The Company is pleased to announce that Shri.K.V.Aiyappan, Chairman of the company declared that the Special Resolution under Section 372A of the Companies Act, 1956, seeking the consent of the members for granting loans/making investments in bodies corporate, giving guarantees and providing securities to bodies corporate in excess of the limits prescribed under the above-mentioned section as circulated in the postal ballot notice dated 20/06/2011 was carried with requisite majority.
50,06,353 votes cast in favour of the resolution and 100 votes were cast against the resolution.
The proposed Special Resolution and Explanatory Statement stating all material facts and the reasons for the proposal is appended below and a postal ballot form is enclosed for your consideration. The Company has appointed Mr.G.Porselvam, Company Secretary in Practice as Scrutinizer for conducting the Postal Ballot process in a fair and transparent manner.
Please read carefully the instructions printed in the Postal Ballot form and return the form duly completed in all respects in the enclosed self-addressed pre-paid postage envelope so as to reach the Scrutinizer on or before the close of the working hours on Thursday the 04/08/2011 at 5.00 P.M. at "Capital Place", No.16/50, South Boag Road, T.Nagar, Chennai-600017.
The Scrutinizer will submit his report to the Chairman after completion of the scrutiny and the result of the voting by Postal Ballot will be announced by the chairman of the company or in his absence any person authorized by him on Thursday the 11th August 2011 at 4.00 P.M. at "Capital Place" No.16/50, South Boag Road, T.Nagar, Chennai- 600017. The results of the postal ballot will be posted on the Companys website-www.afslindia.com besides being communicated to Madras Stock Exchange Limited and Bombay Stock Exchange Limited where the shares of the company are listed. It will also be published in the News-today and Maalai chuddar for information of members.
To consider and if thought fit, to pass with or without modifications the following resolution as Special Resolution:-
"RESOLVED that Pursuant to the provisions of Section 372A and other applicable provisions, if any, of the Companies Act, 1956, the consent of the company be and is hereby accorded to the Board of Directors of the company, to invest in/grant loans to bodies corporate, to provide guarantees and securities to bodies corporate, from time to time, for such amounts, such that the outstanding loans together with investments made, guarantees given and securities provided by the company, do not exceed Rs.25 Crores at any one time".
"RESOLVED FURTHER THAT the terms and conditions subject to which such loans and investments shall be made/granted are as under:
1. The bodies corporate where such loans/investments shall be made would be domestic companies, both private and public excepting (a) companies which have been referred to Board for Industrial and Financial Reconstruction (b) companies in respect of which a Liquidator/administrator/receiver has been appointed in respect of any part or all assets and properties.
2. The loans shall be against pledge of shares listed in Stock Exchanges/hypothecation of vehicles/equipments, inventories or other assets or for purchase of vehicles, equipments or for working capital requirements.
3. The other terms and conditions pertaining to loan, like amount of loan, interest to be charged, repayment period, margin requirements etc. will be as approved by the Board of Directors based on the merits of each case.
4. The loans/investments are made out of the owned funds/borrowings wherever necessary.
5. Maximum amount of loans/investments/guarantees/securities shall be subject to a limit of Rs.5 Crores per party".
"RESOLVED FURTHER THAT , the Board of Directors be and are hereby authorized to do and perform all such acts, deeds, matters and things and to take such steps as may be necessary or desirable to give effect to this resolution".
"RESOLVED FURTHER THAT Mr.L.V.Anantram, Director, Mr.J.Narassimhan, Company Secretary be and is hereby jointly and severally authorized to apply for approval with the Registrar of Companies, Chennai and to do all such acts as they deem fit and necessary to give effect to this resolution".
EXPLANATORY STATEMENT PURSUANT TO SECTION 192A(2) & 173(2) OF THE COMPANIES ACT, 1956.
The Company has been giving loans in the ordinary course of its business for purchase of vehicles, machinery, equipments and for working capital requirements to its retail customers. Out of this, loans/investments in bodies corporate attract the provisions of Section 372A of the Companies Act, 1956. As per the provisions of the Companies Act, 1956, your company can make loans, investments, give any guarantee or provide security to bodies corporate in excess of 60% of the paid-up share capital and free reserves or 100% of free reserves whichever is more, only with the prior approval of shareholders by a Special Resolution.
The companys net worth as on 31st March 2011 was Rs.7.40 Crores.
The outstanding loans and investments in bodies corporate along with loans to individuals as on the date of the Board meeting dated 20-06-2011 amounted to Rs. 577.28 Lakhs. There are no outstanding guarantees/securities.
The growth in the levels of business is expected to increase due to proposed housing loan finance combined with financing of commercial vehicles and construction equipments. In view of the same, it is expected that the total amount of loans and investments already made by the company together with loans/investments/guarantees/securities to be made in future to bodies corporate in the ordinary course of business is likely to exceed the limit prescribed under section 372A of the Companies Act, 1956.
Section 192A read with Companies (passing of the Resolution by Postal Ballot) Rules, 2011 requires that the said Special Resolution be approved by the shareholders through postal ballot.
Accordingly, the enclosed draft Special Resolution, authorizing the making of loans and investments in bodies corporate, providing guarantees and securities to bodies corporate, from time to time, such that the loans outstanding, together with the investments made, guarantees and security made by the company under Section 372A of the Companies Act, 1956 do not exceed Rs.25 Crores at any one time is submitted for consideration of the shareholders and the Board recommends that the resolution be passed.
The Register of Inter-corporate Loans and Investments containing the details required to be mentioned therein is open for inspection during the office hours on any working day at the Registered Office of the company.INTEREST OF DIRECTORS:-
None of the Directors of the company is interested in the resolution.
1. Shareholders who wish to be present at the time of declaration of the result may do so.
2. Only a shareholder entitled to vote is entitled to exercise his vote through postal ballot and a shareholder having no voting rights should treat this notice as an intimation only.