You are here » Home » Companies » Company Overview » Integrated Finance Company Ltd

Integrated Finance Company Ltd.

BSE: 511031 Sector: Financials
NSE: INTEGRFIN ISIN Code: INE787E01016
BSE 05:30 | 01 Jan Integrated Finance Company Ltd
NSE 05:30 | 01 Jan Integrated Finance Company Ltd

Integrated Finance Company Ltd. (INTEGRFIN) - Director Report

Company director report

DIRECTORS

To the Members,

Your directors are pleased to present the Twenty-eighth Annual Report together with theAudited Accounts for the year ended 31st March 2011.

(Rs. in lakhs)
1. FINANCIAL RESULTS: For the year ended 31.03.2011 For the year ended 31.03.2010
Gross Profit/Loss before Interest,
Depreciation and Tax (813.59) (215.16)
Interest 269.46 855.84
Profit /Loss before depreciation & Tax (1083.05) (1071.00)
Depreciation 6.95 7.89
Prior year adjustment 4.19 (0.33)
Profit before tax 349.93 (1079.22)
Provision for tax (FBT) - -
Profit/Loss after tax 349.93 (1079.22)
Amount brought forward from the previous year (26442.34) (25363.13)
Balance carried to Balance sheet (26092.40) (26442.34)

2. DIVIDEND

The Board of Directors has not recommended any dividend on Equity shares for this year.

3. MANAGEMENT DISCUSSIONS AND ANALYSIS:

Management Discussion and Analysis of financial condition and results of operations ofthe Company for the year under review as required under Clause 49 of the Listing Agreementwith the Stock Exchanges is given under.

All statements that address expectations or projections about the future, including butnot limited to statements about the Company's strategy for growth, market, position,expenditures and financial results, are forward looking statements. Forward lookingstatements are based on certain assumptions and expectations of future events. The Companycannot guarantee that these assumptions and expectations are accurate or will be realised.The Company's actual results, performance or achievements could thus differ materiallyfrom those projected in any such forward looking statements. Important factors that couldinfluence the company's operations that include the recovery of all overdue, policies ofregulatory authorities, changes in government regulation and other matters. The FinancialStatements have been prepared in compliance with the requirements of the Companies Act,1956. The management accepts responsibility for the integrity and objectivity of thesefinancial statements, as well as for various estimates and judgements used therein.

Performance of the Company:

Your Company has changed its business lines and worked out new organisation plans.Regarding the restructuring programme of the Company, the Division Bench of the MadrasHigh Court on 30.04.2008 has allowed the appeals filed by RBI and others against the orderof the Single Judge of Madras High Court favouring restructuring under Petition No.160/2005. However, the Company has filed a Special leave petition in the Supreme Court,New Delhi on 09.05.2008 and the same was admitted and ordered notices to the RBI andothers.

As already reported, your Company is negotiating with the Consortium of Banks. Manybanks have shown keen interest for the OTS settlement of our Company and we are awaitingclearance of the restructuring package.

4. SUBSIDIARY COMPANIES:

In terms of the amendment made by the SEBI in their notificationsSEBI/CFD/LA/2/2007/2614 DT 26.04.2007, the reports of the Board of Directors and Auditors,balance sheet and profit and loss account of the following subsidiaries have not beenattached to the balance sheet of the Company. The Company believes that the consolidatedannual accounts which form part of the Annual Report present a full and fair picture ofthe state of affairs. The company will make available the audited annual accounts andrelated details upon request by any member of the Company. These documents will also beavailable for inspection during the business hours at the registered office of theCompany. The financial data of the subsidiaries have been furnished in the consolidatedbalance sheet forming part of the Annual Report.

a) INDUSTRIAL VENTURE CAPITAL LIMITED (IVCL)

The Company has reported a loss of Rs. 1255922/- after depreciation for the year. Therewere no fresh investments by the Company during the year. The Company is negotiating withthe Companies in which investments were made for dis-investing its holdings. The Companycontinued to enjoy registration status with the Securities and Exchange Board of India(SEBI). The Company's entire earnings are exempt from Income tax as per the amendedprovisions of the Income Tax Act, 1961.

b) INTEGRATED STOCK BROKING SERVICES PVT LTD (ISBS)

The performance of the Company has declined during the year due to turmoil in theglobal market. The Company hopes that the market will improve at the earliest.

The total revenue earned during the year was Rs. 4883490/- while the net loss beforedepreciation stands at Rs. 799179/-. The Depository division reached its maximum possiblellimit as per the SEBI norms, necessitating an additional investment in its capiatl byIFCL in March 2005. Application has been made for the enhancement of limit and is shortlyexpected. The primary market division which aims at providing all financial services underone roof also registered a loss due to turmoil in the global market.

FUTURE PROSPECTS

The Company has made arrangements to extend broking operations to more towns in TamilNadu, Andhra Pradesh and Karnataka with the hope of improvement in the present marketconditions. On the basis of the progress in the trading of securities, the company is atthe threshold of a turning point in business volumes and profit.

5. DEPOSITS/BONDS:

The Company has discontinued acceptance of fresh deposits including renewals witheffect from 7th December 2003. The interest rates offered by the Company ondeposits and bonds are far above the current rates. This has resulted in higher cost offunds and has affected the liability of your company. To overcome with this situation,your Company has filed an application for restructuring under Section 391 of the CompaniesAct, 1956.

The Single Judge of the H'nble High Court, Madras has pronounced its order on19.08.2006 to convert all deposits and bonds into 6% convertible debentures with aconversion into equity shares within 12 months from the date of issue. However, theDivision Bench of the Madras High Court on 30.04.2008 has set aside the order of theSingle Bench of Madras High Court and allowed the appeals filed by RBI and others. TheCompany has filed a Special leave Petition in the Supreme Court, New Delhi on 09.05.2008against the order of the Division Bench of the Madras High Court and the same has beenadmitted and ordered notices to RBI and others.

6. PRUDENTIAL NORMS FOR NBFC's:

The Capital to Risk Assets Ration of your company stood at a negative as against theminimum of 12%. This trend will not be continued as the Company has filed an appeal in theSupreme Court, New Delhi against the order of the Division Bench of the Madras High Courtsetting aside the order of the Single Bench of Madras High Court. The Company is confidentof winning the appeal in the Supreme Court which would result in the addition of Rs. 150crores (apprx.) to net worth.

7. CORPORATE GOVERNANCE:

The Company has complied with the statutory provisions of Corporate Governance asprescribed under the Listing Agreement of the Stock Exchanges with which the Company'sshares have been listed. A separate Report on Corporate Governance is enclosed as part ofthis Annual Report. A certificate as to compliance with the conditions of CorporateGovernance as stipulated under Clause 49 of the Listing Agreement is annexed to the Reporton Corporate Governance.

8. DIRECTORS:

Mr. D. G. Nayar retires by rotation and being eligible offers himself forre-appointment.

9. INFORMATION AS PER SECTION 217(1) (E) OF THE COMPANIES ACT, 1956:

The Company has no activity relating to conservation of energy or technologyabsorption.

10. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Foreign Exchange Earnings: Rs. NIL (Previous year Rs. NIL)
Foreign Exchange Outgo: Rs. NIL (Previous year Rs. NIL)

11. PARTICULARS OF EMPLOYEES

There are no employees drawing salary in excess of the monetary ceiling prescribedunder Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars ofEmployees) Rules, 1975 during the financial year 2010-11

12. AUDITORS':

M/s. Brahmayya & Co., Chartered Accountants, Chennai retire at the ensuing Annualgeneral Meeting and being eligible offers themselves for re-appointment.

13. DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THE COMPANIESACT, 1956:

The Directors, to best of their knowledge and belief, confirm that:

1. that in the preparation of the annual accounts, the applicable accounting standardshave been followed and there has been no material departure.

2. that the selected accounting policies were applied consistently and the directorsmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company as at 31st March 2011 and of theProfit of the company for the year ended on that date.

3. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

4. that the annual accounts have been prepared on a going concern basis.

14. ACKNOWLEDGEMENTS:

The Board of Directors place on records its appreciation for the assistance andco-operation received from the Financial Institutes, Banks, Government Authorities,Vendors, members, bondholders and depositiors during the year under review. The Board alsoplaces on record its gratitude to the employees at all levels for their commitment anddedicated efforts.

Place: Chennai By Order of the Board
Date : 01.10.2011 GEORGE KURUVILLA
Managing Director