ARUNA SUGARS FINANCE LIMITED
Good Morning Ladies & Gentlemen.
I am extremely happy to welcome you to the Eighth Annual General Meeting of
The Directors' Report and the Audited Accounts of your Company for the year
ended 31st March '94 are already with you and with your permisssion, I take
them as read.
The Government's positive approach in liberalising the economy has started
yielding fruitful results in the form of increased industrial production and
attracted large inflow of foreign investments in India. The decision to
reduce and restructure indirect taxes helped in reversing the recessionary
trends in certain industrial segments. The Government's commitment to pursue
further the liberalisation policies gives an optimistic view of the future.
As has already been mentioned in the Directors' Report, your Company could
achieve a gross disbursal of Rs. 2163 lakhs as against Rs. 719 lakhs in the
The gross income has gone up to Rs. 615.83 lakhs as against Rs. 287.17 lakhs
in the previous year. The net profit has also increased to Rs. 111.81 lakhs
as against Rs.51.06 lakhs in the previous year.
In this context, I would also like you to know that the above profitability
has been achieved after transfer of Rs. 40.91 lakhs to Lease Terminal
Adjustment Account, during the year.
OUTLOOK FOR 199495
I am glad to inform you that your Company's Fixed Deposit rating which was
upgraded from FA -- to FA last year, has been further upgraded to FA+
(indicating Adequate Safety) by the Credit Rating Information Services of
Indfa Limited(CRlSlL). CRISIL has also awarded P1 + rating which is the
highest rating for the commercial paper programme, to your company. Your
company has already received in-principle approval from the bankers for
increasing its cash credit limits from Rs. 1440 lakhs to Rs. 2275 lakhs d
uring the current year.
Your Company could get financial assistance from the Indistrial Development
Bank of India (IDBI), the Small Industries Development Bank of India (SIDBI)
and the Industrial Finance Corporation of India (IFCI) during last year to
the tune of Rs. 800 lakhs. IDBI has recently sanctioned an additional term
loan of Rs. 200 lakhs to your Company.
The fixed deposits of your Company which was Rs. 600.70 lakhs as on
31.03.94, is around Rs. 800 lakhs as on date.
This year, so far, your Company could acheive disbursals to the extent of Rs.
725 lakhs under hire purchase and lease. On the whole, the performance for
the current year is expected to be quite promising.
As I have mentioned in my last year's address, most of the recommendations of
the Shah Committee have been accepted by the Reserve Bank of India for
implementation by the Non-banking Finance Companies. These include obtention
of credit rating of at least investment grade, following the norms prescribed
for income recognition, capital adequacy, exposure ceilings to individual and
group companies, ceiling on investment in subsidiary companies and in shares.
While the above can create temporary set-backs for certain Companies,
professionally managed Companies like yours, which have been following
appropriate policies, will find the future prospects quite encouraging.
Implementation of the norms can also bring in discipline among the Non-
banking Finance Companies.
To meet the long-term resource requirements of your Company, thb Board of
Directors has proposed to increase the capital through a Rights Issue of
Fully Convertible Debentures, the details of which are already with you. This
Issue along with the conversion of the detachable warrants proposed, in the
normal course, will take care of the owned funds requirement of your Company
for the next three years. I am sure that this will meet with your approval.
May 1, on this occasion, convey my sincere thanks to our valuable clients,
depositors, consortium of bankers, IDBI, SIDBI, IFCI and shareholders for
their continued support. I also thank my colleagues on the Board for their
active involvement in shaping the future of your company. On this occasion, I
would also like to thank the staff of the company for their commitment and
P. MARUTHAI PILLAI