ALPIC FINANCE LTD
ANNUAL REPORT 2000-2001
Alpic Finance Ltd
Yours Directors present the 16th Annual Report, together with the Audited
Accounts, for the Financial Year ended 30th June, 2001.
In view of the loss incurred by the Company, your Directors regret their
inability to recommend any Dividend (previous year - nil) for the Year
ended 30th June, 2001.
Considering that there is no profit for the year, the Directors do not
propose any transfer to the Reserves.
The worldwide recessionary trend in the economy continued during the year
which had affected the general growth in the economy of our country
adversely. In addition to that the matters like Tehelka, UTI Bonds, shaken
the confidence of the investor for investing not only in the corporate
sector but even in the public sector. To improve the situation, the
Government has taken certain steps like cut in the interest rates, relaxing
the norms for direct participation of foreign funds in certain areas and
many other measures. Although in the recent future the picture of the
economy is gloomy, It may be hoped in improving the situation in the long
Operations & Financial Performance
During the year under review, there was no better scenario in comparison
with the last year. With the surplus funds for disbursements drying up,
your Company continued its focus on consolidation and furthering the
financial re-engineering programme begun in last year, involving settlement
of high cost debts with non-yielding assets in the form of real estate and
investments and reducing dependence on the public deposits, so as to ensure
better asset-liability management. However, with the funds becoming scarce,
reaching settlements with financial institutions slowed down on account of
their insistence on receiving higher percentage in cash. Having
discontinued acceptance and renewal of public deposits, your Directors laid
maximum emphasis on meeting the repayment obligations to the depositors on
a priority basis, notwithstanding the tight funds flow position. Pursuant
to the amendment in the Company Law, the Company had made an application to
the Company Law Board for extension of time for repayment of Fixed
Deposits. The Hon'ble Company Law Board had passed an order dated 9th July,
2001, directing the Company to re-schedule the payments of Fixed Deposit
outstanding within a period of 4+ years. The Company is thereby following
the directions under the said order. Your Directors wish to place on record
their appreciation for the support that all deposit and bondholders showed
during these uncomfortable times.
It is a matter of pride to note that that your Company has continued to
comply with the Prudential Norms laid down by the Reserve Bank of India and
that your Company's Capital Adequacy, as of 30th June, 2001, was 30.14% as
against 15% prescribed by the Reserve Bank of India.
Group Companies & Other Operations
The sluggishness in the economy was continued to prevail. Consequently,
there were several setbacks in the securities market, resulting in sizeable
reduction in trading. Consequently, the securities arm of the group,
Allanzers Securities Limited (Erstwhile Alpic Securities Ltd. (ASL),
witnessed Losses for the year under review in comparison with its last year
which was best year since inception. Further, with a view to streamline
operations and achieve economies of scale, the two securities arms of the
group, namely Alpic Securities Ltd. and Alpic BBK Finance Ltd., were merged
into one entity viz., Allanzers Securities Limited (Erstwhile Alpic
Securities Ltd. (ASL). Now, with the memberships of both. the Bombay Stock
Exchange and the National Stock Exchange of India, under one entity, ASL is
expected to perform better in the times ahead.
Your Company continues to put a great emphasis on corporate governance and
has a well defined and clearly laid down operational structure comprising
the Board, its committees like Audit Committee and Share Transfer
Committee, followed by the managerial personnel and all the way down to the
branch heads authority and responsibilities. The staff is regularly deputed
to training programmes, both in-house and by deputation outside, to hone
a. There are no employees who are in receipt of salary exceeding the limits
prescribed under section 217(2A) of the Companies act, 1956.
b. The Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, require the disclosure of particulars regarding
Conservation of Energy in Form A and Technology Absorption in Form B,
prescribed by the Rules. Your Company not being a manufacturing company, is
advised that Forms A and B are not applicable.
c. The Company had no foreign exchange outgo except in respect of travel /
training, Rs. 8.63 lacs. There is no foreign exchange inflow.
Comments on Auditors' Remarks
The Company has been prudential in not recognising the revenues on the Non
Performing Assets (NPAs). Even in respect of contractual accruals of
additional finance charges for overdues, the Company exercises considerable
amount of conservative judgement and does not accrue overdue charges at the
full contracted rate. This aspect has been mentioned in the Notes to the
Accounts too. These amounts are recovered only upon the maturity of the
contracts and their final settlements. Sometimes, these are set off against
the security deposits. The amounts considered as overdue charges are thus
reasonable in the judgement of the management.
As regards the remarks under para 2(f)(ii) of the Report, while the Company
has been prudential and conservative in not recognising incomes on the NPAs
etc., the Company also has not provided for interest on the bank and
institutional loans, since their actual values are indeterminable as per
the one time settlement proposals by the Company to them. As regards the
residual value of the leased assets, the Company has been following the
requirements of the guidance note of the Institute of Chartered Accountants
Consequent to resignation of Directors namely Mr. R. N. Barisal, Mr. S. R.
Mohandas and Mr. Ghulam Ghouse the strength of the Board had been
considerably reduced. It was, therefore, proposed to appoint two additional
Directors, namely, Mr. Ajay Bora and Mr. S. Mohan Rao on the Board of the
Company with effect 28th February, 2001. In view of the restructuring of
the group and also proposed shifting of the focus of the business from
financial services to new business areas like bio-technology, information
technology and agency, and pre occupation of the existing Executive
Directors namely Mr. T. S. Chandrashekar and Mr. R. Ravi for development of
these new areas of business, it was also proposed to enhance the strength
of the Executive Directors on the Board by appointing, Mr. Ajay Bora and
Mr. S. Mohan Rao as Executive Directors on the Board of the Company with
effect from 28th February, 2001. Mr. Ajay Bora, is an entrepreneur and has
an experience in the different fields in the business. The Company is
confident of benefiting by his experience. Mr. S Mohan Rao, has more than
30 years experience in the field of finance and had worked with Banks on
different positions His experience in the field of finance would certainly
benefit the Company in the present circumstances.
In terms of the provisions of Section 260 of the Companies Act, 1956 (the
Act), read with Article 129 of the Articles of Association of the Company
(the Articles), the said Additional Directors hold the Offices as such upto
the ensuing Annual General Meeting of the Company. However, the Company has
received Notices from certain Members, proposing the candidature of Mr.
Ajay Bora and Mr. S Mohan Rao, to be appointed as Directors of the Company,
together with a deposit of Rs. 500/- each, in terms of the provisions of
Section 257 of the Act, read with Article 141 of the Articles. Mr. Ramesh
Shroff and Mr. Sairam Iyer, retire by rotation at the ensuing Annual
General Meeting and being eligible, offer themselves for re-appointment.
Your Directors recommend the respective resolutions for adoption.
The Company's Auditors, M/s. R Kothari & Co., Chartered Accountants, hold
office until the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment. Your Directors recommend their re-
Your Directors express their gratitude to the Company's Clients, Bankers,
Financial Institutions, Bondholders. Depositors and Shareholders, for their
continued valuable support.
On behalf of the Board
Mumbai Ravi Kumar S.
30th November, 2001 Chairman & Managing Director