Dharani Finance Ltd Directors Report.

Dear Members,

The Board of Directors present herein the 30th Annual Report of the Company together with the Audited Accounts for the year ended 31st March 2020.

FINANCIAL SUMMARY

The Financial results for the year ended 31st March 2020 are briefly as follows: - Rs.in Lakhs

Particulars For the year Ended 31.03.2020 For the year Ended 31.03.2019
Income through Travel 106.01 110.54
Operations, Finance Services and others
Expenditure ( Employee & 66.79 90.65
Administrative Expenses)
Profit 39.22 109.89
Depreciation 14.65 7.23
Interest & Bank Charges 2.58 5.85
Profit after depreciation & 21.99 6.81
Interest
Provision for Income Tax
- Current 43.74 9.24
- Deferred 6.33 0.72
Profit/(Loss) after Tax (28.08) (3.15)
Surplus brought forward 314.45 315.54
Profit available for appropriation 309.11 317.89
APPROPRIATIONS
Transfer to Statutory Reserves 2.68 3.44
Proposed Dividend - -
Dividend Distribution Tax - -
Net Surplus carried over 306.43 314.45

PERFORMANCE

The total revenue was Rs 106.01 lakhs as against Rs 110.54 lakhs in the previous year. The income this year consists mainly of interest on loans granted to two Companies. Besides interest, the Company also received a sum of Rs.27.30 lakhs as lease charges for the vehicles given on lease to a Group Company. Dividend income has come up from Rs.0.11 lakhs to Rs.0.22 lakhs. The Company has incurred a net loss of Rs.28.08 lakhs after adjusting for Depreciation and tax.

OUTLOOK

Your company is also exploring the possibility of increasing its resources by additional capital or borrowings though it has not been able to do so during 2019-20. In addition, by using its surplus, your Company proposes to increase its financial services activities.

RESERVES

A sum of Rs.2.68 lakhs is being transferred to the Statutory Reserves, as required by RBI regulations. With this, total Statutory Reserves comes to Rs. 151.53 lakhs.

DIVIDEND

There being no profits for the year your directors are not able to propose to recommend any dividend.

SHARE CAPITAL

There is no change in the Share Capital of the Company- either the Authorized Capital or the Issued Capital. The paid up equity capital as on March 31, 2020 continues to remain at Rs.4,99,44,000.00. The Company has not issued any shares during the period.

EXTRACT OF ANNUAL RETURN

This is available in web address of the Company.

BOARD MEETINGS

1. Board consists of five directors including one Woman Director, as given below.

2. During the year 2019-20 FIVE Board Meetings wereheldon27.05.2019,11.07.2019,13.08.2019, 13.11.2019 and 13.02.2020. Attendance at these meeting is given below.

Sl. No Name of the Director Category of Directorship No of Board Meeting Attended
1 Dr Palani G Periasamy (DIN 00081002) Chairman (Non-Executive) - Promoter 5
2 Mrs Visalakshi Periasamy (DIN 00064517) Non Executive - Promoter 3
3 Mr K Kandasamy (DIN 00277906) Executive -Promoter 5
4 Mr M Ganapathy (DIN 00234337) Non Executive - Independent Director 5
5 Dr S Muthu (DIN 03331664) Non Executive - Independent Director 5

The following Committees are in existence. Audit/ Nomination and Remuneration/Stakeholders and Risk Management Committee.

From 01.04.2019 transfer of shares can be only in demat form and Shareholders have been advised.

MANAGEMENT COMMITTEE

No Management Committee meeting was conducted during this period.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review.

iii) The directors have 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.

iv) The directors have prepared the annual accounts on a going concern basis. v) The directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

The new accounting standards, viz., Ind AS has become applicable to your Company with effect from the year 2019-20.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have given their declarations as per Section 149 (6) to the effect that they meet the criteria of Independence.

LOANS, GUARANTEES OR INVESTMENTS

During the year 2019-20, the company has not given any loans or provided any guarantees covered under the provisions of section 186 of the Companies Act, 2013.

CONTRACTS, ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1)

All related party transactions that were entered into during the financial year were in the ordinary course of business and were on arms length basis. The statement in form AOC 2 is attached as Annexure- II. There are no materially significant related party transactions entered into by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with the interest of the Company at large.

STATUTORY AUDITORS

M/s. CNGSN & Associates LLP, Chartered Accountants (Firm Regn. No. 004915S/S200036), Chennai, appointed in the Annual General Meeting held on 26th September 2017 will continue as, Statutory Auditors.

AUDITORS REPORT

The observations made in the Auditors Report read together with relevant notes thereon are self-explanatory and do not call for any further comments under Section 134(3)f of the Companies Act, 2013. Statement on impact of Audit Qualification is attached.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Mr M Damodaran and Associates, Company Secretaries in practice have carried out the Secretarial Audit of the Company. Their Audit report as on 31.03.2020 is annexed as "Annexure – III. It is declared that Company has complied with all the applicable Secretarial Standards.

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of the report.

FOREIGN EXCHANGE EARNINGS AND OUT-GO, CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION

A. During the year there were no Foreign Exchange Earnings & Outflow.

B. Conservation of Energy & Technology absorption. These guidelines are not applicable to this Company.

SUBSIDIARY COMPANIES

The Company does not have any subsidiary or any associate Company

RISK MANAGEMENT POLICY

The Company has developed a risk management policy. Pursuant to Section 134 (3) (n) of the Companies Act, 2013 details of the Policy are disclosed in the Companys Website. At present the Company has not identified any element of risk which may threaten the existence of the Company. In this context, report against heading ‘Material Changes of Commitments given above may be referred to.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mrs Visalakshi Periasamy, (DIN 00064517) retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for reappointment.

Dr S Kuppan, has joined as Company Secretary on 11.07.2019 and Mr N Sivabalan has been appointed CFO with effect from 25.07.2019.

SIGNIFICANT AND MATERIAL ORDERS

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the assignment order. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board & to the Chairman of the Board. The Internal Audit monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of internal auditor, management undertakes corrective action and thereby strengthen the controls. Significant audit observations wherever made and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

DEPOSITS

The Company does not hold any public deposits as on 31st March 2020. Your Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. The Company has stopped collecting public deposits and had got its Licence amended by Reserve Bank of India to indicate that it is a non deposit taking NBFC. Your Company does not propose to collect public deposits in the coming year.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Your Company does not fall within the parameters as per Section 135 of the Companies Act and hence not mandated to formulate a Corporate Social Responsibility Policy or spend the prescribed amounts.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation is carried out is based on criteria approved by the Board which is available on the Companys Website.

VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES

A competent Vigil mechanism has been established and a whistle blower policy has been designed to help Directors and Employees to report genuine concerns. The complete mechanism is given in the companys website.

CORPORATE GOVERNANCE

This requirement is not applicable to this Company at present, as per Regulation 15(2) of the SEBI (Listing Obligations and Disclosure Requirements), as its paid up capital is less than Rs. 10 crores and Net worth less than Rs.25 crores.

The above is also to be treated as Management discussion and analysis. Related Party disclosures are available in Note 42 to the accounts.

PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE

The Company has in place an Anti Sexual harassment policy in line with the requirements of Section 4 of the Sexual harassment of Women at Work Place (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received as sexual harassment. All employees are covered under this policy. Details have been displayed prominently in the work place and also in the Companys Website.

No complaints were received during the year 2019-20.

CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the Company. The Code has been posted on the Companys website: www.dharanifinance.in

UNCLAIMED DIVIDEND

Pursuant to Section 124 & 125 of the Companies Act, 2013, dividend remaining unpaid or unclaimed for a period of 7 years will be transferred to the Investor Education and Protection Fund of the Central Government. The Company transferred the following amounts of unclaimed dividend to the IEPF of the Central Government during this period. Reminders are sent to the shareholders as per records every year, for the unpaid dividends.

Year % of Dividend Date of declaration Amount Transferred to IEPF on
2011-12 7% 15.10.2012 Rs.7,55,444.50 24.10.2019

MCA by notification GSR 352 (E) dated 10.05.2012 has stipulated publication of details of unclaimed/ unpaid dividend in the Company website and MCA website. This will enable investors track unclaimed dividend by checking the status online and real time. Our company has already uploaded the requisite details that will get updated every year within 90 days of Annual General Meeting. Transfer of Unpaid Dividend and corresponding Shares to the Investor Education and Protection Fund. a. During the financial year 2019-20, 203079 Equity Shares in respect of which dividend entitlements to the extent of Rs. 7,55,444.50 for the year 2011-12 remained unclaimed for seven consecutive years or more, have been transferred by the Company to the Investor Education and Protection Fund established by the Central Government (IEPF), pursuant to the provisions of Section 124 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. The unclaimed dividend amount was already transferred to IEPF Account during 2018-19.

Shareholders may claim their unclaimed dividend for the years prior to and including the financial year 2011-12 and the corresponding shares, from the IEPF Authority by applying in the prescribed Form No. IEPF-5. This Form can be downloaded from the website of the IEPF Authority www.iepf.gov.in. b. Whiletheunclaimeddividendforthefinancialyear 2011-12 has been transferred, the corresponding shares will be transferred by the Company to IEPF Account. Communication has been sent to the concerned Shareholders advising them to write to the Company or Registrar of Transfer Agent to claim their dividend. Notices in this regard have also been published in newspapers. Details of such unclaimed dividend and corresponding shares are available on the Companys corporate website.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation of the services rendered by the Staff and Executives of your Company. Your Directors also thank the shareholders who have continued to repose their confidence in the Company and its management.

For and on behalf of the Board of Directors
For Dharani Finance Limited
Dr. PALANI G PERIASAMY
PLACE: CHENNAI CHAIRMAN
DATE : 28th July 2020 (DIN 00081002)