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Dhanuka Commercial Ltd.

BSE: 538446 Sector: Financials
NSE: N.A. ISIN Code: INE296Q01012
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OPEN 4.26
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VOLUME 10000
52-Week high 9.80
52-Week low 3.20
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Mkt Cap.(Rs cr) 7
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Dhanuka Commercial Ltd. (DHANUKACOMMERC) - Director Report

Company director report

The Members

DHANUKA COMMERCIAL LIMITED

Your boards feels pleasure in presenting their 24th Annual Report together with theAudited Statement of Accounts for the year ended on 31st March 2018.

1. FINANCIAL HIGHLIGHTS

(Amount in Rs.)
For the year ended 31.03.2018 For the year ended 31.03.2017
Total Revenue from Operations 12831576.80 9490451.27
Total Expenditure 15268326.49 10467661.42
Profit/(loss) from Ordinary activities before tax (2436749.69) (977210.15)
Less: Tax Expenses (1368) 37522
Net Profit/(loss) from Ordinary activities after tax (2435381.69) (1014732.15)
Add: balance brought forward 45961.09 1042360.24
Less: Provision for Standard Assets 32187 18333
Less: Statutory Reserves Fund (u/s 45-IC of RBI Act 1934) - -
Less: Transfer from Fixed Asset - -
Less: Provision for Proposed dividend - -
Less: Dividend Tax - -
Balance carried forward to Balance Sheet (2357233.60) 45961.09

2. PERFORMANCE REVIEW

During the year under review the Company's total income is Rs. 12831576.80/-(Rupees One Crore Twenty Eight Lakhs Thirty One Thousand Five Hundred Seventy Six andEighty Paise only) as compared to Rs. 9490451.27/- (Rupees Ninety Four LakhsNinety Thousand Four Hundred Fifty One and Twenty Seven Paise only) in the previous yearand the Company incurred a loss of Rs. 2435381.69/- (Rupees Twenty Four LakhsThirty Five Thousand Three Hundred Eighty One and Sixty Nine Paise only) as compared to Rs.1014732.15/- (Rupees Ten Lakhs Fourteen Thousand Seven Hundred Thirty Two andFifteen Paise only) in the previous year.

3. RESERVES

In order to comply with the provisions of Reserve Bank of India Act 1934 the Companyhas not transferred any amount to Special Reserve Funds under Section 45-IC of the RBIAct 1934 due to net loss during the year under review & has made provision of Rs.32187/- (Rupees Thirty Two Thousand One Hundred and Eighty Seven Only) for StandardAssets during the year under review. Total provisions for Standard Assets of the Companyat the financial year ended 31st March 2018 is Rs. 371953/- (Rupees Three LakhsSeventy One Thousand Nine Hundred and Fifty Three Only).

Except as mentioned above no amount was proposed to transfer to any reserve by theCompany during the year under review.

4. SHARE CAPITAL

There is no change in the authorized share capital and paid up share capital of theCompany during the period under review.

The authorized share capital of the Company is Rs. 17 00 00000 (RupeesSeventeen Crore only) divided into 17000000 (One Crore Seventy Lakhs) Equity Shares of Rs.10/- each. The paid up share capital of the Company is Rs. 16 74 34590(Rupees Sixteen Crore Seventy Four Lakhs Thirty Four Thousand Five Hundred and NinetyOnly) divided into 1 67 43459 (One Crore Sixty Seven Lakhs Forty Three ThousandFour Hundred and Fifty Nine) Equity Shares of Rs. 10/- each.

Issue of Equity Shares with Differential Rights:-

During the financial year ended 31st March 2018 the Company has not issued any EquityShares with Differential Rights.

Issue of Employee Stock Options:-

During the financial year ended 31st March 2018 the Company has not issued anyEmployee Stock Options as stated in Section 62(1) (b) of the Companies Act 2013 and Rule12(9) of Companies (Share Capital and Debenture Rules 2014).

Issue of Sweat Equity Shares:-

During the financial year ended 31st March 2018 the Company has not issued any sweatequity shares as specified in Section 54 of the Companies Act 2013 and Rule 8(13) ofCompanies (Share Capital and Debenture Rules 2014).

5. INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY

During the year under review the Company was engaged in carrying on the business asNon -Banking Financial Company without accepting public deposit. The Company has provided/ taken inter-corporate loans in ordinary course of business and on arms length basis.

6. HOLDING & SUBSIDIARY COMPANY

Since the Company does not have any subsidiaries Joint Ventures or AssociateCompanies Rules 8(5) (IV) of the Companies (Accounts) Rules 2014 does not apply to theCompany.

7. PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY COMPANIES

Since the Company has no Subsidiary Company the clause is not applicable.

8. CONSOLIDATED FINANCIAL STATEMENT

Since the Company has no Subsidiary Company the clause is not applicable.

9. DIVIDEND

Your directors do not recommend any dividend for payment to the shareholders/ membersof the Company for the financial year ended on 31st March 2018.

10. ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH RESPECT TO THE FINANCIAL STATEMENT

The Company has in place adequate internal financial control with reference tofinancial statement. The Company also has an Internal Control System commensurate withthe size scale and complexity of its operations.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Board of Directors

At present the Board of Directors consists of Mr. Gopal Krishan Bansal Mr. MaheshKumar Dhanuka Mr. Mukesh Bansal Ms. Rajni Garg & Mr. Sanjeev Mittal.

In accordance with the provisions of Section 149 of the Companies Act 2013 theIndependent Directors have given a declaration that they meet the criteria of independenceas provided in the said section.

During the year under review the Non-Executive Directors of the Company had nopecuniary relationship or transactions with the Company other than the sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Company.

As required under regulation 36(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the information on the particulars of the Directorsproposed for appointment / re-appointment has been given in the Notice of the AnnualGeneral Meeting.

There was no change in the composition and position of Directors.

i. Retirement by Rotation of the Directors

Mr. Gopal Krishan Bansal retires by rotation at the forthcoming Annual General Meetingand being eligible offers himself for re-appointment.

ii. Key Managerial Personnel

At present the Company has following persons Key Managerial Personnel (KMPs) as perprovisions of the Companies Act 2013 (the Act) and the Rules framed there under:-

Mr. Mahesh Kumar Dhanuka Managing Director
Mr. Sanjeev Mittal Chief Financial Officer
Mr. Bharat Narula Company Secretary

During the period under review Mr. Sunil Jain Company Secretary and Compliance Officerof the Company resigned from office on 09th June 2017 after serving proper notice periodto the Company. Mr. Bharat Narula joined the Company as the Company Secretary andCompliance officer in place of Mr. Sunil Jain on 04th July 2017.

Mr. Ravi Garg resigned from the office of Chief Financial Officer with effect fromclosure of the business hours on 29th day of December 2017. Mr. Sanjeev Mittal (Chairman& Executive Director) was appointed as the Chief Financial Officer with effect from09th day of January 2018 to fill the vacancy caused by the resignation of Mr. Ravi Garg.

Board Meetings

During the financial year 2017-18 Six (06) board meetings were held: 28-04-201729-05-2017 04-07-2017 14-08-2017 13-11-2017 and 09-01-2018. The intervening gap betweenthe meetings was within the period prescribed under the Companies Act 2013.

Committees of the Board

The following are 3 Committees constituted by the Board:

i) Audit Committee;

ii) Stakeholders Relationship Committee;

iii) Nomination and Remuneration Committee;

The Composition of Board and Committees were as under:

S.No Committee meeting Composition
1 Audit Committee Mr. Mukesh Bansal (Chairman)
Ms. Rajni Garg (Member)
Mr. Gopal Krishan Bansal (Member)
2 Nomination and Remuneration Committee Ms. Rajni Garg (Chairman)
Mr. Mukesh Bansal (Member)
Mr. Gopal Krishan Bansal (Member)
3 Stakeholders Relationship Committee Mr. Mukesh Bansal (Chairman)
Mr. Sanjeev Mittal (Member)
Mr. Gopal Krishan Bansal (Member)

Committee Meetings

Table containing details of meetings of Board and various committees along with datesare as below:

S. No Board/ Committee Name No. of meetings Date of Meetings
1 Board Meetings (BM) 6 28 April 2017
29 May 2017
04 July 2017
14 August 2017
13 November 2017
09 January 2018
2 Audit Committee (AC) 4 15 April 2017
29 May 2017
14 August 2017
13 November 2017
3 Stakeholder Relationship 4 05 May 2017
Committee (SRC) 14 August 2017
13 November 2017
09 January 2018
4 Nomination and Remuneration 2 05 May 2017
Committee (NRC) 09 January 2018

ATTENDANCE OF DIRECTORS / MEMBERS AT BOARD AND COMMITTEE MEETINGS

As per Standard 9 of the Secretarial Standard on Meetings of the Board of Director('SS-1') issued by the Institute of Company Secretaries of India ('ICSI') the attendanceof Directors at Board and Committee meetings held during the financial year 2017-18 isprovided as under:

Name of Director BM AC NRC SRC
Mr. Mahesh Kumar Dhanuka 1 0 0 0
Mr. Gopal Krishan Bansal 6 4 2 4
Mr. Sanjeev Mittal 6 0 0 4
Mr. Mukesh Bansal 5 4 2 4
Ms. Rajni Garg 1 3 2 0

Board Evaluation

The Board has formulated an Evaluation Policy (the Policy) for evaluating theperformance of the Board Managing Director Executive Directors Independent DirectorsNon-executive Directors and its Committees. Based on the same the performance wasevaluated for the financial year ended March 31 2018.

The Policy inter alia provides the criteria for performance evaluation such as Boardeffectiveness quality of discussion contribution at the meetings business acumenstrategic thinking time commitment and relationship with the stakeholders corporategovernance practices contribution of the Committees to the Board in discharging itsfunctions etc.

Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of directors senior management and to fixtheir remuneration. The Nomination and Remuneration Policy is stated in the CorporateGovernance Report.

Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 of the Act and Rule 5 (1) Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 (Rules) details of employee remuneration as requiredunder provisions of Section 197 of the Companies Act 2013 and Rule 5(2) and 5(3) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are availableat the registered office of the Company during working hours 21 days before the AnnualGeneral Meeting and shall be made available to any shareholder on request and have beenappended as "Annexure B" to this report.

12 SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has framed a Policy on Prevention of Sexual Harassment at workplace. Therewere no cases reported during the year ended March 31 2018 under the Policy.

13 MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required under regulation 34 of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 the Management Discussion and Analysis Report areenclosed as a part of this report.

14 DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors acknowledges the responsibility for ensuring compliance with theprovisions of section 134(3)(c) read with section 134(5) of the Companies Act 2013 in thepreparation of the Financial Statement for the financial year ended on 31st March 2018and state: i) That in the preparation of Annual Accounts for the financial year ended asat 31st March 2018 the applicable Accounting Standards have been followed along withproper explanation relating to the material departures. ii) That the Directors haveselected such Accounting Policies and applied them consistently and made judgements andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the financial year ended as at 31st March 2018 and of theprofit and loss of the Company for the financial year ended on 31st March 2018.

iii) That 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 or other irregularities.iv) That the Directors have prepared the Annual Accounts on a Going Concern basis. v) TheDirectors have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and vi)There is a proper system to ensure compliance with the provisions of all applicable lawsand that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bymanagement and the relevant board committees including the audit committee the board isof the opinion that the Company's internal financial controls were adequate and effectiveduring financial year 2017-18.

15 PUBLIC DEPOSITS

The Company did not accept any public deposits during the year under review. Thereforethe disclosures as required under the Companies Act 2013 and the Rules framed there underand RBI Directions are not applicable.

16 PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the Notes to the financial statements provided in this Annual report.

17 INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has proper and adequate system of internal control geared towards achievingefficiency in its operations safeguarding assets optimum utilization of resources andcompliance with statutory regulations. The Company has an Internal Control Systemcommensurate with the size scale and complexity of its operations. Testing of suchInternal Control measures and systems forms a part of Internal Audit function. TheInternal Auditors of the Company conduct audits of various departments based on an annualaudit plan covering key areas of operations. Internal Audit reviews and evaluates theadequacy and effectiveness of internal controls ensuring adherence to operatingguidelines and systems and recommending improvements for strengthening them. To maintainits objectivity and independence the Internal Audit function reports to the Chairman ofthe Audit Committee of the Board. The Audit Committee of the Board of Directors reviewsthe adequacy of internal controls. This has improved the management of the affairs of theCompany and strengthened transparency and accountability.

The Management ensures adherence to all internal control policies and procedures aswell as compliance with regulatory guidelines. No significant audit observations andrecommendations have been received from the Internal Auditors of the Company.

18 AUDITORS REPORT AND SECRETARIAL AUDIT REPORT

The Company at its meeting held on 14th August 2017 appointed M/s Manish K &Associates a firm of Company Secretaries in practice to undertake the SecretarialAudit of the Company for the financial year 2017 -18 in terms of provisions of section 204of the Companies Act 2013 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. Report of the Secretarial Auditor for the Financialended 31st March 2018 is attached as an annexure as "Annexure D" whichforms part of this report.

Further the statutory auditors' report and secretarial auditors' report does notcontain any qualifications reservations or adverse remarks.

19 AUDITORS

a) STATUTORY AUDITORS:

Pursuant to the provision of section 139(2) of the Companies Act 2013 No listedCompany or a Company belonging to such class or classes of companies as may be prescribedshall appoint or reappoint-(a) an individual as auditor for more than one term of fiveconsecutive years; and (b) an audit firm as auditor for more than two terms of fiveconsecutive years.

M/s DSP & Associates Chartered Accountants (FRN-006791N) in accordance with theprovisions of the Act has been recommended to be re-appointed as the Statutory auditorsof the Company by the Audit Committee and Board of Directors in their meeting held on 17thMay 2018 who shall hold office from the conclusion of this Annual General Meeting tillthe conclusion of its sixth annual General Meeting held after this Meeting subject to theapproval of the shareholders in the Annual General Meeting proposed to be held on 26thJune 2018.

The Company has obtained a written consent from M/s DSP & Associates CharteredAccountants (FRN-006791N) New Delhi for their appointment and also a obtained certificateto the effect that their appointment if made would be in accordance with Section 139(1)of the Companies Act 2013 and the rules made there under as may be applicable.

20 EXTRACT OF ANNUAL RETURN

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

21 CORPORATE GOVERNANCE REPORT

Your Company practices a culture that is built on core values and ethical governancepractices and is committed to transparency in all its dealings. Further the Members'please note that as per "SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015" the Company is having a paid up equity share capital not exceedingRs. 10 Crore and the Net worth not exceeding Rs. 25 Crore thereby exempted from thecorporate Governance Requirements provided under regulations 17 to 27 and clauses (b) to(i) of sub-regulation (2) of regulation 46 and Para C D and E of Schedule V. Hence nocertificate has been attached regarding compliances of conditions of corporate governancehowever the Company is voluntarily disclosing the information as required under theCorporate Governance section of SEBI (LODR) Regulations 2015 and under Companies Act2013.

A detailed analysis of the Company and its performance is annexed to this report andforms part of this Report.

22 RELATED PARTY TRANSACTIONS

During the period there were contracts or arrangements entered with related partiesreferred to in the provision of the Section 188(1) of the Companies Act 2013 which aredisclosed in AOC-2 which forms the part of this report and is annexed as "AnnexureA".

23 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 placed on the Company's websitehttp://www.dhanukacommercial.com.

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:

• Code for Independent Directors

• Code of internal Procedures and conduct for Regulating Monitoring and Reportingof trades by Insiders

• Vigil Mechanism

• Policy for Determining Material Event

• Details of Persons Authorised for Determining Material Event

All the Board Members and the Senior Management personnel have confirmed compliancewith the Code.

24 VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 readwith the rules made there under and pursuant to the provision of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has established a VigilMechanism to be known as the 'Whistle Blower Policy' for its Directors and Employees toreport instances of unethical behaviour actual or suspected fraud or violation of theCompany's Code of Conduct. The aim of the policy is to provide adequate safeguards againstvictimization of Whistle Blower who avails of the mechanism and also provide direct accessto the Chairman of the Audit Committee in appropriate or exceptional cases.

Accordingly Vigil Mechanism / Whistle Blower Policy have been formulated with a viewto provide a mechanism for the Directors and employees of the Company to approach theCompany Secretary or the Chairman of the Audit Committee of the Company.

The purpose of this policy is to provide a framework to promote responsible and securewhistle blowing. It protects employees willing to raise a concern about seriousirregularities within the Company. During the financial year 2017-18 no such complaint ofunethical or improper activity has been received by the Company.

25 PREVENTION OF INSIDER TRADING

The Company has adopted a Code of internal Procedures and conduct for RegulatingMonitoring and Reporting of trades by Insiders with a view to regulate trading insecurities by the Directors and designated employees of the Company. The Code requirespre-clearance for dealing in the Company's shares and prohibits the purchase or sale ofCompany shares by the Directors and the designated employees while in possession ofunpublished price sensitive information in relation to the Company and during the periodwhen the trading window is closed. The Board is responsible for implementation of theCode. All Board of Directors and the designated employees have confirmed compliance withthe Code.

26 CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS /OUTGO a) CONSERVATION OF ENERGY

(i) The steps taken or impact on conservation of energy - The operations of yourCompany are not energy-intensive. However adequate measures have been initiated forconservation of energy. (ii) The steps taken by the Company for utilising alternate sourceof energy - though the operations of the Company are not energy intensive the Companyshall explore alternative source of energy as and when the necessity arises.

(iii) the capital investment on energy conservation equipments - Nil

b) TECHNOLOGY ABSORPTION

(i) The efforts made towards technology absorption - The minimum technology requiredfor the business has been absorbed.

(ii) The benefits derived like product improvement cost reduction product developmentor import substitution - Not Applicable

(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year) - Not Applicable (a) The details of technologyimported; (b) The year of import; (c) Whether the technology been fully absorbed; and (d)If not fully absorbed areas where absorption has not taken place and the reasons thereof(iv) The expenditure incurred on Research and Development - Not Applicable

c) FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review there were no foreign exchange earnings and outgo(previous year): NIL.

27 DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OFSECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

There are no frauds reported by Auditors under subsection (12) of Section 143.

28 MATERIAL CHANGES AND COMMITMENTS IF ANY

There is no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the Financial Year of the Company to whichthe financial statements relate and the date of the report.

29 MATERIAL ORDERS BY GOVERNING AUTHORITIES

There were no significant or material orders passed by any governing authority of theCompany including regulators courts or tribunals which could impact the going concernstatus and Company's operations in future.

30 OPERATIONS

Your Company's operations were running smoothly during the year.

31 CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year under review provision of section 135 and Schedule VII of theCompanies Act 2013 pertaining to Corporate Social Responsibility are not applicable toour Company. Hence details of expenditures on CSR activities are not required to befurnished.

32 RISK MANAGEMENT

Your directors are of the view that the Risk evaluation and management is an ongoingprocess within the Company as per the risk management policy established by the Board.During the year under review a regular exercise on 'Risk Assessment and Management' wascarried out covering the various aspects of business operations.

In view of the activities of the Company the directors are of the opinion that theCompany has two major inherent risks which may threaten the existence of the Company whichare "default in re-payment of loans by the customers" and "risks associatedin the equity market". However the Company has followed the principal of assessingthe risk and accordingly managing the business.

The Risk Management Committee constituted by the Board of Directors of the Company hasframed and implemented a Risk Management Policy.

33 HUMAN RESOURCE-INITIATIVES

During the year under review a lot of focus was given to engage employees at everylevel by conducting structured interactions and imparting information and knowledge withregards to the training given in AML/CFT areas which inter alia includes familiarizationwith the AML/CFT guidelines issued by the RBI from time to time. The management has alsobeen pro-active in sharing the Company's long term perspective and their role within theorganization. New behavioural training programs were also introduced to widen the scope oflearning and development activity.

34 LISTING OF SECURITIES

Presently the Securities of the Company are listed on SME Platform of BSE LimitedMumbai. The listing fee for the financial year 2018-19 has been paid.

35 ACKNOWLEDGEMENTS

Your directors would like to place their grateful appreciation for the assistance andco-operation received from the Company's bankers during the year under review. Thedirectors also acknowledge with appreciation the support and co-operation rendered byvarious Government Agencies and Departments. Your Directors would also wish to place onrecord their deep sense of appreciation for the continued support of all the investors ofthe Company.

By the Orders of the Board of Directors of
"Dhanuka Commercial Limited"
Place: Delhi Sd/-
Date: 17th May 2018 Sanjeev Mittal
Chairman (ED & CFO)
DIN: 00078563