Inception:
The family of our promoter was engaged in the business of Chit Funds since 1973. The initial form of the business starts with a formation of a group (subscribers) who contribute a fixed amount (installment) and the accumulated amount is taken by one of the members of that group who is prepared to disallow maximum amount. This discount allowed amount is called bid amount. Out of the bid amount the group deducts a fixed amount (commission) and divides the balance amount equally to all the members of the group including the person who has bid the amount. Actually this dividend amount (dividend) will be credited to the account of all the members in the groups. The procedure of bidding the amount, contribution of installments etc. continues for a period, i.e. number of months equal to the number of members.
So, each member will be eligible to take the amount once during the period of chit. By the time the group completes each members of the group gets the amount once. Also the member who has taken the chit will not be eligible to participate in the bid during the succeeding months. But all the members irrespective of whether the amount is taken or not, should contribute for the installations for the whole duration.
During that time there was not much government control over the business except for income tax. Later rules were enforced actively by the Government of India & Government of Andhra Pradesh. All those who were doing Chit Funds business, were asked to register their names with respective Chit officials and follow all the rules and regulations. As per the rules the business was restricted for a partnership firm and could not be expanded.
So in order to expand the business, under the initiative of Smt. Kotha Vijaya Lakshmi and Sri Antony Loyed the Private Limited Company was floated by the name “Sreshta Chit funds Private Limited” in the year 2011. So even though company was floated recently it inherits a vast experience of forty years and ready base of subscribers.
Mode of Business Operation:
In chit business, the income increases, depending on the number of chit groups run by the company. On the other hand, risk increases with increase in the number of chit groups. The intelligence in the business is to select financially sound customers, so that the defaulters are less or nil.
Every time when a group is started, a set of good members are enrolled. The company was not in a hurry to start a chit group, unless all the members are selected and enrolled. The group will be started by doing so and the risk involved is minimized. When a member takes the chit, proper care should be taken in doing documentation with proper surety and securities towards the balance chit amount payable by the subscribers. In doing so, the legal aspects shall be taken care. With all the above precautions and by running more number of chit groups the company earns more profits.
Objective of the Company:
The main objectives pursued by the company on its incorporation are as under:-
i) To carry on the business of Chit Funds or Kuries with the prior approval of the concerned State Government in accordance with and in pursuance of the provisions of Chit Funds Act, as applicable to the States of Indian Union or Indian Chit funds Act., or any statutory re-enactment or modification thereof.
ii) To carry on chit fund business in all its branches and kinds but, not to carry on any business prohibited by the prize chit and money circulation scheme (banking) act, 1978.
iii) To enter into agreement and contract, with Indian or foreign individuals, companies or other organizations for technical, financial or any other assistance for carrying out all or any of the objectives of the company.
iv) To advertise and adopt means of making known the business activities of the company in any as may be expedient.
v) To amalgamate with any company or companies having objects all together or in part similar to those of this company.
vi) To take over, approve, adopt or ratify all steps taken and comities made by the promoters for the proposed business of the company prior to its incorporation.
vii) To open accounts with any individual, firm or company or with any bank or banks and to pay into and withdraw monies from such account or accounts.
viii) To undertake and execute any trust, the undertaking where of may seem desirable either gratuitously or otherwise.
ix) To distribute any of the properties of the company amongst the members in specie or in kind consequent upon the winding of the company.
x) To improve, manage work, develop, alter, exchange, mortgage, lease, turn to account, abandon or otherwise deal with all or any part of the properties, rights and concessions of the company.
xi) The liability of the company is limited.
xi) The liability of the company is limited.
Totally there are 9 directors in the company with a Managing Director.
1. Ms. Kotha Vijaya Lakshmi - Chairman
2. Mr. Antony Loyed – Managing Director
3. Mr. Kalleri James – Special Director
4. Mr. B. Nageswara Rao – Special Director
5. Ms. Usha Soman – Special Director
6. Mr. S. Naga Nath Sai– Special Director
7. Mr. Eldho Midhun Babu– Director
8. Mr. Alex Shaji Joseph– Director
