RBI has catagorised the Company as SYSTAMTICALLY IMPORTANT NON-DEPOSIT TAKING NON-BANKING FINANCE COMPANY. Presently Company is doing investment activities with long-term perspective (MAIN INVESTMENT UNIT) as well as doing Trading Business (TRADING UNIT) to avail benefit of short-term investment opportunities.
In MAIN INVESTMENT UNIT- Company is doing investment in all type of financial securities i.e. Equity, Bonds, Debentures, Commodity, Term Deposits and Securities of any kind issued by Companies, Banks, Mutual Funds, any Authority, Central, State, Municipal, Local and to invest subscribe, purchase, acquire and/or sell or otherwise place funds by way of deposit to anybody corporate, firm, person, any other authority or association whether falling under the same management or otherwise, in accordance with and to the extent permissible under the applicable provisions of the Companies Act 1956 with or without security and on such terms as may be determined from time to time. These investments are being made mainly in requisite schemes of Mutual Funds and some investments are also made directly. The investment in this unit is made with long term perspective i.e. for a period of one year and above and is made in an optimum blend of financial instruments i.e. Equity, Bonds, Term Deposit etc., keeping in view the Domestic and Global financial, economic and political scenario.
As on 31st March, 2011, the Company's investment is of Rs. 39032.87 Lacs which consist of an optimum blend of financial securities such as Equity Shares, Preference Shares, Bonds, Convertible and Non Convertible Debentures, different schemes of Mutual Funds and Exchange Traded Funds. Within the investment portfolio, Rs. 196 crore were strategic in nature by way of investment in Group Companies whereas Rs. 142 crore were deployed in a mix of debt and equity mutual funds.The Investment business has generated good returns and during the last three years, the Company earned returns on investments of Rs. 1972.71 Lacs in 2010-11, Rs. 2504.91 Lacs in 2009-10 and Rs. 1501.95 Lacs in 2008-09.
In TRADING UNIT- investment is made mainly in equity market directly as well as through Portfolio Managements Schemes of reputed Asset Management Companies and is made to get the short term opportunities available in financial market. Special opportunities like Merger and Demerger, Bonus and Right Issue of Equity Shares, Inter Corporate Lending etc., are also considered in this unit.
As on 31st March, 2011, the Company's investment is of Rs. 919.14 Lacs (Market Value) which consist of an optimum blend of financial securities such as Equity Shares, Preference Shares, Bonds and equity and debt scheme of Mutual Funds.
As a part of diversification of Company's business activities into new financial avenues and to explore the available financial opportunity for the further growth and profitability of the Company, the Company is doing the lending activities for short term as well as long term. Company's lending is basically concentrated on secured lending to the parties and against liquid securities like shares, Government Bonds, gold, property and other assets. As on 31st March, 2011, the Company's Loan Book is of Rs. 1015.00 Lacs
REAL ESTATE BUSINESS
Having regard to the good business opportunities available in Real Estate Sector and to diversify the Company's activities, the Company vide Board's Resolution dated 30.07.2011 which was later on confirmed by Shareholders vide their Resolution dated 20.09.2011, decided to undertake new line of business i.e. Real Estate Business within the maximum limits prescribed by Reserve Bank of India. In this sector Company will (1) Purchase and sell the residential and/or commercial land with trading perspective only, (2) Deal in real estate, development of land, construction of building for commercial and residential purpose, (3) To lease, hire or otherwise acquire any such real estate asset, (4) To carry on the business of proprietors of flats and buildings and to let on lease the same, (5) To use the services of Property Developers / Building contractors and/or enter into the agreements with them for its real estate activities.
The Company shall use its own funds as well as raise money within the prescribed RBI regulations, for the purpose of investment and/or lending the same to commercial/residential Real Estate sector.
The Company shall not carry on the business of Banking as defined under the Banking Regulations Act, 1949 without the approval of RBI.
NCFSL may also undertake new activities in future such as financial consultancy, lending against commodities, Infrastructure Financing, merchant banking, underwriting business, stock broking, and other miscellaneous finance activities generally undertaken by the NBFC's after obtaining the requisite approvals.