, doubtful debts, loans and advances have been made as per the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007

(ii) Contingent Provision against Standard Assets

The RBI by its Notification No.DNBS.222/CGM(US)-2011 dated 17th January 2011, has issued directions to all Non-Banking Financial Companies to make a provision of 0.25% on the Standard Assets. Accordingly, the company has made an incremental provision of Rs. 34.20 lakhs as at 31st March 2015.

3. CONTINGENT LIABILITIES

Income Tax disputes pending before Commissioner of 80.31 - Income Tax (Appeals) Coimbatore

4.. The Company has also extended collateral security of company's Building and Land belonging to a Director for Cash Credit/Working Capital Demand Loans availed from a bank.

5.. SEGMENT REPORTING

The Company is primarily engaged in the business of asset financing. This, in the context of Accounting Standard -17 on Segment Reporting, notified by the Companies (Accounting Standards) Rules 2006, is considered to constitute a single primary segment.

6. RELATED PARTY DISCLOSURES FOR THE YEAR ENDED 31ST MARCH 2015

Relationships

A Enterprises in which the key management personnel and their relatives have abt Finance Ltd significant influence

ABT Ltd.

ABT Foundation Ltd.

ABT Industries Ltd.

ARC Retreading Co. Pvt. Ltd.

Sakthi Realty Holdings Ltd.

N Mahalingam & Co

Nachimuthu Industrial Association Sakthifinance Financial Services Ltd.

Sakthifinance Holdings Ltd.

Sakthi Sugars Ltd.

Sri Chamundeswari Sugars Ltd.

Sri Sakthi Textiles Ltd.

The Gounder and Company Auto Ltd.

B Key Management Personnel

Sri M Balasubramaniam,

Vice Chairman and Managing Director

C Relatives of Key Management Personnel

Smt M Mariammal, Mother

Dr M Manickam, Brother

Sri M Srinivaasan, Brother

Smt Vinodhini Balasubramaniam, Wife

7. LEASES

In case of assets taken on lease:

The Company has taken various office premises under operating lease. The lease payments recognised in the Statement of Profit and Loss is Rs. 80.81 Lakhs (Rs. 68.28 Lakhs).

8. Corporate Social Responsibility Expenses

As per Section 135 of the Companies Act 2013, a CSR committee has been formed by the company. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation and rural development projects. The funds were primarily utilized through the year on the sphere of activities which are specified in Schedule VII to the Companies Act 2013.

9. Public Issue of secured Redeemable Non-Convertible Debentures (NCDs)

During the year, the Company made a public issue of Securred, Redeemable, Non-Convertible Debentures (NCDs) of Rs.100 each aggregating to Rs.100 Crores. 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 were listed and admitted to dealings on the Stock Exchange with effect from 7th April, 2015.

10. Previous year figures have been regrouped, reclassified and rearranged, wherever necessary, to conform to current year presentation.


Mar 31, 2014

1 Company Overview

Sakthi Finance Limited ("SFL" or "the Company") is a public limited Company having its Registered Office in Coimbatore, Tamilnadu. The equity shares of the Company are listed on Stock Exchanges at Mumbai and Chennai.

The Company is a deposit-taking Non-Banking Financial Company (NBFC) registered with Reserve Bank of India (RBI). The Company has been classified as an Asset Financing Company by RBI. The Company is engaged in the business of Hire Purchase Financing of Commercial Vehicles, Infrastructure Equipments, Machineries etc.

1.a) The rights, preferences and restrictions attached to each class of shares:

The Company has two classes of shares namely, Equity Shares and Redeemable Cumulative Preference Shares. The rights, preferences and restrictions attached to each class of shares are given below:

Equity Shares

The equity share has a par value of Rs. 10. Each holder of equity share is entitled to one vote per share. An equity shareholder has got a right to attend the General Meetings convened by the company and to receive dividend when declared. The company declares and pays dividend in Indian rupees. The dividend recommended by the Board of Directors is subject to the approval of members at the ensuing Annual General Meeting, except in the case of interim dividend.

The Board of Directors at their meeting held on 28th May 2014, have recommended a dividend of Rs. 1 per share (10% on the par value of Rs. 10) for the year ended 31st March 2014. The dividend recommended is subject to the approval of members at the ensuing Annual General Meeting. The amount of per share dividend recognised as distribution to equity shareholders is Rs. 1 per share (Rs. 1 per share). The total dividend appropriation for the year ended 31st March 2014 amounts to Rs. 584.98 lakhs including corporate dividend tax of Rs. 84.98 lakhs.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the member.

Redeemable Cumulative Preference Shares

The Redeemable Cumulative Preference Shares have a par value of Rs. 100. These shares carry a fixed cumulative dividend of 10% per annum.These shares would be redeemable at par at the end of 3 years from the various dates of allotment.

The Redeemable Cumulative Preference Shares (RCPS) have the following preferential rights over the equity shareholders:

a. The payment of dividend at a fixed rate; and

b. The return of capital on winding up of the company.

The preference shareholders can enforce their right of getting dividend in priority over the equity shareholders only if there are profits and the directors decide to distribute them by way of dividend.

Preference shareholders have no voting right except when dividend is outstanding for more than 2 years in case of cumulative shares. But they have the right to vote on any resolution for winding up of the company or for the reduction or repayment of capital.

The Board of Directors have at their meeting held on 28th March 2014, declared an interim dividend of Rs. 10 per share, (10% on a par value of Rs. 100 ) for the year ending 31st March 2014. The total dividend appropriation for the year ended 31st March 2014 amounts to Rs. 117 lakhs including a corporate dividend tax of Rs. 17 lakhs.

Nature of security and terms of repayment for Debentures

a) 2,88,77,57,155 Secured Redeemable Non-Convertible Debentures of the face value of Rs. 1 each and redeemable at par are secured by specified Hire Purchase receivables, 15 windmills along with land and four buildings situated at Mumbai, Coimbatore, Madurai and Chennai. The rate of interest varies from 10.25% to 10.50%; the date of redemption is reckoned at 12 to 36 months from the date of first allotment in relation to each of the series allotted upto 31st July 2010 and 15 to 36 months in relation to the series allotted from 1st August 2010 onwards.

b) Out of the debentures mentioned above, Rs. 27,400.57 lakhs (Rs. 40,372.51 lakhs), is classified as short-term borrowings and is shown under Note 7.

d) Repayment Terms for Deposits

Deposits are repaid on maturity. The period of deposit ranges from 12 to 36 months. The period of Subordinated Debt is 61 months.

e) There is no default in repayment of loans and interest thereon.

Nature of security and Terms of repayment for Cash Credit and Working Capital Demand Loans:

a) Cash Credits and Working Capital Demand Loans from Scheduled Banks aggregating to Rs. 20100.00 lakhs are repayable on demand and are secured by hypothecation of hire purchase receivables along with personal guarantee of 2 / 3 directors of the company.

b) There is no default in repayment of loans and interest thereon.

a) There is no amount due to be transferred to Investor Education and Protection Fund as on 31st March 2014.

b) The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to their outstanding amount and interest have not been made.

a) Provision as per RBI Norms

(i) Provision for Non Performing Assets

Provision for non-performing assets, doubtful debts, loans and advances have been made as per the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007.

(ii) Contingent Provision against Standard Assets

The RBI by its Notification No.DNBS.222/CGM(US)-2011 dated 17th January 2011, has issued directions to all Non-Banking Financial Companies to make a provision of 0.25% on the Standard Assets. Accordingly, the company has made an incremental provision of Rs. 20.92 lakhs as at 31st March 2014.

# Investments made to comply with the requirements of the directives issued by the Reserve Bank of India.

In accordance with the Reserve Bank of India Circular no. RBI/2006-2007/225/DNBS(PD)C.C No.87/03.02.004/ 2006-07 dated 4th January 2007, the Company has created a floating charge on the statutory liquid assets comprising (both Current & non-current) investment in Government Securities for Rs. 1139.97 lakhs and Rs. 22.36 lakhs interest accrued on the above investments in favour of IDBI Trusteeship Services Ltd, trustees representing the fixed deposit holders of the company.

Current investments

In accordance with the Reserve Bank of India Circular no. RBI/2006-2007/225/DNBS(PD)C.C No.87/03.02.004/ 2006-07 dated 4th January 2007, the Company has created a floating charge on the statutory liquid assets comprising (both Current & non-current) investment in Government Securities for Rs. 1139.97 lakhs and Rs. 22.36 lakhs interest accrued on the above investments in favour of IDBI Trusteeship Services Ltd, trustees representing the fixed deposit holders of the company.

2. The Company has also extended collateral security of company''s Building and Land belonging to a Director for Cash Credit/Working Capital Demand Loans availed from a bank.

3. SEGMENT REPORTING

The Company is primarily engaged in the business of asset financing. This, in the context of Accounting Standard -17 on Segment Reporting, notified by the Companies (Accounting Standards) Rules 2006, is considered to constitute a single primary segment.

4. LEASES

In case of assets taken on lease:

The Company has taken various office premises under operating lease. The lease payments recognised in the Statement of Profit and Loss is Rs. 68.28 Lakhs (Rs. 68.27 Lakhs).

5. Previous year figures have been regrouped, reclassified and rearranged, wherever necessary, to conform to current year presentation.


Mar 31, 2013

1. Company Overview

Sakthi Finance Limited ("SFL" or "the Company") is a Public Limited Company having its Registered Office in Coimbatore'' Tamilnadu. The equity shares of the Company are listed on Stock Exchanges at Mumbai and Chennai.

The Company is a deposit-taking Non-Banking Financial Company (NBFC) registered with Reserve Bank of India (RBI). The Company has been classified as an Asset Financing Company by RBI. The Company is engaged in the business of Hire Purchase Financing of Commercial Vehicles'' Infrastructure Equipments'' Machineries etc.

2. SEGMENT REPORTING

The Company is primarily engaged in the business of asset financing. This in the context of Accounting Standard 17 on Segment Reporting'' notified by the Companies (Accounting Standards) Rules 2006 is considered to constitute a single primary segment.

3. RELATED PARTY DISCLOSURES FOR THE YEAR ENDED 31ST MARCH 2013 Relationships

A Enterprises in which the key management personnel and their relatives have significant influence

ABT Ltd.

ABT Finance Ltd.

ABT Foundation Ltd.

ABT Industries Ltd.

ARC Retreading Co. Pvt. Ltd.

ABT Values Ltd.

N Mahalingam & Co

Nachimuthu Industrial Association

Sakthifinance Financial Services Ltd.

Sakthi Logistic Services Ltd.

Sakthi Sugars Ltd.

Sri Chamundeswari Sugars Ltd.

Sri Sakthi Textiles Ltd.

The Gounder and Company Auto Ltd.

B Key Management Personnel Sri M Balasubramaniam''

Vice Chairman and Managing Director

C Relatives of Key Management Personnel Dr N Mahalingam'' Father

Smt M Mariammal'' Mother Dr M Manickam'' Brother Sri M Srinivaasan'' Brother Smt Vinodhini Balasubramaniam'' Wife

4. LEASES

In case of assets taken on lease:

The Company has taken various office premises under operating lease. The lease payments recognised in the statement of Profit and Loss is Rs. 68.27 Lakhs (Rs. 53.31 Lakhs).

5. Previous year figures have been regrouped'' reclassified and rearranged'' wherever necessary'' to conform to current year presentation.


Mar 31, 2012

1. A Corporate Information

Sakthi Finance Limited ( SFL or the Company ) is a Company having its Registered Office in Coimbatore, Tamilnadu.

The Company is a deposit-taking Non-Banking Financial Company (NBFC) registered with Reserve Bank of India (RBI). The Company has been classified as an Asset Financing Company by RBI. The Company is engaged in the business of Hire Purchase Financing of Commercial Vehicles, Infrastructure Equipments, Machineries etc.

1. B Basis of preparation of financial statements

i. The financial statements are prepared under the historical cost convention on accrual basis of accounting except for certain fixed assets which have been revalued and comply with the mandatory Accounting Standards notified by the Central Government under the Companies (Accounting Standards) Rules 2006, the relevant provisions of the Companies Act 1956 and the guidelines issued by the Reserve Bank of India applicable to Non-Banking Financial Companies.

ii. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the results of operations during the reporting year end. Although the estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Any revisions to the accounting estimates are recognized prospectively in the current and future period.

b) The rights, preferences and restrictions attached to each class of shares:

The Company has two classes of shares namely, Equity Shares and Redeemable Cumulative Preference Shares. The rights, privileges and restrictions attached to each class of shares are given below:

i) Equity Shares

The equity share has a par value of Rs. 10. Each holder of equity share is entitled to one vote per share. An equity shareholder has got a right to attend the General Meetings convened by the company and to receive dividend when declared. The company declares and pays dividend in Indian rupees. The dividend recommended by the Board of Directors is subject to the approval of members at the ensuing Annual General Meeting.

The Board of Directors have, at their meeting held on 29th May 2012, recommended a dividend of Rs. 1 per share (10% of the par value of Rs. 10) for the year ended 31st March 2012. The dividend recommended is subject to the approval of members at the ensuing Annual General Meeting. The total amount recognised towards dividend distribution works out to Rs. 581.11 lakhs including corporate dividend tax of Rs. 81.11 lakhs.

1,98,93,019 equity shares allotted on preferential basis during the year will also be entitled to full dividend. Further, these equity shares along with the pre-preferential shareholdings of allottees will be locked in as per SEBI (ICDR) Regulations 2009 and are restricted from being sold/transferred/hypothecated / pledged.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

Equity Shares issued on Preferential Basis

During the year, the 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 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 with effect from that date.

Bombay and Madras Stock Exchanges have given their approval for listing of 1,98,93,019 equity shares allotted on preferential basis. Steps are being taken to comply with the formalities for listing and obtaining approval for trading of the shares.

As required under Clause 43 of the Listing Agreement regarding utilisation 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 utilised 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".

ii) Redeemable Cumulative Preference Shares

The Redeemable Cumulative Preference Shares have a par value of Rs. 100. These shares carry a fixed cumulative dividend of 10% per annum. These shares would be redeemable at par at the end of 3 years from the date of allotment i.e.31st March 2012.

The Redeemable Cumulative Preference Shares (RCPS) have the following preferential rights over the equity shareholders:

a. The payment of dividend at a fixed rate; and

b. The return of capital on winding up of the company.

The preference shareholders can enforce their right of getting dividend in priority over the equity shareholders only if there are profits and the directors decide to distribute them by way of dividend.

Preference shareholders have no voting right except when dividend is outstanding for more than 2 years in case of cumulative preference shares. But they have the right to vote on any resolution for winding up of the company or for the reduction or repayment of capital.

The Board of Directors at their meeting held on 29th May 2012, have recommended a pro rata dividend of Rs. 0.027 per share (10% pro rata dividend for a day on a par value of Rs. 100) for the year ended 31st March 2012, as the allotment was made on 31st March 2012 only. The dividend recommended is subject to the approval of members at the ensuing Annual General Meeting. The total amount recognised towards dividend distribution works out to Rs. 0.22 lakhs including corporate dividend tax of Rs. 0.03 lakhs.

2. SHARE APPLICATION MONEY PENDING ALLOTMENT

The Company had originally proposed a rights issue in 2010 and accordingly obtained the approval of members at the 53rd Annual General Meeting held in September 2010. For this issue, the company had received an amount of Rs. 1578.63 lakhs as advance towards share application money. Meanwhile, RBI had, by a circular, stipulated that the Capital Adequacy Ratio (CAR) of all deposit-taking NBFCs has to be raised from 12% to 15% before 31st March 2012. Due to paucity of time, the company decided to go for a preferential issue of equity shares. Accordingly, approval of members was obtained for the preferential issue on 19th March 2012 at an EGM. Hence the company refunded the entire share application money from the applicants to the Rights Issue and obtained share application money towards preferential issue of 1,98,93,019 equity shares. The company received from the proposed allottees an amount of Rs. 2208.84 lakhs during the period from January 2012 to March 2012. The issue price of Rs. 11.10 per share, including a premium of Rs. 1.10 per share, was determined in accordance with SEBI (ICDR) Regulations 2009. The allotment was made on 31st March 2012, within the stipulated period of 15 days from the date of approval by members.The share application money was appropriated towards the allotment. The balance of share application money to an allottee was refunded subsequently.

The Company already had sufficient Authorised Share Capital to accommodate the preferential issue.

Nature of security and terms of repayment for Debentures

a) 4,00,55,16,487 Secured Redeemable Non-Convertible Debentures of face value of Rs. 1 each and redeemable at par are secured by specified Hire Purchase receivables, 26 windmills along with land and four buildings situated at Mumbai, Coimbatore, Madurai and Chennai. The rate of interest varies from 11% to 11.50%; the date of redemption is reckoned at 12 to 36 months from the date of first allotment in relation to each of the series allotted upto 31st July 2010 and 15 to 36 months in relation to the series allotted from 1st August 2010 onwards.

b) Out of the debentures mentioned above, Rs. 38,169.31 lakhs (Rs. 34715.19 lakhs), is classified as short-term borrowings and is shown under Note 7.

a) There is no amount due to be transferred to Investor Education and Protection Fund as on 31st March 2012.

b) The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosures relating to their outstanding amount and interest have not been made.

a) Provision as per RBI Norms

i) Provision for Non Performing Assets

Provision for non-performing assets, doubtful debts, loans and advances have been made as per the Non-Banking Financial (Deposit Accepting or Taking) Companies Prudential Norms (Reserve Bank) Directions 2007.

ii) Provision against Standard Assets

RBI by its Notification No.DNBS.222/CGM(US)-2011 dated 17th January 2011, has issued directions to all Non-Banking Financial Companies to make a provision of 0.25% on the Standard Assets. Accordingly, the company has made an incremental provision of Rs. 25.30 lakhs as at 31st March 2012.

Current investments

In accordance with the Reserve Bank of India Circular No. RBI/2006-2007/225/DNBS(PD)C.C No.87/03.02.004/ 2006-07 dated 4th January 2007, the Company has created a floating charge on the statutory liquid assets comprising (both Current and non-current) investments in Government Securities for Rs. 902.01 lakhs and Rs. 18.90 lakhs interest accrued on the above investments in favour of trustees representing the fixed deposit holders of the company.

3. The Company has also extended collateral security of

company's Building and Land belonging to a Director for Cash Credit/Working Capital Demand Loans availed from a bank.

4. SEGMENT REPORTING

The Company is primarily engaged in the business of asset finance. All the activities of the Company revolve around the main business. This in the context of Accounting Standard 17 on Segment Reporting notified by the Companies (Accounting Standards) Rules 2006 is considered to constitute a single primary segment.

5. LEASES

In case of assets taken on lease

The Company has taken various office premises under operating lease.The lease payments recognised in the Statement of Profit and Loss is Rs. 53.31 Lakhs (Rs. 44.30 Lakhs).

6. The Accounts have been prepared as per Revised Schedule VI to the Companies Act 1956, which has a significant impact on the presentation of accounts. As such, previous year figures have been regrouped, reclassified and rearranged, wherever necessary, to conform to current year presentation.


Mar 31, 2011

1.0 BALANCE SHEET

2.1 RESERVES AND SURPLUS

1. Statutory Reserve as per the requirements of Section 45IC of the Reserve Bank of India Act 1934 has been created at 20% of the profits after tax available for appropriation.

2. Revaluation Reserve has been created on the Fixed Assets against revaluation of Land, Buildings and Plant and Machineries (Windmills).

2.2 REVALUATION RESERVE

The net increase in value on account of Revaluation of Assets amounting to Rs. 26,60,09,685 is credited to Revaluation Reserve.

2.3 SECURED LOANS

a) 295 Secured Redeemable Non-Convertible Debentures of the face value of Rs. 1000 each and 3,54,28,80,449 Secured Redeemable Non-Convertible Debentures of the face value of Rs. 1 each issued and redeemable at par are secured by specified Hire Purchase receivables and immovable properties; the earliest date of redemption is reckoned at 12 to 36 months from the date of first allotment in relation to each of the series allotted upto 31st July 2010 and 15 to 36 months in relation to the series allotted from 1st August 2010 onwards.

b) Term Loans from The Tamilnadu Industrial Investment Corporation Limited is secured by mortgage of immovable properties consisting of land and three Wind Electric Generators. Further, the loan is also guaranteed by two directors of the company. Amount availed and outstanding as on 31-03-2011 is Rs. 4,24,68,000 (Sanctioned limit: Rs. 6,62,68,000).

d) Cash Credits/Working Capital Demand Loans from Scheduled Banks are secured by hypothecation of specified hire purchase assets and personal guarantee of directors, besides collateral security of company's building along with land belonging to a director, to a bank. Amount availed and outstanding as on 31-3-2011 is Rs. 1,00,85,53,189 (Sanctioned limit: Rs. 1,32,50,00,000).

2.4 INVESTMENTS

In accordance with the Reserve Bank of India Circular no. RBI/2006-2007/225/DNBS(PD)C.C No.87/03.02.004/2006-07 dated 4th January 2007, the Company has created a floating charge on the statutory liquid assets comprising investment in Government Securities for Rs. 9,02,01,120 and Rs. 18,74,666 interest accrued on the above investments in favour of trustees representing the fixed deposit holders of the company.

2.6 CURRENT ASSETS

b) Balance with Scheduled Banks in deposit accounts include Rs. 1,92,500 ( Rs. 92,500) pledged with the Sales Tax Authorities.

c) Bank deposits of Rs. 1,42,60,631 ( Rs. 1,34,12,584) are under lien towards managed business.

2.7 LOANS AND ADVANCES

i) Loans and Advances include:

a) Loans considered good in respect of which the Company is fully secured: Rs. 2,85,74,837 ( Rs. 2,85,44,653).

b) Loans considered good and unsecured in respect of which the Company holds no security other than the debtors' personal security: Rs. 11,56,35,600 ( Rs. 5,59,84,423).

c) Amount due from an Officer of the Company Rs. 3,41,729 ( Rs. 1,08,525). Maximum amount outstanding during the year Rs. 3,86,858 ( Rs. 1,25,889).

d) Amount due from wholly owned subsidiary: Nil ( Rs. 12,19,135).

2.8 CURRENT LIABILITIES

There is no amount due to be transferred to Investor Education and Protection Fund as on 31st March 2011.

There are no dues to entities covered under the Micro, Small and Medium Enterprises Development Act 2006.

3.0 PROFIT AND LOSS ACCOUNT

3.1 Income-tax deducted at source on interest Rs. 3,19,107 ( Rs. 6,16,493) and on other receipts Rs. 1,55,079 ( Rs. 4,61,410).

4.0 CONTINGENT LIABILITIES

Particulars 2010-11 2009-10

1) Collaterals given to a bank/financial institution – 2,32,676

2) Income Tax and Interest Tax issues pending 31,11,447 31,11,447 before appellate authorities

7.0 SEGMENT REPORTING

The Company is primarily engaged in the business of asset finance. All the activities of the Company revolve around the main business. This in the context of Accounting Standard 17 on “Segment Reporting” notified by the Companies (Accounting Standards) Rules 2006 is considered to constitute a single primary segment.

8.0 DELINKING OF WHOLLY OWNED SUBSIDIARY COMPANY

Sakthi Properties (Coimbatore) Ltd, the wholly owned subsidiary of the Company has been delinked with effect from 5th February 2011. Accordingly, the Statement pursuant to Section 212 of the Companies Act 1956 relating to subsidiary company and consolidation of accounts are not applicable and hence not furnished.

10.0 RELATED PARTY DISCLOSURES FOR THE YEAR ENDED 31ST MARCH 2011 Relationships

A Enterprises in which the ABT Foundation Limited key ABT Limited management personnel and their ABT Industries Limited relatives have significant influence ABT Values Limited ARC Retreading Co. Pvt. Limited

Nachimuthu Industrial Association N Mahalingam & Co

Sakthi Beverages Limited

Sakthifinance Financial Services Limited

Sakthi Logistic Services Limited

Sakthi Properties (Coimbatore) Limited

Sakthi Sugars Limited

Sri Bhagavathi Textiles Limited

Sri Chamundeswari Sugars Limited

Sri Sakthi Textiles Limited

The Gounder and Company Auto Limited

B Key Management Personnel Sri M Balasubramaniam, Vice Chairman and Managing Director

C Relatives of Key Management Dr N Mahalingam, Father Personnel Dr M Manickam, Brother

Sri M Srinivaasan, Brother

Smt Vinodhini Balasubramaniam, Wife

15.0 Previous year's figures have been regrouped / rearranged wherever necessary to conform to current year's presentation.


Mar 31, 2010

1.0 CONTINGENT LIABILITIES

(Rupees)

Particulars 2009-10 2008-09

1) Collaterals given to a bank /financial institution 2,32,676 95,71,056

2) Income Tax and Interest Tax issues pending 31,11,447 31,11,447 before appellate authorities

2.0 SEGMENT REPORTING

The Company is primarily engaged in the business of asset finance. All the activities of the Company revolve around the main business. This in the context of Accounting Standard 17 on "Segment Reporting" notified by the Companies (Accounting Standards) Rules 2006 is considered to constitute a single primary segment.

3.0 RELATED PARTY DISCLOSURES FOR THE YEAR ENDED 31ST MARCH 2010 Relationships

A Subsidiary Sakthi Properties (Coimbatore) Ltd

B Enterprises in which the key ABT Limited

management personnel and their ABT Industries Limited relatives have significant influence Sakthi Beverages Limited

Sakthifinance Financial Services Limited Sakthi Logistic Services Limited Sakthi Sugars Limited

Sri Bhagavathi Textiles Limited

Sri Chamundeswari Sugars Limited

Sri Sakthi Textiles Limited

The Gounder and Company Auto Limited

N Mahalingam & Co

ARC Retreading Co. Pvt. Limited

Nachimuthu Industrial Association



C Key Management Personnel Sri M Balasubramaniam,

Vice Chairman and Managing Director

D Relatives of Key Management Personnel Dr N Mahalingam, Father

Sri M Manickam, Brother

Sri M Srinivaasan, Brother

Smt Vinodhini Balasubramaniam, Wife

4.0 Previous years figures have been regrouped / rearranged wherever necessary to conform to current years presentation.

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