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TruCap Finance Ltd.

BSE: 540268 Sector: Financials
NSE: TRU ISIN Code: INE615R01029
BSE 00:00 | 26 Sep 65.35 -1.90
(-2.83%)
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64.50

NSE 00:00 | 26 Sep 65.90 -0.80
(-1.20%)
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68.50

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OPEN 66.20
PREVIOUS CLOSE 67.25
VOLUME 29362
52-Week high 187.50
52-Week low 24.80
P/E 76.88
Mkt Cap.(Rs cr) 705
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 66.20
CLOSE 67.25
VOLUME 29362
52-Week high 187.50
52-Week low 24.80
P/E 76.88
Mkt Cap.(Rs cr) 705
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

TruCap Finance Ltd. (TRU) - Director Report

Company director report

Dear Members

Dhanvarsha Finvest Limited

Mumbai.

Your Directors are pleased to present the Twenty Seventh Annual Reportalong with the Audited Financial Statements of the Company for the financial year endedMarch 312021. The Company is registered with the Reserve Bank of India ("RBI")as a Non-Banking Financial Company ("NBFC") and is classified as a Non-DepositAccepting Non- Systemically Important Non-Banking Financial Company (NBFC- NSI-ND).

In compliance with the applicable provisions of Companies Act 2013(including any statutory modification(s) or re-enactment(s) thereof for time being inforce) and the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 this report covers the Financial Statements and otherdevelopments during the financial year ended March 312021 and upto the date of the BoardMeeting held on August 13 2021 to approve this report in respect of Dhanvarsha FinvestLimited.

This was an unprecedented year with the Covid-19 pandemic affectingcountries businesses and individuals in India and across the world. Lockdown andrestrictions imposed on various activities due to the pandemic called for extraordinarychanges in the way operations were managed at the Company. Our technological investmentstimely and decisive steps towards remote working ensured business continuity even as thepandemic unfolded across locations of our presence. The Company extended wholeheartedsupport to vulnerable sections of society during this period in a number of ways.

Dissemination of Annual Reports in Electronic Mode

Pursuant to circulars issued by the Ministry of Corporate Affairs (MCA)on April 8 2020 April 13 2020 May 5 2020 and January 13 2021 read with Securitiesand Exchange Board of India ("SEBI") circulars dated May 12 2020 and January15 2021 relaxation has been granted to the companies in respect of sending physicalcopies of annual report to the shareholders and requirement of proxy for general meetingheld through electronic mode till December 312021.

In accordance with the circulars the financial statements (includingBoard's Report Corporate Governance Report Management Discussion and Analysis ReportBusiness Responsibility Report Auditor's Report and other documents annexed herewith) arebeing sent only through electronic mode to those shareholders whose email addresses areregistered with the Registrar and Share Transfer Agent of the Company viz. MCS ShareTransfer Agent Limited or Depository Participants and whose names appear in the registerof members as on Friday August 20 2021. The Company has also made arrangements for thoseshareholders who have not registered their email address to get these registered byfollowing the procedure prescribed in the notice of the Twenty Seventh Annual GeneralMeeting ("AGM").

The Annual Report for the Financial year March 312021 is alsoavailable on the website of the Company at www.dfltd.in.

Standalone and Consolidated Financial Results:

A summary of the Company's financial performance of the Company both ona standalone and consolidated basis for the financial year ("FY") 2020-21 ascompared to the previous Financial Year 2019-20 is given below:

(Rs. in Lakhs)

Particulars Standalone Consolidated
2020-21 2019-20 2020-21 2019-20
Gross Total Income 2441.98 1929.52 3006. 41 1929.38
Profit before Finance Cost depreciation share of loss of Joint Venture exceptional items and taxation 716.48 775.30 828.42 771.61
Finance Cost 423.13 168.59 423.13 168.59
Depreciation 119.84 48.65 127.07 48.72
Profit before exceptional items and tax 173.51 558.06 278.22 554.30
Exceptional items - - - -
Profit before tax 173.51 558.06 278.22 554.30
Less: Taxation - Current tax 71.59 172.52 117.41 172.52
Less: Deferred Tax 32.15 (17.03) 29.39 (16.99)
Less: Short or excess provision for income tax 1.32 (7.32) 1.32 (7.32)
Net profit for the year 68.45 409.89 130.10 406.10
Add: Other Comprehensive Income 1.41 (1.20) 1.41 (1.20)
Total Comprehensive Income 69.86 408.69 131.51 404.90
Add: Balance brought forward from the previous year 615.96 329.70 612.18 329.71
Balance available for appropriation 685.82 738.39 743.68 734.60
Statutory Reserves under Section 45IC of the Reserve Bank of India Act 1934 13.69 81.74 13.69 81.74
Balance to be carried forward 672.13 656.65 729.99 652.87
Basic Earnings Per Share (EPS) (?) 0.47 3.04 0.88 3.01
Diluted EPS (?) 0.37 2.86 0.69 2.83
Proposed Dividend 7.65 14.34 7.65 14.34

Note: Previous period figures have been regrouped / rearrangedwherever necessary.

The financial statement containing the Balance Sheet Profit and Lossand Auditors' Report on the financial statements have been sent to those members who haveregistered their email ids with the Company.

Review of Business Operations and State of Affairs of the Company

During the year under review the Company's total income on aconsolidated basis amounted to Rs. 3006.41 lakhs compared to Rs. 1929.38 lakhs in theprevious year and total income on a standalone basis amounted to Rs. 2441.98 lakhscompared to Rs. 1929.52 lakhs in the previous year. The operating profit of Rs. 828.42lakhs during the year driven by volume growth reduction in cost of funds and better costmanagement compared to Rs. 771.61 lakhs in the previous year. Profit before tax onconsolidated basis stood at Rs. 278.22 lakhs compared to Rs. 554.30 lakhs in the previousyear and Profit after tax on consolidated basis stood at Rs. 130.10 lakhs compared to Rs.406.10 lakhs in the previous year.

The Loan assets under management (AUM) grew 180% year- on-year to Rs.10442.23 lakhs as compared to Rs. 32723.81 lakhs in the previous year.

The financial statements are prepared in accordance with IndianAccounting Standards for the financial year ended March 312021 and forms part of thisAnnual Report.

Impact of Covid-19 Pandemic

The Covid-19 pandemic which is a once in a lifetime occurrence hasbrought with it an unimaginable suffering to people and to almost all sections of theeconomy. The nationwide lockdowns to curtail the transmission of disease had put theglobal economy in extreme stress of the level not seen since the Great Depression andwould have a long-lasting economic impact.

The dynamic and evolving nature of the pandemic with its resurgence(second wave) at the close of the year once again creates uncertainty including economicimpact. Hopefully the outreach of vaccination drives across the country additionalefforts to set up medical infrastructure and obtaining required medical supplies inaddition to continued adherence to Covid-19 specific protocols will help in overcomingthis testing situation.

Like the greater economy the pandemic coupled with the lockdown andrelief measures provided by RBI had a bearing on the performance of the Company. Theimpact of the above on the performance of the Company and the measures adopted by theCompany to steer through the pandemic have been discussed in detail and is forming part ofthe financial statements of the Company. You may refer to the Management Discussion andAnalysis for the same.

Transfer to Reserve Fund

Under section 45-IC (1) of Reserve Bank of India Act 1934 non-bankingfinancial companies (NBFCs) are required to transfer a sum not less than 20% of its netprofit every year to reserve fund before declaration of any dividend. Accordingly theCompany has transferred a sum of Rs. 13.69 lakhs to its reserve fund.

Credit Rating

The Board wishes to inform that owing to high capital adequacy strongpromoter support tightened credit acceptance criteria and robust asset liabilitymanagement the credit rating was upgraded during the year. This re-affirms the highreputation and trust the Company has earned for its sound financial management and itsability to meet all its financial obligations.

The details of ratings assigned by credit rating agencies and migrationof ratings during the year are as follow:

Rating Agency Programme Rating Assigned Migration in ratings during the year
Care Ratings Limited Long Term Bank Facilities CARE BBB; Stable [Triple B; Outlook: Stable] Assigned
Infomerics Valuation Rating Private Limited and Long Term Fund Based Facilities - Term Loans IVR BBB/Stable (IVR Triple B with Stable Outlook) Upward revision
Infomerics Valuation Rating Private Limited and Proposed Long Term Bank Facilities IVR BBB/Stable (IVR Triple B with Stable Outlook) Upward revision
Infomerics Valuation Rating Private Limited and Proposed Long Term Facilities- Proposed NCDs IVR BBB/Stable (IVR Triple B with Stable Outlook) Upward Revision
Infomerics Valuation Rating Private Limited and Long Term Facilities- Non- Convertible Debentures IVR BBB/Stable (IVR Triple B with Stable Outlook) Assigned
Infomerics Valuation Rating Private Limited and Short-Term Bank Facilities - Overdraft IVR A3+ (IVR Single A Three Plus) Assigned

Dividend on Equity Shares

The directors recommend for consideration of the members at theensuing ("AGM") of the Company payment of dividend of Rs. 0.05/- per equityshare i.e. 0.5% of face value of Rs. 10/- each. The total dividend for financial year2020-21 is Rs. 6.75 lakhs to be paid out of the profits of the Company and that the saiddividend be paid subject to the approval of the members of the Company in the ensuing AGMof the Company. Accordingly the dividend payout ratio will be 5%.

Pursuant to the provisions of regulation 43A of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (including any statutorymodification/(s) and re-enactment thereof till date) ("Listing Regulations")the Company has formulated and adopted a dividend distribution policy of the Companyapproved by the Board of Directors of the Company.

The dividend recommended is in accordance with the principles andcriteria set out in the dividend distribution policy.

Dividend paid for financial year 2019-20 was Rs. 0.10/- per equityshare i.e. 1% of face value of Rs. 10/- each. The amount of dividend and tax thereonaggregated to Rs. 14.34 lakhs. Accordingly the dividend payout ratio was 10%.

In view of the amendment to the Income Tax Act 1961 through theFinance Act 2020 imposition of dividend distribution tax has been abolished. Thedividend if declared at the ensuing AGM of the Company will be taxable in the hands ofthe members of the Company.

Pursuant to Regulation 43A of the Listing Regulations the Company hasadopted a Dividend Distribution Policy which is annexed as Annexure I to thisreport and is available on the website of the Company i.e. www.dfltd.in.

Covid Relief Measures by Reserve Bank of India

RBI issued guidelines on March 27 2020 (as amended) permitting allcommercial banks co-operative banks All- India Financial Institutions and NBFCs to givemoratorium to customers in respect of installments falling due between March 1 2020 toAugust 31 2020. Accordingly the Company offered moratorium to its customers based onBoard approved Policy. RBI through its circular dated August 6 2020 provided aresolution framework for Covid-19 related stress and allowed a onetime restructuring ofcertain categories of loans from September 12020 till December 312020.

Further during the financial year ended 2020-21 the Company hadpursuant to the Scheme issued by the Government of India dated October 23 2020 andcircular issued by RBI dated October 26 2020 on Scheme for grant of ex-gratia payment ofdifference between compound interest and simple interest for six months to the borrowersin specified loan accounts for the period between March 1 2020 to August 31 2021(the'Scheme') granted the ex-gratia benefit to all the eligible borrowers.

Share Capital of the Company

During the financial year 2020-21 the total paid up equity sharecapital of the Company increased from Rs. 135077560/- to Rs. 152924290/-.

The movement of equity share capital during the year was as under:

Particulars No. of equity shares allotted Cumulative Number of shares Cumulative outstanding capital (no. of equity shares with face value of Rs. 10/- each)
Number of shares/Capital at the beginning of the year - 13507756 135077560
Allotment of shares to Wilson Holdings Private Limited on April 3 2020 pursuant to the conversion of warrants 775200 14282956 142829560
Allotment of shares to employees on June 15 2020 pursuant to exercise of options granted under Employee Stock Option Plan 2018 29272 14312228 143122280
Allotment of shares to employees on July 31 2020 pursuant to exercise of options granted under Employee Stock Option Plan 2018 17228 14329456 143294560
Allotment of shares to employees on August 22 2020 pursuant to exercise of options granted under Employee Stock Option Plan 2018 8581 14338037 143380370
Allotment of shares to Wilson Holdings Private Limited on November 3 2020 925426 15263463 152634630
Allotment of shares to employees on November 1 1 2020 pursuant to exercise of options granted under Employee Stock Option Plan 2018 28966 15292429 152924290

The Board of Directors of the Company in their meeting held on November03 2020 allotted 1 796944 convertible warrants having face value of Rs. 111.30/- onpreferential basis to various promoter and non-promoter individuals/entities for anaggregate amount of Rs. 199999867.20/-. These warrants shall be convertible intoequivalent number of equity shares of the Company at a conversion price of Rs. 111.30/-per equity share within 18 months from the date of allotment. These convertible warrantshave been allotted against the subscription price equivalent to 25% of the issue price andbalance exercise price equivalent to 75% of the conversion price of the equity sharesshall be payable by the warrant holder(s) at the time of exercising options of conversionof the warrants.

The Board of Directors of the Company at their meeting held on November03 2020 allotted 4043126 unsecured compulsorily convertible debentures on preferentialbasis to Wilson Holdings Private Limited for an aggregate amount of Rs. 449999923.80/-.These securities shall be convertible into equivalent number of equity shares of theCompany at a conversion price of Rs. 111.30/- per equity share within 18 months from thedate of allotment.

Investor Education and Protection Fund (IEPF)

In accordance with the applicable provisions of Companies Act 2013read with Investor Education and Protection Fund (Accounting Audit Transfer and Refund)Rules 2016 ("IEPF Rules") all unclaimed dividends are required to betransferred by the Company to the IEPF after completion of seven (7) years. Furtheraccording to IEPF Rules the shares on which dividend has not been claimed by theshareholders for seven (7) consecutive years or more shall be transferred to the demataccount of the IEPF Authority.

Since there was no dividend declared and paid from financial year2012-2013 till the financial year 2016-2017 your Company did not have any funds as lyingunpaid or unclaimed for a period of seven (7) years in terms of provisions of the Section124 of the Companies Act 2013. Therefore there is no funds which required to betransferred to IEPF established by the Central Government pursuant to provisions of theSection 125 of the Companies Act 2013.

During the year the Company did not have any equity shares which wererequired to be transferred to IEPF.

Employees Stock Option Schemes (ESOS)

The Company has in force the following Schemes which are prepared asper the provisions of SEBI (Share Based Employee Benefits) Regulations 2014 ("SBEBRegulations"):

1. Dhanvarsha ESOP Plan-2018 ("ESOS Scheme 2018")

2. DFL Employees Stock Option Scheme- 2021 ("ESOS Scheme2021")

Further no stock options were granted to the employees during the yearunder the ESOS Scheme 2021.

During the year under review 285000 stock options granted under ESOSScheme.

Under Ind AS equity settled share-based payment transactions withemployees are required to be accounted for as per Ind AS 102 "Share-basedPayment" whereby the fair value of options as on the grant date should be estimatedand recognized as an expense over the vesting period. In accordance with above theCompany has followed fair value method for equity options in its accounts.

There is no material change in Employees' Stock Option Scheme duringthe year under review and the Scheme is in line with SBEB Regulations. A certificate fromthe Auditors of the Company that the Scheme has been implemented in accordance with theSBEB Regulations and the resolution passed by the members of the Company would be placedat the ensuing AGM for inspection by members of the Company through electronic means. Thedisclosures relating to ESOPs required to be made under the provisions of the CompaniesAct 2013 and the SBEB Regulations are provided on the website of the Company i.e.www.dfltd.in and the same is available for inspection by the members of the Company at theRegistered office of the Company on all working days except Saturdays and PublicHolidays during business hours and through electronic means. Members of the Company canrequest the same by sending an email to contact@dfltd.in till the AGM.

Particulars relating to ESOS Scheme 2018 is mentioned in Annexure -II.

Subsidiary Company

DFL Technologies Private Limited is the wholly owned subsidiary companyof the Company. Accordingly pursuant to the provisions of Section 129 134 and 136 of theCompanies Act 2013 read with applicable rules there under Regulation 33 of the ListingRegulations and applicable Indian Accounting Standards ("Ind AS") the Board ofDirectors of the Company approves the Consolidated Financial Statements of the Company andits subsidiary. Copies of the Balance Sheet Profit and Loss Account Report of the Boardof Directors and Report of the Auditors of the subsidiary company are not attached to theaccounts of the Company for financial year 2020-21. The Company will make these documents/ details available upon request by any member of the Company. These documents / detailswill also be available for inspection by any member of the Company at its registeredoffice and at the registered office of the subsidiary company during business hours onworking days and through electronic means. Members of the Company can request the same bysending an email to contact@dfltd.in till the AGM. The Company's financialstatement including the accounts of its subsidiary which forms part of this Annual Reportare prepared in accordance with the Companies Act 2013 and Ind AS 110.

A report on the performance and financial position of the subsidiary ofthe Company as per the Companies Act 2013 is provided in the prescribed Form AOC-1 as AnnexureIII of this report and hence not repeated here for the sake of brevity.

The subsidiary company is not a material subsidiary of the Company asper Regulation 16 of the Listing Regulations for the financial year 2020-21 . Howeverfor the sake of better corporate governance practice Mrs. Manjari Kacker IndependentDirector on the Board of the Company is also an Independent Director of DFL TechnologiesPrivate Limited. The Policy on determining the material subsidiary is available on thewebsite of the Company i.e. www.dfltd.in and the link is https://www.dfltd.in/assets/pdf/new-pdf/Policy on Determining Material Subsidiary.pdf.

Leverage Ratio

The Company being NBFC registered with RBI and classified as (NBFC-NSI-ND) is required to maintain a leverage ratio which as per regulatory norms shall notbe more than 7 times. The Leverage Ratio of the Company as on March 31 2021 was 0.95which is well within the limits prescribed by RBI.

Management Discussion and Analysis

A detailed review of the operations performance and future outlook ofthe Company and its business as stipulated under Regulation 34(2)(e) read with Schedule Vof the Listing Regulations is presented in a separate section forming part of the AnnualReport under the head 'Management Discussion and Analysis.'

Business Responsibility Report

The Business Responsibility Report in terms of Regulation 34(2) (f) ofthe Listing Regulations describing the initiatives taken by the Company from anenvironmental social and governance perspective is attached as part of the Annual Report.

Board of Directors

The Board of Directors of the Company comprises of the followingdirectors:

(i) Mr. Rakesh Sethi- Chairperson & Independent Director

(ii) Mr. Rajiv Kapoor- Independent Director

(iii) Mr. Krishipal Raghuvanshi- Independent Director

(iv) Mr. Nirmal Vinod Momaya- Independent Director

(v) Mrs. Manjari Kacker- Independent Director

(vi) *Mrs. Minaxi Mehta - Non- Executive Non-Independent Director

(vii) **Mr. Atwood Porter Collins - Non- Executive Non- IndependentDirector

(viii) Mr. Karan Neale Desai- Joint Managing Director

(ix) Mr. Rohanjeet Singh Juneja- Joint Managing Director

*Mrs. Minaxi Mehta (Promoter) is appointed as Non-ExecutiveNon-Independent Director w.e.f June 10 2021

**Mr. Atwood Porter Collins is appointed as Non-ExecutiveNon-Independent Director w.e.f July 312021

During the year under review Mr. Ashish Sharad Dalal Non- ExecutiveNon-Independent Director of the Company resigned from the directorship of the Companyw.e.f. close of business hours on November 10 2020.

In accordance with the provisions of Section 152(6) of the CompaniesAct 2013 read with the Companies (Appointment and Qualification of the Directors) Rules2014 amended from time to time Mr. Karan Neale Desai Joint Managing Director of theCompany shall be liable to retire by rotation at the ensuing AGM of the Company and beingeligible for re-appointment.

The Board of Directors of the Company based on the recommendations ofthe Nomination and Remuneration Committee at its meeting held on June 10 2021 appointedMrs. Minaxi Mehta (DIN: 03050609) as an Additional Director - Non-ExecutiveNon-Independent (Promoter) w.e.f. June 10 2021 to hold office up to the date of ensuingAGM of the Company.

Further the Board of Directors of the Company based on therecommendations of the Nomination and Remuneration Committee by resolution passed bycirculation on July 28 2021 appointed Mr. Atwood Porter Collins (DIN: 09239511) as anAdditional Director - Non - Executive Non-Independent w.e.f. July 312021 to hold officeup to the date of ensuing Twenty Seventh AGM.

The Board of Directors of the Company had on August 11 2018 appointedMr. Karan Neale Desai (DIN: 05285546) as Joint Managing Director of the Company for aperiod of 3 years. Since the tenure of appointment of Mr. Karan Neale Desai expires onAugust 10 2021 the Board of the Company had based on the recommendations of theNomination and Remuneration Committee pursuant to the provisions of Section 196 197 readwith Schedule V to the Companies Act 2013 approved the re-appointment of Mr. Karan NealeDesai as Joint Managing Director of the Company for a further period of 3 years fromAugust 11 2021 to August 10 2024 at a remuneration approved by the Board of theDirectors subject to approval of the Members at the ensuing AGM of the Company.

The notice convening the AGM includes brief information and proposalfor appointment of Mrs. Minaxi Mehta as Non- Executive - Non-Independent Director(Promoter) Mr. Atwood Porter Collins as Non-Executive Non- Independent Director andre-appointment of Mr. Karan Neale Desai as Joint Managing Director.

The Company has received necessary declaration from each IndependentDirector under Section 149(7) of the Companies Act 2013 read with the Companies(Appointment and Qualification of the Directors) Rules 2014 amended from time to timethat he/she meets the criteria of independence laid down in Section 149(6) of theCompanies Act 2013 and Regulation 25 of the Listing Regulations.

Further the Company has obtained the certificate from M/s. Bhandari& Associates Practicing Company Secretaries pursuant to Regulation 34(3) andSchedule V Para C Clause 10(i) of the Listing Regulations confirming that none of theDirectors on Board of the Company as on March 31 2021 have been debarred or disqualifiedfrom being appointed or continuing as directors of the companies by SEBI / Ministry ofCorporate Affairs or any such statutory authority.

Secretarial Standards

Pursuant to various relaxations provided by MCA due to onset of CovidPandemic the Institute of Company Secretaries of India had also granted relaxations fromfew provisions of Secretarial Standard ("SS")-1 and SS-2. In view of the samethe Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relating to'Meetings of Board of Directors' and 'General Meetings' respectively have been dulyfollowed by the Company.

Directors' Responsibility Statement

In terms of Section 134(5) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 amended from time to time your Directors state that:

a) in the preparation of the annual accounts for the year ended March31 2021 the applicable accounting standards read with the requirements set out underSchedule III to the Companies Act 2013 have been followed along with proper explanationrelating to material departures;

b) the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31 2021and of the profit and loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a 'going concern'basis;

e) the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and

f) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.

Corporate Governance

Your Company believes in adopting best Corporate Governance practices.The Company has also implemented several best Corporate Governance practices as prevalentglobally. The report on Corporate Governance as stipulated under Regulation 27 andSchedule V to the Listing Regulations forms an integral part of this Annual Report.

The requisite certificate from M/s. Bhandari & AssociatesPracticing Company Secretaries (Ms. Manisha Maheshwari Partner Membership No. ACS -30224 & C.P. No: 11031) confirming the compliance with the conditions of theCorporate Governance as stipulated under Regulation 34(3) and Schedule V to the ListingRegulations is annexed to this Annual Report.

All Board Members and Senior Management Personnel have affirmedcompliance with the Company's code of conduct for the financial year 2020-21. Adeclaration to this effect signed by the Joint Managing Directors is included in thisAnnual Report.

Contracts and Arrangements with Related Parties

The Company has put in place a policy for Related Party Transactions(RPT Policy) which has been approved by the Board of Directors. The policy provides foridentification of Related Party Transactions (RPTs) necessary approvals by the AuditCommittee / Board / Shareholders reporting and disclosure requirements in compliance withthe Companies Act 2013 and provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

All contracts executed by the Company during the financial year withrelated parties were on arm's length basis and in the ordinary course of business. Allsuch RPTs were placed before the Audit Committee/ Board for approval wherever applicable.The Audit Committee reviews all RPTs quarterly.

The Company has obtained the shareholder's approval on Material RelatedParty Transaction in the previous Annual General Meeting.

During the year the Company has entered into contract/ arrangement /transaction with related parties which could be considered material in accordance withRegulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015and the policy of the Company on materiality of RPTs. The policy for determining'material' subsidiaries and the policy on materiality of RPTs and dealing with RPTs asapproved by the Board may be accessed on the website of the Company i.e. www.dfltd.com.You may refer to Note no. 44 of the Standalone Financial Statement which contains relatedparty disclosures. Since all RPTs entered into by the Company were on an arm's lengthbasis and in the ordinary course of business. The Company has not entered into anytransaction requiring disclosure in Form AOC-2 hence the same is not provided.

Considering the Company is being NBFC and its nature of business andoperations the Company will be/continue entering into various Related Party Transactionsin the ordinary course of business and accordingly the Company has sought approval fromshareholders for Material Related Party Transactions and details of same can be soughtfrom the Notice Convening the Annual General Meeting of the Company.

Corporate Social Responsibility

As per Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 every company having net worth ofRs. 500 crores or more or turnover of Rs. 1 000 crores or more or net profit of Rs. 5crores or more during immediately preceding financial year shall constitute CorporateSocial Responsibility Committee and shall ensure that it spends in every financial yearat least 2 (Two) percent of the average net profits made during three immediatelypreceding financial years in pursuance of its Corporate Social Responsibility Policy.

During the financial year 2020-2021 the requirement of compliance withSection 135 of the Companies Act 2013 read with the Companies (Corporate SocialResponsibility Policy) Rules 2014 was not applicable to the Company.

Internal Financial Controls

The Company has in place adequate internal financial controls withreference to the financial statements. The Internal Auditors tested the design andeffectiveness of the key controls. During the year under review no reportable materialweakness in the design or operations was observed.

Annual Return

As required under Section 92(3) of the Companies Act 2013 and therules made there under and amended from time to time the Annual Return of the Company asprescribed in Form MGT-7 is available on the website of the Company i.e. www. dfltd.in.

Key Managerial Personnel

The Company has below mentioned persons as Key Managerial Personnel interms of the requirement of Section 203 of the Companies Act 201 3 read with Rule 8 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 withinthe meaning of Section 2 (51) of Companies Act 2013:

Name of the Person Designation
1. Mr. Karan Neale Desai Joint Managing Director
2. Mr. Rohanjeet Singh Juneja Joint Managing Director
3. Mr. Narendra Tater Chief Financial Officer*
4. Mr. Vijay Mohan Reddy Company Secretary & Compliance Officer**
5. Mr. Sanjay Kukreja Chief Financial Officer***
6. Mr. Fredrick Pinto Company Secretary & Compliance Officer****

* Mr. Narendra Tater has resigned as Chief Financial Officer of theCompany w.e.f. close of business hours on July 312020.

** Mr. Vijay Mohan Reddy has resigned as Company Secretary andCompliance Officer of the Company w.e.f. close of business hours on July 312020.

*** Mr. Sanjay Kukreja has been appointed as Chief Financial Officer ofthe Company w.e.f. August 12020.

**** Mr. Fredrick Pinto has been appointed as Company Secretary andCompliance Officer w.e.f. August 12020.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and as perRegulation 17 of the Listing Regulations the Company has devised a policy for performanceevaluation of Independent Directors Board of Directors Committee and other individualDirectors which include criteria for performance evaluation of the non-executive directorsand executive directors. A structured questionnaire was prepared after taking intoconsideration of the various aspects such as performance of specific duties obligationsBoard's functioning composition of the Board and its Committees culture and governance.

The performance evaluation of the Chairperson Joint Managing Directorsand Independent Directors was carried out by the entire Board of Directors of the Companyexcluding the directors being evaluated. The Board of Directors expresses theirsatisfaction with the evaluation process. The Board of Directors of the Companyappreciated the performance of the Joint Managing Directors and stated that they haveexceeded the expection of the Board in such difficult times.

The details of programmes for familiarization of Independent Directorswith the Company their roles rights responsibilities in the Company nature of theindustry in which the Company operates business model of the Company and related mattersare put up on the website of the Company i.e. www.dfltd.in.

The Appointment and Evaluation Policy which lays down criteria forappointment of Executive Directors and Independent Directors and remuneration ofDirectors Key Managerial Personnel and other Senior Management Employees. The said Policyis annexed herewith as Annexure - IV.

Public Deposits

The Company is registered with RBI as a Non-Deposit accepting NBFC andduring the year under review has neither invited nor accepted any public deposit asdefined in Master Direction - Non-Banking Financial Companies Acceptance of PublicDeposits (Reserve Bank) Directions 2016.

Auction for recovery for Loan against Gold

During the year under review the Company started lending against Goldornaments. Further during the year the Company had not conducted any auctions forrecovery of the outstanding from Loan against Gold.

Statutory Auditors and Auditors' Report

As per the provisions of Section 139 of the Companies Act 2013 andrules made there under M/s. Haribhakti & Co. LLP. Chartered Accountants (FirmRegistration No.103523 W/W 100048 with Institute of Chartered Accountants of India)Mumbai was appointed as Statutory Auditors of the Company at the twenty fifth AGM of theCompany held on September 18 2019 to hold office until the conclusion of the thirtiethAGM of the Company. However vide letter dated August 13 2021 M/s. Haribhakti & Co.LLP Chartered Accountants Mumbai has expressed their inability to continue as theStatutory Auditors of the Company in order to comply with RBI circular bearing referenceno. DoS.CO. ARG/SEC.01 /08.91 .001 /2021 -22 dated April 27 2021 read with FrequentlyAsked Questions dated June 112021 on Appointment of statutory auditors for Banks andNBFCs resulting in a casual vacancy in the office of the Statutory Auditors of the Companyas per Section 139 (8) of the Companies Act 2013.

Based on the recommendations of the Audit Committee the Board ofDirectors of the Company at its meeting held on August 13 2021 noted and accepted theresignation letter of M/s. Haribhakti & Co. LLP Chartered Accountants Mumbai. TheBoard of Directors of the Company also placed on record its appreciation to M/s.Haribhakti & Co. LLP Chartered Accountants Mumbai for their contribution to theCompany with their audit processes and standard of auditing.

In this regard after obtaining consent and eligibility certificatefrom M/s. Bansal Bansal & Co. Chartered Accountants Mumbai under Section 141 of theCompanies Act 201 3 the Board of Directors of the Company at their meeting held onAugust 13 2021 appointed M/s. Bansal Bansal & Co. Chartered Accountants (FirmRegistration No.100986W with Institute of Chartered Accountants of India) Mumbai as theStatutory Auditors of the Company under Section 139(8)(i) of the Companies Act 2013 tofill the casual vacancy consequent to the resignation of M/s. Haribhakti & Co. LLP.Chartered Accountants Mumbai.

As required by Section 139(8)(i) of the Companies Act 2013 and rulesmade thereunder the appointment of the Statutory Auditors to fill up the casual vacancyis also to be ratified and approved at a general meeting of the Company. Accordingly theBoard of Directors recommends the appointment of M/s. Bansal Bansal & Co. CharteredAccountants Mumbai for the ratification and approval of the members of the Company atthe ensuing AGM of the Company.

Further the Board of Directors of the Company based on therecommendation of the Audit Committee and subject to the approval of the members of theCompany approved the appointment of M/s. Bansal Bansal & Co. Chartered Accountants(Firm Registration No.100986W) with Institute of Chartered Accountants of India) Mumbaias the Statutory Auditors of the Company for a period of 3 (three) years from theconclusion of the ensuing AGM of the Company till the conclusion of the thirtieth AGM ofthe Company to be held in the year 2024 at such remuneration plus out of pocket expensesand applicable taxes as may be mutually agreed between the

Board of Directors of the Company and M/s. Bansal Bansal & Co.Chartered Accountants Mumbai.

Appropriate resolution(s) seeking ratification/approval of members forthe appointment of M/s. Bansal Bansal & Co. Chartered Accountants Mumbai as theStatutory Auditors of the Company is appearing in the Notice convening the ensuing AGM ofthe Company.

The audit for the financial year 2020-21 was conducted by M/s.Haribhakti & Co. LLP. Chartered Accountants Mumbai and there are no qualificationsreservations adverse remarks or disclaimers made by M/s. Haribhakti & Co. LLP.Chartered Accountants Mumbai in their audit report. The Notes to the financialstatements referred in the Auditors Report are self- explanatory and therefore do not callfor any comments under Section 134 of the Companies Act 2013. The Auditors' Report isannexed with the financial statements in the Annual Report.

Secretarial Auditors

M/s. Bhandari & Associates. Practicing Company Secretaries (FirmRegistration No. P1981MH043700 with the Institute of Company Secretaries of India) wasappointed to conduct the secretarial audit of the Company for the financial year2020-2021 as required under Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 amended fromtime to time. The Secretarial Audit Report for financial year ended March 31 2021 isannexed herewith marked as Annexure — V to this Board Report. The SecretarialAudit Report does not contain any qualification reservation or adverse remark.

Annual Secretarial Compliance Report

The Company has undertaken an audit for the financial year 2020-2021for all applicable compliances as per SEBI Regulations and circulars/guidelines issuedthere under. The Annual Secretarial Compliance Report for the financial year 2020-2021 hasbeen submitted to the stock exchanges in compliance with the SEBI Circular No.SEBI/HO/CFD/CMD1/ CIR/P/2020/38 dated March 19 2020 as amended from time to time.

Reporting of Frauds by the Auditors

During the year under review the Statutory Auditor and the SecretarialAuditor have not reported any instances of frauds committed in the Company to the AuditCommittee under Section 143(12) of the Companies Act 2013.

Disclosures

Meetings of the Board

The Board met 10 (Ten) times during the year and other details ofmeetings of the Board of Directors of the Company held during the financial year / tenureand the attendance of Directors forms part of the Corporate Governance Report.

Audit Committee

The constitution of the Audit Committee as on March 31 2021 is givenbelow:

Name of the Member Designation
1. Mr. Nirmal Vinod Momaya Independent Director Chairperson
2. Mr. Krishipal Raghuvanshi Independent Director Member
3. Mrs. Manjari Kacker Independent Director Member
4. Mr. Rajiv Kapoor Independent Director Member

Further the Audit Committee has been reconstituted on June 10 2021and the composition of the same as on date is as follows:

Name of the Member Designation
1. Mr. Nirmal Vinod Momaya Independent Director Chairperson
2. Mrs. Manjari Kacker Independent Director Member
3. Mr. Rajiv Kapoor Independent Director Member
4. Mrs. Minaxi Mehta Non-Executive Non- Independent Director

Nomination and Remuneration Committee

As at March 31 2021 the Nomination and Remuneration Committeeconsists of the following Independent Directors:

Name of the Member Designation
1. Mrs. Manjari Kacker Independent Director Chairperson
2. Mr. Nirmal Vinod Momaya Independent Director Member
3. Mr. Rakesh Sethi Independent Director Member

Stakeholders Relationship Committee

As at March 31 2021 the Stakeholders Relationship Committee consistsof the following members:

Name of the Member Designation
1. Mr. Rajiv Kapoor* Independent Director Chairperson
2. Mr. K. P Raghuvanshi Independent Director Member
3. Mrs. Manjari Kacker Independent Director Member

*Pursuant to resignation of Ashish Sharad Dalal the Committee wasreconstituted on November 1 1 2020 and Mr. Rajiv Kapoor was appointed as the Chairpersonof the Stakeholders Relationship Committee

Further the Stakeholders Relationship Committee has been reconstitutedon June 10 2021 and the composition of the same as on date is as follows:

Name of the Member Designation
1. Mrs. Manjari Kacker Independent Director Chairperson
2. Mr. Krishipal Raghuvanshi Independent Director Member
3. Mr. Karan Neale Desai Executive Director Member

Whistle Blower Policy/ Vigil Mechanism

In order to ensure that the activities of the Company and its employeesare conducted in a fair and transparent manner by adoption of highest standards ofprofessionalism honesty integrity and ethical behavior your Company has adopted a VigilMechanism /Whistle Blower Policy. The aim of the policy is to provide adequate safeguardsagainst victimization of whistle blower who avails of the mechanism and is also provideddirect access to the Chairperson of the Audit Committee in appropriate or exceptionalcases.

Accordingly 'Whistle Blower Policy' has been formulated with a view toprovide a mechanism for the Directors and employees of the Company to approach theChairperson of the Audit Committee of the Company.

The purpose of this policy is to provide a framework to promoteresponsible and secure whistle blowing. It protects employees willing to raise a concernabout serious irregularities within the Company.

The policy has also been uploaded on the website of Company i.e.www.dfltd.in. the link is https://www.dfltd.in/assets/pdf/new-pdf/Whistle_Blower_Policy.pdf.

Code of Conduct for Prevention of Insider Trading

The Board of Directors of the Company has amended and adopted the 'Codefor Insider Trading & Fair Disclosure of Unpublished Price Sensitive Information(UPSI)' ("Code") as formulated under SEBI (Prohibition of InsiderTrading) Regulations 2015 and SEBI (Prohibition of Insider Trading) (Amendment)Regulations 2018.

The Insider Trading Policy of the Company laid down the guidelines andprocedure to be followed and disclosures to be made while dealing with the shares of theCompany. The policy has been formulated to regulate monitor and ensure reporting ofdealings by the employees of the Company. The Insider Trading Policy of the Company asamended from time to time is available on the website of the Company i.e. www.dfltd.in.

Particulars of Loan given Investment made Guarantee given andSecurities provided by the Company

Particulars of loans given investments made and guarantees given alongwith the purpose for which the loan or guarantee is proposed to be utilized by therecipient under the provisions of Section 1 86 of the Companies Act 201 3 read with theCompanies (Meetings of Board and its Powers) Rules 2014 amended from time to time areprovided in the respective notes in the financial statement.

Significant and Material order passed by the Regulatory or Courts

There were no significant and material orders passed by the Regulators/ Courts that would impact the going concern status of the Company and its futureoperation.

Material changes and commitments affecting financial position betweenend of the financial year and date of this report

There were no material changes and commitments affecting financialposition of the Company during the period between end of the financial year and date ofthis Board Report.

Listing Fee

The equity shares of the Company are listed on BSE Limited. The Listingfee for the financial year 2021-2022 for BSE Limited has been paid by the Company.

Information under Regulation 34(3) read with Schedule V to theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015

Pursuant to Regulation 34(3) read with Schedule V to the ListingRegulations the details of the shares lying with the Company in Unclaimed SuspenseAccount as on March 31 2021 are as under:

Description No. of Shareholders No. of Shares
1 Aggregate number of shareholders and the outstanding shares in the unclaimed suspense account lying at the beginning of the financial year
2 Number of shareholders who approached issuer for transfer of shares from unclaimed suspense account during the financial year Nil Nil
3 Number of shareholders to whom shares were transferred from unclaimed suspense account during the financial year
4 Aggregate number of shareholders and the outstanding shares in the unclaimed suspense account lying at the end of the financial year

Particulars of Employees and Related Disclosures

In terms of the provisions of Section 197(12) of the Companies Act2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 (including any statutory modification/(s) and re-enactment/(s) thereof till date)the disclosures pertaining to the remuneration and other details as required is appendedas Annexure - VI to this Board Report.

A statement containing the names of every employee employed throughoutthe financial year and in receipt of remuneration of Rs. 1.02 crore or more or employedfor part of the year and in receipt of Rs. 8.5 lakh or more per month under Rule 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014(including any statutory modification/(s) and re-enactment/(s) thereof till date) isavailable for the inspection at the registered office of the Company.

Having regard to the provisions of the first proviso to Section 136(1)of the Companies Act 2013 the Annual Report excluding the aforesaid information is beingsent to the members of the Company. Any member interested in obtaining such informationmay write to the Company Secretary of the Company and the same will be furnished to them.

Internal Control System

The Company has adequate internal control system commensurate with itssize and business. The Internal Auditors of the Company reviewed that all the financialtransactions of the Company are in line with the compliance of laws policies andprocedures and have been correctly recorded and reported. The Internal Audit is conductedon regular basis and the reports are submitted to the Audit Committee at their quarterlymeetings. The Audit Committee actively reviews the adequacy and effectiveness of theinternal control system and suggests improvements to strengthen the same.

Conservation of Energy Technological Absorption Foreign ExchangeEarnings and Outgo

The particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo as required to be disclosed under Section1 34(3)(m) of the Companies Act 2013 read with Rule 8(3) of the Companies (Accounts)Rules 2014 and amended from time to time are set out in the Annexure - VII.

Prevention of Sexual Harassment

Your Company recognizes its responsibility and continues to provide asafe working environment for women free from sexual harassment and discrimination. InCompliance with the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 the Company has put in place a Policy on prevention of SexualHarassment of Women at workplace is available on the website of the Company i.e.www.dfltd.in and has duly constituted an internal complaints committee under the same.

Your Directors further state that during the year under review therewere no case filed under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

Applications under the Insolvency and Bankruptcy Code 2016

There was no application made by the Company or upon the Company underthe Insolvency and Bankruptcy Code 2016 during the year under review. There are noproceedings pending under the Insolvency and Bankruptcy Code 2016 by / against theCompany as on March 312021.

The details of difference between amount of the valuation

During the year under review there were no settlements made by theCompany for any loan / borrowing taken from the Banks or Financial Institutions and henceno comment with regard to the details of difference between amount of the valuation doneat the time of one-time settlement and the valuation done while taking loan from the Banksor Financial Institutions along with the reasons thereof.

General

Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions / events on these itemsduring the year under review:

1. Details relating to deposits covered under Chapter V of theCompanies Act 2013.

2. Issue of equity shares with differential rights as to dividendvoting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme.

4. None of the Executive Directors of the Company receive anyremuneration or commission from any of its subsidiary.

Your Directors state that during the financial year 2020-21:

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

2. The Central maintenance the Company Government has not prescribedthe of cost records for any of the products of under sub-section (1) of Section 148 of theCompanies Act 2013 and the rules framed there under.

Registration with Reserve Bank of India

The Company is registered as NBFC under Section 45-IA of the ReserveBank of India Act 1934. However RBI does not accept any responsibility or guaranteeabout the present position as to the financial soundness of the Company or for thecorrectness of any of the statements or representations made or opinions expressed by theCompany and for repayment of deposits/ discharge of liabilities by the Company.

Appreciation

Your Directors place on record their sincere appreciation for theasssistance and guidance provided by the Reserve Bank of India the Ministry of CorporateAffairs the Securities and Exchange Board of India government and other regulatoryAuthorities stock exchange other statutory bodies bankers and members of the Companyfor the assistance co-operation and encouragement and continued support extended to theCompany.

Your Directors take this opportunity to thank the customers vendorsand investors and other business partners of the Company for their continued supportduring the year and also place on record their appreciation to the contribution made bythe employees of the Company at all levels.

For and on behalf of the Board of Directors
sd/- sd/-
Rohanjeet Singh Juneja Karan Neale Desai
Place: Mumbai (Joint Managing Director) (Joint Managing Director)
Date: August 13 2021 DIN:08342094 DIN:05285546

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