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Dharani Finance Ltd.

BSE: 511451 Sector: Financials
NSE: N.A. ISIN Code: INE899D01011
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NSE 05:30 | 01 Jan Dharani Finance Ltd
OPEN 1.50
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VOLUME 100
52-Week high 3.51
52-Week low 1.36
P/E 12.50
Mkt Cap.(Rs cr) 1
Buy Price 1.50
Buy Qty 1900.00
Sell Price 1.50
Sell Qty 100.00
OPEN 1.50
CLOSE 1.50
VOLUME 100
52-Week high 3.51
52-Week low 1.36
P/E 12.50
Mkt Cap.(Rs cr) 1
Buy Price 1.50
Buy Qty 1900.00
Sell Price 1.50
Sell Qty 100.00

Dharani Finance Ltd. (DHARANIFINANCE) - Director Report

Company director report

Dear Members

The Board of Directors present herein the TWENTY NINTH Annual Report of theCompany together with the Audited Accounts for the year ended 31st March 2019.

FINANCIAL SUMMARY

The Financial results for the year ended 31st March 2019 are briefly as follows: -

Rs. in Lakhs
Particulars For the year Ended 31.03.2019 For the year Ended 31.03.2018
Income through Travel Operations
Finance Services and others 110.45 374.75
Expenditure (Employee &
Administrative Expenses) 69.41 218.44
Profit 41.04 156.31
Depreciation 7.23 7.57
Interest & Bank Charges 5.85 2.97
Profit after depreciation & Interest 27.96 145.77
Provision for Income Tax
- Current 9.24 0.45
- Deferred 1.50 6.21
Profit after Tax 17.22 139.11
Surplus brought forward 248.37 137.08
Profit available for appropriation 265.59 276.19
APPROPRIATIONS -
Transfer to Statutory Reserves 3.44 27.82
Proposed Dividend - -
Dividend Distribution Tax - -
Net Surplus carried over 262.15 248.37

PERFORMANCE

The total revenue was Rs 110.45 lakhs as against Rs 374.75 lakhs in the previous year.Last year there was a profit of nearly Rs.200.00 lakhs due to sale of investments. Theincome this year consists mainly of interest on loans granted to two Companies. Besidesinterest the Company also received a sum of Rs.31.66 lakhs as lease charges for thevehicles given on lease to a Group Company. Dividend income has come down from Rs.4.48lakhs to Rs.0.11 lakhs. Consequent to transfer of the vehicles on lease along with thestaff to a Group Company expenses on employee benefits and

Contribution to Provident Fund etc. came down from Rs. 78.73 lakhs to Rs.15.64 lakhs.There was also a reduction in other expenses from Rs.139.71 lakhs to Rs.53.77 lakhs due toreduced provision for diminution in value of investment from Rs.44.57 lakhs to Rs.5.44lakhs. The Company has not been able to expand its financial services due to insufficientfunds. Activities have remained at the same level as in the previous year due to thisreason.

OUTLOOK

Your company is also exploring the possibility of increasing its resources byadditional capital or borrowings. In addition by using its surplus your Company proposesto increase its financial services activities.

RESERVES

A sum of Rs.3.44 lakhs is being transferred to the Statutory Reserves as required byRBI regulations. With this total Statutory Reserves comes to Rs. 148.85 lakhs.

DIVIDEND

The profits for the year being negligible are proposed to be ploughed back to increaseits range of financial services activities and achieve the required % of financial assetsand income from financial services as advised by RBI to retain the certificate ofregistration as an NBFC. Your directors do not therefore propose to recommend anydividend.

SHARE CAPITAL

There is no change in the Share Capital of the Company- either the Authorized Capitalor the Issued Capital. The paid up equity capital as on March 31 2019 continues to remainat Rs.49944000.00. The Company has not issued any shares during the period.

EXTRACT OF ANNUAL RETURN

This is available in web address of the Company.

BOARD MEETINGS

1. Board consists of five directors including one Woman Director as given below.

2. During the year 2018-19 FOUR Board Meetings were held on 29.05.2018 10.08.201808.11.2018 and 14.02.2019. Attendance at these meeting is given below.

Name of the Director Category of Directorship No. of Board Meetings Attended
1 Dr Palani G Periasamy (DIN 00081002) Chairman (Non-Executive) - Promoter 4
2 Mrs Visalakshi Periasamy (DIN 00064517) Non Executive - Promoter 2
3 Mr K Kandasamy (DIN 00277906) Executive -Promoter 2
4 Mr M Ganapathy (DIN 00234337) Non Executive - Independent 4
5 Dr S Muthu (DIN 03331664) Non Executive - Independent 4

The following Committees are in existence. Audit / Nomination andRemuneration/Stakeholders and Risk Management Committee.

From 01.04.2019 transfer of shares can be only in demat form and Shareholders have beenadvised.

MANAGEMENT COMMITTEE

No Management Committee meeting was conducted during this period.

DIRECTOR'S RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:

i) In the preparation of the annual accounts the applicable accounting standards havebeen followed. ii) The directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were 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 or loss of the Company for the year under review. iii)The directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities. iv)The directors have prepared the annual accounts on a going concern basis. v) The directorshad laid down internal financial controls to be followed by the Company and that suchinternal financial controls are adequate and were operating effectively. vi) The directorshad devised proper systems to ensure compliance with the provisions of all applicable lawsand that such system were adequate and operating effectively.

The new accounting standards Ind AS will become applicable to the your company witheffect from the year 2019-20.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have given their declarations as per Section 149 (6) to theeffect that they meet the criteria of Independence. 2 Independent Directors were appointedas Independent Directors in the Annual General Meeting 25th September 2014 to hold officefor 5 years from 25.09.2014 to 24.09.2019. They are being proposed for re-appointment fora Second Term.

LOANS GUARANTEES OR INVESTMENTS

During the year 2018-19 the company has not given any loans or provided any guaranteescovered under the provisions of Section 186 of the Companies Act 2013. A sum ofRs.88000/- was invested in SBI by purchasing 300 fully paid equity shares of Rs.1/- each.

CONTRACTS ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1)

All related party transactions that were entered into during the financial year were inthe ordinary course of business and were on arm's length basis. The statement in form AOC2 is attached as Annexure- II. There are no materially significant related partytransactions entered into by the Company with Promoters Key Managerial Personnel or otherdesignated persons which may have potential conflict with the interest of the Company atlarge.

AUDITOR'S REPORT

The observations made in the Auditors' Report read together with relevant notes thereonare self explanatory and do not call for any further comments under Section 134(3)f of theCompanies Act 2013. There are no qualifications reservations or adverse remarks. Theirreport is an unmodified one.

STATUTORY AUDITORS

M/s. CNGSN & Associates LLP Chartered Accountants (Firm Regn. No.004915S/S200036) Chennai appointed in the Annual General Meeting held on 26th September2017 will continue as Statutory Auditors.

SECRETARIAL AUDIT

Pursuant to provisions of section 204 of the Companies Act 2013 and the Companies

(Appointment and Remuneration of Managerial Personnel) Rules 2014. Mr M Damodaran andAssociates Company Secretaries in practice have carried out the Secretarial Audit of theCompany. Their Audit report as on 31.03.2019 is annexed as "Annexure III.

Important observations by the Auditors and the Company's explanations are given below.

Observations Reasons
a The Company has partly complied with the provisions of Section 203 of the Companies Act 2013 with regard to the appointment of Whole-time Company Secretary. Effective action is being taken to appoint a whole time Company Secretary within the time allowed in place of the Company Secretary who resigned from 11th January 2019.
b The Company has not transferred shares pertaining to unpaid and unclaimed dividend to IEPF authority as per section 124(6) of the Companies Act 2013 read with Rule 6(5) of the Investor Education and Protection Fund
Authority (Accounting Audit Transfer and Refund) Rules 2016 Transfer of shares (2010-11) to IEPF is underway and expected to be completed shortly. The form IEPF 4 will be filed on completion of the work.
c The Company has not filed e-form IEPF - 4 under rule 6(5) of the Investor Education and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016.
d There was delay in filing e-form IEPF - 6 as per Rule 8 of the Investor Education and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2015. There was some delay in getting the confirmation from bank which resulted in late filing.
e The website of the company was not updated as per regulation 46 of the SEBI (LODR) Regulations 2015.
f There was delay of 5 hours 29 minutes in submission of Voting Results of the Annual General Meeting held for financial year ended 31.03.2018 under regulation 44 of the SEBI (LODR) Regulations 2015.
g There was delay of 4 hours 29 minutes in submission of proceedings of the Annual General Meeting held for financial year ended 31.03.2018 under regulation 30 read with Schedule III of the SEBI (LODR) Regulations 2015. It would be ensured in future as delay occurred while concluding the proceedings of the Annual General Meeting and failure of computer connectivity.

It is declared that Company has complied with all the applicable Secretarial Standards.

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thereport.

FOREIGN EXCHANGE EARNINGS AND OUT-GO CONSERVATION OF ENERGY & TECHNOLOGYABSORPTION

A. During the year there were no Foreign Exchange Earnings & Outflow.

B. Conservation of Energy & Technology absorption. These guidelines are not `applicable to this Company.

SUBSIDIARY COMPANIES

The Company does not have any subsidiary or any associate Company

RISK MANAGEMENT POLICY

The Company has developed a risk management policy. Pursuant to Section 134 (3) (n) ofthe Companies Act 2013 details of the Policy are disclosed in the Company's Website.

At present the Company has not identified any element of risk which may threaten theexistence of the Company. In this context report against heading ‘Material Changesof Commitments' given above may be referred to.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Dr Palani G Periasamy (DIN 00081002) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for reappointment.

Dr S Muthu (DIN 03331664) and Mr M Ganapathy (DIN 00234337) are being proposed forreappointment as Independent Directors in the ensuing Annual General Meeting.

Mr P Rajasekaran Company Secretary and CFO resigned with effect from 11th January2019. Company is taking action to fill up the vacancy at the earliest within the timeallowed.

SIGNIFICANT AND MATERIAL ORDERS

There were no significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations in future.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the assignment order. To maintain its objectivity and independence theInternal Auditor reports to the Chairman of the Audit Committee of the Board & to theChairman of the Board. The Internal Audit monitors and evaluates the efficacy and adequacyof internal control system in the Company its compliance with operating systemsaccounting procedures and policies. Based on the report of internal auditor managementundertakes corrective action and thereby strengthen the controls. Significant audit o b se r v a t i o n s w h e r e v e r m a d e a n d recommendations along with correctiveactions thereon are presented to the Audit Committee of the Board.

DEPOSITS

The Company does not hold any public deposits as on 31st March 2019. Your Company hasnot accepted any deposits covered under Chapter V of the Companies Act 2013 and theCompanies (Acceptance of Deposits) Rules 2014.

The Company has stopped collecting public deposits and had got its Licence amended byReserve Bank of India to indicate that it is a non deposit taking NBFC. Your Company doesnot propose to collect public deposits in the coming year.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Your Company does not fall within the parameters as per Section 135 of the CompaniesAct 2013 and hence not mandated to formulate a Corporate Social Responsibility Policy orspend the prescribed amounts.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 the Board has carried out anevaluation of its own performance the directors individually as well as the evaluation ofthe working of its Audit Nomination & Remuneration Committees. The manner in whichthe evaluation is carried out is based on criteria approved by the Board which isavailable on the Company's Website.

VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES

A competent Vigil mechanism has been established and a whistle blower policy has beendesigned to help Directors and Employees to report genuine concerns. The completemechanism is given in the company's website.

CORPORATE GOVERNANCE

This requirement is not applicable to this Company at present as per Regulation 15(2)of the SEBI (Listing Obligations and Disclosure Requirements) as its paid up capital isless than Rs. 10 crores and Net worth less than Rs.25 crores.

The above is also to be treated as Management discussion and analysis. Related Partydisclosures are available in Note 28 to the accounts.

PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE

The Company has in place an Anti Sexual harassment policy in line with the requirementsof Section 4 of the Sexual harassment of Women at Work Place (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received as sexual harassment. All employees are covered under this policy.Details have been displayed prominently in the work place and also in the Company'sWebsite.

No complaints were received during the year 2018-19.

CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe Company.

The Code has been posted on the Company's website : www.dharanifinance.in

UNCLAIMED DIVIDEND

Pursuant to Section 124 & 125 of the Companies Act 2013 dividend remaining unpaidor unclaimed for a period of 7 years will be transferred to the Investor Education andProtection Fund of the Central Government.

a. The Company transferred the following amounts of unclaimed dividend to the IEPF ofthe Central Government during this period.

Year % of Dividend Date of declaration Amount Transferred to IEPF on
2010-11 5% 20.10.2011 Rs. 497151.50 25.12.2018

b. The following amount is due to be transferred to IEPF during the year 2019-20.

Year % of Dividend Date of declaration Amount Due date for transfer to IEPF
2011-12 7% 15.10.2012 Rs.755444.50 24.10.2019

Reminders are sent to the shareholders as per records every year for the unpaiddividends.

MCA by notification GSR 352 (E) dated 10.05.2012 has stipulated publication of detailsof unclaimed/ unpaid dividend in the Company website and MCA website. This will enableinvestors track unclaimed dividend by checking the status online and real time. Ourcompany has already uploaded the requisite details that will get updated every year within90 days of Annual General Meeting.

Transfer of unpaid Dividend and corresponding Shares to the Investor Education andProtection Fund.

a. During the financial year 2018-19 567740 Equity Shares in respect of which dividendentitlements to the extent of Rs.480790/- for the year 2009-10 remained unclaimed forseven consecutive years or more have been transferred by the Company to the InvestorEducation and Protection Fund established by the Central Government (IEPF) pursuant tothe provisions of Section 124 of the Companies Act 2013 read with the Investor Educationand Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016. Theunclaimed dividend amount was already transferred to IEPF Account during 2017-18

Shareholders may claim their unclaimed dividend for the years prior to and includingthe financial year 2009-10 and the corresponding shares from the IEPF

Authority by applying in the prescribed Form No. IEPF-5. This Form can be downloadedfrom the website of the IEPF Authority www.iepf.gov.in.

b. While the unclaimed dividend for the financial year 2010-11 has been transferredthe corresponding shares will be transferred by the Company to IEPF Account. Communicationhas been sent to the concerned Shareholders advising them to write to the Company orRegistrar of Transfer Agent to claim their dividend. Notices in this regard have also beenpublished in newspapers. Details of such unclaimed dividend and corresponding shares areavailable on the Company's corporate website.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation of the services rendered by the Staffand Executives of your Company. Your Directors also thank the shareholders who havecontinued to repose their confidence in the Company and its management.

For and on behalf of the Board of Directors
Dr. PALANI G PERIASAMY
PLACE: CHENNAI CHAIRMAN
DATE : 27.05.2019 (DIN 00081002)