Dhanuka Commercial Ltd Directors Report.
The Members of
Dhanuka Commercial Limited,
Your Directors have pleasure in presenting their 23rd Annual Report and Audited Accounts of the Company for the year ended March 31, 2017.
1. FINANCIAL RESULTS:
Your Companys performance during the financial year 2016-17 is summarized below:
(Amount in Rupees)
|For the year ended 31.03.2017||For the year ended 31.03.2016|
|Total Revenue from Operations||94,90,451||10,990,129|
|Profit/(loss) from Ordinary activities before tax||(977,210)||2,939,215|
|Less: Tax Expenses||37,522||878,081|
|Net Profit/(loss) from Ordinary activities after tax||(1,014,732)||2,061,134|
|Add: balance brought forward||1,042,360||(600,121)|
|Less: Provision for Standard Assets||(18333)||6,426|
|Less: Statutory Reserves Fund (u/s 45-IC of RBI Act, 1934)||-||412,227|
|Less: Transfer from Fixed Asset||-||-|
|Less: Provision for Proposed dividend||-||-|
|Less: Dividend Tax||-||-|
|Balance carried forward to Balance Sheet||45,961||1,042,360|
2. BUSINESS PERFORMANCE
The Company has not divisions therefore division wise working details are not applicable. The company has mainly engaged in the business of providing unsecured loans and dealing in securities market. The company has incurred a net loss of Rs 1014732/- as compared to last years profit of Rs. 2,061,134/-.
3. SHARE CAPITAL
The paid up equity capital as on March 31, 2017 was Rs. 16,74,34,590. During the year under review, the Company has not issued bonus shares nor issued shares with differential voting rights nor granted stock options nor sweat equity and nor buy back its own securities.
4. RBI GUIDELINES
Your Company has complied with all the applicable rules, regulations & guidelines as prescribed by the Reserve Bank of India from time to time and as are applicable to Non-deposit accepting, Non-Systematically Important NBFCs .
5. NON ACCEPTANCE OF PUBLIC DEPOSITS
Your Company has not accepted public deposits during the year under review in terms of chapter-V of the Companies Act, 2013 and hence there are no defaults in repayments of amount of principle or interest as on date of Balance Sheet.
Due to the Loss in this financial year, your Board of Directors have not recommended any dividend for the financial year 2016-17.
7. RESERVES AND PROVISIONS
The amounts, which the Board carries to any reserves/provisions, are given below:-
As Per RBI Guidelines
|Statutory Reserve Fund (SRF) @||Rs. 0/- created towards SRF||As there was loss|
|20% of Net Profit under Section 45- IC of the RBI Act 1934:-||Net amount in SRF=Rs. 1077706/-||during the year.|
|Provision for Standard Assets (PSA)||Created Rs. (18333.00/-) towards PSA.||As Decline in Standard|
|@ 0.25% on Standard Assets: -||Net amount in PSA=Rs. 404140/-||Assets|
8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Since, the companys main business activities are providing of loans and trading of securities of other companies and the company is registered with RBI as a Non-Banking Finance company hence the provisions of section 186 except sub section 1 of section 186 of the companies Act, 2013 read with Rule
11 & 13 of the Companies (Meetings of Board and its power) Rules, 2014 are not applicable to the company.
9. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
The company has not any subsidiary companies or joint venture companies or associate companies during the year under review. Also, there was no company which have become or ceased to become the subsidiaries/joint ventures/associate company (ies) during the year.
10. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
The Board has met 9 times during the year on 14-04-2016, 30-05-2016, 13-07-2016, 29-08-2016, 12-11-2016, 26-12-2016, 13-01-2017, 21-01-2017 and 10-02-2017 of which meetings proper notices has been given.
11. AUDITORS AND AUDITORSREPORT
The appointment of Statutory Auditors of the Company, M/s DSP & Associates, Chartered Accountants, (Firm Registration No. 006791N), who were initially appointed as Statutory Auditors by the members for four years in the 20th AGM, would be ratified in the this Annual General Meeting.
The observations of the Auditors if any, and the relevant notes on the accounts are self-explanatory and therefore do not call for any further comments.
12. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR provisions were not applicable on the company during the year under review.
13. LISTING WITH STOCK EXCHANGES:
The Company is listed on SME Platform of BSE Ltd. and confirms that it has paid the Annual Listing Fees for the financial year 2017-2018 to BSE Ltd. where the Companys Shares are listed.
14. INTERNAL FINANCIAL CONTROL SYSTEM (IFCS) AND ITS ADEQUACY:
The Company has satisfactory internal control system.
According to Section 134(5)(e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
The Company has a well-placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorized recorded and reported correctly. The Companys internal financial control system also comprises due compliances with Companys policies and Standard Operating Procedures (SOPs) and audit and compliance by in-house Internal Audit Division, supplemented by internal audit checks from Independent Internal Auditors of the Company.
The Companies Act, 2013 re-emphasizes the need for an effective Internal Financial Control system in the Company. The system should be designed and operated effectively. Rule 8(5)(viii) of Companies (Accounts) Rules, 2014 requires the information regarding adequacy of Internal Financial Controls with reference to the financial statements to be disclosed in the Boards report.
To ensure effective Internal Financial Controls the Company has laid down the following measures:
The Company has a robust Management Information System which is an integral part of the control mechanism.
All key operations are executed through Standard Operating Procedures (SOPs) in all functional activities for which key manuals have been put in place. The manuals are updated and validated periodically.
All legal and statutory compliances are ensured on a monthly basis through a various compliance tools and framework. Non-compliance, if any, is seriously taken by the management and corrective actions are taken immediately. Any amendment is regularly updated by internal as well as external agencies in the system.
The Company has developed various comprehensive compliance processes and framework which are modified according to requirement and which prescribed the role and responsibility of various persons who is responsible for compliance.
The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Audit Division and Internal Auditors to the Audit Committee of the Board.
The audit reports for the above audits are compiled and submitted to Audit Committee for review and necessary action.
The Company has a comprehensive risk management framework.
The Company has a system of Internal Business Reviews. All departmental heads discuss their business issues and future plans in monthly review meetings. They review their achievements in quarterly review meetings.
The Company has in place a well-defined Whistle Blower Policy/ Vigil Mechanism.
The Compliance of secretarial functions is ensured by way of secretarial audit.
The control system is improved and modified on continuous basis to meet the changes in business, statutory and accounting requirements.
The Audit Committee of the Board and Statutory Auditors periodically reviews the internal audit findings and corrective actions are taken.
The Company has Mechanism in place for handling the grievances related to the customers.
15. PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed compliance with the Code.
16. THE DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO ARE AS FOLLOWS:
A) Conservation of energy:
(i) The steps taken or impact on conservation of energy; Nil
(ii) The steps taken by the company for utilizing alternate sources of energy; Nil (iii) The capital investment on energy conservation equipments; Nil
Note: - The Company has not any manufacturing activities which require heavy consumption of energy. The company uses latest technology low energy consumption products in its office.
B) Technology absorption: i. The efforts made towards technology absorption;-Nil ii. The benefits derived like product improvement, cost reduction, product development or import substitution; -Nil iii. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - Nil a) The details of technology imported;-Nil b) The year of import; Nil c) Whether the technology been fully absorbed; Nil (a) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof; Nil and iv. The expenditure incurred on Research and Development. Nil
Note: - In respect of the Nature of the Business of the company there was no requirement of any technology.
C) Foreign exchange earnings and Outgo:
The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows. -No Foreign Exchange is earned or spent by the company during the year under review.
17. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013
Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. There were no complaints received from any employees during the financial year 2016- 2017 and hence no complaint is outstanding as on 31.03.2017 for redressal.
A) Changes in Directors and Key Managerial Personnel
Mr. Mahesh Kumar Dhanuka, Managing Director of the Company appointed as such in the EGM held on 17-02-2014 for the period of three years. Hence, his office is liable to be vacated with effect from the closure of the business hours of 16-02-2017. Therefore, as per the provisions of the Companies Act, 2013 he had been re-appointed as Managing Director of the company for further 3 years commencing from 17-02-2017 in the last AGM.
Mr. Gopal Krishan Bansal appointed as Executive Director of the company in the EGM held on 17-02-2014 being longest in tenure, was retired by rotation in last AGM and being eligible, had been reappointed as an Executive Director, liable to retire by rotation, in last AGM. Further, he had been redesignated as Non-Executive Director, liable to retire by rotation with effect from 01-01-2017 by the shareholders in their EGM held on 21-01-2017 on the recommendations of Nomination & Remuneration Committee and Board of Directors of the company.
Mr. Sanjeev Mittal appointed as a Non-Executive Director & Chairman in the EGM held on 17/02/2014 had been re-designated as Executive Director & Chairman of the company, liable to retire by rotation with effect from 01-01-2017 on monthly salary of Rs. 150,000/- by the shareholders in their EGM held on 21-01-2017 on the recommendations of Nomination & Remuneration Committee and Board of Directors of the company. Further Mr. Sanjeev Mittal being longest in tenure, is retiring by rotation in this 23rd AGM and being eligible, offered himself for reappointment as an Executive Director & Chairperson of the company liable to retire by rotation.
Mr. Surinder Kumar Bangia has resigned from the office of Directorship with effect from 30th day of January, 2017. Board of Directors in their meeting held on 10-02-2017 approved his resignation and takes on record his appreciation for the assistance and guidance provided by him during his tenure.
Mr. Vinod Kumar Aggarwal has resigned from the office of Chief Financial Officer with effect from closure of the business hours on 26th day of December, 2016.
Mr. Ravi Garg had appointed as Chief Financial Officer with effect from 27th day of December, 2016 to fill the vacancy caused by the resignation of Mr. Vinod Kumar Aggarwal.
Except as above, there was no other changes has been taken place in the positions of Directors and KMPs held by them.
B) Declaration by Independent Director(s) and re- appointment, if any
All the independent directors have given declaration regarding their compliance of conditions of subsection 6 of section 149 of the Companies Act, 2013 in the first board meeting of the FY 2017-18 as per the provisions of sub-section 7 of section 149 of the said Act. No independent director has been reappointed for second term on passing of a special resolution by the Company.
C) Formal Annual Evaluation
The Nomination & Remuneration Committee (hereinafter known as N & R Committee) had formulated a policy (approved by the board) on performance evaluation of the whole board, its committees, individual directors and KMPs. As per the Policy, performance evaluation of ? independent directors has been done by the whole board excluding the director being evaluated and submit its report to N & R Committee; whole board and non-independent directors including chairman has been done by independent directors and submit its report to N & R Committee;
Committees of the board and KMPs have been done by the board of directors and submit its report to N & R Committee.
Specific questioner sheet has been set-up for performance evaluation of each category of persons mentioned above in the policy. N & R Committee reviews the reports of the Independent Directors and Board and accordingly, recommends the appointment/re-appointment/continuation of Directors to the Board. Based on the recommendation of N & R Committee, Board will take the appropriate action.
19. RELATED PARTY TRANSACTIONS:
The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto is disclosed in Form No. AOC -2 annexed as Annexure-A with this report.
20. MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES
Details of Managerial remuneration required pursuant to Section 197 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-B.
21. EXTRACT OF THE ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure C".
22. SECRETARIAL AUDIT REPORT
The Board had appointed M/s Kumar Arun & Associates, Practicing Company Secretaries, Delhi as Secretarial Auditor for the F.Y. 2016-17 pursuant to the provisions of Section 204 of the Companies Act, 2013. The Report of the Secretarial Auditor is annexed to the Report as per Annexure D.
23. BUSINESS RISK MANAGEMENT:
Business risk evaluation and management is an ongoing process within the Company as per the risk management policy established by the board. During the year under review, a detailed exercise on Risk Assessment and Management was carried out covering the entire gamut of business operations and the Board was informed of the same.
In view of the activities of the company the board has opinion that the company has two major inherent risks which may threaten the existence of the company are "default in re-payment of loans by the customers" and "risks associated in the equity market". However, the company has followed the principal of assessing the risk and accordingly managing the business.
24. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Company has established vigil mechanism for directors and employees to report genuine concerns of fraud & misconduct in the company and the vigil policy is uploaded on the website of the company www.dhanukacommercial.com . Further, the company has not received any protected disclosures as per the vigil policy framed by the board.
25. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS
Your company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. A Report on Corporate Governance is annexed to this report and forms part of this report.
Note: - Members please note that as per "SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015" the company (being Listed on a SME Platform of BSE Ltd) is exempted from the corporate Governance Requirements provided under regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and Para C, D and E of Schedule V. Hence no certificate has been attached regarding compliances of conditions of corporate governance, however, the company is complying with the corporate governance requirements as applicable to it under Companies Act, 2013.
A detailed analysis of the Companys performance is discussed in the Management Discussion and Analysis Report, annexed to this report and forms part of this Report.
26. OTHER DETAILS
No Change in the nature of the business of the company during the year;
No change of the name of the company during the year;
No material changes has been occurred subsequent to the close of the financial year of the company to which the balance sheet relates and the date of the report like settlement of tax liabilities, operation of patent rights, depression in market value of investments, institution of cases by or against the company, sale/purchase of capital assets or destruction of any assets etc;
No significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future;
Refer Corporate Governance Report for details of Audit Committee;
Refer Corporate Governance Report for details of Nomination & Remuneration Committee; and
Refer Corporate Governance Report for details of Remuneration Policy.
27. DIRECTORS RESPONSIBILITY STATEMENT
As required under the provisions contained in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Directors hereby confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had 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 financial year and of the profit and loss of the company for that period; (c) 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; (d) the directors had prepared the annual accounts on a going concern basis; (e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Your Directors take this opportunity to thanks Regulatory and Government Authorities, the Companys shareholders, investors, customers, bankers, and other stakeholders for their continued support to the company. Your Directors express their deep sense of appreciation towards all the employees and staff of the company and wish the management all the best for achieving greater heights in the future.
For and on behalf of the Board of Directors of
Dhanuka Commercial Ltd
FORM NO. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto.
|1. Details of contracts or arrangements or transactions not at arms length basis||-|
|No such transactions were taken place during the year under review.|
|(a) Name(s) of the related party and nature of relationship||-||NA|
|(b) Nature of contracts/arrangements/transactions||-||NA|
|(c) Duration of the contracts / arrangements/transactions||-||NA|
|(d) Salient terms of the contracts or arrangements or transactions including the value, if any -||NA|
|(e) Justification for entering into such contracts or arrangements or transactions||-||NA|
|(f) Date of approval by the Board||-||NA|
|(g) Amount paid as advances, if any:||-||NA|
|(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188||-||NA|
2. Details of material contracts or arrangement or transactions at arms length basis
|Name(s) of related party and nature of relationship||Sanjeev Mittal Executive Director (ED)||Mahesh Kumar Dhanuka Managing Director||Reena Bansal Wife of Director||Reena Bansal Wife of Director||Sanjeev Mittal & Sons HUF Related Concern|
|Nature of contracts/ arrangements||Appointment at the Post of ED at monthly salary of Rs. 1.5 Lakhs.||Increase of Remuneration from 15k to 25k p/m||Appointment at the Post of RM* at monthly salary of Rs. 75k.||Rent Paid @ Rs. 15K p/m||Loan Given 95 Lakhs Repaid 70 Lakhs; o/s 2600691.|
|Duration of the contracts||For the duration of employment.||From 01-01- 2017 to 16-02- 2020.||For the duration of employment.||5 Years from 23-01-2017||NA|
|Salient terms||NA||NA||NA||Rent Agreement||Unsecured Loans|
|Date(s) of approval by BOD||26-12-2016||26-12-2016||26-12-2016||13-01-2017||NA|
For and on behalf of the Board of Directors of
Dhanuka Commercial Ltd
Pursuant to Section 197 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
DETAILS RELATED TO MANAGERIAL REMUNERATION:
A) Details pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
|S Requirement of Rule 5(1) No||Disclosure|
|1 The ratio of the remuneration of each director to the median remuneration of the employees for the financial year||Name of the Salary Ratio Director|
|Mr. Mahesh Kumar Dhanuka||25000/-||1:1.04 pm|
|Mr. Sanjeev Mittal||150000/-||1:6.25 pm|
|No other director was remunerating except sitting fees of Rs 500/- per Board/Committee meetings|
|2 Percentage increase in remuneration of each director, CFO, financial year CEO, CS or Manager in the||Particulars||%||Remarks|
|a) Directors||NA||No hikes in the salary of any Directors|
|c) CFO||Nil||Appointment of new CFO at Increased Remuneration.|
|d) CEO||NA||No CEO in Company|
|e) Company Secretary||04.34%||-|
|f) Manager||NA||No Manager in the Company.|
|3 The percentage increase in the median remuneration of employees in the financial year||60% increase in the median remuneration of the employees in the financial year.|
|4 The number of permanent employees on the rolls of the company||There were 10 employees on permanent roll of the company as on March 31, 2017.|
|5 Average percentile increase already made in||Average percentile increase in remuneration of|
|the salaries of eees other than the Managerial Personnel in the last financial year i.e. 2016-17 and its comparison with the||Managerial Personnel*||Employees|
|percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional||Exceptional increase is appointment of Executive Director.||due to|
|circumstances for increase in the managerial remuneration.||Otherwise 66.67% increase|
|6||Affirmation that the remuneration is as per the||We affirm that the remuneration paid to employees|
|remuneration policy of the company||and KMPs was based on the Remuneration Policy.|
B) Details of the Top-10 employee of the Company as required pursuant to rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 who:-
? Drawing salary of 1 Crore and 2 Lakhs or above for the year if employed throughout the year -Nil
? Drawing salary of 8.5 Lakhs p/m or above for a month if employed for part of the year -Nil
? Drawing salary more than the salary of MD and having 2% stake in the company -Nil
C) No Managing Director or Whole-time Director of the Company is receiving any commission from the company as well as from the Holding Company or Subsidiary Company of the Company.
D) The disclosures required under clause C (5) of Schedule-V of SEBI (LODR) Regulations, 2015 are mentioned in the "Corporate Governance Report" under the heading "Disclosures".
For and on behalf of the Board of Directors of
Dhanuka Commercial Ltd