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DCM Financial Services Ltd.

BSE: 511611 Sector: Financials
NSE: DCMFINSERV ISIN Code: INE891B01012
BSE LIVE 15:40 | 17 Aug 2.40 0.01
(0.42%)
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2.49

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2.49

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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 2.49
PREVIOUS CLOSE 2.39
VOLUME 1461
52-Week high 8.55
52-Week low 1.00
P/E 4.90
Mkt Cap.(Rs cr) 5
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2.49
CLOSE 2.39
VOLUME 1461
52-Week high 8.55
52-Week low 1.00
P/E 4.90
Mkt Cap.(Rs cr) 5
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

DCM Financial Services Ltd. (DCMFINSERV) - Director Report

Company director report

To

The Members

Your Directors have pleasure in submitting their 25th (Twenty fifth) Annual Report ofthe Company together with the Audited Statements of Accounts for the financial year endedMarch 31 2016.

FINANCIAL RESULTS

The summarized financialresults for the year under review along with previous year'sfigures are given hereunder:

(Rupees in Lacs)
PARTICULARS For the Year ended 31st March2016 For the Year ended 31st March2015
INCOME
Income from Business Operations - -
Other operating revenues - 0.11
Less Excise Duty -
Net Revenue from Operations - 0.11
Other Income 393.23 408.40
Total Income 393.23 408.51
EXPENSES
Total Expenses 130.44 691.02
Profit before Exceptional and Extraordinary items and tax 262.78 (282.51)
Exceptional Items - -
Profit before Extraordinary items and tax 262.78 (282.51)
Extraordinary items - -
Profit before Tax 262.78 (282.51)
VI. Tax Expenses
Current year tax 53.60 28.52
Mat Credit Adjustment (28.52)
Profit After Tax 209.18 (282.51)
Profit/(Loss) for the year 209.18 (282.51)
Earnings per Equity share
Basic 0.95 (1.28)
Diluted 0.95 (1.28)

The Gross Income comprises of amount(s) received on recovery of delinquent assetsthrough settlement/ compromise/ legal action.

STATE OF COMPANY'S AFFAIRS AND RESULT OF OPERATIONS

At present your company is not having any NBFC business activities in view ofrestrictions imposed by the Reserve Bank of India.

DIVIDEND

In view of accumulated losses no dividend has been considered for the year underreview.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no unpaid/unclaimed Dividend declared and paid last year theprovisions of Section 125 of the Companies Act 2013 do not apply.

CHANGE IN NATURE OF BUSINESS

There is no change in the nature of business of the Company

SHARE CAPITAL

The paid up equity share capital outstanding as on 31st March2016 was Rs 2212.51 lacs.During the year under review the Company has neither issued Shares with DifferentialVoting rights nor granted Stock Options nor sweat equity.

As on 31st March2016 none of the Directors of the Company has held shares of theCompany except Mr. Om Prakash Gupta who holds 150 equity shares.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements prepared in accordance with the Companies Act2013 and Accounting Standards-21 is attached with the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS

Management's discussion and analysis Report for the year under review as stipulatedunder Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 is presented in a separate section which forms part of the Annual Reportas Annexure A

PUBLIC DEPOSITS

During the year under review the Company has not invited any fixed Deposits.As on 31stMarch2016 there were 50928 fixed deposits aggregating to Rs 5637.28 remained unpaid asthe scheme of repayment to fixed depositors is pending approval before the Hon'ble HighCourt of Delhi and out of these deposits Rs 3.51 Cr (3639 depositors) have not submittedfixed deposit receipts and can be considered as unclaimed. However since while making therepayments in terms of sanction of the scheme by the Hon'ble Court all deposits will beverified as recommended by the One Man Committee of Retd Justice Anil Kumar. Theduplicate or invalid deposits once discovered might be reversed.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of section 149 of the Companies Act 2013 Mr. Sehdev Shoriwas appointed as independent Director at the Annual General Meeting of the Company held on30th Nov2015.

During the year the non-executive Director of the Company had no pecuniaryrelationship or transaction with the Company other than reimbursement of expenses

Pursuant to the provisions of section 203 of the Act key managerial person of theCompany is Mr. Surender Kumar whole time Director.

Independent Directors have submitted their disclosures to the Board that they fulfillall the requirements as stipulated in Section 149(6) of the Companies Act 2013 so as toqualify themselves to be appointed as Independent Directors under the provisions of theCompanies Act 2013 and the relevant rules.

RELATIONSHIP BETWEEN DIRECTORS INTERSE

None of the Directors are related to each other within the meaning of term"relative" as per Section 2(77) of the Companies Act 2013

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:—

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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) the directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial operatingeffectively.-

Internal financial control means the policies and procedures adopted by the Company forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

STATUTORY AUDIT & AUDITORS

The Statutory Auditors of the Company M/s. V. Sahai Tripathi & Co. CharteredAccountants Delhi (Firm Registration No. 000262N) were appointed as Statutory Auditorsby the members for two years. Their appointment would be ratified at the ensuring AnnualGeneral Meeting

Auditors' Qualifications/ Observations and Management Comments Thereon

Going Concern Basis -Para i and note 29. In accordance with section 217 (2AA) ofthe Companies Act 1956 the financial statements are required to be made on going freshscheme of restructuring pending before the Hon'ble Delhi High Court the Company has plansfor future business and income generation. Accordingly it is not only prudent but alsoimperative to draw the financial statement based on such Going Concern basis. The Schemeseeks to restructure relying on debt equity swaps and profits earned by engaging inservice oriented fee based business leading to progressive reduction in the debt of theCompany. The Scheme of Arrangement would not only enable the Company to wipe out its debtsbut will also enable it to reduce carry forward losses to be a profitable entity. Furtherin accordance with amended Section 217 (2AA) of the Companies Act 1956 the financialstatements are required to be made on going concern basis.

Provision of interest on certain liabilities covered under Para II and under notes3.1.f 3.4(g) & 3.6 is in accordance with the Scheme of restructuring filed by theCompany before the Hon'ble Delhi High Court which provides for waiver and cancellation ofinterest and the same is pending before the Hon'ble Court.

Para iii and Note 2.2 on non-creation of debenture redemption reserve isself-explanatory and cannot be created due to insufficient profits

Depletion in the value of Assets charged to Banks/Institution and Debentures in Para ivand covered under notes 3.1.d 3.2.b& 3.3.1 relates to ascertainment of Securityagainst Debentures and Bank Loan which could not be ascertained since the Company is inlitigation with various Lease and Hire Purchase customers and the matters are sub-judicehence confirmations and acknowledgments are not feasible

Para v. In view of litigation with creditors mentioned in the para v it's notpossible to obtain the balance confirmations

Para vi. In view of restrictions imposed by the Hon'ble High Court of Delhi on theoperations of bank accounts since 2006 assistance of Rs 22.39 lacs has been taken tomeet the essential expenses and obligations from Global IT Options Ltd. The Company beingsick and as the scheme of arrangement pending before the court does not provide payment ofany interest to creditors the subsidiary company has given this amount without interestand element of interest and its payment will be decided once the scheme is approved andliquidity position improves/

Para vii. Efforts have been made for the appointment of a Whole time CompanySecretary and even after giving advertisements in the newspapers for the vacancy themanagement was unable to appoint in view of restrictions imposed by the Hon'ble High Courtof Delhi on company's bank accounts no candidate opted to join in view of theserestrictions.

Para viii. The necessary compliance in this regard has been made w.e.f 6th Oct2016

Para (ix(a)).The Company is contesting claims lodged against it not acknowledged asdebts including claims of Mr. Dhruv Prakash and on account of securitization transactionand underwriting obligations. Rest of the contingent liabilities are being addressedthrough the Scheme

In case of Payment to Punjab & Sind Bank & IndusInd Bank as mentioned in paraviii(ix(b)) & para ix(c)) it is submitted that the scheme of restructuringpending before the Hon'ble Delhi High Court and repayment issue to these banks is beingaddressed in the scheme of arrangement with creditors . Further the Hon'ble Court hasstayed the suits filed in DRT by PSB & IndusInd Bank

Para (ix(d)) the Company has filed an application with Hon'ble High Court of Delhifor the release of amount to be deposited in the Punjab & Haryana High Court and thesame is pending

Para (ix (e)) There are certain disputes with the tenant and the claim of tenant iscontested in the pending arbitration.

As mentioned in the para viii (ix(f)) the Company has filed necessaryapplication for the rectification application for the deletion of said demand however thesame is pending

Para viii (ix(g)) Company has preferred an appeal/objections before Hon'ble HighCourt of Delhi in the MS Shoes East Limited matter against the arbitration order and thesame pending adjudication

Para (ix (h)) Company is contesting the claim of NBCC which is pending arbitrationunder the Indian Arbitration Act

Para (ix(i) it is submitted that the scheme of restructuring pending before theHon'ble Delhi High Court and repayment issue to SIDBI is being addressed in the scheme ofarrangement with creditors

All the other notes are self-explanatory.

SECRETARIAL AUDITORS

The Board of Directors of the Company has appointed M/s Latika Chawla and AssociatesPracticing Company Secretaries to conduct secretarial audit of the Company for thefinancial Secretarial Audit Report for the financial year ended March 31 2016 is enclosedas Annexure B and forms an integral part of this Report.

Management Comments on the observations of Secretarial Auditor

a In view of defaults in repayments of deposits and debentures in the year 1997-98 theprovisions of the Companies Act restricts the Company to appoint a director on the Boardof subsidiary Company in terms of the clause 49(iii) of the listing agreement. Howeveronce the scheme of arrangement pending sanction before the Hon'ble High Court of Delhi issanctioned the Company will be able to comply with the said provision.

b. The Company has appointed a Woman Director w.e.f 6thOct 2016.

c. The Company has taken adequate steps to appoint a Full time Company Secretarycommensurate to the requirement. Attempts have been made for the appointment of a Wholetime Company Secretary and even after giving advertisements in the newspapers for thevacancy the management was unable to appoint in view of restrictions imposed by theHon'ble High Court of Delhi on company's bank accounts no candidate opted to join in viewof these restrictions. However the Company has duly outsourced all its Secretarial workto the reputed Secretarial Audit Firms.

d. Other observations are on the basis of the facts and hence self-explanatory.

INTERNAL AUDITORS

M/s SVTG & Co. Chartered Accountants performs the duties of Internal Auditors ofthe Company and their report/s are reviewed by Audit Committee from time to time.

CORPORATE GOVERNANCE

Your Company has taken adequate steps to ensure compliance with the provisions ofCorporate Governance as prescribed under SEBI (LODR)Regulations 2015 with the stockexchanges. However the company could not comply with Regulation 17 19& 24(1)

The Corporate Governance Report and Auditors'Certificate regarding compliance ofconditions of Corporate Governance are enclosed as Annexure – B and forms an integralpart of this Report.

DISCLOSURES UNDER COMPANIES ACT 2013

Meetings of the Board

Seven meetings of the Board of Directors were held during the year. For furtherdetails please refer Report on Corporate Governance annexed as Annexure – B to thisreport.

Extracts of Annual Return

In terms of provisions of Section 92 of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 the extracts of Annual Return in Form MGT-9is enclosed as Annexure – C and forms an integral part of this Report.

Particulars of Loans given Investments made Guarantees given and Securities provided

During the year under review no loan investment guarantees and securities has beenprovided.

Contracts and Arrangements with Related Parties

No contract/ arrangements/ transactions were entered by the Company during thefinancial year with related parties. During the year the Company had not entered into anycontract/ arrangement/ transaction with related parties which could be considered materialin accordance with the policy of the Company on the materiality of related partytransactions. The particulars of contracts and arrangement with related parties undersection 188(1) in Form AOC-2 is enclosed as Annexure–D.

The Policy on materiality of related party transactions and dealing with related partytransactions as provided by the Board may be accesses on the Company's websitewww.dfslonline.com under Investor Information.

Your Directors draw attention of the members to Note 31 to the financial statementwhich sets out related party disclosures.

COMPOSITION OF AUDIT COMMITTEE

The Board has constituted an Audit Committee which comprises of Ms Richa Kalra as theChairperson and Mr. Sehdev Shri Mr. Surender Kumar as the members. More details about theCommittee are given in the Corporate Governance report appended hereto.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATOR OR COURTS.

The Hon'ble High Court of Delhi in a winding up filed by the Reserve Bank of India in the year 2006 has restricted the Company to operate its bank accounts.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

Fraud free and corruption free work culture has been the core of the Company'sfunctioning. In view of the potential risk of fraud and corruption the Company has puteven greater emphasis to address this risk.

To meet the objective a Whistle Blower Policy has been laid down. The same policy asapproved by the board was uploaded on the Company's website www.dfslonline.com

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and under the Securities &Exchange Board of India (Listing Obligations and Disclosure Regulations) Regulations2015 the Board has carried out an Annual Performance Evaluation of its own performanceand all the directors individually

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBTION ANDREDRESSAL) ACT 2013

Internal Complaints Committee has been set up to redress complaints received regardingsexual harassment. There were no complaints received from any employee during thefinancial year 2015-16 and hence no complaint is outstanding as on 31.03.2016 forredressal

INTERNAL POLICY ON REMUNERATION

The policy for Appointment and Remuneration of Director's Key Managerial Personnel andOther Employees is attached as Annexure –E and forms an integral part of this report.

PARTICULARS OF EMPLOYEES

None of the employees of your Company is in receipt of remuneration requiringdisclosure pursuant to the provisions of Section 197 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014; hence no such particulars areannexed.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as Annexure – F and forms an integralpart of this Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134(3)(m) of theCompanies Act 2013 read with Companies (Accounts) Rules 2014 are as follows:-

Conservation of Energy

Your Company being engaged in financing business and does not have any activityrelating to conservation of energy.

Research & Development (R&D)

Specific There is no Research and Development activity in the Company. Benefits R&DActivities: derived as a result of above R&D: N.A.

Future Plan of Action: NIL

Expenditure on R & D: NIL

Technology Absorption Adaptation and Innovation: Efforts in brief made towardsTechnology absorption etc.: NIL

Benefits derived as a result of above: N.A.

Technology imported years of Import Has technology been fully absorbed? If not fullyabsorbed areas where this has not taken place reasons therefor and future plans ofaction: N.A.

Foreign exchange earnings and outgo: During the period under review there was noforeign exchange outflow from your Company and it had no foreign exchange earnings.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.

RISK MANAGEMENT POLICY OF THE COMPANY

During the year your Directors have constituted a Risk Management Committee which hasbeen entrusted with the responsibility to assist the Board in (a) overseeing and approvingthe Company's enterprise wide risk management framework; and (b) Overseeing that all therisks that the organization faces such as strategic financialcredit market liquiditylegal regulatory and other risks have been identified and assessed and there is anadequate risk management infrastructure in place capable of addressing those risks. TheRisk Management Policy was reviewed and approved by the Committee.

CORPORATE SOCIAL RESPONSIBILITY

The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.

SUBSIDIARIES

M/s Global IT Solutions Limited is the Subsidiary of your Company. The FinancialStatements and other documents of the subsidiary company is being attached with theFinancial Statements of the Company.

SHARES

a. Buy Back of Securities:

The Company has not bought back any of its securities during the year under review.

b. Sweat Equity:

The Company has not issued any Sweat Equity Shares during the year under review.

c. Bonus Shares:

No Bonus Shares were issued during the year under review.

d. Employees Stock Option Plan:

The Company has not provided any Stock Option Scheme to the employees.

MATERIAL CHANGES

There is no material change effecting the financial position of the Company which hasoccurred between the end of financial year of the Company and the date of report.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.

By Order of the Board

For DCM Financial Services Limited

Sd/-

(Richa Kalra)

Chairperson

Date: 28th Oct 2016

Place: New Delhi