2011 2012 - samasta microfinance · 2019-10-31 · delegation of powers to the management...

ANNUAL REPORT 2011-12

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ANNUAL REPORT

2011 – 2012

SAMASTA MICROFINANCE LIMITED EMPOWERING INDIVIDUALS, ENRICHING COMMUNITIES


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CORPORATE INFORMATION

Board of Directors Regd. & Corporate Office 1. A. Ramanathan Director 2. A. Vikraman Director 3. Badri Seshadri Director 4. Solomon Jayaprakash Director 5. R.C. Shekar Director 6. D. Shivaprakash Director 7. N. Venkatesh Managing Director

418 1/2A, 4th Cross, 6th Main, Wilson Garden, Bangalore - 560 027. Tel: +91 80 4291 3500 Email: [email protected] Website: www.samasta.co.in

Auditors M/s. Gowthama & Co. 23/57, 41st Cross, East End 'C' Main Road, 9th Block, Jayanagar, Bangalore – 560 069. Tel: +91 80 2665 6194

mailto:[email protected]

http://www.samasta.co.in/


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Bankers

1 State Bank of India

2 Union Bank of India

3 IDBI Bank

4 State Bank of Travancore

5 Small Industries Development Bank of India

6 Lakshmi Vilas Bank Ltd.

7 Karur Vysya Bank Ltd.

8 Bank of Baroda

9 Bank of Maharashtra

10 Indian Bank

Institutional Lenders

1 Ananya Finance for Inclusive Growth Pvt. Ltd.

2 Manaveeya Holdings & Investments Pvt. Ltd.

3 MAS Financial Services Ltd.


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Table of Contents

Company Snapshot 05

Directors Report 11

Auditor’s Report 16

Balance Sheet 21

Profit & Loss Account 23

Cash Flow Statement 24

Notes to Accounts 25


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THE YEAR AT A GLANCE

FINANCIAL HIGHLIGHTS

Particulars 2011-12 2010-11 Growth %

Income 6.90 8.46 -

Operating profit 2.86 3.14 -

Profit after tax 0.08 0.11 -

Earnings per share 0.12 0.17 -

Financial position

Fixed assets 1.38 1.02 35.2

Cash and cash equivalents 4.00 2.56 56.2

Net current assets 36.69 29.36 24.9

Total assets 41.13 33.61 22.3

Debt 32.37 24.93 29.8

Net worth 8.76 8.68 0.9

Cash and cash equivalents/ total as-sets (%) 9.72 8.30 1.7

OPERATIONAL HIGHLIGHTS

Particulars 2009-10 2010-11 2011-12

Active Customers 55024 49358 44473

Loan Disbursement (Rs. Crores) 40.12 52.32 52.00

Portfolio Outstanding (Rs. Crores) 26.38 28.46 34.20

No. of Branches 24 29 27

No. of Centres 2198 3107 2258

No. of Employees 210 259 198

Repayment Rate 100% 99% 99%

Amount in Rs. Crores


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LOAN PRODUCT PORTFOLIO

1) Income Generation Loan

2) Dairy Cow Loan

3) Agri-Plantation Loan

4) Education Loan

5) Festival Loan

OUR ENTERPRISING CUSTOMERS

1) Mrs. Dhanalakshmi – Negamum Branch, Centre No. 158

Silk Saree weaving has been the family occu-

pation for Mrs. Dhanalakshmi. Out of Sa-

masta’s loan, she has upgraded her hand-

loom due to which her monthly income has

increased from Rs.5000 to Rs.8000 per

month. Currently, she is weaving 2 silk sa-

rees a week.

2) Mrs. Mahalakshmi – Kinathukadavu, Centre No. 42

Mrs. Mahalakshmi who was a daily wage earner, purchased a coir making machine out of Samas-

ta’s loan. She is now earning around Rs.8,000 to Rs.10,000 per month. She also provides employ-

ment to 2 women.


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3) Mrs. Kamalaveni and Mrs. Mahalakshmi – Vadavalli Branch, Centre No. 91

Mrs. Mahalakshmi and Mrs. Kamalaveni have

trained themselves in mushroom cultivation

and have invested their loans taken from

Samasta in this trade to produce mushroom

in their backyard. They produce mushrooms

at Rs.40/kg and sell at Rs.130/kg. Each of

them earn about Rs. 9500/- per month and

give employment to 5 other women.

4) Mrs. Bhuvaneshwari – Vadavalli Branch, Centre No. 61

Mrs.Bhuvaneshwari has invested the loan

taken from Samasta to purchase the Gold

Covering Cutting Machine. She now executes

cutting orders from covering shops for more

than 50 chains per day. She now earns about

Rs.9000 per month.


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DIRECTORS’ REPORT To the Shareholders Your Directors present herewith Annual Report on the business and operations together with Audited Financial Accounts for the year ended 31st March, 2012. 1. FINANCIAL RESULTS

(Rs. in Lakhs)

Particulars Year ended 31-03-2012

Year ended 31-03-2011

Total Revenue 690.54 846.13

Profit (Loss) before Interest, Depreciation and Tax 286.36 314.55

Profit (Loss) before Depreciation and Tax 23.76 35.42

Depreciation 17.85 24.45

Profit (Loss) before Tax 5.90 10.97

Add/Less: Provision for Tax (2.15) (0.10)

Profit (Loss) after Tax 8.05 11.07

Profit available for Appropriation 8.05 11.07

Appropriations:

Transfer to Statutory Reserves 1.61 2.22

Transfer to Loan Loss Reserve - (2.64)

Dividend on Preference Shares 1.74 1.49

Dividend Distribution Tax 0.28 0.25

Balance carried forward to Balance Sheet 4.42 9.75

Total Appropriations 8.05 11.07

2. OPERATIONAL HIGHLIGHTS OF THE YEAR

Particulars 2011-12 2010-11

Active Customers 44473 49358

Loan Disbursement (Rs. in lakhs) 5200 5232

Portfolio Outstanding (Rs. in lakhs) 3420 2846

No of Branches 27 29

No of Centres 2258 3107

No of Employees 198 259

Repayment Rate 99% 99%

3. MANAGEMENT ANALYSIS AND DISCUSSION The Microfinance sector has adapted to the regulatory environment as the uncertainties sur-rounding it ended. RBI has also come out with the final set of guidelines which the MFIs have to follow for getting classified as NBFC-MFI making them eligible for borrowing from Banks under priority sector.


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The banks started active funding in the last quarter of the FY 2011-12 with an undertaking from MFIs to get registered as NBFC-MFI with RBI. However, the registration formalities will com-mence only during the current financial year 2012-13. Your company intends to get itself regis-tered as NBFC-MFI as it has been complying with the Guidelines spelt out by RBI for MFIs. Your company continues to enjoy the support of its existing lenders and has also established new re-lationships with Banks and FIs. These developments are expected to place the company in good stead in its effort to tap the debt market for continuous funding. It will also tap the equity route for funding its future operations and to shore up the capital adequacy.

4. BUSINESS OUTLOOK

Your company’s operations and growth have been affected to a certain extent during the finan-cial year 2011-12 as the bank funding has not resumed as anticipated in the first half. The Oper-ations of your company had to be curtailed as bank funding dried during the period. However, the loan volume has grown in the last quarter with better credit atmosphere. During the year, the Company obtained credit rating of mfr 3+ from CARE which reflects its ability to conduct its operations in a scalable and sustainable manner. The rating has helped the company in mobiliz-ing funds and end the financial year on an optimistic note by achieving growth in its loan portfo-lio and positive bottom line. Your company continued to maintain the momentum in microfinance operations by achieving growth in portfolio of 21% during the financial year 2011-12. This has been possible due to the launching of innovative loan products and enhanced efficiencies in operations. It has also stepped up its cattle loan volumes and the current dairy cow loan portfolio stands at Rs. 58 lakhs. Your company has set higher business target and a lower operational cost for the current finan-cial year 2012-13 and will strive to achieve better working results.

5. DIVIDEND Since the profits are inadequate, no dividend is recommended for the year ended 31st March 2012.

6. BOARD OF DIRECTORS

The routine affairs of the Company are managed by the Managing Director and assisted by the Whole-time Director of the Company. The Board approves, reviews and oversees the action and results of the management to ensure that the long-term objective of maximizing profits and en-hancing stakeholders’ value is met with. The Company presently has seven Directors, including two Whole-Time Directors. BOARD PROCEDURES

A detailed Agenda is sent to each Director in advance of Board and Committee meetings. A de-tailed functional report is also placed at Board Meetings when required. The Board also reviews:

Strategic Plans and Business plans Annual operating and capital expenditure plans Investment and exposure limits The information on recruitment and remuneration of senior officers just below the

board level


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Show cause, demand, prosecution notices and penalty notices which are materially im-portant

Any material point for financial obligation and discipline to and by the company Compliance with statutory/regulatory requirements and review of major legal issues The unaudited quarterly /half yearly/annual results and audited annual accounts of the

Company for consideration and adoption Delegation of powers to the management Transaction pertaining to sale or purchase of material nature of Investments, subsidiar-

ies, assets, which is not in normal course of business. Major accounting provisions and write-offs Corporate restructuring Minutes of meeting of the Audit and other committees of the Board Share transfers

Attendance at meeting of Board of Directors; The details of the Board Meetings held during the year ended 31st March 2012 are as follows:

Date of meeting

N. Ven-katesh

D. Shivapra-kash

R.C. Shekar A. Vikraman

A. Rama-nathan

Badrinara-yan Sesha-dri

Solomon Jayapra-kash

09.05.2011 Yes Yes Yes Yes Yes Yes Yes

15.07.2011 Yes Yes Yes Yes Yes Yes No

09.11.2011 Yes Yes Yes No No No No

21.11.2011 Yes Yes Yes Yes Yes Yes No

20.02.2012 Yes Yes Yes No No No No

28.03.2012 Yes Yes Yes Yes No Yes No

The Board has the following Committees:

Name of the Committee Chairman Other Directors

Audit Mr. A. Vikraman Mr. Badri Seshadri, Mr. D. Shivaprakash

Risk Mr. A. Ramanathan Mr. N.Venkatesh, Mr. D. Shivaprakash

Remuneration Mr. A. Ramanathan Mr. Badri Seshadri, Mr. N.Venkatesh.

7. CORPORTE SOCIAL RESPONSIBILTIES Your company will undertake activities for economic and social development of communities in geographical areas in which it operates. These activities will include education, skill building for livelihood of people, health, cultural and social welfare etc., particularly targeting at disadvan-taged sections of society. Towards this, the company has transferred voluntarily a sum equiva-lent to 2% of the net profit after tax during the financial year 2011-12. 8. STATUTORY AUDITORS M/s. Gowthama & Company, Statutory Auditors of the company hold office until the conclusion of the ensuing Annual General Meeting. The company has received a letter from them to the ef-


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fect that their appointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956. Accordingly the said Auditors can be reappointed as Statutory Auditors of the Company at the ensuing Annual General Meeting. 9. PUBLIC DEPOSITS During the period under review the Company has not accepted any public deposits.

10. INSURANCE Adequate Insurance cover has been taken for properties of the Company including Buildings, Computers, Office Equipment’s, Vehicles, etc. Insurance policy has also been taken for medical and personal accident benefits of the employees and life cover for the Microfinance customers. 11. PARTICULARS OF EMPLOYEES There are no employees attracting the provision of Section 217 (2A) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 1988, who are in receipt of remuneration of not less than Rs.60,00,000/- p.a., or Rs. 5,00,000/- per month or part thereon. (Previous Year-Nil)

12. DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that: (i) in the preparation of the Annual Accounts, the applicable accounting standards have

been followed along with proper explanation relating to material departures;

(ii) appropriate Accounting Policies have been selected and applied consistently, and have 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 as at March 31, 2012 and of the profit of the company for the said period;

(iii) proper and sufficient care has been taken for the maintenance of 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;

(iv) the Annual Accounts have been prepared on a going concern basis.

13. RELATED PARTY TRANSACTIONS

The required disclosures of related party transactions as per the applicable Accounting Stand-ards are disclosed in the Notes to the Accounts. There are no transactions of material nature with the related parties, which may have potential conflict with the interests of company at large.

14. CONSERVATION OF ENERGY As regards disclosure under Sec 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of particulars in respect of Board of Directors) Rules, 1988, we submit that our operations are not energy intensive.


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15. FOREIGN EXCHANGE EARNING AND OUTGO There was no foreign exchange earnings or outgo during the financial year under review. 16. ACKNOWLEDGEMENTS Your Directors wish to place on record their appreciation and acknowledge with gratitude the continued support and co-operation extended by the investors, clients, business associates and bankers and look forward for their continued support. Your Directors also place on record their appreciation for the services rendered by the employees at all levels. Registered Office: By Order of the Board of Directors Samasta Microfinance Ltd 418, 1/2A, 4th Cross, 6th Main, Wilson Garden, Bangalore - 560027

Place: Bangalore D. SHIVAPRAKASH N. VENKATESH Date: 25.05.2012 DIRECTOR MANAGING DIRECTOR


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AUDITORS’ REPORT

To the Members of M/S. SAMASTA MICRO FINANCE LIMITED (FORMERLY COLANAC FINANCE LIMITED) 1. We have audited the attached Balance Sheet of M/s SAMASTA MICROFINANCE LIMITED.

As at MARCH 31st, 2012, Profit & Loss Account and the Cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. In our opinion and based on the information available this provisions of the companies (

Auditor’s Report ) order,2003 as amended by companies (Auditor’s Report) (Amendment) order, 2004,issued by the Central Government of India in Terms of Sub-Section (4A)of Sec-tion 227 of the Companies Act, 1956, are applicable to this company. We enclose in the an-nexure a statement on the matters specified in paragraph 4.

4. Further to our comments in the Annexure referred to above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, the Company has kept proper books of account as required by law, so

far as appear from our examination of those books.

c. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account.

d. In our opinion the Balance Sheet and Profit and Loss Account comply with the Ac-

counting Standards referred to the sub-section (3C) of section 211 of the Companies Act 1956, to the extent applicable.

e. On the basis of written representations received from the directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2012 from being ap-pointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations

given to us the Financial Statements read together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in confinement with the accounting principles generally ac-cepted in India:


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(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012,

(ii) In the case of the Profit and Loss Account, of the Profit of the Company for the year ended as on that date.

(iii) In the case of the Cash flow Statement, of the Cash flows of the Company for the year ended as on that date.

For Gowthama & Company

Chartered Accountants

Firm No. 005917S

H. V. Gowthama

Partner

Membership No. 14353

Place: Bangalore

Date: 25.05.2012


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ANNEXURE TO THE AUDITORS’ REPORT Annexure referred to in paragraph ‘3’ of the Auditors’ Report to the Members of M/s SAMASTA MICROFINANCE LIMITED, on the accounts for the year ended 31ST MARCH, 2012 1. In respect of Fixed Assets

a. The Company has maintained proper records to show full particulars, including quanti-tative details and situation of fixed assets.

b. Fixed assets have been physically verified by the management on various occasions dur-ing the year, and there is a regular program of verification which, is in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No ma-terial discrepancies were noticed on such verification.

2. In respect of inventories

The Company is a Non-Banking Financial Company granting Micro Loans. Accordingly, there are no Inventories; hence this clause is not applicable.

3. The Company has neither granted nor taken any loans, secured or unsecured, to/from Com-panies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

4. According to the information and explanations given to us, there are adequate internal con-trol procedures commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets and with regard to the rendering of Services. During the course of our audit, no major weakness has been noticed in the underlying internal con-trols.

5. In respect of transactions entered in the register maintained in pursuance of section 301 of

the companies Act, 1956.

a) To the best of our knowledge and belief and according to the information and explana-tions given to us, transactions that needed to enter in to the register have been so en-tered.

b) According to the information and explanations given to us transaction of purchase of fixed assets and sale of services exceeding Rs. 50,000 in respect of each party, the trans-action have been made at prices which are prime facie reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company

has not accepted any deposits from the public and as such, compliance with directives is-sued by the Reserve bank of India and provisions of Section 58A of the Companies Act, 1956 and the rules framed there under does not arise.

7. The Company has an Internal Audit System commensurate with the size of the Company and

the nature of its business. 8. Maintenance of cost records have not been prescribed by the Central Government and

therefore comment under section 209 (1) (d) of the Companies Act, 1956, does not arise. 9. In respect of statutory dues

a. According to the information and explanation given to us, the Company is regular in de-positing undisputed statutory dues including Provident Fund, Employees State Insur-


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ance, Income Tax, Service Tax, Cess and any other material Statutory dues with the ap-propriate authorities.

b. According to information and explanation given to us, there are no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Service Tax, Cess and any other material Statutory dues outstanding as at March 31, 2012 for a period of more than six months from the date they became payable.

c. According to the information and explanation given to us, there are no amounts in re-spect of Provident Fund, Employees State Insurance, Income Tax, Service Tax, Cess and any other material Statutory dues outstanding which have not been deposited on ac-count of any dispute.

10. The company has no accumulated losses at the end of the financial year and has not in-

curred Cash losses in the financial year and in the immediately preceding financial year. 11. Based on our audit procedures and on the information and explanations given by the man-

agement, we are of the opinion that, the Company has not defaulted in repayment of dues to banks, financial institutions and has not issued debentures.

12. The Company has not granted any loans and advances on the basis of security by way of

pledge of shares, debentures and other securities. 13. In our opinion and according to the information and explanations given to us, the nature of

activities of the company does not attract any special statute applicable to chit fund / nidhi / mutual benefit funds / society.

14. The Company is not dealing or trading in shares, securities, debentures and other invest-

ment. 15. According to the information and explanations given to us, the company has not given any

guarantee for loans taken by others from bank or financial Institutions. 16. In our opinion, according to the information and explanations given to us and to the best of

knowledge and belief on an overall basis, the Company did not have any term loans overdue

during the year.

17. We have been informed by the management that the funds raised on short term basis have

been used for short term investment.

18. The Company has made preferential allotment of shares to parties covered in the register

maintained under section 301 of the Act. The price at which shares issued by the company under preferential allotment to parties covered under Section 301 of the Act is not prejudi-cial to the interest of the company.

19. During the year under consideration the Company has not issued any debentures. 20. During the year under consideration the Company has not raised money by way of public

issue. 21. Based upon the audit procedures performed and information and explanations given by the

management, we report that, no fraud on or by the Company has been noticed or reported during the course of our audit.


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For Gowthama & Company


Firm No. 005917S

H. V. Gowthama

Partner

Membership No. 14353

Place: Bangalore

Date: 25.05.2012


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SAMASTA MICROFINANCE LIMITED (FORMERLY COLANAC FINANCE LIMITED)

BALANCE SHEET AS AT 31ST MARCH, 2012

Particulars Note No.

As at 31st March, 2012


Rs. Rs.

I EQUITY AND LIABILITIES

(1) Shareholder's Funds

(a) Share Capital 2 6,64,50,000 6,63,50,000

(b) Reserves and Surplus 3 2,11,38,663 2,05,35,585

8,75,88,663 8,68,85,585

(2) Non-Current Liabilities

(a) Long-term borrowings 4 12,65,40,277 8,62,42,706

(b) Deferred tax liabilities (Net) 5 71,376 3,22,534

(d) Long term provisions 6 24,62,103 6,96,777

12,90,73,756 8,72,62,017

(3) Current Liabilities

(a) Other current liabilities 7 19,40,71,593 16,15,72,058

(b) Short-term provisions 8 5,71,694 4,38,646

19,46,43,287 16,20,10,704

Total 41,13,05,706 33,61,58,306

II ASSETS

(1) Non-current assets

(a) Fixed assets

(i) Tangible assets 9 1,01,26,294 73,29,464

(ii) Intangible assets 36,68,755 29,25,401

1,37,95,049 1,02,54,865

(b) Non-current investments 10 5,00,000 5,00,000

(c) Other non-current assets 11 3,00,84,749 2,75,46,273

3,05,84,749 2,80,46,273

(2) Current assets

(a) Trade Receivables 12 33,63,34,676 28,47,29,044

(b) Cash and Bank Balances 13 2,51,47,327 69,34,492

(c) Short-term loans and advances 14 45,24,449 56,50,808

(d) Other current assets 15 9,19,456 5,42,823

36,69,25,908 29,78,57,167

Total 41,13,05,706 33,61,58,306

Significant accounting policies and notes to the accounts

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As per our report of even date For Gowthama & Company For and on behalf of the Board of Directors

Chartered Accountants Firm No. 005917S

H.V.Gowthama Managing Director Director

Partner M.NO. 014353

Date: 25.05.2012 Place: Bangalore Chief Financial Officer Company Secretary


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SAMASTA MICROFINANCE LIMITED

(FORMERLY COLANAC FINANCE LIMITED)

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2012

Particulars Note No.

Year ended 31st March, 2012


Rs. Rs.

A. INCOME

(a) Income from Operations 16 6,67,27,859 8,42,39,041

(b) Other Income 17 23,26,385 3,74,172

Total Income ( A )

6,90,54,244

8,46,13,213

B. EXPENDITURE

(a) Employee benefits expenses 18 2,79,93,868 3,30,64,675

(b) Administrative and Other Expenses 19 1,24,25,033 2,00,92,690

(c) Finance costs 20 2,62,60,870 2,79,13,603

(d) Depreciation 9 17,84,660 24,45,111

Total Expenditure ( B )

6,84,64,431

8,35,16,079

Profit Before Tax ( A - B ) 5,89,813 10,97,134

Tax expenses

(a) Current tax MAT 3,70,000 2,65,000

(b) MAT credit

(3,33,800) (5,37,062)

(c) Taxes for earlier years - 784

(d) Deferred Tax

(2,51,159) 2,62,408

Profit / (Loss) for the year 8,04,772 11,06,004

Earnings per Equity Share:

(a) Basic

0.12 0.17

(b) Diluted 0.12 0.17

Significant accounting policies and notes to the accounts 1







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CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012

Particulars


Rs. Rs.

A CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Tax 5,89,813

Adjustments for:

Depreciation (3,34,728)

Deferred Revenue Expenditure (10,63,278)

Provision for tax 2,14,959

Interest & Finance Charges 2,62,60,870

Interest on FD (15,33,516)

Preference share Dividend and Dividend Tax (2,01,694) 2,33,42,612

2,39,32,425

Operating Profit before Working Capital Changes

Adjustments for:

Decrease/(Increase) in Receivables (5,23,31,102)

Increase/(Decrease) in Payables 3,41,46,751

(1,81,84,351)

Cash generated from operations 57,48,075

Income Tax paid -

Net Cash flow from Operating activities 57,48,075

B CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (32,08,257)

Sale of Fixed Assets 2,800

Interest on FD 15,33,516

Net Cash used in Investing activities

(16,71,941)

C CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Issue of Shares 1,00,000

Proceeds from Long term Borrowings 4,02,97,571

Interest paid (2,62,60,870)

Net Cash used in financing activities

1,41,36,701

Net increase in cash & Cash Equivalents

1,82,12,835

Cash and Cash equivalents as at 01.04.11 69,34,492

Cash and Cash equivalents as at 31.03.12

2,51,47,327

The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in Accounting Standard -3 on Cash Flow Statement.


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Note 1 - Significant Accounting Policies & Notes Forming Part Of The Accounts

1. Basis of Preparation The financial statements are prepared under historical cost convention on an accrual basis and in accordance with the applicable mandatory accounting standards and the provisions of the Companies Act 1956 and the directions issued by the Reserve Bank of India (RBI) to the extent applicable to the Company. The Company follows prudential norms for Income recognition, asset classification and provi-sioning as prescribed by the RBI for Non-deposit taking Non-Banking Finance Companies (NBFCs). 2. Use of Estimates The presentation of financial statements in conformity with Indian Generally Accepted Account-ing Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Although such estimates are made on a reasonable and prudent basis taking into ac-count all available information, actual results could differ from those estimates.

3. Fixed Assets and Depreciation Fixed Assets of the Company are accounted at cost of acquisition, less depreciation. Cost of ac-quisition includes direct expenses attributable to brining the assets to their present location and working condition for their intended use. Financial cost attributable to acquisition of fixed asset is capitalised to the period up to, which the assets are ready to be put to use. Change in the method of depreciation from the previously adopted written down value to straight line has been made from the date of asset coming into use. It is considered that the change would result in a more appropriate presentation of the financial statements of the en-terprise. The surplus arising from retrospective recalculation of depreciation in accordance with the new method is credited to the profit and loss account. The effect of the credit of the surplus to the profit and loss account upto 31st March, 2012 is Rs. 21,21,081. Deprecation on fixed assets is provided using Straight line method at the rates given in the schedule XIV of the Companies Act, 1956.

4. Revenue Recognition Revenue from Interest on loans financed by the company is recognized on accrual basis, consid-ering the directions issued by the Reserve Bank of India from time to time in terms of the Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998. Revenue from interest income on Fixed Deposits with Banks is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.


26

Documentation Fees, Service charges and Insurance charges which are due at the time of dis-bursement of loan, are recognized as Income on upfront basis. 5. Investments Investments which are long term in nature, are stated at cost with provisions where necessary for diminution, other than temporary, in the value of Investment. 6. Income Tax and Deferred Tax Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognized, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized only if there is virtual certainty that they will be realized and are reviewed every year. The tax effect is calculated on the accumulated timing differences at the end of the year based on enacted or substantially enacted tax rates. 7. Classification & Provisions of Loan Portfolio Loans are classified and provided as per norms required in Non-Banking Financial (Non-Deposit Accepting) Companies Prudential Norms (Reserve Bank) Directions, 2007.

Asset Classification RBI norms Rs.

Standard Assets Less than 180 days 33,89,26,008

Sub-Standard Assets 180-720 days 31,46,369

Loss Assets More than 720 days 0

Total 34,20,72,377

Provisioning Norms RBI norms Rs.

Standard Assets 0.25% 8,47,315

Sub-Standard Assets 10% 3,14,637

Loss Assets 100% provision / Write off 0

Total 11,61,952

8. Earnings per Share In determining the Earning per Share the company considers the Net Profit after Tax. The num-ber of shares used in computing Basic Earning per share is number of share outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares.


27


Note 2 - Share Capital

As at As at

Particulars 31st March,

2012 31st March,

2011 Rs. Rs. Authorised: 8,000,000 (Previous year 8,000,000) Equity Shares of Rs.10/- each 80,000,000 80,000,000 2,00,000 (Previous year 2,00,000) Preference Shares of Rs.100/- each 20,000,000 20,000,000 100,000,000 100,000,000 Issued: 6,500,000 (Previous year 6,500,000) Equity Shares of Rs.10/- each 65,000,000 65,000,000 14,500 (Previous year 13,500) 12% Redeemable, Cumulative, Non Con-vertible Preference Shares of Rs.100/- each

1,450,000

1,350,000

66,450,000 66,350,000 Subscribed and Paid up: 6,500,000 (Previous year 6,500,000) Equity Shares of Rs.10/- each 65,000,000 65,000,000 14,500 (Previous year 13,500) 12% Redeemable, Cumulative, Non Con-vertible Preference Shares of Rs.100/- each

1,450,000

1,350,000

Total 66,450,000 66,350,000

i) Reconciliation of the number of Equity and Preference shares at the beginning and at the end of the year:

As at As at 31st March,

2012 31st March,

2011 Number of

shares Number of

shares

Number of shares at the beginning of the year

6,513,500

5,707,000

Add: Additional shares issued during the year

1,000

806,500

Number of shares at the end of the year

6,514,500

6,513,500


28

ii) Number of shares held by each shareholder holding more than 5% shares in the company are as follows: Class of shares / Name of the shareholder

Particulars

Number of shares as at 31st March,

2012

Number of shares as at 31st March,

2011 Equity Shares:

R.C. Shekar

1,279,000

1,179,000

V.A. Narayanaswamy

760,000

760,000

G.J. Krishnaprasad

400,000

400,000

N. Venkatesh

968,000

968,000

Kalpathi Investments Pvt Ltd

1,200,000

1,200,000

B.H.Krishnamurthy

400,000

400,000

Sanjay Shenoy

400,000

400,000

Total

5,407,000

5,307,000 Preference Shares: Basavarajeshwari Bhoomraddi 1,000

1,000

R Jegannath 1,000

1,000

Roopa J Shetty 3,000

3,000

Kuljit Singh Rekhi 3,500

3,500

P.V.Siva Kumar 2,000

2,000

P.Padmavathi 3,000

3,000 Malathi Ramanathan 1,000 -

Total

14,500

13,500


29



Note 3 - Reserves and Surplus

Particulars


Rs.


Rs. a) Securities Premium Account

Opening Balance 18,000,000 6,000,000 Add: Premium on shares issued during the year - 12,000,000 Closing Balance 18,000,000 18,000,000 b) Statutory Reserve

Opening Balance 521,792 300,591 Add: Additions during the year 160,954 221,201 Closing Balance 682,746 521,792

c) Surplus

Opening Balance 2,013,793 1,038,808 Add: Profit for the year 804,772 1,106,004 Less: Proposed Dividend on Preference Shareholders 173,541 149,408 Less: Dividend Distribution Tax 28,153 24,238 Less: Transfer to Loan Loss Reserve - (263,828) Less: Transfer to Statutory Reserve 160,954 221,201 Closing Balance 2,455,917 2,013,793 Total 21,138,663 20,535,585


30

NOTE 4 1

Particulars

As at 31st March, 2012 As at 31st March, 2011

Current As-sets Rs.

Non-current Assets

Rs.

Current As-sets Rs.

Non-current Assets

Rs.

Secured

Term Loans & Term Cash credit from Banks 146,491,305 112,543,445 105,485,637 69,333,415 Term Loans from others 44,374,549 12,697,437 28,771,046 16,238,664 Total 190,865,854 125,240,882 134,256,683 85,572,079

Secured

Vehicle loan from Bank 109,076 377,562 96,831 500,738 Unsecured

Vehicle loan from others 476,357 921,833 169,023 169,889 Total 585,433 1,299,395 265,854 670,627 Total 191,451,287 126,540,277 134,522,537 86,242,706

Security and terms of repayment: Term loans and Cash Credit Accounts are secured by way of hypothecation of book debts and/or Cash Collateral and/or personal guarantee by promoter-directors and/or repayable in 18 - 36 equal monthly installments with 1 to 3 months moratorium from the date of the loan and/or 5 - 14 equal quarterly installments with 6 months to 1 year moratorium from the date of the loan with interest of 11.75% - 16% p.a. Vehicle Loan is secured by way of hypothecation of vehicle and/or repayable in 36-60 equal monthly install-ments with interest of 10.25% p.a


Note 4 - Long-term Borrowings

Particulars

As at 31st March,

2012 Rs.

As at 31st March,

2011 Rs.

Term Loans and Term Cash Credits Secured - from Banks (Refer Note 4.1 below) 112,543,445 69,333,415 - from other parties (Refer Note 4.1 below) 12,697,437 16,238,664 Vehicle Loan from Bank 377,562 500,738 Unsecured Vehicle loan from other parties (Refer Note 4.1 below) 921,833 169,889

Total 126,540,277 86,242,706


31


Note 5 - Deferred Tax

PARTICULARS

AS PER BOOKS AS PER IT

DIFFER-ENCE

TAX @ 30.9%

DEFERRED TAX LIABILITY

Fixed asset 13,795,049 8,767,960 5,027,089 (1,553,370)

DEFFERED TAX ASSET

Provision for Gratuity 796,077 - 796,077 245,988

Provision for Doubtful Debts 1,446,901 - 1,446,901 447,092

Carry Forward Loss 979,560 (1,573,560) 2,553,120 788,914

(71,376)

Deferred Tax Liability as on 31.03.2012

1,553,370

Opening Balance of Deferred Tax Liability

535,716 Provision made in Profit & Loss Account

1,017,654

Deferred Tax Asset as on 31.03.2012

1,481,994

Opening Balance of Deferred Tax Asset

213,181 Provision made in Profit & Loss Account

1,268,813

Total Provision made in Profit & Loss Account

(251,159)

Deferred Tax Liability as on 31.03.2012 (Net) 71,376


32


Note 6 - Long - term provisions

Particulars


Rs.


Rs. Provision for Gratuity 796,077 404,961 Provision for Taxation 203,025 6,867 Provision for Contingencies against Standard Assets 847,315 - Provision for Doubtful Debts 599,586 284,949 Provision for CSR activities 16,100 - Total 2,462,103 696,777


33


Note 7 - Other current liabilities

Particulars


Rs.


Rs. a) Current maturities of long-term debt 191,451,287 134,522,537 b) Interest accrued but not due on borrowings 432,858 703,794 c) Other payables i) Statutory remittances 655,701 808,403 ii) Security deposits from Members 945,009 24,376,250 iii) Other liabilities 586,739 1,161,074

Total 194,071,593 161,572,058


34


Note 8 - Short-term provisions

Particulars


Rs.


Rs. Tax provision less payments (Current tax) 370,000 265,000 Proposed Dividend on Preference Shares 173,541 149,408 Dividend Distribution Tax on Preference Shares 28,153 24,238 Total 571,694 438,646


35


Note 9 - Fixed Assets

Fixed Assets

Gross Block Depreciation / Amortisation Net Block

Balance as at 1st April,

2011 Rs.

Additions during the

year Rs.

Deletions during the

year Rs.

Balance as at 31st

March, 2012 Rs.

Balance as at 1st April, 2011

Rs.

Deprecia-tion /

Amortisa-tion for the

period Rs.

Deprecia-tion on sale of Asset

Rs.

Balance as at 31st March, 2012

Rs.

Balance as at 31st

March, 2012 Rs.

Balance as at 31st

March, 2011 Rs.

A Tangible Assets

Furniture & Fixtures 4,175,460 11,445 5,500 4,181,405 308,357 264,677 1,004 572,030 3,609,375 3,867,103

Office Equipment 1,553,650 9,440 - 1,563,090 50,246 74,052 - 124,298 1,438,792 1,503,404

Computers 2,522,768 300,016 - 2,822,784 440,744 454,188 - 894,931 1,927,853 2,082,025

Vehicles 1,408,544 2,084,479 - 3,493,023 81,723 261,027 - 342,750 3,150,273 1,326,821

Total (A) 9,660,423 2,405,380 5,500 12,060,303 881,070

1,053,944

1,004 1,934,009 10,126,294 8,779,353

Previous Year - Straight Line Method 4,951,941 5,532,806 824,325 9,660,423 413,186 677,318

209,434 881,070 8,779,353 4,538,755

Previous Year - Written Down Value Method 4,951,941 5,532,806 824,325 9,660,422 1,587,880

1,329,702

586,624 2,330,958 7,329,464 3,364,061

B Intangible Assets

Computer Software 4,063,357 802,877 - 4,866,234 466,763 730,716 - 1,197,480 3,668,755 3,596,594

Total (B) 4,063,357 802,877 - 4,866,234 466,763 730,716 - 1,197,480 3,668,755 3,596,594

Previous Year - Straight Line Method 1,550,149 2,513,208 - 4,063,357 11,089 455,674 - 466,763 3,596,594 1,539,060

Previous Year - Written Down Value Method 1,550,149 2,513,208 - 4,063,357 22,548

1,115,409 - 1,137,956 2,925,401 1,527,602

Total (A+B)

13,723,780 3,208,257 5,500 16,926,538 1,347,833

1,784,660

1,004 3,131,489 13,795,049 12,375,947

Previous Year - Straight Line Method 6,502,090 8,046,014 824,325 13,723,780 424,275

1,132,992

209,434 1,347,833 12,375,947 6,077,815

Previous Year - Written Down Value Method 6,502,090 8,046,014 824,325 13,723,779 1,610,427

2,445,111

586,624 3,468,914 10,254,865 4,891,663


36



Note 10 - Non-current investments

Particulars As at

31st March, 2012 Rs.


Rs. Investments in Equity Instruments 500,000 500,000 Unquoted, Untraded 50,000 Equity Shares of Alpha Micro Finance Consultants Pvt. Ltd., of Rs.10/- per share. (Previous year 50,000 Equity shares of Rs.10/- per share) Total 500,000 500,000

Aggregate amount of unquoted investments 500,000 500,000


37


Note 11 - Other non-current assets

Particulars


Rs.


Rs. a) Trade receivables under financing activity 5,737,701 220,000 b) Deposits with more than 12 months maturity 14,886,612 18,716,055 c) Deferred Revenue Expenditure 5,325,816 4,262,538 d) Rent Deposits 2,937,500 3,635,500 e) Advance Tax for FY 2010-11 (AY 2011-12) 50,000 50,000 f) TDS Receiables 276,256 125,118 g) MAT Credit 870,865 537,062

Total 30,084,749 27,546,273


38


Note 12 -Trade receivables

Particulars


Rs.


Rs. Unsecured, Considered Good Outstanding for a period less than six months from the date they are due for payment

333,188,307 284,444,095

Unsecured, Considered Good Outstanding for a period exceeding six months from the date they are due for payment

3,146,369 284,949

Total 336,334,676 284,729,044


39


Note 13 - Cash and Bank balances

Particulars


Rs.


Rs. 1. Cash and Cash equivalents a) Cash on hand 623,232 255,309 b) Balances with Banks (i) In Current accounts 8,737,843 6,679,183 9,361,075 6,934,492 2. Other bank balances

(i) In Fixed Deposit accounts with maturity less than 12 months under lien against term loans availed by the Company.

15,786,252 -

15,786,252 -

Total 25,147,327 6,934,492


40


Note 14 - Short-term loans and advances

Particulars


Rs.


Rs.

Loans and Advances to employees - Unsecured, Considered Good 877,223 897,648 Prepaid Expenses - Unsecured, Considered Good 405,540 137,875 Other advances - Unsecured, Considered Good 3,241,686 4,615,285 Total 4,524,449 5,650,808


41


Note 15 - Other current assets

Particulars


Rs.


Rs. a) Interest accrued 919,456 542,823

Total 919,456 542,823


42


Note 16 - Income from Operations

Particulars For the year ended 31st March, 2012

Rs.

For the year ended 31st March, 2011

Rs.

Interest income on Loans 54,657,486 69,316,356 Document fee and service charges 7,310,415 8,563,375 Other financial services 3,226,441 5,006,614 Interest on fixed deposits (collateral) 1,533,516 1,352,696 Total 66,727,859 84,239,041

Note 17 - Other Income


Rs.


Rs.

Profit on Sale of Fixed Asset - 326,068 Miscellaneous income 205,304 48,104 Depreciation written back 2,121,081 - Total 2,326,385 374,172

Note 18 - Employee benefits expenses


Rs.


Rs.

Salaries and wages 25,293,557 28,904,509 Contributions to provident fund and other funds 2,524,763 2,061,015 Staff welfare expenses 175,548 2,099,151 Total 27,993,868 33,064,675


43



Note 19 Administrative and Other Expenses

Particulars

For the year end-ed 31st March,

2012 Rs.


2011 Rs.

Advertisement expenses 16,311 10,165 Auditor's Remuneration (Refer Note (i) below) 104,310 51,650 Annual Maintenance Charges 295,472 173,440 Books and Periodicals 1,260 2,799 Brokerage 24,750 22,500 Bad Debts Written off - 68,766 Computer consumables 72,959 134,643 Donation - 53,501 Directors expenses 380,196 621,893 Deferred Revenue Expenditure Written Off 1,775,272 1,420,846 Electricity and Water charges 245,068 242,891 Equipment maintenance 7,324 1,500 Health Insurance for Members 2,682 103,221 Insurance for Members 3,684 1,726,369 Insurance - General 201,896 418,282 Local conveyance 1,197,806 2,246,885 Loss on Sale of Fixed Assets 1,696 20,833 Meeting and Conference expenses 25,003 177,574 Members Welfare - 1,294,097 Membership Subscription Charges 124,997 178,282 Miscellaneous Expenses 12,412 - Office Maintenance 670,192 698,890 Postage 175,393 193,349 Printing And Stationery 12,048 1,130,626 Prompt Payment Rebate to Members 30,300 2,143,200 Provision for Contingencies against Standard Assets 847,315 - Provision for doubtful debts 314,637 284,949 Provision for CSR activities 16,100 - Professional Fees 1,077,699 982,918 Rates and Taxes 163,026 155,636 Rent 3,705,640 3,559,548 Telephone Charges 487,521 1,166,592 Travelling Expenses 122,338 413,870 Vehicle Maintenance & Insurance 304,996 391,088 Website Charges 4,732 1,887 Total 12,425,033 20,092,690


44

Note (i)

Particulars


2012 Rs.


2011 Rs.

Auditor's Remuneration - Statutory Audit Fee 52,660 30,000 - Tax Audit Fee 26,650 20,000 - Other Expenses 25,000 1,650 Total 104,310 51,650


45


Note 20 - Finance Costs

Particulars


2012 Rs.


2011 Rs.

(a) Interest expenses on Borrowings 26,021,876 27,623,194

(b) Financial expenses 238,994 290,409 Total 26,260,870 27,913,603


46



NOTES FORMING PART OF THE ACCOUNTS Note - 21 Additional information 21.1 Contingent liabilities and commitments (to the extent not provided for)

Particulars

As at March 31,

2012

Rs.

As at March 31,

2011

Rs.

Contingent liabilities

(a) Disputed court case 30,000 -

21.2 Disclosure on foreign currency exposure: Expenditure and Earning in Foreign Exchange in Foreign Currency during the year is Rs. Nil (Previous Year Rs. Nil) 21.3 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 There are no Micro and Small Enterprises, to whom the company owes dues, which are out-standing for more than 45 days at the Balance Sheet date. The above information regarding Mi-cro Enterprises and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the Auditors.


47

21.4 Disclosures of frauds reported during the year vide DNBS PD.CC.No. 256 / 03.10.042 / 2011-12 dated March 02, 2012

Less than Rs. 1

Lakh Rs. 1 - 5 Lakhs Rs. 5 - 25 Lakhs Total

No. of

Ac-

counts

Value

Rs.in

Lakhs

No. of

Ac-

counts

Value

Rs.in

Lakhs

No. of

Ac-

counts

Value

Rs.in

Lakhs

No. of

Ac-

counts

Value

Rs.in

Lakhs

A) Person involved Staff - - 20 1.37 - - - -

Customer - - - - - - - -

Staff and Customer - - - - - - - -

Total 20 1.37

B) Type of fraud

Misappropriation and criminal breach of trust - - 20 1.37 - - - -

Fraudulent encashment /

Manipulation of books of Accounts - - - - - - - -

Unauthorised credit facility

extended - - - - - - - - Cheating and forgery - - - - - - - -

Total - - 20 1.37 - - - -


48

Note 22 - Earnings Per Share

Particulars For the year ended 31st March,

2012

For the year ended 31st March,

2011

Profit after Tax (Rs.) 804,772 1,106,004 No. of Equity Shares - Basic 6,500,000 6,500,000 - Diluted 6,500,000 6,500,000 Earnings Per Share - Basic 0.12 0.17 - Diluted 0.12 0.17 Face Value of Shares (Rs.) 10 10

Note 23 - Recognisation of MAT Credit MAT credit of Rs. 333,800/- is recognized during the year (previous year Rs. 537,062/-)

Note 24 - Disclosure Pursuant to Reserve Bank of India Notification DNBS.193DG (VL) 2007 dated 22nd February, 2007:

Sl No.

Particulars As at 31st March, 2012

Amount Out-standing

Amount Overdue

Liabilities

(1) Loan and Advances availed by the NBFC inclusive of Interest accrued thereon but not paid:

a Debentures - - - 4 Secured - - - 5 Secured - - (Other than falling the meaning of Public Deposits) - - b Deferred Credits - - c Term Loan 316,106,736 - d Inter-corporate Loans & Borrowings - - e Commercial Paper - - f Other Loans – Vehicle Loan 1,884,828 -


49

Sl No.

Particulars Amount Outstanding

31st March, 2012

(2) Break-up of Loans & Advances including Bills Receiva-bles [ Other than those included in (3) below]

(a) Secured -

(b) Unsecured

342,072,377

(3) Breakup of Leased and Stock on Hire and other Assets counting towards AFC activities -

(i) Lease assets including Lease rentals accrued and due: -

(a) Finance Lease - (b) Operating Lease -

(ii) Stock on Hire including Hire Charges under sundry debtors: -

(a) Assets on Hire - (b) Repossessed Assets -

(iii) Other Loans contributing towards AFC Activities - (a) Loans where assets have been repossessed - (b) Loans other than (a) above -


50

Sl No. Particulars Amount Outstanding

31st March 2012 (4) Break-up of Investments Current Investments -

I Quoted: - (i) Shares: (a) Equity - (b) Preference -

(ii) Debentures and Bonds - (iii) Units of Mutual Funds - (iv) Government Securities - (v) Others - II Unquoted: - (i) Shares: (a) Equity - (b) Preference -

(ii) Debentures and Bonds - (iii) Units of Mutual Funds - (iv) Government Securities - (v) Others -

Long term Investments - I Quoted: -

(i) Shares: (a) Equity - (b) Preference -

(ii) Debentures and Bonds - (iii) Units of Mutual Funds - (iv) Government Securities - (v) Others - II Unquoted: - (i) Shares: (a) Equity 500,000 (b) Preference -

(ii) Debentures and Bonds - (iii) Units of Mutual Funds - (iv) Government Securities - (v) Others -


51

(5) Borrower Group wise classification of Assets Financed as in (2) and (3) above

Sl No. Particulars As at 31st March, 2012

Amount in Rs. (Net of Provisions) Secured Unsecured Total

1 (a) Related Parties Subsidiaries - - - (b) Companies in the same group - - - (c) Other Related Parties - - - 2 Other than related parties - 340,910,425 340,910,425

Total - 340,910,425 340,910,425

(6) Investor Group-wise classification of all investments (Current and Long Term) in Share and Securities (both Quoted and Unquoted):

Sl No.

Category Market Value / Break up value or Fair

Value or Net Assets Value Book Value

1 (a) Related Parties Sub-sidiaries - -

(b) Companies in the same group - -

(c) Other Related Parties - - 2 Other than related parties - 500,000

Total - 500,000

(7) Other Information Related Parties Other than Related Parties

(i) Gross Non - Performing Assets - 3,146,369 (ii) Net Non - Performing Assets - 2,831,732 (iii) Assets acquired in Satisfaction of Debt - -


52

Note 25 - Previous year Figures Previous year’s figures have been reclassified to conform with the current year’s classification /

presentation, wherever applicable.

For Gowthama & Company For and on behalf of the Board vide our annexed report


Firm No. 005917S


Partner

M.No. 014353

Company Secretary

Chief Financial Officer

Date: 25.05.2012

Place: Bangalore


53

NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the 17th Annual General Meeting of the Shareholders of the Com-

pany will be held on Friday, the 29th of June 2012, at the Registered Office of the company 418,

1/2A, 6th Main, 4th Cross, Wilson Garden, Bangalore 560 027 to consider and transact the fol-

lowing business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet and Profit & Loss Account for the financial year ended 31st March 2012 and Director’s Report and Auditor’s Report thereon.

2. To appoint a Director in place of Mr. A. Vikraman, who retires from office by rotation, and being eligible, offers himself for re-appointment.

3. To appoint a Director in place of Mr. R.C. Shekar, who retires from office by rotation, and being eligible, offers himself for re-appointment.

4. To re-appoint M/s. Gowthama & Company, Chartered Accountant, as Auditors, from the conclusion of this Meeting until the conclusion of the next Annual General Meeting of the Company and to fix their remuneration.

SPECIAL BUSINESS: To consider and if thought fit, to pass with or without modification(s), the following resolu-tion as Special Resolution:

ITEM NO 5 ADOPTION OF INSURANCE BUSINESS

“RESOLVED THAT pursuant to the provision of section 17 and other applicable provisions, if any, of the Companies Act, 1956, and subject to the approval of members and confirmation of the Registrar of Companies the object clause of Memorandum of Association be altered by in-serting the following new clauses numbered as (6) and (7) to read as follows:

(6) To carry on, establish, organize, manage, promote, provide, operate, conduct, market and develop insurance products including life and general insurance in all its branches and mani-festations in India or elsewhere and for this purposes to operate various schemes including whole life insurance, endowment insurance, double benefit insurance and multiple benefit in-surance, medical insurance, fire, riot, earth-quake, natural calamity or crop insurance, loss of profit insurance, theft insurance, transit insurance, accidental insurance, limbs and organ in-surance, annuity plans, gratuity plans, fixed income plans and such other schemes and plans as may be considered expedient and necessary from time to time subject to the such rights, ti-tle entitlements and permissions from Government, Semi-Government, local authorities, pub-lic bodies, undertaking and from such other authorities as may be necessary and expedient.


54

(7) To act as agents, representatives, surveyors, sub-insurance agents, franchisers, consult-ants, advisors, collaborators in life and general insurance either with or without risk partici-pation.

“RESOLVED FURTHER THAT Mr. Narayanaswamy Venkatesh, the Managing Director be and

is hereby authorized to do all such acts, deeds, matters and things as may be deemed expedi-

ent and necessary to give effect to this resolution.”

BY ORDER OF THE BOARD


Managing Director

Place: Bangalore

Date: 2nd June, 2012

Notes:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING IS

ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE OF HIMSELF / HERSELF AND

SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. A proxy form in order to be valid and effective should be deposited at the registered office of

the company not less than 48 hours before the scheduled time for the commencement of

meeting.

3. The Members are requested to notify immediately any change in their address to the Com-

pany.

4. The explanatory statement pursuant to section 173(2) of the Companies Act, 1956 setting

out material facts is annexed hereto.

5. Letter of Representation, authorizing a representative to attend and vote at the meeting on

behalf of the Body Corporate, in order to give effective, must reach the Registered Office of

the Company not later than forty-eight hours before the time appointed for holding the

Meeting.


55

Explanatory Statement Pursuant to Section 173(2) of the Companies Act, 1956-

ITEM NO 6

ADOPTION OF INSURANCE BUSINESS:

The Company presently carries on non-banking financial business, such as the financing of in-dustrial enterprises as Loan Company, hire purchase, equipment, leasing company, housing fi-nance company, Investment Company etc. The Board of Directors of the Company at their meet-ing held on 25th May 2012 discussed in length for expanding the company’s activities into insur-ance sector which is permitted under RBI regulations. Considering the financial resources of the Company and other relevant factors, the Board decided to extend its services by undertaking Insurance business either with or without risk participation. The proposed business activities is to act as agents, consultants, advisors; collaborators etc in life and general insurance and pro-vide Insurance products in all its branches and manifestations in India conveniently and advan-tageously with the existing business of the Company which will prove to be useful and beneficial to the Company. Further RBI in its circular No the RBI/2011-12/27 permitted NBFC Companies to carry on in-surance business subject compliance of such terms and conditions as specified in the said circu-lar. In order to reflect the insurance business in the main object clause of the memorandum of association of the Company, it has been decided to amend the object clause by inserting the new clauses 6 & 7 in the object clause of memorandum of association of the Company. In order to give effect to such amendment in the memorandum of association, member’s resolution is re-quired by way of special resolution. Copy of amended Memorandum of Association is available for inspection of members during office hours along with member registers. None of the Directors of the Company is concerned or interested in the above resolution except

to the extent of their holding of equity shares in the Company.

BY ORDER OF THE BOARD


Managing Director


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