Your Directors present their Twenty Eighth Annual Report together with the Audited
accounts for the financial year ended March 31, 2015.
1. FINANCIAL RESULTS
(Rs. In Lakhs)
| PARTICULARS |
For the Financial year ended 31.03.2015 |
For the Financial year ended 31.03.2014 |
| GROSS INCOME |
30.59 |
189.59 |
| PROFIT/(LOSS) BEFORE INTEREST & DEPRECIATION |
(2315.01) |
(345.92) |
| LESS: INTEREST |
1090.30 |
941.17 |
| PROFIT/(LOSS) BEFORE DEPRECIATION |
(3405.31) |
(1287.09) |
| LESS: EXCEPTIONAL ITEMS |
– |
– |
| LESS : DEPRECIATION |
15.69 |
22.56 |
| PROFIT / (LOSS) BEFORE TAX |
(3421.00) |
(1309.65) |
| PROVISION FOR TAXATION (including FBT / Deferred tax) |
– |
– |
| PROFIT / (LOSS) AFTER TAX |
(3421.00) |
(1309.65) |
| ADD: BALANCE FROM LAST YEAR |
(18226.50) |
(16916.85) |
| PROFIT /(LOSS) AVAILABLE FOR APPROPRIATION |
(21647.50) |
(18226.50) |
| PROPOSED DIVIDEND (Including Dividend Tax) |
Nil |
Nil |
| TRANSFER TO STATUTORY RESERVE |
Nil |
Nil |
| TRANSFER TO GENERAL RESERVE |
Nil |
Nil |
| BALANCE CARRIED FORWARD |
(21647.50) |
(18226.50) |
2. OPERATIONS
As the restriction imposed by Reserve Bank of India is in place, the company could not
carryout any business afresh this year.
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
and Staff obligations because of the adequate collection mechanism.
3. DIVIDEND
In view of the absence of profit, the Board is not recommending any dividend including
interim 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 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.
4. 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
Auditor in compliance of Clause 49 of the Listing Agreement is attached as part of this
report vide Annexure-1.
Compliance Report in respect of all laws applicable to the company have been reviewed
by Board of Directors.
5. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the
Consolidated Financial Statements, drawn up in accordance with the applicable Accounting
Standards, form part of the Annual Report. A separate statement containing the salient
features of the financial statements of Subsidiaries, Associates in Form AOC-I forms part
of this report vide Annexure-II.
6. SECRETARIAL AUDIT:
Pursuant to provisions of section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has
appointed M/s. M Damodaran and Associates Company Secretaries in practice to undertake the
Secretarial Audit of the Company. Their Audit report as on 31.03.2015 is annexed herewith
as "Annexure III and also the qualifications and observations made by the Practicing
Company Secretary detailed in under the head Auditors observation.
7. HOLDING COMPANY - AUCTUS HOLDINGS PRIVATE LIMITED
Auctus holds 30,45,453 equity shares of DFL Infrastructure Finance Limited comprising
of 51.15% to total Equity Capital.
8. 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.
9. PROHIBITORY ORDER FROM RESERVE BANK OF INDIA
Subsequent to the completion of inspection by Reserve Bank of India under Section 45-N
of the RBI Act, 1934, the Reserve Bank of India has directed 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.
10. DEMATERIALISATION OF SHARES:
As on 31st March, 2015, 49,93,847 shares of the Company held by the shareholders are in
dematerialized form, aggregating to 83.86% of the Equity share capital of the Company. The
Companys Registrars are M/s Cameo Corporate Services Limited having their registered
office at "Subramanian Building", No. 1, Club House Road, Chennai - 600 002.
11. DIRECTORS:
During the current financial year the following changes have occurred in the
constitution of directors of the company:
| S.No. |
Particulars |
Compliance |
| 1 |
Punjab National Bank has withdrawn the appointment of Mr. G S Gusain, Nominee Director
with effect from 9th December, 2014 |
The Board accepted the withdrawal with effect from 9th December, 2014 |
| 2 |
Mr. Dakshinamurthy Radhakrishnan was appointed as additional director with effect from
15th April, 2015 |
Approval of the Board of Directors obtained vide the meeting dated 15th April, 2015 |
| 3 |
Mr. Balasubramanian Ramaiah was appointed as additional director with effect from 15th
April, 2015 |
Approval of the Board of Directors obtained vide the meeting dated 15th April, 2015 |
| 4 |
Mr. T R Suresh, resigned on 15th April, 2015 |
The Board accepted his resignation vide the Board Meeting dated 15th April, 2015 |
| 5 |
Mr. S Mahadevan, resigned on 06th July, 2015 |
The Board accepted his resignation vide the Board Meeting dated 6th July, 2015 |
| 6 |
Change in Designation of Mr. B Prakash, Wholetime Director to Director |
The Board accepted change in the designation of Mr. Bakthavathsalu Prakash from Whole
-Time Director to Director of the company with effect from 06th July, 2015 |
| 7 |
Ms. Gomathi Shankar was appointed as additional director with effect from 06th July,
2015 |
Approval of the Board of Directors obtained vide the meeting dated 6th July, 2015 |
12. RETIREMENT BY ROTATION
Mr. BAKTHAVATHSALU PRAKASH (DIN: 01978381), director liable to retire by rotation,
being eligible offers himself for reappointment.
13. DISQUALIFICATION OF DIRECTORS:
None of the Directors is disqualified to hold directorships under the provisions of
Section 164 of the Companies Act, 2013.
14. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby
state and confirm that:
a. In the preparation of the annual accounts, the applicable accounting standards had
been followed along with proper explanation relating to material objects;
b. The directors had 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 financial year and of
the profit and loss of the company for that period;
c. The directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the company and for preventing and detecting fraud and other irregularities;
d. The directors had prepared the annual accounts on a going concern basis; and
e. They have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively
15. STATUTORY STATEMENT
A. Statement pursuant to Sec.129 (3) of the Companies Act, 2013 in respect of
Subsidiary Companies is annexed in AOC 1.
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 Financial
year 2015-16.
D. Information under section 134 of the Companies Act, 1956 read with Companies
(Particulars of employees) Rules, 1975 is given hereunder:
In terms of the provisions of section 134 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 136 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 companys
registered office.
16. REAPPOINTMENT OF AUDITORS AND REPORT THEREON
M/s. P. B. Vijayaraghavan & Co, Chartered Accountants, (FRN.No:004721S) Statutory
Auditors of the Company retire at the ensuing Annual General Meeting and being eligible
offer themselves for reappointment. A certificate from the Auditors that they satisfy the
conditions prescribed under the Companies Act, 2013 and the Rules made thereunder
(including satisfaction of criteria under Section 141 of the Companies Act, 2013), has
been received from them.
17. AUDIT OBSERVATIONS:
A. Statutory Auditor Observation
In response to the observations 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 |
|
Net worth |
Refer note b |
| Attention invited to Shareholder |
RBI directions |
Refer note c |
|
Redeemable Preference Shares |
Refer note d |
|
Loans & advances |
Refer note e |
|
Remuneration to Wholetime Director |
Refer note f |
|
Dividend for Preference Shares |
Refer note g |
|
Internal Auditor |
Refer note h |
a. Going Concern:
The Management of the Company approached the CDR Cell for the restructure of debts
extended by consortium banks and was approved by CDR. However during the implementation
stage since some of the Banks did not accept the CDR/CDR Re-work schemes, 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. The management is
confident of reaching a settlement with the Secured Creditors and hence the accounts are
prepared under "Going Concern" norms.
b. Net Owned Funds: Reason for fall in Net Owned Funds:
Due to impairment of Assets the company had substantial write - offs in the last five
years resulting in fall in Net Owned Funds. Thereafter consequent to the directions of
Reserve Bank of India under section 45JA and 45L of Reserve Bank of India Act, 1934, the
company could not carryout its main activity of lending and hence no revenue generation
has taken place which has further contributed to fall in the Net Owned Funds.
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.
c. Prohibitory Directions from Reserve Bank of India:
The Company has represented to Reserve Bank of India for withdrawing the Directions.
d. Preference Shares Allotted to Asia Pragati Capfin Pvt. Ltd.:
The Redeemable Preference Shares issued to Asia Pragati Capfin Private 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 years.
Hence as on date of this Annual Report there is no default. However, the Dividend on these
shares are due from 1-4-2013 which have not been paid / provided in the absence of
Profits.
e. Loans and Advances:
The remuneration paid to Mr. R. 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
settle the amount.
f. Remuneration to Wholetime Director:
The remuneration of Whole Time Director for FY 2013-14 fixed by the Board of Directors
was partially approved by the Central Government, Ministry of Corporate Affairs vide its
order dated 26th August 2014 due to technical fallacies. The company has filed an
application before Central Government for approval of the balance amount.
g. 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.
Since the dividends are cumulative in nature, the same will be paid as and when profits
are made.
h. Internal Auditor:
Since there is no commercial activity undertaken by the Company no Internal Auditing is
being carried out.
B. Secretarial Auditors Observations
In observation made by the Practicing Secretary, the Board wishes to place the
following explanation:
| Observation in Secretarial Audit Report |
Reference to notes below |
| RBI directions |
Refer note a |
| Remuneration to Wholetime Director |
Refer note b |
| Internal Auditor |
Refer note c |
| Wholetime Company Secretary |
Refer note d |
| Women Director |
Refer note e |
| Dividend for Preference Shares |
Refer note f |
a. RBI Directions:
The Company has represented to Reserve Bank of India for withdrawing the Directions.
b. Remuneration to Wholetime Director:
The remuneration of Whole Time Director for FY 2013-14 fixed by the Board of Directors
was approved only partially by the Central Government, Ministry of Corporate Affairs vide
its order dated 26th August 2014 due to technical fallacies. The company has filed an
application for approval of the balance amount.
c. Internal Auditor:
Since there is no commercial activity undertaken by the Company no Internal Auditing is
being carried out.
d. Wholetime Company Secretary:
The Company is making efforts to appoint Wholetime Company Secretary.
e. Women Director:
Ms. Gomathi Shankar was appointed as Women Director with effect from 6th July 2015.
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. These bear a cumulative dividend of 9%. However
in the absence of Profits, the dividends have not been paid / provided since 2011-12.
Since the dividends are cumulative in nature, the same will be paid as and when profits
are made.
18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars prescribed under section 134(3)(m) of the Companies Act, 2013 read with
Rule 8 of the Companies (Accounts) Rules, 2014, are as follows:
Conservation of Energy
The company has taken all steps for the conservation of energy in its operations.
Technology Absorption
There was no technology absorption during the year.
| Foreign Exchange Earnings |
: NIL |
| Foreign Exchange outgo |
: NIL |
19. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Company does not fall under the Sec 135 of the Companies Act, 2013, hence the CSR
Committee is not applicable.
20. VIGIL MECHANISM:
The Mechanism of performance evaluation of Non-executive directors by peer group of
directors is under process. This would help the company to determine any modifications in
their terms of Appointment.
The Whistle Blower policy being a non mandatory requirement, the Company has not
evolved any policy for the same. However, as a matter of internal check, the Companys in
house Internal Audit department is powered to bring to the notice of the management, by
way of internal reporting of any occasion of unethical activities, which will be seriously
discussed and deliberated upon in the Audit committee meetings.
21. RELATED PARTY TRANSACTIONS:
There are no materially significant related party transactions made by the Company
22. EXTRACT OF ANNUAL RETURN:
As required pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of
the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in
MGT-9 is annexed as a part of this report vide Annexure IV
23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
There were no loans, guarantees or investments made by the Company under Section 186 of
the Companies Act, 2013 during the year.
24. REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies
(Particulars of Employees) Rules, 1975, in respect of Directors of the Company is
furnished hereunder:
| S.No. |
Name |
Designation |
Remuneration paid FY 2014-15 |
Remuneration paid FY 2013-14 |
Increase in remuneration from previous year |
Ratio/Times per Median of employee remuneration |
|
|
|
Rupees in Lakhs |
| 1 |
SREENIVASAN BALACHANDER |
Managing Director |
– |
50.00 |
– |
– |
| 2. |
BAKTHAVATHSALU PRAKASH |
Wholetime Director |
– |
39.05 |
– |
– |
25. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY:
During the year, your Directors have constituted a Risk Management Committee which has
been entrusted with the responsibility to assist the Board in (a) Overseeing and approving
the Companys enterprise wide risk management framework; and (b) Overseeing that all the
risks that the organization faces such as strategic, financial, credit, market, liquidity,
security, property, IT, legal, regulatory, reputational and other risks have been
identified and assessed and there is an adequate risk management infrastructure in place
capable of addressing those risks. A Group Risk Management Policy was reviewed and
approved by the Committee.
26. RESTRICTIONS ON PURCHASE BY COMPANY OR GIVING LOANS FOR PURCHASE OF ITS OWN SHARES
(Sec.67 of Companies Act, 2013)
The Company has not purchased and shall not give any loan, guarantee or any financial
assistance for purchase or subscription of its own shares during the period.
27. BOARD & COMMITTEES
The details regarding number of board meetings held during the financial year and
composition of Audit Committee, Nomination and Remuneration Committee, Share Transfer and
Investor Relation Committee and Asset Liability Management Committee is furnished in the
Corporate Governance Report.
28. EQUITY SHARES HAVING DIFFERENTIAL VOTING RIGHTS - Share Capital and Debenture Rules
4 (4), 2014
The Company has not issued the Equity Shares with the Differential Rights during the
financial year 2014-2015 details as follows:
29. BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
30. SWEAT EQUITY SHARES
The Company has not issued any Sweat Equity Shares during the year under review.
31. ESOP DISCLOSURE
The Company has not provided any Stock Option Scheme to the employees.
32. BONUS SHARES
No Bonus Shares were issued during the year under review.
33. FORMAL ANNUAL EVALUATION
Formal Annual Evaluation by the Board of it own performance and that of its committees
and individual directors have been made.
34. DEPOSITS:
The company has not accepted any deposits during the year.
35. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to
financial statements. During the year, such controls were tested and no reportable
material weaknesses in the design or operation were observed.
36. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT
Structure and Developments, Opportunities and Threats, Performance, outlook, Risks and
Concerns:
As the restriction imposed by Reserve Bank of India is in place, the company could not
carryout any business afresh this year.
Internal Control Systems and their Adequacy:
Management has put in place effective Internal Control Systems to provide reasonable
assurance for Safeguarding Assets and their usage, Maintenance of Proper Accounting
Records and Adequacy and Reliability of the Information used for carrying on Business
Operations.
Since there is no commercial activity undertaken by the company no Internal Auditing is
being carried out.
The Audit Committee is reviving the financial results regularly with specific emphasize
on key areas of the operations. Normal for seeable risks of the Companys assets are
adequately covered by comprehensive insurance. Risk assessments, inspections and safety
audits are carried out periodically.
Financial and Operational Performance:
The financial and operation performance of the company is mentioned earlier.
Human Resources Development and Industrial Relations:
The Company has constituted an Internal Complaint Committee (ICC) in pursuant to the
provisions of Companies Act, 2013 for prevention, prohibition and redressal of complaints
/ grievances on the sexual harassment of women at work places.
Cautionary Statement:
Statements in the Management Discussion and Analysis and Directors Report describing
the Companys strengths, strategies, projections and estimates, are forward-looking
statements and progressive within the meaning of applicable laws and regulations. Actual
results may vary from those expressed or implied, depending upon economic conditions,
Government Policies and other incidental factors. Readers are cautioned not to place undue
reliance on the forward looking statements.
37. MATERIAL CHANGES IN FINANCIAL STATEMENT:
No material changes and commitments affecting the financial position of the Company
occurred between the end of the financial year to which this financial statements relate
on the date of this report.
38. GENERAL
Your Directors state that no disclosure or reporting is required in respect of the
following items as there were no transactions on these items during the year under review:
Details relating to deposits covered under Chapter V of the Act.
Neither the Managing Director nor the Whole-time Directors of the Company receive any
remuneration or commission from any of its subsidiaries.
Your Directors further state that during the year under review, there were no cases
filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
39. ACKNOWLEDGEMENT:
Your Directors thank the Companys 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 : 14.08.2015 |
Managing Director |
|
(DIN : 02644584) |
+91-9892691696
