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Naga Dhunseri Group Ltd.

BSE: 538369 Sector: Financials
NSE: NDGL ISIN Code: INE756C01015
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Naga Dhunseri Group Ltd. (NDGL) - Director Report

Company director report

We have pleasure in presenting the 99th Annual Report together with Audited FinancialStatements of Accounts of the Company for the year ended 31st March 2017.

1. Financial Results

Standalone For the year ended 31.03.2017 Standalone For the year ended 31.03.2016 Consolidated For the year ended 31.03.2017 Consolidated For the year ended 31.03.2016
Rs Lakhs Rs Lakhs Rs Lakhs Rs Lakhs
Profit before Depreciation & Taxation 1329.28 249.39 1329.28 249.39
Add / Less : Depreciation (17.56) (25.55) (17.56) (25.55)
Provision for Taxation (247.00) - (247.00) -
Deferred Tax Liability (Asset) (2.76) 1.30 (2.76) 1.30
Earlier Year Tax Adjustment - 1.31 - 1.31
Profit after Taxation 1061.96 226.45 1061.96 226.45
Share of Profit / (Loss) of Associates - - 7561.49 (2030.33)
Net Profit after Share of Profit / (Loss) of Associates 1061.96 226.45 8623.45 (1803.88)
Add : Balance brought forward from previous year 119.72 68.65 (1787.51) 191.75
Profit available for appropriation 1181.68 295.10 6835.94 (1612.13)
Appropriations
Proposed Dividend (Previous year f 2.50 per share) - 25.00 - 25.00
Dividend Tax on proposed dividend - 5.09 - 5.09
Transferred to NBFC Reserve Fund 212.39 45.29 212.39 45.29
Transferred to General Reserve 400.00 100.00 400.00 100.00
Balance carried to Balance Sheet 569.29 119.72 6223.55 (1787.51)
1181.68 295.10 6835.94 (1612.13)

2. Operations

The income of the Company during the year under review mainly comprised of profit onsale of investments in shares & securities dividend income and rental income. TheCompany’s profit increased substantially due to improved market conditions. Theprofit after tax during the year was Rs 1061.96 Lakhs compared to Rs 226.45 Lakhs duringthe previous year.

3. Dividend

Your Directors are pleased to recommend a dividend @ Rs 2.50 per equity share (25%) forthe financial year ended 31st March 2017 subject to shareholders approval at the ensuingAnnual General Meeting to be held on 8th August 2017. The total outgo on account ofdividend inclusive of taxes for 2016-17 is Rs 30.09 Lakhs.

4. NBFC Reserve Fund

The Company proposes to transfer Rs 212.39 Lakhs to NBFC Reserve Fund out of the amountavailable for appropriation.

5. General Reserve

The Company proposes to transfer ^ 400 lakhs to General Reserve out of the amountavailable for appropriation.

6. Associate and Subsidiary Company

Pursuant to Section 2(6) of the Companies Act 2013 the Company has an AssociateCompany as on 31.03.2017 i.e. Dhunseri Investments Limited and does not have anySubsidiary Company as on 31st March 2017. Pursuant to Provisions of Section 129(3) of theAct a statement in Form AOC-1 containing the salient features of the financialstatements of the Company’s Associate is attached with the financial statement of theCompany.

7. NBFC Public Deposits Directions

The Company neither invited nor accepted any deposit from the public during thefinancial year 2016-17. The Company does not intend to invite or accept any public depositduring the financial year 2017-18. No amount on account of principal or interest ondeposit from public was outstanding as on the date of balance sheet.

8. Listing of shares with Stock Exchange

The equity shares of the Company are listed on the Calcutta Stock Exchange and also onthe National Stock Exchange of India Ltd. (w.e.f. 29th August 2016). The Company’sshares are compulsorily traded in dematerialized form.

9. Delisting with Calcutta Stock Exchange (CSE)

The equity shares of the Company are presently listed on the Calcutta Stock ExchangeLimited (CSE) and the National Stock Exchange of India Ltd. (NSE). There is no trading onCSE for last several years thus no advantage to the Company or the shareholders isavailable for continued listing on CSE. Moreover the Company has to incur considerablecost toward listing fee and other compliances with CSE. Further NSE is having nationwidetrading terminal and the shares of the Company are actively traded on NSE. Thusconsidering the interest of the Company and no benefits available to the shareholders theBoard at its meeting held on May 30 2017 has approved the Voluntary Delisting of theequity shares of the Company from the CSE in accordance with Regulation 6(a) read withRegulation 7 of the Delisting Regulations. After delisting from CSE the equity shares ofthe Company shall continue to be listed on the NSE. Further as per the provisions ofRegulation 6(a) of the Delisting Regulations no exit opportunity needs to be given to thepublic shareholders.

10. Directors’ Responsibility Statement

Pursuant to Section 134(3) (c) read with Section 134(5) of the CompaniesAct 2013 the Directors of your Company confirm that -

(a) In the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed with no material departures;

(b) They have selected such Accounting Policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period.

(c) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) They have prepared the annual accounts on a going concern basis;

(e) They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and

(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

With reference to the work performed by the Internal Auditor Statutory Auditor andSecretarial Auditor and the reviews performed by the Management and the Audit Committeethe Board is of the opinion that the Company’s Internal Financial Controls wereadequate and effective during the financial year 2016-17.

11. Directors & Key Managerial Personnel Directors

Mrs. Aruna Dhanuka retires by rotation at the ensuing Annual General Meeting and beingeligible offers herself for reappointment.

Key Managerial Personnel

Mr. H. P. Bhuwania retired from the post of Chief Financial Officer of the Companyw.e.f. 01.10.2016 and Mr. Ayush Beriwala was appointed in his place w.e.f 03.11.2016.

Mrs. Aruna Dhanuka resigned from the post of Managing Director w.e.f. 9th February2017. However she continues as director of the Company.

Mr. H. P. Bhuwania was appointed as Chief Executive Officer w.e.f. 10th February 2017.

Mr. A. K. Sarkar retired from the post of Company Secretary and Ms. Shilpa Agarwal wasappointed in his place w.e.f. 1st March 2017.

12. Number of Meetings of the Board

The Board met four times during the financial year 2016-17. The details have beenprovided in the Corporate Governance Report in terms of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015.

13. Board Evaluation

An annual evaluation of the performances of the Board its committees and individualdirectors was undertaken during the year and has been disclosed in the CorporateGovernance Report.

14. Declaration by Independent Directors

The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he meets the criteria of independence laiddown in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

15. Policy on directors’ appointment and remuneration and other details

The Company’s policy on directors’ appointment and remuneration and othermatters as required under Section 178(3) of the Act has been disclosed in the CorporateGovernance Report.

16. Internal Financial Control System and their adequacy

The details in respect of Internal Financial Control and their adequacy are included inthe Management Discussion & Analysis which forms part of the Corporate GovernanceReport.

17. Audit Committee

The details pertaining to composition of Audit Committee and its meetings are includedin the Corporate Governance Report.

18. Auditors

M/s. S. S. Kothari & Co. Chartered Accountants the Statutory Auditors of theCompany who were appointed for a period of 3 years at the 96th Annual General Meeting(AGM) held on 4th September 2014 will retire on the conclusion of this 99th AGM of theCompany.

The Board proposes to appoint M/s. Dhandhania & Associates Chartered Accountants(FRN : 316052E) as the Statutory Auditor of the Company for a period of 5 years to holdoffice from the conclusion of 99th AGM till the conclusion of 104th AGM of the Companysubject to ratification of appointment by the Members at every AGM held after this AGM.

19. Auditors’ Report and Secretarial Auditors’ Report

The Auditors' Report and Secretarial Auditors’ report are self-explanatory anddoes not contain any qualifications reservations or adverse remarks and have been annexedto the report.

20. Risk Management

The details of the Risk Management Committee have been provided in the CorporateGovernance Report.

21. Particulars of loans guarantees and investments

The particulars of loans guarantees and investments have been disclosed in thefinancial statements.

22. Transactions with Related Parties

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm’slength basis. During the year the Company had not entered into any contract / arrangement/ transaction with related parties which could be considered material in accordance withthe policy of the Company on materiality of related party transactions.

Your Directors draw attention of the members to Note 26 to the financial statementwhich sets out related party disclosures.

23. Management’s Discussion and Analysis Report

Management’s Discussion and Analysis Report for the year under review asstipulated under SEBI (LODR) Regulations 2015 is provided in the Corporate GovernanceReport.

24. Extract of the Annual Return

As required under section 92(3) of the Companies Act 2013 an extract of the AnnualReturn is given in Annexure I in the prescribed Form No. MGT - 9 which forms part of thisReport.

25. Corporate Social Responsibility

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiative undertaken by the Company on the CSR activities during the year are setout in Annexure II of this report in the format prescribed in the Companies (CorporateSocial Responsibility Policy) Rules 2014. The policy is also available on theCompany’s website : www.nagadhunserigroup.com.

26. Particulars of Employees

The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow :

a. Ratio of Remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2016-2017.

SI. No. Name of Director Remuneration (^) Median Remuneration Ratio
(Rs/in Lakhs)
1. Mrs. Aruna Dhanuka 4523605/- 3.08 Lakhs 14.69
2. Mr. C. K. Dhanuka 29000/- 3.08 Lakhs 0.09
3. Mr. Mrigank Dhanuka 25000/- 3.08 Lakhs 0.08
4. Mr. Rajeev Rungta 36500/- 3.08 Lakhs 0.12
5. Mr. I. K. Kejriwal 40500/- 3.08 Lakhs 0.13
6. Mr. G. R. Goenka 36500/- 3.08 Lakhs 0.12

b. Percentage Increase of Remuneration of each Director Chief Executive OfficerChief Financial Officer and Company Secretary in the financial year:

SI. No. Name and Designation % of Increase
1. Mr. C. K. Dhanuka - Chairman No Change
2. Mrs. Aruna Dhanuka - Managing Director upto 09.02.2017 53.86%
3. Mr. Mrigank Dhanuka - Director No Change
4. Mr. Rajeev Rungta - Director No Change
5. Mr. I. K. Kejriwal - Director No Change
6. Mr. G. R. Goenka - Director No Change
7. Mr. H. P. Bhuwania-CFO (retired on 01.10.2016) No Change
8. Mr. Ayush Beriwala - CFO (appointed on 03.11.2016) No Change
9. Mr. H. P. Bhuwania-CEO (appointed on 10.02.2017) No Change
10. Mr. A. K. Sarkar - CS (retired on 01.03.2017) 20.00%
11. Ms. Shilpa Agarwal - CS (appointed on 01.03.2017) No Change

c. The percentage increase in the median remuneration of the employees in thefinancial year: 17.11

d. No of employees on the rolls of the Company as on 31.03.2017 :10 (Ten)

e. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the financial year 2016-17 was 10.93% and in the case ofmanagerial remuneration the increase was 53.86%. The remuneration payable to ManagingDirector has variable component which is dependent on the profit of the Company and otheremployees remuneration has fixed pay which depends on his / her performance.

f. The Company affirms remuneration is as per remuneration policy of the Company.

g. The statement containing particulars of employees as required under Section 197of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

i) Statement of Particulars of Top 10 Employees

Sr. No. Name of Employee Age Qualification Designation Date of Joinig Experience (in years) Remuneration (Rs Rs.)
1. Mrs. Aruna Dhanuka* 58 Graduate Managing Director 31.10.2005 12 4523605
2. Mr. Hari Prasad Bhuwania** 79 Graduate CFO 13.08.2014 50 1506683
3. Mr. Ashit Kumar 82 Graduate CS 01.11.2014 50 647116
Sarkar# CA CS
4. Mr. Ayush Beriwala 35 Graduate CA CFO 03.11.2016 10 499897
5. Mr. Swapan Kumar Das 62 Graduate Accounts Executive 01.11.1979 37 388496
6. Mr. Sumanjit Das 47 Graduate Accounts Executive 18.04.1994 23 364220
7. Mr. Supriyo Bose## 65 Graduate Accounts Executive 06.08.1979 37 341627
8. Mr. Deepak Verma 28 Graduate Accounts Executive 27.07.2015 5 315833
9. Mr. K. Venugopal Nair 56 Graduate Accounts Executive 01.04.2007 31 300800
10. Mr. Samir Kumar Mitra### 63 Graduate Accounts Executive 02.11.1974 42 239200

* Resigned as Managing Director w.e.f. 09.02.2017.

** Retired w.e.f. 01.10.2016.

# Retired w.e.f. 01.03.2017.

## Retired w.e.f. 01.01.2017.

### Retired w.e.f. 01.11.2016.

ii) Employed throughout the Financial Year 2016-17 and drawing a remuneration inaggregate not Less Than One Crore Two Lakh Rupees per annum : NIL

iii) Employed for a part of the Financial Year 2016-17 and drawing a remuneration inaggregate not Less Than Eight Lakh Fifty Thousand Rupees per month : NIL

27. Disclosure requirements

The Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 mandate the formulation of certain policies for alllisted companies. All policies are available on the Company’s website www.nagadhunserigroup.com. The CorporateGovernance Report with Auditors’ Certificate thereon and Management Discussion andAnalysis Report are attached which form part of this report.

The key policies that have been adopted by the Company are as follows :

Details of the familiarization program of the independent directors are available onthe website of the Company http://www.nagadhunserigroup.com/downloads/programme-independent-directors.pdf.

Policy for determining material subsidiaries of the Company is available on the websiteof the Company http:// www.nagadhunserigroup.com/downloads/naga-policy-for-determining-material-subsidiary.pdf.

Policy on dealing with related party transactions is available on the website of theCompany http:// www.nagadhunserigroup.com/downloads/naga-related-party-transaction-policy.pdf.

The Company has formulated and published a Whistle Blower Policy to provide VigilMechanism for employees including directors of the Company to report genuine concerns.There has been no change to the whistle blower policy adopted by the Company during theyear 2017 and the said policy is available on the website of the Company http://www.nagadhunserigroup.com/downloads/naga-vigil-mechanism.pdf.

The Company has formulated the Corporate Social Responsibility Policy and the same isavailable on the

website of the Company http://www.nagadhunserigroup.com/downloads/CSR-Policy.pdf

The Company has formulated a policy related to disclosure of material events affectingthe Company i.e. Policy on

Materiality and the same is available on the website of the Company http://www.nagadhunserigroup.com/downloads/

determination-of-materiality-of-an-event-or-information-for-disclosure-to-stock-exchanges-policy.pdf

The policy which deals with the retention and archival of corporate records of theCompany is also available on

the website of the Company http://www.nagadhunserigroup.com/downloads/archival-policy.pdf

The Company has formulated the policy on preservation of documents and the same isavailable in the website

of the Company http://www.nagadhunserigroup.com/downloads/policy-on%20-peservation-of-documents.pdf

28. State of Company’s affairs

The Company’s main business is investments in shares and securities. TheManagement regularly monitor the changing market conditions and trends. Further anyslowdown of the economic growth or volatility in global financial market could adverselyaffect the Company’s business.

29. Material changes and commitments if any affecting the financial position of theCompany

There are no such material changes and commitments which have occurred between the endof the financial year of the Company to which the financial statements relate and the dateof this report.

30. Details of significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and the Company’s operations in future.

No significant and material orders were passed by any regulator or court or tribunalsimpacting the going concern status and affecting the company’s operation in future.

31. Particulars of Conservation of Energy and Technology absorption

The particulars in respect of conservation of energy and technology absorption are notapplicable to the Company. Foreign Exchange Earnings and outgo.

During the year under review there was no foreign exchange earnings and the outflow wasRs 8 lakhs.

32. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013

The Company has set up Internal Complaint Committee (ICC) under Sexual Harassment ofwomen at workplace (Prevention Prohibition and Redressal) Act 2013 along with itsrelevant Rules.

The Committee met once during the year on 3rd February 2017.

No complaints have been received by the Company during the F.Y. 2016-17.

33. Transfer of shares to Investor Education Protection Fund

The Company had issued notices to respective shareholders regarding proposed transferof equity shares to Investor Education and Protection Fund (IEPF) (in respect of whichdividend has been unclaimed / unpaid for seven consecutive years or more) pursuant to theprovisions of Section 124(6) of the Companies Act 2013 read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016. Thedetails of the shareholders who have not claimed dividend for the last 7 consecutive yearsare available on the Company’s website at www.nagadhunserigoup.com.The Company has also published notice in newspapers in this regard.

The members who have not encashed the dividend warrant(s) for the year(s) 2009-2010onwards are requested to submit their claim to the Company.

Please note that no claim shall lie against the Company in respect of the shares sotransferred to the IEPF.

The shares transferred to the IEPF can be claimed back by the concerned members fromIEPF Authority after complying with the procedure prescribed under the IEPF Rules.

34. Green Initiatives

As part of our green initiative the electronic copies of this Annual Report includingthe Notice of the 99th AGM are sent to all members whose email addresses are registeredwith the Company / Depository Participant(s). For members who have not registered theiremail addresses physical copies of this Annual Report including the Notice of the 99thAGM are sent by permitted mode.

The Company is providing e-voting facility to all its members to enable them to casttheir votes electronically on all resolutions set forth in the Notice. This is pursuant toSection 108 of the Companies Act 2013 and Rule 20 of the Companies(Management and Administration) Rules 2014. The instructions for e-voting isprovided in note 10 annexed to the Notice.

35. Acknowledgement

The Board of Directors take this opportunity to express their grateful appreciation forthe excellent assistance and cooperation received from the banks and other authorities.The Board of Directors also thank the employees of the Company for their valuable serviceand support during the year. The Board of Directors also gratefully acknowledge withthanks the cooperation and support received from the shareholders of the Company.

For & on behalf of the Board of Directors
Place : Kolkata C. K. DHANUKA
Dated The 30th day of May 2017 Chairman