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Directors Report of Sakthi Finance Ltd.

Mar 31, 2018

BOARD''S REPORT

To the Members

Your Directors are pleased to present their 61st Annual Report together with the audited financial statements of the company for the year ended 31st March 2018.

1. FINANCIAL PERFORMANCE (Rs lakh)

Particulars

2017-18

2016-17

Profit before tax

1,853.95

2,111.54

Less: Provision for Taxation:

- Current Tax

839.28

599.84

- Deferred tax

(180.23)

(163.88)

- Net provision for tax (earlier years)

2.27

0.02

Profit after tax

1,192.63

1,675.56

Surplus brought forward from previous year

1,087.19

1,472.88

Transfer from General Reserve

1,000.00

-

Transfer from Revaluation Reserve

43.24

43.24

Amount available for appropriation

3,323.06

3,191.68

Appropriations

Transfer to Statutory Reserve

238.53

335.11

Interim Dividend on Preference Shares*

110.61

105.00

Tax on Preference Dividend*

22.51

21.38

Dividend on Equity Shares Paid (FY 2017)

500.00

-

Tax on Equity Dividend (FY 2017)

101.80

-

Transfer to Debenture Redemption Reserve

1,333.00

1,643.00

Balance carried over to Balance Sheet

1,016.61

1,087.19

Total

3,323.06

3,191.68

* Interim Dividend for the financial year 2017-18 was paid during April 2018

Equity Dividend recommended for the financial year 2017-18, if approved by the members, will be recognised as a liability during the financial year 2018-19

2. BUSINESS

For the year under review, the company disbursed Rs 54,964 lakh in hire purchase operations as against Rs 53,791 lakh during the previous financial year. The collection efficiency continues to be good. Your directors hope to achieve better business disbursements and profitability in the coming years.

3. CHANGE IN NATURE OF BUSINESS, IF ANY

During the year, there was no change in the nature of business of the company.

4. DIVIDEND Preference Shares

Your Directors have, at their meeting held on 28th March 2018, declared an interim dividend of Rs 10 per share on 10% Redeemable Cumulative Preference Shares of Rs 100 each and a pro rata dividend on 9% Redeemable Cumulative Preference Shares of Rs 100 each for the financial year ended 31st March 2018 amounting to Rs 110.61 lakh. The dividend distribution tax on the above is Rs 22.51 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 2018 amounting to Rs 500.00 lakh. The dividend distribution tax works out to Rs 102.80 lakh.

5. TRANSFER TO RESERVES

No amount has been proposed to be transferred to general reserve.

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations), a report on Management Discussion and Analysis, which forms part of this report, is set out in Annexure 1.

7. REDEMPTION OF SECURED, REDEEMABLE, NON-CONVERTIBLE DEBENTURES

As per the terms and conditions of the Public Issue Prospectus dated 18th February 2015, your company has redeemed Non-Convertible Debentures issued under Option III, IV and V aggregating to Rs 1,535.32 lakh. The repayment was made on 31st March 2018 to the respective Debenture holders.

Further, as per the terms and conditions of the Public Issue Prospectus dated 30th March 2016, your company has redeemed Non-Convertible Debentures issued under Option I and II aggregating to Rs 3,432.09 lakh. The repayment was made on 18th May 2018 to the respective Debenture holders.

8. ALLOTMENT OF REDEEMABLE CUMULATIVE PREFERENCE SHARES ON PRIVATE PLACEMENT BASIS

During the year, your company has issued and allotted 9% Redeemable Cumulative Preference Shares of Rs 100 each for an amount of Rs 835 lakhs.

9. DEPOSITS

The total deposits with the company as at 31st March 2018 stood at Rs 16,296.73 lakh as against Rs 14,959.06 lakh as at the end of the previous year.

As at the end of the financial year 2018, 403 public deposits aggregating to Rs 274.30 lakh were due for repayment, but remained unclaimed. The Company has been regularly reminding the depositors about the maturity and out of the said deposits, 169 deposits amounting to Rs 153.94 lakh have since been claimed and repaid / renewed as per their instructions.

10. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year 2017-18, your Company has transferred unclaimed matured debentures and deposits amounting to Rs 2.91 lakhs to Investor Education and Protection Fund.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Cessation

Your Directors regret to inform that Sri A Shanmugasundaram, Independent Director, passed away on 19th September 2017. The Board places on record it''s deep appreciation for the valuable guidance provided by him during his long association with the Company.

b. Retiring by rotation

In accordance with the provisions of Section 152(6) of the Companies Act 2013, Dr. M Manickam, Chairman (DIN: 00102233) will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

c. Continuation of Directorship

In terms of Regulation 17(1A) of the Listing Regulations as amended on 9th May 2018, Sri P S Gopalakrishnan, Non-Executive Independent Director, who is aged more than 75 years, will be continuing as an Independent Director till the end of his present tenure, i.e., up to 26th September 2019, which has been recommended by Nomination and Remuneration Committee and Board of Directors to members.

d. Key Managerial Personnel

In terms of Section 203 of the Companies Act 2013, Sri M Balasubramaniam, Vice Chairman and Managing Director, Dr S Veluswamy, Chief Executive Officer, Sri M K Vijayaraghavan, Chief

Financial Officer and Sri S Venkatesh, Company Secretary are the Key Managerial Personnel (KMPs) of the Company.

e. Remuneration Policy

Company''s policy on Director''s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Act are covered in the Corporate Governance Report which forms part of the Board''s Report. The policy on remuneration is set out in Annexure 2. Further, information about elements of remuneration package of individual directors is provided in the extract of Annual Return as required under Section 92(3) of the Act and is enclosed as Annexure 3 in the prescribed form MGT-9 which forms part of this Report.

f. Number of Meetings of the Board

Five (5) meetings of the Board of Directors of the Company were held during the year. For details of the meetings, please refer to the Corporate Governance Report, which forms part of this Report.

g. Independent Directors'' Declaration

Sri P S Gopalakrishnan, Dr A Selvakumar, Smt. Priya Bhansali and Sri K P Ramakrishnan who are Independent Directors, have submitted declarations that each of them meet the criteria of independence as provided in sub-section (6) of Section 149 of the Act and Regulation 25 of the Listing Regulations. Further, there has been no change in the circumstances which affect their status as independent directors during the year.

h. Code of Conduct for Directors and Senior Management

The Directors and members of the Senior Management have confirmed compliance with the code of conduct. A declaration to this effect has been signed by Vice Chairman and Managing Director and forms part of the Annual Report.

i. Inter se relationship amongst Directors

Except Dr M Manickam, Chairman, Sri M Balasubramaniam, Vice Chairman and Managing Director and Sri M Srinivaasan, Director who are related to each other, none of the other Directors is related to each other within the meaning of the term "relative" as per Section 2(77) of the Companies Act 2013 read with Listing Regulations.

j. Board Evaluation

In terms of the requirements of Companies Act 2013 and Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, individual Directors as well as the evaluation of its Committees.

The evaluation was carried out based on a structured questionnaire which includes performance criteria such as performance of duties and obligations, independence of judgement, level of engagement and participation, contribution in increasing the Board''s over-all effectiveness etc. Your directors have expressed their satisfaction on functioning and performance of Individual Directors, Board and its Committees.

12. AUDIT COMMITTEE

The present Audit Committee has three non-executive directors as members of which two are Independent Directors.

The composition of the Committee is given below:

a. Dr A Selvakumar, Chairman

b. Sri M Srinivaasan, Member

c. Sri K P Ramakrishnan, Member

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the financial year 2017-18, there has been no loans, guarantees or investments which would attract the provisions of Section 186 of the Act.

14. TRANSACTIONS WITH RELATED PARTIES

The Company has entered into contracts or arrangements with the related parties in the ordinary course of business and these are on arm''s length basis only. There are no contract or arrangement entered into with Related Party(ies) during the year to be disclosed under Sections 188(1) and 134(h) of the Companies Act 2013.

15. INTERNAL CONTROL

The information about internal controls is set out in the Management Discussion and Analysis Report which forms part of this Report.

16. RISK MANAGEMENT

The Risk Management is overseen by the Risk Management Committee of the Company. The Committee oversees the Company''s processes and policies for determining risk tolerance against established levels. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuous basis. For details, please refer to the Management Discussion and Analysis Report which forms part of the Board''s Report.

17. VIGIL MECHANISM

The Company has established a vigil mechanism of Directors and employees to report their genuine concerns. During the year, no complaint has been received in this regard. For details, please refer to Corporate Governance Report which forms part of this Report.

18.CORPORATE GOVERNANCE REPORT

As required under Regulation 34(3) and Schedule V to the Listing Regulations, a report on Corporate Governance and a certificate from the auditors of the company regarding compliance of the conditions of Corporate Governance form part of the Annual Report.

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

The Company has put in place a Sexual Harassment Prevention Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. An Internal Compliance Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this Policy. During the year 2017-18, there were no complaints received in this regard by the ICC.

20. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has put in place necessary internal financial controls which are adequate and are operating effectively. The controls are adequate for ensuring the orderly and efficient conduct of the business, completeness of accounting records and timely preparation of reliable financial information, besides adherence to the Company''s policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy, etc.

21. 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 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. 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.

22. 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 - 4. Further, details regarding composition of Corporate Social Responsibility Committee and other particulars are provided in the Corporate Governance Report which forms part of this report.

Your Company has so far spent Rs 10.21 lakhs as against Rs 44.68 lakhs required to be spent during the previous financial year 2016-17. The unspent balance amount of Rs 34.47 lakh for previous year 2016-17 was also spent during the financial year 2017-18.

23. AUDITORS

a. Statutory Auditors

M/s P K Nagarajan & Co., Chartered Accountants (ICAI Regn. No. : 016676S) were appointed as statutory auditors of the Company at the 60th Annual General Meeting to hold office up to the conclusion of the 65th Annual General Meeting. 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.

M/s. P K Nagarjan & Co, Chartered Accountants, have audited the accounts of the company for year 2017-18 and submitted their report thereon. There has been no qualification, reservation, adverse remarks or disclaimer given by the Auditors in their report.

b. Secretarial Auditors

The Board appointed M/s. S Krishnamurthy & Co, Practicing Company Secretaries, Chennai as Secretarial Auditors for the year 2017-18 and they have given their Secretarial Audit Report for the financial year 2017-18. The Secretarial Audit Report for the financial year 31st March 2018 is set out in Annexure - 5.

M/s. S Krishnamurthy & Co, Secretarial Auditors, have submitted their report for the financial year 2017-18 and there has been no qualification, reservation, adverse remarks or disclaimer given by the Auditors in their report.

24. PARTICULARS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT 2013

Particulars 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 95.48 lakh

The disclosures in terms of Section 197(12) of the Companies Act 2013 read with rule 5(1), (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 relating to remuneration is enclosed as Annexure 6.

25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT

There are no significant and material orders passed by the regulators or courts or tribunals affecting the going concern status of your company and its operations in future.

26. MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments which occurred between the end of the financial year of the company and the date of this report affecting the Company''s financial position.

27. EXTRACT OF ANNUAL RETURN

The extract of Annual Return as provided under sub-section (3) of Section 92 of the Companies Act 2013 is enclosed as Annexure - 3 in the prescribed Form MGT-9 and forms part of this Report.

28. PECUNIARY RELATIONSHIP OR TRANSACTIONS OF NON-EXECUTIVE DIRECTORS

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company.

29. SECRETARIAL STANDARDS COMPLIANCE

Your Directors confirm that the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India in relation to Board and General Meetings.

30. 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 endeavors.

For and on behalf of the Board

9th August 2018

M Manickam

Coimbatore

Chairman


Mar 31, 2016

BOARD S REPORT

To the Members

The Directors are pleased to present their 59th Annual Report together with the audited accounts of the company for the financial year ended 31st March 2016.

FINANCIAL PERFORMANCE (Rs. lakh)

Particulars

2015-16

2014-15

Profit before tax

2039.93

2128.96

Less: Provision for Taxation:

- Current Tax

863.07

806.18

- Deferred tax

(75.71)

(259.09)

- Net Provision for tax (earlier years)

(2.77)

Profit after tax

1252.57

1584.64

Surplus brought forward from previous year

2112.13

1567.14

Transfer from Revaluation Reserve

46.06

Amount available for appropriation

3410.76

3151.78

Appropriations

Transfer to Statutory Reserve

250.51

316.93

Dividend on Preference Shares

104.34

100.76

Tax on Preference Dividend

21.24

20.15

Proposed Dividend on Equity Shares

500.00

500.00

Tax on Equity Dividend

101.79

101.81

Transfer to Debenture Redemption Reserve

960.00

Balance carried over to Balance Sheet

1472.88

2112.13

Total

3410.76

3151.78

BUSINESS

For the year under review, the company disbursed Rs. 52562 lakh in hire purchase operations as against Rs.50266 lakh during the previous financial year. The collection efficiency has been good. Your directors hope to achieve better business disbursements and profitability in the years to come.

CHANGE IN NATURE OF BUSINESS, IF ANY

During the year, there was no change in the nature of business of the company.

DIVIDEND Preference Shares

The Board of Directors have, at their meeting held on 12th March 2016, declared an interim dividend of Rs.10 per share on 10% Redeemable Cumulative Preference Shares of Rs.100 each for the financial year ending 31st March 2016 amounting to Rs.125.58 lakh including dividend distribution tax amount of Rs. 21.24 lakh on pro rata basis.

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 2016 amounting to Rs. 601.79 lakh including dividend distribution tax amount of Rs.101.79 lakh.

TRANSFER TO RESERVES

There is no amount proposed to be transferred to general reserve.

ISSUE OF PREFERENCE SHARES (NEW)

During the current year, 3,02,450 10% Redeemable Cumulative Preference Shares of '' 100 each have been issued on private placement basis aggregating to Rs.302.45 lakh. Further, 3,09,700 10% Redeemable

Cumulative Preference Shares of Rs.100 each which were issued on private placement basis during the year 2012 aggregating to Rs.309.70 lakh has been redeemed out of the proceeds of the fresh issue of preference shares.

As at 31st March 2016, the company has a paid-up preference share capital of Rs. 1050.00 lakh comprising of 10,50,000 10% Redeemable Cumulative Preference Shares of Rs. 100 each.

DEPOSITS

The total deposits with the company as at 31st March 2016 stood at Rs. 16,242.60 lakh as against Rs.16,513 lakh as at the end of the previous year.

As at the end of the financial year, 1,088 public deposits aggregating to Rs.709.91 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, 252 deposits amounting to Rs.190.83 lakh have since been claimed and repaid / renewed as per their instructions.

PUBLIC ISSUE OF SECURED, REDEEMABLE, NON-CONVERTIBLE DEBENTURES FOR Rs.200 CRORE

The Company made a public issue of Secured, Redeemable, Non-Convertible Debentures (NCDs) of Rs.1,000 each up to Rs.100 crore, with an option to retain over subscription up to Rs.100 crore, aggregating to Rs.200 crore. The NCD issue opened on 7th April 2016 and closed on 6th May 2016. The Company received a subscription of Rs.164.87 crore. The Company made allotment of 16,48,708 NCDs to the applicants on 18th May 2016. The NCDs have been listed and admitted for trading with BSE Limited with effect from 23rd May 2016.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

1. Retiring by rotation

In accordance with the provisions of Section 152(6) of the Companies Act 2013, Dr. M Manickam (DIN: 00102233) will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for reappointment. The Board recommends his reappointment.

2. Changes in Key Managerial Personnel

Dr.S.Veluswamy, resigned from the post of Chief Financial Officer (CFO) with effect from 14th November 2015 and continues as Senior President (Operations). The Board has also appointed him as a Key Managerial Personnel.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors appointed Sri. M.K. Vijayaraghavan, Senior President (Finance and Corporate Services) as Chief Financial Officer (CFO) of the Company with effect from 14th November 2015.

In terms of Section 203 of the Companies Act 2013, Sri M Balasubramaniam, Vice Chairman and Managing Director, Sri M K Vijayaraghavan, Chief Financial Officer, Dr S Veluswamy, Senior President (Operations) and Sri S Venkatesh, Company Secretary are the 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 Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a report on Management Discussion and Analysis Report forms part of this report.

CORPORATE GOVERNANCE REPORT

As required under Regulation 34(3) and Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, 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 regulations forms part of the Annual Report.

DISCLOSURE 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 2015-16, the company has not received any complaint on sexual harassment.

DISCLOSURES REQUIRED UNDER THE COMPANIES ACT 2013 AND THE LISTING REGULATIONS

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

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has put in place internal financial controls which are adequate and are operating effectively. The controls are adequate for ensuring the orderly and efficient conduct of the business, including adherence to the Company''s policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

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 regarding composition of 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, 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 Boards 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 fulfillment 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, Practicing Company Secretaries, Chennai to carry out Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year 31st March 2016 is enclosed as Annexure- III.

The clarification to the observations made by the Statutory Auditors and Secretarial Auditor 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. Due to the migration to the new software, the checks and balances with regard to verification of validity of accounting figures generated from the new software is taking additional time. Because of this, there has been delay in compilation of the various returns like NBS-1, NBS-2, NBS-3, NBS-6 and ALM being submitted to RBI periodically. The company is now taking efforts to streamline the operational procedure and data compiling operations under the new software during the current year and expects to submit the above returns within the time limit prescribed by RBI in future.

The shortfall in maintenance of liquid assets in government securities is reported by reckoning the investment at acquisition cost instead of market price as prescribed by RBI. The correct position in this regard was brought to the notice of RBI and they have accepted the company''s contention. However, RBI has advised the company to incorporate the figures with respect to market price in future.

The Board has appointed M/s. S Krishnamurthy & Co, Practicing Company Secretaries, Chennai as the Secretarial Auditors for the financial year 2016-17. Necessary consent has been received from them to act as Secretarial Auditors.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT

There are no significant and material orders passed by the regulators or courts or tribunals affecting the going concern status of your company and its operations in future.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments which occurred during the period under review affecting the Company''s Financial position.

PARTICULARS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT 2013

Particulars 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.48.96 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 endeavors.

For and on behalf of the Board

10th August 2016 M Manickam

Coimbatore Chairman


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, 2011

To the Members

The directors are pleased to present their Fifty Fourth Annual Report together with the audited accounts of the company for the financial year ended 31st March 2011.

FINANCIAL PERFORMANCE ( Rs. lakhs)

Particulars 2010-11 2009-10

Profit before tax and 1228.32 1052.62 exceptional items

Less : Exceptional items – 135.12 - General Provision on Standard Assets

Profit before tax 1093.20 1052.62

Less: Provision for:

Less: – Current Tax 255.43 175.61

– MAT credit entitlement (131.86) -

Less: – Deferred tax 160.64 249.97

Less: Net Provision for Income Tax (earlier years) 15.40 (1.15)

Profit after tax 793.59 628.19

Add : Balance brought forward 1578.96 1076.41 from previous year

Amount available for appropriation 2372.55 1704.60

Appropriations

Proposed Dividend on Equity Shares 301.07 –

Tax on Proposed Dividend 48.84 –

Transfer to Statutory Reserve 158.72 125.64

Transfer to General Reserve 1500.00 –

Surplus carried to balance sheet 363.92 1578.96

2372.55 1704.60

BUSINESS

During the year under review, the company's disbursement set a new record. The company disbursed Rs.35127 lakhs in hire purchase business as against Rs. 29,609 lakhs during the previous financial year. The collection efficiency has been 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. An amount of Rs. 1500 lakhs has been transferred to General Reserve.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 1 per share (10% on the face value of equity share of Rs. 10 each) for the year ended 31st March 2011. The dividend, if approved by the members, would involve a cash outflow of Rs. 349.91 lakhs including dividend tax.

DEPOSITS

The total deposits with the company as at 31st March 2011 stood at Rs. 4829 lakhs as against Rs. 5,239 lakhs for the corresponding previous year.

As at the end of the financial year, 713 public deposits amounting to Rs. 227.77 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, 172 deposits amounting to Rs. 63.21 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 S A Murali Prasad

2. Sri S Ragothaman

Sri S A Muraliprasad, Director has expressed his desire not to seek reappointment as a director of the company.

The profile of Sri S Ragothaman, Director as required under Clause 49(IV)(G) of the Listing Agreement entered into with stock exchanges is given in the Annexure to the Notice of the 54th Annual General Meeting.

AUDIT COMMITTEE

The Audit Committee has been functioning with the following non-executive Independent directors:

1. Sri S A Murali Prasad, Chairman

2. Dr A Selvakumar, Member

3. Sri A Shanmugasundaram, Member

SUBSIDIARY COMPANY

The Board of Directors at their meeting held on 5th February 2011 have approved a resolution to delink the subsidiary company, Sakthi Properties (Coimbatore) Limited from our company. Accordingly, Sakthi Properties (Coimbatore) Limited ceased to be a subsidiary of our company with effect from 5th February 2011.

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. 2.27 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 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 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 (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 fix their remuneration for the financial year 2011-12.

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

M Manickam Chairman

Coimbatore 30th May 2011


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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