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Dhanada Corporation Ltd.

BSE: 531198 Sector: Services
NSE: N.A. ISIN Code: INE041F01015
BSE 14:19 | 26 May 3.61 -0.18
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NSE 05:30 | 01 Jan Dhanada Corporation Ltd
OPEN 3.90
PREVIOUS CLOSE 3.79
VOLUME 3
52-Week high 8.41
52-Week low 3.50
P/E
Mkt Cap.(Rs cr) 20
Buy Price 3.61
Buy Qty 127.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3.90
CLOSE 3.79
VOLUME 3
52-Week high 8.41
52-Week low 3.50
P/E
Mkt Cap.(Rs cr) 20
Buy Price 3.61
Buy Qty 127.00
Sell Price 0.00
Sell Qty 0.00

Dhanada Corporation Ltd. (DHANADACORP) - Director Report

Company director report

To

The Members

DHANADA CORPORATION LIMITED

The Board of Directors of your Company has pleasure in presenting the35th Annual Report of the Company together with the Audited statements ofaccounts for the year ended on 31st March 2021.

1. Financial summary or highlights / performance of the Company:

Your Company's financial summary / performance during the year underreview as compared to the previous year are summarized below:

(Rs. in Crores)
Particulars 2020 - 21 2019 - 20
Turnover 2.94 9.28
Profit / (Loss) before Finance charges Tax Depreciation / Amortization (1.10) 0.97
Finance Charges 4.10 3.54
Profit / (Loss) before Tax Depreciation / Amortization (5.21) (2.57)
Depreciation 0.70 0.76
Profit / (Loss) before Tax (5.91) (3.33)
Provision for Tax Nil Nil
Profit / (Loss) after Tax (5.91) (3.33)
Proposed Dividend Nil Nil

2. Dividend:

In view of the losses the Board of Directors does not recommend anydividend for the year ended on 31st March 2021.

3. Reserves:

No amount is proposed to be transferred to the Reserves.

4. State of Affairs (Standalone):

As per the Orders passed by Additional Sessions Judge Aurangabad dated05.02.2019 24.05.2019 and 24.10.2019 the office of the Sub Divisional Officer andCompetent Authority (MPID Act) Aurangabad after attaching VITS Hotel had taken itspossession and continued the supervision of the Hotel premises and management of day today affairs of the said hotel operations.

In the last week of March 2020 (23rd March 2020) there waslockdown announced due to COVID-19 pandemic. The guests' bookings were cancelled and nofresh bookings were taken till 31st July 2020. Subsequently as per the orderof SDO dated 05.05.2020 the hotel was announced as COVID Centre for the stay of doctors /medical officers till February 2021. Accordingly during the year under review theturnover of the Company in respect of accommodation and food & beverages hassubstantially gone down as compared to the previous year.

The operating margins were under pressure due to fix operating costsespecially power and employee benefit cost. As a result the Company could not registerprofit.

Finance

The shortage of finance continues to be the major challenge before theCompany. The parent company was not able to extend its helping hand due to its ownproblems.

Due to the NPA status all the sources of raising further finance areblocked. The Promoters are doing whatever is possible in their individual capacity toremedy the situation.

The Company somehow managed its working capital needs through internalresources. Current Year Prospects

The lockdown has had an unfortunate impact on the hospitality sectorwhere the occupancy levels have taken a major hit and are at an alarming all-time lowresulting in some hotel having to either shut operations or run with very limitedfacilities. Almost 53% of the total leading hotel operators have shut down more than 80%of their inventory during the nation-wide lockdown period. The COVID-19 pandemic hasbrought the world to a standstill with the hospitality travel and tourism sector beingthe most affected due to travel restrictions across the world and within India.

Being one of the high contact sectors hospitality has been one of thefirst and worst-hit sectors due to the pandemic and the second wave has only added totheir woes as it has come at a time when the industry was on its path to recovery.Majority of hotel operators expect that it will take 13 to 24 months for their hotels toreturn to revenue per available room (RevPAR) levels of last year. Luxury hotel operatorsare expected to ramp up much slower with some expecting that their portfolio may take morethan 2 years to reach 2019 performance levels the survey said. However with the slowdownof hotel developments capital assistance is needed to help hotels to sustain until demandreturns.

The tourism and hospitality sectors were first to be affected byCOVID-19 and probable will be the last to come out of this.

The chances of improvement in financial situation during the year lookdim.

5. Change(s) in the nature of business if any:

There is no change in the nature of business of the Company.

6. Material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report:

Nil. No such material changes and commitments have occurred.

7. Details of significant and material orders passed by the regulators/ courts / tribunals impacting the going concern status and the Company's operations infuture:

The Court of District and Session Judge Aurangabad had passed an orderfor attachment and sale of the property / assets of the Company under MaharashtraProtection of Interest of Depositors (In Financial Establishment) Act 1999 (MPID Act).

The Company had filed Petitions for Special Leave to Appeal in SupremeCourt of India Delhi against the order passed by the Aurangabad High Court and theHon'ble High Court Mumbai for attachment and sale of the property / assets of the Companyunder MPID Act to challenge the said orders. The Petitions were called on for hearing on30th November 2018. Upon hearing the Hon'ble Court passed the order ofdismissal of the Special Leave Petitions.

Accordingly the office of the Sub Divisional Officer and CompetentAuthority (MPID Act) Aurangabad had taken possession of the Hotel premises and attached /debit - freeze the bank accounts of the Company and had put the property / commercialbuilding of the Company i.e. Hotel Vits CTS No. 18349/1-2-3 Vedant Nagar Near GoldyCinema Railway Station Road Aurangabad for e-Auction in the months of February and March2019. However the said e-Auction is not yet taken place.

As per the Orders passed by Additional Sessions Judge Aurangabad dated05.02.2019 24.05.2019 and 24.10.2019 the Competent Authority (MPID Act) Aurangabadafter attaching VITS Hotel continued the supervision of the Hotel premises and managementof day-to-day affairs of the said hotel operations. The Competent Authority has formed acommittee for the supervision of the Hotel premises through the staff of the Hotel. TheCompetent Authority has opened a separate bank account to manage the day-to-day financialoperations of the Company.

Further the Court has directed the Competent Authority to deposit theamount lying in its bank account in the Court and to deposit the income of the VITS Hotelin the Court every fortnight along with the account statements and to make payments to theapplicants of the case out of the amount deposited in Court. Accordingly the CompetentAuthority has deposited / transferred certain amount to the account head 'AdditionalSession Judge Aurangabad'. The Company has not received any intimation from the courtauthority till date about any payments made under MPID Act to the applicants. The Companyhas been running the hotel under an arrangement with Vitizen Hotels Ltd. (VHL) to whommanagement and other charges are payable. The Sessions Court Aurangabad under theongoing MPID case vide its further Order dated 17th March 2021 had appointedan independent auditor to examine the books of the Company. The Court ordered VHL todeposit an amount of Rs. 41.00 lakhs with the Competent Authority. Against this VHL hasdeposited an amount of Rs. 32.52 lakhs which has been included in amount with 'AdditionalSession Judge Aurangabad' Further the VHL is directed to deposit a certain amount on orbefore 10th of every month w.e.f. April 2021 till further order. The Court alsoordered Competent Authority to initiate the process of auction sale of attached propertywithin a period of 6 weeks from the order date on the price reserved earlier. However theauction is not yet concluded.

8. Statement in respect of adequacy of internal financial controls withreference to the Financial Statements:

Internal Financial controls are adequate and operating effectivelycommensurate with the size nature of operations of the Company.

The separate report of the Auditors about the existence of internalfinancial controls system and its operations is attached to the Auditor's Report as anAnnexure A to the Auditor's Report.

Explanation to Auditor's comment on Internal Financial Controls:

The management has noted the discrepancies pointed out by the Auditorand is taking steps to strengthen the controls in those areas.

9. Details of Subsidiary / Associate Companies / Joint Ventures:

Nil. The Company has no Subsidiary / Associate / Joint Venture.

10. Performance and financial position of each of the subsidiariesincluded in the consolidated financial statement:

Not Applicable.

11. Particulars of loans / advances / guarantees / investmentsoutstanding during the financial year:

The particulars of loans / advances / guarantees / investments coveredunder Sections 185 and 186 of the Companies Act 2013 and as per SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 are given in the notes to the financialstatements provided in the Annual Report.

12. Deposits:

The Company has not accepted deposits from the public within themeaning of Section 73 of the Companies Act 2013 and the rules framed there under. TheCompany has not taken any loans or advance from directors during the year.

13. Auditors:

Statutory Auditors

M/s. Shashank Patki & Associates Firm of Chartered AccountantsPune having Firm Registration No. 122054W were appointed as Statutory Auditors of theCompany in the 30th Annual General Meeting held on 30th September2016 to hold office upto the conclusion of 35th Annual General Meeting.

Pursuant to the provisions of Section 139 of the Companies Act 2013read with the rules made thereunder a listed entity can appoint an Audit Firm asStatutory Auditors for two terms of 5 (Five) consecutive years. However the same AuditFirm shall not be reappointed after completion of both terms. The first term of M/s.Shashank Patki &

Associates would be completed at the conclusion of the ensuing AnnualGeneral Meeting.

Based on the recommendation of Audit Committee the Board of Directorsfurther recommended to re-appoint the aforesaid Audit Firm as Statutory Auditors of theCompany for another term of 5 (Five) consecutive years i.e. upto the conclusion of 40thAnnual General Meeting subject to the compliance of applicable provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The Company has received Consent letter and Eligibility Certificatefrom the said Audit Firm in terms of the provisions of Section 141 of the Companies Act2013 and Rule 4 of Companies (Audit and Auditors) Rules 2014.

Secretarial Auditor

Ms. Sanjana Hinge Practicing Company Secretary was appointed toconduct the secretarial audit of the Company for the financial year 2020 - 2021 asrequired under Section 204 of the Companies Act 2013 and rules made there under. TheSecretarial Audit Report for the financial year 2020 - 2021 in Form MR-3 is attached asAnnexure 1 to the Directors' Report.

14. Explanations or comments on qualification reservation or adverseremark or disclaimer in Auditor's Report:

The Audit Report contains certain observations and we offer ourcomments in this regard as under:

a. Auditors Comment: As mentioned in note no. l of Note - 22 B theaccounts have been compiled on the basis of the records and documents available with theCompany due to seizure of records and documents by various authorities on variousoccasions. The impact on accounts (financial as well as disclosure) due to suchnon-availability of the records is not ascertainable.

There will be no significant impact on accounts (financial as well asdisclosure) of the Company.

b. Auditors Comment: During last year in the last week of March 2020(23rd March 2020) there was lockdown announced due to Covid-19. Further vide the order ofSDO dated 05.05.2020 the hotel has been declared as a Covid centre for the stay ofdoctors as per the order of session judge. The hotel was occupied for the doctors staytill February 2021.This created an impact on the operations of the concern; financialimplication of the same is not ascertainable.

There will be no significant impact on accounts (financial as well asdisclosure) of the Company.

c. Auditors Comment: As mentioned hereinabove a lockdown was announcedw.e.f. 23rd March 2020 throughout the State of Maharashtra and the same wasreimposed again in April 2021. Due to the restriction on inter-district movements wecould not visit the Place of business at Aurangabad. We have carried out our audit on thebasis of the accounts maintained in the system and scanned copies of various records anddocuments submitted to us. As far as the bills vouchers and documents pertaining to thebusiness place at Aurangabad are concerned we have been constrained to keep reliance onthe internal audit reports and stock verification reports submitted by an independent firmof Chartered Accountants appointed as Internal Auditors of the Company. Our audit andcertification is subject to the non-availability of these records also.

The Auditors remarks are self-explanatory.

d. Auditors Comment: As mentioned in foot note no. 1 of Note no. 1 andfoot note no. 2 of Note no. 8 pending conveyance of land at Nande pending payment ofstamp duty applicable to scheme of arrangement & amalgamation sanctioned by Hon'bleBombay High Court vide their judgment dated 16th July 2009 and pending legalformalities of allotment of shares (the subject matter of the aforesaid scheme)accounting has been done of Fixed Assets (Land) of Rs. 15965999.74 Issued Subscribedand Paid up Share Capital of Rs. 1796254.00 Share Premium of Rs. 10669748.76 andCurrent Liabilities (Amount payable to Dr. Laxman V. Kulkarni) of Rs. 3499996.98.Pending completion of all legal formalities the respective amounts on the aforesaidaccounts are overstated to that extent.

The Company has acquired land at Nande from Dr. Laxman V. Kulkarnipursuant to the Scheme of Amalgamation approved by the High Court. As per the Scheme theCompany was required to allot 1796254 Equity Shares and pay Rs. 3499996.98additionally as a consideration for the said land to Dr. Kulkarni by executing separateConveyance Deed. However the management was advised that the allotment is required to bemade before the execution of the Conveyance Deed. Accordingly in good faith the Boardallotted the necessary shares to Dr. Kulkarni and prepared the deed for registration.However Dr. Kulkarni expressed his desire for upward revision of the totalconsideration as the prices of the land have gone up considerably since 01.04.2008 i.e.the appointed date and the market price of the equity shares of the Company have notappreciated in line with the same. Due to this the conveyance deed with Dr. Laxman V.Kulkarni is not yet done. The management is exploring ways and means to sort out the issueand hopes that the same will be resolved amicably. However until the financialdifficulties are resolved a solution to this issue appears remote. After settlement ofthe issue and completion of all legal formalities the aforesaid amounts accounted forunder Fixed Assets Share Capital Share Premium will stand confirmed.

e. Auditors Comment: In the absence of the records the nature ofCapital Work in Progress (pending since long) as mentioned in foot note no. 3 of Note no.1 could not be ascertained. As such the probable accounting thereof capital or revenueis pending. Further the impairment of Assets (including Capital Work in Progress) ifany as per the requirements of Ind AS 36 has not been ascertained and as such theconsequent financial impact on accounts is not ascertainable.

The management believes that there will be no significant impact onaccounts (financial as well as disclosure) of the Company. Till the underlying asset isput to use the amount will stay under Capital work in progress.

f. Auditors Comment: Details and supporting documents of the amount ofRs. 39100000/- paid as Advance to Dr. Laxman V. Kulkarni (Foot note 2 of Note no. 4)are not available with the Company. As such we are unable to express our opinion on thegenuineness of the payment recoverability thereof and correctness of the accountingtreatment. Financial impact on accounts is not ascertainable.

The Company has acquired land at Nande from Dr. Laxman V. Kulkarnipursuant to the Scheme of Amalgamation approved by the High Court. As per the Scheme theCompany was required to allot 1796254 Equity Shares and pay Rs. 3499996.98additionally as a consideration for the said land to Dr. Kulkarni by executing separateConveyance Deed. However Dr. Kulkarni expressed his desire for upward revision of thetotal consideration as the prices of the land have gone up considerably since 01.04.2008i.e. the appointed date and the market price of the equity shares of the Company have notappreciated in line with the same. The Company has paid Rs.39100000/- to Dr. Kulkarnias Advance against the said land. However due to financial difficulties the Company isnot able to pay the balance amount as desired by Dr. Kulkarni. Due to this the conveyancedeed with Dr. Laxman V. Kulkarni is not yet done. The management is exploring ways andmeans to sort out the issue and hopes that the same will be resolved amicably. Howeveruntil the financial difficulties are resolved a solution to this issue appears remote.After settlement of the issue the amount of Rs. 39100000/- will be added to the FixedAssets under Land.

g. Auditors Comment: As mentioned in foot note no. 6 of Note No. 7Balances with Banks in current account include as amount of Rs. 17975000/- kept in bankaccount in the individual name of a director. As informed to us this amount has been keptin No Lien Account as part of the negotiation with a lender bank for One Time Settlement.Further this account is subject to confirmation reconciliation and consequentialadjustments if any. Financial impact on accounts is not ascertainable. The Company hasassured us that no such other bank account (other than those recorded in the books of theCompany) has been opened by the Company on which reliance has been placed.

The Company has received a proposal from Bank of Maharashtra to availthe "MAHA MUKTI YOJANA" Scheme introduced by it for One Time Settlement (OTS) ofoutstanding dues of the Company. A No Lean Account was opened in the name of Director ofthe Company and the amount of Rs. 17975000/- was deposited in the said account as apart of the negotiation with a lender bank. After finalization of OTS proposal thisamount of Rs. 17975000/- will be adjusted by the Bank against its dues. As a resultthe amount will be reduced from Current assets and Current liabilities.

h. Auditors Comment: As mentioned in foot note no. f of Note No. 22Bthe outstanding balances of sundry creditors sundry debtors and advances (taken orgiven) bank current accounts (as specified in foot note 8 and 9 of Note 7) bank depositaccounts all loan/overdraft accounts are subject to confirmation reconciliation andconsequential adjustments if any. Financial impact on accounts is not ascertainable.

The management believes that there will be no significant impact onaccounts (financial as well as disclosure) of the Company.

i. Auditors Comment: As mentioned in various notes no provision hasbeen made for interest on Sales Tax Deferment and interest / penalties for non-payment /late payment of statutory dues and for non-compliance of legal formalities under differentstatutes and laws interest payable to MSME creditors etc. if any. The amount is notascertainable. Financial impact on accounts is not ascertainable.

Phoenix ARC Pvt. Ltd. / Saraswat Co.-Op. Bank Ltd. are not providingthe statement of dues / interest / penal interest / other charges if any. Hence theCompany has provided in its books as per the contractual rate of interest. As far as SalesTax demand is concerned the Company has provided as per the Assessment Order. The penalinterest / penalties for late payment of statutory dues non-compliance of legalformalities etc. are not provided for due to financial difficulties. The management isunable to estimate the impact of audit qualification.

j. Auditors Comment: As mentioned in Note No. 16 and 20 in the absenceof details the interest on borrowings and on bank deposits has been accounted for atcontractual rates. Financial impact on accounts is not ascertainable.

Phoenix ARC Pvt. Ltd. / Saraswat Co.-Op. Bank Ltd. are not providingthe statement of dues / interest / penal interest / other charges if any. Hence theCompany has provided in its books as per the contractual rate of interest. The penalinterest / penalties are not provided for due to financial difficulties. The management isunable to estimate the impact of audit qualification.

k. Auditors Comment: The company's gross investments in equity sharesof the then three subsidiary companies of Rs. 883.13 lakhs were sold during the FinancialYear 2017-18 for an amount of Rs. 0.48 lakh only. The value of these investments wasdiminished progressively by charging to profit and loss accounts for the years from2014-15 to 2017-18. We have not examined the propriety of this sale which was based onthe management's assessment on the recoverability of these financial assets and of theconsequent loss.

These the then three subsidiary companies are non-operational. Theirnet-worth is completely eroded. They did not contribute anything to the Company but addedthe work of consolidation. The Company is not in a position to infuse funds in thesecompanies for their revival. The management has chopped of some dead wood from its BalanceSheet.

l. Auditors Comment: The Company has not obtained confirmations fromdebtors and other parties for the amount due from them. Further in the absence of therecords seized by various authorities at various points of time the recoverability ofthese amounts could not be ascertained. The company has written off / provided for thecredit loss and non-recoverability of debtors based on its own assessment. However thecompany has not applied any scientific / verifiable basis for arriving at such write offor provision for doubtful of recovery.

All the outstanding balances of debtors are from ordinary coursebusiness activity of the Company. Due to Covid 19 pandemic most of the offices of concernparties are still closed or doing their work from home and unable to provide confirmationof balances.

The Company has identified debtors of which the balances standing withthem was old outstanding and could not be recovered in spite of putting continuous effortsin appropriate manner or some of are not in exist in their business. Finally it has beendecided to written off such amount in the books of accounts. The Company has identifiedsuch debtors and made provision thereof for doubtful recovery which is having somedisputes and possibility that amount may not be recovered from them.

m. Auditors Comment: In the earlier years an advance was paid to aDirector (outstanding balance as on 31st March 2020 - Rs. 30144128/-swapped in the name of Dhanada Holding Pvt. Ltd. in earlier year and again transferredduring the year in the name of the director) which was in contravention of Section 185 ofthe Companies Act 2013. As mentioned in note no. j of Note no. 22 B the director hascleared this advance by bringing in money from his own business activity at various timesin the current year.

In the absence of any supporting documentary evidence we areconstrained to rely on the declaration of the Director that the said amount has beenbrought in from his own business activity.

Out of such money brought in by the director the cheques amounting toRs. 25904128/- were lying with the company as at the Balance Sheet date. They arereflected as Cheques on Hand as at 31st March 2021. However the amounts haveactually been credited in the bank account in the months of April and May 2021. Furtherpay-in-slips for these credits have not been produced for our verification. Though thereare actual credits in the bank statements in the ensuing months we are unable toascertain whether really these were the cheques on hand as at 31st March 2021.

Further any interest fines and penalties for contravention of theprovisions of Section 185 & 186 (for a small intervening period) of the Companies Act2013 if any is not ascertainable. Impact on accounts is not ascertainable.

The Auditor's Comment is self explanatory. The director has cleared theadvance by bringing in money from his own business activity at various times in thecurrent year. The Company has deposited Cheques on Hand as at 31st March 2021received from a director in its bank account by putting account number and other detailson the back of the cheques as instructed by the bank and dropped them in the drop box. TheCompany has not received any pay-in-slips from the bank. The amounts credited in the bankaccounts in the month of April and May 2021 are against the clearance of the said chequenumbers only. The necessary entries are appearing in the bank statement. There will be nosignificant impact on accounts (financial as well as disclosure) of the Company.

n. Auditors Comment: As mentioned in Foot note 4 of Note no. 6 thecompany has been running the hotel under an arrangement with Vitizen Hotels Ltd. (VHL) towhom Management and other charges are payable. Sessions Court Aurangabad under theongoing MPID case had appointed an independent auditor to examine the books of theCompany. Pursuant to his audit report the Court ordered VHL to deposit an amount of Rs.41.00 lakhs with the Competent Authority. Against this VHL has deposited an amount of Rs.32.52 lakhs which has been included in amount with 'additional session judge Aurangabad'.Management and other charges in respect of revenue from the Doctors stay at Hotel duringpandemic have not been accounted for pending discussion with VHL. VHL has now submittedtheir account statement which is in the process of reconciliation. In view of theforegoing the account of VHL is subject to confirmation reconciliation and consequentialadjustments if any. Impact on accounts is not ascertainable.

The Auditor's Comment is self explanatory. The management believes thatthere will be no significant impact on accounts (financial as well as disclosure) of theCompany.

o. Auditors Comment: As mentioned in Foot note 9 of Note 4 An amountof Rs.96.42 lakhs (Previous Year Rs. 63.90 lakhs) has been transferred to the account of'Additional Sessions Judge Aurangabad' till 31st March 2021 pursuant to an order dated24.05.2019 and 17-03-2021 passed by the Sessions Judge under MPID Act. The balance issubject to confirmation. Vide order dated 24.10.2019 Spl. Judge (MPID) Aurangabad hasordered to make payment to the applicants of the said case under MPID Act out of thisamount deposited in the Court. The Company has not received any intimation from the CourtAuthority till date about any payments made under MPID Act to the applicants. Pending suchintimation the amount is shown as advance in the name of Spl. Judge MPID Aurangabad. Asinformed to us on receiving the official intimation appropriate accounting would bedone. Impact on accounts is not ascertainable.

The Auditor's Comment is self explanatory. The management is unable toestimate the impact of audit qualification.

p. Auditors Comment: Statutory dues

The default made in payment of certain statutory dues is due tofinancial difficulties. Management is unable to estimate the financial impact of the same.

Rest of the Auditor's observations / comments are eitherself-explanatory or are dealt with / replied earlier in this report.

15. Explanations or comments on qualification reservation or adverseremark or disclaimer in Secretarial Audit Report:

The Secretarial Audit Report contains certain observations and we offerour comments in this regard as under:

1. An amount of Rs. 30144128/- is advanced to the Managing Directorand execution of Tri-partite Financial Liability Takeover Agreement in contravention ofthe provisions of Section 185 of the Companies Act 2013.

The Auditor's comment is self explanatory. The Managing Director hasrepaid / cleared the entire outstanding amount / advance as at 31st March 2021receivable from him to the Company.

2. Non - publishing of notices etc. in the newspapers regardingavailability of electronic voting facility cut-off date etc. required u/s 108 of the Actand rule 20 of Companies (Management & Administration) Rules 2014 read withSecretarial Standards.

Due to financial difficulties the Company did not publish notices etc.in the newspapers.

3. Non - publishing of book closure notice in the newspapers and alsonot submitted the same to BSE.

Due to financial difficulties the Company did not publish notice inthe newspapers. Also non - submission of book closure notice to BSE was due to oversight.

4. Non - filing of Form PAS - 3 (earlier Form-2) for allotment ofEquity shares made on 30th April 2010.

In respect of allotment of Equity shares against consideration otherthan cash the Company has to file stamped document with the Registrar of Companies alongwith Form PAS - 3 (earlier Form 2) i.e. Return of Allotment. Due to the pendency ofpayment of stamp duty on High Court Order dated 16th July 2009 the Company is not able tofile the said form with the Registrar of Companies in respect of Equity Shares allotted toDr. Laxman V. Kulkarni.

5. Discrepancies in the issued share capital and listed share capital.

Due to technical issues and financial difficulties some formalities inrespect of issue of shares made under the Scheme of Arrangement and Amalgamation are notyet completed; hence those shares and the shares further issued by the Company throughprivate placement are yet to be listed. The Company would like to resolve the issue.However until the financial difficulties are resolved a solution to this issue appearsremote.

6. Non - submission of Certificate under regulation 74(5) of SEBI(Depositories and Participants) Regulations 2018 for the quarters ended on 31.03.202030.06.2020 30.09.2020 and 31.12.2020.

The non - submission was due to oversight.

7. Non - submission of disclosures under regulation 29(2) of SEBI(SAST) Regulations 2011 for changes made in shareholding of promoters during the periodfrom 01.04.2019 to 31.03.2021.

The non - submission was due to oversight / COVID-19 situations. Themanagement is in the process of submission of the said pending disclosures.

8. Delay in submission of disclosures under regulation 29(2) of SEBI(SAST) Regulations 2011 for changes made in shareholding of one of the promoters duringthe month of March 2021.

The delay was due to some technical issues.

9. The promoters of the Company had sold certain shares / did tradingin the securities of the Company when trading window was closed pursuant to SEBI (PIT)Regulations 2015.

As lockdown announced by the Government due to COVID-19 pandemic theoffice and Hotel VITS situated at Aurangabad was closed and not generating any revenue.Further due to financial crises the Company was not in a position to pay salary of itsemployees / staff and certain immediate statutory dues. Considering the urgent requirementof funds and in the best interest of and for the benefit of the Subsidiary Company and itsemployees / staff the promoters sold certain shareholding. The transactions were placedfor urgent necessities and after pre-clearance / approval obtained from the ComplianceOfficer. Further at the time of execution of trade promoters were not in possession ofany such unpublished price sensitive information.

10. Non - submission of disclosures under regulation 7(2) of SEBI (PIT)Regulations 2015 for changes made in shareholding of promoters during the period from01.04.2019 to 31.12.2020.

The non - submission was due to oversight / COVID-19 situations. Themanagement is in the process of submission of the said pending disclosures.

11. Delay in submission of disclosures under regulation 7(2) of SEBI(PIT) Regulations 2015 for changes made in shareholding of promoters during the month ofMarch 2021.

The delay was due to some technical issues.

12. There was no qualified Company Secretary as Compliance Officerduring the period 07.12.2020 to 08.04.2021 pursuant to regulation 6 of SEBI (LODR)Regulations 2015.

The previous Company Secretary had resigned w.e.f. 07.12.2020. Thevacancy was filled by the Company in the Board Meeting held on 09.04.2021. The said non -compliance is rectified now.

13. Delay in payment of Annual Listing Fees (ALF) to the Bombay StockExchange Limited pursuant to regulation 14 of SEBI (LODR) Regulations 2015.

Due to financial difficulties the delay was made in payment of AnnualListing Fees (ALF) to the Bombay Stock Exchange Limited.

14. Delay in submission of disclosures of related party transactionsfor the half year period ended on 31.03.2020 and 30.09.2020 pursuant to regulation 23(9)of SEBI (LODR) Regulations 2015.

The delay was due to COVID-19 situations / oversight.

15. Delay in submission of disclosure of default on payment of interest/ repayment of principal amount on loans from banks / financial institutions for thequarter ended on 31.03.2020 pursuant to regulation 30 of SEBI (LODR) Regulations 2015read with SEBI Circular dated 21.11.2019.

As lockdown announced by the Government due to COVID-19 pandemic theoffice was closed. Hence the management was not able to collect the necessary information/ figures required for such disclosure within the prescribed time limit. However the saiddisclosure was submitted later on 20.08.2020.

16. Non - submission of disclosure of default on payment of interest /repayment of principal amount on loans from banks / financial institutions for thequarters ended on 30.06.2020 30.09.2020 and 31.12.2020 that are required to be submittedwithin 7 days of the end of the quarter pursuant to regulation 30 of SEBI (LODR)Regulations 2015 read with SEBI Circular dated 21.11.2019.

The non - submission was due to oversight.

17. Hundred percent of shareholding of promoters and promoters group isnot in dematerialized form.

Due to technical issues some formalities in respect of 2900879Equity shares issued under the Scheme of Arrangement and Amalgamation to promoter are notyet completed; hence those shares and 5417000 Equity shares further issued by theCompany through private placement to promoter are yet to be listed. As the allottee cannotdematerialize the securities issued to him before listing of the same on the relevantstock exchange the 8317879 Equity shares held by the promoter(s) / promoter group arein physical form. The Company would like to resolve the issue. However until thefinancial difficulties are resolved a solution to this issue appears remote.

18. Delay in submission of audited annual and quarterly financialresults for the year ended 31.03.2020 along with Statement on Impact of AuditQualifications pursuant to regulation 33(3)(d) of SEBI (LODR) Regulations 2015.

Inadvertently the Statement on Impact of Audit Qualifications was notsubmitted along with the results. The said non - compliance was rectified by it later on.

19. The financial results in respect of the last quarter along-with theresults for the entire financial year ended on 31.03.2020 submitted by the Company did notcontain a note that the figures of last quarter are the balancing figures between auditedfigures in respect of the full financial year and the published year-to-date figures uptothe third quarter of the current financial year pursuant to regulation 33(3)(d) of SEBI(LODR) Regulations 2015.

The non - compliance was due to oversight.

20. Delay in serving of / submission of Annual Report for the yearended on 31.03.2020 along with the Notice of Annual General Meeting and other attachmentsthereto. The said notice and documents were served / submitted at a shorter period.

The delay was due to some technical issues.

21. Dealings with unclaimed shares.

The Auditor's comment is self explanatory. The management has startedthe process of compliance with the same.

22. Non - publishing notices etc. in the newspapers as required underListing Regulations.

The Company has submitted notices quarterly unaudited financialresults and audited financial statements etc. required under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 to the Bombay Stock Exchange Ltd. within theprescribed time and the same were also made available on the website of the Company.However due to financial difficulties the Company did not publish notices results andstatements etc. in the newspapers.

23. Non - payment of fine to BSE for non - submission / late submissionof disclosures / documents required under regulations 23(9) and 34 of SEBI (LODR)Regulations 2015.

Due to financial difficulties the Company is not in a position to paythe amount of fine. The management will request BSE to waive the fine amount.

24. Non - submission of disclosure / undertaking for Large CorporateEntities for the year ended on 31.03.2020 as required under SEBI Circular No.SEBI/HO/DDHS/CIR/P/2018/144 dated 26th November 2018.

The non - submission of undertaking was due to oversight. Further theCompany is not falling under the criteria of Large Corporate Entities. Hence the Companywas not required to submit any disclosure to the exchange under SEBI Circular.

25. Complaints against Chairman Directors and the Company

The complaints and cases are still pending in the respective court/s.The Chairman and the Directors are not yet convicted.

Rest of the Secretarial Auditor's observations / comments areself-explanatory or dealt with / replied earlier in this Report.

16. Share Capital:

There were no changes in the share capital during the year underreview.

17. Extract of the Annual Return:

Pursuant to the provisions of Section 92 of the Companies Act 2013the Annual Return of the Company in Form No. MGT-7 filed with the Registrar of CompaniesPune for the F.Y. 2019 - 20 is available on the website of the Company. The web linkthereto is http://www.dhanadacorp.com/pdf/Form MGT-7 310320.pdf. As the ensuing AnnualGeneral Meeting of the Company is proposed to be held on 30th September 2021the Company shall upload a copy of Annual Return for the F.Y. 2020 - 21 on its website assoon as it has been filed with the Registrar of Companies Pune.

18. Conservation of energy technology absorption foreign exchangeearnings and outgo:

The Company through constant monitoring selection of energy savingequipments and education of staff and guests endeavors to conserve and optimize the use ofenergy.

The Company does not undertake any research and development activityneither does it use any imported technology.

Foreign Exchange Earnings : Nil

Foreign Exchange Outgo : Nil

19. Corporate Social Responsibility (CSR):

The provisions of Section 135 of the Companies Act 2013 are notapplicable to the Company.

20. Directors:

Change in Directors and Key Managerial Personnel (KMP)

Mr. Ramesh R. Havele (DIN 00007580) was re-appointed as a ManagingDirector of the Company w.e.f. 25th October 2020 for a further period of 5(Five) years.

Mrs. Smita A. Mishra Company Secretary and Compliance Officer of theCompany resigned w.e.f. 7th December 2020. The Company has appointed Ms. ParulRathore as Company Secretary and Compliance Officer of the Company w.e.f. 9thApril 2021.

Appointments

Mrs. Veena R. Havele (DIN 00007593) Director of the Company is liableto retire by rotation at the ensuing Annual General Meeting and being eligible offersherself for reappointment. The Board recommends her re-appointment at the ensuing AnnualGeneral Meeting.

Mr. Dilip A. Prabhune (DIN 01779383) was appointed as a Non -Executive Independent Director of the Company for a term of 5 (Five) consecutive yearsw.e.f. 30th September

2016. Pursuant to the provisions of Sections 149 152 of the CompaniesAct 2013 read with the rules made thereunder and regulation 25(2) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 an Independent Director shallhold office for a term up to 5 (Five) consecutive years on the Board of the Company.However the Company by passing a special resolution can re-appoint him for a further termof 5 (Five) consecutive years. However Independent Director shall not hold office formore than two consecutive terms.

The first term of 5 (Five) consecutive years of Mr. Dilip A. Prabhune(DIN 01779383) would be completed on 29th September 2021. Based on therecommendation of Audit Committee and Nomination and Remuneration Committee the Boardrecommends to re-appoint him as an Independent Director for another term of 5 consecutiveyears w.e.f. 30th September 2021. The Company has received consent letters andnecessary declarations from him.

Statement on declaration given by Independent Directors

The Company has received necessary declaration from IndependentDirectors under Section 149(7) of the Companies Act 2013 and Regulation 25(8) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 that they meets thecriteria of independence laid down in Section 149(6) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

Relationship between directors inter-se

Mr. Ramesh R. Havele (DIN 00007580) and Mrs. Veena R. Havele (DIN00007593) are related to each other as husband and wife.

Formal Annual Evaluation

The evaluation of the Board and its committees evaluation ofperformance of individual directors and independent directors in compliance with SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 Schedule IV and otherapplicable provisions of the Companies Act 2013 was conducted based on the criteria suchas the Board composition and structures effectiveness of board processes information andfunctioning contribution of the individual Director to the Board and Committee meetingslike preparedness on the issues to be discussed meaningful and constructive contributionand inputs in meetings etc.

The performance of independent directors was evaluated by the entireBoard of Directors.

Details of familiarisation programmes of Independent Directors

The Company has a policy to keep the Independent Directors informed andupdated about the business and the operations of the Company on a continuous / as neededbasis. In order to familiarise the Independent Directors with the Company and to informthem about their roles rights and responsibilities the Company conducts the orientationprograms for them. The Company conducts an induction program for every new IndependentDirector joining the Company's Board covering the organization structure Company'sbusiness and its group companies.

The Company issues detailed letter of appointment to the IndependentDirectors detailing their roles and duties to be performed as an Independent Director onthe Board of the Company.

The details of familiarisation programmes are available on the websiteof the Company. The web link thereto is

http://www.dhanadacorp.com/pdf/Details%20of%20Familiarisation%20programme%20for%20IDs.pdf

21. Number of meetings of Board of Directors:

During the financial year 2020 - 2021 the Board of Directors met 6(Six) times on 30th July 2020 17th August 2020 25thAugust 2020 24th October 2020 11th November 2020 and 14thFebruary 2021 and all the directors were present at the meeting.

22. Audit Committee:

The Company has in place duly constituted Audit Committee. The AuditCommittee consists of three members i.e. Mr. Dilip A. Prabhune (DIN 01779383) Chairman ofthe Committee and Mr. Shreeniwas G. Kale (DIN 00150957) and Mrs. Veena R. Havele (DIN00007593).

All recommendations made by the Committee during the year were acceptedby the Board.

23. Stakeholders Relationship Committee:

The Company has in place duly constituted Stakeholders RelationshipCommittee. The Committee consists of three members i.e. Mr. Shreeniwas G. Kale (DIN00150957) Chairman of the Committee and Mrs. Veena R. Havele (DIN 00007593) and Mr. DilipA. Prabhune (DIN 01779383).

The Committee reviews and ensures redressal of investor grievances.There were no investor complaints received during the year.

24. Nomination and Remuneration Committee:

The Company has in place duly constituted Nomination and RemunerationCommittee. The Committee consists of three members i.e. Mr. Shreeniwas G. Kale (DIN00150957) Chairman of the Committee and Mrs. Veena R. Havele (DIN 00007593) and Mr. DilipA. Prabhune (DIN 01779383).

The Committee has formulated policy on nomination and remuneration ofDirectors Key Managerial Personnel Senior Management Personnel and other employeesincluding criteria for determining qualifications positive attributes and independence ofdirector performance evaluation and other matters in compliance with Section 178 of theCompanies Act 2013 read with rules made there under and SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015.

The said policy is also available on the website of the Company. A weblink thereto ishttp://www.dhanadacorp.com/pdf/Nomination%20and%20Remuneration%20Policy.pdf.

The Committee operates as per the policy adopted by the Board. Allrecommendations made by the Committee were accepted by the Board.

25. Details of establishment of vigil mechanism for directors andemployees:

The Company has established Whistle Blower / Vigil Mechanism Policy fordirectors and employees to report concerns about unethical behaviour actual or suspectedfraud or violation of the Company's Code of Conduct and Ethics. The said policy is alsoavailable on the website of the Company. A web link thereto ishttp://www.dhanadacorp.com/pdf/Vigil%20Mechanism%20Policy.pdf

26. Particulars of contracts or arrangements with related parties:

The Company has not entered in any contract or transaction with relatedparties during the year under review as referred to in Section 188 of the Companies Act2013.

The Company has formulated policy on materiality of Related PartyTransactions and also on dealing with Related Party Transactions in compliance with SEBI(Listing Obligations and Disclosure Requirement) Regulations 2015.

The said policy is available on the website of the Company. A web linkthereto is http://www.dhanadacorp.com/pdf/Related-Partv-Transactions-Policv-Amended.pdf

27. Managerial Remuneration:

No director draws any remuneration from the Company.

Remuneration of Key Managerial Personnel (KMP)

Name of KMP Designation Remuneration in 2020 - 21 (Rs.) Remuneration in 2019 - 20 (Rs.) % Increase of remuneration
Mr. Ramesh Pradhan Chief Financial Officer 573048 582644 -1.65
Mrs. Smita Mishra* Company Secretary 274107 395044 1.71**

*Resigned w.e.f. 7th December 2020.

**Computed on the basis of proportionate salary for FY 2019-20.

Median Remuneration of Employees (MRE) was Rs. 13535/- and Rs.12950/- in the financial year 2020-21 and 2019-20 respectively. The increase in MRE inthe financial year 2020-21 as compared to financial year 2019-20 is 4.52%.

The number of permanent employees on the rolls of the Company as on31.03.2021 and 31.03.2020 are 42 and 38 respectively.

The revenue of the Company has declined by 68.35%. The Company hassuffered losses. The remuneration of the employees has declined by 30.60%.

The closing price of the Company's equity shares on BSE as of31.03.2021 was Rs.6.68 representing 33.20% decrease over IPO price.

It is affirmed that the remuneration of employees and KMPs is as perthe remuneration policy of the Company.

A statement showing information of the top ten employees of the Companyin terms of remuneration drawn is attached as Annexure 2 to the Directors Report. Furtherno employee of the Company is receiving remuneration exceeding the limits prescribed underRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.

28. Risk Management Policy:

In compliance with SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has laid down procedures to inform Boardmembers about the risk assessment and minimization procedures. The Board of Directors hasalso framed Risk Management Policy / Plan. The said policy is available on the website ofthe Company. A web link thereto is

http://www.dhanadacorp.com/pdf/Risk%20Management%20Policy.pdf

29. Corporate Governance and Management Discussion and Analysis Report:

The Company is committed to achieve business excellence andstakeholders' welfare through good corporate governance and adhere to the corporategovernance requirements set out by SEBI. As per SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Management Discussion and Analysis Report and Report onCorporate Governance along with Certificate of Compliance from Auditors are annexed andform part of the Directors' Report.

30. Directors' Responsibility Statement:

The Directors of the Company hereby state that:

a) in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;

c) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting frauds and other irregularities;

d) the Directors had prepared the annual accounts on a going concernbasis;

e) the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively;

f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

31. Sexual Harassment of Women at workplace (Prevention Prohibitionand Redressal) Act 2013:

The Company has in place a Prevention of Sexual Harassment Policy inline with the requirements of the Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013. An Internal Complaints Committee has been set up toredress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy. During the year underreview the Internal Complaints Committee has not received any complaint.

32. Maintenance of Cost Records:

The Company is not required to maintain cost records pursuant toSection 148(1) of the Companies Act 2013 read with rules made thereunder. Hence no suchaccounts and records maintained.

33. Compliance with Secretarial Standard

Your directors confirm that the Secretarial Standards issued by theInstitute of Companies Secretaries of India as applicable to the Company have been dulycomplied with.

34. Investor Education and Protection Fund (IEPF)

There were no funds which required to be transferred to InvestorEducation and Protection Fund (IEPF).

35. General Information:

In the last week of March 2020 (23rd March 2020) there waslockdown announced by Central Government due to COVID-19 pandemic. The guests' bookingswere cancelled and no fresh bookings were taken till 31st July 2020.Subsequently as per the order of SDO dated 05.05.2020 the hotel was announced as COVIDcentre for the stay of doctors / medical officers till February 2021.

In case of future revenue flows COVID-19 has hit our future businessvery hard. Many confirmed bookings especially international travelers have been cancelleddue to ban on flights and other strict SOPs of COVID-19 by respective governments. Evendomestic corporate guests have been reduced to large extent due to lockdowns as well asencouragement for work from solutions by respective corporate. In order to promote roomsales we are promoting various travel friendly solutions like staycation and quarantinepackages for guests with added facilities to attract guest and client.

As a result of COVID 19 even the contracted companies are nownegotiating for lower tariff in order to give further business. The Company offered themvery competitive tariff along with enhanced facilities so that companies continue to havebusiness relations with the Company.

36. Acknowledgements:

The Directors express their sincere thanks to Dhanada Holdings PrivateLimited the associate company the Bankers employees and stakeholders for theircontinued support and the faith and belief shown by them.

.