The Directors have pleasure in presenting the 23rd Annual Report of
your Company together with the Audited Statements of Accounts for the
year ended March 31, 2012.
(Rs. in Lacs)
Financial Results Year Ended Year Ended
Income 6.22 2.22
Profit before Tax & extraordinary item 3.05 0.40
Less : Provision for Taxation - 0.07
Profit after Tax (1.92) 0.33
Add: Profit/(Loss) brought forward
from Previous Year (4.67) (5.00)
Balance carried forward (6.59) (4.67)
In view of current year loss as well as due to carried forward losses,
your Directors do not recommend any Dividend for the year under review.
INDUSTRY STRUCTURE AND DEVELOPMENT
The Indian economy has emerged rapidly from the slowdown caused by the
global financial crisis of 2007- 09 and remains one of the fastest
growing economies of the world. After dipping to 6.8% in 2008-09, GDP
growth had recovered sharply to 8% and is projected to remain above
this level in 2010-11. Economic and financial events over the year,
however, have increased concerns about the sustainability of the growth
The global economic and financial situation is recovering slowly. The
large fiscal deficits and high debt ratios coupled with slow economic
growth have created unsettling conditions for business and have
potential for causing great volatility in financial markets. It is hard
to visualize strong economic growth in the advanced economies in 2010
and to a large extent in 2011. The implications of this, for India''s
strategy to return to the 9.0 per cent growth trajectory, are that
public policy must promote business confidence and facilitate increased
Apart from above, high current account deficit, particularly in the
context of weakening capital inflows, was also a cause of concern,
which has hitherto managed to compensate the rising trade deficit. The
current account deficit was a manifestation of strong domestic demand
and global weakness. This pressure has abated somewhat during the past
few months, with rise in exports and slowing (non-oil) imports.
However, a strong rebound in India''s exports over the past couple of
months has considerably reduced the pressure, but India''s overall
balance of payments remains weaker than expected, putting pressure on
OPPORTUNITIES & THREATS
The Fundamental drives of India''s medium term growth prospects remain
intact. However, global developments, in conjunction with Indian Policy
responses to the concerns noted above, are likely to make 2011-12 a
Global economic and financial conditions can be expected to remain
adverse for some time, particularly in the aftermath of Japan''s
natural disaster. Once the current financial year and commodity
volatility subsides, deeper structural factors are likely to slow down
economic growth, particularly in developed economics. Fiscal
consolidation in Europe and an excess supply overhang in the US will
probably moderate growth in the second half, together with increasing
expectations of policy rate rise to quell rising inflation.
In India, inflationary pressure are likely to persist and hence result
in a further, though moderate, monetary policy tightening the impact of
which will be increasingly visible, through rising borrowing costs, in
fiscal 2012. Increasing savings, high interest rates, an expected lower
rise in currency driven by lower food prices, are likely to help
deposits to grow stronger in fiscal 2012. However, in light of
inflationary pressures and rising interest rates, there is a likelihood
that the credit growth momentum might slow in 2011-12.
OVERVIEW OF FINANCIAL AND BUSINESS PERFORMANCE
During 2010-11, the Company has actually started its business
activities and has earned small profit during the year. Having laid
down its key business objectives and a common vision, it took several
steps in fulfilling these goals. The Company focused on strengthening
its retail risk appetite in the SME business and filling product gaps
in its business.
Your Company is providing Advisory Services to clients and also
investing its surplus fund in Capital and/or Securities Market. The PBT
of the Company stood at Rs. 0.40 Lac which is below its expectation.
The Company is trying hard to get new clients or business in order to
survive and then to develop its business.
RISK MANAGEMENT & CONCERNS
The objective of risk management is to balance the trade-off between
risk and returns and ensure optimum risk adjusted return on capital. It
entails the identification, measurement and management of risks across
the various businesses of the Company. Risk is managed through a
framework of policies and principles approved by the Board of Directors
and supported by an Independent risk function that ensures that the
Company operates within its risk appetite. The risk management function
attempts to anticipate vulnerabilities at the transaction level or at
the portfolio level, as appropriate, through quantitative or
qualitative examination of the embedded risks. The Company continues to
focus on refining and improving its risk management systems. In
addition to ensuring compliance with regulatory requirements, the
Company had developed internal systems for assessing capital
requirements keeping in view the business objectives.
The Company has identified following main risks for its business, which
needs to be addressed at this point of time :-
1. Credit Risk
2. Market Risk
3. Liquidity Risk
4. Operational Risk
The Company has framed the appropriate business policies to tackle the
challenges of above risks and is continually reviewing and modifying
these policies in order to face the challenges and come out with the
help of Company''s business policies.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
DKFL has developed adequate Internal Control Systems in place to ensure
a smooth functioning of its business. The Control System provides a
reasonable assurance of recording the transactions of its operations in
all material aspects and of providing protection against misuse or loss
of Company''s assets.
The ICS and their adequacy are frequently reviewed and improved and are
MATERIAL DEVELOPMENT IN HUMAN RESOURCES
The Company was having staff strength of 5 people during the year under
review however the Company is recruiting more experienced employees
during financial year 2011-12. Once the process of new recruitment will
be over, the Company will be able to comment on this.
During the year under review, your Company has not accepted any
deposits from the public within the meaning of section 58A of the
Companies Act 1956 and the rules there under.
Statements in the Management Discussions and Analysis describing the
Company''s objectives, projections, estimates, expectations may be
forward looking statements. Actual results may differ materially from
those expressed or implied. Important factors that could make a
difference to the Company''s performance include economic conditions
affecting demand / supply and price conditions in the domestic and
overseas markets in which the Company operates, changes in the
Government Regulations, tax laws, statues and other incidental factors.
There is no Change in Management of the Company during the year under
In accordance with the requirements of the Companies Act, 1956 and as
per the provisions of Articles of Association of the Company, Mr. Manav
Sharma is liable to retire after conclusion of forthcoming Annual
General Meeting and is eligible, offers himself for re-appointments in
the forthcoming Annual General Meeting.
Except Mr. Manav Sharma himself, none other Directors are interested in
their respective re-appointments.
Further, non of the Directors of the Company are disqualified under
section 274(1)(g) of the Companies Act 1956.
The Company aims to maintain a scalable computing infrastructure that
delivers efficient and seamless services across multiple channels for
customer convenience. In order to retain competitive edge, technology
infrastructure has been implemented wherever necessary, in alignment
with business requirements.
The Compliance function of the Company is responsible for independently
ensuring that operating and business units comply with regulatory and
internal guidelines. The Compliance Department of the Company is
continued to play a pivotal role in ensuring implementation of
compliance functions in accordance with the directives issued by
regulators, the Company''s Board of Directors and the Company''s
Compliance Policy. The Audit Committee of the Board reviews the
performance of the Compliance Department and the status of compliance
with regulatory/internal guidelines on a periodic basis.
New Instructions/guidelines issued by the regulatory authorities were
disseminated across the Company to ensure that the business and
functional units operate within the boundaries set by regulators and
that compliance risks are suitably monitored and mitigated in course of
their activities and processes. New products and process launched
during the year were subjected to scrutiny from the Compliance
Standpoint and proposals of financial services were screened from risk
The Company recognizes that its success is deeply embedded in the
success of its human capital. During 2011-12, the Company continued to
strengthen its HR processes in line with its objective of creating an
inspired workforce. The employee engagement initiatives included
placing greater emphasis on learning and development, launching
leadership development programme, introducing internal communication,
providing opportunities to staff to seek inspirational roles through
internal job postings, streamlining the Performance Management System,
making the compensation structure more competitive and streamlining the
performance-link rewards and incentives.
The Company believes that learning is an ongoing process. Towards this
end, the Company has built a training infrastructure which seeks to
upgrade skill levels across grades and functions through a combination
of in-house and external programme.
The Company being basically in the investment sector, requirement,
regarding and disclosures of Particulars of conservation of energy and
technology absorption prescribed by the rule is not applicable to us.
The Auditors M/s Sanjay Kumar Jindal & Co., Chartered Accountants,
Jagadhri, Haryana holds the office until the conclusion of ensuing
Annual General Meeting. Your Company has received certificate from the
Auditors U/S 224(1B) of the Companies Act, 1956 to the effect that
their reappointment if made, will be within the limit prescribed.
The shareholders are requested to appoint Auditors and fix their
COMMENTS ON AUDITOR''S REPORT :
The notes referred to in the Auditor''s Report are self explanatory
and as such they do not call for any further explanation as required
under section 217(3) of the Companies Act, 1956.
PARTICULARS OF EMPLOYEES
There were no employees in Company during the year under review.
The information as required by provisions of section 217(2A) of the
Companies Act, 1956 read with the companies (Particular of employees)
amendments rules, 1988 is reported to be NIL.
PARTICULARS UNDER SECTION 217 (1) (E) OF THE COMPANIES ACT, 1956
The Company is having no business other than the business of advisory
services during the year under review and hence the information
regarding conservation of energy, Technology Absorption, Adoption and
innovation, the information required under section 217(1)(e) of the
Companies Act, 1956 read with the Companies (Disclosure of particulars
in the Report of Board of Directors) Rules 1988, is reported to be NIL.
The Company has not earned or used foreign exchange earnings/outgoings
during the year under review.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000
the Directors confirm that:
1. In the preparation of the annuals accounts, for the year ended 31st
March 2012, all the applicable accounting standards prescribed by the
Institute of Chartered Accountants of India have been followed;
2. The Directors had adopted such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for that period.
3. The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
4. The Directors had prepared the annual accounts on a going concern
REPORT ON CORPORATE GOVERNANCE
The Company is committed to good Corporate Governance. The Company
respects the rights of its Shareholders to inform on the performance of
the Company and its endeavor to maximize the long-term value to the
Shareholders of the Company. As per Clause 49 of the listing Agreement
of the Stock Exchange, a report on Corporate Governance is set out
separately, which forms part of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Corporate Social Responsibility (CSR) is commitment of the Company to
improve the quality and living standard of the employees and their
families and also to the community and society at large. The Company
believes in undertaking business in such a way that it leads to overall
development of all stake holders and Society.
The Board of Directors wishes to convey their appreciation to all the
Company''s managing body for their performance and continued support.
The Directors would also like to thank all the Shareholders,
Consultants, Customers, Vendors, Bankers, Service Providers, and
Governmental and Statutory Authorities for their continued support.
New Delhi, August 17, 2012 By order of the Board
For DEE KARTAVYA FINANCE LIMITED
Registered Office :
Kothi No. 1, Pocket No. 52
Chitranjan Park MANAV SHARMA
New Delhi-110 019 Chairman