Dhoot Industrial Finance Ltd Directors Report.

For the financial year 1st April, 2017 to 31st March, 2018

To

The Members of

DHOOT INDUSTRIAL FINANCE LIMITED

Your Directors have pleasure in presenting the 40th Annual Report on the business and operations of the Company together with the Audited Accounts for the year ended 31st March, 2018.

1. Financial summary/highlights and state of Company’s affairs.

During the said financial year:

• The turnover of the Company is INR 3,109.66 Lakhs as against INR 4,799.28 Lakhs for the last year.

• The net loss of the Company is INR 415.47 Lakhs as against net profit of INR 556.11 Lakhs for the last year.

2. Change in the nature of Business, if any:

During the year in review, there was no change in the nature of business of the Company.

3. Board Meetings.

The Board of the Company consists of Directors as prescribed by the Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

The details pertaining to composition of the Board, terms of reference, etc. of the Board of Directors of your Company and the meetings of the Board held during the financial year and the attendance thereat have been mentioned in the Corporate Governance section forming part of this Annual Report.

4. Audit Committee.

The Company has an Audit Committee in place, constituted as per the provisions of Section 177 of the Companies Act, 2013. The members of the Audit Committee, its terms of reference, the meetings of the Audit Committee and attendance thereat of the members of the Committee is mentioned in the Corporate Governance Report under the appropriate heading.

5. Reserves.

The Board does not propose to carry any amount to reserves for the said financial year

6. Dividend.

Your Directors do not recommend any dividend for the year with a view to conserve the resources for future growth of the Company.

7. Particulars of loans and investment and utility purpose by the recipient under section 186.

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 10, 11 & 28 to the standalone financial statement).

8. Particulars of contracts or arrangements with related parties under Section 188(1).

There were no contracts or arrangements with related parties referred to Section 188(1). Hence, not applicable.

9. Details of Directors or Key Managerial Personnel who were appointed or have resigned during the year.

During the year, Mr. Rajgopal Dhoot was liable to retire by rotation and was re-appointed in the 39th AGM.

10. Policy on Directors’ appointment, remuneration and others as formulated by the Nomination & Remuneration Committee.

The Nomination & Remuneration Committee has formulated the following policy: a. Directors’ appointment and remuneration: As best suited for Company’s business and in accordance with the applicable law. b. Criteria for determining qualifications, positive attributes and independence of a Director: As per the Companies Act, 2013. c. Remuneration for key managerial personnel and other employees: At present Non–Executive and Independent Directors are not paid any remuneration except sitting fees for attending Board Meetings. The Managing Director and the Key Managerial Personnel is paid remuneration as per the terms of their appointment.

11. Statement on declaration given by Independent Director(s) under Section 149

The Board confirms that all the Independent Directors on the Board have given a declaration of their Independence to the Board as required under Section 149(6) of the Companies Act, 2013.

12. Formal annual evaluation.

The Board of Directors has devised a policy for the performance evaluation and accordingly evaluation process was carried for the financial year for Board of Directors, Board Committees, Independent Directors and other individual Directors.

13. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo.

Particulars Reporting for the said financial year
A. Conservation of energy
i. Steps taken or impact on conservation of energy Wherever possible, the Company strives to curtail the energy consumption on a continuous basis
ii. Steps taken for utilising alternate sources of energy
iii. Capital investment on energy conservation equipments
B. Technology absorption
i. Efforts made towards technology absorption Not Applicable
ii. The benefits derived like product improvement, cost reduction, product development or import substitution Not Applicable
iii. Imported technology ( imported during last three years reckoned from the beginning of the financial year)
a. the details of technology imported Not Applicable
b. the year of import Not Applicable
c. whether the technology has been fully absorbed Not Applicable
d. if not fully absorbed, areas where absorption has not taken place, and the reasons thereof Not Applicable
iv. Expenditure incurred on research and development Not Applicable
C. Foreign exchange earnings and outgo
a. The foreign exchange earned in terms of actual inflows during the year NIL
b. The foreign exchange outgo during the year in terms of actual outflow Travelling expenses – INR 21.63 Lakhs

14. Details on deposits covered under Chapter V of the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014.

In terms of the provisions of Sections 73 and 74 of the Companies Act, 2013, read with the relevant rules, your Company has not accepted any fixed deposits during the year under report.

15. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

During the year in review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

16. Other Company/ies which have become or ceased to be Company’s subsidiaries, joint ventures or associate companies.

Not Applicable as the company has no subsidiaries, joint ventures or associates.

17. Performance and financial position of each of the subsidiaries, associates and joint venture Companies included in the consolidated financial statement.

The company has no subsidiary or associate company or any joint venture to be included in the consolidated financial statement of the Company

18. Extract of annual return.

The extract of the annual return is annexed here, in Form MGT-9, at Annexure I.

19. Disclosure on Remuneration.

None of the employees of the Company fall within the purview of the provisions of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 hence, no information is required to be disclosed.

20. Material changes between the period 31/03/2018 and 15/05/2018.

There was no material change in the Company between the period 31/03/2018 and 15/05/2018.

21. Details in respect of adequacy of internal financial controls with reference to the financial statements.

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

22. Risk management policy.

Your company does not find a place in the list of top 100 listed entities, hence it does not have a Risk Management Committee.

23. Vigil mechanism.

The Company has established vigil mechanism for directors and employees to report genuine concerns, to provide for adequate safeguards against victimisation of employees and directors who avail of the vigil mechanism and provides for direct access to Mr. Rajesh Loya - Chairperson of the Audit Committee in exceptional cases. The details of establishment of such mechanism have been disclosed on the website of the Company.

24. Statutory Auditors.

M/s Bohra & Co., Chartered Accountants (Firm Reg. No. 136492W) being eligible, offer themselves for ratification of their appointment for the year 2018-2019. Your Directors’ recommend their ratification until the conclusion of the 41st Annual General Meeting of the Company.

25. Secretarial Audit Report.

The Secretarial Audit Report as given by Mr. Swapneel Patel of M/s. Shah Patel & Associates –Company Secretaries (Membership No. 41106 & COP No. 15628), is enclosed herewith in Form MR-3 at

26. Explanation/ Comments by the Board on qualification, reservation or adverse remark or disclaimer made in Auditors’ Report and Secretarial Audit Report.

There are no qualifications, reservations or adverse remarks by the Statutory Auditors and by the Secretarial Auditors of the Company.

27. Disclosure about Corporate Social Responsibility

The Company had not crossed the limit of 5 crores of Net Profit Before Tax as on 31st March, 2017 as per the profits shown in the Statement of Profit and Loss of the Company which is below the applicable limits of Corporate Social Responsibility. Hence, Corporate Social Responsibility is not applicable for your company. The Company has adopted Ind AS from the Financial Year 2017-18 and the Audited Accounts of the full year is based on Ind AS. However, in the quarterly results up to December 2017 the current Investments (Quoted Equity Shares) held for trading was shown as Inventory (Quoted Equity Shares) of Stock in Trade and it was valued at lower of cost or market value instead of Fair value, based on previous IGAAP. The adoption of Ind AS for FY 2017-18 has necessitated restatement of accounts of 31.3.2016 as on 1.4.2016 and for FY 2016-17. The restatement has resulted in higher profits for FY 2016-17 and in the accounts restated on 1.4.2016 than what was reported earlier under previous IGAAP. However, Corporate Social Responsibility is not applicable for your company based on previous year’s financial statement audited as per IGAAP.

28. Directors’ responsibility statement.

Your Directors’ confirm that: a. In the preparation of the annual accounts, the applicable accounting standards had been followed and there were no 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 of the Company for 2017-18; 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; and e. 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. 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

29. Changes in Share Capital

The total share capital of the Company has been increased from INR 5,42,00,000 to INR 5,70,40,000 during the year under review pursuant to allotment of 2,84,000 Equity shares of INR 10 each at a premium of INR 43 each under Preferential Allotment of the Company.

Further, the Company has also issued 6,14,000 Warrants convertible into Equity at such price as per SEBI ICDR Regulations further disclosed in Notes to Accounts.

30. Acknowledgments.

Your Directors wish to place on record its appreciation to the Staff, Executives, Company’s Bankers, Auditors and Government Authorities for their co-operation, guidance and support.

For & on behalf of the Board
Dhoot Industrial Finance Limited
Sd/-
Place: Mumbai Rajgopal Dhoot
Date: 15th May, 2018 Chairman