MADRAS MOTOR FINANCE AND GUARANTEE CO. LIMITED
Your Directors have pleasure in presenting to you their Seventeenth Annual
Report of the company together with the Audited Statement of Accounts for
the period of 18 months ended 31st March, 1995
CHANGE OF ACCOUNTING YEAR:
The Board of Directors have decided in their meeting held on 5th September,
1994 to extend the current financial year of the Company by a period of 6
months upto 31st March, 1995 Accounts for the current year. have therefor
been prepared for a period of 18 months ended 31st March, 1995.
As the Profit after tax amounted to Rs.199.15 lacs during the period of 18
months ended 31.3.1995, the total amount available for appropriation is
Rs.225.23 lacs. Your Directors have decided to transfer a sum of Rs. 109.
lacs to Debenture Redemption Reserve taking the total debenture redemption
reserve to Rs.300 lacs being 50' of the face value of outstanding
debentures. It was also decided to transfer a sum of Rs.21 lacs to Genera
Reserve II to take care of the terminal charges on leased assets. As the
balance available after the above appropriation is only Rs.94.63 lacs, your
directors have decided not to recommend any dividend and carry forward the
entire balance of Rs. 94.63 lacs so as to conserve resources.
The approval of the Debenture Trustees and Institutions holding debentures
has been received for the payment of 15% dividend declared at the Adjourned
16th Annual General Meeting held on 12th October 1994. Your Directors are
pursuing the matter with the institutions with a request to rephase the
payments due under the debentures and approve the payment of dividend. As
and when the approval is received, the dividend will be paid to the
As the shareholders may be aware Mr.P.V.Sivan Nair handed over the control
of the Company P. Rajarsthinam and Associates on 5th September, 1994.
During the period under review, 77,64,000 equity shares of Rs.10/- each at
a premium of Rs.4.38 per share were allowed on preferential basis to Mr.
Rajarathinam and his Associates in accordance with the relevant
guidelines and within the limit authorise by the Shareholders by a Special
Resolution passed at the Adjourned 16th Annual General Meeting held on 12th
Consequent to this allotment the paid up Capital increased by Rs.7.76
crores to Rs.18.55 Crores and a sum of Rs.3.40 crores has been credited to
the share premium account.
As it is considered necessary to bring In additional funds, It is proposed
to authorise the Board of Directo under Section 81 of the Companies Act,
1956 to issue and allot upto 60,00,000 equity shares of Rs. 10 each on
preferential basis in accordance with the guidelines issued by SEBI.
There has been only a minimum growth in the financial operations of the
Company during the Eighteen months ended 31.3.1995. The disbursements in
Hire Purchase and lease transactions had to be kept to the minimum, as the
Company was facing the liquidity problems during the period. Outstanding
under Hi Purchase agreements has increased to Rs.164.55 crores as against
Rs.156.30 crores at the end of the previous year. The funds brought in by
way of share capital during the period has been deployed in proportionate
Hire Purchase and Lease Finance so as to be in tune with the classification
of your Company Lease disbursements during the period amounted to Rs.7.36
crores and the gross value of based assets increased to Rs.11.98 crores.
The gross income during the year has increased to Rs.18.51 crores against
Rs.17.60 crores during the previous accounting period of 15 months.
During the year, the Company was unable to avail additional finance from
banks due to the restrictions imposed cash credit limits of NBFCs. Despite
the increased competition, and the liquidity problems faced by the Company,
net accretion deposits from the public and others amounted to over Rs 12
crores during the period.
Despite the current liquidity problems, your directors have identified
profitable areas of business to improving the financial position of the
As on 31st March, 1995 fixed deposits numbering 1708 for an aggregate value
of Rs.137.83 lacs remained unrenewed. Of these, 596 deposit receipts for a
total of Rs.51.02 lacs have since been renewed or repaid. 1112 deposit
receipts for a value of Rs.86.01 lacs have not been surrendered for renewal
/repayment till date.
Due to temporary liquidity problems, payments are still due in respect of
2609 deposit receipts for an aggregate amount of Rs.2.12 crores as on
31.3.95. As on the date of the report 4504 deposit receipt aggregating Rs.
2.71 crores is pending payment. Your directors are taking serious steps to
mobilise additional resources and meet all commitments within the next
On the basis of an understanding with Mr. P.V. Sivan Nair, M/s P.
Rajarathinam and Associates have assumed control of the company on 5.9.94.
Hence there was a change in the management of the company Mr. P.V. Sivan
Nair, Mrs. Usha Nair, Dr. J. Venkataramana, Mr. T.N. Lakhminarayanan, Mr.
C. G. Rangabashyam, Mr. K. Ravindran Mr. J.S. Varshneya, Mr. Ajay Kumar and
Mr. Arvindlal Patel Directors of the Company have resigned on 5.9.94. The
Board placed on record their appreciation of the services rendered by these
Directors during their tenure of office.
Mr.Saalai Kadhambha Mani, Mr.S.Sukumar, Mr.T.Palanivelu, Mr.N. Ponnusamy,
Mr.Rajan Isaac and Mr.U.Kassim Razvi representing M/s.P.Rajarathinam and
Associates were appointed on 5.9.94 in the casual vacancies caused by the
resignation of Directors Mr.P.V.Sivan Nair, Mr.T.N.Lakshmi Narayanan, Mr K
Ravindran, Mr.J.S.Varshneya, Mrs.Usha Nair and Mr.C.G. Rangabashyam
Mr Saalai Kadhambha Mani was appointed as a Whole time Director of the
Company on 5th September,1994.
Subsequent to the close of the year, Mr Rajan Isaac, Director has resigned
from the Board with effect from 31st May 1995. The Directors have placed
on record his appreciation of the services rendered by Mr. Rajan Isaac
during his tenure as Director of the Company.
In accordance with the provisions of the Companies Act, 1956
Mr.T.Palaniveiu and Mr.N.Ponnusamy, Directors of the Company retire by
rotation and being eligible offers themselves for reappointment. The
necessary resolutions for their reappointment are proposed in the notice
convening the Annual General Meeting.
Mr. M.V.Ramachandran and Mr.V.Ganesan were appointed as Directors in 31st
May 1995 vacate office at the ensuing Annual General Meeting. The Company
has received notices under Section 257 of the Companies Act, 1956 from the
members proposing the candidatures of Mr. M. V. Ramachandran and
Mr.V.Ganesan as Directors.
M/s M.C. Ranganathan & Co., Auditors of the Company retire at this Annual
General Meeting and are eligible for re-appointment.
The observations made in the Auditors Report are dealt with separately by
notes to the Profit and Lacs Account and to the Balance Sheet in schedule
16 of the Accounts. These are self explanatory.
PARTICULARS REQUIRED TO BE FURNISHED BY THE COMPANIES (DISCLOSURE OF
PARTICULARS IN THE REPORT OF THE BOARD OF Directors) RULES, 1958:-
a. Part A & B pertaining to the conservation of energy and technology
absorption are not applicable to the company.
b. Foreign Exchange used and earned: The company has neither used nor
earned any foreign exchange during the period under review.
The Company had no employee to be reported under Section 217 (2A) of the
Companies Act, 1956.
Your Directors wish to thank and place on record their appreciation for the
support extended by the Company's bankers and institutional debentures.
Your Directors also acknowledge with gratitude the continued co-operation
extended and the confidence reposed by the shareholders, debenture holder
depositors and agents. Your Directors also acknowledge the dedicated
support and the valuable contribution made by the employees of the Company
at all levels for the successful working d the Company during a difficult
For and on behalf of the Board,
SAALAI KADHAMBHA MANI T. PALANIVELU
WHOLE TIME DIRECTOR. DIRECTOR.
Place : Madras,
Dated : 17th August, 1995.