ENARI FINANCE LIMITED
Your Directors have pleasure in presenting their Eleventh Annual Report
together with the Audited Statements of Account for the year ended 31st
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
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)
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
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
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
Place : Mumbai,
Dated : 27th June, 1996.