1. (a) Cash credit and working capital demand loan facilities from
 banks are secured by hypothecation of respective hire purchase and
 lease agreements as well as by way of equitable mortgage of companys
 premises at Chennai and Bangalore as collateral security with personal
 guarantee by two directors and a third party. Corporate guarantee by a
 body corporate as collateral security is also given to bankers.
 
 (b) Term loans from domestic financial institutions/Banks are secured
 by Hypothecation of specific assets and counter guarantee by one.
 Director and in one case by assignment of future receivables arising
 from specific hire purchase assets and lease assets along with the cash
 collateral in the form of Fixed Deposits.
 
 (c) Rupee Term Loan from a Foreign Financial Institution is secured by
 Hypothecation of specific assets acquired or to be acquired and
 personal guarantee of two Directors.
 
 3. (a) The Company has entered into an Agreement with Citicorp Finance
 (India) Limited to undertake hire purchase business on the basis of
 disbursement ratio of each individual hire purchase agreement as per
 terms and conditions mentioned in the Agreement and in the subsequent
 exchange of letters forming part of the Agreement.
 
 (b) The Company has entered into an agreement with HDFC Bank Limited to
 undertake hire purchase business on the basis of disbursement ratio of
 each individual hire purchase agreement as per terms and conditions
 mentioned in the Agreement and in the subsequent exchange of letters
 forming part of the Agreement.
 
 4. (a) CURRENT INVESTMENTS :
 
                                   2005-2006               2004-2005
                               Qty.        Value        Qty.       Value
                                           (Rs.)                   (Rs.)
 A. Opening
 
 Quoted equity shares        56,439     1,52,701    1,53,020 1,14,67,985
 
 Mutual funds                     -            -   14,61,902 3,25,45,689
 
 B. Purchases
 
 Quoted equity shares        66,070  1,11,70,863    2,69,125 1,30,80,743
 
 C. Sales *
 
 Quoted equity shares        83,129  1,23,66,612    3,65,706 2,54,59,129
 
 Mutual funds                     -            -   14,61,902 2,92,92,173
 
 D. Closing
 
 Quoted equity shares        39,380     7,63,719      56,439   15,27,101
 
 * Includes shares written off 5,570 nos. valued at Rs. 1,08,325/-
 
 (b) DERIVATIVE TRANSACTIONS:
 
 The Company has made profit of Rs. 1,48,028/- from the F&O
 transactions.
 
 (c) 1. Income from shares & securities includes loss Rs. 8,734/-
 wrongly booked last year on 1,100 shares of HGI Industries Ltd.
 
 2. Income from shares & securities includes investments in shares
 written off to the extent of Rs.1,13,194/- which are bad delivered/not
 traceable.
 
 3. Investments in 1,60,254 shares of JP Hydro Power Ltd. and 90,000
 shares of Bank of Rajasthan Ltd. shown under Schedule G includes 20,000
 shares of JP Hydro Power Ltd. and 20,000 shares of Bank of Rajasthan
 Ltd. kept as margin for Future & Options Trading with MLB Securities
 Ltd.
 
 4. Repossess assets shown under Schedule `H have been valued at cost
 or market value whichever is less.
 
 In compliance with the Accounting Standard (AS-19) on leases, all the
 assets given on lease on or after 1st April, 2001 are shown as
 receivables at an amount equal to the net investment in the leases.
 Consequently, additions to leased assets for Rs. 1,135.68 lacs during
 the year (previous year Rs. 768.28 lacs) have not been considered in
 the gross block of Lease Assets under Fixed Assets schedule. The
 reconciliation between the lease receivables and the present value of
 net investment in the lease contracts & maturity patterns of Gross
 Investment in Lease and Net Investment in Lease as on 31st March, 2006
 is as under:
 
                                                                (Rupees)
 Description                             Gross Investment Net Investment
 
 Less than 1 year                             7,00,32,727    5,89,70,492
 
 Later than 1 year and not later than 5 years 6,09,37,833    5,02,16,383
 
 Later than 5 years                                     -              -
 
 Total                                       13,09,70,560   10,91,86,875
 
 Unearned Finance Income : Rs. 2,17,83,685/-.
 
 (a) Loans under Schedule `M include interest free loan of Rs.
 44,76,413/- (previous year Rs.27,89,923/-) to the subsidiary.
 
 (b) Loans under Schedule `M include loan of Rs.5,08,30,408/- (previous
 year Rs.87,92,176/-) made to companies where one of the directors is
 interested.
 
 8. Liabilities for expenses include Rs.9,36,436/- (previous year
 Rs.7,09,368/-) due to the Managing Director.
 
 9. There is no amount payable to any Small Scale Industrial
 Undertaking.
 
 10. There is unclaimed matured deposit of Rs. 29,61,500/- in fixed
 deposit and for which management has taken reasonable steps.
 
 12. Earning per Share:
 
 Profit after taxation as per Profit
 & Loss Account                       (A)  Rs.  5,91,19,801  5,39,96,044
 
 Number of Equity Shares outstanding  (B) Nos.    85,01,135    85,01,135
 
 Earning per Share (Face Value
 Rs. 10/- per Share)                (A/B)  Rs.         6.95         6.35
 
                                                        Rs.          Rs.
 13. Expenditure in foreign currency:
 
 Travelling Expenses                               9,62,947     8,94,898
 
 Interest                                         75,20,651    45,85,220
 
 Others                                           39,56,331     7,36,143
 
 14. Remuneration to Managing Director & Directors:
 
 Salary & commission                              23,38,466    21,23,528
 
 Companys contribution to provident fund            86,400       86,400
 
                                                  24,24,866    22,09,928
 
 15. The name of the Company was changed from Shrachi Securities Limited
 to Shrachi Infrastructure Finance Limited with effect from 2nd
 November, 2005. The principal businessof the Company was to finance
 commercial vehicles, construction equipments etc, which does not
 resembles with its earlier name and hence the name was changed to
 Shrachi Infrastructure Finance Limited. All operational income of the
 Company are relating to the financing of commercial vehicles,
 construction equipments etc.
 
 16. Computation of net profit in accordance with Section 309(5) of the
 Companies Act, 1956 and calculation of commission to Managing Director
 :
 
                                                  2005-2006    2004-2005
                                                        Rs.          Rs.
 Net Profit (after tax) as per Profit
 & Loss Account                                 7,55,03,614  5,81,06,562
 
 Add : Managing Directors remuneration
 & commission                                     24,24,866    22,09,928
 
 Whole time Directors remuneration                3,00,000     3,00,000
 
 Provision for non performing assets               5,79,394  (79,93,504)
 
 Provision for diminution in value of shares     (2,21,528)   (3,93,095)
 
 Loss on sale of fixed assets                     40,57,219    47,06,944
 
 Provision for income tax                       1,10,00,000  1,40,00,000
 
                                                9,36,43,565  7,09,36,835
 
 Commission paid to Managing Director              9,36,436     7,09,368
 
 17. Contingent Liabilities :
 
 Guarantee given to the bank for guarantee given by them on behalf of
 the Company Rs.4,67,462/- (Previous year Rs. 4,67,462/-).
 
 20. The levy of service-tax on hire purchase and leasing transactions
 introduced with effect from 16.07.2001 has been challenged by a Trade
 Association, of which the Company is a member, before the Madras High
 Court and a stay has been obtained. Pending disposal of the writ
 petitions, the Company is not remitting service-tax on the aforesaid
 transactions.
 
 21. In the opinion of the management there is no impairment of assets
 as per AS-28 Impairment of Assets issuied by ICAI.
 
 22. Previous years figure have been regrouped and rearranged, wherever
 necessary.