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 :
Qty. Value Qty. Value
Quoted equity shares 56,439 1,52,701 1,53,020 1,14,67,985
Mutual funds - - 14,61,902 3,25,45,689
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
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
(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
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
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:
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
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
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
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
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
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
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
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