ANNUAL REPORT 2000-2001
APPLE FINANCE LIMITED
I Welcome you all to the fifteenth annual general meeting of your Company.
The audited financial statements for the period ended March 31, 2001 and
the reports of the Directors and Auditors thereon are already with you for
some time and I hope you have gone through them.
The fourteenth annual general meeting of your Company was held on June
29,2001 for approval of the annual accounts for the year ended December 31,
2000 and other matters. Today's meeting has become necessary in view of
the mandatory requirement stipulated by Reserve Bank of India in their
notification dated January 13, 2000 directing Non-Banking Financial
Companies (NBFCs) to prepare Balance Sheet and Profit & Loss Account as on
March 31 every year beginning with the present period, even if fractional,
ending on March 31, 2001.
Accordingly, in compliance with the aforesaid notification of Reserve Bank
of India, the accounting year of your Company has been changed to end on
March 31, 2001.
The fate of the NBFC industry is perforce linked to trends in the national
economy and various government policies-fiscal and monetary, impacting upon
the finance sector. The gradual slump in the national economy witnessed for
past two years is only accentuating further and now the spectre of a deep
and long-lasting depression looms large. Low GDP growth, sagging market
conditions, global competition for which we were poorly prepared and total
lack of investor confidence have contributed to these overall recessionary
conditions in the entire economy which have direct bearings on fortune of
Further, during the past few years, banks and financial institutions have
become averse to extending financial assistance to the NBFC industry
leading to reduced availability of long term funds, forcing the NBFCs to
increase their dependence on high cost short term funds and thereby
resulting in severe erosion in margins. The situation is further
exacerbated as the NBFC industry has to face stiff competition with entry
of large multinational companies, banks and institutions who, with their
aggressive marketing tactics and strong financial muscle, have made
substantial inroads into the areas of business which were once dominated by
This period has also been characterized by higher rate of defaults by the
clients with a lot of companies reported sick under the Sick Industrial
Companies (Special Provisions) Act, 1985 which had a further fallout on the
There has been a general trend of increase in non-performing assets for the
industry. The slowdown in the various core sectors of the economy had a
severe impact on our customers who are mostly small and medium corporates
and individual truck operators, and this in turn resulted in their not
fulfilling commitments and the contractual obligations to the Company,,
thereby impacting on realization dues from them.
The abysmally thin margins and increased business risks have been major
reasons for our zero business level. As your Company vas not able to
compete with other players in the industry viz., multinational companies,
banks and financial institutions, your Directors took a conscious decision
not to disburse further but to focus on recoveries.
Your Directors are continuing to make all out efforts for recovery. Such
solutions include legal remedies, assets swaps, etc. With these efforts,
your Directors hope to reduce the quantum of losses in future. However,
such recovery process is a long drawn involving courts, continued
negotiations and discussions with clients etc. and hence requires lots of
As mentioned in the previous meeting, your Directors had taken a conscious
decision to prepay all public deposits, and as such your Company has
successfully prepaid the public deposits. The unclaimed deposits have also
been provided for fully.
We are in dialogue with creditors for settlement of their dues. Their
responses are positive and we are striving for early settlements as those
can be of immense importance and beneficial for all.
Your Company acknowledges the invaluable team spirit of its dedicated
employees who have stayed with us even in these difficult days. Mr. V.
Gopalakrishnan, who was the Managing Director, resigned on August 9, 2001
and Mr. T. K R. Chary, Executive Director resigned on August 31, 2001 for
personal reasons. The Board wishes to place on record its appreciation of
the services rendered by them.
I take this opportunity to express our sincere gratitude for your support,
which will no doubt help us to tide over the crisis.
Date: September 7, 2001