126
CONTENTS
AT A GLANCE ................................................................................................................................ 2
NOTICE TO SHARE HOLDERS ................................................................................................... 3
DIRECTORS’ REPORT ................................................................................................................... 9
MANAGEMENT DISCUSSION AND ANALYSIS REPORT .................................................... 15
REPORT ON CORPORATE GOVERNANCE ............................................................................. 16
AUDITORS’ REPORT ................................................................................................................... 31
BALANCE SHEET ........................................................................................................................ 36
PROFIT AND LOSS ACCOUNT ................................................................................................. 37
NOTES FORMING PART OF ACCOUNTS................................................................................ 48
CASH FLOW STATEMENT ......................................................................................................... 58
SUBSIDIARIES
DFL HOLDINGS & SECURITIES LIMITED ............................................................................. 62
SMARTINVEST AGENCY.COM PRIVATE LIMITED .............................................................. 81
CONSOLIDATED ACCOUNTS .................................................................................................... 94
BOARD OF DIRECTORS Mr S MAHADEVAN Director
Mr G S GUSAIN Nominee Director
Mr T R SURESH Additional Director
Mr E SELVARAJ Additional Director
Mr B PRAKASH Wholetime Director
Mr S BALACHANDER Managing Director
COMPANY SECRETARY Mr I CHANDRAMOHAN
STATUTORY AUDITORS M/s. P B Vijayaraghavan & Co.,
Chartered Accountants,
New No. 14 Cathedral Garden Road
Nungambakkam, Chennai - 600 034.
BANKERS Punjab National Bank,
Bank of India,
The Catholic Syrian Bank Ltd.,
State Bank of Hyderabad,
The Dhanalaxmi Bank Ltd.,
The Federal Bank Ltd.,
Canara Bank,
Indian Overseas Bank,
ING Vysya Bank Ltd.,
State Bank of Travancore,
UCO Bank,
Yes Bank Ltd.
SUBSIDIARIES M/s. DFL Holdings & Securities Limited
M/s. Smartinvest Agency.com Private Limited
BRANCHES Tamil Nadu, Andhra Pradesh, Karnataka
REGISTERED OFFICE No 14, Ramakrishna Street, T Nagar, Chennai 600 017
Phone: 2814 1778, 2814 2663, 2814 2706
Fax: 2814 1612. Email : [email protected]
LISTING BOMBAY STOCK EXCHANGE LTD.
REGISTRAR AND M/s. Cameo Corporate Services Ltd,
TRANSFER AGENTS No.1, Club House Road, Chennai – 600 002
Phone: 044-28460390
DFL Infrastructure Finance Limited
2
AT A GLANCE
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3
NOTICE TO THE SHAREHOLDERS
Notice is hereby given that the twenty seventh Annual General meeting of the Company will be held on
Friday the 19th September, 2014 at 10.00 A M at Balamandir German Hall, (Unit of Balamandir Kamaraj
Trust), No. 17, Prakasam Street, T Nagar, Chennai 600 017 to transact the following business:
ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Financial Statements as on 31st March, 2014 together with
the report of the Board of Directors and Auditors of the Company.
2. To appoint a Director in the place of Mr. S Mahadevan (DIN : 00179338 )who retires by rotation and
being eligible offers himself for reappointment.
3. To appoint the Auditor, M/s. P B Vijayaraghavan & Co., ( Firm Regn No. 004721S) to hold office
from the conclusion of this Annual General Meeting till the conclusion of next annual general meeting
and fix their remuneration.
SPECIAL BUSINESS
4. To consider and if thought fit, to pass with or without modification(s), the following resolution as an
Ordinary Resolution
RESOLVED THAT Mr. T R Suresh (DIN : 01091253), who was appointed as an Additional Director
with effect from 5th February, 2014 by the Board of the Company in terms of Section 161 and other
applicable provisions, if any, of The Companies Act, 2013 and in terms of Article 39 of the Articles
of Association of the Company and who is entitled to hold office up to the date of ensuing Annual
General Meeting, and in respect of whom a notice has been received from a Member in writing, under
Section 160 of the Companies Act, 2013, proposing his candidature for the office of a Director, be
and is hereby appointed as a director (Independent) pursuant to the provisions of Sections 149, 150,
152 and other applicable provisions of the Companies Act, 2013 for a term of five years and to hold
office till 31.03.2019.
5. To consider and if thought fit, to pass with or without modification(s), the following resolution as an
Ordinary Resolution
RESOLVED THAT Mr. E Selvaraj (DIN : 06859420), who was appointed as an Additional Director
with effect from 3rd May, 2014 on the Board of the Company in terms of Section 161 and other
applicable provisions, if any, of The Companies Act, 2013 and in terms of Article 39 of the Articles
of Association of the Company and who is entitled to hold office up to the date of ensuing Annual
General Meeting, and in respect of whom a notice has been received from a Member in writing, under
Section 160 of the Companies Act, 2013, proposing his candidature for the office of a Director, be
and is hereby appointed as a director (independent) pursuant to the provisions of Sections 149, 150,
152 and other applicable provisions of the Companies Act, 2013 for a term of five years and to hold
office till 31.03.2019.
for and on behalf of the Board
Place: Chennai S BALACHANDER
Date : 04.08.2014 Managing Director
(DIN : 02644584)
4
NOTES:
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO
APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND SUCH PROXY
NEED NOT BE A MEMBER OF THE COMPANY. THE PROXIES IN ORDER TO BE VALID
MUST BE DULY STAMPED, EXECUTED AND RECEIVED AT THE REGISTERED /
CORPORATE OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE
COMMENCEMENT OF THE MEETING.
2. Please bring the admission slip duly filled in and handover at the entrance of the meeting hall.
3. The register of members and share transfer books of the Company will remain closed from 15.09.2014
to 19.09.2014 (both days inclusive), as per the requirements of the listing agreements.
4. Members are requested to immediately notify any change of address:
i. To the Depository Participants (DPs) in respect of their electronic share accounts.
ii. To the Registered Office at No: 14, Ramakrishna Street, T Nagar, Chennai - 600 017 in respect
of their physical share folios.
5. In case the mailing address mentioned on this Annual Report is without the pin code, members are
requested to kindly inform their pin code immediately.
6. The Company has remitted all the unclaimed /unpaid dividends upto the financial year 2005-06 to the
central government account. No dividend has been declared from the financial year 2006-07.
7. The Company has a designated E-mail ID for Investor Grievance. All the shareholders are requested
to mail their Grievance to [email protected]
8. Members are requested to quote their folio numbers, DPID No. and client ID in all their
correspondence.
9. Members are requested to bring their copies of the Annual report for the meeting.
10. As per the provisions of the amended Companies Act, 1956, facility for making nomination is now
available to individuals holding shares in the Company. The nomination form 2B prescribed by the
Government can be obtained from the Company.
11. As required under the Listing Agreement, the particulars of directors who are proposed to be
appointed / re-appointed are given in the Report on Corporate Governance.
12. Shareholders are requested to see Annexure I as attached hereto relating to awareness about the
GREEN INITIATIVE IN CORPORATE GOVERNANCE - Electronic Mode of service of
documents introduced by The Ministry of Corporate Affairs (MCA) by issuing circulars no. 17/2011/
95/2011 CL.V dated 21.04.2011 and 29.04.2011
13. The instructions for shareholders voting electronically are as under:
(i) The voting period begins on 13.09.2014 at 9.00 a.m and ends on 15.09.2014 at 6.00 p.m. During
this period shareholders' of the Company, holding shares either in physical form or in
dematerialized form, as on the cut-off date (record date) of 08.08.2014, may cast their vote
electronically. The e-voting module shall be disabled by CDSL for voting thereafter.
5
(ii) The shareholders should log on to the e-voting website www.evotingindia.com.
(iii) Click on Shareholders.
(iv) Now Enter your User ID
a. For CDSL: 16 digits beneficiary ID,
b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,
c. Members holding shares in Physical Form should enter Folio Number registered with the
Company.
(v) Next enter the Image Verification as displayed and Click on Login.
(vi) If you are holding shares in demat form and had logged on to www.evotingindia.comand voted
on an earlier voting of any company, then your existing password is to be used.
(vii) If you are a first time user follow the steps given below:
For Members holding shares in Demat Form and Physical Form
PAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department
(Applicable for both demat shareholders as well as physical shareholders)
l Members who have not updated their PAN with the Company/Depository
Participant are requested to use the first two letters of their name and the 8 digits
of the sequence number in the PAN field. (Sequence number has been provided as
Serial Number (SL NO.) in the Address Label
l In case the sequence number is less than 8 digits enter the applicable number of
0's before the number after the first two characters of the name in CAPITAL letters.
Eg. If your name is Ramesh Kumar with sequence number 1 then enter
RA00000001 in the PAN field. Sequence no has been provided as Sl No in the
address label
DOB Enter the Date of Birth as recorded in your demat account or in the company records
for the said demat account or folio in dd/mm/yyyy format.
Dividend Enter the Dividend Bank Details as recorded in your demat account or in the company
Bank records for the said demat account or folio.
Details l Please enter the DOB or Dividend Bank Details in order to login. If the details are
not recorded with the depository or company please enter the member id / folio
number in the Dividend Bank details field as mentioned in instruction (v).
(viii) After entering these details appropriately, click on "SUBMIT" tab.
(ix) Members holding shares in physical form will then directly reach the Company selection screen.
However, members holding shares in demat form will now reach 'Password Creation' menu
wherein they are required to mandatorily enter their login password in the new password field.
Kindly note that this password is to be also used by the demat holders for voting for resolutions
of any other company on which they are eligible to vote, provided that company opts for e-
voting through CDSL platform. It is strongly recommended not to share your password with any
other person and take utmost care to keep your password confidential.
6
(x) For Members holding shares in physical form, the details can be used only for e-voting on the
resolutions contained in this Notice.
(xi) Click on the EVSN for the relevant <Company Name> on which you choose to vote.
(xii) On the voting page, you will see "RESOLUTION DESCRIPTION" and against the same the
option "YES/NO" for voting. Select the option YES or NO as desired. The option YES implies
that you assent to the Resolution and option NO implies that you dissent to the Resolution.
(xiii) Click on the "RESOLUTIONS FILE LINK" if you wish to view the entire Resolution details.
(xiv) After selecting the resolution you have decided to vote on, click on "SUBMIT". A confirmation
box will be displayed. If you wish to confirm your vote, click on "OK", else to change your vote,
click on "CANCEL" and accordingly modify your vote.
(xv) Once you "CONFIRM" your vote on the resolution, you will not be allowed to modify your
vote.
(xvi) You can also take out print of the voting done by you by clicking on "Click here to print" option
on the Voting page.
(xvii) If Demat account holder has forgotten the same password then Enter the User ID and the image
verification code and click on Forgot Password& enter the details as prompted by the system.
(xviii) Note for Non - Individual Shareholders and Custodians
l Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are
required to log on to www.evotingindia.comand register themselves as Corporates.
l A scanned copy of the Registration Form bearing the stamp and sign of the entity should
be emailed to [email protected].
l After receiving the login details they have to create a compliance user should be created
using the admin login and password. The Compliance user would be able to link the
account(s) for which they wish to vote on.
l The list of accounts should be mailed to [email protected] and on approval
of the accounts they would be able to cast their vote.
l A scanned copy of the Board Resolution and Power of Attorney (POA) which they have
issued in favour of the Custodian, if any, should be uploaded in PDF format in the system
for the scrutinizer to verify the same.
(xix) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked
Questions ("FAQs") and e-voting manual available at www.evotingindia.com, under help section
or write an email to [email protected].
7
EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013
SPECIAL BUSINESS:
Item No. 4
Mr. T R Suresh was appointed as an Additional director with effect from 5th February, 2014. He holds
office only upto the date of the forthcoming Annual General meeting. In terms of Sec 161 and other
applicable provisions, if any, of The Companies Act, 2013 the Company has received a notice in writing
from a member signifying his intention to propose Mr. T R Suresh as a candidate for the office of Director.
The Board proposes to appoint him as a director (Independent), not liable to retire by rotation, as per the
relevant provisions of the Companies Act, 2013. The Board recommends the resolution for your approval.
None of the Directors except T R Suresh is deemed to be interested in the resolution.
Item No. 5
Mr. E Selvaraj was appointed as an Additional director with effect from 3rd May, 2014. He holds office
only upto the date of the forthcoming Annual General meeting. In terms of Sec 161 and other applicable
provisions, if any, of The Companies Act, 2013 the Company has received a notice in writing from a
member signifying his intention to propose Mr. E Selvaraj as a candidate for the office of Director. The
Board proposes to appoint him as a director (Independent), not liable to retire by rotation, as per the
relevant provisions of the Companies Act, 2013. The Board recommends the resolution for your approval.
None of the Directors except E Selvaraj is deemed to be interested in the resolution.
for and on behalf of the Board
Place: Chennai S BALACHANDER
Date : 04.08.2014 Managing Director
(DIN : 02644584)
8
ANNEXURE I
Green initiative in Corporate Governance - Electronic Mode of service of documents
The Ministry of Corporate Affairs (MCA) has taken a Green Initiative in Corporate Governance by issuing
circulars no. 17/2011/95/2011 CL.V dated 21.04.2011 and 29.04.2011, permitting companies to service
documents to their shareholders through an electronic mode.
To support this sustainability initiative of MCA, we propose to send future communication, including
Notice of Annual General Meeting and Annual Report of the Company for the year 2013-14 onwards, in
electronic mode to your e-mail address available in the Register of Members of the Company.
This initiative by the government will not only go a long way in conservation of the environment but also
enable you to receive notices/documents, etc. promptly and without loss in postal transit. In order for you
to receive notices/documents of the Company on email you would be required to register your email with
the Company and/or update your email with your depositary participant with NSDL / CDSL. As and when
there are changes in your email address, you are requested to keep your Depository Participant (DP)
informed of the same.
We request your support in this endeavour. To receive the e-version of the Annual Report for the year ended
31.03.2015, you are requested to register your mail ID with the concerned as soon as you receive Annual
Report in physical form. Besides ensuring that your mailbox has adequate free capacities to receive
approximately 2 MB of communication. However, in case you do desire to receive the Annual Report in
physical form from 2014 onwards, you are requested to inform us by sending an email to [email protected]
and indicating your preference. A copy will be sent to you free of cost.
Please note that the Annual Report will also be available on the Company's website www.dflfinance.com
for viewing/downloading. Physical copies of the Annual Report will also be available at our Registered
Office in Chennai for inspection during office hours.
We look forward to your whole-hearted response for the success of this green initiative.
Assuring you of our best services at all times,
Thanking you,
S BALACHANDER
Managing Director
(DIN : 02644584)
9
Your Directors present their Twenty Seventh Annual Report together with the Audited accounts for the
financial year ended March 31, 2014.
1. FINANCIAL RESULTS (Rs. In Lakhs)
For the Financial For the Financial
PARTICULARS year ended year ended
31.03.2014 31.03.2013
GROSS INCOME 223.23 340.45
PROFIT/(LOSS) BEFORE INTEREST & DEPRECIATION (345.92) (644.32)
LESS: INTEREST 941.17 872.13
PROFIT/(LOSS) BEFORE DEPRECIATION (1287.09) (1516.45)
LESS: EXCEPTIONAL ITEMS – –
LESS : DEPRECIATION 22.56 (45.11)
PROFIT / (LOSS) BEFORE TAX (1309.65) (1561.56)
PROVISION FOR TAXATION (including FBT / Deferred tax) – –
PROFIT / (LOSS) AFTER TAX (1309.65) (1561.56)
ADD: BALANCE FROM LAST YEAR (16916.85) (15355.29)
PROFIT /(LOSS) AVAILABLE FOR APPROPRIATION (18226.50) (16916.85)
PROPOSED DIVIDEND (Including Dividend Tax) Nil Nil
TRANSFER TO STATUTORY RESERVE Nil Nil
TRANSFER TO GENERAL RESERVE Nil Nil
BALANCE CARRIED FORWARD (18226.50) (16916.85)
DIRECTORS’ REPORT
2. DIVIDEND
In view of the absence of profit, the Board is not recommending any dividend on the Equity Shares of the
Company during the period under review.
The Preference Shares issued to the Banks in terms of the CDR Approval carry a Cumulative Dividend of
9% and the Preference Shares issued to the Asia Pragati Capfin Private Limited a Cumulative Dividend of
4%. An amount of Rs. 346.52 Lakhs and Rs. 89.04 Lakhs respectively amounting to total of Rs. 435.56
Lakhs being the amount of Dividend accumulated but not paid are shown under Contingent Liability.
3. OPERATIONS
During the financial year ended 31st March, 2014, due to the inability in implementing the CDR package
by the Banks the company was unable to disburse any amount as against a disbursement of Rs. 366.95
Lakhs during the previous period.
Your Company has been focusing on Collections during the year. In spite of the absence of any fresh Funds
infused by the Banks, the Company was able to meet all the statutory, Staff obligations because of the
Strong Collection mechanism.
10
4. Holding Company - Auctus Holdings Private Limited
The Company has been informed by M/s. Auctus Holdings Private Limited (Auctus) that they have
purchased 8750 equity shares of our company comprising of 0.15% through Open Offer from the public
in December, 2012.
It may be noted that as per Share Purchase Agreement dated 13th March, 2012, 30,36,703 Equity Shares
comprising of 51% of Equity Capital of DFL Infrastructure Finance Limited was purchased from D B
Zwirn Mauritius on June, 2013. Accordingly, DFL Infrastructure Finance Limited becomes subsidiary of
Auctus.
Now Auctus holds 30,45,453 equity shares of DFL Infrastructure Finance Limited comprising of 51.15%
to total Equity Capital.
5. PRUDENTIAL NORMS
Reserve Bank of India has prescribed prudential norms for registered Non Banking Financial Companies
on various parameters. Your Company is in Category "B" with effect from 27th November, 2012.
6. Prohibitory Order from Reserve Bank of India
After completion of inspection of the books of accounts and other records of the Company carried out
Under Section 45-N of the RBI Act, 1934, the Reserve Bank of India hereby directs that until further orders
the Company shall not
a) Sell, transfer, create charge or mortgage or deal in any manner with its property and assets
without prior written permission of the Reserve Bank of India;
b) Declare or distribute any dividend;
c) Transact any business; or
d) Incur any further liabilities.
7. ASSET LIABILITY MANAGEMENT COMMITTEE
The company has an Asset Liability Management Committee, which monitors the Asset Liability mismatch.
8. EXPLANATIONS TO THE REMARKS IN AUDITORS' REPORT AS PROVISIONS OF
SECTION 217(3) OF THE ACT:
In response to the Emphasis of matter made by the Auditor, the Board wishes to place the following
explanation:
Reference to the
Auditors ReportHead of Account Reference to notes below
CDR implementation Refer note a
RBI directions Refer note b
Net worth Refer note c
Redeemable Preference Shares Refer note d
Loans & advances Refer note e
Dividend for Preference Shares Refer note f
Attention invited
to Shareholder
11
a. CDR implementation:
The Management of the Company approached the CDR Cell for the restructure of debts
extended by consortium banks and was approved by CDR. However some of the Banks did not
approve the CDR/CDR Re-work schemes due to which the Company was unable to implement
the CDR rework scheme. The management is taking efforts to arrive at an acceptable One Time
Settlement (OTS) with Secured Creditors.
b. Prohibitory Directions from Reserve Bank of India:
The Company has represented to Reserve Bank of India to withdraw the Directions.
c. Net Owned Funds:
Reason for fall in Net Owned Funds:
i. The company has gone through years of losses due to impairment of assets since 2007.
Due to this substantial write offs in the past 5 years, the company has incurred losses
amounting to more than Rs. 150 Crores.
ii. The Company has not been carrying out its main activity of lending since 2010 and hence
no revenue generation has taken place. This has also contributed to the fall in the NOF.
Actions taken to improve the Net Owned Funds:
i. The company has converted part of the debt into Preference Shares thus improving the
Capital base.
ii. The management is in dialogue with investors to bring in fresh equity funds to strengthen
the capital base.
iii. The CDR package has not been approved by all the banks and hence no fresh funds have
been extended by the banks. The company is in dialogue with the Consortium Banks for
a "one time settlement".
iv. The management is pursuing efforts to raise funds from financial entities to re-commence
the lending operations.
d. Preference Shares Allotted to Asia Pragati Capfin Pvt. Ltd. Limited:
The Redeemable Preference Shares issued to Asia Pragati Capfin Limited in the year 2007
should have been redeemed in December 2009. However due to absence of Profits and financial
strain, the said shares were not redeemed. The company negotiated with the Preference
Shareholders and rescheduled the redemption dates to 2017/2018/2019. Hence as on date of this
Annual Report there is no default. However, the Dividend on these share due from 1-4-2013
have not been paid / provided in the absence of Profits.
e. Loans and Advances:
The remuneration paid to Mr. Ravichandran (erstwhile Managing Director) was not approved by
the shareholders in the general meeting held in December 2010. Hence the company could not
approach the Central Government for approval. As the remuneration was already paid, this
amount was classified under Loans and Advances. Efforts are underway to recover the amount.
f. Dividend on Preference Shares issued to the Banks:
The consortium Banks have converted part of their outstanding to optionally Convertible
Preference Shares as per the CDR Approval. This bear a cumulative dividend of 9%. However
in the absence of Profits, the dividends have not been paid / provided since 2011-12 and also
for the year 2013-14. Since the dividends are cumulative in nature, the same will be paid as and
when profits are made.
12
9. CORPORATE GOVERNANCE
Your Company is complying with the Code of Corporate Governance introduced by SEBI. A detailed report
on Corporate Governance together with a certificate from the Statutory Auditors in compliance of Clause
49 of the Listing Agreement is attached which forms part of the Directors' Report.
10. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussions and Analysis report highlighting the performance of the company is attached
forming part of the Directors' Report.
11. OTHER DISCLOSURES
a. SUBSIDIARIES
The Annual Accounts for the period ended March 31, 2014 of the Subsidiary Companies DFL
Holdings and Securities Ltd and Smartinvest Agency.Com Private Limited are annexed to your
Company's Annual Report.
b. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statement for the period ended March 31, 2014 prepared in accordance with
Accounting Standards 21 on Consolidated Financial Statements-issued by the Institute of Chartered
Accountants of India, is also provided in this Annual Report in accordance with Clause 32 of the
Listing Agreement.
12. DIRECTORS:
Change in Directorship during the period:
S.No. Particulars Compliance
1 Mr. V Sambamoorthy, Additional Director
of the Company has resigned on 14th
September, 2013
2 Ms. S Mythili, Additional Director of the
Company has resigned on 14th September,
2013
3 Ms. Krithika Sambamoorthy, Additional
Director of the Company has resigned on
14th September, 2013
4 Dr. R Baskaran, Director of the Company
has resigned on 5th February, 2014
5 Mr. T R Suresh was appointed as
additional director with effect from 5th
February, 2014
6 Mr. E Selvaraj was appointed as additional
director with effect from 3rd May, 2014
The Board accepted his resignation vide
the Board Meeting dated 16th September,
2013
The Board accepted her resignation vide
the Board Meeting dated 16th September,
2013
The Board accepted her resignation vide
the Board Meeting dated 16th September,
2013
The Board accepted his resignation vide the
Board Meeting dated 5th February, 2014
Approvals of the Board of Directors
obtained vide the meeting dated 5th
February, 2014
Approvals of the Board of Directors
obtained vide the meeting dated 3rd May,
2014
13
Retirement by Rotation
Mr. S Mahadevan, director liable to retire by rotation, being eligible offers himself for reappointment.
Disqualification of Directors:
None of the Directors is disqualified to hold directorships under the provisions of Section 274(1) (g) of the
Companies Act, 1956.
13. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors confirm:
1. That in the preparation of the annual accounts, the applicable accounting standards have been
followed;
2. That they have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company at the end of the period and of the loss of the Company for
the financial year ended 31st March, 2014.
3. That they have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956 for safeguarding the
assets of the company and for preventing and detecting fraud and other irregularities; and
4. That they have prepared the annual accounts on a going-concern basis.
14. AUDITORS
M/s. P. B. Vijayaraghavan & Co, Chartered Accountants, Statutory Auditors of the Company retire at the
ensuing Annual General Meeting and being eligible offer themselves for re-appointment.
A certificate under Section 224(1B) of the Companies Act, 1956 has been received from M/s P. B.
Vijayaraghavan & Co.
15. STATUTORY STATEMENT
A. Statement pursuant to Sec.212 (3) of the Companies Act, 1956 in respect of Subsidiary
Companies is annexed.
B. The equity shares of your Company are listed at the Bombay stock Exchange.
C. The Company has paid the Listing fees to Bombay stock Exchange for the years 2014-15 and
Annual Custodial Fees to National Securities Depository Limited and Central Depository
Services Limited.
D. Information under section 217(2A) of the Companies Act, 1956 read with Companies
(Particulars of employees) Rules, 1975 is given hereunder:
In terms of the provisions of section 217(2A) of the Companies Act, 1956 read with Companies (Particulars
of Employees) Rules, 1975 as amended, the name and other particulars of employees are required to be
set in the Director's report. However, as per the provisions of Section 219(1)(b)(iv) of the Act, the annual
report excluding the said information is being sent to all the shareholders.
Members who are interested in obtaining such particulars may write to the company's registered office.
14
16. INFORMATION AS PER SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956
The Company is a Non Banking Finance Company and has no activity relating to Conservation of Energy
or technology absorption.
The Company does not have any Foreign Exchange earnings and Outgo.
17. ACKNOWLEDGEMENTS
Your Directors thank the Company's Bankers and the Financial Institutions for their support. Your Directors
also thank the customers and share-holders and also appreciate the wholehearted effort and co-operation
rendered by the employees at all levels.
for and on behalf of the Board
Place: Chennai S BALACHANDER
Date : 04.08.2014 Managing Director
(DIN : 02644584)
15
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Industry structure and development:
Business scenario:
The Company is engaged in the Non-Banking Financial services Business (NBFC).
The consortium of Banks which earlier agreed to support the CDR package reversed their stand. The
company has proposed One Time Settlement to the Banks which is under their consideration. The Company
has been focusing on Collections during the year.
Economy overview:
The Indian Economy is showing signs of revival and with the new political climate, the economy is
expected to grow further.
The financial services sector which has been at the cross roads due to uncertain political scenario, is now
expected grow faster while the need for fresh funds infusion there, not much progress had taken place. With
the Reserve Bank of India announcing the norms for issuing fresh Licenses for Banks, the Financial
Services entities are looking at this opportunity.
Opportunities and threats:
The market in which your company mainly operates is growing slowly. There are new players entering the
semi urban and rural markets. This is likely to increase the competition. However, due to the escalating
costs of the new commercial vehicles and many shying away from bank finances, the market for used
commercial vehicles remains buoyant. However to utilize this opportunity, your company needs to recover
and commence operations again.
Review of Operations:
During the financial year ended 31st March, 2014, due to the inability in implementing the CDR package
by the Banks the company was unable to disburse any amount as against a disbursement of Rs. 366.95
Lakhs during the previous period.
Your Company has been focusing on Collections during the year under Review. Inspite of the absence of
any fresh Funds, the Company was able to meet all the statutory obligations because of the Strong
Collection mechanism.
Outlook 2014-15
Your Company expects to overcome the adverse happenings which held back the progress of your company
in past four years. With the fresh funds infusion, your Company is hoping to shift to the growth path in
the coming years.
Risk & concerns:
As an NBFC, your Company is subjected to both external risk and internal risk. External risk due to interest
rate fluctuation, slowdown in economic growth rate, political instability, market volatility, decline in foreign
exchange reserves, etc. Internal risk is associated with your Company's business which includes overcoming
the adverse happenings, OTS with Banks, retention of talented personnel, NPAs in portfolio, contingent
liabilities and other legal proceedings. Your Company recognizes the importance of risk management and
has invested in people, process and technologies to effectively mitigate the above risks.
16
CORPORATE GOVERNANCE REPORT
The Board of Directors of the Company lays great emphasis on the broad principles of Corporate
Governance. Given below is the report on Corporate Governance.
1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE
DFL Infrastructure Finance Limited (DFL) recognizes that Transparency and accountability are the
touchstone of the Corporate Governance. The ultimate objective of the Corporate Governance is to enhance
value in the long term for all stakeholders and decision-making process reflects this concern.
DFL is committed to conduct its business in a manner, which will ensure long-term growth thereby
maximizing value of its shareholders, customers, employees and society at large. DFL's policies are in line
with Corporate Governance guidelines prescribed under the Listing Agreements with the Stock Exchange
and the Company ensures that various disclosures requirement are complied with for effective Corporate
Governance.
DFL recognizes that good Corporate Governance is essential to build and retain the confidence of all
stakeholders. To this end, the Company's is to endeavors to ensure:
1. That the system and procedure to monitor the compliance with laws, rules and regulations are in place
in each area of its business.
2. That the relevant information regarding the Company and its operations is disclosed, disseminated and
easily available to its stakeholders.
3. That the Board of Directors is kept fully informed of all material developments in the Company, the
risks in its business and its operations and the rationale for management's decisions and
recommendations so that the Board of Directors can effectively discharge its responsibilities to
stakeholders.
CORPORATE CODE OF CONDUCT
The activities and conduct of the company and its employees are governed by the Code of Conduct of the
Group. The major salutary principles prescribed by the Code of Conduct are:
(a) Conduct of business in consonance with national interest
(b) Fair and accurate possible presentation of financial statement
(c) Practicing political non-alignment
(d) Maintaining quality of product and services
(e) Being a good corporate citizen
(f) Ethical conduct
(g) Commitment to enhancement of stakeholder's value / statutory compliance in all areas.
BOARD OF DIRECTORS
The Company has ensured that the Board functions with utmost transparency, independence which enables
the Directors to take informed decisions. To this effect, steps have been taken to ensure that the Board
consists of distinguished members with expertise in various fields. The board at DFL is fully aware of its
responsibilities to the company, to the stakeholders and to the regulatory authorities and is working towards
achieving these responsibilities.
REPORT ON CORPORATE GOVERNANCE
17
DFL has appropriate personnel in respective position to handle risk management, credit approval
collections / sales management. DFL is committed to ethical values and desires lawful business to be
conducted by those at helm of the affairs. In connection with this, the company has formulated a code of
conduct applicable to Board and senior management. The company also adopted strict insider trading code
for preventing insider trading within the company.
Composition of Board
The board has been constituted in such a way to have appropriate mix of the directors with expertise in
banking, law, finance, IT, etc. The company has two independent directors to comply with the provisions
of the listing agreements. The directors are elected based on their qualification and expertise based on the
company's needs. The Board of Directors consists of six members as on the date of the Board Meeting
approving this report, the details of which are given below:
Directorship Membership in
Director Position Designation in other other Board
Companies # Committees
S Mahadevan Non Executive Director – –
S Balachander Executive Managing Director – –
G S Gusain Nominee Director – Nominee Director – –
Independent
B Prakash Executive Wholetime Director 1 –
T R Suresh Non Executive – Director – –
Independent
E Selvaraj Non Executive – Director – –
Independent
# excludes private limited companies and membership in board and other committees of DFL Infrastructure Finance Limited.
Mr. S Balachander is related with Mr. S Mahadevan
BOARD MEETINGS
The Board of directors meets at regular intervals and the dates for Board meetings are fixed in advance.
The Board is briefed on key parameters and activities of the business by way of briefings, business plan
documents and presentations on need basis. The Board of the Company met on the following dates during
the financial year ended 31st March, 2014.
28.05.2013, 12.08.2013, 16.09.2013, 6.11.2013 and 5.02.2014
Dr. R Baskaran, Mr. G S Gusain, Mr. S Mahadevan, Mr. B Prakash and Mr. S Balachander were present
during the last Annual General Meeting of the Company held on September 18, 2013.
The Company placed before the Board the annual operating plans, budgets, performance of various
branches and other information including those specified under Annexure I of the Listing Agreement, from
time to time.
18
S.
NoName of the Director
Held Attend
Attendance
at
AGM
held on
18.09.2013
Number of directorships in other public
companies and Committee memberships /
Chairmanships in DFL (only audit and
shareholders / investors grievance
committees considered)
Directorships Committee
memberships
Committee
Chairmanships
1 Mr. S Mahadevan 5 4 Attended – 2 –
2 Mr. G S Gusain 5 – Absent – 2 1
3 Mr. T R Suresh @ 1 1 NA – – –
4 Mr. B Prakash 5 5 Attended – 1 –
5 Mr. S Balachander 5 5 Attended – 2 –
6 Mr. V Sambamoorthy * 2 2 NA – 1 2
7 Ms. Krithika Sambamoorthy^ 2 1 NA – 1 –
8 Ms. S Mythili # 2 2 NA – 2 –
9 Dr. R Baskaran % 4 4 Attended – 2 1
10 E Selvaraj ! – – – – – –
@ Appointment with effect from 5th February, 2014
* Resigned on 14th September, 2013
^ Resigned on 14th September, 2013
# Resigned on 14th September, 2013
% Resigned on 5th February, 2014
! Appointment with effect from 3rd may, 2014
No of Board
Meetings
Details of Directors seeking appointment / re-appointment at the Annual General meeting:
Name S Mahadevan T R Suresh E Selvaraj
Age 40 48
Date of Appointment 30.11.2012 5.02.2014 03.05.2014
Chartered Accountant, M.Com; LLB;
Qualification Company Secretary & B. Com(Hons), A C A Dip in Taxation Law,
Cost Accountant ACS (Inter)
Areas of Expertise Banking & Professional Services Company Law
Financial Service Consultant & Advocate
Number of other Indian companies
holding directorship3 1 0
Number of membership in other committees 2 2 2
Number of shares held in the company Nil Nil Nil
AUDIT COMMITTEE
The Audit Committee monitors and provide effective supervision of the management's financial reporting
process with a view to ensuring accurate, timely and proper disclosure and transparency, integrity and
quality of financial reporting. The Audit Committee adheres to the Listing Agreement in terms of quorum
19
for its meetings, functioning, role and powers as also those set out in the Companies Act, 1956. The
functions of the committee include:
a. Overseeing the company's financial reporting process and disclosure of its financial information to
ensure that the financial statements are correct, sufficient and credible
b. Recommendation of appointment and removal of external auditor, fixation of audit fee and also
approval for payment for any other services
c. Review of quarterly / annual financial statements before submission to the Board
d. Review of adequacy of internal control systems
e. Review the internal audit function.
f. Review of the company's financial and risk management policies
The company has an Audit Committee, consisting of Independent and Non-Executive Directors. All the
members including the Chairman have adequate financial and accounting knowledge
The present composition of the committee Mr. T R Suresh (Chairman), Mr. S Mahadevan and Mr. G S
Gusain Members of the Audit Committee of the Company met on 28.05.2013, 12.08.2013, 06.11.2013 and
5.02.2014 during the period. Requisite quorum was present in all the audit committee meetings. The
Company Secretary is act as the Secretary of the Audit Committee.
S No Director No of Meetings No of Meetings attended
1 G S Gusain 4 -
2 S Mahadevan 4 3
3 V Sambamoorthy 2 2
4 R Baskaran 3 3
5 T R Suresh 1 1
SHARE TRANSFER AND INVESTOR RELATIONS COMMITTEE
The Composition of the Committee includes Mr. S Mahadevan (Chairman), Mr. B Prakash and Mr. S
Balachander.
S No Director No of Meetings No of Meetings attended
1 S Mahadevan 1 1
2 V Sambamoorthy 1 1
3 R Baskaran 2 2
4 B Prakash 3 3
5 S Balachander 3 3
The Share transfer & Investor Relations Committee approves and monitors transfers, transmission, splits
and consolidation of shares of the Company, reviews Redressal of complaints from shareholders relating
to transfer of shares, non-receipt of dividends and other grievances. The Committee also reviews the
compliances with various statutory and regulatory requirements. During the period, committee met 3 times.
l All shares have been transferred within one month from the date of the receipt so long as the
documents are clear in all respects.
20
l Total numbers of share transferred in physical form for the financial year ended 31st March, 2014
were 888 shares numbering to 41 share transfers.
l There is no transmission during the financial year ended 31st March, 2014.
l Total numbers of Remat for the financial year ended 31st March, 2014 were 65,900 shares
numbering to 13 remats.
l There are no transfers pending with the Company as on 31st March, 2014.
Details of complaints regarding shares for the year:
Nature of complaint Number of complaints Complaints redressed
Non receipt of dividend 8 8
Non receipt of shares lodged for transfer – –
Total 8 8
Mr. Chandramohan I, Company Secretary is the Compliance Officer of the Company.
Remuneration committee:
The remuneration committee, which will assist / suggest the Board in finalizing the compensation packages
for the employees of the company. The Committee would have its own terms of references on the basis
of which the committee would function. The minutes of the Remuneration committee will be placed before
the subsequent Board meeting for ratification and adoption.
The terms of reference of the committee amongst others, shall include:
To assist the Board in the determination of specific remuneration packages / any compensation payment to
Managing and Executive Directors
To provide independent view / opinion on the company's compensation policies with respect to executive
management.
To develop and review annual compensation plans, including pension rights, periodic review of salary
increments to the executive directors.
To review and approve compensation plans or any other benefits to the employees of the company as a
whole.
The composition of the committee includes Mr. T R Suresh, Chairman, Mr. E Selvaraj and Mr. G S Gusain
Members of the remuneration Committee of the Company.
REMUNERATION OF DIRECTORS
The remuneration package of Managing Director and Wholetime Director has been calculated in
accordance with the requirements of Schedule XIII of the Companies Act, 1956.
The remuneration of the Managing Director and Wholetime Director were approved by the shareholders
through Postal Ballot on 18th March, 2014.
The non-executive directors are being remunerated by way of sitting fees. The details of remuneration paid
to the Managing Director and Wholetime Director are disclosed in the Notes on Accounts.
21
Name of the Director Date of Date of Salary Allowances / Sitting Total
Appointment cessation PF fees
Mr. G S Gusain 08.04.2011 NA – – – –
Mr. B Prakash 30.11.2012 NA 22.83 16.22 – 39.05
Mr. S Balachander 14.02.2011 NA 50.00 – – 50.00
Mr. V Sambamoorthy* 18.10.2012 14.09.2013 – – 0.33 0.33
Ms. Krithika
Sambamoorthy^30.11.2012 14.09.2013 – – 0.09 0.09
Ms. S Mythili# 30.11.2012 14.09.2013 – – 0.18 0.18
Dr. R Baskaran% 30.11.2012 05.02.2014 – – 0.61 0.61
Mr. S Mahadevan 30.11.2012 NA – – 0.51 0.51
Mr. T R Suresh @ 05.02.2014 NA – – 0.14 0.14
@ Appointment with effect from 5th February, 2014
* Resigned on 14th September, 2013
^ Resigned on 14th September, 2013
# Resigned on 14th September, 2013
% Resigned on 5th February, 2014
Remuneration paid for the financial year ended 31st March, 2014
Rs. in Lakhs
GENERAL BODY MEETINGS
Time and location of last three Annual General Meetings
Year Date Time Location Special Resolution
Passed
2011 28.06.2011 10.30 am Balamandir German Hall,
(Unit of Balamandir Kamaraj Trust) Nil
No. 17, Prakasam Street, T Nagar,
Chennai 600 017
2012 20.09.2012 09.00 am Balamandir German Hall, Payment of
(Unit of Balamandir Kamaraj Trust) remuneration to
No. 17, Prakasam Street, T Nagar, Managing Director
Chennai 600 017
2013 18.09.2013 10.30 am Balamandir German Hall, Payment of
(Unit of Balamandir Kamaraj Trust) remuneration to
No. 17, Prakasam Street, T Nagar, Wholetime Director
Chennai 600 017
22
Extra-ordinary General Meetings (EGM)
During the year, no extra-ordinary general meetings were held.
Postal Ballot
Your Company, vide postal ballot dated 5th February, 2014, sought the consent of its members in respect
of the resolutions for the purpose of:
Resolution 1: Special Resolution for Payment of Remuneration to Mr. Sreenivasan Balachander,
Managing Director
Particulars No. of Postal No. of % of
Ballot Forms Shares Vote
Postal Ballot Forms with Assent for the Resolutions for
payment of remuneration to Mr. Sreenivasan Balachander, 86 3342697 99.7189
Managing Director, under Sections 198, 269 and 310 read
with Schedule XIII:
Postal Ballot Forms with Dissent for the Resolutions for
payment of remuneration to Mr. Sreenivasan Balachander, 34 9424 0.2811
Managing Director, under Sections 198, 269 and 310 read
with Schedule XIII:
Postal Ballot Forms with Not Voted for this Resolution: 0 0 0
Particulars No. of Postal No. of % of
Ballot Forms Shares Vote
Postal Ballot Forms with Assent for the Resolutions for
payment of remuneration to Mr. Bakthavathsalu Prakash, 80 3342097 99.7010
Whole Time Director, under Sections 198, 269 and 310 read
with Schedule XIII:
Postal Ballot Forms with Dissent for the Resolutions for
payment of remuneration to Mr. Bakthavathsalu Prakash, 33 8874 0.2647
Whole Time Director, under Sections 198, 269 and 310 read
with Schedule XIII:
Postal Ballot Forms with Not Voted for this Resolution: 7 1150 0.0343
Resolution 2: Special Resolution for Payment of Remuneration to Mr. Bakthavathsalu Prakash,
Whole-Time Director
23
Mr. M. Damodaran of M/s. Damodaran & Associates, Company Secretaries, Chennai, appointed as
Scrutinizer has submitted his report on the postal ballot on 18.03.2014. The above result was published by
the Chairman on 18.03.2014.
Compliance report:
The Board reviews periodically of all the compliance requirements and provide necessary directions.
Code of Conduct
The Board has laid down a code of conduct for the board and senior management of the company and is
prominently displayed on the website. Annual declaration is obtained from every person covered by the
code of conduct. A declaration to this effect signed by the Whole time Director is attached to this report.
CEO/CFO certification:
CEO / CFO's certificate pursuant to Clause 49 of the listing agreement forms part of this Annual report.
DISCLOSURES
i. There are no materially significant transactions with related parties, subsidiaries, promoters, directors
or the management and their relatives conflicting with the Company's interests.
ii. There were no instances of non-compliance by the Company on any matter related to Capital markets
during the last three years.
iii. The Whistle Blower policy being a non mandatory requirement, the Company has not evolved any
policy for the same. However, as a matter of internal check, the Company's in house Internal Audit
department is powered to bring to the notice of the management, by way of internal reporting of any
occasion of unethical activities, which will be seriously discussed and deliberated upon in the Audit
committee meetings.
iv. The company has complied with all the mandatory requirements of the Clause 49 and has obtained
a certificate from the statutory auditors of the company which forms part of this annual report. The
extent of compliance of non mandatory requirements is specified later in this report.
MEANS OF COMMUNICATION
Quarterly and Annual Results were published in accordance with the Stock Exchange Listing Agreement in
"Trinity Mirror" (English) and "Makkal Kural" (Tamil).
The results were also displayed on the Company's website @ www.dflfinance.com
GENERAL SHAREHOLDER INFORMATION
Annual General meeting
Date Time Venue
19.09.2014 10.00 am Balamandir German Hall,
17, Prakasam Street,
T. Nagar, Chennai – 600 017
24
Financial Calendar
Financial year - 1st April, 2014 to 31st March, 2015
Board Meeting for consideration of accounts 27.05.2014
Annual General Meeting 19.09.2014
Posting of Annual Report along with notice of AGM 22.08.2014
Book Closure dates 15.09.2014 to 19.09.2014
(both days inclusive)
Last date for receipt of proxy forms 17.09.2014 (before 10 am)
Unaudited results for the quarter ending 30th Jun, 2014 Before 15th Aug, 2014
Unaudited results for the quarter ending 30th Sep, 2014 Before 15th Nov, 2014
Unaudited results for the quarter ending 31st Dec, 2014 Before 15th Feb, 2015
Dividend:
In view of the loss posted by the Company, the Board does not recommend any dividend for the financial
year ended March 31, 2014.
Listing on Stock Exchanges:
The Company’s shares are presently listed on the Bombay Stock Exchange.
BSE Stock Code ISIN No:
511393 ISINE 071C01019
The Company has paid the listing fees for the financial year 2014-15 to the Bombay Stock exchange.
Stock Market data - High and Low quotations of Equity Shares for the financial year ended March
31, 2014 are:
Bombay Stock Exchange (BSE)
Month & Year
HIGH LOW
Apr 2013 4.40 4.40
May 2013 No Trade No Trade
Jun 2013 4.85 462
Jul 2013 No Trade No Trade
Aug 2013 5.56 4.61
Sep 2013 5.83 5.83
Oct 2013 7.35 5.82
Nov 2013 10.29 7.00
Dec 2013 10.66 9.30
Jan 2014 10.60 9.63
Feb 2014 11.00 10.70
Mar 2014 10.46 8.98
25
SHARE TRANSFER SYSTEM
Share transfers were processed and share certificates despatched within 30 days from the date of lodgment
in accordance with the Stock Exchange listing agreement. The Company's shares are being compulsorily
traded in dematerialised form. Requests for dematerialization of shares are completed within the prescribed
time limit.
REGISTRAR AND TRANSFER AGENTS
M/s. Cameo Corporate Services Ltd, have been appointed as the registrars and share transfer agents of the
Company for both physical and electronic segment and have attended to the share transfer formalities
regularly. The Registrar and Share transfer agent can be contacted by the investors at the following address:
M/s. Cameo Corporate Services Ltd, Phone No: 044 28460390 to 0394
Subramanian Building, Fax: 044 28460129
No.1, Club House Road, Email: [email protected]
Chennai – 600 002 Contact person: Ms. K. Sreepriya
Nomination facility:
The nomination form 2B is available to all those shareholders desiring to make a nomination. The
shareholders holding shares in demat form are requested to forward their nomination instructions to the
respective depository participants. Nomination is only optional and can be cancelled or varied at any point
of time.
Payment of Unclaimed / Unpaid Dividend:
The Company has remitted all the unclaimed /unpaid dividends upto the financial year 2005-06 to the
central government account. No dividend has been declared from the financial year 2006-07.
DISTRIBUTION OF SHARE HOLDING AS ON 31.03.2014
1 - 500 6649 91.1946 10239470 17.1967
501 - 1000 402 5.5136 3448280 5.7912
1001 - 2000 138 1.8927 2152540 3.6150
2001 - 3000 45 0.6171 1164830 1.9562
3001 - 4000 14 0.1920 485230 0.8149
4001 - 5000 9 0.1234 436120 0.7324
5001 - 10000 23 0.3154 1675900 2.8145
10001 & Above 11 0.1508 39940830 67.0787
Total 7291 100.0000 59543200 100.0000
Shares of nominal value of
Rs.10/- eachShare holders Share Amount
Shares
(1)
Number
(2)
% to Total Nos.
(3)
In Rupees
(4)
% to Total Amount
(5)
26
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27
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28
Online Information:
The Company has been regularly filing the financial results, shareholding patterns and other results.
Investor grievance redressal division:
Further to the BSE circular on the exclusive designation of an email ID for investor grievance redressal has
to be displayed on the website of the company. Accordingly, the investors are requested to register their
complaints in the email ID: [email protected]
DEMATERIALISATION / REMATERIALISATION
As on 31st March, 2014, 49,90,797 shares of the Company held by the share-owners are held in
dematerialized form, aggregating to 83.82% of the Equity share capital of the Company.
Address for correspondence and any assistance / clarification:
DFL Infrastructure Finance Limited
No: 14, Ramakrishna Street
T Nagar, Chennai - 600 017
Phone Nos. 28141778 / 2663
COMPLIANCE WITH NON-MANDATORY REQUIREMENTS
The Company has fulfilled the following non-mandatory requirements.
Remuneration Committee
The compliance requirements with respect to Remuneration Committee have been mentioned earlier in this
report.
Shareholders Rights
As the Company's financial results are published in an English newspaper and in a Tamil newspaper widely
circulated in Chennai, the same are not sent to the shareholders of the company individually. The
Company's quarterly / half yearly / annual audited results are also posted on the Company's website.
Shareholders holding more than 1% as at 31.03.2014 of the equity share capital
Sl No Name of the Shareholder No. of Shares % of Shareholding
1 VARADHARAJAN T N 65800 1.1051
2 K DHANDAPANI & CO LTD 500001 8.3973
3 DFL HOLDINGS & SECURITIES LTD 274200 4.6051
4 AUCTUS HOLDINGS PRIVATE LTD 3045453 51.1469
Audit Qualifications
The response by the Board to the remarks made by the Statutory Auditor in the Auditors' Report is given
in the Directors' Report.
Training of Board Members
The necessary training is being provided to the Board members as and when required.
29
Mechanism for evaluating Non-Executive Board Members
The Mechanism of performance evaluation of Non-executive directors by peer group of directors is under
process. This would help the company to determine any modifications in their terms of Appointment.
Whistle Blower Policy
The Company's stand on the whistle Blower policy has been mentioned under DISCLOSURE clause of this
report.
Subsidiary Companies
The company does not have a material non-listed Indian subsidiary whose turnover or net worth (i.e. paidup
capital and free reserves) exceeds 20% of the consolidated turnover or net worth of the listed holding
company and its subsidiaries in the immediately preceding accounting year.
The financial statements of the subsidiary companies are placed before and reviewed by the Audit
Committee.
Copies of the minutes of the Board meetings of the subsidiary companies are tabled at the Board Meetings
of the company.
ANNUAL DECLARATION OF CODE OF CONDUCT BY MANAGING DIRECTOR
This is to confirm that the Board has laid down a Code of Conduct for all the board members and senior
management of the company. The Code of Conduct has also been posted on the website of the Company.
It is further confirmed that all directors and senior management of the company have affirmed compliance
with the Code of Conduct of the company for the financial year ended 31st March 2014 as envisaged in
Clause 49 of the Listing Agreement with the Stock Exchanges.
Place : Chennai S BALACHANDER
Date : 04.08.2014 Managing Director
(DIN : 02644584)
30
CERTIFICATE ON CORPORATE GOVERNANCE
To the members of DFL Infrastructure Finance Ltd
We have examined the compliance of conditions of Corporate Governance of DFL Infrastructure Finance
Ltd for the financial year ended 31st March 2014, as stipulated in Clause 49 of the Listing Agreement of
the said Company with Stock Exchanges(s).
The Compliance of conditions of Corporate Governance is the responsibility of the Management. Our
examination was limited to procedures and implementation thereof, adopted by the Company for ensuring
the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of
opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify
that the Company has complied with the conditions of Corporate Governance as stipulated in the above
mentioned Listing Agreement.
We state that no investor grievance(s) are pending exceeding one month against the Company as per the
records maintained by the Shareholders/Investors Grievance Committee.
We further state that such compliance is neither an assurance as to the future viability of the Company nor
the efficiency or effectiveness with which the management has conducted the affairs of the Company.
for and on behalf of
P.B.VIJAYARAGHAVAN AND CO.,
Chartered Accountants
Firm Registration No.: 004721S
P.R.KRISHNAMURTHY
Place : Chennai Partner
Date : 27.05.2014 Membership No.: 12622
31
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
DFL INFRASTRUCTURE FINANCE LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of DFL Infrastructure Finance limited (“the Company”),
which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant accounting policies and other explanatory
information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of
the financial position, financial performance and cash flows of the Company in accordance with the accounting
standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”). This
responsibility includes the design, implementation and maintenance of internal control relevant to the
preparation and fair presentation of the financial statements that are free from material misstatement, whether
due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India.
Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgement, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the Company's preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's Internal
Control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
The debit balances under receivables and debtors' accounts and the credit balances are as per books of
accounts subject to confirmation from the parties.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the
effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the
information required by the Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;
b. in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Emphasis of Matter
Attention of the share holders is invited to the following:
a. The Company has taken loans from certain bankers which it could not repay and the Company
approached the CDR for reschedulement of these loans. The implementation of the CDR and the CDR Re-
work Package has reached stalemate condition. Pursuant to this the Company has approached the
bankers for One Time Settlement Scheme for settlement of Loans and some of the banks have approved
the same. The OTS Scheme offered by some of the Banks is pending implementation and settlement. These
conditions, indicate the existence of material uncertainty that may cast a significant doubt about the
32
Company's ability to continue as a Going Concern. {Refer Note 1,5 & 6 of Schedule 18)
b. The Reserve Bank of India, has issued certain prohibitory directions (Refer Note 2 of Schedule 18) under
Section 45JA and Section 45L of Reserve Bank of India Act, 1934. These conditions along with those
stated in Note 1, 5 & 6 of Schedule 18 indicate the existence of material uncertainty that may cast a
significant doubt about the Company's ability to continue as a Going Concern.
c. The Company's net owned funds is below Rs. 25 lakhs, the limit prescribed by Reserve Bank of India
under section 45 - IA of the Reserve Bank of India Act, 1934. This could attract penal provisions under
section 45 - MC of the Act
d. The Company has entered into an amendment agreement with Asia Pragati Capfin Pvt. Ltd. (Preference
Share Holder) on 27th March 2012 for redemption of preference shares of Rs. 10 @ Rs. 8.54 per share.
The gain on redemption amounting to Rs.325 lakhs has not been accounted for as the same would be
accounted at the time of redemption during the years 2017, 2018 & 2019. (Refer Note No.4 of Schedule
18)
e. The shareholders have not approved the re-appointment and increase in remuneration of the erstwhile
Managing Director and the amount is included in Loans and Advances. We are unable to express an
opinion on the recoverability of the amount. (Refer Note No.9 of Schedule 18)
f. In the absence of profits, the Company could not declare dividend on the 4% and 9% Redeemable
Preference Shares for the financial year 2013 -14 and hence it is charged to the Statement of Profit and
Loss. (Refer Note No. 17 of Schedule 18)
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003 ("the Order") issued by the Central
Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required under provisions of section 227(3) of the Companies Act, 1956, we report that:
a. we have obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purpose of our audit;
b. in our opinion proper books of account as required by law have been kept by the Company so far
as appears from our examination of those books
c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report
are in agreement with the books of account.
d. except for the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the
Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting
standards referred to in sub-section (3C) of section 211 of the Act;
f. on the basis of written representations received from the directors as on March 31, 2014, and taken
on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from
being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.
g. Since the Central Government has not issued any notification as to the rate at which the cess is to
be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said
section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the
Company,For P.B.VIJAYARAGHAVAN AND CO.,
Chartered Accountants
Firm Registration No.: 004721S
P.R.KRISHNAMURTHY
Place : Chennai Partner
Date : 27.05.2014 Membership No.: 12622
33
ANNEXURE TO THE AUDITORS’ REPORT
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
1) In respect of fixed assets:
a. The Company has maintained proper records showing full particulars including quantitative
details and situation of fixed assets.
b. As per the information and explanation given to us all the fixed assets have been physically
verified by the management at regular intervals, which in our opinion, is reasonable having
regard to the size of the Company and the nature of the assets. No material discrepancies were
noticed on such verification.
c. The Company has not disposed off substantial part of fixed assets during the year.
2) As the Company is a Non Banking Finance Company, the provisions of sub clause (ii) a, band c of
the Companies (Auditor's Report) Order, 2003 are not applicable.
3) In respect of loans, secured or unsecured, taken by the Company from companies, firms or other
parties covered in the register maintained under section 301 of the Companies Act, 1956:
a. According to the information and explanations given to us, the Company has taken unsecured
loans from group companies, covered in the register maintained under Section 301 of the
Companies Act, 1956. The year-end balance of loans taken from such parties was Rs. 691.38
lakhs.
b. The Company is not providing any interest on the loans taken from group companies. As per
terms of arrangement, the interest is payable on maturity along with Principal.
All other terms and conditions prima-facie are not prejudicial to the interest of the Company.
c. As the loans taken from the group companies are repayable on demand along with the interest,
the question of overdue as on the Balance Sheet Date, does not arise.
d. The Company has not granted any loans, secured or unsecured, to companies, firms or other
parties covered in the register maintained under section 301 of the companies Act, 1956.
4) In our opinion and according to the information and explanations given to us, there are internal control
procedures commensurate with the size of the Company and nature of its business for purchase of
fixed assets and sale of goods and services. During the course of audit, no major weakness has been
noticed in the internal control.
5) In respect of transactions entered in the register maintained in pursuance of Section 301 of the
Companies Act, 1956.
a) In our opinion and according to the information and explanation given to us, the transactions
made in pursuance of contracts or arrangements, if any, that needed to be entered into in the
register maintained under section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and explanation given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 have been
made at prices which are reasonable having regard to prevailing market prices at the relevant
time where such market prices are available.
34
6) During the year Company has not accepted any deposits from the public. However, in the case of
deposits accepted by the Company from the public in the earlier years, in our opinion and according
to the information and explanations given to us, the directives issued by Reserve Bank of India and
the provisions of sections 58A and of the Companies Act and the rules framed there under, wherever
applicable to the Company have been complied with.
7) In our opinion, the Company's present internal audit system is commensurate with its size and nature
of its business.
8) The Central Government has not prescribed maintenance of cost records under Section 209 (l)(d) of
the Act.
9) In respect of statutory dues:
a) According to the information and explanations given to us, the Company has been regular in
depositing undisputed statutory dues' including Provident Fund, Investor Education and
Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax Customs Duty,
Excise Duty, Cess and other statutory dues with the appropriate authorities in India.
b) According to the information and explanations given to us and records of the Company
examined by us the particulars of dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax and
Excise Duty which have not been deposited on account of any dispute are as follows:
ASST.YEAR
TAX DUE AMOUNT REMARKS
IN RS. (In Lakhs)
1995-96 To 1999-2000 246.16 Appeal Before CIT (A)
2001-02 294.03 Appeal Before CIT (A)
2002-03 56.35 Chief Commissioner of Income Tax.
2003-04 13.91 Chief Commissioner of Income Tax.
2004-05 8.34 Appeal before CIT(A)
2005-06 4.44 Appeal before CIT(A)
2007-08 58.17 Appeal before CIT(A)
2008-09 482.15 Appeal before CIT(A)
2009-10 581.28 Appeal before CIT(A)
10) The accumulated losses of the Company at the end of the financial year are not less than fifty percent
of its net worth. The Company has incurred cash losses in the financial year and in the immediately
preceding financial year also.
11) The Company had a Working Capital Term Loan, under the Corporate Debt Restructuring Package
(CDR), for which the repayment has to commence from 01.04.2012. The Company has gone for
rescheduling the repayment of the term loans under CDR. However, the implementation of the CDR
Package has ended in a stalemate. The Company has submitted proposals for One Time Settlement
and the same is being taken up by the Banks. Also the One Time Settlement Scheme has been
approved by 3 out of 12 participating banks and one another bank not forming part of CDR. Pending
35
repayment of amounts accepted through OTS Scheme the Company has not repaid the Working
Capital Term Loan pending consideration.
12) The Company has not granted any loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
13) The provisions of any special statute applicable to chit fund / Nidhi / mutual benefit fund / societies
are not applicable to the Company
14) In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other
investments.
15) As per the information and explanations given to us the Company has not given any guarantees for
loans taken by others.
16) On the basis of review of utilization of funds on an overall basis, in our opinion, the term loans taken
by Company were applied for the purposes for which the loans were obtained.
17) On the basis of review of utilization of funds on an overall basis in our opinion, the funds raised on
short-term basis have not been used for long-term investment or vice versa during the year.
18) The Company has not made any preferential allotment of shares to parties and companies covered in
the Register maintained under section 301 of the Act.
19) The Company has not issued Debentures.
20) The Company has not raised any money by public issues during the year.
21) During the course of our examination of the books of accounts carried out in accordance with the
generally accepted auditing practices in India, we have not come across any instance of fraud on or
by the Company nor have we been informed by the management of any such instance being noticed
or reported during the year.
For P.B.VIJAYARAGHAVAN AND CO.,
Chartered Accountants
Firm Registration No.: 004721S
P.R.KRISHNAMURTHY
Place : Chennai Partner
Date : 27.05.2014 Membership No.: 12622
36
BALANCE SHEET AS AT 31st MARCH 2014
(Rs. in Lakhs)
ParticularsAs at
31.03.2013
As at
31.03.2014
Refer Note
No.
I. EQUITY AND LIABILITIES
1 Shareholders’ funds
Share Capital 1 6,671.67 6,671.67
Reserves and surplus (13,226.21) (11,916.56)
(6,554.54) (5,244.89)
2 Non-current liabilities
Long-term borrowings 3 – –
Long-term provisions 4 0.28 0.70
0.28 0.70
3 Current liabilities
Short-term borrowings 3 12,342.73 11,432.62
Other current liabilities 5 87.48 103.21
Short-term provisions 4 3.66 2.59
12,433.87 11,538.42
TOTAL 5,879.61 6,294.23
II. ASSETS
1 Non-current assets
Fixed assets
(i) Tangible assets 6 1,691.35 1,702.60
(ii) Intangible assets 6 – –
Non-current investments 7 29.93 29.93
Receivables under financing activity 8 123.69 345.46
Long-term loans and advances 9 488.44 479.13
Other non-current assets 10 1,073.34 1,064.20
3,406.75 3,621.33
2 Current assets
Current investments – –
Receivables under financing activity 8 2,311.49 2,365.38
Cash and cash equivalents 11 155.37 270.07
Short-term loans and advances 9 5.55 37.45
Other current assets 10 0.45 –
2,472.86 2,672.90
TOTAL 5,879.61 6,294.23
See accompanying note forming part of the financial statementsIn terms of our report attachedfor P.B. VIJAYARAGHAVAN & CO S. BALACHANDER T.R. SURESHChartered Accountants Managing Director DirectorFirm Regn No. 004721S
I. CHANDRA MOHAN B. PRAKASHP R KRISHNAMURTHY Company Secretary Wholetime DirectorPartnerMembership No 12622
Date : 27.05.2014Place : Chennai
37
(Rs. in Lakhs)
ParticularsAs at
31.03.2013
As at
31.03.2014
Refer Note
No.
1 Income:
Revenue from operations 12 189.59 260.87
Other income 13 33.64 79.58
Total Revenue 223.23 340.45
2 Expenses:
Finance costs 14 941.17 872.13
Employee benefits expense 15 260.99 342.75
Depreciation and amortization expense 6 22.56 45.11
Other operating Expenses 16 143.77 242.51
Provision, Loan losses and other charges 17 164.39 399.51
Total expenses 1,532.88 1,902.01
Loss before extraordinary items and tax (1,309.65) (1,561.56)
Extraordinary Items – –
Loss before tax (1,309.65) (1,561.56)
Tax expense – –
Loss for the period carried over to Balance Sheet (1,309.65) (1,561.56)
Basic Earnings per equity share: (30.69) (34.82)
Diluted Earnings per equity share: (30.69) (34.82)
PROFIT AND LOSS STATEMENT FOR THE
YEAR ENDED 31ST MARCH, 2014
See accompanying note forming part of the financial statementsIn terms of our report attachedfor P.B. VIJAYARAGHAVAN & CO S. BALACHANDER T.R. SURESHChartered Accountants Managing Director DirectorFirm Regn No. 004721S
I. CHANDRA MOHAN B. PRAKASHP R KRISHNAMURTHY Company Secretary Wholetime DirectorPartnerMembership No 12622
Date : 27.05.2014Place : Chennai
38
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
Note : 1 - SHARE CAPITAL
AUTHORISED
Equity Shares : 2,500.00 2,500.00
2,50,00,000 (2013 - 2,50,00,000) Equity Shares of Rs 10 each
Preference Shares : 7,500.00 7,500.00
7,50,00,000 (2013- 2,50,00,000) Preference shares of Rs 10 each
10,000.00 10,000.00
ISSUED
Equity Shares :
61,22,625 (2013 - 61,22,625) Equity Shares of Rs 10 each 612.26 612.26
Preference Shares :
2,22,60,000 (2013 - 2,22,60,000) 4% Cumulative Redeemable
Preference shares of Rs 10 each 2,226.00 2,226.00
3,85,02,384 (2013 - 3,85,02,384) 9% Cumulative Redeemable Preference
Shares of Rs 10 each 3,850.24 3,850.24
Subscribed & Paid up
Equity Shares :
59,54,320 (2013 - 59,54,320) Equity Shares of Rs 10 each 595.43 595.43
Preference Shares :
2,22,60,000 (2013 - 2,22,60,000) Cumulative Redeemable Preference
shares @ 4% (from 1st April, 2012) 2,226.00 2,226.00
3,85,02,384 (2013 - 3,85,02,384) 9% Cumulative Redeemable Preference
Shares of Rs 10 each 3,850.24 3,850.24
6,671.67 6,671.67
Details of shareholding more than 5% shares in the company
EQUITY
As at 31 March 2014 As at 31 March 2013Name of Shareholder
No. of Shares held% of Holding
in the classNo. of Shares held
% of Holding
in the class
Auctus Holdings Pvt Ltd 30,45,453 51.15 – –
D.B. Zwirn Mauritius – – 30,36,703 51.00
K Dhandapani & Co 500,001 8.40 500,001 8.40
4% CUMULATIVE REDEEMABLE PREFERENCE SHARES
Asia Pragati Capfin Private Limited 2,22,60,000 100.00 2,22,60,000 100.00
(Rs. in Lakhs)
As at
31.03.2013
As at
31.03.2014
39
As at 31 March 2014 As at 31 March 2013Name of Shareholder
No. of Shares held% of Holding
in the classNo. of Shares held
% of Holding
in the class
9% CUMULATIVE REDEEMABLE PREFERENCE SHARES
ING Vysya Bank 2,646,123 6.87 2,646,123 6.87
YES Bank 4,645,229 12.06 4,645,229 12.06
Bank of India 4,941,049 12.83 4,941,049 12.83
Federal Bank 4,190,915 10.88 4,190,915 10.88
Canara Bank 4,222,059 10.97 4,222,059 10.97
State Bank of Travancore 3,167,706 8.23 3,167,706 8.23
Punjab National Bank 2,942,026 7.64 2,942,026 7.64
United Commercial Bank 3,174,352 8.24 3,174,352 8.24
Indian Overseas Bank 2,590,199 6.73 2,590,199 6.73
The Dhanalaxmi Bank Limited 1,669,603 4.34 1,669,603 4.34
State Bank of Hyderabad 1,501,323 3.90 1,501,323 3.90
The Catholic Syrian Bank Limited 2,811,800 7.30 2,811,800 7.30
38,502,384 100.00 38,502,384 100.00
Disclosure pursuant to Note no. 6(A)(d) of Part I of Schedule VI to the Companies Act, 1956
(Following disclosure should be made for each class of Shares)
Rs in Lakhs
Equity Shares 4% Preference Shares 9% Preference SharesParticulars
Number Value Number Value Number Value
Shares outstanding at the
beginning of the year 5954320 595.43 22260000 2226.00 38502384 3850.24
Shares Issued during the year – – – – – –
Shares bought back during
the year – – – – – –
Discount on redemption – – – – – –
Shares outstanding at the end
of the year 5954320 595.43 22260000 2226.00 38502384 3850.24
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
40
Disclosure pursuant to Note no. 6(A)(i) of Part I of Schedule VI to the Companies Act, 1956
(Following disclosure should be made for each class of Shares)
Equity Shares :
Fully paid up pursuant to contract(s)
without payment being received – – – – – –
in cash
Fully paid up by way of bonus shares – – – – – –
Shares bought back – – – – – –
Preference Shares 4% :
Fully paid up pursuant to contract(s)
without payment being received – – – – – –
in cash
Fully paid up by way of bonus shares – – – – – –
Shares bought back – – – – – –
Preference Shares 9% :
Fully paid up pursuant to contract(s)
without payment being received – – – 38502384 – –
in cash
Fully paid up by way of bonus shares – – – – – –
Shares bought back – – – – – –
Year (Aggregate No. of Shares)
2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014Particulars
(Rs in Lakhs)
As at
31.03.2013
As at
31.03.2014Note : 2 - RESERVES & SURPLUS
ParticularsCapital Revaluation General Statutory Security P & L
Reserve Reserve Reserve Reserve Premium Account
Opening
Balance 12.03 1,305.42 2,578.57 961.97 142.29 (16,916.85) (11,916.56)
Additions – – – – – (1,309.65) (1,309.65)
Deletions – – – – – –
Closing
Balance 12.03 1,305.42 2,578.57 961.97 142.29 (18,226.50) (13,226.21)
Previous Year 12.03 1,305.42 2,578.57 961.97 142.29 (16,916.85) (11,916.56)
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
41
(Rs in Lakhs)
Note : 3 - BORROWINGS
Secured Borrowings: **
From Banks / Financial Institutions – – 11,594.15 10,680.03
From Related Parties – – – –
From Others – – – –
Total Secured Borrowings – – 11,594.15 10,680.03
Unsecured Borrowings:
From Banks / Financial Institutions – – – –
From Related Parties – – 691.38 691.38
From Others – – 57.21 61.21
Total Unsecured Borrowings – – 748.58 752.59
– – 12,342.73 11,432.62
Long Term Short Term
As at 31.03.2014 As at 31.03.2013 As at 31.03.2014 As at 31.03.2013
** Refer Note no 5 of Notes on accounts
1) Loans from Auctus Holdings Private Limited of Rs.600 lacs is repayable on demand without any interest
2) Out of the unsecured loans an amount of Rs. 57.21 Lakhs is in default for a period of 3 years
3) All term loans from banks and financial institutions are secured by first paripasu charge on fixed assets and
second pari-pasu charge on current assets of the Company.
4) All working capital borrowings are secured by first paripasu charges on current assets and second pari-pasu
charge on fixed assets.
5) Working Capital Term Loan and funded interest term loan are secured by first pari-pasu charge on current
and fixed assets of the company.
The following collateral security shall be available to the banks to secure their Working capital term loan by way
of first pari-pasu charge and to secure other debts by way of second pari-pasu charge.
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
Land & Building Situated at Plot No 37,
Door No. 17, Ramakrishna Street,
T.Nagar, Chennai 600 017, comprised in
T.S. No 106, T.Nagar Village,
Mambalam - Guindy Taluk
Land situated at Chokampatti Village,
Kadayanallur, Tenkasi
Tirunelveli District
2 Nos of Flat @ No. 110,
Bhanumathy Ramakrishna Street,
Saligramam Village,
Saidapet Taluk
Chengalpattu District
42
Note : 4 - PROVISIONS
(Rs in Lakhs)
Provident Fund – – 2.46 1.66
Employees State Insurance Corporation – – 0.21 0.26
Standard Asset 0.28 0.70 0.11 0.10
Professional tax – – 0.88 0.57
0.28 0.70 3.66 2.59
Long Term Short Term
As at 31.03.2014 As at 31.03.2013 As at 31.03.2014 As at 31.03.2013
Note : 5 - OTHER CURRENT LIABILITIES
(Rs in Lakhs)
Unclaimed Dividend – 5.13
TDS & Service Tax Payable 8.12 8.90
Dues to Insurance Companies 0.23 0.24
Current Liabilities for expenses 79.13 88.94
87.48 103.21
As at 31.03.2014 As at 31.03.2013
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
Provision for Employee Benefits
43
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
Lan
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44
Note : 7 - INVESTMENTS
(Rs in Lakhs)
UNQUOTED
In Shares Fully Paid Unquoted 2,99,296 Equity Shares of Rs. 10/- each in
DFL Holdings and Securities Limited 29.93 29.93
29.93 29.93
As at 31.03.2014 As at 31.03.2013
Note : 8 - RECEIVABLES UNDER FINANCING ACTIVITY
(Rs in Lakhs)
Secured Receivables other than Repo 180.10 416.58 4,484.66 7,395.17
Less: LPP & Other charges on receivables – 19.49 – 2,822.40
Less: Unrecovered Finance charges 22.21 27.50 269.45 275.61
Less: Provision for Secured Receivables 36.67 39.29 1,994.71 2,015.99
Net Secured Receivables 121.21 330.30 2,220.50 2,281.17
Repossessed Stock 4.13 30.51 151.64 380.85
Less: LPP & Other charges on repo asset – 5.20 – 240.48
Less: Repossessed Provision 1.65 10.14 60.66 56.16
Net Repossessed Stock 2.48 15.16 90.99 84.21
Net Receivables including Repossessed Stock 123.69 345.46 2,311.49 2,365.38
Secured Receivables include amounts outstanding more than six months 1,736.30 1,829.42
Non Current Current
As at 31.03.2014 As at 31.03.2013 As at 31.03.2014 As at 31.03.2013
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
Note : 9 - LOANS & ADVANCES
(Rs in Lakhs)
UNSECURED CONSIDERED GOOD
Prepaid Expenses – – 5.55 7.02
Advance Rent 14.06 15.41 – –
Staff Loan – 4.21 – –
Other Advances - Others 468.24 453.37 – 30.43
Other Deposits 6.14 6.14 – –
DOUBTFUL
Dhandapani Properties Pvt Ltd 720.02 720.02 – –
Less : Provision for Doubtful
Loans & Advances -720.02 -720.02 – –
488.44 479.13 5.55 37.45
Long Term Short Term
As at 31.03.2014 As at 31.03.2013 As at 31.03.2014 As at 31.03.2013
45
Disclosure pursuant to Note no. 6(T) of Part I of Schedule VI to the Companies Act, 1956
Contingent liabilities and commitments (to the extent not provided for)
(i) Commitments
(a) Other commitments (specify nature) – –
9% Cumulative Preference Shares Dividend 34,652,146.00 34,652,146.00
4% Cumulative Preference Shares Dividend 8,904,000.00 8,904,000.00
43,556,146.00 43,556,146.00
Dividends proposed to be distributed to equity shareholders – –
Dividends proposed to be distributed to preference shareholders 78,208,292.00 43,556,146.00
Arrears of fixed cumulative dividends on preference shares 31,153,328.00 22,249,328.00
109,361,620.00 65,805,474.00
Particulars
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
As at 31.03.2014 As at 31.03.2013
As at 31.03.2014 As at 31.03.2013
Note : 10 - OTHER ASSETS
(Rs in Lakhs)
Other current assets – – – –
Other non current assets 1,073.34 1,064.21 – –
Other Loans, Advances - Operations – – 0.45 –
1,073.34 1,064.21 0.45 –
As at 31.03.2014 As at 31.03.2013As at 31.03.2014 As at 31.03.2013
Note : 11 - CASH & BANK BALANCES
(Rs in Lakhs)
Cash and Cash equivalents
Cash on Hand – – 4.44 24.94
Balances with Banks – – 150.93 240.00
Earmarked balances with Banks
(Unclaimed dividend – 2005-06) – – – 5.13
– – 155.37 270.07
As at 31.03.2014 As at 31.03.2013As at 31.03.2014 As at 31.03.2013
(Amount in Rs.)
46
Rs in Lakhs
Note : 12 – REVENUE FROM OPERATIONSIncome from Financing activity 71.92 77.14Other operating revenue 117.67 183.73
189.59 260.87
Note : 13 – OTHER INCOMEInterest Income on bank deposits 13.77 5.84Interest - Staff 0.04 0.20Rent Received 4.85 4.63Sale of scrap – 1.53Miscellaneous Income 10.28 25.47Provision no longer required 4.70 41.91
33.64 79.58
Note : 14 – FINANCE COSTSInterest ExpensesBank Loans/Financial Institutions 939.12 869.19Bank Charges 2.05 2.94
941.17 872.13
Note : 15 – EMPLOYEE BENEFIT EXPENSESSalaries, Allowances & Bonus 237.54 313.71Contributions to Provident Fund & Other Funds 12.46 13.47Staff Welfare Expenses 10.99 15.57
260.99 342.75
Note : 16 – OTHER OPERATING EXPENSESRent 19.69 25.30Electricity Charges 9.49 10.69Rates & Taxes 1.61 1.72Communication cost 13.85 19.95Travelling & Conveyance 24.60 46.96Advertisement Expenses 0.69 1.77Insurance 1.06 6.10Repairs & Maintenance 7.25 8.72Printing & Stationery 3.14 4.61Audit Certification Fees 2.86 2.01Auditors Remuneration - Statutory 3.93 3.95Auditors Remuneration - Internal audit – 3.66Auditors Remuneration - Concurrent 0.39 1.79Auditors Remuneration - Tax audit 3.42 2.81Professional charges 26.09 60.83Sitting Fees to Directors 1.93 3.02Loss on sale of Fixed assets 0.22 0.30Legal Expenses 3.21 6.98Office Maintenance 15.07 21.98Filing Fees 0.05 1.11Interest paid 0.09 1.46Other Expenses 4.35 6.01AGM Expenses 0.77 0.78
143.77 242.51
As at 31.03.2014 As at 31.03.2013
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
47
Rs in Lakhs
a. Auditor - Statutory 3.93 3.95
b. for taxation matters 3.42 2.81
c. for company law matters 2.86 2.01
d. for management services – 3.66
e. for other services 0.39 1.79
10.61 14.23
Note : 17 – PROVISION, LOAN LOSSES AND OTHER CHARGES
Shortfall Repossession written off 31.70 42.12
Bad debts written off – 10.00
Rebate on settlement 141.09 133.75
Provision for Standard Asset 0.39 0.80
Provision for Non Performing Assets -8.78 212.84
164.39 399.51
As at 31.03.2014 As at 31.03.2013
Disclosure pursuant to Note no. 5(i)(g) of Part II of Schedule VI to the Companies Act, 1956
Payments to the auditor as
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
48
Note - 18
A. Significant Accounting Policies
The accounts have been prepared using historic cost convention and on the basis of going concern, with
revenues recognised, expenses accounted on accrual basis, unless otherwise stated and in accordance with
applicable accounting standards as prescribed by Central Government through sub-section (3C) of section
211 of the Companies Act, 1956.
The Company is registered with Reserve Bank of India as a 'Non-Banking Finance Company under the
category Non Deposit Taking NBFC' and the Company follows the directions prescribed by the Reserve
Bank of India for Non-Banking Financial Companies with respect to Income Recognition, Asset
Classification, Provisioning norms.
The preparation of financial statements requires management to make estimates and assumptions of some
of the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities on the
date of the financial statements and amounts of revenues and expenses during the period reported.
1.1 Income Recognition:
Revenue is recognised on accrual basis other than those stated and where there is no uncertainty in ultimate
realization
a. Income from Hypothecation loan transactions are accounted on the based on Internal Rate of Return
method following accrual basis.
b. Income is not recognised on contracts in which the installments are due for more than 180 days.
c. Additional Finance Charges, Cheque dishonor charges, Due Date Missing Charges and Late payment
charges are accounted on receipt basis.
1.2 Repossessed Stock:
Repossessed stocks are valued at the settlement value.
As per Guidelines issued by Reserve Bank of India, provision of 40% is made uniformly on the settlement
value at the time of repossession.
1.3 Fixed Assets:
Fixed assets are stated at historical cost less accumulated depreciation.
1.4 Depreciation:
On Own assets (Tangible):
Depreciation on assets for own use is provided on Written down value method at the rates prescribed in
Schedule XIV to the Companies Act, 1956. Assets costing Rs.5,000/- or less acquired during the year are
fully depreciated.
On Own assets (Intangible):
Intangible assets are amortised over a period of five years.
NOTES FORMING PART OF FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014
49
1.5 Investments:
Investment in Subsidiary Company is valued at cost.
Provision, if any, is made to recognise decline other than a temporary, in the value of long-term investments.
1.6 Employee Benefits:
a. Short Term Employee Benefits such as salaries are charged at undiscounted amounts to the Statement
of Profit and Loss in the year of service.
b. Contribution to Provident Fund is recognised in the Statement of Profit and Loss on the basis of actual
liability.
c. Liability towards Long term compensated absence such as Earned Leave is recognised based on the
estimates as determined by the Management.
d. Post employment benefit such as Gratuity is treated as Defined Contribution Plan and contribution is
accounted as expense as when incurred towards Group Gratuity Scheme maintained with Life
Insurance Corporation of India.
1.7 Taxes on Income:
Income-tax expense is accounted in accordance with AS 22 - "Accounting for taxes on Income" which
includes current taxes and deferred taxes. Deferred tax is recognised on timing difference between
accounting income and taxable income that originate in one period and are capable of being reversed in
one or more subsequent periods, subject to consideration of prudence. Deferred tax assets are recognised
only to the extent that there is reasonable certainty that sufficient future taxable income will be available.
1.8. Provisions & Contingencies:
a. A present obligation, which could be reliably estimated, is provided for in the accounts, if it is
probable that an outflow of resources embodying economic benefits will be required for its settlement.
b. Contingent Liabilities are disclosed by way of notes in the Balance Sheet.
c. Contingent Assets are neither recognised nor disclosed.
B. Notes on accounts
1. Going Concern:
The Management of the Company approached the CDR Cell for restructure of loans given by consortium
banks, which was approved. However as all the Banks did not approve the CDR/CDR Re-work schemes
the Company is not able to implement the CDR rework scheme. The management is taking efforts to arrive
at an acceptable One Time Settlement (OTS) with Secured Creditors. Hence, the financial statements are
continued to be prepared on the basis of 'Going Concern'.
2. Directions issued by Reserve Bank of India:
The Reserve Bank of India had issued certain "Prohibitory Directions" under Section 45 JA and 45 L of
Reserve Bank of India Act 1934 restraining the company to Sell, transfer, create charge or mortgage or deal
with its property and assets; not to declare or distribute any Dividend; not to transact any business and not
to incur any further liabilities. Further, the Company has been directed to submit periodical statements to
Reserve Bank of India.
NOTES FORMING PART OF FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014
50
3. Equity Capital:
D. B. Zwirn Mauritius, which held 30,36,703 equity shares had entered into a Share Purchase Agreement
with M/s. Auctus Holdings Pvt Limited on 13th March 2012 to sell their entire holdings in the Company.
As this attracted SEBI's (Substantial Acquisition of Shares and Takeover) Regulations 2011, M/s. Auctus
Holdings Private Limited made a Public Announcement on 20th March, 2012. An open offer was made to
the existing shareholders on November 15th 2012. Total of 8750 shares were received in the open offer and
the entire offer was accepted.
On 06th June 2013, the entire holding aggregating to 30,36,703 shares was transferred by D B Zwirn
Mauritius to M/s. Auctus Holdings Private Ltd. Effective 06th June 2013 the company has become a
subsidiary of M/s. Auctus Holdings Private Limited
4. Redeemable Preference Shares:
The Company has issued 2,22,60,000 Preference Shares at a face value of Rs. 10 per Preference Share
aggregating to Rs.22,26,00,000 on 30th July 2008 to M/s. Asia Pragati Capfin Pvt Ltd carrying a coupon
rate of 4% payable from 01st April 2012 which were redeemable on 31st December 2009. Pursuant, to the
amendment agreement dated 27th March 2012 to the Share Purchase Agreement, these Preference Shares
are redeemable at a price of Rs. 8.54 per preference share and redeemable in 3 equal annual installments
commencing from 31st March 2017 and ending on 31st March 2019. And the discount on redemption of
preference shares will be accounted on redemption.
As a part of Originally approved CDR Package, a part of the debt amounting to Rs. 38,50,23,840 was
converted to Optionally Convertible Cumulative Redeemable Preference Shares (OCCRPS) carrying a
coupon rate of 9% p.a. Consortium Banks (12 participating banks) . As per the said package these OCCRPS
are redeemable in four equal annual installments at a premium of 3% commencing from the year 2013-14
onwards and ending in 2016-17.
5. Un-Secured Loans:
a. Unsecured Loan include Rs.600 lakhs received from Auctus Holdings Pvt Ltd, brought in as part of
the Promoters Contribution as specified in the CDR Re-work package.
b. DFL Holdings and Securities Limited, a subsidiary company has given a loan of Rs. 91.38 lakhs to
the Company. The terms of settlement including interest if any will be decided mutually between the
Company and the subsidiary.
6. Corporate Debt Restructuring (CDR) Package Arrangement:
a. CDR Rework Package:
As the original CDR package could not be implemented within the stipulated time frame, the
Company had applied for Re-work Package under CDR System and the same was approved by the
CDR Empowered Group. As per the Re-work package, Preference Shares are Redeemable in four
equal yearly installments commencing from the year 2014-15 and ending in 2017-18.
b. Implementation of CDR Re-work Package by Banks:
The CDR Re-work Package has been approved by only 6 out of the 12 participating Consortium
Banks. Hence, the Company could not proceed with the implementation of the CDR Re-work package
and the hence the implementation of CDR Re-work Package has ended in a stalemate.
NOTES FORMING PART OF FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014
51
7. One Time Settlement (OTS) Scheme with Secured Creditors:
Consequent to the non implementation of the CDR Re-work Package, the Company requested Consortium
Banks to consider an OTS proposal to settle the Outstanding Liabilities comprised in the 'Borrowings' of
the Company and OCCRPS issued as a part of CDR Re-work Package. The Company has received the
approval from three banks and the Company is pursuing with the remaining nine participating Banks.
The OTS scheme is being implemented by the Company and the Company is yet to settle the accepted
offers. Pending execution and settlement of accepted amounts, impact of OTS will be recognised in the
books of accounts upon settlement of OTS offer with respective banks.
In addition to the above, the Company was liable to pay State Bank of India Rs. 1182 lakhs comprised in
'Borrowings' of the Company. The Bank had filed a suit against the company in Debt Recovery Tribunal,
Chennai for the recovery of the same. In the meanwhile, the Company has negotiated for OTS to settle the
entire outstanding at Rs. 300 lakhs. The Company had also deposited an amount Rs. 25 lakhs in an Escrow
Account towards part payment of OTS Scheme. Pending execution of OTS Scheme, no interest has been
provided for the current financial year. Also pending execution and settlement of accepted amounts, impact
of OTS will be recognised in the books of accounts upon settlement of OTS offer with respective banks.
8. Loan and Dhandapani Properties Private Limited:
The Company had given a loan of Rs. 720 lakh to Dhandapani Properties Private Ltd in 2007 secured by
way of a property of approximately 1 acre of Land at Whitefield, Bangalore. The security provided is an
agricultural land registered in an Individual's name and was given to the Company by way of an irrevocable
Power of Attorney in favour of erstwhile Managing Director of the Company. However, Government of
Karnataka has rejected the contention of the buyer and attached the property in favour of the Government
of Karnataka. The Company, through the buyer has appealed for reversing the decision.
9. Current Assets:
Secured Receivable includes Hire Charges and Sundry Debtors valued at Agreement Value less Installments
received and net off Un-matured Finance Charges and write offs. These receivable are considered good by
the management of the company.
10. Loans and Advances:
Loans and Advances include an amount of Rs. 216.53 lakhs paid to Mr. R Ravichandran, erstwhile
Managing Director towards Managerial Remuneration. The same has not been approved by the
Shareholders and the application made to the Central Government has been rejected. The Company is
taking steps to recover this amount.
11. Unpaid Dividend Account:
During the year the Company has transferred the entire balance outstanding amounting to Rs. 5.13 lakhs
to Investor Education and Protection Fund. As on 31.03.2014, there are no amounts outstanding to be
transferred to Investor Education and Protection Fund.
12. Value of Investment in Subsidiaries:
Company has invested an amount of Rs. 29.93 Lakhs in DFL Holdings and Securities Limited (Subsidiary
Company). Though the subsidiary company is not actively entered in to income generating activity, the
management is of the view that the suitable activity will be carried out Subsidiary in the near future and
hence no provision for depreciation in the value of investment is considered necessary.
NOTES FORMING PART OF FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014
52
NOTES FORMING PART OF FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014
13. Related Party Disclosure:
(A) Remuneration to Managing Director Rs. in Lakhs
Particulars 31.03.2014 31.03.2013
Salary & DA 25.00 30.00
House Rent allowance 5.00 6.00
Company's Contribution to PF Nil Nil
Others 20.00 36.00
Total 50.00 72.00
(B) Remuneration to Whole Time Director Rs. in Lakhs
31.03.2014 31.03.2013
Salary & DA 22.83 17.43
House Rent allowance 11.42 8.71
Company's Contribution to PF 2.74 1.45
Others 2.06 5.32
Total 39.05 32.91
Determination of net profits in accordance with Sec 349 of the Companies Act, 1956 for remuneration
payable to Directors
Particulars Rupees in Lakhs
Loss after tax as per Profit & Loss Account (1309.65)
Add: Directors remuneration charged in the accounts 89.05
Net loss (1398.70)
a. Subsidiaries : DFL Holdings and Securities Limited, Smart Invest Agency.Com
Private Limited.
b. Key Management Personnel : S. Balachander and B. Prakash
(Rs. in Lakhs)
Nature of Transaction
Holding/ Key Management Total
Subsidiary Personnel
Unsecured Loan received from
Auctus Holding Private Limited600.00 – 600.00
Loan from Subsidiary Company - Balance
outstanding at the end of the year91.38 – 91.38
Remuneration to Key Management Personnel 10.22 89.05 99.27
53
14. Earnings per share:
A. Basic Earnings Per Share Amt. in Rupees
Particulars FY 2013-14 FY 2012-13
Profit / (Loss) after tax before Preference Dividend (13,09,65,117) (15,61,55,800)
Add: Preference Dividend on 4% & 9% Cumulative
Preference Shares including tax(5,11,78,471) (5,11,78,471)
Profit/(Loss) available to Equity Holders (18,21,43,588) (20,73,34,121)
Weighted average number of equity shares 59,54,320 59,54,320
Earnings after tax (Basic) (30.69) (34.82)
Face value per share 10.00 10.00
B. Diluted Earnings Per Share Amt. in Rupees
Particulars FY 2013-14 FY 2012-13
Profit / (Loss) after tax before Preference Dividend (13,09,65,117) (15,61,55,800)
Add: Preference Dividend on 4% Cumulative
Preference Shares including tax1,04,62,200 1,04,62,200
Profit/(Loss) available to Equity Holders (14,14,27,317) (16,66,18,000)
Basic Weighted average number of equity shares 59,54,320 59,54,320
Potential Convertible Shares 4,41,61,977 9,41,98,232
Total Weighted average number of equity shares 5,01,16,297 10,01,52,552
Diluted Earnings after tax (Basic) (30.69) (34.82)
Face value per share 10.00 10.00
Potential Convertible share arise out of 9% Optionally Convertible Cumulative Redeemable Preference
Share (OCCRPS). Upon conversion, these shares do not increase the loss available to equity holders and
these shares are treated non-dilutive in accordance with Accounting Standard - 18. Therefore, Basic
Earnings per Share will be the Dilutive Earnings per Share.
15. Provision for Taxation:
In the absence of profits for the current and considering the accumulated business and depreciation losses,
provision for taxation has not been made.
16. Deferred Tax Assets / liability Rs. in Lakhs
Particulars 31.03.2014 31.03.2013
Opening Balance NIL NIL
Less Reversal of Deferred tax asset NIL NIL
Add: Liability on account of depreciation NIL NIL
Total NIL NIL
NOTES FORMING PART OF FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014
54
Deferred tax asset arising on account of carry forward loss and provisions has not been recognized in the
books of accounts on a conservative basis.
17. Dividend On Preference Shares:
In the absence of profits, the Company could not declare dividend on the Preference Shares for the financial
year 2013-14 as detailed below
a. Dividend in respect of 4% Cumulative Preference Shares for the financial year amounting to Rs. 89.04
lakhs and cumulative upto 31st March 2014 amounting to Rs. 178.08 lakhs has not been provided for.
b. Dividend in respect of 9% OCCRPS for the financial year 2013-14 amounting to Rs. 346.52 lakhs
and cumulative upto 31st March 2014 amounting to Rs. 915.54 lakhs has not been provided for.
Thus, the aggregate amounts outstanding to be provided for and paid is Rs. 1,093.62 lakhs.
18. Suits against the Company:
The Company had purchased from Central Electronics Limited certain machineries for which the payments
were agreed to be made on deferred payment basis over a period of ten year along with interest. The
cheques issued by the Company towards payment of installments were dishonoured. Central Electronics
Limited resorted to legal action for dishonor of cheques and filed 6 cases against the Company under
section 138 of the Negotiable Instruments Act claiming Rs. 51.20 lakhs which is pending before the
Magistrate Court, Gazhiabad. In the meanwhile the Company negotiated for withdrawal of suit to arrive at
an out of Court settlement and accepted to clear the dues in installments of Rs. 2 lakhs per month. The
company had paid Rs. 4 lakhs and 1 case has been withdrawn.
The Company has obtained stay against the remaining cases from Hon'ble High Court of Allahabad and the
matter is pending before the Magistrate Court, Gazhiabad.
The amounts payable by the Company is included under the head 'Unsecured Loans'.
Pending disposal of appeal the Company has not accounted for interest payable by it.
19. Contingent Liability:
Disputed Income Tax demand of Rs. 1648.07 lakhs (after adjustment of TDS Refunds of various assessment
year amounting to Rs. 96.75 lakhs) together with interest is pending in appeal/representation before various
forums. These cases pertain to Assessment years 1997-98 to 2011-12.
20. Previous year's figures have been regrouped / reclassified to confirm to current period's classification
wherever necessary.
In terms of our report attached
for P.B. VIJAYARAGHAVAN & CO S. BALACHANDER T.R. SURESH
Chartered Accountants Managing Director Director
Firm Regn No. 004721S
I. CHANDRAMOHAN B. PRAKASH
P R KRISHNAMURTHY Company Secretary Wholetime Director
Partner
Membership No 12622
Date : 27.05.2014
Place : Chennai
NOTES FORMING PART OF FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014
55
Schedule to the Balance Sheet for the year ended 31st March 2014 (As required in terms of Paragraph 9BB of
Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998)
(Rs.in Lakhs)
Particulars Principal Interest Amount Amount
accrued outstanding overdue
but not due
Liabilities side:
(1) Loans and advances availed by the NBFCs
inclusive of Interest accrued thereon but not paid: – – – –
(a) Debentures : Secured – – – –
Debentures : Unsecured – – – –
(Other than falling with in the meaning of
public deposits*)
(b) Deferred Credits * – – – –
(c) Term loans 254.70 – 254.70 –
(d) Inter-corporate loans and borrowing 748.59 – 748.59 –
(e) Commercial Paper – – – –
(f) Public Deposits ** – – – –
(g) Cash Credit & Working Capital Demand Loan 8328.82 3010.63 11339.45 –
(h) Hire Purchase Loan – – – –
Total 9332.11 3010.63 12342.74 –
(2) Break-up of (1) (f) above
(Outstanding public deposits inclusive of interest
accrued thereon but not paid):
(a) in the form of Unsecured debentures
(b) in the form of partly secured debentures
ie. debentures where there is a shortfall
in the value of security.
(c) other public deposits – – – –
(Rs.in Lakhs)
Assets side: Amountcc
Particulars outstanding
(3) Break-up of Loans and Advances
including bills receivables
(Other than those included in (4) below):
(a) Secured – – – –
(b) Unsecured – – – –
56
(Rs.in Lakhs)
Particulars Principal Interest Amount Amount
accrued outstanding overdue
but not due
(4) Break up of Leased Assets and stock on hire and
hypothecation loans counting towards EL/HP activities
(i) Lease Assets including lease rentals
under sundry debtors :
(a) Financial lease – – – –
(b) Operating lease – – – –
(ii) Stock on hire including hire charges
under sundry debtors:
(a) Assets on hire 2341.71 – 2341.71 –
(b) Repossessed Assets 93.47 93.47
(iii) Hypothecation loans counting towards EL/HP
activities
(a) Loans where assets have been repossessed – – – –
(b) Loans other than (a) above – – – –
(5) Break-up of investments:
Current Investments
1. Quoted
(i) Shares: (a) Equity – – – –
(b) Preference – – – –
(ii) Debentures and bonds – – – –
(iii) Units of mutual funds – – – –
(iv) Govt.Securities – – – –
(v) Others (please specify) – – – –
2. Unquoted
(i) Shares: (a) Equity 29.93 – 29.93 –
(b) Preference – – – –
(ii) Debentures and bonds – – – –
(iii) Units of mutual funds – – – –
(iv) Govt.Securities – – – –
(v) Others (please specify) – – – –
LONG TERM INVESTMENTS
1. Quoted
(i) Shares: (a) Equity – – – –
(b) Preference – – – –
(ii) Debentures and bonds – – – –
(iii) Units of mutual funds – – – –
(iv) Govt.Securities – – – –
(v) Others (please specify) – – – –
57
(Rs.in Lakhs)
Particulars Principal Interest Amount Amount
accrued outstanding overdue
but not due
2. Unquoted
(i) Shares: (a) Equity – – – –
(b) Preference – – – –
(ii) Debentures and bonds
(iii) Units of mutual funds – – – –
(iv) Govt.Securities – – – –
(v) Others (please specify) – – – –
Total – – – –
Less: Provision for Diminution for long term investments – – – –
Total – – – –
(6) Borrower group-wise classification of all leased assets, stock-on-hire and loans and advances:
Category Secured Unsecured Total
(i) Related parties
(a) Subsidiaries – – –
(b) Companies in the same group – – –
(c) Other related parties – – –
(ii) Other than related parties – – –
Total – – –
(7) Investor groupwise classification of all investments (current and long term)
in shares and securities (both quoted and unquoted):
Category Market value/Break up Book value
value or fair value of NAV (Net of Provisions)
(i) Related parties
(a) Subsidiaries pending – –
(b) Companies in the same group 29.93 –
(c) Other related parties – –
(ii) Other than related parties – –
Total 29.93 –
(8) Other information
(i) Gross Non Performing Assets
(a) Related Parties – –
(b) Other than related parties 4213.86 –
(ii) Net Non Performing Assets
(a) Related Parties – –
(b) Other than related parties 2182.48 –
(iii) Assets acquired in satisfaction of debt 93.47 –
58
CASH FLOW STATEMENT FOR
THE PERIOD ENDED 31st MARCH 2014
(Rupees in Lakhs)
31.03.2014 31.03.2013
A. CASH FLOW FROM OPERATING ACTIVITIES
NET PROFIT BEFORE INTEREST, TAX AND (1,309.65) (1,561.56)
EXTRAORDINARY ITEMS
Adjustments for :
Depreciation 22.56 45.11
Provision for written off 164.39 397.66
Finance Charges 941.17 872.13
Loss on sale of Assets 0.22 0.30
Provision No longer required (4.70) (41.91)
1,123.64 1,273.29
OPERATING PROFIT BEFORE
WORKING CAPITAL CHANGES (186.01) (288.27)
Adjustments for :
Trade and other receivables / Stock on Hire 111.27 (97.88)
Other working capital changes 13.01 270.35
Increase / Decrease in Provisions 0.65 0.40
Other Current Liabilities (11.03) (267.26)
113.89 (94.40)
CASH GENERATED FROM OPERATIONS (72.12) (382.66)
Direct Taxes Paid – –
Cash Flow before Extraordinary Items (72.12) (382.66)
Extraordinary Items – –
Net Cash Flow from Operating Activities (72.12) (382.66)
B. CASH FLOW FROM INVESTING ACTIVITIES
(Purchase) / Sale of Fixed Assets (11.53) (4.20)
NET CASH FROM INVESTING ACTIVITIES (11.53) (4.20)
59
C. CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Borrowings of Banks and Financial Institutions 910.11 847.55
Proceeds from Unsecured Borrowings 193.24
Proceeds from Directors / Group Companies – –
Finance Charges (941.17) (872.13)
NET CASH FROM IN FINANCING ACTIVITIES (31.06) 168.65
D. Net Increase / (Decrease) in Cash & Cash Equivalents (114.70) (218.22)
E. Opening Cash & Cash Equivalents 270.07 488.28
F. Closing Cash & Cash Equivalents 155.37 270.06
(Rupees in Lakhs)
31.03.2014 31.03.2013
CASH FLOW STATEMENT FOR
THE PERIOD ENDED 31st MARCH 2014
Subject to our report of even date
for P.B. VIJAYARAGHAVAN & CO S. BALACHANDER T.R. SURESHChartered Accountants Managing Director DirectorFirm Regn No. 004721S
I. CHANDRA MOHAN B. PRAKASHP R KRISHNAMURTHY Company Secretary Wholetime DirectorPartnerMembership No 12622
Date : 27.05.2014Place : Chennai
AUDITORS’ CERTIFICATE
We have examined the above Cash Flow Statement for the period ended 31st March 2014. The statement has been
prepared in accordance with the requirements of Clause 32 of the listing agreement with the Bombay Stock Exchange
and is based on and in agreement with the corresponding Profit and Loss account and Balance Sheet of the Company
covered by our report to the Members of the Company.
Subject to our report of even date
for P.B. VIJAYARAGHAVAN & CO
Chartered Accountants
Firm Regn No. 004721S
P R KRISHNAMURTHY
Date : 27.05.2014 Partner
Place : Chennai Membership No 12622
60
Balance Sheet Abstract and Company’s General Business Profile
I. Registration Details State Code 1 8
Balance Sheet Date
II. Capital Raised during the year(Amount in Lakhs)
III. Position of Mobilisation and deployment of Funds (Amount in Lakhs)
Source of Funds
Application of Funds
IV. Performance of the Company
Turnover Total Expenditure
Profit/(loss) before tax Profit /(loss) after Tax
Earning per Share Rs. Dividend Rate %
V. Generic Names of Three Principal Products / Services of the Company
Item Code No. (ITC Code)
Service
INFORMATION AS REQUIRED UNDER PART IV OF
SCHEDULE VI OF THE COMPANIES ACT, 1956
1 3 6 2 6
Date Month Year
3 1 0 3 1 4
Public Issue
N I L
Bonus Issue
N I L
Rights Issue
N I L
Private Placement
5 8 7 9 . 6 1
Total Liabilities Total Assets
6 6 7 1 . 6 7
Paid-up Capital
- 1 3 2 2 6 . 5 1
Reserves & Surplus
Secured Loans
7 4 8 . 5 9
Unsecured Loans
Deferred Tax
Net Fixed Assets Investments
Net Current Assets
N I L
Misc. Expenditure
Accumulated Losses
( 1 3 0 9 . 6 5 )( 1 3 0 9 . 6 5 )
N I L( 3 0 . 6 9 )
N A
2 0 5 3 9 . 3 2
1 5 3 2 . 8 81 8 9 . 5 9
H I R E N P U R C H A S E N L E A S I N G
2 0 5 3 9 . 3 2B I L L S N D I S C O U N T I N G
N I L
5 8 7 9 . 6 1
1 1 5 9 4 . 1 5
1 6 9 1 . 3 5
( 9 9 6 1 . 0 1 )
2 9 . 9 3
1 8 8 2 6 . 5 0
CIN : L65921TN1986PLC013626
In terms of our report attachedfor P.B. VIJAYARAGHAVAN & CO S. BALACHANDER T.R. SURESHChartered Accountants Managing Director DirectorFirm Regn No. 004721S
I. CHANDRA MOHAN B. PRAKASHP R KRISHNAMURTHY Company Secretary Wholetime DirectorPartnerMembership No 12622
Date : 27.05.2014Place : Chennai
N I L
61
STATEMENT PURSUANT OF SECTION 212 (3)
OF THE COMPANIES ACT, 1956
S.No. Name of the Subsidiary Company M/s. DFL M/s. Smart Invest
Holdings & Securities Ltd. Agency.com (P) Ltd
1 Financial year of the Subsidiary Company 31.03.2014 31.03.2014
2 Holding Company’s 2,99,296 shares of 10,000 shares of
Interest in the Company Rs.10/- each (99.77%) Rs.10/- each (96.86%)
3 Net aggregate amount of the profit of the
subsidiary dealt with in the Holding
Company’s Accounts
a. For the subsidiary’s financial Nil Nil
year on 31.03.13.
b. For the previous year of the Nil Nil
subsidiary company
4 Net aggregate amount of the profits not
dealt with in the Holding Company
Accounts
a. For the subsidiary’s financial (Rs.0.33 Lakhs) Rs.0.05 Lakhs
year on 31.03.14.
b. For the previous financial year Rs.95.62 Lakhs Rs.0.85 Lakhs
of the subsidiary company.
5 (a) Changes in Shareholding Nil Nil
(b) Material changes between the end of
the financial year of the subsidiary
and that of Holding Company
(i) Fixed assets Nil Nil
(ii) Investments Nil Nil
(iii) Moneys lent by subsidiary Nil Nil
(iv) Moneys borrowed by Subsidiary for Nil Nil
any purpose other than that of
meeting current liabilities
In terms of our report attachedfor P.B. VIJAYARAGHAVAN & CO S. BALACHANDER T.R. SURESHChartered Accountants Managing Director DirectorFirm Regn No. 004721S
I. CHANDRA MOHAN B. PRAKASHP R KRISHNAMURTHY Company Secretary Wholetime DirectorPartnerMembership No 12622
Date : 27.05.2014Place : Chennai
62
BOARD OF DIRECTORS B PRAKASH
P SUDHAKAR
A RAMESH KUMAR
REGISTERED OFFICE & : 14, Ramakrishna Street, T. Nagar
CORPORATE OFFICE Chennai - 600 017
AUDITORS : M/s. A.K. Rajagopalan & Co., Chartered Accountants
BANKERS : The South Indian Bank Limited
T. Nagar, Chennai – 600 017.
DFL Holdings and Securities Ltd.
63
Your Directors have pleasure in presenting the TWENTIETH ANNUAL REPORT together with the
audited accounts for the year ended 31st March 2014.
FINANCIAL RESULTS
Rs. in Lakhs
Particulars 2013-14 2012-13
Gross Income 1.79 4.99
Profit before Depreciation & tax (0.33) (0.73)
Less: Depreciation – –
Profit before Tax (0.33) (0.73)
Provision for Taxation – –
Profit after Tax (0.33) (0.73)
Add: Balance from Last Year 94.24 94.97
Profit available for appropriation (0.33) (0.73)
Balance carried forward 93.91 94.24
BUSINESS
Your Company's main source of income was from marketing of home loan products and non-life insurance.
DIVIDEND
Your Directors do not propose dividend for the year 2013-14 in view of the losses incurred.
PROSPECTS
Your Company has taken steps to tap the market potential to increase the fee based income from insurance
and home loan products and is confident of posting better results in the ensuing years.
DIRECTORS
Mr. A Ramesh Kumar retires by rotation and, being eligible, offers himself for reappointment. None of the
other directors are concerned or interested in this appointment. Your Directors recommend the re-
appointment of Mr. A Ramesh Kumar as the Director considering his expertise in the field of financial
industry.
DIRECTORS’ RESPONSIBILITY STATEMENT
In compliance with the provisions of Section 217 (2AA) of the Companies Act 1956, your Directors
confirm:
1. That in the preparation of the annual accounts, the applicable accounting standards have been
followed;
2. That they have selected such accounting policies and applied them consistently and made judgments
and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs
DIRECTORS’ REPORTDFL Holdings and Securities Ltd.
64
of the Company at the end of the period and of the loss of the Company for the year ended 31st
March, 2014.
3. That they have taken proper and sufficient care for the maintenance of adequate accounting records
in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the
company and for preventing and detecting fraud and other irregularities; and
4. That they have prepared the annual accounts on a going-concern basis.
INFORMATION UNDER SEC. 217(1)(e) OF THE COMPANIES ACT, 1956
There is no activity relating to conservation of energy or technology absorption. The company has no
foreign exchange earnings or outgo.
PARTICULARS OF EMPLOYEES UNDER SEC. 217(2A) OF THE COMPANIES ACT, 1956
None of the employees of the company is in receipt of remuneration in excess of limits prescribed under
section 217 (2A) of the Companies Act, 1956.
SECRETARIAL COMPLIANCE CERTIFICATE
In terms of Section 383(A) (1) of the Companies Amendment Act, 2000, the secretarial compliance
certificate for the year ended 31st March 2014 has been obtained and the same is annexed.
AUDITORS
M/s. A K Rajagopalan & Co., Chartered Accountants, Chennai the Statutory Auditors of the Company retire
at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. A certificate
under Sec. 224(1B) of the Companies Act, 1956 has been obtained from them.
ACKNOWLEDGEMENT
Your directors wish to thank the company's bankers for their valuable support. Your Directors also wish to
place on record the appreciation of the good work done by the employees of the company.
for & on behalf of the Board
Place: Chennai B PRAKASH P SUDHAKAR
Date : 19.05.2014 Director Director
DFL Holdings and Securities Ltd.
65
Corporate Identification No : U65993TN1994PLC028703
Paid up Capital : Rs.30,00,000/-
FORM
[SEE RULE 3]
Compliance Certificate
To
The Members,
DFL HOLDINGS AND SECURITIES LIMITED.
Chennai.
I have examined the registers, records, books and papers produced to me for my verification pertaining to
the financial year 01.04.2013 to 31.03.2014 of DFL HOLDINGS AND SECURITIES LIMITED, as
required to be maintained under the Companies Act, 1956/2013, and the rules made there under and also
the provisions contained in the Memorandum and Articles of Association of the Company for the financial
year ended 31.03.2014 In my opinion and to the best of my information and according to the examinations
carried out by me of the documents produced to me and explanations furnished to me by the Company, its
officers and agents, I, on strength and reliance of the documents produced and information provided to me,
pertaining to the financial year 2013-2014, certify that in respect of the aforesaid financial year:
1. The Company has kept and maintained all registers as stated in Annexure `A' to this certificate, as
per the provisions and the rules made there under and all entries therein have been recorded.
2. The Company has filed the forms and returns as stated in Annexure `B' to this certificate, with the
Registrar of Companies, Regional Director, Central Government, Company Law Board or other
authorities under the Act and the rules made thereunder.
3. The Company being public limited Company has the minimum prescribed paid-up capital.
4. The Board of Directors met 6(Six) times on 10.05.2013, 12.08.2013, 26.08.2013, 06.11.2013,
06.02.2014 and 19.02.2014 in respect of which meetings notices were given and the proceedings were
recorded and signed in the Minutes Book maintained for the purpose.
5. The Company has not closed its Register of Members under Section 154/91 of the Companies Act,
1956/2013 during the financial year.
6. The Annual General Meeting for the financial year ended on 31.03.2013 was held on 18.09.2013, after
giving notice to the members of the Company and the resolutions passed thereat were recorded in
Minutes Book maintained for the purpose.
7. No Extra-Ordinary General Meeting was held during the financial year .
8. As per information provided to me it appears that, the Company has not advanced any loan to its
directors and/or persons or firms or companies referred in the Section 295/ 185 of the Companies Act,
1956/2013 during the financial year.
9. As per information provided to me, the Company represents that there was no transaction falling within
the purview of Section 297 of the Act.
COMPLIANCE CERTIFICATEDFL Holdings and Securities Ltd.
66
10. The company has made necessary entries in the register maintained under Section 301/189 of the
Companies Act, 1956/2013.
11. As explained to me, it seems that there were no instances falling within purview of Section 314 of the
Act, owing to which Company has not obtained any approvals from the Board of Directors, members
and previous approval of the Central Government, as the case may be.
12. As per records shown to me, the Company has not issued any duplicate share certificates during the
financial year.
13. As per documents produced to me, the Company:
(i) has not delivered share certificate as there was no allotment / transfer / transmission of securities
during the financial year.
(ii) has not deposited amount in a separate bank account as there was no dividend declared during
the financial year.
(iii) has not posted dividend warrants to any member of the Company as there was no dividend
declared during the financial year.
(iv) has not transferred the amounts in unpaid dividend account, application money due for refund,
matured deposits, matured debentures and the interest accrued thereon which have remained
unclaimed or unpaid for a period of seven years to Investor Education and Protection Fund as
there was no such amount outstanding during the financial year under review
(v) has generally complied with the requirements of Section 217 of the Act.
14. The Board of Directors of the Company is constituted and there was no appointment of directors,
additional directors, alternate directors and directors to fill casual vacancies during the financial year.
15. The Company has not appointed any Managing Director/ Whole-time Director/Manager during the
financial year under scrutiny.
16. The Company has not appointment sole-selling agents during the financial year under scrutiny.
17. As per information provided to me, observations made by me and the records produced to me, no
approvals was taken by the Company from the Central Government, Company Law Board, Regional
Director, Registrar or such other authorities as may be prescribed under the various provisions of the
Act as the Company represents that there no occasions have arisen during the financial year.
18. The directors have disclosed their interest in other firms/companies to the Board of Directors pursuant
to the provisions of the Act and the rules made there under.
19. As per records of the Company, the Company has not issued shares/ debentures/securities during the
financial year.
20. The Company has not bought back any shares during the financial year.
21. The Company has not made redemption of preference shares/debentures during the year As there was
no redemption of preference shares/debenture issued
22. There was no transaction necessitating the Company to keep in abeyance the rights to dividend, rights
shares and bonus shares pending registration of transfer of shares.
23. As per information provided to me, the Company has not accepted any deposit falling within the
purview of Section 58A of the Companies Act 1956 during the financial year.
DFL Holdings and Securities Ltd.
67
24. The Company has not made borrowings from its directors, its members, public, financial institutions,
banks and others falling under Section 293(1) (d) / 180 (1)(c) of the Companies Act, 1956/2013 during
the financial year.
25. The company has not made loans and investments, or given guarantees or provided securities to other
bodies corporate falling under section 372A of the Act during the financial year
26. The Company has not altered the provisions of the memorandum of association of the company with
respect to situation of the Company's registered office from one state to another during the financial
year under scrutiny.
27. The Company has not altered the provisions of the memorandum of association of the company with
respect to the objects of the Company during the year under scrutiny.
28. The Company has not altered the provisions of the memorandum of association of the company with
respect to name of the Company, during the year under scrutiny.
29. The company has not altered the provisions of the memorandum of association of the company with
respect to share capital of the company during the year under scrutiny.
30. The company has not altered its articles of association of the company during the financial year.
31. As per explanations given to me, there was no prosecution initiated against or show cause notices
received by the Company and fines/penalties or any other punishment imposed on the Company during
the financial year for offences under the act.
32. The Company has not received any security deposit from its employees during the financial year under
scrutiny.
33. The Company has not constituted any Fund under section 418 of the Act.
Place : Trivandrum G. GNANENDRA KUMAR, ACS
Date : 19.05.2014 Company Secretary
M No. 25205
C P No. 9059ANNEXURE A
Registers as maintained by the Company
SI. No. Under Section Name of the Register
1 150 Register of Members
2 193 Minutes of All meeting of Board of Directors
3 193(1) Minutes of General Meeting
4 303 Register of Directors
5 307 Register of Directors' Share holding
6 301/189 Register of Contracts, Companies and firms in which the directors are
interested.
7 – Share Transfer register
8 143 Register of Charges
9 372A Register of loans and investments, or given guarantees or provided securities
DFL Holdings and Securities Ltd.
68
ANNEXURE B
Returns/ Documents/ Forms as filed or Re submitted by the Company with the
Registrar of Companies from 01.04.2013 to 31.03.2014
SI.
No.
Form
No.
Under
Section
Document/filing
DatesDescription
DFL Holdings and Securities Ltd.
1 23AC/ ACA 220 Annual Report for financial year ended 18.10.2013
31.03.2013
2 66 383A(1) Compliance Certificate for the year ended 17.10.2013
31.03.2013
3 20B 159 Annual Return as on date of AGM 18.09.2013 12.11.2013
Note:
Form 23B filed by Statutory Auditor of the company on 17.10.2013 for the period from 01.04.2013 to
31.03.2014
Forms and Returns as filed by the Company with Regional Director during the financial year ending on
31.03.2014 – Nil
Forms and Returns as filed by the Company with Central Government or other authorities during the
financial year ending on 31.03.2014 – Nil
69
Report on the Financial Statements:
1. We have audited the accompanying financial statements of the M/s DFL HOLDINGS AND
SECURITIES LIMITED, which comprise the Balance Sheet as at 31st March, 2014 and the
Statement of Profit and Loss for the year then ended, and a summary of significant accounting policies
and other explanatory information.
Management's Responsibility for the Financial Statements:
2. Management is responsible for the preparation of these financial statements in accordance with the
Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the
Act"). This responsibility includes the design, implementation and maintenance of internal control
relevant to the preparation of the financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility:
3. Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgement, including the
assessment of the risks of material misstatement of the financial Statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the
Company's preparation and fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of the accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion:
6. In our opinion and to the best of our information and according to the explanations given to us, the
financial statements give the information required by the act in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India:
(i) In the case of the Balance Sheet, the state of affairs of the Company as at 31st March, 2014;
(ii)In the case of the Profit and Loss Account the Loss for the year ended on that date; and
(iii) In the case of the Cash Flow Statement the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Matters:
7. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of
India in terms of Section 227(4A) of the Companies Act 1956, we annex hereto a statement on the
matters specified in paragraphs 4 and 5 of the said order
DFL Holdings and Securities Ltd.
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
DFL HOLDINGS AND SECURITIES LTD.
70
8. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purpose of our audit;
b) In our opinion proper books of account as required by law have been kept by the Company so
far as appears from our examination of those books
c) The Balance Sheet, Statement of Profit and Loss, dealt with by this Report are in agreement with
the books of account.
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, comply with the Accounting
Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;
e) On the basis of written representations received from the directors as on March 31, 2014, and
taken on record by the Board of Directors, none of the directors is disqualified as on March 31,
2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956.
For A.K.RAJAGOPALAN & CO.,
Chartered Accountants
CA T.R.ASHOK
Partner
Place: Chennai Membership Number: 026133
Date : 19.05.2014 Firm Registration Number: 003405S
DFL Holdings and Securities Ltd.
71
ANNEXURE TO THE AUDITORS’ REPORT
(Referred to in paragraph 3 of our report of even date) M/s DFL HOLDINGS AND SECURITIES
LIMITED
On the basis of such checks as we considered appropriate and according to the information and
explanations given to us during the course of our audit, we report that:
1. In respect of Fixed Assets:
On the basis of our audit of our examination of Books of Accounts, Company is not having any Fixed
Assets.
2. In respect of Inventories:
On the basis of our audit of the records, Company does not hold any Inventory.
3. (a) According to the information and explanations given to us and on the basis of our examination
of the books of account, the Company has not granted any loans, secured or unsecured, to
companies, firms or other parties listed in the register maintained under Section 301 of the
Companies Act, 1956. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the
order are not applicable to the Company.
(b) According to the information and explanations given to us and on the basis of our examination
of the books of account, the Company has not taken loans from companies, firms or other parties
listed in the register maintained under Section 301 of the Companies Act, 1956. Thus sub
clauses (f) & (g) are not applicable to the company.
4. In our opinion and according to the information and explanations given to us, there is generally an
adequate internal control procedure commensurate with the size of the company and the nature of its
business, for the payment for expenses & for sale of services. During the course of our audit, no major
instance of continuing failure to correct any weaknesses in the internal controls has been noticed.
5. a) Based on the audit procedures applied by us and according to the information and explanations
provided by the management, the particulars of contracts or arrangements referred to in section
301 of the Act have been entered in the register required to be maintained under that section.
b) As per information & explanations given to us and in our opinion, the transaction entered into
by the company with parties covered u/s 301 of the Act does not exceeds five lacs rupees in a
financial year therefore requirement of reasonableness of transactions does not arises.
6. The Company has not accepted any deposits from the public covered under section 58A and 58AA
of the Companies Act, 1956.
7. As per information & explanations given by the management, the Company has no internal audit
system commensurate with its size and the nature of its business.
8. As per information & explanation given by the management, maintenance of cost records has been
prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the act;
it is not applicable to the Company.
9. (a) According to the records of the company, undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other
statutory dues have generally been regularly deposited with the appropriate authorities.
According to the information and explanations given to us there were no outstanding statutory
dues as on 31st of March, 2014 for a period of more than six months from the date they became
payable.
DFL Holdings and Securities Ltd.
72
DFL Holdings and Securities Ltd.
(b) According to the information and explanations given to us, there is no amounts payable in
respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which
have not been deposited on account of any disputes.
10. The company's accumulated losses at the end of the financial year are less than fifty per cent of its
net worth. However, it has incurred cash losses both in current year as well as in the immediately
preceding financial year.
11. Based on our audit procedures and on the information and explanations given by the management, we
are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution,
bank or debenture holders.
12. According to the information and explanations given to us, the Company has not granted loans and
advances on the basis of security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of
this clause of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the
Company.
14. According to information and explanations given to us, the Company is trading in Shares, Mutual
funds & other Investments. Proper records & timely entries have been maintained in this regard &
further investments specified are held in their own name.
15. According to the information and explanations given to us, the Company has not given any guarantees
for loan taken by others from a bank or financial institution.
16. Based on our audit procedures and on the information given by the management, we report that the
company has not raised any term loans during the year.
17. Based on the information and explanations given to us and on an overall examination of the Balance
Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have
been used for long-term investment by the Company.
18. Based on the audit procedures performed and the information and explanations given to us by the
management, we report that the Company has not made any preferential allotment of shares during
the year.
19. The Company has no outstanding debentures during the period under audit.
20. The Company has not raised any money by public issue during the year.
21. Based on the audit procedures performed and the information and explanations given to us, we report
that no fraud on or by the Company has been noticed or reported during the year, nor have we been
informed of such case by the management.
For A.K.RAJAGOPALAN & CO.,
Chartered Accountants
CA T.R.ASHOK
Partner
Place: Chennai Membership Number: 026133
Date : 19.05.2014 Firm Registration Number: 003405S
73
BALANCE SHEET AS AT 31st MARCH, 2014
Amount in Rupees
ParticularsAs at
31.03.2013
As at
31.03.2014
Refer Note
No.
I. EQUITY AND LIABILITIES
1 SHAREHOLDERS’ FUNDS
a) Share Capital 1 3,000,000.00 3,000,000.00
b) Reserves and surplus 2 9,529,420.87 9,562,824.94
12,529,420.87 12,562,824.942 NON-CURRENT LIABILITIES
a) Long-term borrowings – –
b) Deferred Tax Liabilities (Net) – –
c) Long-term provisions – –
– –3 CURRENT LIABILITIES
a) Short-term borrowings – –
b) Trade Payables – –
c) Other Current Liabilities 3 9,428.00 9,428.00
d) Short-term Provisions 4 1,117,394.00 1,117,394.00
1,126,822.00 1,126,822.00
TOTAL 13,656,242.87 13,689,646.94
II. ASSETS1 NON-CURRENT ASSETS
a) Fixed assets
(i) Tangible assets – –
(ii) Intangible assets – –
(iii) Capital work-in progress – –
b) Non-current investments – –
c) Long-term loans and advances 5 9,137,564.00 9,138,104.00
d) Other non-current assets – –
9,137,564.00 9,138,104.00
2 CURRENT ASSETS
a) Inventories – –
b) Trade Receivables – –
c) Cash and Bank Balance 6 597,445.87 581,165.94
d) Short-term loans and advances – –
e) Other current Assets 7 3,921,233.00 3,970,377.00
4,518,678.87 4,551,542.94
TOTAL 13,656,242.87 13,689,646.94
Refer Accompanying Notes to Financial Statements
As per our even dated
For A.K. RAJAGOPALAN & CO. For DFL Holdings and Securities Ltd.
Chartered Accountants
(FRN 003405S) B. PRAKASH
Director
CA. T.R. ASHOK
Partner P. SUDHAKAR
M.No. 026133 Director
Place : Chennai
Date : 19.05.2014
DFL Holdings and Securities Ltd.
74
PROFIT AND LOSS ACCOUNT FOR THE
YEAR ENDED 31st MARCH, 2014
Amount in Rupees
ParticularsAs at
31.03.2013
As at
31.03.2014
Refer Note
No.
I. REVENUE
Revenue from operations 8 158,453.93 442,834.47
Other income 9 20,072.00 55,677.00
Total Revenue 178,525.93 498,511.47
II. EXPENSES
Cost of Material consumed – –
Changes in inventories of Finished Goods and
Work in Progress – –
Employee Benefits Expense 10 193,820.00 457,925.00
Finance Costs 11 134.00 163.03
Depreciation and Amortization Expenses – –
Other Expenses 12 17,976.00 113,132.50
Total expenses 211,930.00 571,220.53
III. Profit Before Tax (33,404.07) (72,709.06)
IV. Tax Expense
1. Current Tax – –
Less: MAT Credit Entitlement – –
Net Current Assets – –
2. Deferred Tax – –
V. Profit After Tax for the Year (33,404.07) (72,709.06)
VI. Earnings Per Share
Par value Per share Rs.10/-
a) Basic (0.11) (0.24)
b) Diluted – –
Refer Accompanying Notes to Financial Statements
DFL Holdings and Securities Ltd.
As per our even dated
For A.K. RAJAGOPALAN & CO. For DFL Holdings and Securities Ltd.
Chartered Accountants
(FRN 003405S) B. PRAKASH
Director
CA. T.R. ASHOK
Partner P. SUDHAKAR
M.No. 026133 Director
Place : Chennai
Date : 19.05.2014
75
DFL Holdings and Securities Ltd.
A. Corporate Information
DFL HOLDINGS AND SECURITIES LIMITED was incorporated on 22nd September 1994. The
current board of directors are (1) Shri. B. Prakash (2) Shri. P. Sudhakar (3) Shri. A. Ramesh Kumar.
The company having a place of business at No:14 Ramakrishna Street, T.Nagar. Chennai - 600 017
Tamil Nadu. The company is engaged generally in the business of Marketing of home loan Products
and non life insurance.
B. Significant Accounting Policies
The financial statements are being prepared on historical cost convention on accrual basis in
accordance with Indian Generally Accepted Accounting Principles (“GAAP”) and mandatory
accounting standards as prescribed in the Companies (Accounting Standard) Rules, 2006, the
provisions of the Companies Act, 1956.
The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.
B.1 Employee benefits
Employee benefits include salaries & wages, Bonus and Staff welfare expenses.
B.2 Provisions and contingencies:
Provision for current tax is made after taking into consideration benefits admissible income such as
interest etc., recognised on accrual basis and applicability of minimum Alternate Tax under the
Provision of the income tax Act 1961.
B.3 Revenue recognition:
The revenue from the services are recognized on realization basis. Other Income recognized on
accrual basis.
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
76
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
1. SHARE CAPITAL
Authorised
5,00,000 Equity Shares of Par Value of Rs. 10/- each 5,000,000.00 5,000,000.00
5,000,000.00 5,000,000.00
Issued, Subscribed and Paid up:
3,00,000 Equity Shares of Par Value of Rs. 10/- each 3,000,000.00 3,000,000.00
3,000,000.00 3,000,000.00
DFL Holdings and Securities Ltd.
Amount in Rupees
31.03.201331.03.2014
Details of shareholding more than 5% shares
EQUITY
Name of Shareholder
DFL Infrastructure Finance Ltd.
No. of Shares held 299,296 299,296
% of Holding the class 99.77 99.77
31.03.201331.03.2014
2. RESERVES AND SURPLUS
General Reserve:
Balance at the beginning of the year 137,900.00 137,900.00
Add: Transfer from Profit and Loss Account – –
Balance at the closing of the year 137,900.00 137,900.00
Surplus
Balance at the beginning of the year 9,424,924.94 9,497,634.00
Add: Transfer from Profit and Loss Account (33,404.07) (72,709.06)
Balance at the closing of the year 9,391,520.87 9,424,924.94
9,529,420.87 9,562,824.94
31.03.201331.03.2014
77
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014DFL Holdings and Securities Ltd.
3. OTHER CURRENT LIABILITIES
Audit Fees 8,427.00 8,427.00
Other Payables 1,001.00 1,001.00
9,428.00 9,428.00
Amount in Rupees
31.03.201331.03.2014
4. SHORT TERM PROVISIONS
Provision for Income Tax (Net) 1,117,394.00 1,117,394.00
1,117,394.00 1,117,394.00
31.03.201331.03.2014
5. LONG TERM LOANS AND ADVANCES
Inter Corporate Deposit
ICD-DFL Infrastructure Finance Ltd 9,137,564.00 9,138,104.00
9,137,564.00 9,138,104.00
31.03.201331.03.2014
6. CASH AND BANK BALANCES
Cash and cash Equivalents
Cash in hand – –
Balances with Banks in Current Accounts – 581,165.94
The South India Bank 50,719.09 –
Balance with ICICI 10,140.78 –
Deposits with BOB 136,586.00 –
Fixed Deposit with SIB 400,000.00 –
597,445.87 581,165.94
31.03.201331.03.2014
78
DFL Holdings and Securities Ltd.
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
7. OTHER CURRENT ASSETS
Quoted
DFL Infrastructure Finance Ltd. 2,097,630.00 2,097,630.00
Unquoted
Smart Invest Agency.Com Pvt. Ltd. 100,000.00 100,000.00
Tax Deducted at Source 298,253.00 297,095.00
Advance tax 325,350.00 325,350.00
Coimbatore Stock Exchange 600,000.00 600,000.00
Interest Accrued but not due – 302.00
Colligos Credit & Collection Services Pvt Ltd 500,000.00 550,000.00
3,921,233.00 3,970,377.00
Amount in Rupees
31.03.201331.03.2014
8. REVENUE FROM OPERATIONS
Commission received 158,453.93 442,834.47
158,453.93 442,834.47
31.03.201331.03.2014
9. OTHER INCOME
Interest Income on Bank deposits 20,072.00 55,677.00
20,072.00 55,677.00
31.03.201331.03.2014
10. EMPLOYEE BENEFITS EXPENSES
Salaries and wages 193,820.00 457,925.00
193,820.00 457,925.00
31.03.201331.03.2014
79
Amount in Rupees
11. FINANCE COST
Bank Charges 134.00 163.03
134.00 163.03
31.03.201331.03.2014
12. OTHER EXPENSES
Professional Charges – 16,874.00
Audit Fees 8,427.00 8,427.00
Telephone Charges 4,522.00 22,831.50
Travelling Charges – 65,000.00
General Expenses 302.00 –
Filing Charges 4,725.00 –
17,976.00 113,132.50
31.03.201331.03.2014
DFL Holdings and Securities Ltd.
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
80
Balance Sheet Abstract and Company’s General Business Profile
I. Registration Details State Code 1 8
CIN:
Balance Sheet Date
II. Capital Raised during the year
III. Position of Mobilisation and deployment of Funds (Amount in Thousands)
Source of Funds
Application of Funds
IV. Performance of the Company
Turnover Total Expenditure
Profit before tax Profit after Tax
Earning per Share Rs. Dividend Rate %
V. Generic Names of Three Principal Products / Services of the Company
Item Code No. (ITC Code)
Service
2 8 7 0 3
Date Month Year
3 1 0 3 1 4
Public Issue
N I L
Bonus Issue
N I L
Rights Issue
N I L
Private Placement
N I L
1 3 6 5 6
Total Liabilities
1 3 6 5 6
Total Assets
3 0 0 0
Paid-up Capital
9 5 2 9
Reserves & Surplus
N I L
Secured Loans
N I L
Unsecured Loans
Net Fixed Assets Investments
3 3 9 2
Net Current Assets
N I L
Misc. Expenditure
N I L
Accumulated Losses
( 0 . 3 3 )( 0 . 3 3 )
N I L
N A
2 0 5 3 9 . 3 2
2 1 21 7 8
S E R V I C E N A G E N C Y N B U S I N E S S
( 0 . 1 1 )
N I L
U65993TN1994PLC028703
DFL Holdings and Securities Ltd.
INFORMATION AS REQUIRED UNDER PART IV OF
SCHEDULE VI OF THE COMPANIES ACT, 1956
N I L
Per our report attached
For A.K. RAJAGOPALAN & CO. For DFL Holdings and Securities Ltd.
Chartered Accountants
(FRN 003405S) B. PRAKASH
CA. T.R. ASHOK
Partner P. SUDHAKAR
M.No. 026133 Directors
Place : Chennai
Date : 19.05.2014
81
BOARD OF DIRECTORS B PRAKASH
P SUDHAKAR
REGISTERED OFFICE : 14, Ramakrishna Street, T. Nagar, Chennai – 600 017.
AUDITORS : M/s. A.K. Rajagopalan & Co., Chartered Accountants
BANKERS : THE SOUTH INDIAN BANK LTD.
T. Nagar, Chennai – 600 017.
SMARTINVEST AGENCY.COM PVT. LTD.
82
DIRECTORS’ REPORT
Your Directors have pleasure in presenting the THIRTEENTH ANNUAL REPORT together with the
audited accounts for the year ended 31st March 2014.
FINANCIAL RESULTS
The accompanying Profit and Loss Account shows a profit after tax of Rs.5,113/-.
BUSINESS
The Company would pursue its objectives in investment broking, Insurance Agency and allied areas to
concentrate on fee-based activities.
DIVIDEND
Your Directors do not propose dividend for the year 2013-14.
PROSPECTS
Your Directors are confident of increased turnover during the current year with the increase in Fee based
activities.
DIRECTORS’ RESPONSIBILITY STATEMENT
In compliance with the provisions of Section 217 (2AA) of the Companies Act 1956, your Directors
confirm:
1. That in the preparation of the annual accounts, the applicable accounting standards have been
followed;
2. That they have selected such accounting policies and applied them consistently and made judgments
and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the period and of the profit of the Company for the year ended 31st
March 2014.
3. That they have taken proper and sufficient care for the maintenance of adequate accounting records
in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the
company and for preventing and detecting fraud and other irregularities; and
4. That they have prepared the annual accounts on a going-concern basis.
INFORMATION UNDER SEC. 217(1)(e) OF THE COMPANIES ACT, 1956
There is no activity relating to conservation of energy or technology absorption. The company has no
foreign exchange earnings or outgo.
PARTICULARS OF EMPLOYEES UNDER SEC. 217(2A) OF THE COMPANIES ACT, 1956
There are no employees drawing the remuneration as stipulated under Sec. 217 (2A) of the Companies Act,
1956.
SMARTINVEST AGENCY.COM PVT. LTD.
83
AUDITORS
M/s. A K Rajagopalan & Co., Chartered Accountants, Chennai the Statutory Auditors of the Company retire
at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. A certificate
under Sec. 224(1B) of the Companies Act, 1956 has been obtained from them.
ACKNOWLEDGEMENT
Your directors wish to thank the company's bankers for their valuable support.
for & on behalf of the Board
Place : Chennai B PRAKASH P SUDHAKAR
Date : 19.05.2014 Director Director
84
Report on the Financial Statements:
1. We have audited the accompanying financial statements of the M/s SMARTINVEST
AGENCY.COM PRIVATE LIMITED, which comprise the Balance Sheet as at 31st March, 2014
and the Statement of Profit and Loss for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management's Responsibility for the Financial Statements:
2. Management is responsible for the preparation of these financial statements in accordance with the
Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the
Act"). This responsibility includes the design, implementation and maintenance of internal control
relevant to the preparation of the financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility:
3. Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgement, including the
assessment of the risks of material misstatement of the financial Statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the
Company's preparation and fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of the accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion:
6. In our opinion and to the best of our information and according to the explanations given to us, the
financial statements give the information required by the act in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India:
(i) In the case of the Balance Sheet, the state of affairs of the Company as at 31st March, 2014;
(ii) In the case of the Profit and Loss Account the Profit for the year ended on that date; and
(iii) In the case of the Cash Flow Statement the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Matters:
7. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of
India in terms of Section 227(4A) of the Companies Act 1956, we annex hereto a statement on the
matters specified in paragraphs 4 and 5 of the said order
SMARTINVEST AGENCY.COM PVT. LTD.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
SMARTINVEST AGENCY.COM PRIVATE LIMITED
85
8. As required by section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purpose of our audit;
b) In our opinion proper books of account as required by law have been kept by the Company so
far as appears from our examination of those books
c) The Balance Sheet, Statement of Profit and Loss, dealt with by this Report are in agreement with
the books of account.
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, comply with the Accounting
Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;
e) On the basis of written representations received from the directors as on March 31, 2014, and
taken on record by the Board of Directors, none of the directors is disqualified as on March 31,
2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956.
For A.K.RAJAGOPALAN & CO.,
Chartered Accountants
CA T.R.ASHOK
Partner
Place: Chennai Membership Number: 026133
Date : 19.05.2014 Firm Registration Number: 003405S
86
(Referred to in paragraph 3 of our report of even date) M/s SMARTINVEST AGENCY.COM
PRIVATE LIMITED
On the basis of such checks as we considered appropriate and according to the information and
explanations given to us during the course of our audit, we report that:
1. In respect of Fixed Assets:
On the basis of our audit of our examination of Books of Accounts, Company is not having any Fixed
Assets.
2. In respect of Inventories:
On the basis of our audit of the records, Company does not hold any Inventory.
3. (a) According to the information and explanations given to us and on the basis of our examination
of the books of account, the Company has not granted any loans, secured or unsecured, to
companies, firms or other parties listed in the register maintained under Section 301 of the
Companies Act, 1956. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the
order are not applicable to the Company.
(b) According to the information and explanations given to us and on the basis of our examination
of the books of account, the Company has not taken loans from companies, firms or other parties
listed in the register maintained under Section 301 of the Companies Act, 1956. Thus sub
clauses (f) & (g) are not applicable to the company.
4. In our opinion and according to the information and explanations given to us, there is generally an
adequate internal control procedure commensurate with the size of the company and the nature of its
business, for the revenue and payment for expenses & for sale of services. During the course of our
audit, no major instance of continuing failure to correct any weaknesses in the internal controls has
been noticed.
5. a) Based on the audit procedures applied by us and according to the information and explanations
provided by the management, the particulars of contracts or arrangements referred to in section
301 of the Act have been entered in the register required to be maintained under that section.
b) As per information & explanations given to us and in our opinion, the transaction entered into
by the company with parties covered u/s 301 of the Act does not exceeds five lacs rupees in a
financial year therefore requirement of reasonableness of transactions does not arises.
6. The Company has not accepted any deposits from the public covered under section 58A and 58AA
of the Companies Act, 1956.
7. As per information & explanations given by the management, the Company has no internal audit
system commensurate with its size and the nature of its business.
8. As per information & explanation given by the management, maintenance of cost records has been
prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the act;
it is not applicable to the Company.
9. (a) According to the records of the company, undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other
statutory dues have generally been regularly deposited with the appropriate authorities.
According to the information and explanations given to us there were no outstanding statutory
dues as on 31st of March, 2014 for a period of more than six months from the date they became
payable.
ANNEXURE TO AUDITOR’S REPORTSMARTINVEST AGENCY.COM PVT. LTD.
87
(b) According to the information and explanations given to us, there is no amounts payable in
respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which
have not been deposited on account of any disputes.
10. The company has no accumulated losses at the end of the financial year and it has not incurred any
cash losses during the current financial year. However, it has incurred cash loss in the immediately
preceding financial year.
11. Based on our audit procedures and on the information and explanations given by the management, we
are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution,
bank or debenture holders.
12. According to the information and explanations given to us, the Company has not granted loans and
advances on the basis of security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of
this clause of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the
Company.
14. According to information and explanations given to us, the Company is trading in Shares, Mutual
funds & other Investments. Proper records & timely entries have been maintained in this regard &
further investments specified are held in their own name.
15. According to the information and explanations given to us, the Company has not given any guarantees
for loan taken by others from a bank or financial institution.
16. Based on our audit procedures and on the information given by the management, we report that the
company has not raised any term loans during the year.
17. Based on the information and explanations given to us and on an overall examination of the Balance
Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have
been used for long-term investment by the Company.
18. Based on the audit procedures performed and the information and explanations given to us by the
management, we report that the Company has not made any preferential allotment of shares during
the year.
19. The Company has no outstanding debentures during the period under audit.
20. The Company has not raised any money by public issue during the year.
21. Based on the audit procedures performed and the information and explanations given to us, we report
that no fraud on or by the Company has been noticed or reported during the year, nor have we been
informed of such case by the management.
For A.K.RAJAGOPALAN & CO.,
Chartered Accountants
CA T.R.ASHOK
Partner
Place: Chennai Membership Number: 026133
Date : 19.05.2014 Firm Registration Number: 003405S
SMARTINVEST AGENCY.COM PVT. LTD.
88
BALANCE SHEET AS AT 31st MARCH 2014
Amount in Rupees
Particulars 31.03.201331.03.2014Note No.
I. EQUITY AND LIABILITIES1 SHAREHOLDERS’ FUNDS
a) Share Capital 1 103,000.00 103,000.00
b) Reserves and Surplus 2 90,715.00 85,602.00
193,715.00 188,602.002 NON-CURRENT LIABILITIES
a) Long-term borrowings – –
b) Deferred Tax Liabilities (Net) – –
c) Long-term provisions – –
– –3 Current liabilities
a) Short-term borrowings – –
b) Trade Payables – –
c) Other Current Liabilities 3 2,809.00 2,809.00
d) Short-term provisions – –
2,809.00 2,809.00
TOTAL 196,524.00 191,411.00II. ASSETS1 NON-CURRENT ASSETS
a) Fixed assetsi) Tangible assets – –
ii) Intangible assets – –
iii) Capital work-in progress – –
b) Non-current investments – –
c) Long-term loans and advances 4 150,000.00 –
d) Other non-current assets 5 16,778.00 16,778.00
166,778.00 16,778.002 CURRENT ASSETS
a) Inventories – –
b) Trade Receivables – –
c) Cash and Cash equivalents 6 29,746.00 174,633.00
d) Short-term loans and advances – –
e) Other current assets – –
29,746.00 174,633.00
TOTAL 196,524.00 191,411.00
Refer Accompanying Notes to Financial Statements
SMARTINVEST AGENCY.COM PVT. LTD.
As per our even dated
For A.K. RAJAGOPALAN & CO. For Smartinvest Agency.com Pvt. Ltd.
Chartered Accountants
(FRN 003405S) B. PRAKASH
Director
CA. T.R. ASHOK
Partner P. SUDHAKAR
M.No. 026133 Director
Place : Chennai
Date : 19.05.2014
89
PROFIT AND LOSS ACCOUNT FOR THE
YEAR ENDED 31st MARCH 2014
Amount in Rupees
Particulars 31.03.201331.03.2014Note No.
I. REVENUE
Revenue from operations – –
Other income 7 10,229.00 –
Total Revenue 10,229.00 –
II. Expenses
Cost of Materials Consumed – –
Changes in Inventories of Finished Goods and – –
Work-in-progress – –
Employee Benefits Expenses – –
Finance costs 8 22.00 1194.00
Depreciation and Amortization Expenses – –
Other Expenses 9 5,094.00 7,141.00
Total expenses 5,116.00 8,335.00
III. Profit Before Tax 5,113.00 (8335.00)
IV. Tax Expense:
1. Current Tax – –
Less: MAT Credit Entitlement – –
Net Current Tax – –
2. Deferred Tax – –
– –
V. Profit after Tax for the year 5,113.00 (8,335.00)
VI. Earnings per Share:
Par Value Per Share Rs.10/-
a) Basic 0.50 (0.81)
b) Diluted – –
Refer Accompanying Notes to Financial Statements
SMARTINVEST AGENCY.COM PVT. LTD.
As per our even dated
For A.K. RAJAGOPALAN & CO. For Smartinvest Agency.com Pvt. Ltd.
Chartered Accountants
(FRN 003405S) B. PRAKASH
Director
CA. T.R. ASHOK
Partner P. SUDHAKAR
M.No. 026133 Director
Place : Chennai
Date : 19.05.2014
90
A. Corporate Information
SMART INVEST AGENCY.COM (P) LTD was incorporated on 16th October 2000. The current
board of directors are (1) Shri. B. Prakash (2) Shri. P. Sudhakar. The company having a place of
business at No:14 Ramakrishna Street, T.Nagar, Chennai - 600 017, Tamil Nadu. The company is
engaged generally in the business of investment broking. Insurance Agency and allied areas to
concentrate on fee-based activities.
B. Significant Accounting Policies
B.1 Preparation of financial Statement
The financial statements are being prepared on historical cost convention on accrual basis in
accordance with Indian Generally Accepted Accounting Principles (“GAAP”) and mandatory
accounting standards as prescribed in the Companies (Accounting Standard) Rules, 2006, the
provisions of the Companies Act, 1956.
The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.
B.2 Employee benefits
Employee benefits include salaries & wages, Bonus and Staff welfare expenses.
B.3 Provisions and contingencies:
Provision for current tax is made after taking into consideration benefits admissible income such as
interest etc., recognised on accrual basis and applicability of minimum Alternate Tax under the
Provision of the income tax Act 1961.
B.4 Revenue recognition:
The revenue from the services are recognized on realization basis. Other Income recognized on
accrual basis.
SMARTINVEST AGENCY.COM PVT. LTD.
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
91
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014SMARTINVEST AGENCY.COM PVT. LTD.
1. SHARE CAPITAL
Authorised
20,000 Equity Shares of Par Value of Rs. 10/- each 200,000.00 200,000.00
200,000.00 200,000.00
Issued, Subscribed and Paid up:
10,300 Equity Shares of Par Value of Rs. 10/- each 103,000.00 103,000.00
103,000.00 103,000.00
Amount in Rupees
31.03.201331.03.2014
Details of shareholding more than 5% shares
EQUITY
Name of Shareholder
DFL Holdings & Securities Ltd
No. of Shares held 10,000.00 10,000.00
% of Holding in the class 97.09 97.09
31.03.201331.03.2014
2. RESERVES AND SURPLUS
General Reserve:
Balance at the beginning of the year 111,794.00 111,794.00
Add: Transfer from Statement of Profit & Loss 5,113.00 –
Balance at the closing of the year – A 116,907.00 111,794.00
Surplus
Balance at the beginning of the year (26,192.00) (17,857.00)
Add: Transfer from Statement of Profit & Loss – (8,335.00)
Balance at the closing of the year – B (26,192.00) (26,192.00)
Total (A+B) 90,715.00 85,602.00
31.03.201331.03.2014
3. OTHER CURRENT LIABILITIES
Audit Remuneration Payable 2,809.00 2,809.00
2,809.00 2,809.00
31.03.201331.03.2014
92
SMARTINVEST AGENCY.COM PVT. LTD.
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
4. LONG TERM LOANS AND ADVANCES
Fixed Deposit 150,000.00 –
150,000.00 –
Amount in Rupees
31.03.201331.03.2014
5. OTHER NON CURRENT ASSETS
Tax Deducted at Source 998.00 998.00
Advance Tax 15,780.00 15,780.00
16,778.00 16,778.00
31.03.201331.03.2014
6. CASH AND BANK BALANCES
Cash in hand – –
Balances with Banks in Current Accounts 29,746.20 174,633.00
29,746.20 174,633.00
31.03.201331.03.2014
7. OTHER INCOME
Bank Interest 9,479.00 –
Bank Charges Reversal 750.00 –
10,229.00 –
31.03.201331.03.2014
8. FINANCE COST
Bank Charges Paid 22.00 1,194.00
22.00 1,194.00
31.03.201331.03.2014
9. OTHER EXPENSES
Auditors Remuneration 2,809.00 2,809.00
Professional Charges – 4,332.00
Filing Charges 2,285.00 –
5,094.00 7,141.00
31.03.201331.03.2014
93
Balance Sheet Abstract and Company’s General Business Profile
I. Registration Details State Code 1 8
CIN U67120TN2000PTC045920
Balance Sheet Date
II. Capital Raised during the year
III. Position of Mobilisation and deployment of Funds (Amount in Thousands)
Source of Funds
Application of Funds
IV. Performance of the Company
Turnover Total Expenditure
Profit before tax Profit after Tax
Earning per Share Rs. Dividend Rate %
V. Generic Names of Three Principal Products / Services of the Company
Item Code No. (ITC Code)
Service
4 5 9 2 0
Date Month Year
3 1 0 3 1 4
Public Issue
N I L
Bonus Issue
N I L
Rights Issue
N I L
Private Placement
N I L
1 9 6
Total Liabilities
1 9 6
Total Assets
1 0 3
Paid-up Capital
9 1
Reserves & Surplus
N I L
Secured Loans
N I L
Unsecured Loans
N I L
Net Fixed Assets
N I L
Investments
Net Current Assets
N I L
Misc. Expenditure
N I L
Accumulated Losses
5
N I L
N A
2 0 5 3 9 . 3 2
51 0
S E R V I C E N A G E N C Y N B U S I N E S S
0 . 5 0
Per our report attached
For A.K. RAJAGOPALAN & CO. For Smartinvest Agency.com Pvt. Ltd.
Chartered Accountants
(FRN 003405S) B. PRAKASH
Director
CA. T.R. ASHOK
Partner P. SUDHAKAR
M.No. 026133 Director
Place : Chennai
Date : 19.05.2014
5
INFORMATION AS REQUIRED UNDER PART IV OF
SCHEDULE VI OF THE COMPANIES ACT, 1956SMARTINVEST AGENCY.COM PVT. LTD.
2 7
94
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
DFL INFRASTRUCTURE FINANCE LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of DFL Infrastructure Finance Limited ("the
Company") and its subsidiaries, which comprise the consolidated Balance Sheet as at March 31, 2014, and
the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these consolidated financial statements that give a true
and fair view of the financial position, financial performance and cash flows of the Company in accordance
with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956
("the Act"). This responsibility includes the design, implementation and maintenance of internal control
relevant to the preparation and fair presentation of the financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgement, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's Internal
Control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
qualified audit opinion.
Basis for Qualified Opinion
The debit balances under receivables and debtors' accounts and the credit balances are as per books of
accounts subject to confirmation from the parties.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for
the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements
give the information required by the Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;
b. in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
95
Emphasis of Matter
Attention of the share holders is invited to the following:
a. The Company has taken loans from certain bankers which it could not repay and the Company
approached the CDR for reschedulement of these loans. The implementation of the CDR and the CDR
Re-work Package has reached stalemate condition. Pursuant to this the Company has approached
the bankers for One Time Settlement Scheme for settlement of Loans and some of the banks have
approved the same. The OTS Scheme offered by some of the Banks is pending implementation and
settlement. These conditions, indicate the existence of material uncertainty that may cast a significant
doubt about the Company's ability to continue as a Going Concern. (Refer Note 1, 5 & 6 of Schedule
18)
b. The Reserve Bank of India, has issued certain prohibitory directions (Refer Note 2 of Schedule 18)
under Section 45JA and Section 45L of Reserve Bank of India Act, 1934. These conditions along with
those stated in Note 1, 5 & 6 of Schedule 18 indicate the existence of material uncertainty that may
cast a significant doubt about the Company's ability to continue as a Going Concern.
c. The Company's net owned funds is below Rs. 25 lakhs, the limit prescribed by Reserve Bank of India
under section 45 - IA of the Reserve Bank of India Act, 1934. This could attract penal provisions
under section 45 - MC of the Act
d. The Company has entered into an amendment agreement with Asia Pragati Capfin Pvt. Ltd
(Preference Share Holder) on 27th March 2012 for redemption of preference shares of Rs.10 @ Rs.
8.54 per share. The gain on redemption amounting to Rs.325 lakhs has not been accounted for as
the same would be accounted at the time of redemption during the years 2017, 2018 & 2019. (Refer
Note No. 4 of Schedule 18)
e. The shareholders have not approved the re-appointment and increase in remuneration of the
erstwhile Managing Director and the amount is included in Loans and Advances. We are unable to
express an opinion on the recoverability of the amount. (Refer Note No. 9 of Schedule 18)
f. In the absence of profits, the Company could not declare dividend on the 4% and 9% Redeemable
Preference Shares for the financial year 2013 -14 and hence it has not been charged to the Statement
of Profit and Loss. (Refer Note No. 17 of Schedule 18)
Other Matters
We did not audit the financial statements of subsidiaries, whose financial statements reflect total assets (net)
of Rs. 15.95 lakh, as at March 31, 2014, total revenues of Rs.1.89 lakh and net cash outflows amounting
to Rs. (0.21) lakh for the year ended on that date as considered in the consolidated financial statements.
These Financial Statements have been audited by other auditors whose reports have been furnished to us
by the management and our opinion is based solely on the reports of the other auditors. Our Opinion is not
qualified in respect of this matter.
For P.B.VIJAYARAGHAVAN AND CO.,
Chartered Accountants
Firm Registration No.: 004721S
P.R.KRISHNAMURTHY
Place : Chennai Partner
Date : 27.05.2014 Membership No.: 12622
96
CONSOLIDATED BALANCE SHEET
AS AT 31st MARCH 2014
(Rs. in Lakhs)
ParticularsAs at
31.03.2013
As at
31.03.2014
Refer Note
No.
I. EQUITY AND LIABILITIES1 Shareholders’ funds
Share Capital 1 6,644.26 6,644.26
Reserves and surplus 2 (13,123.87) (11,813.93)
Minority Interest 0.38 0.36
(6,479.23) (5,169.31)2 Non-current liabilities
Long-term borrowings 3 – –
Long-term provisions 4 0.28 0.70
0.28 0.703 Current liabilities
Short-term borrowings 3 12,251.36 11,341.24
Other current liabilities 5 87.60 103.33
Short-term provisions 4 3.66 2.59
12,342.62 11,447.16
TOTAL 5,863.67 6,278.55II. ASSETS1 Non-current assets1 Fixed assets
(i) Tangible assets 6 1,691.35 1,702.60
(ii) Intangible assets 6 – –
Non-current investments 7 – –
Receivables under financing activity 8 123.69 345.46
Long-term loans and advances 9 488.44 484.63
Other Non current assets 10 1,068.58 1,053.20
3,372.06 3,585.892 Current assets
Current investments – –
Receivables under financing activity 8 2,311.46 2,365.37
Cash and cash equivalents 11 163.14 277.62
Short-term loans and advances 9 5.55 37.45
Other current assets 10 11.45 12.22
2,491.60 2,692.66
TOTAL 5,863.66 6,278.55
See accompanying note forming part of the financial statementsIn terms of our report attachedfor P.B. VIJAYARAGHAVAN & CO S. BALACHANDER T.R. SURESHChartered Accountants Managing Director DirectorFirm Regn No. 004721S
I. CHANDRA MOHAN B. PRAKASHP R KRISHNAMURTHY Company Secretary Wholetime DirectorPartnerMembership No 12622
Date : 27.05.2014Place : Chennai
97
CONSOLIDATED PROFIT & LOSS ACCOUNT
FOR THE PERIOD ENDED 31st MARCH 2014
(Rs. in Lakhs)
ParticularsAs at
31.03.2013
As at
31.03.2014
Refer Note
No.
1 Income:
Revenue from operations 12 191.17 265.30
Other income 13 33.95 80.14
Total Revenue 225.12 345.44
2 Expenses:
Finance costs 14 941.17 872.14
Employee benefits expense 15 262.93 347.33
Depreciation and amortization expense 6 22.56 45.11
Other operating Expenses 16 144.00 243.71
Provision, Loan losses and other charges 17 164.40 399.51
Total expenses 1,535.06 1,907.80
Loss before extraordinary items and tax (1,309.94) (1,562.36)
Extraordinary Items – –
Loss before tax (1,309.94) (1,562.36)
Tax expense – –
Loss for the period carried over to Balance Sheet (1,309.94) (1,562.36)
Basic Earnings per equity share: (30.69) (34.82)
Diluted Earnings per equity share: (30.69) (34.82)
See accompanying note forming part of the financial statementsIn terms of our report attachedfor P.B. VIJAYARAGHAVAN & CO S. BALACHANDER T.R. SURESHChartered Accountants Managing Director DirectorFirm Regn No. 004721S
I. CHANDRA MOHAN B. PRAKASHP R KRISHNAMURTHY Company Secretary Wholetime DirectorPartnerMembership No 12622
Date : 27.05.2014Place : Chennai
98
Note : 1 - SHARE CAPITAL
AUTHORISED
Equity Shares :
2,50,00,000 Equity Shares of Rs 10 each 2,500.00 2,500.00
Preference Shares : 7,500.00 7,500.00
7,50,00,000 Preference shares of Rs 10 each
10,000.00 10,000.00
ISSUED
Equity Shares :
61,22,625 Equity Shares of Rs 10 each 612.26 612.26
Preference Shares :
2,22,60,000 4% Cumulative Redeemable Preference shares of Rs 10 each 2,226.00 2,226.00
3,85,02,384 9% Cumulative Redeemable Preference Shares of Rs 10 each 3,850.24 3,850.24
Subscribed & Paid up
Equity Shares :
59,54,320 Equity Shares of Rs 10 each 595.43 595.43
Less : Shares held by DHSL -27.41 -27.41
568.02 568.02
Preference Shares :
2,22,60,000 Cumulative Redeemable Preference shares
@ 4% (from 1st April, 2012) 2,226.00 2,226.00
3,85,02,384 9% Cumulative Redeemable Preference Shares of Rs 10 each 3,850.24 3,850.24
6,644.26 6,644.26
Details of shareholding more than 5% shares in the company
EQUITY
As at 31 March 2014 As at 31 March 2013Name of Shareholder
No. of Shares held% of Holding
in the classNo. of Shares held
% of Holding
in the class
Auctus Holdings Private Limited 3,045,453 51.15 – –
D.B. Zwirn Mauritius – – 30,36,703 51.00
K Dhandapani & Co 500,001 8.40 500,001 8.40
4% CUMULATIVE REDEEMABLE PREFERENCE SHARES
Asia Pragati Capfin Private Limited 2,22,60,000 100.00 2,22,60,000 100.00
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
(Rs. in Lakhs)
As at
31.03.2013
As at
31.03.2014
99
As at 31 March 2014 As at 31 March 2013Name of Shareholder
No. of Shares held% of Holding
in the classNo. of Shares held
% of Holding
in the class
9% CUMULATIVE REDEEMABLE PREFERENCE SHARES
ING Vysya Bank 2,646,123 6.87 2,646,123 6.87
YES Bank 4,645,229 12.06 4,645,229 12.06
Bank of India 4,941,049 12.83 4,941,049 12.83
Federal Bank 4,190,915 10.88 4,190,915 10.88
Canara Bank 4,222,059 10.97 4,222,059 10.97
State Bank of Travancore 3,167,706 8.23 3,167,706 8.23
Punjab National Bank 2,942,026 7.64 2,942,026 7.64
United Commercial Bank 3,174,352 8.24 3,174,352 8.24
Indian Overseas Bank 2,590,199 6.73 2,590,199 6.73
The Dhanalaxmi Bank Limited 1,669,603 4.34 1,669,603 4.34
State Bank of Hyderabad 1,501,323 3.90 1,501,323 3.90
The Catholic Syrian Bank Limited 2,811,800 7.30 2,811,800 7.30
38,502,384 100.00 38,502,384 100.00
Disclosure pursuant to Note no. 6(A)(d) of Part I of Schedule VI to the Companies Act, 1956
(Following disclosure should be made for each class of Shares)
Rs in Lakhs
Equity Shares 4% Preference Shares 9% Preference SharesParticulars
Number Value Number Value Number Value
Shares outstanding at the
beginning of the year 5,954,320 595.43 22,260,000 2,226.00 38,502,384 3,850.24
Shares Issued during the year – – – – – –
Shares bought back during
the year – – – – – –
Shares outstanding at the
end of the year 5,954,320 595.43 22,260,000 2,226.00 38,502,384 3,850.24
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
100
Disclosure pursuant to Note no. 6(A)(i) of Part I of Schedule VI to the Companies Act, 1956
(Following disclosure should be made for each class of Shares)
Equity Shares :
Fully paid up pursuant to contract(s)
without payment being received – – – – – –
in cash
Fully paid up by way of bonus shares – – – – – –
Shares bought back – – – – – –
Preference Shares 4% :
Fully paid up pursuant to contract(s)
without payment being received – – – – – –
in cash
Fully paid up by way of bonus shares – – – – – –
Shares bought back – – – – – –
Preference Shares 9% :
Fully paid up pursuant to contract(s)
without payment being received – – – 38,502,384 – –
in cash
Fully paid up by way of bonus shares – – – – – –
Shares bought back – – – – – –
Year (Aggregate No. of Shares)
2008-2009 2009-2010 2010-2011 2011-2012 2012-2013Particulars
(Rs in Lakhs)
As at
31.03.2013
As at
31.03.2014Note : 2 - RESERVES & SURPLUS
ParticularsCapital Revaluation General Statutory Security P & L
Reserve Reserve Reserve Reserve Premium Account
Opening
Balance 12.03 1,305.42 2,579.95 961.97 142.29 (16,815.59) (11,813.92)
Additions – – – – – (1,309.95) (1,309.95)
Deletions – – – – – – –
Minority
Interest – – – – – – –
Closing
Balance 12.03 1,305.42 2,579.95 961.97 142.29 (18,125.54) (13,123.87) (11,813.93)
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
2013-2014
101
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
(Rs in Lakhs)
Note : 3 - BORROWINGS
Secured Borrowings: **
From Banks / Financial Institutions – – 11,594.15 10,680.03
From Related Parties – – – –
From Others – – – –
Total Secured Borrowings – – 11,594.15 10,680.03
Unsecured Borrowings:
From Banks / Financial Institutions – – – –
From Related Parties – – 600.00 600.00
From Others – – 57.21 61.21
Total Unsecured Borrowings – – 657.21 661.21
– – 12,251.36 11,341.24
Long Term Short Term
As at 31.03.2014 As at 31.03.2013 As at 31.03.2014 As at 31.03.2013
** Refer Note no 5 of Notes on accounts
1) Loans from Auctus Holdings Private Limited of Rs 600 lacs is repayable on demand without any interest
2) Unsecured loan of Rs. 57.21 Lakhs is in default for a period of 3 years
3) All term loans from banks and financial institutions are secured by first paripasu charge on fixed assets and
second pari-pasu charge on current assets of the Company.
4) All working capital borrowings are secured by first paripasu charge on current assets and second pari-pasu
charge on fixed assets.
5) Working Capital Term Loan and funded interest term loan are secured by first pari-pasu charge on current
and fixed assets of the company
The following collateral security shall be available to the banks to secure their Working Capital Term Loan by way
of first pari-pasu charge and to secure other debts by way of second pari-pasu charge.
Situated at Plot No 37, Door No 17,
Ramakrishna Street, T.Nagar,
Chennai 600 017, comprised in
T.S. No 106, T.Nagar Village,
Mambalam - Guindy Taluk
Situated at Chokampatti Village,
Kadayanallur, Tenkasi
Tirunelveli District
No.110, Bhanumuthy Ramakrishna
Street, Saligramam Village,
Saidapet Taluk
Chengalpattu District
102
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
Note : 4 - PROVISIONS
(Rs in Lakhs)
Provident Fund – – 2.46 1.66
Employees State Insurance Corporation – – 0.21 0.26
Standard Asset 0.28 0.70 0.11 0.10
Professional Tax – – 0.88 0.57
Taxation – – – –
Others – – – –
0.28 0.70 3.66 2.59
Long Term Short Term
As at 31.03.2014 As at 31.03.2013 As at 31.03.2014 As at 31.03.2013
Note : 5 - OTHER CURRENT LIABILITIES
(Rs in Lakhs)
Unclaimed Dividend – 5.13
TDS & Service Tax Payable 8.12 8.90
Dues to Insurance Companies 0.23 0.24
Current Liabilities for expenses 79.25 89.06
87.60 103.33
As at 31.03.2014 As at 31.03.2013
103
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
Lan
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104
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
Note : 8 - RECEIVABLES UNDER FINANCING ACTIVITY
(Rs in Lakhs)
Secured Receivables other than Repo 180.10 416.58 4,484.66 7,395.17
Less: LPP & Other charges on receivables – 19.49 – 2,822.40
Less: Unrecovered Finance charges 22.21 27.50 269.45 275.61
Less: Provision for Secured Receivables 36.67 39.29 1,994.71 2,015.99
Net Secured Receivables 121.21 330.30 2,220.50 2,281.17
Repossessed Stock 4.13 30.51 151.64 380.85
Less: LPP & Other charges on repo asset – 5.20 – 240.48
Less: Repossessed Provision 1.65 10.14 60.66 56.16
Net Repossessed Stock 2.48 15.16 90.99 84.21
Net Receivables including Repossessed Stock 123.69 345.46 2,311.49 2,365.38
Secured Receivables include amounts outstanding more than six months 1,736.30 1,829.42
Non Current Current
As at 31.03.2014 As at 31.03.2013 As at 31.03.2014 As at 31.03.2013
Note : 9 - LOANS & ADVANCES
(Rs in Lakhs)
UNSECURED CONSIDERED GOOD
Prepaid Expenses – – 5.55 7.02
Advance Rent 14.06 15.41 – –
Staff Loan – 4.21 – –
Other Advances - Others 468.24 458.87 – 30.43
Other Deposits 6.14 6.14 – –
DOUBTFUL
Dhandapani Properties Pvt Ltd 720.02 720.02 – –
Less : Provision for Doubtful
Loans & Advances -720.02 -720.02 – –
488.44 484.63 5.55 37.45
Long Term Short Term
As at 31.03.2014 As at 31.03.2013 As at 31.03.2014 As at 31.03.2013
Note : 10 - OTHER ASSETS
(Rs in Lakhs)
Other Current Assets – – – –
Other Non Current Assets 1,068.58 1,053.20 11.00 12.22
Other Loans, advances - Operations – – 0.45 –
1,068.58 1,053.20 11.45 12.22
As at 31.03.2014 As at 31.03.2013As at 31.03.2014 As at 31.03.2013
105
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
Disclosure pursuant to Note no. 6(T) of Part I of Schedule VI to the Companies Act, 1956
Contingent liabilities and commitments (to the extent not provided for)
(i) Commitments
(a) Other commitments (specify nature) – –
9% Cumulative Preference Shares Dividend 34,652,146.00 22,249,328.00
4% Cumulative Preference Shares Dividend 8,904,000.00 –
43,556,146.00 22,249,328.00
Dividends proposed to be distributed to equity shareholders – –
Dividends proposed to be distributed to preference shareholders 43,556,146.00 –
Arrears of fixed cumulative dividends on preference shares 65,805,474.00 22,249,328.00
Particulars
As at 31.03.2014 As at 31.03.2013
As at 31.03.2014 As at 31.03.2013
Note : 11 - CASH & BANK BALANCES
(Rs in Lakhs)
Cash and Cash equivalents
Cash on Hand – – 4.44 24.95
Balances with Banks – – 158.70 247.54
Earmarked balances with Banks – – – 5.13
– – 163.14 277.62
As at 31.03.2014 As at 31.03.2013As at 31.03.2014 As at 31.03.2013
106
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
Rs in Lakhs
Note : 12 – REVENUE FROM OPERATIONS
Income from Financing activity 73.50 81.57
Other operating revenue 117.67 183.73
191.17 265.30
Note : 13 – OTHER INCOME
Interest Income on bank deposits 14.08 6.40
Interest - Others & staff 0.04 0.20
Sale of scrap – 1.53
Miscellaneous Income 10.28 25.47
Rent Received 4.85 4.63
Provision no longer required 4.70 41.91
33.95 80.14
Note : 14 – FINANCE COSTS
Interest Expenses
Bank Loans/Financial Institutions 939.12 869.19
Bank Charges 2.05 2.95
941.17 872.14
Note : 15 – EMPLOYEE BENEFIT EXPENSES
Salaries, Allowances & Bonus 239.48 318.29
Contributions to Provident Fund & Other Funds 12.46 13.47
Staff Welfare Expenses 10.99 15.57
262.93 347.33
Note : 16 – OTHER OPERATING EXPENSES
Rent 19.69 25.30
Electricity Charges 9.49 10.69
Rates & Taxes 1.61 1.72
Communication cost 13.90 20.18
Travelling & Conveyance 24.60 47.61
Advertisement Expenses 0.69 1.77
Insurance 1.06 6.10
Repairs & Maintenance 7.25 8.72
Printing & Stationery 3.14 4.61
Auditors Remuneration - Statutory 4.04 4.06
Auditors Remuneration - Others 6.68 10.27
Professional charges 26.09 61.04
Sitting Fees to Directors 1.93 3.02
Loss on sale of Fixed assets 0.22 0.30
Legal Expenses 3.21 6.98
Office Maintenance 15.07 21.98
Filing Fees 0.12 1.11
Other Expenses 4.35 6.01
Interest Paid 0.09 1.46
AGM Expenses 0.77 0.78
144.00 243.71
As at 31.03.2014 As at 31.03.2013
107
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
Rs in Lakhs
a. auditor 4.04 4.06
b. for taxation matters 3.42 2.81
c. for company law matters 2.86 2.01
d. for management services – 3.66
e. for other services 0.39 1.79
f. for reimbursement of expenses – –
10.71 14.33
Note : 17 – PROVISION, LOAN LOSSES AND OTHER CHARGES
Shortfall Repossession 31.70 42.12
Bad Debts – 10.00
Loss on Closed Contracts – 1.85
Rebate on Settlement 141.09 131.90
Provision for Standard Asset 0.39 0.80
Provision for Non Performing Assets -8.78 212.84
Provision for Impairment – –
164.40 399.51
As at 31.03.2014 As at 31.03.2013Payments to the auditor as
108
NOTES FORMING PART OF CONSOLIDATED FINANCIAL
STATEMENTS FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014
Note - 18
A. Significant Accounting Policies
The accounts have been prepared using historic cost convention and on the basis of going concern, with
revenues recognised, expenses accounted on accrual basis, unless otherwise stated and in accordance with
applicable accounting standards as prescribed by Central Government through sub-section (3C) of section
211 of the Companies Act, 1956.
The Company is registered with Reserve Bank of India as a 'Non-Banking Finance Company under the
category Non Deposit Taking NBFC' and the Company follows the directions prescribed by the Reserve
Bank of India for Non-Banking Financial Companies with respect to Income Recognition, Asset
Classification, Provisioning norms.
The preparation of financial statements requires management to make estimates and assumptions of some
of the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities on the
date of the financial statements and amounts of revenues and expenses during the period reported.
1.1 Income Recognition:
Revenue is recognised on accrual basis other than those stated and where there is no uncertainty in ultimate
realization
a. Income from Hypothecation loan transactions are accounted on the based on Internal Rate of Return
method following accrual basis.
b. Income is not recognised on contracts in which the installments are due for more than 180 days.
c. Additional Finance Charges, Cheque dishonor charges, Due Date Missing Charges and Late payment
charges are accounted on receipt basis.
d. Dividend incomes are on receipt basis.
1.2 Repossessed Stock:
Repossessed stocks are valued at the settlement value.
As per Guidelines issued by Reserve Bank of India, provision of 40% is made uniformly on the settlement
value at the time of repossession.
1.3 Fixed Assets:
Fixed assets are stated at historical cost less accumulated depreciation.
1.4 Depreciation:
On Own assets (Tangible):
Depreciation on assets for own use is provided on Written down value method at the rates prescribed in
Schedule XIV to the Companies Act, 1956. Assets costing Rs.5,000/- or less acquired during the year are
fully depreciated.
On Own assets (Intangible):
Intangible assets are amortised over a period of five years.
109
1.5 Investments:
Investment in Subsidiary Company is valued at cost.
Provision, if any, is made to recognise decline other than a temporary, in the value of long-term investments.
1.6 Employee Benefits:
a. Short Term Employee Benefits such as salaries are charged at undiscounted amounts to the Statement
of Profit and Loss in the year of service.
b. Contribution to Provident Fund is recognised in the Statement of Profit and Loss on the basis of actual
liability.
c. Liability towards Long term compensated absence such as Earned Leave is recognised based on the
estimates as determined by the Management.
d. Post employment benefit such as Gratuity is treated as Defined Contribution Plan and contribution is
accounted as expense as when incurred towards Group Gratuity Scheme maintained with Life
Insurance Corporation of India.
1.7 Taxes on Income:
Income-tax expense is accounted in accordance with AS 22 - "Accounting for taxes on Income" which
includes current taxes and deferred taxes. Deferred tax is recognised on timing difference between
accounting income and taxable income that originate in one period and are capable of being reversed in
one or more subsequent periods, subject to consideration of prudence. Deferred tax assets are recognised
only to the extent that there is reasonable certainty that sufficient future taxable income will be available.
1.8. Provisions & Contingencies:
a. A present obligation, which could be reliably estimated, is provided for in the accounts, if it is
probable that an outflow of resources embodying economic benefits will be required for its settlement.
b. Contingent Liabilities are disclosed by way of notes in the Balance Sheet.
c. Contingent Assets are neither recognised nor disclosed.
B. Notes on accounts
1. Going Concern:
The Management of the Company approached the CDR Cell for restructure of loans given by consortium
banks, which was approved. However as all the Banks did not approve the CDR/CDR Re-work schemes
the Company is not able to implement the CDR rework scheme. The management is taking efforts to arrive
at an acceptable One Time Settlement (OTS) with Secured Creditors. Hence, the financial statements are
continued to be prepared on the basis of 'Going Concern'.
2. Directions issued by Reserve Bank of India:
The Reserve Bank of India had issued certain "Prohibitory Directions" under Section 45 JA and 45 L of
Reserve Bank of India Act 1934 restraining the company to Sell, transfer, create charge or mortgage or deal
with its property and assets; not to declare or distribute any Dividend; not to transact any business and not
to incur any further liabilities. Further, the Company has been directed to submit periodical statements to
Reserve Bank of India.
NOTES FORMING PART OF CONSOLIDATED FINANCIAL
STATEMENTS FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014
110
3. Equity Capital:
D. B. Zwirn Mauritius, which held 30,36,703 equity shares had entered into a Share Purchase Agreement
with M/s. Auctus Holdings Pvt Limited on 13th March 2012 to sell their entire holdings in the Company.
As this attracted SEBI's (Substantial Acquisition of Shares and Takeover) Regulations 2011, M/s. Auctus
Holdings Private Limited made a Public Announcement on 20th March, 2012. An open offer was made to
the existing shareholders on November 15th 2012. Total of 8750 shares were received in the open offer and
the entire offer was accepted.
On 06th June 2013, the entire holding aggregating to 30,36,703 shares was transferred by D B Zwirn
Mauritius to M/s. Auctus Holdings Private Ltd. Effective 06th June 2013 the company has become a
subsidiary of M/s. Auctus Holdings Private Limited.
4. Redeemable Preference Shares:
The Company has issued 2,22,60,000 Preference Shares at a face value of Rs. 10 per Preference Share
aggregating to Rs.22,26,00,000 on 30th July 2008 to M/s. Asia Pragati Capfin Pvt Ltd carrying a coupon
rate of 4% payable from 01st April 2012 which were redeemable on 31st December 2009. Pursuant, to the
amendment agreement dated 27th March 2012 to the Share Purchase Agreement, these Preference Shares
are redeemable at a price of Rs. 8.54 per preference share and redeemable in 3 equal annual installments
commencing from 31st March 2017 and ending on 31st March 2019. And the discount on redemption of
preference shares will be accounted on redemption.
As a part of Originally approved CDR Package, a part of the debt amounting to Rs. 38,50,23,840 was
converted to Optionally Convertible Cumulative Redeemable Preference Shares (OCCRPS) carrying a
coupon rate of 9% p.a. Consortium Banks (12 participating banks) . As per the said package these OCCRPS
are redeemable in four equal annual installments at a premium of 3% commencing from the year 2013-14
onwards and ending in 2016-17.
5. Un-Secured Loans:
a. Unsecured Loan include Rs.600 lakhs received from Auctus Holdings Pvt Ltd, brought in as part of
the Promoters Contribution as specified in the CDR Re-work package.
b. DFL Holdings and Securities Limited, a subsidiary company has given a loan of Rs. 91.38 lakhs to
the Company. The terms of settlement including interest if any will be decided mutually between the
Company and the subsidiary.
6. Corporate Debt Restructuring (CDR) Package Arrangement:
a. CDR Rework Package:
As the original CDR package could not be implemented within the stipulated time frame, the
Company had applied for Re-work Package under CDR System and the same was approved by the
CDR Empowered Group. As per the Re-work package, Preference Shares are Redeemable in four
equal yearly installments commencing from the year 2014-15 and ending in 2017-18.
b. Implementation of CDR Re-work Package by Banks:
The CDR Re-work Package has been approved by only 6 out of the 12 participating Consortium
Banks. Hence, the Company could not proceed with the implementation of the CDR Re-work package
and the hence the implementation of CDR Re-work Package has ended in a stalemate.
NOTES FORMING PART OF CONSOLIDATED FINANCIAL
STATEMENTS FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014
111
7. One Time Settlement (OTS) Scheme with Secured Creditors:
Consequent to the non implementation of the CDR Re-work Package, the Company requested Consortium
Banks to consider an OTS proposal to settle the Outstanding Liabilities comprised in the 'Borrowings' of
the Company and OCCRPS issued as a part of CDR Re-work Package. The Company has received the
approval from three banks and the Company is pursuing with the remaining nine participating Banks.
The OTS scheme is being implemented by the Company and the Company is yet to settle the accepted
offers. Pending execution and settlement of accepted amounts, impact of OTS will be recognised in the
books of accounts upon settlement of OTS offer with respective banks.
In addition to the above, the Company was liable to pay State Bank of India Rs. 1182 lakhs comprised in
'Borrowings' of the Company. The Bank had filed a suit against the company in Debt Recovery Tribunal,
Chennai for the recovery of the same. In the meanwhile, the Company has negotiated for OTS to settle the
entire outstanding at Rs. 300 lakhs. The Company had also deposited an amount Rs. 25 lakhs in an Escrow
Account towards part payment of OTS Scheme. Pending execution of OTS Scheme, no interest has been
provided for the current financial year. Also pending execution and settlement of accepted amounts, impact
of OTS will be recognised in the books of accounts upon settlement of OTS offer with respective banks.
8. Loan and Dhandapani Properties Private Limited:
The Company had given a loan of Rs. 720 lakh to Dhandapani Properties Private Ltd in 2007 secured by
way of a property of approximately 1 acre of Land at Whitefield, Bangalore. The security provided is an
agricultural land registered in an Individual's name and was given to the Company by way of an irrevocable
Power of Attorney in favour of erstwhile Managing Director of the Company. However, Government of
Karnataka has rejected the contention of the buyer and attached the property in favour of the Government
of Karnataka. The Company, through the buyer has appealed for reversing the decision.
9. Current Assets:
Secured Receivable includes Hire Charges and Sundry Debtors valued at Agreement Value less Installments
received and net off Un-matured Finance Charges and write offs. These receivable are considered good by
the management of the company.
10. Loans and Advances:
Loans and Advances include an amount of Rs. 216.53 lakhs paid to Mr. R Ravichandran, erstwhile
Managing Director towards Managerial Remuneration. The same has not been approved by the
Shareholders and the application made to the Central Government has been rejected. The Company is
taking steps to recover this amount.
11. Unpaid Dividend Account:
During the year the Company has transferred the entire balance outstanding amounting to Rs. 5.13 lakhs
to Investor Education and Protection Fund. As on 31.03.2014, there are no amounts outstanding to be
transferred to Investor Education and Protection Fund.
12. Value of Investment in Subsidiaries:
Company has invested an amount of Rs. 29.93 Lakhs in DFL Holdings and Securities Limited (Subsidiary
Company). Though the subsidiary company is not actively entered in to income generating activity, the
management is of the view that the suitable activity will be carried out Subsidiary in the near future and
hence no provision for depreciation in the value of investment is considered necessary.
NOTES FORMING PART OF CONSOLIDATED FINANCIAL
STATEMENTS FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014
112
13. Related Party Disclosure:
(A) Remuneration to Managing Director Rs. in Lakhs
Particulars 31.03.2014 31.03.2013
Salary & DA 25.00 30.00
House Rent allowance 5.00 6.00
Company's Contribution to PF Nil Nil
Others 20.00 36.00
Total 50.00 72.00
(B) Remuneration to Whole Time Director Rs. in Lakhs
31.03.2014 31.03.2013
Salary & DA 22.83 17.43
House Rent allowance 11.42 8.71
Company's Contribution to PF 2.74 1.45
Others 2.06 5.32
Total 39.05 32.91
Determination of net profits in accordance with Sec 349 of the Companies Act, 1956 for remuneration
payable to Directors
Particulars Rupees in Lakhs
Loss after tax as per Profit & Loss Account (1309.65)
Add: Directors remuneration charged in the accounts 89.05
Net loss (1398.70)
a. Subsidiaries : DFL Holdings and Securities Limited, Smart Invest Agency.Com
Private Limited.
b. Key Management Personnel : S. Balachander and B. Prakash
(Rs. in Lakhs)
Nature of Transaction
Holding/ Key Management Total
Subsidiary Personnel
Unsecured Loan received from Auctus
Holding Private Limited 600.00 – 600.00
Loan from Subsidiary Company - Balance
outstanding at the end of the year 91.38 – 91.38
Remuneration to Key Management Personnel 10.22 89.05 99.27
NOTES FORMING PART OF CONSOLIDATED FINANCIAL
STATEMENTS FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014
113
14. Earnings per share:
A. Basic Earnings Per Share Amount in Rupees
Particulars FY 2013-14 FY 2012-13
Profit / (Loss) after tax before Preference Dividend (13,09,65,117) (15,61,55,800)
Add: Preference Dividend on 4% & 9% Cumulative
Preference Shares including tax(5,11,78,471) (5,11,78,471)
Profit/(Loss) available to Equity Holders (18,21,43,588) (20,73,34,121)
Weighted average number of equity shares 59,54,320 59,54,320
Earnings after tax (Basic) (30.69) (34.82)
Face value per share 10.00 10.00
B. Diluted Earnings Per Share Amount in Rupees
Particulars FY 2013-14 FY 2012-13
Profit / (Loss) after tax before Preference Dividend (13,09,65,117) (15,61,55,800)
Add: Preference Dividend on 4% Cumulative
Preference Shares including tax1,04,62,200 1,04,62,200
Profit/(Loss) available to Equity Holders (14,14,27,317) (16,66,18,000)
Basic Weighted average number of equity shares 59,54,320 59,54,320
Potential Convertible Shares 4,41,61,977 9,41,98,232
Total Weighted average number of equity shares 5,01,16,297 10,01,52,552
Diluted Earnings after tax (Basic) (30.69) (34.82)
Face value per share 10.00 10.00
Potential Convertible share arise out of 9% Optionally Convertible Cumulative Redeemable Preference
Share (OCCRPS). Upon conversion, these shares do not increase the loss available to equity holders and
these shares are treated non-dilutive in accordance with Accounting Standard - 18. Therefore, Basic
Earnings per Share will be the Dilutive Earnings per Share.
15. Provision for Taxation:
In the absence of profits for the current and considering the accumulated business and depreciation losses,
provision for taxation has not been made.
16. Deferred Tax Assets / liability Rs. in Lakhs
Particulars 31.03.2014 31.03.2013
Opening Balance NIL NIL
Less Reversal of Deferred tax asset NIL NIL
Add: Liability on account of depreciation NIL NIL
Total NIL NIL
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
114
Deferred tax asset arising on account of carry forward loss and provisions has not been recognized in the
books of accounts on a conservative basis.
17. Dividend On Preference Shares:
In the absence of profits, the Company could not declare dividend on the Preference Shares for the financial
year 2013-14 as detailed below
a. Dividend in respect of 4% Cumulative Preference Shares for the financial year amounting to Rs. 89.04
lakhs and cumulative upto 31st March 2014 amounting to Rs. 178.08 lakhs has not been provided for.
b. Dividend in respect of 9% OCCRPS for the financial year 2013-14 amounting to Rs. 346.52 lakhs
and cumulative upto 31st March 2014 amounting to Rs. 915.54 lakhs has not been provided for.
Thus, the aggregate amounts outstanding to be provided for and paid is Rs. 1,093.62 lakhs.
18. Suits against the Company:
The Company had purchased from Central Electronics Limited certain machineries for which the payments
were agreed to be made on deferred payment basis over a period of ten year along with interest. The
cheques issued by the Company towards payment of installments were dishonoured. Central Electronics
Limited resorted to legal action for dishonor of cheques and filed 6 cases against the Company under
section 138 of the Negotiable Instruments Act claiming Rs. 51.20 lakhs which is pending before the
Magistrate Court, Gazhiabad. In the meanwhile the Company negotiated for withdrawal of suit to arrive at
an out of Court settlement and accepted to clear the dues in installments of Rs. 2 lakhs per month. The
company had paid Rs. 4 lakhs and 1 case has been withdrawn.
The Company has obtained stay against the remaining cases from Hon'ble High Court of Allahabad and the
matter is pending before the Magistrate Court, Gazhiabad.
The amounts payable by the Company is included under the head 'Unsecured Loans'.
Pending disposal of appeal the Company has not accounted for interest payable by it.
19. Contingent Liability:
Disputed Income Tax demand of Rs. 1648.07 lakhs (after adjustment of TDS Refunds of various assessment
year amounting to Rs. 96.75 lakhs) together with interest is pending in appeal/representation before various
forums. These cases pertain to Assessment years 1997-98 to 2011-12.
20. Previous year's figures have been regrouped / reclassified to confirm to current period's classification
wherever necessary.
In terms of our report attached
for P.B. VIJAYARAGHAVAN & CO S. BALACHANDER T.R. SURESH
Chartered Accountants Managing Director Director
Firm Regn No. 004721S
I. CHANDRAMOHAN B. PRAKASH
P R KRISHNAMURTHY Company Secretary Wholetime Director
Partner
Membership No 12622
Date : 27.05.2014
Place : Chennai
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014
115
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 31ST MARCH 2014
(Rupees in Lakhs)
31.03.2014 31.03.2013
A. CASH FLOW FROM OPERATING ACTIVITIES
NET PROFIT BEFORE INTEREST, TAX AND
EXTRAORDINARY ITEMS (1309.95) (1562.37)
Adjustments for :
Depreciation 22.56 45.11
Provision for NPA 164.40 397.66
Finance Charges 941.17 872.15
Loss on sale of Assets 0.22 0.30
Provision No longer required (4.70) (41.91)
1,123.65 1273.31
OPERATING PROFIT BEFORE
WORKING CAPITAL CHANGES (186.30) (289.06)
Adjustments for :
Trade and other receivables / Stock on Hire 111.26 (97.88)
Other working capital changes 13.48 271.45
Increase / Decrease in provisions 0.65 0.40
Other Current Liabilities (11.00) (267.28)
114.39 (93.31)
CASH GENERATED FROM OPERATIONS (71.91) (382.38)
Direct Taxes Paid – –
Cash Flow before Extraordinary Items (71.91) (382.38)
Extraordinary Items – –
Net Cash Flow from Operating Activities (71.91) (382.38)
B. CASH FLOW FROM INVESTING ACTIVITIES
(Purchase)/Sale of Fixed Assets (11.53) (4.20)
Sale of Investments – –
NET CASH FROM INVESTING ACTIVITIES (11.53) (4.20)
116
C. CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Borrowings of Banks and Financial Institutions 910.12 847.55
Proceeds from Unsecured Borrowings – 193.24
Proceeds from Directors / Group Companies – –
Finance Charges (941.17) (872.15)
NET CASH FROM IN FINANCING ACTIVITIES (31.05) 168.64
D. Net Increase / (Decrease) in Cash & Cash equivalents (114.49) (217.94)
E. Opening Cash & Cash Equivalents 277.63 495.57
F. Closing Cash & Cash Equivalents 163.14 277.63
(Rupees in Lakhs)
31.03.2014 31.03.2013
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 31ST MARCH 2014
AUDITORS’ CERTIFICATE
We have examined the above Cash Flow Statement for the period ended 31st March 2014. The statement has been
prepared in accordance with the requirements of Clause 32 of the listing agreement with the Bombay Stock Exchange
and is based on and in agreement with the corresponding Profit and Loss account and Balance Sheet of the Company
covered by our report to the Members of the Company.
Subject to our report of even date
for P.B. VIJAYARAGHAVAN & CO
Chartered Accountants
Firm Regn No. 004721S
P R KRISHNAMURTHY
Date : 27.05.2014 Partner
Place : Chennai Membership No 12622
In terms of our report attached
for P.B. VIJAYARAGHAVAN & CO S. BALACHANDER T.R. SURESH
Chartered Accountants Managing Director Director
Firm Regn No. 004721S
I. CHANDRAMOHAN B. PRAKASH
P R KRISHNAMURTHY Company Secretary Wholetime Director
Partner
Membership No 12622
Date : 27.05.2014
Place : Chennai
117
Regd. Office : 14, Ramakrishna Street, T. Nagar, Chennai 600 017
ATTENDANCE SLIP
PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER AT ENTRANCE OF THE
MEETING HALL. ONLY MEMBERS OR THEIR PROXIES ARE ENTITLED TO BE PRESENT AT
THE MEETING.
FOLIO NO:
I hereby record my presence at the TWENTY-SEVENTH ANNUAL GENERAL MEETING, to be held at
Balamandir German Hall, (Unit of Balamandir Kamaraj Trust), 17, Prakasam Street, T. Nagar,
Chennai – 600 017 on Friday the 19th September 2014 at 10.00 a.m. as a Shareholder / Proxy*
..........................................................................................................................................................................
NAME OF PROXY IN BLOCK LETTERS SIGNATURE OF THE SHAREHOLDER / PROXY
*Strike whichever is not applicable
Regd. Office : 14, Ramakrishna Street, T. Nagar, Chennai 600 017
PROXYFolio No:
I / We........................................................................of......................................................... in the district of
.................................................................... being a Member(s) of DFL INFRASTRUCTURE FINANCE
LIMITED here by appoint.................................................................................................................of in the
district of ......................................................................................................................................................or
failing him...........................................................................of..............................................................in the
district of.........................................................................................................as my / our proxy to vote for
me / us on my / our behalf, at the TWENTY-SEVENTH ANNUAL GENERAL MEETING, to be held at
Balamandir German Hall, (Unit of Balamandir Kamaraj Trust), 17, Prakasam Street, T. Nagar,
Chennai – 600 017 on Friday the 19th September 2014 at 10.00 a.m. and at any adjournment thereof.
Signed this............................ Day of..........................2014
Signature.........................................
Note : 1. In the case of a corporation this Proxy shall be either given under the Common seal or signed
on its behalf by an attorney or officer of the Corporation.
2. Proxies to be valid must be deposited at the Regd. Office of the Company at 14, Ramakrishna
Street, T. Nagar, Chennai 600 017, not less than 48 hours before the time for holding
the meeting.
Rs.1.00
Revenue
Stamp
""
DFL Infrastructure Finance Limited
DFL Infrastructure Finance Limited
DFL Infrastructure Finance Ltd.
No. 14, Ramakrishna Street,
Off : North Usman Road,
T. Nagar, Chennai – 600 017.
If undelivered, Please return to:
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