Your Directors have pleasure in presenting their Eleventh Annual
Report together with the Audited Statements of Accounts for the year
ended 31st March, 1996.
1. Amalgamation and Change of Name
Pursuant to the order of the High Court, Mumbai dated 8th August,
1996, Credential Finance Limited was merged with the Company (formerly
Bloom Field Builders & Construction Co. Ltd.) with effect from 1st
December, 1995. The Scheme of Amalgamation envisages the transfer and
vesting of the entire business and undertaking including all its
properties, moveable and immoveable, and other trading assets of
whatsoever nature, such as licences and quota rights, trade marks and
other industrial property rights and all other interest rights, or
powers of every kind and assets, liabilities and reserves of the
erstwhile Credential Finance Limited with the Company with effect from
the appointed date i.e. 1st December, 1995.
Consequently the accounts for the period incorporates the Assets,
Liabilities and Reserves of the erstwhile Credential Finance Ltd. as
at 1st December, 1995 i.e. the Appointed Day as per the terms of the
Scheme of Amalgamation. The profits of the transferor Company i.e.
Credential Finance Limited for 8 months, till 30th November, 1995 of
Rs. 1101.69 lacs along with the balance in the Profit & Loss Account
have been transferred and are reflected in the Reserves as on March
The name of the Company has been changed from Bloom Field Builders &
Construction Company Limited to Credential Finance Limited under the
provisions of Section 21 of the Companies Act, 1956.
Under the Scheme of Amalgamation, one equity share of face value of
Rs. 10/- each at par and credited as fully paid up shall be issued and
allotted against one share of the Transferor Company held by the
shareholders of the Transferor Company and one 6% Cumulative
Convertible Preference Share of Rs. 100/- each at par credited as
fully paid up shall be issued and allotted against one 6% Cumulative
Convertible Preference Share to the members of the Transferor Company
whose names appear in the Register of Members as on 30th November,
1995 i.e. the effective date of amalgamation. The above said Equity
Shares shall rank pari passu in all respects including the benefits of
listing on the Stock Exchange and shall be eligible for any dividend
the Company declares for the period commencing from 1st December, 1995
onwards on a pro rata basis.
2. Financial Results
The financial results for the year ended 31st March, 1996, are
summarised below giving the break-up of pre-amalgamation and
The Directors are pleased to recommend payment of dividend for the
year ended 31st March, 1996 as under :
(Rs. in Lacs)
(i) On the Equity shares @ 18% per
annum on a pro-rata basis 45.76
(ii) On 6% Cumulative Convertible Preference
Shares @ 6% per annum 10.65
for the period on pro-rota basis
Payment is subject to deduction of tax at source and approval by the
shareholders at the Annual General Meeting.
4. Current Operations
Consequent to the Scheme of Amalgamation, this year the Company has
diversified its operations into Non-Banking Financial Activities. The
Company is carrying on the business as a Non Banking Finance Company
with the same R.B.I. Registration Number as was the status & Number
enjoyed by the erstwhile Credential Finance Limited.
5. Future Prospects
The Financial Year 1996-97 (FY 97) will be marked with a quantum jump
in the asset finance volumes. Lease disbursements are targeted to show
a 200% growth over the previous year. Your Company is entering the
Hire Purchase segment, with targeted volumes of Rs. 25.00 Crores in
FY97. Asset Finance will be broken up into segments based on the
category of the assets. Your Company already has a presence in the
equipment and machinery leases and has targeted commercial vehicle and
car finance for growth in volumes in FY97. The vehicle finance
operations will cover the commercial vehicles segments as well as the
car segment. In both commercial vehicles and car finance your Company
will lay emphasis on a strong business infrastructure, and to this end
it had delayed its entry into these segments.
Your Company proposes to focus on specific industry segments, in
particular transport and infrastructure (oil, telecom, power, railways
and ports). The thrust on asset finance is prompted by the growth in
the capital formation by Indian and translational corporates alike. An
increasing number of projects, primarily in the infrastructure sectors
are taking shape and large investments are scheduled to flow from
FY97. Increasing opportunities for financing assets, from
manufacturing plants to individual equipment, are being thrown up,
with structured, customised solutions becoming the need for these
The thrust in asset finance would classify your Company as a Leasing &
Hire Purchase Company from FY97, with over 51% of its income
contributions coming from asset finance operations.
In the area of Investment Banking your Company is focussing on
liability restructuring for its corporate clients. The importance
being attached to this area is an outcome of the fluctuations in the
Indian financial markets, especially in the unorganised short term
lending markets, as also the liquidity crisis faced by the banking and
institutional sectors in the past 18 months. In addition, thrust will
be given to the areas of arranging project finance, funding
diversification programmes, financing annual working capital
Your Company is setting up subsidiaries in London, Singapore and Dubai
as part of expanding the investment banking operations and deposit
mobilisations from NRIs.
A specific focus of your Company is to expand its Fixed Deposit
investor base. While the fixed deposit schemes were opened in February
1996, the mobilisation drive commenced only in June 1996 and your
Company is pleased to report that the collections have crossed Rs.
6. Share Capital
As a result of the amalgamation the Authorised Capital is enhanced
from Rs. 1 Crore to Rs. 15 Crores and the Paid up Equity Capital of
the Company stands enhanced from Rs.99,60,000/- to Rs.5,63,45,000/-
and the 6% Cumulative Convertible Preference Share Capital stands at
7. Public Deposits
The Company has accepted Public Deposits during the period under
review. The Company has no unpaid deposits or interest outstanding
thereon as on 31st March, 1996.
During the period under review Mr. Deepak Kochhar and Mr. Rajiv
Kochhar were appointed as the Managing Director and Executive Director
respectively. Also Mr. Manoj Maheshwari, Mr. O.P. Bharadwaj, Mr. T.
Thyagarajan were appointed as Additional Directors by the Board and
vacate their seats at the forthcoming Annual General Meeting. The
Company has received notices from members under Section 257 of the
Companies Act, 1956 proposing their names as Directors of the Company.
They have agreed to act as Directors if appointed.
During the period under review, Mr. Satyabrata Mukherjee, Mr. Subrata
Das, Smt. Barsha Mukherjee, Mr. Anil Jain and Mr. Soman Thomas have
resigned from the Directorship of the Company. The Board places on
record its appreciation of the contribution made by them during their
tenure as Directors of the Company.
In accordance with the provisions of the Companies Act, 1956, Mr. S.K.
Shelgikar retires by rotation and being eligible, offers himself for
9. Statutory Disclosures
There are no employees covered by Section 217 (2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules
1975 as amended.
The Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules 1988, require disclosure of particulars regarding
Conservation of Energy in Form A and Technology Absorption in Form B
prescribed by the rules. The Company not being a manufacturing Company
is advised that Form A and B are not applicable to it.
The Company had no foreign exchange earnings during the period under
review. The outgoings in respect of foreign travel expenses are Rs.
2.29 lacs and Rs. 0.11 lacs towards other expenses.
M/s. Shah & Co. Chartered Accountants, Mumbai had been appointed as
statutory auditors of the Company by the members in their meeting held
on 29th September, 1995 and hold office until the conclusion of the
ensuing Annual General Meeting. However, they have expressed their
inability for re-appointment. The Directors wish to place on record
their gratitude for the services rendered.
The Directors propose M/s J.S. Bhatia & Co. Charterd Accountants,
Mumbai as auditors of the Company till the conclusion of the next
Annual General Meeting on a remuneration to be decided by the Board.
M/s. J.S. Bhatia & Co. have informed the Company that they would be
available for appointment, if they are appointed. The Directors
recommend their appointment.