tiaan consumer ltd Management discussions

BHERUDAN DUGAR FINANCE LIMITED ANNUAL REPORT 2004-2005 MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS The financial scenario has undergone substantial changes in the business environment over the last few years especially in the automobile industry. While the growth opportunity in vehicle finance increased substantially, heightened competition, especially from the banks, has led to a squeeze in spreads. The Non-Banking Financial companies, in general, play a competitive role in the prevailing finance market conditions like lending rate, efficient distribution system and strong relationships. The finance business on heavy vehicles will continue to grow, strongly aided by the healthy growth of the economy and expanding base of possible consumers. At the present circumstances, during the year under review, the company has granted Hypothecation/Hire Purchase loans to the extent of Rs.340.58 lacs as against Rs.319.60 lacs and earned an income of Rs.25.86 lacs recording a decrease of approximately 50% as against Rs.50.77 lacs through the business of Hypothecation/Hire Purchase loans. But the company recorded a gross income of Rs.80.67 lacs, which is consequent to the reversal of Provision against NPA and Provision against overdue instalment of NPA. The company has made provisions for Non-performing Assets to Rs.9.56 lacs during the financial year as against the previous years of Rs.26.28 lacs and against Non-performing Assets to Rs.0.80 lacs as against Rs.3.77 lacs. Your company has been able to secure profit before tax of Rs. 19.80 lacs after providing depreciation of Rs.38.66 lacs. The company has provided an amount of Rs.6.03 lacs towards Taxation of current tax and deferred tax and reported a net profit of Rs.13.77 lacs. Out of the amount available for appropriation, your directors decided to transfer Rs.10.50 lacs to General Reserves and Rs.3 lacs to Special Reserves and the balance amount to be carried forward to the Balance sheet. During the year, the company has not purchased any fixed assets and a loss of Rs. 7.54 lacs had been occurred by selling some of the assets as against the previous years loss of Rs.3.21 lacs. The company aims to achieve profitable growth through efficient management, credit and recover process and good process. The Reserve Banks continuing initiative in supporting a soft inter rate environment and providing adequate liquidity to meet credit growth, to enable the Company to reduce its funding costs. The company has complied with applicable, regulations as per Reserve. Bank of India Directions to NBFCs. The capital to Risk Assets Ratio of your company is 100.12% as on 31.03.2005. BANKS During the year the company has not enjoyed any limit with the Banks. The company has placed deposits to the extent of Rs.161 lacs with scheduled banks and proposed to avail any financial assistance, through Reinvestment plan against Fixed Deposits, to meet for further development of business. FUTURE PROSPECTS The country has witnessed a rise in economic reforms and liberalized policy regime which has opened up the shackled environment, thereby ushering in a period of growth and expansion. Your Directors are of the opinion, that such a scenario continuing, the company will be able to earn better profits. The company intends to take up major business in the current year.