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Enarai Finance Ltd.

BSE: 507888 Sector: Financials
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Enarai Finance Ltd. (ENARAIFIN) - Director Report

Company director report

1996 ENARI FINANCE LIMITED DIRECTORS REPORT Your Directors have pleasure in presenting their Eleventh Annual Report together with the Audited Statements of Account for the year ended 31st March, 1996. 1. DIVIDEND The Board with pleasure recommends higher Dividend of Rs.2.30 per Share for the year 1995-96 (previous year Rs.2.20 per Share on per annum basis) on Equity Shares subject to deduction of tax at source. 2. BUSINESS OPERATIONS During the year, the Gross Income has jumped to Rs.1607.31 lacs showing an increase of 80.51% (annualised). The Cash Profit has shown a smart improvement by 73.89% (annualised) to Rs.786.69 lacs The Net Profit After Tax increased by 36.09% (annualised) to Rs.503.55 lacs The Gross Fixed Assets increased by 103.25% to Rs.3972.61 lacs while the Networth increased by 16.76% to Rs. 2039.93 lacs. The year 1995-96 was a very volatile year. The depressed Capital and Money Markets and the severe liquidity crunch in general affected the Non-Banking Financial Companies (NBFCs) adversely. However, you will be happy to note that your Company proved its resilience by proper strategic planning, diversification of activities and concentrating on focus areas This is reflected in the improved performance of the Company. Despite the adverse conditions, the Financial Services Division of the Company did substantial volumes of Lease and Hire Purchase transactions and the Lease and Hire Purchase income leaped by approx 157% (annualised) to Rs.1189.07 lacs. In Corporate Finance, the volume of the Company's activities as intermediary for bills and inter corporate deposit transactions also increased as compared to the previous year. In Merchant Banking, despite the depressed Capital Market, the Company could Lead Manage 5 issues of over Rs.18.50 crores. The Company also acted as Co-Managers for well known issues. The Company has established its credibility in successful management of the issues and as a result, the Company has on hand issues of diverse industries exceeding Rs. 20 crores. In share trading activities also, the Company could generate good volumes of business and income. 3. FIXED DEPOSITS : During the year, the Company gave a tremendous thrust to its Fixed Deposit mobilisation programme on an all India basis by opening offices at Ahmedabad, Bangalore, Madras and New Delhi. The, Company received excellent response and as on 31st March, 1996 the Company had Fixed Deposits of Rs. 1610.36 lacs. You will be happy to note that the Fixed Deposit programme of the Company received credit rating "FA" from Credit Rating and Information Services of India Limited (CRISIL). 98 deposits totalling Rs.16.81 lacs due for repayment on or before 31st March, 1996 were not claimed by the depositors on that date. As on the date of this report, majority of the deposits thereof have been claimed and paid or renewed. 4. FUTURE PROSPECTS : The diversified activities and personalised and professional services has helped the Company in establishing its name in the Financial Services industry. With the excellent team of experienced professionals and young and dynamic managers, the goodwill generated over the last eleven years and focus on certain specific growth areas, your Company expects to have a substantial improvement in all spheres of its activities. Enarai Securities Limited, an associate Company has established its name as a member of the National Stock Exchange (NSE) for Capital Market segment. The transparency and liquidity in operations of the National Stock Exchange, has attracted the attention of the investors, which has helped Enarai Securities Limited to increase its volumes substantially. 5. GEOGRAPHICAL PRESENCE : The Company has opened offices at all the metros and important Centres viz. Ahmedabad, Bangalore, Calcutta, Madras, New Delhi and Pune. The Company is in the process of establishing additional offices all over India which will enable it to achieve increased volumes in all spheres of its activities. 6. PERFORMANCE V/S. PROJECTIONS AND UTILISATION OF FUNDS : The projections as given in the Prospectus dated 8th September, 1994 versus the actual performance are as follows : (Rs. in lacs) Performance Projections Total Income 1607.31 1493.53 Net Profit after tax 503.55 704.73 Proposed Dividend 23% 24% The reduction in the Net Profit after Tax is mainly due to higher Depreciation arising out of substantial increase in the fund based activities and increase in the Interest and Finance Charges arising out of depressed money market and severe liquidity crunch. The proceeds of the Public Issue have been substantially deployed for the objects mentioned in the Prospectus. 7. NON-CONVERTIBLE DEBENTURES : 15,000 Zero Interest Secured Redeemable Non-Convertible Debentures (NCDs) of Rs.100 each aggregating to Rs.15 lacs allotted to Promoters, Associates etc. on 17th January, 1994 were redeemed at the end of 18 months period on 16th July, 1995. As per the terms of the issue, the detachable warrant option however, can be exercised by them at any time within 36 months from the date of allotment i.e. on or before 16th January, 1997. 8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO : The prescribed information relating to conservation of energy and technology absorption as per Section 217 (1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is not given as the same is not applicable to your Company. Particulars regarding Foreign Exchange Earnings and Outgo appears in the Notes to Accounts. 9. DIRECTORS : In terms of the resolution passed at the 10th Annual General Meeting, Mr. Nilesh L. Parekh was appointed as Managing Director with effect from 1st September, 1995. Mr. Atul L. Parekh, Mr. Satish C. Shah and Mr. Arun A. Trivedi, Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their appointment in Company's interest. 10. AUDITORS : M/s. P.D. Dani & Co., Chartered Accountants and M/s. Dilip Jain & Co., Chartered Accountants retire at the conclusion of the ensuing Annual General Meeting as Joint Statutory Auditors. M/s. P.D. Dani & Co., have, however regretted their inability to be re-appointed as Statutory Auditors, due to their pre-occupation in other matters. The Company has received Special Notices from some members signifying their intention to move the resolution for appointment of M/s. Dilip Jain & Co., Chartered Accountants as the Statutory Auditors. M/s. Dilip Jain & Co., have given their consent to the Company to the effect that their appointment, if made, will be in accordance with the limits specified under Section 224(1 B) of the Companies Act, 1956. You are requested to appoint the Statutory Auditors for the current year and fix their remuneration. 11. PARTICULARS OF EMPLOYEES : Particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, are set out in the Schedule annexed hereto forming part of this Report. 11. ACKNOWLEDGMENTS : The Directors wish to place on record their sincere thanks to all the Bankers for the confidence reposed in the Company and for their continued co-operation and support. The Directors also wish to record their appreciation for the sincere and dedicated efforts of employees for successful working of the Company. 13. The note referred to in the Auditors' Report is self-explanatory. For and on behalf of the Board of Directors LALITBHAI T. PAREKH Chairman Place : Mumbai, Dated : 27th June, 1996.