The decrease in profit was on the back of rise in total expenditure by 33.22 per cent. However, the company recorded increase in income from operations by 46.27 per cent and decrease in tax expense by 39.23 per cent.
The total expenditure of the company stood at Rs. 28,884 lakh in the quarter ended March 2011 from Rs. 21,682 lakh in the corresponding quarter last year. The rise in expenditure was largely on the back of increase in interest by 39.70 per cent to Rs. 16,634.
The income from operations increased to Rs. 32,611 lakh from Rs. 22,295 lakh in the quarter ended March 2010. Further, the tax paid by the company was Rs. 1,298 lakh in the quarter ended March 2011 from Rs. 2,136 lakh.
The paid up equity share capital of the company stood at Rs. 11,935 lakh from Rs. 6,647 lakh in the corresponding quarter last year.
During the year, the Company has focused on aggressively growing its asset financing business lines, improving the profitability and significantly reducing non performing asset. Moreover, the company has also been aggressively growing its asset financing business line.
During the year, disbursements grew by 48 per cent from Rs.3, 86,600 lakh to Rs. 5, 73,100 lakh the highest for the Company since inception. All the existing business verticals recorded their highest growth / profits since inception.
PBT recorded for the year by the Asset financing businesses amounted to Rs. 34,763 lakh. While the losses in the Personal Loan portfolio continued, the company has brought down the portfolio to Rs. 4,700 lakh, which is a mere 1 per cent of the overall Portfolio as on 31-3-2011, thereby eliminating any further losses on this account in the year ahead.
The Company has been making aggressive provisions. A substantial part of the provisions and loan losses related to its unsecured personal loan portfolio. The personal loan book which was at Rs. 23,000 lakh net of provisions as on 31March 2010 has been reduced to Rs. 4,700 lakh as on 31March 2011.
The total amount of provisions, loan losses and other charges for the year was Rs. 22,449 lakh, this includes a sum of Rs. 16,777 lakh towards the personal loan portfolio, constituting 75 per cent of overall loan losses and provisions.
With the reduction of Personal loan book size to Rs.47 lakh as on 31 March 2011, and the probable losses from the portfolio having been fully provided for, the delinquencies relating to the personal loan book have been now fully addressed.
The Securities Business posted a profit before tax of Rs. 49 lakh as against a profit of Rs. 348 lakh in the previous year, while the distribution / wealth management business posted a profit before tax of Rs. 690 lakh as against a profit of Rs. 689 lakh in the previous year.
Cholamandalam Factoring Limited, made a loss before tax of Rs. 816 lakh as against a loss of Rs.862 lakh in the previous year. The wealth management business has plans for expansion. A senior management team with industry experience has been put in place to explore the cross sell business.