INDUS FINANCE CORPORATION LIMITED
ANNUAL REPORT 2011-2012
REPORT OF THE DIRECTORS AND MANAGEMENT DISCUSSION & ANALYSIS
Your Directors have great pleasure in presenting the 21st Annual Report of
the Company along with the Audited Accounts of the Company for the year
ended 31st March 2012.
FINANCIAL RESULTS (Rs. in Lacs)
PARTICULARS 2011-12 2010-11
Total Income 1070.13 112.45
Profit before Depreciation and Tax 862.03 47.12
Depreciation 811.19 11.93
Tax provision 24.61 14.28
Deferred Tax Asset 9.22 3.61
Profit after Tax 35.44 24.50
Amount available for appropriation 35.44 24.50
Transfer to Statutory Reserve 7.76 4.90
Transfer to Profit and Loss Account 27.68 19.60
Your Company has increased its total income for the period under review 10
times than that of the previous year from Rs. 112.45 Lacs to Rs.1070.13
The sizable improvement in sales income was due to increase in the
financial income amounting to Rs. 1037.42 Lacs for the period under review
as against Rs. 95.54 Lacs of the previous year. Further there was an
increase from the income for sale of power which amounts to Rs. 31.05 Lacs
for the period under review as against 16.30 Lacs for the previous year.
The depreciation for the period under view amounts Rs. 811.19 Lacs against
Rs. 11.93 Lacs of previous year. Your Company has registered a net profit
of Rs. 35.44 Lacs for the period under review against Rs. 24.50 Lacs as
that of previous year.
Your Directors are pleased to recommend a 3.5% dividend i.e. Rs. 0.35 for
every equity shares of Rs. 10/- each fully paid up for the year 2011 -12
aggregating to Rs. 32.40 Lacs. The Dividend Tax of Rs. 5.25 Lacs will be
paid by the Company. The Dividend, if approved by the shareholders at the
ensuing Annual General Meeting will be paid to the equity share holders
whose names appear in Register of Members, as per the provisions of the
Companies Act 1956.
Though there was not much impact of Global Financial Crisis on Your
Company, the significant change in the Regulatory frame work in the last
few years has helped us to be very prudent resulting in achieving the
desired goal. A settlement of long standing dispute between a group company
and ICICI bank for which the Company had extended guarantee, resulted in
the Company achieving good financial results. The deployment of funds so
received in long term revenue generating fixed asset should help the
Company to get regular flow of income in future. In the past few years, the
increased competition from banks in the retail finance segment has led to
excess diversification by NBFCs from their core business activities. With
proper loan policy in place and the loan portfolio performing well, the
Company is confident of reasonably good results. As envisaged earlier the
increased customer base, quality advance portfolio and committed workforce
will work for increased net profit and net worth, creating value for all
the stakeholders in the most competitive manner. With the loan portfolio
growing rapidly company plans to raise requisite funds either through bank
borrowings or placing NCDs.
OPPORTUNITIES & THREATS
Most of the NBFC`s Customer profile is concentrated either in unorganized
sector or on the self employed segment, NBFC`s have also ventured into
riskier segments such as real estate, unsecured loans, purchase finance for
used commercial vehicles, etc. These factors increase their risk profile
which could have adverse impact on the financial health of NBFCs. have
immense business potential from the segment untapped by commercial banks.
The changes in the regulatory frame work have made them NBFCs. Very
competitive and responsible. The Reserve Bank of India (RBI) has introduced
guidelines under which bank loans to NBFCs are not considered priority-
sector loans from 1 April 2011, which reduces incentives from banks to lend
directly to NBFCs and will increase the latter`s funding costs. Access to
stable funding from banks, institutional investors and capital markets is a
key factor in the stable outlook on the sector, and any disruption in
funding access could lead to negative growth as well as rating action. A
continued deadline in economic growth in 2012 in particular, a steep drop
in industrial output, affecting asset quality/asset growth and earning
could also lead to negative rating action.
RISK AND CONCERNS
Every NBFCs is subject to both Business and Financial risk. While the
business risk associated with operating environment, ownership structure,
Management, System & Policy and Corporate Governance, the financial risk
lies in Asset Quality, Liquidity, Profitability and Capital Adequacy. IFCL
recognises these risks and makes best effort to mitigate them in time.
THE RBI NORMS AND ACCOUNTING STANDARDS
To comply with RBI directions, your company closed its accounts for the
full year ending March 2012, and your Company continues to comply with the
directives issued as well as the norms prescribed by Reserve Bank of India
INFORMATION AS PER SECTION 217 (1) (E) OF THE COMPANIES ACT. 1956
Your Company is a Non-Banking Finance Company and is not engaged in
manufacturing activity of any kind. The disclosure of information relating
to conservation of energy and technology absorption are therefore not
applicable to your company. There were no foreign exchange earnings or
outgo for your Company during the year.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to section 217 (2A) of the Companies (Amendment) Act 2000, the
Directors confirm that;
1. In the preparation of Annual Accounts for the year ended 31st March
2012, all the applicable accounting standards have been followed along with
proper explanation relating to material departures.
2. The Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that were reasonable and
prudent so as to give a true and fair view of the state of affairs of the
company as at 31s` March 2012 and of the Profit or Loss of the company for
the year under review.
3. The Directors have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities.
4. The Directors have prepared the Annual Accounts for the current
financial year on a `going concern` basis.
Mr. Bala V. Kutti, retires at the end of this meeting and being eligible,
offers himself for re-appointment. Dr. K.R. Shyamsundar, Retired IPS was
appointed as additional Director U/s. 260 of the Companies Act 1956. He
holds office up to the conclusion of 21st AGM of the Company. A notice has
been received from a member proposing his candidature for the Directorship
along with requisite fee and the same is included in the notice convening
the 21st AGM for the consideration and approval of the shareholders.
DELISTING OF SHARES FROM MADRAS STOCK EXCHANGE LTD AND COIMBATORE STOCK
Pursuant to the share holder`s approval for voluntary delisting of shares
from MSE and CSE under delisting of (equity shares regulation 209 of SEBI)
in their Annual general meeting held on 30-9-2011, the company has
submitted the application for delisting of shares to the respective stock
exchanges in the month of February 2012. The stock exchanges have not
intimated their approvals so far. However, as per the said regulation it is
deemed to have approved, on the expiry of thirty working days from the date
of submission of such application.
Your Company provides considerable importance to good Corporate Governance
and complying with the Code of Corporate Governance introduced by SEBI. A
detailed report on Corporate Governance together with a certificate from
the Statutory Auditors in compliance of Clause 49 of the Listing Agreement
has been annexed as part of the Annual Report. Management Discussion and
Analysis Report highlighting the performance of the company is attached
forming part of the Directors` Report.
Your company does not have any employee drawing salary in excess of the
amount stipulated under Section 217 (2A) of the Companies Act, 1956.
M/s.V.Ramaratnam & Co. retire at the conclusion of this Annual General
Meeting and are eligible for reappointment. Necessary resolutions are
placed before the Shareholders for their approval.
Your Directors wish to place on record their sincere appreciation and
gratitude to the bankers of the company and various Government agencies for
their support, assistance and co-operation and look forward for their
For and on behalf of Board of
INDUS FINANCE CORPORATION LTD
Bala V. Kutti
Date : 10th August 2012.