Manipal Finance Corporation Ltd Management Discussions.

Review of Operations:

The Company is engaged in the business of Hire Purchase and Lease finance and has completed 33 yeans of operation in this field. During the year 2015-2016, the Company has earned a net profit of Rs.85.17 Lakhs as against the net profit of Rs. 13.75 Lakhs in the previous year 2014-2015.

Hire Purchase and Lease finance business is facing severe competition and margins are under great pressure. In the aftermath of stringent Prudential Norms promulgated by the RBI, the NBFCs all across the country suffered a severe set back. Their borrowing capacity is drastically curtailed. With no avenues for further growth, together with ever increasing defaulters in the list of corporate clients, triggered the downfall in the performance of the NBFCs. The situation that has arisen. In your Company is In no way different. In spite of these hurdles, the Company has tried Its best to salvage the situation by reducing its operational cost on ail fronts.

The Company is putting in serious efforts to recover NPA accounts. Criminal complaints under Section 138 of Negotiable Instrument Act are also lodged simultaneously against such defaulters whose cheques were dishonoured. The Company is making good progress on the Recovery Front.

The Company has appointed M/s N P Pai & Co. Chartered Accountants, Udupi (Firm Regn. No. 115271W) as its internal Auditor.

The discussion on financial performance of the Company is covered in the Directors Report. There has been no material development on the human resource front during the year. The number of employees employed as on 31st March, 2016 was 3.

During the year ending 31st March, 2005 the Scheme of Compromise and Arrangement under Section 391 of the Companies Act,1956 to effect the restructure of Companys debts particularly Debentures and subordinated debts of the Company was framed and presented before the Honorable High Court of Karnataka. Accordingly, the meeting of the Shareholders, Debenture Holders and Subordinated Debt holders were held on 20th April, 2005. The scheme as proposed had provided for payment of principal. In a phased manner over 60 months from effective date and payment of interest accrued till 30th June, 2002 within 72 months from the effective date. The Scheme as proposed do not provide for accrual of interest after 30th June, 2002. (For the above purpose the effective date means the date on which the Order of High Court of Karnataka sanctioning the Scheme of Arrangement is filed with the Registrar of Companies in Karnataka.)

On 10th July 2009, Honorable High Court of Karnataka has directed the Company to submit the details of payments made to Non-Convertible Debenture holders and subordinated debt holders from 1st April, 2005. Accordingly the details were furnished to Honorable Court, it was submitted before the Honorable Court that the Company has settled substantial portion of Non-Convertible Debentures and Subordinated Debts and rt was therefore felt that the scheme requires to be changed having regard to the settlements already made and quantum of non-convertible debentures and subordinated debts remaining to be settled. Therefore the Company had proposed to withdraw the scheme of arrangement from the Honorable High Court of Karnataka, with an option to present a new scheme of arrangement. The Honorable High Court of Karnataka has permitted the Company to withdraw the petition, with liberty to file a fresh petition, vide its order dated 28th October, 2009. Accordingly, the Company is exploring the possibility of proposing a fresh petition to be filed before the Honorable High Court of Karnataka.

2. Human Resource Development:

There has been no material development on the Human Resources front.