MIRA
INFORM REPORT
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Report Date : |
20.04.2007 |
IDENTIFICATION
DETAILS
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Name : |
MARGADARSI CHIT FUND LIMITED |
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Registered Office : |
5-10-195, Opp. Police Control Room, Fathem
Maidan Road, Hyderabad;500004, Andhra Pradesh |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
31.08.1962 |
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Com. Reg. No.: |
01-000927 |
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CIN No.: [Company
Identification No.] |
U65992AP1962PLC000927 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
HYDM00152F |
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PAN No.: [Permanent
Account No.] |
AABCM4751G |
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Legal Form : |
Closely held public limited liability company |
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Line of Business : |
To establish, support, or aid in the establishments and support of
chit funds with a view to encourage the members to join chit serried and
thereby get into the habit of saving and pursue policy of wise economy |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 8100000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is well-established and reputed company having satisfactory
track. Directors are reported as experienced and respectable businessmen. Trade
relations are reported as fair. Business is active. Payments are usually
correct and as per commitments. The company can be considered normal for business dealings at usual
trade terms and conditions. |
LOCATIONS
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Registered Office : |
5-10-195, Opp. Police Control Room, Fathem
Maidan Road, Hyderabad;500004, Andhra Pradesh , India |
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Tel. No.: |
91-40-23442160 |
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Mobile No.: |
91-9840-50150 / 98481-56656 |
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Fax No.: |
91-40-23442166 |
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E-Mail : |
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Website : |
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Branches: |
NO.6, Indin Chamebers Building , 3rd Floor, Esplanade
(Parrys) Chennai-600108, India |
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Tel. No.: |
91-44-25352791 |
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Fax No.: |
91-44-25352902 |
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E-Mail : |
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Branches: |
Flat No.S-801 & 802, Manipal Centre, 47, Dickenson Road, Bangalore-560
001 India |
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Tel. No.: |
91-80-25322939 |
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Fax No.: |
91-80-30522537 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. Ramoji Rao |
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Designation : |
Director |
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Address : |
No.3 Chikoti Gardens, Begumpet, Hyderabad, Andhra Pradesh;500016 |
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Date of Birth/Age : |
16.11.1936 |
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Date of Appointment : |
31.08.1962 |
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Name : |
Mr. Cherukuri Sailaja |
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Designation : |
Director |
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Address : |
No.3 Chikoti Gardens, Begumpet, Hyderabad, Andhra Pradesh;500016 |
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Date of Birth/Age : |
28.11.1965 |
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Date of Appointment : |
29.04.1995 |
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Name : |
Mr. T. Venkata Krishhna Rao |
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Designation : |
Director |
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Address : |
Behind Eenadu Patamata Lanka Vijayananda, Krishna , Andhra Pradesh;
520014 |
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Date of Birth/Age : |
09.04.1935 |
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Date of Appointment : |
27.08.1969 |
MAJOR SHAREHOLDERS
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Names of Shareholders |
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No. of Shares |
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Ramoji Rao |
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61617 |
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G. J. Reddy |
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288 |
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M. Ramachandraha |
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1088 |
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T. Himakar |
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4163 |
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Ch. Kiron |
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69942 |
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Ch. Suman |
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61616 |
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Rama Devi Cherukuri |
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1286 |
Equity Share Breakup
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Category |
Percentage |
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Direcotrs or relatives of Directors |
99.32 |
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Others |
0.68 |
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Total |
100.00 |
BUSINESS DETAILS
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Line of Business : |
To establish, support, or aid in the establishments and support of chit
funds with a view to encourage the members to join chit serried and thereby
get into the habit of saving and pursue policy of wise economy |
GENERAL
INFORMATION
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No. of Employees : |
Unknown |
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Bankers : |
Indian Bank (A Scheduled commercial
Bank) Himmayat Nagar Hyderabad |
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Facilities : |
-- |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Brahmayya and Company Chartered Accountant |
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Address : |
Flat No:403 and 404 Golden Green Apartments, Erramanzil Colony, Andhra
Pradesh; 500082 , Hyderabad |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
500000 |
Equity shares |
Rs.100/- each |
Rs.50.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
200000 |
Equity Shares |
Rs. 100/-
each |
Rs.20.000
Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
|
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
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20.000 |
20.000 |
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2] Share Application Money |
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0.000 |
0.000 |
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3] Reserves & Surplus |
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2028.984 |
1696.136 |
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4] (Accumulated Losses) |
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0.000 |
0.000 |
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NETWORTH |
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2048.984 |
1716.136 |
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LOAN FUNDS |
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1] Secured Loans |
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150.000 |
50.000 |
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2] Unsecured Loans |
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0.070 |
0.115 |
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TOTAL BORROWING |
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150.070 |
50.115 |
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DEFERRED TAX LIABILITIES |
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0.944 |
0.677 |
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TOTAL |
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2199.998 |
1766.928 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
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605.724 |
234.499 |
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Capital work-in-progress |
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3.481 |
142.983 |
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INVESTMENT |
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323.887 |
275.093 |
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DEFERREX TAX ASSETS |
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0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
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15.790 |
4.888 |
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Sundry Debtors |
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946.276 |
848.802 |
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Cash & Bank Balances |
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2864.157 |
2547.509 |
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Other Current Assets |
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150.254 |
120.091 |
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Loans & Advances |
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834.828 |
623.279 |
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Total
Current Assets |
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4811.305 |
4144.569 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
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2879.399 |
2559.875 |
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Provisions |
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665.000 |
470.341 |
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Total
Current Liabilities |
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3544.399 |
3030.216 |
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Net Current Assets |
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1266.906 |
1114.353 |
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MISCELLANEOUS EXPENSES |
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0.000 |
0.000 |
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TOTAL |
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2199.998 |
1766.928 |
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KEY RATIOS
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PARTICULARS |
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31.03.2006 |
31.03.2005 |
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Debt Equity Ratio (Total Liability/Networth) |
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1.72 |
1.76 |
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Current Ratio (Current Asset/Current Liability) |
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1.35 |
1.36 |
LOCAL AGENCY
FURTHER INFORMATION
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Name of the company |
MARGADARSI CHIT FUND PRIVATE LIMITED |
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Presented By |
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1) Date and description of instrument creating the change |
Agreement of Hypothecation dates the 24th March, 1994
exeorted by M/s.Margadarasi Chit Fund Limited (therin abnd herinafter
referred to as the company) in favour of Indian Bank securing the packaging
Credit Preshipment Advance of Rs. 7.300 Millions Draft of the Letter t Bank for the operation of equitable mortgage of
Feed Division Property. Letter of Foreign Bill Purchase/ Megetiation Foreign Currency or in
Indian Rupees. Agreement of Personal; Guaantees by Shri. Ramoji Rao, Shri a. Krishna Murthy, Shri M.
Marasimbulu, the reminating directors. Counter Guarantee for the performance Guaron of Rs. 0.600 Millions |
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2) Amount secured by the charge/amount owing on the securities of charge |
Packing Limits: Rs.7.300 Millions Bank
Guarantee: Rs.0.600
Millions (FBN (Sub limit
of FC) Rs.5.000 Millions |
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3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given |
Hypothecation by
way of first charge, ever goods for exceeds to described in the so held
forming part of Hypothecation agreement and 1st charge one Plant
and Machinery and FM of Land and Building of Feed Division. |
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4) Gist of the terms and conditions and extent and operation of the charge. |
In consideration
of the Bank having agreed to lend and advanced to the Company’s Feed
division, the company, covenants inter allied as follows:
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5) Name and Address and description of the person entitled to the charge. |
Indian Bank (A Scheduled
commercial Bank) Himmayat Nagar Hyderabad |
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6) Date and brief description of instrument modifying the charge |
-- |
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7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification. |
-- |
As Per Web Site:
Guided by the vision and determination of Sri Ramoji Rao, Company made its humble beginning in October, 1962, in a small office with just two people working. To him can be credited pioneering the concept of chit funds in the state as never done before. Now it has become a household name in Andhra Pradesh.
Far from being a popular form of planning that it is today, chit funds was a little known concept when The company unfolded it in Andhra Pradesh. But with the passage of time and experience, chit funds became popular as people discovered in it an ideal way to save profitably and raise money at short notice to meet the contingencies. Many companies followed suit and chit fund companies sprung up like mushrooms. In this vast changing scenario, Margadarsi’s unchanging values like honesty of performance, professional integrity, high quality of service and absolute financial discipline helped in retaining its leadership position.
The company enjoyed exponential growth over the years and today employs 2,300 employees, and has 2,500 agents, 89 Branches, over 3,80,000 subscribers and a turnover of over Rs. 30000.000 Millions. s not only No.1 Chit Fund Company, but also a household name in Andhra Pradesh.
- Growing
force in Tamil Nadu too.
- Trust
now comes to Karnataka.
- A
tradition of excellence.
- History
of chit funds.
- A
chit fund company is as good as its Foreman.
- Why
Margadarsi?
- How
The comapnyworks.
- Margadarsi,
a lifelong friend.
- Pitfalls
in the chit fund system.
Growing force in Tamil Nadu too
Having started operations in Tamil Nadu in 1992, The company is fast gaining a firm foothold in the state. The company has already established 13 Branches engaged in providing the same high standards of service and reliability that made it the leader in Andhra Pradesh.
With the opening of six branches in Karnataka by December, 2001 The company brings its long standing record of trust and reliability to the people of Karnataka in huge measure.
A tradition of excellence
Everyday some activity or interest of the well-diversified Eenadu-Margadarsi Group, of which company Chit Fund is a part, touches the lives of people in some way or the other. The group is behind brands like Priya pickles & confectionary and Eenadu publications that publish the largest circulated Telugu daily, Eenadu, News time, a popular English daily and a host of magazines. The Group has also established a name for itself in entertainment with its Etv channel in Marathi, Telugu, Kannada, Bengali, Oriya, Rajasthani, Bihari, Gujarati, and Urdu. Dolphin Hotels, its venture in the hospitality business is known for its friendly service. The Group has also made a mark in film production and distribution with Ushakiron Movies, in handicrafts with Kalanjali and its latest venture Ramoji Film City, a one-stop destination for film making and also a unique tourist destination.
History of chit funds
Chit Funds are indigenous financial institutions unique to South India and predating commercial banks. They have stood the test of time, as evidenced by the growth in the number of chit fund companies in the South. However, the importance of any financial institution cannot be judged by its numerical strength alone, but by its performance. Tracing back the history of the origin of chit funds reveals that they evolved at a time when banking facilities had not developed, thus filling an important credit gap in the economy. But with the growth of banks, chit funds were doomed to closure. However, on the contrary, vast expansions in the chit fund business were witnessed over the years, neck to neck with that of the banking system. Proof enough that chit funds continue to fill the credit gap in the developing economy of their country. Today chit fund companies are recognized as important credit and investment agencies.
A chit fund company is as good as its Foreman
‘Foreman’ means a person who under the chit agreement is responsible for the conduct of the chit and includes any other person discharging the duties of the Foreman. It is the personality and conduct of the Foreman, whether individual or institutional, that lends strength to a chit Fund Company. A Foreman credited with qualities like promptness, straightforwardness and honesty attracts subscribers easily for the chit fund company. Similarly, basic dishonesty and unscrupulousness on the part of the Foreman can break it. The Foreman assumes a dual role. Besides being an organizer, he also is a subscriber in every chit group. He is also entitled to obtain one chit amount into the chit group without deduction of the amount. It is a good practice if the Foreman ploughs back the entire prize amount into the chit business to meet his future obligations promptly. This ensures prompt payment to subscribers even in the eventuality of some members defaulting on the payment of their installments or discontinuing their membership. Thus ensuring that failure on the part of some members does not become an excuse for the Foreman to delay the Bid Payable amount to the subscribers.
Why Margadarsi?
The hallmark of companies success is its meticulous planning, coupled with hard work and deep commitment to serve its customers in the best possible manner. New schemes are introduced form time to time to meet the financial needs of the customers and fulfill their aspirations. With a task force of 2,300 employees, 2,500 agents and development officers, efficient and prompt services are available to customers at all times. Subscribers can rest assured that the company will serve its customers with the same zeal throughout the association, right up to the termination of the chit. Keeping with its promise of providing high quality professional and personalized service, company started the unique ‘72 hour response’ facility. This facility of quick disbursement of money (subject to documentation) is unique to company and currently not being offered by any other chit fund company.
If for any reason, a subscriber fails to draw the prize amount before the next succeeding auction, the prize amount payable is deposited in a separate bank account. This money is earmarked for payment to the concerned subscriber only. Thus company ensures total security for subscribers’ money.
It is this understanding of the need and requirements of customers that enabled the company to reach out to so many subscribers and continues to do so. The company impeccable track record and its strict professional discipline have earned it tremendous good will and respect across the social chain: Professionals, industrialists, corporate executives, government employees, teachers, housewives and more. They all know and have experienced the company’s commitment to give the best and its ability to meet every kind of need. Besides they are secure in the knowledge that company belongs to a stable financial group that shares an excellent relationship with all its customers. This success hasn’t come easy. Nor has it in any way made the company take it easy. It was the first chit fund company of its kind and company continues to remain the first choice for lakhs of people from the different walks of life.
How the company works
With its vast experience in the field, the company has made systems and procedures simple, systematic and full proof. Subscribers can choose from a wide range of chits from Rs. 0.010 to Rs. 2.500 Millions designed to suit a variety of requirements. To become a subscriber, individuals need to fill out an enrollment form, and opt for any of the chit schemes available with monthly installments ranging from Rs. 400 to Rs. 50,000. Depending upon the requirement, one may choose Long Term Chits (50 month duration) for saving purpose and Short Term Chits (25 months duration) for emergency planning. Subscribers are entitled to bid at the auction even if only one installment has been paid i.e., the first installment. However, depending upon the requirement and competition, one can get the bid in any of the installments. After being declared as successful bidder in the auction, the successful bidder has to submit sureties depending upon future liability either from salaried employees with required basic salary or business people having taxable income or even property mortgage. Thereafter, the prize money is released after completing a few formalities. The chit money has to be paid back in remaining easy installments. The successful bidder earns his or her profit by repaying the monthly installments excluding the dividends.
Margadarsi, a lifelong friend
Every individual is driven by hopes and aspirations, but may lack the resources to make them come true. Sometimes, there are emergencies, obligations and unforeseen expenditures. All these occasions require money in lump sum. It is on occasions like these that one can turn to the company for help. Be it educating children or performing their marriage, constructing a house or buying a flat or investing in security for the future, the company has always been like a trusted friend. The company has been playing a vital role in making life easier for all those who’ve invested their confidence and hopes in it. This explains why the company has become synonymous with trust and reliability.
Pitfalls in the chit fund system
Lured by the objective of making quick profits, persons with inadequate means start chit funds by furnishing the required security and fulfilling other prescribed formalities in the Act. Since their objectives are neither honest nor legal, such companies roll down their shutters soon, thus cheating many gullible investors .
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist organization
or whom notice had been received that all financial transactions involving
their assets have been blocked or convicted, found guilty or against whom a
judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction registered
against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling shareholders,
director, officer or employee of the company is a government official or a
family member or close business associate of a Government official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on Corporate
Governance to identify management and governance. These factors often have been
predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.41.67 |
|
UK Pound |
1 |
Rs.83.41 |
|
Euro |
1 |
Rs.56.61 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
|
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DEMERIT POINTS |
|
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--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
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--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
53 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|