The Board of Directors present herein the TWENTYSIXTH Annual Report of theCompany together with the Audited Accounts for the year ended 31 st March 2016.
The Financial results for the year ended 31 March 2016 are briefly as follows: -
| || ||Rupees in Lakhs |
|Particulars ||For the year Ended 31.03.2016 ||For the year Ended 31.03.2015 |
|Income through Travel Operations || || |
|Finance Services and others ||245.41 ||289.87 |
|Expenditure (Employee & Administrative Expenses) ||197.97 ||262.45 |
|Profit ||47.44 ||27.42 |
|Depreciation ||3.26 ||6.13 |
|Interest & Bank Charges ||0.13 ||0.23 |
|Profit / after depreciation & Interest ||44.05 ||21.06 |
|Provision for Income Tax || || |
|- Current ||- ||10.00 |
|- MAT ||- ||(8.58) |
|- Deferred Tax ||11.78 ||4.44 |
|Profit / after Tax ||32.27 ||15.36 |
|Surplus / brought forward ||84.88 ||72.59 |
|Profit available for appropriation ||117.16 ||87.95 |
|APPROPRIATIONS || || |
|Transfer to Statutory Reserves ||6.45 ||3.07 |
|Proposed Dividend ||- ||- |
|Dividend Distribution Tax ||- ||- |
|Net Surplus/(Deficit) carried over ||110.70 ||84.88 |
Total income of the Company is Rs.245.41 lakhs as against Rs.289.87 lakhs in theprevious year though income through travel operations has marginally increased fromRs.224.74 lakhs to Rs.225.94 lakhs. Company provides travel services to the guests of theGroup's 5 star hotels at Chennai and Coimbatore. The Company earns a major portion of itsincome from travel services only. There was however increase in the amount of dividendreceived on long term investments from Rs.2.63 lakhs in the previous year to Rs.9.36 lakhsin the current year. The Company could not expand its financial services to the lowcapital base.
The Company's expenses have decreased to Rs.197.97 lakhs from the previous year'sRs.262.45 lakhs. The gross profits have increased from Rs.27.42 lakhs to Rs.47.44 lakhs.Software services which the Company commenced last year could not bring in muchbusiness. After providing Rs.3.26 lakhs towards depreciation and Rs.0.13 lakhs as BankCharges etc. net profit comes to Rs.44.05 lakhs as against a profit of Rs. 21.06 lakhs inthe previous year while profit after tax works out to Rs.32.27 lakhs against Rs.15.36lakhs in the previous year.
With the expected improvement in the fortunes of the hospitality industry business ofproviding travel services to the visitors to our group hotels is likely to grow resultingin increased revenue to your Company.
As the profits for the year are not sufficient enough your directors regret theirinability to recommend any dividend.
A sum of Rs.6.45 lakhs is being transferred to the Statutory Reserves as required byRBI regulations. With this total Statutory Reserves comes to Rs.110.99 lakhs.
There is no change in the Share Capital of the Company either the Authorised Capital orthe Issued Capital. The paid up equity capital as on March 31 2016 continues to remain atRs.49944000. The Company has not issued any shares during the period.
EXTRACT OF ANNUAL RETURN
Extract of the Annual Return in form MGT-9 as provided under Section 92(3) of theCompanies Act 2013 is attached herewith. Annexure - I
Board consists of the following directors including one Woman Director.
|Name of the Director ||Category of Directorship |
|1Dr Palani G Periasamy ||Chairman (Non Executive) |
|(DIN 00081002) ||- Promoter |
|2Mrs Visalakshi Periasamy (DIN 00064517) ||Non Executive - Promoter |
|3 R K Viswanathan (DIN 00047420) ||Non Executive - Independent |
|4 K Kandasamy (DIN 00277906) ||Executive - Promoter |
|5 M Ganapathy (DIN 00234337) ||Non Executive - Independent |
|6 Dr S Muthu (DIN 03331664) ||Non Executive - Independent |
During the year 2015-16 four Board Meetings were held on 27.05.2015 13.08.201512.11.2015 and 11.02.2016.
LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loans or provided any guarantees covered under theprovisions of section 186 of the Companies Act 2013.
The details of the investments made by Company are given in the notes to the financialstatements.
CONTRACTS ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1)
All related party transactions that were entered into during the financial year were inthe ordinary course of the business and were on arm's length basis. The statement in formAOC 2 is attached. There are no materially significant related party transactions made bythe Company with Promoters Key Managerial Personnel or other designated persons which mayhave potential conflict with interest of the Company at large.
The observations made in the Auditors' Report read together with relevant notes thereonare self explanatory and hence do not call for any further comments under Section 134 ofthe Companies Act 2013. There are no qualifications reservations or adverse remarks.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thereport.
As the Company being a NBFC registered with Reserve Bank of India has not been able tocomply with the RBI norms in regard to maintenance of % of revenue from financial servicesto total revenue and % of financial assets to total assets it has been decided in theBoard Meeting held on 26 May 2016 to seek the advice of RBI whether the Company cansurrender the Certificate of RBI as a NBFC temporarily till such time the Company is ableto increase its financial services business and be in a position to conform to the RBInorms. Once this certificate is surrendered your Company will not be permitted to carryon any NBFC business and its activities will be limited to providing travel services onlywhich will have a bearing on the Company's Income.
FOREIGN EXCHANGE EARNINGS AND OUT-GOCONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION
A. During the year there were no Foreign Exchange Earnings & Outflow.
B. Conservation of Energy & Technology absorption. These guidelines are notapplicable to this Company.
The Company does not have any subsidiary or any associate Company. Hence no report onsubsidiary associate joint venture Company is provided.
RISK MANAGEMENT POLICY
The Company has developed a risk management policy. Pursuant to Section 134 (3) (n) ofthe Companies Act 2013 details of the Policy are disclosed in the Company's Website.
At present the Company has not identified any element of risk which may threaten theexistence of the Company. In this context report against heading 'Material Changes andCommitments' given above may be referred to.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mrs Visalakshi Periasamy (DIN 00064517) retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers herself for reappointment.
SIGNIFICANT AND MATERIAL ORDERS
There were no significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations in future.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the assignment order. To maintain its objectivity and independence theInternal Auditor reports to the Chairman of the Audit Committee of the Board & to theChairman.
The Internal Audit monitors and evaluates the efficacy and adequacy of internal controlsystem in the Company its compliance with operating systems accounting procedures andpolicies. Based on the report of internal auditor management undertake corrective actionand thereby strengthen the controls. Significant audit observations wherever made andrecommendations along with corrective actions thereon are presented to the Audit Committeeof the Board.
The Company does not hold any public deposits as on 31st March 2016. Your Company hasnot accepted any deposits covered under Chapter V of the Companies Act 2013 and theCompanies (Acceptance of Deposits) Rules 2014.
The Company has stopped collecting public deposits and has got its Licence amended byReserve Bank of India accordingly. Your Company does not propose to collect publicdeposits in the coming year.
DECLARATION BY INDEPENDENT DIRECTOR
The Independent Directors have given their declarations as per Section 149 (6) to theeffect that they meet the criteria of Independence. The 3 Independent Directors wereappointed as Independent Directors in the Annual General Meeting 25th September 2014 andwill hold office for 5 years from 25.09.2014 to 24.09.2019.
Pursuant to provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr M Damodaran and Associates Company Secretaries in practice to undertake theSecretarial Audit of the Company. Their Audit report as on 31.03.2016 is annexed herewithas "Annexure III. There were no qualifications or observations requiring Boardcomments.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Your Company does not fall within the parameters as per section 135 of the CompaniesAct and hence not mandated to form Corporate Social Responsibility Policy or to spend theprescribed amounts.
A qualified Audit Committee is in position consisting of the following independentdirectors.
Mr M Ganapathy Chairman
Mr R. K Viswanathan and
Dr S Muthu
The Company Secretary is the Secretary to this Committee. The Audit Committee met 4times on 27.05.2015 13.08.2015 12.11.2015 and 11.02.2016. There was no instance wherethe recommendation of the Audit Committee was not accepted by the Board.
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anevaluation of its own performance the directors individually as well as the evaluation ofthe working of its Audit Nomination & Remuneration Committees. The manner in whichthe evaluation is carried out is based on criteria approved by the Board and is alreadyavailable on the Company's Website.
NOMINATION AND REMUNERATION COMMITTEE
As required by Section 178 of the Companies Act 2013 a Nomination & RemunerationCommittee has been set up. Mr M Ganapathy Mr R K Viswanathan and Dr S Muthu with Mr. M.Ganapathy as the Chairman are the members of this Committee. All the three are independentdirectors. The Committee has formulated the criteria for appointment of Directors andtheir Remuneration.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is available in the Website.
VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES
A competent Vigil mechanism has been established and a whistle blower policy has beendesigned to help Directors and Employees to report genuine concerns. The completemechanism is given in the company's website.
This requirement is not applicable to this Company at present as per Regulation 15(2)of the Listing Obligations and Disclosure Requirements its paid up capital being lessthan Rs. 10 crores and Net worth being less than Rs.25 crores.
Management discussion and analysis is part of the Board's report.
Related Party disclosures are available in Notes 20.7 to the accounts
|MANAGERIAL REMUNERATION || |
|A Details of the ratio of the remuneration of each director to the median employee's remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. (Applicable to listed Company) ||Annexure (IV) - enclosed |
|B Details of the every employee of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 ||There are no employees falling within the requirements of Section 197 read with rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. |
|C Any director who is in receipt of any commission from the company and who is a Managing Director or Whole-time Director of the Company shall receive any remuneration or commission from any Holding Company or Subsidiary Company of such Company subject to its disclosure by the Company in the Board's Report. ||NIL |
D The following disclosures shall be mentioned in the Board of Director's report underthe heading "Corporate Governance" if any attached to the financial statement:as per Schedule V Part II Section II of the Companies Act2013
| || ||In Rupees |
|(i) all elements of remuneration package such as salary benefits bonuses ||Salary ||1268750.00 |
|stock options pension etc. of all the directors; ||Perquisites || |
| ||HRA ||90000.00 |
| ||Provident Fund @ 12% ||151200.00 |
| ||Superannuation @ 15% ||189000.00 |
| ||Gratuity ||14391.00 |
|(ii) details of fixed component and performance linked incentives along with the performance criteria; ||NA || |
|(iii) service contracts notice period severance fees; ||5 years 3 months Nil || |
|(iv) stock option details if any and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable. ||Nil || |
As the profits of the Company for the year were inadequate remuneration within theprescribed limits as given in D (i) above has been proposed to be paid to the ManagingDirector. The same amount as was paid in the last year is proposed to be paid for the year2015-16 Approval of the Shareholders in accordance with Schedule V Part II Section II ofthe Companies Act 2013 for making this payment for a period of 3 years has been obtainedthrough a special resolution in the Annual General Meeting held on 25 September 2015. Thisis valid for the years 2014-15 2015-16 and 2016-17.
PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE
The Company has in place an Anti Sexual harassment policy in line with the requirementsof the 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 redresscomplaints received of sexual harassment. All employees are covered under this policy.Details have been displayed prominently in the work place and also in the Company'sWebsite.
No complaints were received during the year 2015-16.
M/s K. Ramkrish & Co. Chartered Accountants (Firm Regn. No. 1030125) Chennairetire as Statutory Auditors on the conclusion of this Annual General Meeting. They can becontinued for a further period of 2 years though they have completed the two terms of 5years each on 31.03.2014. They have conveyed their consent for re-appointment and havealso furnished the required declaration as required in Section 139 of the Act.Accordingly they were re-appointed for a period of 2 years from 01.04.2015 to 31.03.2017in the Annual General Meeting held on 25 September 2015. Ratification of their appointmentby the shareholders is sought for in this Annual General Meeting for their continuance asStatutory Auditor for the year 2016-17.
DIRECTOR'S RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for the year under review.
iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe 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 theCompany and that such internal financial controls are adequate and were operatingeffectively.
vi) The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.
The Members of the Management Committee are:
Dr Palani G Periasamy Mrs Visalakshi Periasamy and Mr K Kandasamy.
No meeting of this Committee was held during 2015-16.
STAKEHOLDER RELATIONSHIP COMMITTEE
The Stakeholders' Relationship Committee is in position to specifically look intoshareholders / investors complaints on transfer of shares non receipt of balance sheetnon- receipt of declared dividend etc. and also the action taken by the Company on thosematters. The Committee met on 27.05.2015. The members of the Stakeholders RelationsCommittee are Mr R K Viswanathan Independent Director(Chairman) and Mr K KandasamyManaging Director.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe Company.
The Code has been posted on the Company's website www.dharanifinance.in
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. All the Board Members and the Senior Management personnelhave confirmed compliance with the Code. All Management Staff were given appropriatetraining in this regard.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of disclosures & a Code of Conduct for Prevention ofInsider Trading with a view to regulate trading in securities by the Directors anddesignated employees of the Company. This has been disclosed in the Company's website. TheCode requires pre-clearance for dealing in the Company's shares and prohibits the purchaseor sale of Company shares by the Directors and the designated employees while inpossession 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 Directors and the designated employees have confirmed compliance with theCode.
Pursuant to Section 124 & 125 of the Companies Act 2013 dividend remaining unpaidor unclaimed for a period of 7 years will be transferred to the Investor Education andProtection Fund of the Central Government. Reminders are sent to the shareholders as perrecords every year for the unpaid dividends.
|Year ||% of Dividend ||Date of Declaration ||Amt in lakhs ||Due date for transfer to IEPF |
|2009-10 ||5 ||01.10.2010 ||488040.00 ||11.10.2017 |
|2010-11 ||5 ||20.10.2011 ||510276.50 ||30.10.2018 |
|2011-12 ||7 ||15.10.2012 ||760939.90 ||24.10.2019 |
The Company transferred the following amounts of unclaimed dividend to the IEPF of theCentral Government during this year
|Year ||% of Dividend ||Date of Declaration ||Amt in lakhs ||Transferred to IEPF on |
|2007-08 ||5 ||10.10.2008 ||448176.00 ||31.10.2015 |
MCA by notification GSR 352 (E) dated 10.05.2012 has stipulated publication of detailsof unclaimed/ unpaid dividend in the Company website and MCA website. Our company hasalready uploaded the requisite details that will get updated every year within 90 days ofAnnual General Meeting.
Your Directors place on record their appreciation of the services rendered by the Staffand Executives of your Company. Your Directors also thank the shareholders who havecontinued to repose their confidence in the Company and its management.
For and on behalf of the Board of Directors
| ||DR PALANI G PERIASAMY |
|Place : Chennai ||CHAIRMAN |
|Date : 26.05.2016 ||(DIN 00081002) |
Annexure to Boards Report
Annexure - II
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 arms length transactions under third provisothereto.
1. Details of contracts or arrangements or transactions not at arms length basis- NIL
|a Name(s) of the related party and nature of relationship ||Nil |
|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(s) 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 arrangements or transactions at arm's length basis
|a Name(s) of the related party and nature of relationship ||Section 2(76)(v) : Appu Hotels Ltd: Director holds more than 2% of the paid up Capital. |
|b Nature of contracts/arrangements / transactions ||Providing Travel Services cars for the guests of Appu Hotels Ltd |
|c Duration of the contracts / arrangements / transactions ||One year |
|d Salient terms of the contracts or arrangements or transactions including the value if any: ||Charges not exceeding prevailing market rates that will be charged by any other Travel Services providers upto a maximum of Rs. 4.00 crores Value Rs. 23474110/- during 2015-16 |
|e Date(s) of approval by the Board if any: ||27 May 2015 |
|f Amount paid as advances if any ||Nil |
| ||For DHARANI FINANCE LIMITED |
| ||DR PALANI G PERIASAMY |
|Place : Chennai ||CHAIRMAN |
|Date : 26.05.2016 ||(DIN 00081002) |
Board's Report Annexure - IV
Particulars pursuant to section 197(12) and Rule 5 of Companies (Appointment andRemuneration) rules 2014.
|(i) The ratio of the remuneration of each director to the median employees remuneration for the Financial year. ||Only Managing Director is paid remuneration. Other Directors are not paid any remuneration except sitting fees. Sitting fees paid to the Directors have not been considered as Remuneration. Ratio in respect of Managing Director is 9.61 |
(ii) The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the Financial year:
|Sl.No ||Name ||Designation ||% of Increase/decrease |
|1 ||Mr K Kandasamy ||Managing Director ||-6.38 ( No increase) |
|2 ||Mr N Subramanian ||Company Secretary ||-14.16 ( No increase) |
|3 ||Mr R Muralidharan ||Chief Financial Officer ||(Not comparable) as his services in the previous year was only 7 months against 12 months in the current year and salary was paid accordingly. Rule 5 of Companies (Appointment and Remuneration) rules 2014. |
|iii The percentage increase in the median remuneration of employees in the financial year: ||6.01% |
|iv The number of permanent employees on the rolls of company as on 31st March 2016 ||43 |
|v Average increase in remuneration & Company Performance. ||No increase in average Remuneration. |
(vi) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:
| ||Managerial Personnel ||Performance of the Company |
|2014-15 ||Rs.29.56 ||Profit before Tax ||Rs.21.05 |
|2015-16 ||Rs.31.45 ||Profit before Tax ||Rs.44.05 |
|Increase ||Rs.1.89 ||Increase ||Rs.23.00 |
|% of ||6.4% ||% of ||109.26% |
Increase in remuneration of Key Managerial personnel is 6.4% while the Companyperformance increased 109.26%
(vii) Variation in the market capitalization of the Company Price Earnings ratio as atthe closing date of the current Financial year and previous Financial year and percentageincrease or decrease in the market quotations of the shares of the Company in comparisonto the rate at which the company came out with the last public offer:
|Date ||Issued Capital Rs In Lakhs ||Closing Market price per share ||PE Ratio ||Market Capitalisation |
| || || || ||Rs In Lakhs |
|31.03.2015 ||499.00 ||4.50 ||14.52 ||224.75 |
|31.03.2016 ||499.00 ||5.16 ||7.94 ||257.71 |
|Issue price of the Share at the last Public Offer (IPO) || |
Last IPO was more than 20 years back.
Issued at par i.e. Rs.10/- per share
|Increase/Decrease in market price as on 31.03.2016 as compared to Issue Price of IPO ||- ||Decrease 4.84 ||- ||- |
|Increase/Decrease in % ||- ||-48.4% ||- ||- |
|viii Average percentile increase already made in the salaries of employees other than the managerial personnel in the last ||In the Current year salary for the CFO for the whole year i.e. 12 months has been taken into account while in the last year it was for 7 months only as he was appointed only from 1 September 2014. |
|Financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration ||Hence the apparent increase in remuneration of Managerial Personnel .There is no increase in the remuneration of Managing Director and Company Secretary. |
|xi The Key parameters for any variable component of remuneration availed by the Directors. ||Not Applicable. There are no variable components. |
|X The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year. ||Not Applicable |
|xi If remuneration is as per the remuneration policy of the Company ||Yes |
| ||For DHARANI FINANCE LIMITED |
| ||DR PALANI G PERIASAMY |
|Place : Chennai ||CHAIRMAN |
|Date : 26.05.2016 ||(DIN 00081002) |