1996
DHARANI FINANCE LIMITED
CHAIRMAN'S STATEMENT
I have great pleasure in extending a warm welcome to you all shareholders
on this annual occasion of presenting the annual report for the year 1995-
96. Despite the adverse market conditions, the year 1995-96 has been a
fairly successful one. The total income has gone up from Rs. 255.34 lakhs
to Rs. 359.37 lakhs which represents a growth rate of 40.74%. Likewise,
Public Deposits rose from Rs. 604.85 lakhs to Rs. 913.87 lakhs registering
an increase of more than 51% .The gross profit has registered a 28%
increase to Rs. 144.72 lakhs. The provision for depreciation has gone up
from Rs. 17.9 lakhs to Rs. 49.2 lakhs. Apart from this, we had to make an
unprecedented provision for payment of income tax for the first time in the
company's history for a sum of Rs. 23.30 lakhs. These two items totalling
to Rs. 72.50 lakhs have made a sizeable dent in the profits available for
distribution as dividend and transfer to reserves. Your directors had
therefore to recommend a slightly lower rate of dividend of 13% against 16%
in the last year. In this context, I am sure you shareholders will
appreciate the circumstances relating to the difficult general money market
conditions in the country and the political developments all of which
contributed to a bearish phase in the capital market. You will also note
that this has been the case with majority of non-banking financial
companies.
Your company has been able to get a satisfactory rating for its deposits
from CARE with the abbreviation BBB representing adequate safety for
payment of principal. We had planned for an increase of total deposits to a
sum of Rs. 12 Crores, but due to the sticky conditions in the primary
market and the serious cash crunch in the money market as also fluctuations
in the rupee-dollar parity, we have not been able to mobilise our targetted
Rs. 12 crores. We hope the coming year 1996-97 will be more favourable to
non-banking financial companies like ours and we may be able to expand our
activities substantially.
Though the total network of branches remains the same, we have been able to
consolidate the gains achieved during the last year. For better and
smoother co-ordination we have formed two regional offices and the branches
have been attached to one or the other. The Regional Offices will co-
ordinate the work of the branches attached to them. As the primary market
was not in a very happy state, we did not venture into Merchant Banking
activities to avoid development and consequent loss to the company. With
the uncertainity in the political situation having been resolved, and a new
government having taken over the reins of administration, we are sure that
the reforms policy will continue in the coming years with greater speed and
vigour. Your company hopes to take advantage of these developments and
progress with your support and co-operation.
Yours sincerely,
Dr. PALANI G. PERIASAMY
Chairman