The Indian economy have went through a rising phase of GDP growth in the year 2015-16 and the same trend is assuming in 2016-17 fiscal year also. Our country’s economy is showing its potentials.

The new Government is committed to put the economy on growth path with a focus on expand the business & creation of jobs by various methods like ease of doing business, startup India, Standup India, Make in India and Digital India. It is committed to give impetus especially to manufacturing activity which has shown a negative trend during several years in past.

The economy today is much better than what it was a year ago. The present government has taken a lot of measures towards improving the business sentiments and removing the hurdles in the economic growth. Also, the declining commodity prices, especially that of crude, will further strengthen our macroeconomic fundamentals. It will also help in reducing inflation and drive the interest cost down and improve the profitability of business entities as well.


The Financial services sector had gone through some testing times in the past several years due to the negative/lower rate of growth of manufacturing sector thereby impacting stock market and increase in NPA’s in this sector. The company competes with NBFC’s as well as large commercial banks due to this there is significant competition in the Indian financial services market. But the time is changing now, due to the new government’s various initiatives as discussed above and improvement in the market demand in the economy, the growth rate now accelerates slowly and steadily. THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016 will give improvement in the real estate sector and also the Parliament has passed THE INSOLVENCY AND BANKRUPTCY CODE, 2016 which is considered as the most important law for the financial services sector as this law is considered more stringent on the willful defaulters and faster resolution of insolvency and related matters hence thereby reducing the overall NPA’s of the financial services sector. The Government’s is taking multifold efforts to accelerate growth rate to 8% or more. Since, financial services sector depends largely on the manufacturing sectors performance which is improving day by day thereby providing more opportunities to the company. The company has made its niche market in the unsecured funding sector thereby reduces competition to itself. The company has in its loan portfolio small and medium enterprises which are the backbone of the country and the company as well. From the above, the management is of the view that the company has enough opportunities to explore in the current year and in the years to come, also the company plans to introduce new products which includes loan against shares/Retail IPO funding, loan against property and Financial & Management Consultancy.



The company has made a niche market for itself in loans and advances sector and wide experience of our directors and management in the finance and securities market can create opportunities for the company even in the conditions not favorable to the company. Since last two years, the market conditions of Indian economy were in improvement phase and coupled with its innovative ideas and techniques the company can introduce several new instruments and products in the loan segment which can create opportunities to the company in future. The international penetration by several means such as merger/acquisitions/restructuring has thrown open wide arena for Indian Corporate to establish its hold in the international market.


Any default in repayment of the loan amount by the customers could add to the non performing assets which will result in deterioration of the quality of the loan portfolio. The company has adopted Modern system of analyzing the loan applications and has not done away with traditional route of scrutinizing loan applications; this practice much reduces the chances of a loan converting into NPA. Further, the Company has always maintained sufficient liquid funds, so that its operations are not affected. Constantly sticking on to the traditional values and ethics and with the support of efficient and dedicated resources, we are able to phase out any difficulties in our area of operation. Threat is posed primarily from the fact that unsecured funding and securities market operations involve inbuilt risk and uncertainty. With the innovative marketing strategies, the Company is able to add new customers and retain existing clientele.


The company has inbuilt risk of "default in unsecured loans provided to the customers" and "risk in dealing in securities market" due to its nature of business apart from other common risks which includes change in management/personnel and policies, lapses / inadequacy in existing infrastructure facilities, delinquencies on the part of employees, staff attrition, misfeasance, change in interest rates, government regulations, competition from others operating in similar business, etc. The Company is taking proactive steps in implementing management principles well adapted to the demands of the changing environment. The company has the policy of assess the risk and manage the business. The company is operating on a well defined plan and strategy; hence we are equipped to face any change in regulatory risk.


Please refer Director’s Report for financial performance of the company. Segment/product wise performance is not applicable to the company.


The Company has required number of employees on its roll and whenever there is need for any recruitment the same has done as per the policy & procedures of the company. The company has recruited one staff during the year and there was no other change in the human resources of the company. The company has focus to retain its manpower by providing good working conditions thereby reduce turnover ratio. Focus has also been extensively on internal training, complemented by external training and development programs for improving the competency and self development of employees.


The Company has satisfactory internal control system.

According to Section 134(5)(e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The Company has a well-placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorized recorded and reported correctly. The Company’s internal financial control system also comprises due compliances with Company’s policies and Standard Operating Procedures (SOPs) and audit and compliance by in-house Internal Audit Division, supplemented by internal audit checks from Independent Internal Auditors of the Company.

The Companies Act, 2013 re-emphasizes the need for an effective Internal Financial Control system in the Company. The system should be designed and operated effectively. Rule 8(5)(viii) of Companies (Accounts) Rules, 2014 requires the information regarding adequacy of Internal Financial Controls with reference to the financial statements to be disclosed in the Board’s report.

To ensure effective Internal Financial Controls the Company has laid down the following measures:

• The Company also has a robust Management Information System which is an integral part of the control mechanism.

• All key operations are executed through Standard Operating Procedures (SOPs) in all functional activities for which key manuals have been put in place. The manuals are updated and validated periodically.

• All legal and statutory compliances are ensured on a monthly basis through a various compliance tools and framework. Non-compliance, if any, is seriously taken by the management and corrective actions are taken immediately. Any amendment is regularly updated by internal as well as external agencies in the system.

• The Company has developed various comprehensive compliance processes and framework which are modified according to requirement and which prescribed the role and responsibility of various persons who is responsible for compliance.

• The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Audit Division and Internal Auditors to the Audit Committee of the Board.

• The audit reports for the above audits are compiled and submitted to Audit Committee for review and necessary action.

• The Company has a comprehensive risk management framework.

• The Company has a system of Internal Business Reviews. All departmental heads discuss their business issues and future plans in monthly review meetings. They review their achievements in quarterly review meetings.

• The Company has in place a well-defined Whistle Blower Policy/ Vigil Mechanism.

• The Compliance of secretarial functions is ensured by way of secretarial audit.

• The control system is improved and modified on continuous basis to meet the changes in business, statutory and accounting requirements.

• The Audit Committee of the Board and Statutory Auditors periodically reviews the internal audit findings and corrective actions are taken.

• The Company has Mechanism in place for handling the grievances related to the customers. The NON GRO grievances are directly handled by the customer care department and others are handled by GRO itself.


Statements in the Management discussion and analysis, describing the Company’s objectives, outlook, opportunities and expectations may constitute "Forward Looking Statements" within the meaning of applicable laws and regulations. The actual result may vary materially from those expressed or implied in the statement. Several factors make a significant difference to the company’s operations including the government regulations, taxation and economic scenario affecting demand and supply condition and other such factors over which the Company does not have any direct control.

For and on behalf of the Board of Directors

Dhanuka Commercial Ltd

Chairman Date: 30-05-2016
Sanjeev Mittal Place: Delhi


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