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Madras Motor Finance & Guarantee Company Ltd.

BSE: 511055 Sector: Financials
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Madras Motor Finance & Guarantee Company Ltd. (MADRASMFIN) - Director Report

Company director report

1995 MADRAS MOTOR FINANCE AND GUARANTEE CO. LIMITED DIRECTOR'S REPORT 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 shareholders. SHARE CAPITAL: 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 October, 1994. 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. OPERATIONS: 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. RESOURCES: 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 Company. DEPOSITS: 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 three months. DIRECTORS: 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 respectively. 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. AUDITORS: M/s M.C. Ranganathan & Co., Auditors of the Company retire at this Annual General Meeting and are eligible for re-appointment. AUDITORS REPORT: 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. EMPLOYEES: The Company had no employee to be reported under Section 217 (2A) of the Companies Act, 1956. ACKNOWLEDGMENTS: 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 period. For and on behalf of the Board, SAALAI KADHAMBHA MANI T. PALANIVELU WHOLE TIME DIRECTOR. DIRECTOR. Place : Madras, Dated : 17th August, 1995.