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Dhanuka Commercial Ltd.

BSE: 538446 Sector: Financials
NSE: N.A. ISIN Code: INE296Q01012
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OPEN 9.40
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VOLUME 30000
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52-Week low 8.20
P/E
Mkt Cap.(Rs cr) 15
Buy Price 8.70
Buy Qty 20000.00
Sell Price 10.90
Sell Qty 10000.00
OPEN 9.40
CLOSE 9.20
VOLUME 30000
52-Week high 9.80
52-Week low 8.20
P/E
Mkt Cap.(Rs cr) 15
Buy Price 8.70
Buy Qty 20000.00
Sell Price 10.90
Sell Qty 10000.00

Dhanuka Commercial Ltd. (DHANUKACOMMERC) - Director Report

Company director report

To

The Members of

Dhanuka Commercial Limited

Your Directors have pleasure in presenting their 23rd Annual Report and AuditedAccounts of the Company for the year ended March 31 2017.

1. FINANCIAL RESULTS:

Your Company's 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 9490451 10990129
Total Expenditure 10467661 8050914
Profit/(loss) from Ordinary activities before tax (977210) 2939215
Less: Tax Expenses 37522 878081
Net Profit/(loss) from Ordinary activities after tax (1014732) 2061134
Add: balance brought forward 1042360 (600121)
Less: Provision for Standard Assets (18333) 6426
Less: Statutory Reserves Fund (u/s 45-IC of RBI Act 1934) - 412227
Less: Transfer from Fixed Asset - -
Less: Provision for Proposed dividend - -
Less: Dividend Tax - -
Balance carried forward to Balance Sheet 45961 1042360

2. BUSINESS PERFORMANCE

The Company has not divisions therefore division wise working details are notapplicable. The company has mainly engaged in the business of providing unsecured loansand dealing in securities market. The company has incurred a net loss of Rs 1014732/- ascompared to last year's profit of Rs. 2061134/-.

3. SHARE CAPITAL

The paid up equity capital as on March 31 2017 was Rs. 167434590. During the yearunder review the Company has not issued bonus shares nor issued shares with differentialvoting rights nor granted stock options nor sweat equity and nor buy back its ownsecurities.

4. RBI GUIDELINES

Your Company has complied with all the applicable rules regulations & guidelinesas prescribed by the Reserve Bank of India from time to time and as are applicable toNon-deposit accepting Non-Systematically Important NBFC's .

5. NON ACCEPTANCE OF PUBLIC DEPOSITS

Your Company has not accepted public deposits during the year under review in terms ofchapter-V of the Companies Act 2013 and hence there are no defaults in repayments ofamount of principle or interest as on date of Balance Sheet.

6. DIVIDEND

Due to the Loss in this financial year your Board of Director's have not recommendedany 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 company's main business activities are providing of loans and trading ofsecurities of other companies and the company is registered with RBI as a Non-BankingFinance company hence the provisions of section 186 except sub section 1 of section 186 ofthe companies Act 2013 read with Rule

11 & 13 of the Companies (Meetings of Board and its power) Rules 2014 are notapplicable to the company.

9. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The company has not any subsidiary companies or joint venture companies or associatecompanies during the year under review. Also there was no company which have become orceased 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 13-07-201629-08-2016 12-11-2016 26-12-2016 13-01-2017 21-01-2017 and 10-02-2017 of whichmeetings proper notices has been given.

11. AUDITORS AND AUDITORS'REPORT

The appointment of Statutory Auditors of the Company M/s DSP & AssociatesChartered Accountants (Firm Registration No. 006791N) who were initially appointed asStatutory Auditors by the members for four years in the 20th AGM would be ratified in thethis Annual General Meeting.

The observations of the Auditors if any and the relevant notes on the accounts areself-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 theAnnual Listing Fees for the financial year 2017-2018 to BSE Ltd. where the Company'sShares 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 FinancialControl (IFC) means the policies and procedures adopted by the company for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.

The Company has a well-placed proper and adequate internal financial control systemwhich ensures that all assets are safeguarded and protected and that the transactions areauthorized recorded and reported correctly. The Company's internal financial controlsystem also comprises due compliances with Company's policies and Standard OperatingProcedures (SOPs) and audit and compliance by in-house Internal Audit Divisionsupplemented by internal audit checks from Independent Internal Auditors of the Company.

The Companies Act 2013 re-emphasizes the need for an effective Internal FinancialControl system in the Company. The system should be designed and operated effectively.Rule 8(5)(viii) of Companies (Accounts) Rules 2014 requires the information regardingadequacy of Internal Financial Controls with reference to the financial statements to bedisclosed in the Board's report.

To ensure effective Internal Financial Controls the Company has laid down the followingmeasures:

The Company has a robust Management Information System which is an integral part ofthe control mechanism.

All key operations are executed through Standard Operating Procedures (SOPs) in allfunctional activities for which key manuals have been put in place. The manuals areupdated and validated periodically.

All legal and statutory compliances are ensured on a monthly basis through a variouscompliance tools and framework. Non-compliance if any is seriously taken by themanagement and corrective actions are taken immediately. Any amendment is regularlyupdated by internal as well as external agencies in the system.

The Company has developed various comprehensive compliance processes and frameworkwhich are modified according to requirement and which prescribed the role andresponsibility of various persons who is responsible for compliance.

The Internal Auditors independently evaluate the adequacy of internal controls andconcurrently audit the majority of the transactions in value terms. Independence of theaudit and compliance is ensured by direct reporting of Internal Audit Division andInternal Auditors to the Audit Committee of the Board.

The audit reports for the above audits are compiled and submitted to Audit Committeefor review and necessary action.

The Company has a comprehensive risk management framework.

The Company has a system of Internal Business Reviews. All departmental headsdiscuss their business issues and future plans in monthly review meetings. They reviewtheir 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 changesin business statutory and accounting requirements.

The Audit Committee of the Board and Statutory Auditors periodically reviews theinternal audit findings and corrective actions are taken.

The Company has Mechanism in place for handling the grievances related to thecustomers.

15. PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code. All Board of Directors and the designated employees haveconfirmed 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 heavyconsumption of energy. The company uses latest technology low energy consumption productsin its office.

B) Technology absorption: i. The efforts made towards technology absorption;-Nilii. The benefits derived like product improvement cost reduction productdevelopment 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 areaswhere absorption has not taken place and the reasons thereof; Nil and iv. Theexpenditure incurred on Research and Development. Nil

Note: - In respect of the Nature of the Business of the company there was norequirement of any technology.

C) Foreign exchange earnings and Outgo:

The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows. -No Foreign Exchange is earnedor 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 receivedregarding sexual harassment. There were no complaints received from any employees duringthe financial year 2016- 2017 and hence no complaint is outstanding as on 31.03.2017 forredressal.

18. DIRECTORS:

A) Changes in Directors and Key Managerial Personnel

Mr. Mahesh Kumar Dhanuka Managing Director of the Company appointed as such in the EGMheld on 17-02-2014 for the period of three years. Hence his office is liable to bevacated with effect from the closure of the business hours of 16-02-2017. Therefore asper the provisions of the Companies Act 2013 he had been re-appointed as ManagingDirector 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 heldon 17-02-2014 being longest in tenure was retired by rotation in last AGM and beingeligible had been reappointed as an Executive Director liable to retire by rotation inlast AGM. Further he had been redesignated as Non-Executive Director liable to retire byrotation with effect from 01-01-2017 by the shareholders in their EGM held on 21-01-2017on the recommendations of Nomination & Remuneration Committee and Board of Directorsof the company.

Mr. Sanjeev Mittal appointed as a Non-Executive Director & Chairman in the EGM heldon 17/02/2014 had been re-designated as Executive Director & Chairman of the companyliable to retire by rotation with effect from 01-01-2017 on monthly salary of Rs.150000/- by the shareholders in their EGM held on 21-01-2017 on the recommendations ofNomination & 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 beingeligible offered himself for reappointment as an Executive Director & Chairperson ofthe company liable to retire by rotation.

Mr. Surinder Kumar Bangia has resigned from the office of Directorship with effect from30th day of January 2017. Board of Directors in their meeting held on 10-02-2017 approvedhis resignation and takes on record his appreciation for the assistance and guidanceprovided by him during his tenure.

Mr. Vinod Kumar Aggarwal has resigned from the office of Chief Financial Officer witheffect 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 ofDecember 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 ofDirectors and KMP's held by them.

B) Declaration by Independent Director(s) and re- appointment if any

All the independent directors have given declaration regarding their compliance ofconditions of subsection 6 of section 149 of the Companies Act 2013 in the first boardmeeting of the FY 2017-18 as per the provisions of sub-section 7 of section 149 of thesaid Act. No independent director has been reappointed for second term on passing of aspecial resolution by the Company.

C) Formal Annual Evaluation

The Nomination & Remuneration Committee (hereinafter known as 'N & RCommittee') had formulated a policy (approved by the board) on performance evaluation ofthe whole board its committees individual directors and KMP's. As per the Policyperformance evaluation of ? independent directors has been done by the whole boardexcluding the director being evaluated and submit its report to N & R Committee; wholeboard and non-independent directors including chairman has been done by independentdirectors and submit its report to N & R Committee;

Committees of the board and KMP's have been done by the board of directors andsubmit its report to N & R Committee.

Specific questioner sheet has been set-up for performance evaluation of each categoryof persons mentioned above in the policy. N & R Committee reviews the reports of theIndependent Directors and Board and accordingly recommends theappointment/re-appointment/continuation of Directors to the Board. Based on therecommendation 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 withrelated parties referred to in sub-section (1) of section 188 of the Companies Act 2013including certain arm's length transactions under third proviso thereto is disclosed in FormNo. 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 theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed asAnnexure-B.

21. EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 isannexed herewith as "Annexure C".

22. SECRETARIAL AUDIT REPORT

The Board had appointed M/s Kumar Arun & Associates Practicing CompanySecretaries Delhi as Secretarial Auditor for the F.Y. 2016-17 pursuant to the provisionsof Section 204 of the Companies Act 2013. The Report of the Secretarial Auditor isannexed to the Report as per Annexure ‘D'.

23. BUSINESS RISK MANAGEMENT:

Business risk evaluation and management is an ongoing process within the Company as perthe risk management policy established by the board. During the year under review adetailed exercise on 'Risk Assessment and Management' was carried out covering the entiregamut 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 twomajor inherent risks which may threaten the existence of the company are "default inre-payment of loans by the customers" and "risks associated in the equitymarket". However the company has followed the principal of assessing the risk andaccordingly managing the business.

24. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company has established vigil mechanism for directors and employees to reportgenuine concerns of fraud & misconduct in the company and the vigil policy is uploadedon the website of the company www.dhanukacommercial.com . Further the company has notreceived 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 governancepractices and is committed to transparency in all its dealings. A Report on CorporateGovernance is annexed to this report and forms part of this report.

Note: - Members' please note that as per "SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015" the company (being Listed on a SME Platform of BSELtd) is exempted from the corporate Governance Requirements provided under regulations 17to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and Para C D and E ofSchedule V. Hence no certificate has been attached regarding compliances of conditions ofcorporate governance however the company is complying with the corporate governancerequirements as applicable to it under Companies Act 2013.

A detailed analysis of the Company's performance is discussed in the ManagementDiscussion 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 ofthe company to which the balance sheet relates and the date of the report like settlementof tax liabilities operation of patent rights depression in market value of investmentsinstitution of cases by or against the company sale/purchase of capital assets ordestruction of any assets etc;

No significant and material orders passed by the regulators or courts or tribunalsimpacting the going concern status and company's operations in future;

Refer Corporate Governance Report for details of Audit Committee;

Refer Corporate Governance Report for details of Nomination & RemunerationCommittee; 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) inthe preparation of the annual accounts the applicable accounting standards had beenfollowed along with proper explanation relating to material departures; (b) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period; (c) the directors had taken properand sufficient care for the maintenance of adequate accounting records in accordance withthe provisions of this Act for safeguarding the assets of the company and for preventingand detecting fraud and other irregularities; (d) the directors had preparedthe annual accounts on a going concern basis; (e) the directors in the caseof a listed company had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

28. ACKNOWLEDGEMENTS

Your Directors take this opportunity to thanks Regulatory and Government Authoritiesthe Company's shareholders investors customers bankers and other stakeholders fortheir continued support to the company. Your Directors express their deep sense ofappreciation towards all the employees and staff of the company and wish the managementall the best for achieving greater heights in the future.

For and on behalf of the Board of Directors of

Dhanuka Commercial Ltd

-Sd-
Chairman Date: 29-05-2017
Sanjeev Mittal Place: Delhi

ANNEXURE-A

FORM NO. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arm's length transactions under third provisothereto.

1. Details of contracts or arrangements or transactions not at arm's 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 arm's 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
Advance paid NA NA NA NA NA

For and on behalf of the Board of Directors of

Dhanuka Commercial Ltd

-Sd-
Chairman Date: 29-05-2017
Sanjeev Mittal Place: Delhi

ANNEXURE-B

Pursuant to Section 197 and Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014

DETAILS RELATED TO MANAGERIAL REMUNERATION:

A) Details pursuant to Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial 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
Increase
a) Directors NA No hikes in the salary of any Directors
b) MD 66.67 -
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 eee's other than the Managerial Personnel in the last financial year i.e. 2016-17 and its comparison with the Managerial Personnel* Employees
483% 87%
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 KMP's was based on the Remuneration Policy.

B) Details of the Top-10 employee of the Company as required pursuant to rule 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 who:-

? Drawing salary of 1 Crore and 2 Lakhs or above for the year if employedthroughout the year -Nil

? Drawing salary of 8.5 Lakhs p/m or above for a month if employed for part ofthe 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 anycommission from the company as well as from the Holding Company or Subsidiary Company ofthe 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 theheading "Disclosures".

For and on behalf of the Board of Directors of

Dhanuka Commercial Ltd

-Sd-
Chairman Date: 29-05-2017
Sanjeev Mittal Place: Delhi