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History of DCM Financial Services Ltd.

DCM Financial Services limited [DFSs] was incorporated as Tanvi Leasing & Finance Pvt. limited on 13th February, 1991. The name was subsequently changed to DCM Financial Services Pvt. Ltd in February 1992 to reflect the fact of its DCM pedigree as also the nature of its business. There after the Comp. became a public Comp. in July 1993 under the provisions of Sec. 43-A of Companies Act, 1956. Thereafter Shareholders of Comp. passed a Special Resolution on 3rd June, 1994 for deleting the restrication clause under the Section 3[1s][iiis] of the Companies Act, 1956 & as such Comp. became fully Public Limited Comp. within the meaning of Section 3[1s][ivs] of the Companies Act, 1956. The Comp. commenced its operations in April 1991.

The Comp. belongs to the DCM limited group, which was earlier a part of DCM group established in the year 1889. The DCM group was split up into four groups in the year 1990, one of them being the DCM Ltd., a group headed by Dr.Bharat Ram. Over the years DCM has grown into one of the leading multi-product conglomerates of country. The business interests of DCM Ltd today include Textiles, Engineering, Automobiles, Electronics & Real Estates amongst others. DFS is a subsidiary of DCM International Limited, which inturn is wholly owned subsidiary of DCM Ltd.

The Comp. is a Non-Banking Financial Comp. & is governed by Non- Banking Financial Companies [Reserve Banks] Directions, 1977, issued by Reserve Bank of India.

PRESENT ACTIVITIES OF THE COMPANY

The Comp. commenced its operations in February, 1991. The main activities under taken were lease financing of commercial vehicles. Since then the Comp. has steadily grown & has added expertise in various areas of financial services. It has also developed the requisite systems and infrastructure, in line with the market trends & future growth.

Today, the Company cumulative exposure in vehicle financing is in excess of Rs.24 crores representing 1029 vehicles & 861 customers. In addition to lease financing, the Comp. has added new services like Stock Broking, Bill discounting, Inter Corporate Financing, Advisory services, Equity research, Bridge Financing etc.

Lease & Hire Purchase: The Comp. is the largest financer of DCM Toyota trucks [Dynas] in India. The expertise and knowledge gained by Comp. in the area of LCV financing shall help the Comp. in diversifying its portfolio into other areas of vehicle financing such as HCVS, passenger cars etc. The Comp. projects disbursements of Rs 20 Crores in the coming financial year in this area.

Corporate Lease: The Comp. has a diversified corporate lease portfolio with some of major business houses of the country availing lease / hire purchase facilities from the Company. Keeping in view the projected growth in the economy & particularly in industry, trade and infrastructure, the Comp. foresees adequate demand to meet the projected levels of disbursements and profitability.

Money Market Operations [Bill discounting/ICDss]:

As part of total financial services offered to the clients, the Comp. arranges short term funds by way of discounting of trade bills & placement of intercorporate deposits. In this activity, the Comp. deploys its own funds as well as acts as an intermediary between clients. In this segment the Comp. has stabilised its operations in a short span & foresees tremendous growth because of the increased usage of such instruments in the Indian Money Markets.

Investments and Broking : The Comp. is engaged in investment in primary & secondary equity markets. Long and short term investment decisions are taken based on extensive research. The Comp. proposes to engage in the business of corporate broking & institutional broking including private placement of securities & trading in debt instruments. The Comp. has acquired the dealership of OTCEI.

Merchant Banking: The Comp. is proposing to enter into merchant banking activities & has already obtained SEBI approval to act as Category i merchant banker. Main activities which the Comp. is proposing to commence are Issue Management, Underwriting, consultancy services, credit syndication & technology tie-up services.

Activity wise performance data for last 3 years [Rs inlacss]

1993-94 1992-93 1991-92

As] Income from operations

1s] Leasing - Gross 491.35 408.18 339.02

2s] Hire Purchase-Gross 80.53 34.94 6.65

3s] Bill Discounting - Gross 2.45 2.40 -

Bs] Disbursements Made

1s] Leasing - Gross 346.96 315.10 942.57

2s] Hire Purchase - Gross 574.36 307.58 212.29

3s] Bill Discounting - Gross 365.88 27.71 -

Cs] Bad Debts

1s] Leasing /H.P. 14.69 - -

Ds] Recovery Percentage

1s] Leasing and Hire Purchase 91.06% 90.07% 89.71%

2s] Bill Discounting 100% 100% 100%

Investment Policy

The Company investment policy is based on strict criteria in appraising credit risks & norms for company's credit exposure based on overall & individual exposure to each Industry, Comp. & activity, security of the transaction, balancing between risk & return. The Company closely monitors & reviews its outstanding commitments/positions/transactions periodically depending upon the amount of exposure, market conditions, payment record of party & other relevant factors. The powers for overall deployment of funds are vested with the President of Comp. which are reviewed from time to time by Board.

There are no non-recoveries of principal/interest due, or bad & doubtful debts from Companies in which the Directors are interested

2002

- DCM Financial Services Ltd has informed that a massive fire reportedly due to an electric short circuit broke out on the intervening night of March 20 and 21, 2002 at around 2.00 A. M. at their office premises at New DelhiMost of important documents, files & records relating to Secretarial, legal & other departments has been completely burnt.