Mar 31, 2014
Dear Members,
The Directors present their Twenty Seventh Annual Report together with
the Audited accounts for the financial year ended March 31, 2014.
1. FINANCIAL RESULTS (Rs. In Lakhs)
PARTICULARS For the For the
Financial Financial
Year ended Year ended
31.03.2014 31.03.2013
GROSS INCOME 223.23 340.45
PROFIT/(LOSS) BEFORE INTEREST & DEPRECIATION (345.92) (644.32)
LESS: INTEREST 941.17 872.13
PROFIT/(LOSS) BEFORE DEPRECIATION (1287.09) (1516.45)
LESS: EXCEPTIONAL ITEMS - -
LESS : DEPRECIATION 22.56 (45.11)
PROFIT / (LOSS) BEFORE TAX (1309.65) (1561.56)
PROVISION FOR TAXATION
(including FBT / Deferred tax) - -
PROFIT / (LOSS) AFTER TAX (1309.65) (1561.56)
ADD: BALANCE FROM LAST YEAR (16916.85) (15355.29)
PROFIT /(LOSS) AVAILABLE FOR APPROPRIATION (18226.50) (16916.85)
PROPOSED DIVIDEND (Including Dividend Tax) Nil Nil
TRANSFER TO STATUTORY RESERVE Nil Nil
TRANSFER TO GENERAL RESERVE Nil Nil
BALANCE CARRIED FORWARD (18226.50) (16916.85)
2. DIVIDEND
In view of the absence of profit, the Board is not recommending any
dividend on the Equity Shares of the Company during the period under
review.
The Preference Shares issued to the Banks in terms of the CDR Approval
carry a Cumulative Dividend of 9% and the Preference Shares issued to
the Asia Pragati Capfin Private Limited a Cumulative Dividend of 4%. An
amount of Rs. 346.52 Lakhs and Rs. 89.04 Lakhs respectively amounting
to total of Rs. 435.56 Lakhs being the amount of Dividend accumulated
but not paid are shown under Contingent Liability.
3. OPERATIONS
During the financial year ended 31st March, 2014, due to the inability
in implementing the CDR package by the Banks the company was unable to
disburse any amount as against a disbursement of Rs. 366.95 Lakhs
during the previous period.
Your Company has been focusing on Collections during the year. In spite
of the absence of any fresh Funds infused by the Banks, the Company was
able to meet all the statutory, Staff obligations because of the Strong
Collection mechanism.
4. Holding Company - Auctus Holdings Private Limited
The Company has been informed by M/s. Auctus Holdings Private Limited
(Auctus) that they have purchased 8750 equity shares of our company
comprising of 0.15% through Open Offer from the public in December,
2012.
It may be noted that as per Share Purchase Agreement dated 13th March,
2012, 30,36,703 Equity Shares comprising of 51% of Equity Capital of
DFL Infrastructure Finance Limited was purchased from D B Zwirn
Mauritius on June, 2013. Accordingly, DFL Infrastructure Finance
Limited becomes subsidiary of Auctus.
Now Auctus holds 30,45,453 equity shares of DFL Infrastructure Finance
Limited comprising of 51.15% to total Equity Capital.
5. PRUDENTIAL NORMS
Reserve Bank of India has prescribed prudential norms for registered
Non Banking Financial Companies on various parameters. Your Company is
in Category "B" with effect from 27th November, 2012.
6. Prohibitory Order from Reserve Bank of India
After completion of inspection of the books of accounts and other
records of the Company carried out Under Section 45-N of the RBI Act,
1934, the Reserve Bank of India hereby directs that until further
orders the Company shall not
a) Sell, transfer, create charge or mortgage or deal in any manner with
its property and assets without prior written permission of the Reserve
Bank of India;
b) Declare or distribute any dividend;
c) Transact any business; or
d) Incur any further liabilities.
7. ASSET LIABILITY MANAGEMENT COMMITTEE
The company has an Asset Liability Management Committee, which monitors
the Asset Liability mismatch.
8. EXPLANATIONS TO THE REMARKS IN AUDITORS'' REPORT AS PROVISIONS OF
SECTION 217(3) OF THE ACT:
In response to the Emphasis of matter made by the Auditor, the Board
wishes to place the following explanation:
Reference to the
Auditors Report Head of Account Reference to notes below
CDR implementation Refer note a
RBI directions Refer note b
Attention invited Net worth Refer note c
to Shareholder
Redeemable Preference Refer note d
Shares
Loans & advances Refer note e
Dividend for Preference Refer note f
Shares
a. CDR implementation:
The Management of the Company approached the CDR Cell for the
restructure of debts extended by consortium banks and was approved by
CDR. However some of the Banks did not approve the CDR/CDR Re-work
schemes due to which the Company was unable to implement the CDR rework
scheme. The management is taking efforts to arrive at an acceptable One
Time Settlement (OTS) with Secured Creditors.
b. Prohibitory Directions from Reserve Bank of India:
The Company has represented to Reserve Bank of India to withdraw the
Directions.
c. Net Owned Funds:
Reason for fall in Net Owned Funds:
i. The company has gone through years of losses due to impairment of
assets since 2007. Due to this substantial write offs in the past 5
years, the company has incurred losses amounting to more than Rs. 150
Crores.
ii. The Company has not been carrying out its main activity of lending
since 2010 and hence no revenue generation has taken place. This has
also contributed to the fall in the NOF.
Actions taken to improve the Net Owned Funds:
i. The company has converted part of the debt into Preference Shares
thus improving the Capital base.
ii. The management is in dialogue with investors to bring in fresh
equity funds to strengthen the capital base.
iii. The CDR package has not been approved by all the banks and hence
no fresh funds have been extended by the banks. The company is in
dialogue with the Consortium Banks for a "one time settlement".
iv. The management is pursuing efforts to raise funds from financial
entities to re-commence the lending operations.
d. Preference Shares Allotted to Asia Pragati Capfin Pvt. Ltd. Limited:
The Redeemable Preference Shares issued to Asia Pragati Capfin Limited
in the year 2007 should have been redeemed in December 2009. However
due to absence of Profits and financial strain, the said shares were
not redeemed. The company negotiated with the Preference Shareholders
and rescheduled the redemption dates to 2017/2018/2019. Hence as on
date of this Annual Report there is no default. However, the Dividend
on these share due from 1-4-2013 have not been paid / provided in the
absence of Profits.
e. Loans and Advances:
The remuneration paid to Mr. Ravichandran (erstwhile Managing Director)
was not approved by the shareholders in the general meeting held in
December 2010. Hence the company could not approach the Central
Government for approval. As the remuneration was already paid, this
amount was classified under Loans and Advances. Efforts are underway to
recover the amount.
f. Dividend on Preference Shares issued to the Banks:
The consortium Banks have converted part of their outstanding to
optionally Convertible Preference Shares as per the CDR Approval. This
bear a cumulative dividend of 9%. However in the absence of Profits,
the dividends have not been paid / provided since 2011-12 and also for
the year 2013-14. Since the dividends are cumulative in nature, the
same will be paid as and when profits are made.
9. CORPORATE GOVERNANCE
Your Company is complying with the Code of Corporate Governance
introduced by SEBI. A detailed report on Corporate Governance together
with a certificate from the Statutory Auditors in compliance of Clause
49 of the Listing Agreement is attached which forms part of the
Directors'' Report.
10. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussions and Analysis report highlighting the performance
of the company is attached forming part of the Directors'' Report.
11. OTHER DISCLOSURES
a. SUBSIDIARIES
The Annual Accounts for the period ended March 31, 2014 of the
Subsidiary Companies DFL Holdings and Securities Ltd and Smartinvest
Agency.Com Private Limited are annexed to your Company''s Annual Report.
b. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statement for the period ended March 31, 2014
prepared in accordance with Accounting Standards 21 on Consolidated
Financial Statements-issued by the Institute of Chartered Accountants
of India, is also provided in this Annual Report in accordance with
Clause 32 of the Listing Agreement.
12. DIRECTORS:
Change in Directorship during the period:
Particulars > Compliance
1 Mr. V Sambamoorthy, Additional Director of the Company has resigned
on 14th September, 2013 :
The Board accepted his resignation vide the Board Meeting dated 16th
September, 2013
2 Ms. S Mythili, Additional Director of the Company has resigned on
14th September, 2013 :
The Board accepted her resignation vide the Board Meeting dated 16th
September, 2013
3 Ms. Krithika Sambamoorthy, Additional Director of the Company has
resigned on 14th September, 2013 :
The Board accepted her resignation vide the Board Meeting dated 16th
September, 2013
4 Dr. R Baskaran, Director of the Company has resigned on 5th February,
2014 :
The Board accepted his resignation vide the Board Meeting dated 5th
February, 2014
5 Mr. T R Suresh was appointed as additional director with effect from
5th February, 2014 :
Approvals of the Board of Directors obtained vide the meeting dated 5th
February, 2014
6 Mr. E Selvaraj was appointed as additional director with effect from
3rd May, 2014 :
Approvals of the Board of Directors obtained vide the meeting dated 3rd
May, 2014
Retirement by Rotation
Mr. S Mahadevan, director liable to retire by rotation, being eligible
offers himself for reappointment. Disqualification of Directors:
None of the Directors is disqualified to hold directorships under the
provisions of Section 274(1) (g) of the Companies Act, 1956.
13. DIRECTORS'' RESPONSIBILITY STATEMENT Your Directors confirm:
1. That in the preparation of the annual accounts, the applicable
accounting standards have been followed;
2. That they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the period and of the loss of the Company for
the financial year ended 31st March, 2014.
3. That they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities; and
4. That they have prepared the annual accounts on a going-concern
basis.
14. AUDITORS
M/s. P. B. Vijayaraghavan & Co, Chartered Accountants, Statutory
Auditors of the Company retire at the ensuing Annual General Meeting
and being eligible offer themselves for re-appointment.
A certificate under Section 224(1B) of the Companies Act, 1956 has been
received from M/s P. B. Vijayaraghavan & Co.
15. STATUTORY STATEMENT
A. Statement pursuant to Sec.212 (3) of the Companies Act, 1956 in
respect of Subsidiary Companies is annexed.
B. The equity shares of your Company are listed at the Bombay stock
Exchange.
C. The Company has paid the Listing fees to Bombay stock Exchange for
the years 2014-15 and Annual Custodial Fees to National Securities
Depository Limited and Central Depository Services Limited.
D. Information under section 217(2A) of the Companies Act, 1956 read
with Companies (Particulars of employees) Rules, 1975 is given
hereunder:
In terms of the provisions of section 217(2A) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended, the name and other particulars of employees are required to be
set in the Director''s report. However, as per the provisions of Section
219(1)(b)(iv) of the Act, the annual report excluding the said
information is being sent to all the shareholders.
Members who are interested in obtaining such particulars may write to
the company''s registered office.
16. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956
The Company is a Non Banking Finance Company and has no activity
relating to Conservation of Energy or technology absorption.
The Company does not have any Foreign Exchange earnings and Outgo.
17. ACKNOWLEDGEMENTS
Your Directors thank the Company''s Bankers and the Financial
Institutions for their support. Your Directors also thank the customers
and share-holders and also appreciate the wholehearted effort and
co-operation rendered by the employees at all levels.
For and on behalf of the Board
Place: Chennai S BALACHANDER
Date : 04.08.2014 Managing Director
(DIN : 02644584)
Mar 31, 2013
The Directors present their Twenty Sixth Annual Report together with
the Audited accounts for the financial year ended March 31, 2013.
1. FINANCIAL RESULTS
(Rs. In Lakhs)
PARTICULARS For the
Financial For the
Financial
year ended year ended
31.03.2013 31.03.2012
GROSS INCOME 340.45 308.42
PROFIT/(LOSS) BEFORE
INTEREST & DEPRECIATION (644.32) (1454.29)
LESS: INTEREST 872.13 634.25
PROFIT/(LOSS) BEFORE DEPRECIATION (1516.45) (2088.54)
LESS: EXCEPTIONAL ITEMS (44.74)
LESS : DEPRECIATION (45.11) (62.99)
PROFIT / (LOSS) BEFORE TAX (1561.56) (2196.27)
PROVISION FOR TAXATION (including
FBT / Deferred tax)
PROFIT / (LOSS) AFTER TAX (1561.56) (2196.27)
ADD: BALANCE FROM LAST YEAR (15355.29) (13159.05)
PROFIT /(LOSS) AVAILABLE
FOR APPROPRIATION (16916.85) (15355.29)
PROPOSED DIVIDEND
(Including Dividend Tax) Nil Nil
TRANSFER TO STATUTORY RESERVE Nil Nil
TRANSFER TO GENERAL RESERVE Nil Nil
BALANCE CARRIED FORWARD (16916.85) (15355.29)
2. DIVIDEND
In view of the paucity of profits, the Board is not recommending any
dividend on the Equity Shares of the Company during the period under
review.
The Preference Shares issued to the Banks in terms of the CDR Approval
carry a Cumulative Dividend of 9% and The Preference Shares Issued to
the Asia Pragati Capfin Private Limited a Cumulative Dividend of 4%. An
amount of Rs. 356.63 Lakhs and Rs. 89.04 respectively amounting to
total of Rs. 435.56 being the amount of Dividend accumulated are shown
under Contingent Liability.
3. OPERATIONS
During the financial year ended 31st March, 2013, due to the non
disbursal of funds by the Banks the company was able to disburse only
Rs. 366.95 Lakhs as against a disbursement of Rs. 209.00 Lakhs during
the previous period.
Your Company has been focusing on Collections during the year. Inspite
of the absence of any fresh Funds infused by the Banks, the Company was
able to meet all the statutory obligations because of the Strong
Collection mechanism.
4. STATUS OF NBFC CLASSIFICATION
The Company had approached Reserve Bank of India (RBI) for changing its
classification from "Deposit accepting" to "Non Deposit accepting
NBFC". This has been approved by RBI and a new certificate of
Registration issued on 27th November, 2012.
5. OPEN OFFER
The Company has been informed by M/s. Auctus Holdings Private Limited
(Auctus) that they have signed a Share Purchase Agreement with D B
Zwirn Mauritius (who hold 51% of the paid up Equity share capital) to
acquire their shareholding. Auctus has also made a public announcement
of the same and has filed the open offer document through SPA Merchant
Bankers Limited with SEBI
The Open offer opened on November 15, 2012 and closed on November 29,
2012. A total of 8,750 equity shares were offered, which were accepted
in full by Auctus Holdings Private Limited.
6. PRUDENTIAL NORMS
Reserve Bank of India has prescribed prudential norms for registered
Non Banking Financial Companies on various parameters. Your Company is
in Category "B" with effect from 27th November, 2012.
7. ASSET LIABILITY MANAGEMENT COMMITTEE
The company has an Asset Liability Management Committee, which
continuously monitors the Asset Liability mismatch. The committee meets
at regular intervals.
8. EXPLANATIONS TO THE REMARKS IN AUDITORS'' REPORT AS PROVISIONS OF
SECTION 217(3) OF THE ACT:
In response to the remarks made by the Statutory Auditor, the Board
wishes to explain as follows.
a. Reasons for diminishing NOF:
i. The company has gone through years of losses due to impairment of
assets since 2007. Due to this substantial write offs in the past 5
years, the company has incurred losses amounting to more than Rs. 150
Crores.
ii. The Company has not been carrying out its main activity of lending
and hence no revenue generation has taken place. This has also
contributed to the fall in the NOF.
Actions taken to improve the NOF:
i. The company has converted part of the debt into Preference Shares
thus improving the Capital base.
ii. The management is in dialogue with investors to bring in fresh
equity funds to strengthen the capital base.
iii. The CDR package has not been approved by all the banks and hence
no fresh funds have been extended by the banks. The company is in
dialogue with the Consortium Banks for a "one time settlement".
iv. The management is pursuing efforts to raise funds from financial
entities to re-commence the lending operations.
b. Remuneration paid to erstwhile Managing Director :
The remuneration paid to Mr. Ravichandran (erstwhile Managing Director)
was not approved by the shareholders in the general meeting held in
December 2010. Hence the company could not approach the Central
Government. Since the remuneration was already paid, this amount was
classified as "advance given". Efforts are underway to obtain the
shareholders'' approval for the remuneration already paid.
c. Preference Shares Allotted to Asia Pragati Capfin Limited :
Company had issued Redeemable Preference Shares to Asia Pragati Capfin
Limited in the year 2007 should have been redeemed in December 2009.
However due to absence of Profits and acute financial strain, the said
shares were not redeemed. The company negotiated with the Preference
Shareholders and rescheduled the redemption dates to 2017/2018/2019.
Hence as on date of this Annual Report there is no default. However,
the Dividend on these share due from 1-4-2012 have not been paid /
provided in the absence of Profits.
d. Dividend on Preference Shares issued to the Banks :
The consortium Banks have converted part of their outstanding to
optionally Convertible Preference Shares as per the CDR Approval. These
bear a cumulative dividend of 9%. However in the absence of Profits,
the dividends have not been paid / provided since 2011-12 and also for
the year 2012-13. Since the dividend is cumulative, the dividends will
be paid as and when the profits are made.
e. Change in the Accounting Policy
From 1st April 2012, the Company recognizes the income arising out of
Additional Finance Charges (AFC), Due Date Missing Charges and Cheque
Bouncing Charges on receipt basis as against on Accrual basis hitherto.
Due to this change, the loss has been over stated by Rs. 117.23 Lacs
during the year under consideration.
This Change in Accounting Policy has been considered and recommended by
the Audit Committee in the meeting held on 30th January, 2013 and
approved by the Board of Directors in their meeting held on 31st
January, 2013.
9. CORPORATE GOVERNANCE
Your Company is complying with the Code of Corporate Governance
introduced by SEBI. A detailed report on Corporate Governance together
with a certificate from the Statutory Auditors in compliance of Clause
49 of the Listing Agreement is attached which forms part of the
Directors'' Report.
10. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussions and Analysis report highlighting the performance
of the company is attached forming part of the Directors'' Report.
11. OTHER DISCLOSURES
a. SUBSIDIARIES
The Annual Accounts for the period ended March 31, 2013 of the
Subsidiary Companies DFL Holdings and Securities Ltd and Smartinvest
Agency.Com Private Limited are annexed to your Company''s Annual Report.
b. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statement for the period ended March 31, 2013
prepared in accordance with Accounting Standards 21 on Consolidated
Financial Statements-issued by the Institute of Chartered Accountants
of India, is also provided in this Annual Report in accordance with
Clause 32 of the Listing Agreement.
12. DIRECTORS:
Change in Directorship during the period:
S.No. Particulars Compliance
1 Mr. T R Suresh, Director of the Company The Board accepted his
resignation vide the has resigned on 18th July, 2012 Circular
Resolution dated 18th July, 2012
2 Mr. B Prakash, Wholetime Director of the The Board accepted his
resignation vide the Company has resigned on 18th July, 2012 Circular
Resolution dated 18th July, 2012
3 Mr. S Mahadevan, Director of the The Board accepted his resignation
vide the Company has resigned on 18th July, 2012 Circular Resolution
dated 18th July, 2012
4 Mr. V Sambamoorthy was appointed as Approvals of the Board of
Directors obtained additional director with effect from 18th vide the
meeting dated 18th October, 2012 October, 2012
5 Mr. R. Nagarajan, Director of the The Board accepted his resignation
in the Company has resigned on 18th Oct. 2012 Board Meeting dated 18th
October, 2012
6 Mr. B Prakash was appointed as Approvals of the Board of Directors
obtained additional director with effect from 30th vide the meeting
dated 30th November, 2012 November, 2012
S.No. Particulars Compliance
7 Mr. B Prakash was appointed as Whole Approvals of the Board of
Directors obtained time director of the Company vide the meeting dated
30th November, 2012
subject to approval of Shareholders.
8 Mr. S Mahadevan was appointed as Approvals of the Board of Directors
obtained additional director with effect from 30th vide the meeting
dated 30th November, 2012 November, 2012
9 Dr. R Baskaran was appointed as Approvals of the Board of Directors
obtained additional director with effect from 30th vide the meeting
dated 30th November, 2012 November, 2012
10 Ms S Mythili was appointed as additional Approvals of the Board of
Directors obtained director with effect from 30th November, vide the
meeting dated 30th November, 2012 2012
11 Ms Krithika Sambamoorthy was Approvals of the Board of Directors
obtained appointed as additional director with vide the meeting dated
30th November, 2012 effect from 30th November, 2012
Disqualification of Directors:
None of the Directors is disqualified to hold directorships under the
provisions of Section 274(1) (g) of the Companies Act, 1956.
13. DIRECTORS'' RESPONSIBILITY STATEMENT Your Directors confirm:
1. That in the preparation of the annual accounts, the applicable
accounting standards have been followed;
2. That they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the period and of the loss of the Company for
the financial year ended March 31, 2013.
3. That they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities; and
4. That they have prepared the annual accounts on a going-concern
basis.
14. AUDITORS
M/s P. B. Vijayaraghavan & Co, Chartered Accountants, Statutory
Auditors of the Company retire at the ensuing Annual General Meeting
and being eligible offer themselves for re-appointment.
A certificate under Section 224(1B) of the Companies Act, 1956 has been
received from M/s P. B. Vijayaraghavan & Co.
15. STATUTORY STATEMENT
A. Statement pursuant to Sec.212 (3) of the Companies Act, 1956 in
respect of Subsidiary Companies is annexed.
B. The equity shares of your Company are listed at the Bombay stock
Exchange.
C. The Company has paid the Listing fees to Bombay stock Exchange for
the years 2013 Â 14 and Annual Custodial Fees to National Securities
Depository Limited and Central Depository Services Limited.
D. Information under section 217(2A) of the Companies Act, 1956 read
with Companies (Particulars of employees) Rules, 1975 is given
hereunder:
In terms of the provisions of section 217(2A) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended, the name and other particulars of employees are required to be
set in the Director''s report. However, as per the provisions of Section
219(1)(b)(iv) of the Act, the annual report excluding the said
information is being sent to all the shareholders
Members who are interested in obtaining such particulars may write to
the company''s registered office.
16. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956
The Company is a Non Banking Finance Company and has no activity
relating to Conservation of Energy or technology absorption.
The Company does not have any Foreign Exchange earnings and Outgo.
17. ACKNOWLEDGEMENTS
Your Directors thank the Company''s Bankers and the Financial
Institutions for their support. Your Directors also thank the customers
and share-holders and also appreciate the wholehearted effort and
co-operation rendered by the employees at all levels.
for and on behalf of the Board
Place: Chennai V SAMBAMOORTHY
Date : 28.05.2013 Chairman
Mar 31, 2012
The Directors present their Twenty Fifth Annual Report together with
the Audited accounts for the financial year ended March 31, 2012.
1. FINANCIAL RESULTS (Rs. In Lakhs)
PARTICULARS For the For the 18
Financial Months
year ended period ended
31.03.2012 31.03.2011
GROSS INCOME 308.42 1931.69
PROFIT/(LOSS) BEFORE INTEREST
& DEPRECIATION (1454.29) (1621.76)
LESS: INTEREST 634.25 2011.94
PROFIT/(LOSS) BEFORE DEPRECIATION (2088.54) (3633.71)
LESS: EXCEPTIONAL ITEMS (44.74) -
ADD: EXTRA - ORDINARY ITEMS - 1589.24
LESS: DEPRECIATION (62.99) (98.31)
PROFIT/(LOSS) BEFORE TAX (2196.27) (2142.78)
PROVISION FOR TAXATION
(including FBT/Deferred tax) - -
PROFIT/(LOSS) AFTER TAX (2196.27) (2142.79)
ADD: BALANCE FROM LAST YEAR (13159.05) (11016.26)
PROFIT/(LOSS) AVAILABLE FOR
APPROPRIATION (15355.32) (13159.05)
PROPOSED DIVIDEND
(Including Dividend Tax) - -
TRANSFER TO STATUTORY RESERVE - -
TRANSFER TO GENERAL RESERVE - -
BALANCE CARRIED FORWARD (15355.32) (13159.05)
2. DIVIDEND
In view of the in paucity of profits, the Board is not recommending any
dividend on the Equity Shares of the Company during the period under
review.
The Preference Shares issued to the Banks in terms of the CDR Approval
carry a Cumulative Dividend of 9%. However due to paucity of Profits
this has not been disbursed. An amount of Rs. 222.49 Lakhs being the
amount of Dividend accumulated is shown under Contingent Liability.
3. OPERATIONS
During the financial year ended 31st March, 2012, the company was able
to disburse only Rs. 209.50 Lakhs as against a disbursement of Rs.
231.00 Lakhs during the previous period.
Your Company has been focusing on Collections during the year under
Review. Inspite of the absence of any fresh Funds infused the Company
was able to meet all the statutory obligations because of a strong
collection mechanism.
4. RESOURCES DEPOSITS
As on the date of this report, there is no deposit from public lying
with the company.
5. PROMOTERS
The Company has been informed by M/s. Auctus Holdings Private Limited
(Auctus) that they have signed a Share Purchase Agreement with D B
Zwirn Mauritius (who hold 51% of the paid up Equity share capital) to
acquire their entire shareholding. Auctus has also made a public
announcement of the same and has filed a draft of the open offer
document through SPA Merchant Bankers Limited with SEBI
6. OPTIONALLY CONVERTIBLE CUMULATIVE REDEEMABLE PREFERENCE SHARES
During the Year under Review, the Company had allotted 3,85,02,384
Optionally Convertible Cumulative Redeemable Preference Shares
aggregating to Rs. 38,50,23,840/- with a Coupon Rate of 9% to the
Consortium Banks as per the terms of the CDR Approval. As per the
Re-worked CDR package these Preference Shares are Redeemable in four
equal yearly installments commencing from the year 2014-15.
7. PRUDENTIAL NORMS
Reserve Bank of India has prescribed prudential norms for registered
Non Banking Financial Companies on various parameters and your Company
is in Category "A".
8. ASSET LIABILITY MANAGEMENT COMMITTEE
Your company has an Asset Liability Management Committee, which
continuously monitors the Asset Liability matching. The committee meets
at regular intervals.
9. EXPLANATIONS TO THE REMARKS IN AUDITORS' REPORT AS PROVISIONS OF
SECTION 217(3) OF THE ACT
The Board of Directors have examined the Audit Report and in response
to the remarks made Auditor, the responses are given below:
Reference Head of Account Reference to
to the notes below
Auditors
Report
3(a) Negative net worth Refer Note 1
3(b) Reappointment and increase in Refer Note 2
remuneration of the former Managing
Director
3(c) Redeemable Preference Shares Refer Note 3
5(f) Balance Confirmation Refer Note 4
5(g) Dividend for Optionally Convertible Refer Note 5
Cumulative Redeemable Preference Shares
Notes:
1. Consequent to the write offs due to impairment of assets during the
years 2007 - 2011, the Net Owned Funds have fallen below the limits
prescribed by Reserve Bank of India. However, consequent to the
implementation of the CDR scheme and the infusion of Promoter's
contribution the Net Worth is showing improvement. The Directors are
confident that the Reserve Bank of India guidelines on minimum Net
Owned Funds will be achieved in the coming years.
2. The Company is taking steps to recover the amount due from the
erstwhile Managing Director Mr. R Ravichandran.
3. The Company has entered into an Preference Shareholder's Amendment
Agreement with Asia Pragati Capfin Pvt. Ltd. (Preference Share Holder)
on 27th March 2012 for redemption of preference shares of face value of
Rs. 10 at a price of Rs. 8.54 per share. The gain on redemption
amounting to Rs. 325 lakhs has not been accounted for during the year
under review and the same shall be accounted at the time of redemption
during the years 2017, 2018 & 2019. (Refer Note No. 2 of Note 19)
4. Company sends periodical Balance confirmation letters to Debtors
and Creditors. The balances are reconciled as and when these
confirmations are received.
5. The Company has made an allotment of 9% Optionally Convertible
Cumulative Preference Shares to various banks during the year in
accordance with Corporate Debt Restructuring package. The Company has
not provided for preference dividend of Rs. 222.49 lakhs during the
year due to inadequacy of profits. To that extent, losses and
liabilities are understated. This amount is disclosed as contingent
liability.
10. CORPORATE GOVERNANCE
Your Company is complying with the Code of Corporate Governance
introduced by SEBI. A detailed report on Corporate Governance together
with a certificate from the Statutory Auditors in compliance of Clause
49 of the Listing Agreement is attached which forms part of the
Directors' Report.
11. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussions and Analysis report highlighting the operations
of the company is attached and forms part of the Directors' Report.
12. OTHER DISCLOSURES
a. SUBSIDIARIES
The Annual Accounts for the financial year ended March 31, 2012 of the
Subsidiary Companies DFL Holdings and Securities Ltd and Smartinvest
Agency.Com Private Limited are annexed to your Company's Annual Report.
b. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statement for the financial year ended March 31,
2012 prepared in accordance with Accounting Standards 21 on
Consolidated Financial Statements-issued by the Institute of Chartered
Accountants of India, is also provided in this Annual Report in
accordance with Clause 32 of the Listing Agreement.
13. DIRECTORS:
Change in Directorship during the period:
Sl. Particulars Compliance
No.
1. Mr. Jaideep Krishna, The Board accepted his
Director of the Company resignation in the board
has resigned on 23rd Meeting dated 23rd September,
September, 2011. 2011
2. Mr. B. Prakash was appointed Approvals of the Board of
as additional director with Directors obtained vide the
effect from 23.09.2011 meeting dated 23.09.2011
subject to approval of
Shareholders.
3. Mr. B. Prakash was appointed Approvals of the Board of
as Whole time director of the Directors obtained vide the
Company meeting dated 23.09.2011
subject to approval of
Shareholders.
4. Mr. B. Prakash, Director of The Board accepted his
the Company has resigned on resignation vide Circular
18th July, 2012. Resolution dated 18th July,
2012
5. Mr. S. Mahadevan, Director The Board accepted his
of the Company has resigned resignation vide Circular
on 18th July, 2012. Resolution dated 18th July,
2012
6. Mr. T. R. Suresh, Director The Board accepted his
of the Company has resigned resignation vide Circular
on 18th July, 2012. Resolution dated 18th July,
2012
Your Directors thank Mr. Jaideep Krishna, Mr. B. Prakash, Mr. S
Mahadevan and Mr. T R Suresh for their valuable support during their
tenure as Directors of your company.
Retirement by Rotation
Mr. R Nagarajan, director liable to retire by rotation, being eligible
has offers himself for reappointment.
Disqualification of Directors:
None of the Directors is disqualified to hold directorships under the
provisions of Section 274(1) (g) of the Companies Act, 1956.
14. CHANGE IN THE NAME OF THE COMPANY
Your Company has obtained the approval from Ministry of Corporate
Affairs (Registrar of Companies, Tamil Nadu), Reserve Bank of India and
the Shareholders for Change in the name of the Company from Dhandapani
Finance Limited to DFL Infrastructure Finance Limited with effect from
20th July, 2011. The fresh certificate of Registration of
Incorporation has been received by the Company.
15. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors confirm:
1. That in the preparation of the annual accounts, the applicable
accounting standards have been followed;
2. That they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the period and of the loss of the Company for
the financial year ended March 31, 2012.
3. That they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities; and
4. That they have prepared the annual accounts on a going-concern
basis.
16. AUDITORS
M/s P. B. Vijayaraghavan & Co, Chartered Accountants, Statutory
Auditors of the Company retire at the ensuing Annual General Meeting
and being eligible offer themselves for re-appointment. A certificate
under Section 224(1B) of the Companies Act, 1956 has been received from
M/s P. B. Vijayaraghavan & Co. M/s. Suresh and Balaji, the Auditors,
have expressed their inability to continue and hence are not offering
themselves for reappointment.
17. STATUTORY STATEMENT
A. Statement pursuant to Sec. 212 (3) of the Companies Act, 1956 in
respect of Subsidiary Companies is annexed.
B. The equity shares of your Company are listed at the Bombay stock
Exchange.
C. The Company has paid the Listing fees to Bombay stock Exchange for
the year 2012 - 13.
D. Information under section 217(2A) of the Companies Act, 1956 read
with Companies (Particulars of employees) Rules, 1975 is given
hereunder:
In terms of the provisions of section 217(2A) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended, the name and other particulars of employees are required to be
set in the Director's report. However, as per the provisions of Section
219(1)(b)(iv) of the Act, the annual report excluding the said
information is being sent to all the shareholders.
Members who are interested in obtaining such particulars may write to
the company's registered office.
18. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956
The Company is a Non Banking Finance Company and has no activity
relating to Conservation of Energy or technology absorption.
The Company does not have any Foreign Exchange earnings or outgo.
19. ACKNOWLEDGEMENTS
Your Directors thank the Consortium of Company's Bankers for their
valuable and timely support. Your Directors also thank the CDR Cell for
their efforts in reviving the Company. Your Directors also thank the
customers and share-holders for their understanding and patience. Your
Directors sincerely appreciate the wholehearted effort and co-operation
rendered by the staff and employees at all levels.
for and on behalf of the Board
R. NAGARAJAN
Chairman
Place: Chennai
Date : August 07, 2012
Mar 31, 2011
The Directors present their Twenty Fourth Annual Report together with
the Audited accounts for the 18 months period ended March 31, 2011.
1. FINANCIAL RESULTS (Rs. In Lakhs)
PARTICULARS For the 18 Months
period ended
31.03.2011 For the year
ended 30.09.2009
GROSS INCOME 1931.69 3075.17
PROFIT/(LOSS).BEFORE INTEREST
& DEPRECIATION (1621.76) 1293.99
LESS: INTEREST 2011.94 2551.47
PROFIT/(LOSS) BEFORE
DEPRECIATION (3633.71) (1257.48)
LESS: EXCEPTIONAL ITEMS (5534.42)
ADD: EXTRA - ORDINARY ITEMS 1589.24 -
LESS: DEPRECIATION (98.31) (66.35)
PROFIT/(LOSS) BEFORE TAX (2142.78) (6858.25)
PROVISION FOR TAXATION
(including FBT / Deferred tax) - 2.78
PROFIT / (LOSS) AFTER TAX (2142.79) (6861.03)
ADD: BALANCE FROM LAST YEAR (11016.26) (4155.23)
PROFIT/(LOSS) AVAILABLE FOR
APPROPROATION (13159.05) (11016.26)
PROPOSED DIVIDEND (Including
Dividend Tax) - - -
TRANSFER TO STATUTORY RESERVE - -
TRANSFER TO GENERAL RESERVE - -
BALANCE CARRIED FORWARD (13159.05) (11016.26)
2. DIVIDEND
In view of the losses posted by your company, the Board decided not to
recommend any dividend during the period under review.
3. OPERATIONS
During the period ending March 31, 2011, due to the paucity of funds
the company was able to disburse only 2.31 crores as direct business and
Rs. 8.33 Crores under arrangement with FICCL as against a disbursement
of Rs. 27.02 Crores towards direct business and Rs.29.41 crores under
FICCL arrangement respectively for the 12 months period ending 30th
September 2009.
The Company has already approached CDR for restructuring of its debts
and expects to restart its asset finance business once further funds
infusion takes place.
DFL is however continuing its focus on recoveries from customers and
the same have been satisfactory during the period under review. The
Company is also looking into avenues of raising income through fee
based sources viz., distribution of financial products including life &
general insurance, mutual funds and fixed deposits.
4. RESOURCES
DEPOSITS
The Company has ceased taking deposits from 31.03.2005. In terms of the
letter dated 28.12.2007 communicated by RBI, in response to the
Companys application for conversion into Non deposit accepting
company, all the outstanding deposits as on 07.03.2008 were transferred
to an Escrow Account.
As on March 31, 2011, unclaimed deposits totaling to Rs. 1.54 Lakhs
including interest, which matured for payment, were awaiting
instructions for repayment. The Company sends periodical reminders to
deposit holders before transferring the same to Investor Education and
Protection Fund as per the provisions of Section 205C of the Companies
Act, 1956.
5. PRUDENTIAL NORMS
Reserve Bank of India has prescribed prudential norms for registered
Non Banking Financial Companies on various parameters. Your Company is
in Category A indicating prompt and regular filing of returns.
6. ASSET LIABILITY MANAGEMENT COMMITTEE
The company has an efficient Asset Liability Management Committee,
which continuously monitors the Asset Liability mismatch. The committee
meets at regular intervals.
7. EXPLANATIONS TO THE REMARKS IN AUDITORS REPORT:
In response to the remarks made by the Statutory Auditor, the Board
wishes to explain as follows.
Reference to
the Auditors
Report Head of Account Reference to notes below
3(a) Negative net worth Refer note 1
5(0 Balance confirmation Refer note 2
5(g) Donation Refer note 3
5(h) Re-appointment and
increase in
remuneration of the
Managing Director Refer Notes on Accounts SI
No 10(b) of Schedule 18
Notes
1. As a result of the extensive clean up of legacy issues initiated in
March 2007. which continued until the year under review, companys net
owned funds have fallen below the limit prescribed by RBI. Coupled with
this, promoters of the company, DBZM were unable to infuse any further
capital in to the company.
2. Company is in the process of obtaining balance confirmation from
the parties and is hopeful of completing the exercise within the next
60 days.
3. Company is in the process of moving application with Company Law
Board under section 621A of the Companies Act, 1956.
8. CORPORATE GOVERNANCE
Your Company is complying with the Code of Corporate Governance
introduced by SEBI. A detailed repor on Corporate Governance together
with a certificate from the Statutory Auditors in compliance of Clause
4< of the Listing Agreement is attached which forms part of this
Report.
9. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussions and Analysis report highlighting the performance
of the company is attachec forming part of this Report.
10. OTHER DISCLOSURES
a. SUBSIDIARIES
The Annual Accounts for the period ended March 31, 2011 of the
Subsidiary Companies Dhandapan Holdings & Securities Ltd and
Smartinvest Agency.Com Private Limited are annexed to youi Companys
Annual Report.
b. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statement for the period ended March 31, 2011
prepared in accordance witr Accounting Standards 21 on Consolidated
Financial Statements-issued by the Institute of Charterec Accountants
of India, is also provided in this Annual Report in accordance with
Clause 32 of the Listing Agreement.
11. DIRECTORS:
Change in Directorship during the period:
S.No. Particulars Compliance
1 Mr. S Mahadevan was appointed as
additional director with effect
from 24.02.2011 Approvals of the Board of
Directors obtained vide
Circular resolution dated
24.02.2011 As per provisions
of the Section 260 of the
Companies Act, 1956, the
directors hold office only up
to the forthcoming coming
Annual General Meeting. Your
directors recommended for his
regularization as the
director in the ensuing
Annual General meeting
2- Mr. Jaideep Krishna was appointed
as additional director with effect
from 20.05.2010 Approvals of the Board of
Directors obtained vide
Circular resolution dated
20.05.2010 As per provisions
of the Section 260 of the
Companies Act, 1956, the
directors hold office only
up to the forthcoming coming
Annual General Meeting. Your
directors recommended for his
regularization as the director
in the ensuing Annual
General meeting
3 Mr. S Balachander was appointed
as additional director with
effect from 14.02.2011 Approvals of the Board of
Directors obtained vide the
meeting dated 14.02.2011
4 Mr. S Balachander was appointed
as Whole time director of the
Company
Appointed by the Shareholders
of the Company vide Postal
Ballot dated 08.04.2011
5 Mr,T R Suresh was appointed as
additional director with effect
from 28.05.2011 Approvals of the Board of
Directors obtained vide the
meeting dated 28.05.2011. As
260 of the Companies Act,
1956 the directors hold
office only up to the
forthcoming coming Annual
General Meeting. Your
directors recommended
for his regularization as the
director in the ensuing
General meeting
6 Mr. G S Gusain, Nominee Director
appointed by Punjab National Bank
Approval of the Board of
Directors obtained vide the
meeting dated 08.04.2011 He
is appointed as a Nominee
Director of the Company.
7 Mr. David Chul Know Lee who was
a director of the Company,
has resigned from the Board on
16.12.2009 The resignation was accepted
vide circular resolution dated
16.12.2009
8 Mr. David Lawrence Culter. who
was a director of the Company
w.e.f. 15.05.2009, has resigned
from the Board on 16.12.2009 The resignation was accepted
vide circular resolution dated
16.12.2009
9 Mr. Tony Chung HO-Chang who was
director of the Company w.e.f.
26.062 009, has resigned from
the Board on 16.12.2009 The resignation was accepted
vide circular resolution dated
16.12.2009
10 Mr. S. Shravan who was a
director of the Company, has
resigned from the Board on
14.02.2011 The Board Accepted the
resignation vide the
board Meetings dated 03.03.2011
11 Mr, S Narayanan who was a
director of the Company,
resigned from the Board on
24.02.2011 The Board Accepted the resignation
vide the board
Meetings dated 03.03.2011
12 Mr. R Ravichandran.
Managing Director of the
Company has resigned
on 03rd March, 2011. The Board Accepted his resignation
vide the board
Meeting dated 03.03.2011
Retirement by Rotation
Mr. R Nagarajan, director liable to retire by rotation, being eligible
has offers himself for reappointment.
Disqualification of Directors:
None of the Directors is disqualified to hold directorships under the
provisions of Section 274(1) (g) of the Companies Act, 1956.
12. DIRECTORS RESPONSIBILITY STATEMENT Your Directors confirm:
1. That in the preparation of the annual accounts, the applicable
accounting standards have been followed;
2. That they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the period and of the loss of the Company for
the 18 months period ended March 31, 2011
3. That they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act. 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities; and
4. That they have prepared the annual accounts on a going-concern
basis.
13. AUDITORS
M/s P. B. Vijayaraghavan & Co, Chartered Accountants, Statutory
Auditors of the Company retire at the ensuing Annual General Meeting
and being eligible offer themselves for re-appointment.
Your Directors propose to appoint M/s. Suresh and Balaji, Chartered
Accountants as Joint Statutory Auditors along with M/s. P B
Vijayaraghavan & Co., retiring Auditors of the Company. Accordingly a
resolution is being brought forward for their appointment in the
ensuing Annual General Meeting. A Certificate under Section 224(1B) of
The Companies Act, 1956 has been received from them
14. STATUTORY STATEMENT
A. Statement pursuant to Sec.212 (3) of the Companies Act, 1956 in
respect of Subsidiary Companies is annexed.
B. The equity shares of your Company are listed at the Bombay stock
Exchange.
C. The Company has paid the Listing fees to Bombay stock Exchange for
the years 2009-10, 2010-11 and 2011-12
D. Information under section 217(2A) of the Companies Act, 1956 read
with Companies (Particulars of employees) Rules, 1975 is given
hereunder:
In terms of the provisions of section 217(2 A) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended, the name and other particulars of employees are required to be
set in the Directors report. However, as per the provisions of Section
219(l)(b)(iv) of the Act, the annual report excluding the said
information is being sent to all the shareholders and such particulars
be available for inspection to the members at Registered Office of the
Company during working hours till the date of Annual General Meeting.
15. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956
The Company is a Non Banking Finance Company and has no activity
relating to Conservation of Energy or technology absorption.
The Company does not have any Foreign Exchange earnings and Outgo.
16. ACKNOWLEDGEMENTS
Your Directors thank the Companys Bankers and the Financial
Institutions for their valuable and timely support.
Your Directors also thank the customers, vehicle manufacturers, dealers
and share-holders for their support Your Directors sincerely appreciate
the wholehearted effort and co-operation rendered by the employees at
all levels.
for and on behalf of the Board
Place: Chennai
Date: May 28, 2011 R NAGARAJAN
Chairman
Sep 30, 2009
The Directors present the Twenty Third Annual Report together with the
Audited accounts for the year ended September 30, 2009.
1. FINANCIAL RESULTS (Rs. In Lakhs)
PARTICULARS For the year ended For the 18 Months
30.09.2009 ended
30.09.2008
GROSS INCOME 3075.17 7507.56
PROFIT/(LOSS) BEFORE INTEREST
& DEPRECIATION 1293.99 3102.03
LESS: INTEREST 2551.47 4046.38
PROFIT/(LOSS) BEFORE
DEPRECIATION (1257.48) (944.35)
ADD: EXCEPTIONAL ITEMS (5534.42) Nil
LESS: DEPRECIATION /
IMPAIRMENT LOSS (66.35) (501.74)
PROFIT / (LOSS) BEFORE TAX (6858.25) (1446.09)
PROVISION FOR TAXATION
(including FBT/ Deferred tax) 2.78 51.97
PROFIT / (LOSS) AFTER TAX <6861.03) (1498.06)
ADD: BALANCE FROM LAST YEAR (4155.23) (2657.12)
PROFIT/(LOSS) AVAILABLE FOR
APPROPRIATION (11016.26) (4155.23)
PROPOSED DIVIDEND (Including
Dividend Tax) Nil Nil
TRANSFER TO STATUTORY RESERVE Nil Nil
TRANSFER TO GENERAL RESERVE Nil Nil
BALANCE CARRIED FORWARD (11016.26) (4155.23)
2. DIVIDEND
In view of the losses posted by your company, the Board decided not to
recommend any dividend during the year under review.
3. OPERATIONS
During the year ended September 30, 2009, the company has disbursed an
amount of Rs. 56.43 Crores (Rs. 27.02 Crores as direct business and Rs.
29.41 Crores under arrangement with FICCL) as against a disbursement of
Rs. 179.39 Crores during the 18 months ended 30th September 2008. The
severe liquidity crunch and fall in general market conditions have
affected new loan disbursements for the year under review. Period from
October to December 2008 being worst effected and almost all of the
NBFCs stopped new. loan disbursements. DFL continued its focus on
recoveries from customers which is the companys strong point and
recoveries have been satisfactory during the year under review.
4. SLUMP SALE REVERSAL
As detailed in the previous annual report, DFL initiated business
transfer to Zwirn Pragati Capfin Private Limited ("ZP) by way of a
slump sale on a going concern basis. With the approval of the share
holders of DFL and the Board of.Directors, on 30th September, 2008,
your Company entered into a Business Transfer Agreement ("BTA") with
ZP. The BTA provided for the transfer of business, including all assets
and liabilities but excluding tax liabilities, on a slump sale basis.
The transfer was to be effective on 31st October 2008 (this deadline
was extended later), subject to the achievement of all conditions
precedent, including obtaining the approval of all lenders.
However during the quarter ended 30.06.2009, ZP terminated the BTA
citing that the conditions precedent in the agreement had not been met
by DFL. The board of DFL met on the 3rd of July, 2009, and deliberated
the matter and accepted the termination notice from ZP and also decided
to reverse all slump sale entries which were passed as of 30th
September 2008.
The impact of slump sale was given in the Companys books of accounts
for the year ended 30th September 2008. However, due to non-fulfilment
of the conditions precedent, the Business Transfer Agreement was
terminated and necessary effect has been given for the reversal of
slump sale entries as on 01 st October 2008.
5. RESOURCES
DEPOSITS
The Company has ceased taking deposits from 31.03.2003. In terms of the
letter dated 28.12.2007 communicated by RBI, in response to the
Companys application for conversion into Non deposit accepting
company, all the outstanding deposits as on 07.03.2008 were transferred
to an Escrow Account.
As on 30.09.2009, unclaimed deposits totaling to Rs. 1.S4 Lakhs
including interest, which matured for payment, were awaiting
instructions for repayment. The Company sends periodical reminders to
deposit holders before transferring the same to Investor Education and
Protection Fund as per the provisions of Section 205C of the Companies
Act, 1956.
6. PRUDENTIAL NORMS
Reserve Bank of India has prescribed prudential norms for registered
Non Banking Financial Companies on various parameters. Your Company is
in Category A indicating prompt and regular filing of returns.
7. ASSET LIABILITY MANAGEMENT COMMITTEE
The company has an efficient Asset Liability Management Committee,
which continuously monitors the Asset Liability mismatch. The committee
met at regular intervals.
8. PROSPECTS
The Indian economy managed to grow at a rate of 6.70% in the year
ending March 2009 after growing at an average rate,of around 9 percent
or mors in three fiscal years to March 2008. This was on account of a
global economic downturn and a contraction in domestic demand. But
future looks bright with expectations of Indian economy growing at more
than 8% in the coming years.
The first quarter of the year, Oct-Dec08, was the worst effected
period with almost all the NBFCs putting a hold on their fresh new loan
disbursements due to severe liquidity crunch. Situation improved later,
though the negative growth over previous year continued till June 2009.
One of the major indicators considered as a bench mark for analyzing
the growth pattern in Indian economy, sales of new commercial vehicles,
has shown promise with growth in sales, over previous year, from July
2009. From November 2009 onwards the sale of commercial vehicles are
registering an impressive growth, of more than 100% over previous year.
Several factors, such as increased movement of freight at the leading
ports, pick-up in project investments, increased hiring, and
encouraging data from a number of key manufacturing segments could be
an indicator that the downtrend has bottomed out and that our economy
is regaining its lost vigour It is reported that auto, cement, steel
and capital goods sectors have started performing strongly which
indicates a possible strong turnaround in the economy. Though the
slowdown in the economy has led to lower freight movement, which in
turn brought down the sales of new commercial vehicles as they are
mainly used for long haulage of manufactured goods, the demand for used
vehicles was not impacted much as these vehicles are used in shorter
routes for carrying essential commodities. The funding requirements of
the used commercial vehicles segment are estimated to be about Rs. 650
bn. The aspirations would continue to grow and so would the demand for
used trucks.
9. EXPLANATIONS TO THE REMARKS IN AUDITORS REPORT:
In response to the remarks made by the Statutory Auditor, the Board
wishes to explain as follows.
Reference to the Head of Account Reference
Auditors Report to notes below
3 (a) Company Secretary Refer note 1
3 (b) Negative net worth Refer note 2
3 (c) Going concern Refer note 3
5 (f) Managing Directors remuneration Refer note 4
5 (g) Balance confirmation Refer note 5
5 (h) Provision for outstanding in
secured advances
extended to Dhandapani
Properties (P) Ltd Refer note 6
Notes
1. Since the management was occupied with the task of completing slump
sale process which envisaged transfer of all manpower, assets and
liabilities of the company in favour of Zwim Pragati Finance Private
Limited (ZP), the recruitment process of company secretary could not be
taken up earlier. However this task was taken up post slump sale
reversal and company secretary came on board in September 2009.
2. As a result of the extensive clean up of legacy issues initiated in
March 2007, which continued until the year under review, companys net
owned funds have fallen below the limit prescribed by RBI. Coupled with
this, promoters of the company, DBZM were unable to infuse any further
capital in to the company.
Board of DFL had taken note of the situation and decided to approach
lenders of the company with a request to allow for a deep restructuring
of its debts through Corporate Debt Restructure (CDR) mechanism.
Process for admission of companys proposal in to CDR mechanism is
progressing smoothly with requisite majority of the lenders giving
their consent.
As a result of implementation of CDR package which envisages conversion
of part of the debt to equity, net worth of the company will turn
positive and this will also enable the company to restart its direct
line of business actively.
3. As explained earlier the company is in the process of going through
a debt restructuring process and simultaneously efforts are being made
to bring in a new investor.
DFLs board believes that the business model followed by the company
has inherent strengths and company will be able to come back to normal
status post the CDR process and infusion of capital by new investor.
Surviving through the past 3 years under difficult situations is a
testimony of the strength of the business model followed by company.
Post CDR process, company shall have healthy cash flows due to the
expected reliefs derived from CDR process and infusion of capital will
allow the company to leverage and raise borrowings to restart die
direct line of business actively.
4. Company received approval of the Central Government vide their
letter dated 17th August 2009. This is being put up for approval in
the forth coming AGM to be held on 29th March 2010.
5. Company is in the process of obtaining balance confirmation from
the parties and is hopeful of completing the exercise within the next
60 days.
6. The company is actively pursuing the matter with the concerned
party and is hopeful a resolution in the current financial year, i.e.,
2010-11.
10. CORPORATE GOVERNANCE
Your Company is complying with the Code of Corporate Governance
introduced by SEBI. A detailed report on Corporate Governance together
with a certificate from the Statutory Auditors in compliance of Clause
49 of the Listing Agreement is attached which forms part of the
Directors Report.
Management Discussion and Analysis
Management Discussion and Analysis report highlighting the performance
of the company is attached forming part of the Directors Report.
11. OTHER DISCLOSURES
a. SUBSIDIARIES
The Annual Accounts for the Financial Year ended March 31, ,2009 of the
Subsidiary Companies Dhandapani Holdings & Securities Ltd and
Smartinvest Agency.Com Private Limited are annexed to your Companys
Annual Report.
b. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statement for the period ended September 30,
2009 prepared in accordance with Accounting Standards AS 21 on
Consolidated Financial Statements-issued by the Institute of Chartered
Accountants of India, is also provided in this Annual Report in
accordance with Clause 32 of the Listing Agreement.
12. DIRECTORS
Mr. S Narayanan and Mr. S Shravan were appointed as additional
directors. As per provisions of the Section 260 of the Companies Act,
1956, the directors hold office only up to the forthcoming Annual
General Meeting. Resolutions seeking approval of Members for the
appointment of Mr. S Narayanan and Mr. S Shravan as directors of the
Company have been incorporated in the Notice of the ensuing Annual
General meeting.
Mr. R Nagarajan, director liable to retire by rotation, being eligible
has offered himself for reappointment.
Mr. David Chul Kwon Lee, R Vasudevan, Jaideep Krishna, Mr. Shing Yan
Chan who were directors of the Company, have resigned on different
dates during the year under scrutiny. Mr. David Lawrence Cutler and Mr.
Tony Chung Ho-Chang, who were appointed as the additional directors of
the company on May 15,2009 and June 26, 2009 have resigned with effect
from December 16, 2009.
None of the Directors is disqualified to hold directorships under the
provisions of Section 274(1) (g) of the Companies Act, 1956.
DIRECTORS RESPONSIBILITY STATEMENT
In compliance with the provisions of Section 217 (2AA) of the Companies
Act 1956, your Directors confirm:
1. That in the- preparation of the annual accounts, the applicable
accounting standards have been followed;
2. That they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the period and of the loss of the Company for
the year ended 30th September 2009.
3. That they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities; and
4. That they have prepared the annual accounts on a going-concern
basis.
13. AUDITORS
M/s P. B. Vijayaraghavan & Co, Chartered Accountants, Chennai,
Statutory Auditors of the Company retire at the ensuing Annual General
Meeting and being eligible offer themselves for re-appointment.
A certificate under Section 224(1B) of the Companies Act, 1956 has been
received from them.
14. STATUTORY STATEMENT
A. Statement pursuant to Sec.212 (3) of the Companies Act, 1956in
respect of Subsidiary Companies is annexed.
B. The equity shares of your Company are listed at the Bombay stock
Exchange.
C. The Company has paid the Listing fees to Bombay Stock Exchange for
the years 2007-08, 2008-09 & 2009-10.
D. Information under section 217(2 A) of the Companies Act, 1956 read
with Companies (Particulars of employees) Rules, 1975 is given
hereunder:
In term of the provisions of section 217(2A) of the Companies Act, 1956
read with Companies (Particulars of Employees) Rules, 1975 as amended,
the name and other particulars of employees are required to be set in
the Directors report. However, as per the provisions of Section
219(lXbXiv) of the Act, die annual report excluding die said
information is being sent to all the shareholders.
Members who are interested in obtaining such particulars may write to
the companys registered office.
15. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956
- The Company is a Non Banking Finance Company and has no activity
relating to Conservation of Energy or technology absorption.
- The Company does not have any Foreign Exchange earnings and Outgo.
16. ACKNOWLEDGEMENTS
Your Directors thank the Companys Bankers and the Financial
Institutions for their valuable and timely support.
Your Directors also thank the customers, vehicle manufacturers, dealers
and share-holders for their support Your Directors sincerely appreciate
the wholehearted effort and co-operation rendered by the employees at
all levels.
for & On behalf of the Board
Place: Chennai R. NAGARAJAN
Date: 26.02.2010 Chairman