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SM Finance Ltd.

BSE: 511318 Sector: Financials
NSE: SMFINANC ISIN Code: N.A.
BSE 05:30 | 01 Jan SM Finance Ltd
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SM Finance Ltd. (SMFINANC) - Director Report

Company director report

ANNUAL REPORT 1998-99 SM FINANCE LIMITED DIRECTORS REPORT The MEMBERS Your Directors have pleasure in presenting their Report for the Sixteenth Financial Year together with the Audited Statement of Accounts of the Company for the year ended 31st March,1999. DIVIDEND In view of the losses incurred during the year, the Directors are unable to recommend any dividend on Equity Capital of the Company. REVIEW OF OPERATIONS The year 1998-99 was again a very difficult year for the Company. Your Company's gross income during the year declined to Rs.238.63 lacs as against Rs.532.93 lacs during the previous year. The Company closed the year with a net loss of Rs.981.78 lacs mainly due to write off and provisions of Rs. 695.41 lacs towards substandard assets, doubtful debts and non-accounting of income on non-performing assets & diminition in value of Ouoted Investments with a view to complying with RBI norms on assets classification, income recognition and provisions. Due to tight money market situations during last 4 years, Company's recoveries under Lease / Hire Purchases have been adversely affected and practically no recoveries are forthcoming. Your Company has already initiated legal proceedings, including action under section 138 of Negotiable Instrument Act, wherever necessary for the recovery of overdues. In view of the very depressing capital market scenario, your Company could not do any non fund based activities. Your Company's Issue House Division has also been affected due to dematerialisation of Securities. In the area of Forex, your Company was operating as full fledged money changer, however due to severe competition & being unremunerative, your Company has decided to close down the Forex Division w.e.f April'99. In view of present scenario and to consolidate further, your Company has also decided to close down its U. K. Branch w.e.f. April 1999. Due to continued depressed Real Estate market conditions your Company has decided to go slow on the SM Gardens project at Bangalore. The Reserve Bank of India has rejected the application of the Company for registration as an NBFC. However, the Company has preferred appeal against the order of rejection. FIXED DEPOSITS Company's total Fixed Deposit as at the end of the year decreased to Rs. 607.20 lacs compared to Rs. 684 lacs a year back. The overdue fixed deposits as on 31.03.1999 amounted to Rs.560.64 lacs covering 3,980 depositors of which fixed deposits aggregating Rs.510.28 Lacs covering 3,897deposits had been claimed but not paid. During the year some fixed deposits holders have approached to various Consumer Fora and Company Law Board for non repayment of fixed deposits in time. The Company Law Board Southern Region Bench, Chennai has passed Suo Motto order dated. 12.01.99 for repayment of Fixed Deposits in phased manner and interest thereon at the contracted rate upto the date of maturity and thereafter from the date of maturity till the date of payment at 12 percent per annum. Your Company is putting all out efforts to implement the order of the Company Law Board. SUBSIDIARY COMPANY Pursuant to Section 212 of the Companies Act 1956, Statement of Accounts along with the Report of the Board of Directors and Auditors' Report for year ended 31 st March, 1999 of Angel Capital and Debt Market Ltd formerly known as SM Share & Stock Brokers Ltd., the Company's Subsidiary, is attached with the Accounts. DIRECTORS In accordance with the provisions of the Companies Act, 1956 and as per the provisions of the Articles of Association of the Company,Shri.O.P.Chaturvedi & Shri.Manmohan Shetty will retire by rotation at the forthcoming Annual General Meeting and being eligible,offers themselves for re-appointment. Your Directors recommend their re- appointment so as to obtain their continued valuable services and guidance in the smooth conduct of your Company s affairs. AUDITOR S REPORT The observations made in the Auditors Report are self-explanatory and therefore do not call for any further comments under Section 217(3) of the Companies Act, 1956. HUMAN RESOURCES Your Directors acknowledge and appreciate the sincere and dedicated services provided by the committed officers and staff of the Company. There are no employees in receipt of remuneration as specified under Section 217 (2A) of the Companies Act, 1956. comply with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies Act,1956. AUDITORS M/s M.Bhaskara Rao & Co., Chartered Accountants, Hyderabad & M/s S.K.Kavathekar & Co.,Chartered Accountants, Mumbai willretire and are eligible for reappointment. The members are requested to consider their reappointment at a remuneration to be decided by the Board of Directors. ACKNOWLEDGEMENTS Your Directors wish to acknowledge their appreciation tothebankers of the Company SIDBI and other Financial Institutions, customers and depositors for their assistance, co-operation in this difficult time.The Company will continueto look forward to their co-operation and support in future also. The Directors also convey their wholehearted thanks to you all Shareholders for the trust and confidence reposed in the Company. For And on behalf of the Board of Directors S.M.SHETTY Chairman Place: Mumbai Date: 31.05.99