The Members of
Dynamic Portfolio Management & Services Ltd.
Your Directors have pleasure in presenting the 22nd Board's Report of yourCompany together with the Audited Statement of Accounts and the Auditors' Report of yourcompany for the financial year ended 31st March 2017.
(Rs. In Lacs)
|Particulars || |
|Particulars ||2016-2017 ||2015-16 |
|Profit Before Interest and Depreciation ||20.67 ||19.51 |
|Finance Charges ||0.02 ||0.17 |
|Gross Profit ||20.65 ||19.34 |
|Provision for Depreciation ||1.11 ||1.08 |
|Net Profit Before Tax ||19.54 ||18.26 |
|Provision for Tax ||5.82 ||3.18 |
|Net Profit After Tax ||13.72 ||15.08 |
STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK
The Business environment remains extremely challenging and the recessionary economicconditions leading to slowdown in demand and inflation pushed scale up of input costs leftits adverse imprint on overall performance for 2016-2017. Directors are pleased to informin spite of difficult times your Company based on its intrinsic strength has broadlymaintained its track record of profit making Company. During the year the Companyregistered a Gross Sales/Revenue of Rs. 206.34 Lac as compared to previous financialyear's figure of Rs. 88.91 Lac. PBT Margin during the year remains Rs. 19.53 Lac incomparison to last years' figures of Rs 18.26 Lac whereas Net Profit down at Rs. 13.72 Lacin comparison to last years' figure of Rs. 15.07 Lac.
The Company is in to the Business of lending its surplus fund in to the Capital andMoney Market as well as to lending money to Corporate and HNIs.
The outlook for the current year is challenging mainly due to sluggish economic.However your Company expects to grow despite the adverse environment due to itscommitment to clients of the Company.
CHANGE IN NATURE OF BUSINESS IF ANY
The Board may provide details relating to change in the business carried on by thecompany or its subsidiaries. This shall also contain details pertaining to classes ofbusiness in which the company has an interest.
However with the view to conserve the resources of company the directors are notrecommending any dividend.
AMOUNTS TRANSFERRED TO RESERVES
The Board of the company has decided/proposed to carry Rs 2.7 Lac to its SpecialReserve u/s 45-IC of RBI Act 1934.
CHANGES IN SHARE CAPITAL IF ANY
The paid up Equity Share Capital as on March 31st 2017 was 1169.18 Lac.During the year under review the Company has not issued shares with differential votingrights nor granted stock options nor sweat equity. As on March 31st 2017 noneof the Directors of the Company hold shares or convertible instruments of the Companyexcept Mr. Ravi Kr. Newatia who is holding 13500 shares.
INFORMATION ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY
Company does not have any Subsidiary Joint venture or Associate Company.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
The provisions of Section 125(2) of the Companies Act 2013 do not apply as there wasno dividend declared and paid last year.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the financial position of the Companyoccurred between the ends of the financial year to which these financial statements relateon the date of this report
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as required under section 92(3) of the Companies Act 2013and rule 12(1) of the Companies (Management and Administration) Rules 2014 in Form MGT-9is annexed herewith for your kind perusal and information.
MEETINGS OF THE BOARD OF DIRECTORS
During the Financial Year 2016-17 the Company held 12 board meetings of the Board ofDirectors as per Section 173 of Companies Act 2013 which is summarized below. Theprovisions of Companies Act 2013 and listing agreement were adhered to while consideringthe time gap between two meetings.
|S No. ||Date of Meeting |
|1 ||25.05.2016 |
|2 ||28.05.2016 |
|3 ||24.06.2016 |
|4 ||07.07.2016 |
|5 ||10.08.2016 |
|6 ||31.08.2016 |
|7 ||09.11.2016 |
|8 ||12.01.2017 |
|9 ||16.01.2017 |
|10 ||31.01.2017 |
|11 ||10.02.2017 |
|12 ||13.03.2017 |
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of theCompany confirms that-
(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 controls areadequate and were operating effectively.
(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.
AUDITORS and REPORT thereon
The Auditors M/s M A N V & Associates Chartered Accountants retire at theensuing Annual General Meeting and being eligible offer themselves for reappointmentfrom the conclusion of this Annual General Meeting [AGM] till the conclusion of next AGM.
Their continuance of appointment and payment of remuneration are to be confirmed andapproved in the ensuing Annual General Meeting.
Note: Above details may be suitably modified based on the following event.
1. Information about change of Auditor if any during the year may be included.
2. Information about the proposal of the shareholders for appointment of new Auditors.
3. Rotation of Auditors in respect of certain classes of Companies.
There are no qualifications or adverse remarks in the Auditors' Report which requireany clarification/ explanation. The Notes on financial statements are self-explanatoryand needs no further explanation.
Further the Auditors' Report for the financial year ended 31st March 2017 is annexedherewith for your kind perusal and information.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remunerations of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Vikas kumar sharma Practicing Company secretary to undertake theSecretarial Audit of the Company. The Secretarial Audit Report is annexed. The SecretarialAudit Report does not contain any qualification reservations or adverse remark.
LOANS GUARANTEES AND INVESTMENTS
Details of Loans Guarantees and Investment if any covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statements.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large and Approval of the Board of Directors &shareholders was obtained wherever required.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
(A) Conservation of energy and Technology absorption
The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 in respect of conservation of energy and technology absorption have not beenfurnished considering the nature of activities undertaken by the company during the yearunder review.
(B) Foreign exchange earnings and Outgo
There were no foreign exchange earnings and outgo during the year under review.
The Company does not have any Risk Management Policy as the element of risk threateningthe Company's existence is very minimal.
DIRECTORS and KMP
During the current financial year the following changes and have occurred in theconstitution of directors of the company:
|Name ||Designation ||Date of appointment ||Date of cessation ||Mode of Cessation |
|1 Narendra Singh ||Company Secretary ||16.01.2017 ||- ||- |
|2. Ankit Bhatnagar ||Company Secretary ||28.05.2016 ||29.12.2016 ||- |
The company has not accepted any deposits during the year.
CORPORATE SOCIAL RESPONSIBILITY
The company does not meet the criteria of Section 135 of Companies Act 2013 read withthe Companies (Corporate Social Responsibility Policy) Rules 2014 so there is norequirement to constitute Corporate Social Responsibility Committee.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act theReport and Accounts are being sent to the Members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the Membersat the Registered Office of the Company during business hours on working days of theCompany up to
the date of the ensuing Annual General Meeting. If any Member is interested inobtaining a copy thereof such Member may write to the Compliance Officer in this regard.
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit Nomination & Remuneration andCompliance Committees.
A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering various aspects of the Board's functioning such as adequacyof the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Secretarial Department.
The Company conforms to the norms of Corporate Governance as envisaged in the CompaniesAct 2013 and the Listing Agreement signed with the Exchanges vide BSE and CSE. Pursuantto Clause 27 of the Listing Agreement a Report on the Corporate Governance and theAuditors Certificate on Corporate Governance are annexed to this report.
NOMINATION. REMUNERATION AND STAKEHOLDERS RELATIONSHIP COMMITTEE
The Nomination and Remuneration Committee consists of four Independent Directors andthe Managing Director. All members of the Nomination and Remuneration Committee arefinancially literate and they have accounting or related financial management expertise.
Terms of Reference
The Terms of Reference of the Nomination and Remuneration Committee are as under:
1. To identify persons who are qualified to become Directors and who may be appointedin senior management in accordance with the criteria laid down recommend to the Boardtheir appointment and removal and shall carry out evaluation of every Director'sperformance.
2. To formulate the criteria for determining qualifications positive attributes andindependence of a Director and recommend to the Board a policy relating to theremuneration for the Directors Key Managerial Personnel and other employees.
3. The Nomination and Remuneration Committee shall while formulating the policy ensurethat:
a. the level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;
b. relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and
c. remuneration to Directors Key Managerial Personnel and senior management involves abalance between fixed and incentive pay reflecting short and long-term performanceobjectives appropriate to the working of the company and its goals:
4. Regularly review the Human Resource function of the Company
5. Discharge such other function(s) or exercise such power(s) as may be delegated tothe Committee by the Board from time to time.
6. Make reports to the Board as appropriate.
7. Review and reassess the adequacy of this charter periodically and recommend anyproposed changes to the Board for approval from time to time.
8. Any other work and policy related and incidental to the objectives of the committeeas per provisions of the Act and rules made there under.
Remuneration to Executive Directors:
The remuneration paid to Executive Directors is recommended by the Nomination andRemuneration Committee and approved by Board in Board meeting subject to the subsequentapproval of the shareholders at the General Meeting and such other authorities as may berequired. The remuneration is decided after considering various factors such asqualification experience performance responsibilities shouldered industry standards aswell as financial position of the Company.
Any director who is in receipt of any commission from the company and who is a managingdirector or whole time director of the company shall not be be disqualified from receivingany remuneration or commission from any holding company or subsidiary company of suchcompany .(section 197 (14))
Remuneration to Non Executive Directors:
The Non Executive Directors are paid remuneration by way of Sitting Fees andCommission. The Non Executive Directors are paid sitting fees for each meeting of theBoard and Committee of Directors attended by them.
According to Section 177 of the Companies Act 2013 the company's Audit Committeecomprised of four directors. The board has accepted the recommendations of the AuditCommittee. The table sets out the composition of the Committee:
|Name of the Director ||Position held in the Committee ||Category of the Director |
|Sushil Kumar Mittal ||Chairman ||Non-Executive Independent Director |
|Anil Kumar Agarwal ||Member ||Non-Executive Independent Director |
|Ravi Kumar Newatia ||Member ||Executive Director |
|Sunil Kumar Gupta ||Member ||Non-Executive Independent Director |
SECRETARIAL AUDIT REPORT
There are no qualifications or adverse remarks in the Secretarial Audit Report whichrequire any clarification/ explanation.
Further the Secretarial Audit Report as provided by Mr. Vikas kumar sharmaPracticing Company Secretary for the financial year ended 31st March 2017 is annexedherewith for your kind perusal and information.
As per Section 177(9) and (10) of the Companies Act 2013 and as per the Clause ofListing Agreement the company has established Vigil Mechanism for directors and employeesto report genuine concerns and made provisions for direct access to the chairperson of theAudit Committee. Company has formulated the present policy for establishing the vigilmechanism/ Whistle Blower Policy to safeguard the interest of its stakeholders Directorsand employees to freely communicate and address to the Company their genuine concerns inrelation to any illegal or unethical practice being carried out in the Company. Thedetails of the Vigil Committee are annexed herewith for your kind perusal and information.
a. BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
b. SWEAT EQUITY
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.
ORDER OF COURT
The details of significant and material orders passed by the regulators or courts orTribunals impacting the going concern status and company's operation in future if anyneed to be mentioned.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT (LISTED COMPANY)
Macro Economy Environment
The Company's main object is Non-banking Finance activities. The market for thisactivity offers high potential for growth. There have been a number of causes behindgrowth of Indian economy in last couple of years. A number of market reforms have beeninstituted by Indian government and there has been significant amount of foreign directinvestment made in India. Much of this amount has been invested into several businessesincluding knowledge process outsourcing industries. India's foreign exchange reserves havegone up in last few years. Real estate sector as well as information technology industryof India have taken off. Capital markets of India are doing pretty well too. All thesefactors have contributed to growth of Indian economy.
Review of Operations
The performance of the Company for the current financial year was continued to affectbadly due to negative sentiments. Lack of liquidity in Capital Market as well as fear ofbad loans in the Money Market.
The Company registered a Sales/Revenue of RS. 206.34 lac as compared to profit of Rs.88.91 lac in previous financial year.
Non-Banking Finance Companies (NBFCs) are an integral part of the country's financialsystem because of their complementary as well as competitive role. They act as a criticallink in the overall financial system catering to a large market of niche customers. Inspite of strong competitions faced by the NBFCs the inner strength of NBFCs viz localknowledge credit appraisal skill well trained collection machinery closed monitoring ofborrowers and personalized attention to each client are catering to the needs of smalland medium enterprises in the rural and semi urban area. However as a result ofconsolidation and restructuring in the financial sector and liberalization andglobalization of markets only few strong NBFCs now remain in business.
On the regulatory front NBFCs are regulated by the Reserve Bank of India (RBI) almostat par with banks. All the prudential norms for asset classification income recognitionprovisioning etc. are applicable to NBFCs in India. Given the continuously high levels ofinflation through FY 13 the Reserve Bank of India (RBI) has no option but tightenmonetary policies. This has resulted in an increase in domestic interest rates. Theenvironment of high interest rates has a negative impact on sentiments of industries.During 2013 global financial conditions broadly improved amid lingering vulnerabilitiesequity markets rose risk spreads continued to tighten and bank lending conditions inmajor advanced economies even for small and medium-sized firms. Financial turbulencere-emerged in the periphery of the Euro area. Measures of risk aversion have not risenthough equity markets in most regions have posted significant gains and financial stresseshave been limited.
Opportunities and Threats
The performance of capital market in india has a direct correlation with the prospectof economic growth and political stability. Though the growth proj ections for FY 2017-18appear reassuring there are certain downside risks such as pace and shape of globalrecovery effect of withdrawal of fiscal stimulus and hardening of commodity prices.Accommodative monetary policies in advanced economies coupled with better growthprospectus in Emerging Markets (Ems) including India are expected to trigger largecapital inflows in Ems which in turn could lead to inflationary pressures and asset pricebubble. Our business performance may also be impacted by increased competition from localand global players operating in India regulatory changes and attrition of employees. Withgrowing presence of players offering advisory service coupled with provision of funds forthe clients' needs we would face competition of unequal proportion. We continuouslytackle this situation by providing increasingly superior customized services.
In financial services business effective risk management has become very crucial. Asan NBFC your company is exposed to credit risk liquidity risk and interest rate risks.Your company has in place suitable mechanisms to effectively reduce such risks. All theserisks are continuously analyzed and reviewed at various levels of management through aneffective e information system. The Company is having excellent Board of Directors who areexpert in financial sector and are helping the Company on making good investment. Thecompany is also facing risk of heavy ups and down in stock market which have beenminimized due to risk management system of our Company.
INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
Your Company has an Internal Control System which is commensurate with the sizescale scope and complexity of its operations. To maintain its objectivity andindependence an independent Chartered Accountants has been appointed as the InternalAuditors who report to the Chairman of the Audit Committee of the Board.
The Internal Auditors monitor and evaluate the efficacy and adequacy of internalcontrol system in your Company its compliance with operating systems accountingprocedures and policies at all locations of your Company. Based on the report of theInternal Auditors placed before the Audit Committee process owners undertake correctiveaction in their respective areas and hereby strengthen the controls. The internal controlshave been reported by the Auditors to be adequate and effective during the year.
OUTLOOK AND FUTURE PROSPECTUS
Competition continues to be intense as the Indian and foreign banks have entered theretail lending business in a big way thereby exerting pressure on margins. The erstwhileproviders of funds have now become competitors. NBFCs can sustain in this competitiveenvironment only through optimization of funding costs identification of potentialbusiness areas widening geographical reach and use of technology cost efficienciesstrict credit monitoring and raising the level of customer service.
RISKS & CONCERNS
In today's complex business environment almost every business decision requiresexecutives and managers to balance risk and reward. Effective risk management is thereforecritical to an organization's success. Globalization with increasing integration ofmarkets newer and more complex products & transactions and an increasingly stringentregulatory framework has exposed organizations to newer risks. As a result today'soperating environment demands a rigorous and integrated approach to risk management.Timely and effective risk management is of prime importance to our continued success.Increased competition and market volatility has enhanced the importance of riskmanagement. The sustainability of the business is derived from the following:
Identification of the diverse risks faced by the Company.
The evolution of appropriate systems and processes to measures and monitor them.
Risk management through appropriate mitigation strategies within the policy framework.
Monitoring the progress of the implementation of such strategies and subjecting them toperiodical audit and review. Reporting these risk mitigation results to the appropriatemanagerial levels.
The Company recognizes that its success is deeply embedded in the success of its humancapital. During 20162017 the Company continued to strengthen its HR processes in linewith its objective of creating an inspired workforce. The employee engagement initiativesincluded placing greater emphasis on learning and development launching leadershipdevelopment programme. Introducing internal communication providing opportunities tostaff to seek inspirational roles through internal job postings streamlining theperformance Management System making the compensation structure more competitive andstreamlining the performance link rewards and incentives.
Corporate Sustainability and Social Responsibility
The Company constantly strives to meet and exceed expectations in terms of the qualityof its business and services. The Company commits itself to ethical and sustainableoperation and development of all business activities according to responsible care and itsown code of conduct. Corporate Social Responsibility is an integral part of the Company'sphilosophy and participates in activities in the area of education and health.
This report describing the company's activities projections about future estimatesassumptions with regard to global economic conditions government policies etc. maycontain "forward looking statements" based on the information available with thecompany. Forward-looking statements are based on certain assumptions and expectations offuture events. The statements are subject to certain risks and uncertainties. The Companycannot guarantee that these assumptions and expectations are accurate or will be realized.The actual results may be fraud rent from those expressed or implied since the company'soperations are affected by the many external and internal factors which are beyond thecontrol of the management. Hence the company assumes no responsibility in respect offorward-looking statements that may be amended or modified in future on the basis ofsubsequent developments. Information or events.
The Compliance functions of the Company is responsible for independently ensuring thatoperating and business units comply with regulatory and internal guidelines. TheCompliance Department of the Company is continued to play a pivotal role in ensuringimplementation of compliance functions in accordance with the directives issued byregulators the Company's Board of Directors and the Company's Compliance Policy. TheAudit Committee of the Board reviews the performance of the Compliance Department and thestatus of compliance with regulatory/ internal guidelines on a periodic basis.
New Instructions/ guidelines issued by the regulatory authorities were disseminatedacross the Company to ensure that the business and functional units operate within theboundaries set by regulators and that compliance risks are suitably monitored andmitigated in course of their activities and processes. New products and process launchedduring the year were subjected to scrutiny from the Compliance Standpoint and proposals offinancial services were screened from risk control prospective.
The Company has complied with all requirements of regulatory authorities. Nopenalties/strictures were imposed on the company by stock exchanges or SEBI or anystatutory authority on any matter related to capital market during the last three yearsexcept Penalty imposed by stock exchange under Regulation 35 and Clause 49 of ListingAgreement.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (Prevention Prohibitionand Redressal) Act 2013:
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy.
Your Directors wish to express their grateful appreciation to the continuedco-operation received from the Banks Government Authorities Customers Vendors andShareholders during the year under review. Your Directors also wish to place on recordtheir deep sense of appreciation for the committed service of the Executives staff andWorkers of the Company.
By order of the Board
For DYNAMIC PORTFOLIO MANAGEMENT & SERVICES LIMITED
Ravi Kr Newatia
Chairman & Managing Director