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Sakthi Finance Ltd.

BSE: 511066 Sector: Financials
NSE: SAKTHIFIN ISIN Code: INE302E01014
BSE 10:56 | 20 Apr 33.00 -0.20
(-0.60%)
OPEN

33.20

HIGH

33.20

LOW

33.00

NSE 05:30 | 01 Jan Sakthi Finance Ltd
OPEN 33.20
PREVIOUS CLOSE 33.20
VOLUME 400
52-Week high 51.00
52-Week low 29.00
P/E 10.06
Mkt Cap.(Rs cr) 165
Buy Price 33.00
Buy Qty 315.00
Sell Price 33.50
Sell Qty 10.00
OPEN 33.20
CLOSE 33.20
VOLUME 400
52-Week high 51.00
52-Week low 29.00
P/E 10.06
Mkt Cap.(Rs cr) 165
Buy Price 33.00
Buy Qty 315.00
Sell Price 33.50
Sell Qty 10.00

Sakthi Finance Ltd. (SAKTHIFIN) - Director Report

Company director report

To the Members

Your Directors are pleased to present their 60th Annual Report together with theaudited accounts of the company for the financial year ended 31st March 2017.

FINANCIAL PERFORMANCE

Particulars 2016-17 2015-16
Profit before tax 2111.54 2039.93
Less: Provision for Taxation:
- Current Tax 599.84 863.07
- Deferred tax (163.88) (75.71)
- Net provision for tax (earlier years) 0.02
Profit after tax 1675.56 1252.57
Surplus brought forward from previous year 1472.88 2112.13
Transfer from Revaluation Reserve 43.24 46.06
Amount available for appropriation 3191.68 3410.76
Appropriations
Transfer to Statutory Reserve 335.11 250.51
Dividend on Preference Shares 105.00 104.34
Tax on Preference Dividend 21.38 21.24
Proposed Dividend on Equity Shares * 500.00
Tax on Equity Dividend * 101.79
Transfer to Debenture Redemption Reserve 1643.00 960.00
Balance carried over to Balance Sheet 1087.19 1472.88
Total 3191.68 3410.76

* will be recognised as a liability on approval by the members at the Annual GeneralMeeting.

BUSINESS

For the year under review the company disbursed Rs. 53791 lakh in hire purchaseoperations as against Rs. 52562 lakh during the previous financial year. The collectionefficiency has been good. Your directors hope to achieve improved business disbursementsand profitability in the years to come.

CHANGE IN NATURE OF BUSINESS IF ANY

During the year there was no change in the nature of business of the company.

DIVIDEND Preference Shares

Your Directors have at their meeting held on 16th March 2017 declared an interimdividend of Rs. 10 per share on 10% Redeemable Cumulative Preference Shares of Rs. 100each for the financial year ending 31st March 2017 amounting to Rs. 105.00 lakh. Thedividend distribution tax on that is Rs. 21.38 lakh.

Equity Shares

Your Directors are pleased to recommend a dividend of Rs. 1 per equity share (10% onthe face value of equity share of Rs. 10 each) for the year ended 31st March 2017amounting to Rs. 500.00 lakh. The dividend distribution tax on that is Rs. 101.79 lakh.

TRANSFER TO RESERVES

No amount is proposed to be transferred to general reserve.

REDEMPTION OF SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES

As per the terms and conditions of the Public Issue Prospectus dated 18th February2015 your company has redeemed Option I and II of Non-Convertible Debentures aggregatingto Rs. 4816.78 lakh. The repayment was made on 31st March 2017 to the respective Debentureholders.

DEPOSITS

The total deposits with the company as at 31st March 2017 stood at Rs. 14959.06 lakh asagainst Rs. 16242.60 lakh as at the end of previous year.

As at the end of the financial year 816 public deposits aggregating to Rs. 506.82 lakhwere due for repayment but remained unclaimed. The Company has been reminding thedepositors regularly about the maturity and out of the said deposits 353 depositsamounting to Rs. 256.79 lakh have since been claimed and repaid/renewed as per theirinstructions.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year 2016-17 your Company has transferred unclaimed matured debenturesamounting to Rs. 2.14 lakh to Investor Education and Protection Fund.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Retiring by rotation

In accordance with the provisions of Section 152(6) Sri. M Srinivaasan (DIN: 00102387)will retire by rotation at the ensuing Annual General Meeting of the Company and beingeligible offers himself for reappointment. The Board recommends his reappointment. b. KeyManagerial Personnel

In terms of Section 203 of the Companies Act 2013 Sri M Balasubramaniam Vice Chairmanand Managing Director Sri M K Vijayaraghavan Chief Financial Officer Dr S VeluswamySenior President (Operations) and Sri S Venkatesh Company Secretary are the KeyManagerial Personnel (KMPs) of the Company.

AUDIT COMMITTEE

The Audit Committee has three non-executive directors as members of which two areIndependent Directors.

a. Dr A Selvakumar Chairman

b. Sri A Shanmugasundaram Member

c. Sri M Srinivaasan Member

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34(2) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a report on Management Discussion and Analysis Reportforms part of this report.

CORPORATE GOVERNANCE REPORT

As required under Regulation 34(3) and Schedule V to the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) a report on CorporateGovernance and a certificate from the auditors of the company regarding compliance of theconditions of Corporate Governance as stipulated under the listing regulations forms partof the Annual Report.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013

The Company has put in place a Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. An Internal Compliance Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees are covered under this Policy. Duringthe year 2016-17 there were no complaints received by the ICC.

DISCLOSURES REQUIRED UNDER THE COMPANIES ACT 2013 AND THE LISTING REGULATIONS

The information required to be disclosed under the Companies Act 2013 and the ListingRegulations is set out in the Annexure - 1 and forms part of this report.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has put in place necessary internal financial controls which are adequateand are operating effectively. The controls are adequate for ensuring the orderly andefficient conduct of the business completeness of accounting records and timelypreparation of reliable financial information besides adherence to the Company'spolicies safeguarding of assets prevention and detection of frauds and errors accuracyetc.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act 2013 your directors confirm tothe best of their knowledge and belief that:

a. in the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures;

b. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitof the company for the financial year;

c. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR Policy of the Company and the details about the initiatives taken by theCompany on CSR during the year as per the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 have been disclosed in Annexure - 2. Further details regardingcomposition of Corporate Social Responsibility Committee and other particulars areprovided in the Corporate Governance Report which forms part of this report.

Your Company has so far spent Rs. 10.21 lakh as against Rs. 44.68 lakh required to bespent during the financial year 2016-17.

BOARD EVALUATION

In terms of the requirements of Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) the Board has carried outan annual performance evaluation of its own performance individual Directors as well asthe evaluation of its Committees.

The evaluation was carried out based on a structured questionnaire which includesperformance criteria such as performance of duties and obligations independence ofjudgement level of engagement and participation contribution in increasing the Board'sover-all effectiveness etc. Your directors have expressed their satisfaction onfunctioning and performance of Individual Directors Board and its Committees.

AUDITORS

a. Statutory Auditors

M/s. P N Raghavendra Rao & Co Chartered Accountants were first appointed asstatutory auditors of the Company at the 44th AGM held on 8th September 2001. They havealready completed more than ten years as Statutory Auditors of the Company. In terms oftheir appointment made at the 57th AGM held on 27th September 2014 they hold office asauditors up to the conclusion of the 60th AGM and hence would retire at the conclusion ofthe forthcoming 60th AGM. Your Directors place on record their appreciation for theservices rendered by M/s P N Raghavendra & Co as the Statutory Auditors of theCompany.

In view of the mandatory rotation requirement your Directors have recommendedappointment of M/s P K Nagarajan & Co. (Firm Regn No: 016676S) CharteredAccountants as Statutory Auditors for a period of five (5) years from the conclusion of60th AGM till the conclusion of 65th AGM of the Company.

M/s P K Nagarajan & Co. (Firm Regn No: 016676S) Chartered Accountants haveconsented to the said appointment and confirmed that their appointment if made would bewithin the limits specified under Section 141(3) of the Act. They have further confirmedthat they are not disqualified to be appointed as statutory auditors in terms of theproviso to Section 139(1) Section 141(2) and 141(3) of the Companies Act 2013 and theprovisions of the Companies (Audit and Auditors) Rules 2014. They have also confirmed thatthey hold a valid peer review certificate from the Institute of Chartered Accountants ofIndia (ICAI).

b. Secretarial Auditors

The Board appointed M/s. S Krishnamurthy & Co Practicing Company SecretariesChennai who has given Secretarial Audit Report for the financial year 2016-17. TheSecretarial Audit Report for the financial year 31st March 2017 is enclosed as Annexure -3.

The clarification to the observation made by the Secretarial Auditors on the delayedsubmission of returns to Reserve Bank of India (RBI) is given hereunder:

The Company had been experiencing some difficulty on account of migration to newsoftware and in the matters of checks and balances with regard to verification of validityof accounting figures generated by it. The delay was only in the first quarter of thefinancial year on account of the aforesaid reasons. For subsequent quarters the companyhas been submitting the returns within the prescribed time.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT

There are no significant and material orders passed by the regulators or courts ortribunals affecting the going concern status of your company and its operations in future.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments which occurred between the end of thefinancial year of the company and the date of this report affecting the Company'sfinancial position.

PARTICULARS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT 2013

Particulars as required under Section 134(3)(m) of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 are given below:

a. The Company has no activity involving conservation of energy or technologyabsorption;

b. The Company does not have any Foreign Exchange Earnings; and

c. Foreign Exchange Outgo : Rs. 72.73 lakh

The disclosures in terms of Section 197(12) of the Companies Act 2013 read with rule5(1) (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 relating to remuneration are provided in Annexure 1.

ACKNOWLEDGEMENT

Your Directors wish to place on record the valuable assistance and excellentco-operation extended by the members banks financial institutions rating agenciesReserve Bank of India and other regulatory authorities. The Board of Directors wish toconvey their sincere thanks to the depositors and debenture holders of the company fortheir continued patronage. They also wish to appreciate the excellent services rendered bythe employees of the company.

Your Directors pray Goddess SAKTHI to continue to shower Her blessings and to guide usin all our endeavors.

For and on behalf of the Board
10th August 2017 M Manickam
Coimbatore Chairman