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Naga Dhunseri Group Ltd.

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

Company director report

We have pleasure in presenting the 100th Annual Report together with Audited FinancialStatements of the Company for the year ended 31st March 2018.

1. Financial Results

(Rs. in Lakhs)

Standalone Standalone Consolidated Consolidated
Particulars For the year ended 31.03.2018 For the year ended 31.03.2017 For the year ended 31.03.2018 For the year ended 31.03.2017
Profit before Depreciation & Taxation 1539.47 1329.28 1539.47 1329.28
Less : Depreciation 18.05 17.56 18.05 17.56
Provision for Taxation (Net) 308.41 249.76 308.41 249.76
Profit after Taxation 1213.01 1061.96 1213.01 1061.96
Add : Share of Profit/(Loss) of Associates 1867.00 7561.49
Net Profit for the Year 1213.01 1061.96 3080.01 8623.45
Add : Balance brought forward 569.29 119.72 6223.55 (1787.51)
Less : Dividend Paid during the Year 25.00 25.00
Less : Dividend Distribution Tax Paid during the Year 5.09 5.09
Amount available for appropriation 1752.21 1181.68 9273.47 6835.94
The Directors recommend this amount to be
Appropriated as under :
Transfer to NBFC Reserve Fund 242.60 212.39 242.60 212.39
Transfer to General Reserve 500.00 400.00 500.00 400.00
Balance carried Forward 1009.61 569.29 8530.87 6223.55
1752.21 1181.68 9273.47 6835.94

2. Operations

The income of the Company during the year under review mainly comprised of profit onsale of investments in shares & securities dividend and rental income. During theyear under review the Company's standalone net profits have increased to Rs.1213.01Lakhs compared to Rs.1061.96 Lakhs during the previous year.

3. Dividend

The Directors recommend a dividend @ Rs.2.50 per equity share (25%) of Rs.10/- each forthe financial year ended 31st March 2018 subject to approval of the shareholders at theensuing Annual General Meeting to be held on 9th August 2018. The total outflow onaccount of dividend inclusive of taxes for 2017-18 is Rs. 30.09 Lakhs.

4. NBFC Reserve Fund

A sum of Rs.242.60 Lakhs was transferred to NBFC Reserve Fund from the year's surplus.

5. General Reserve

The Company proposes to transfer Rs.500 lakhs to General Reserve out of the amountavailable for appropriation.

6. Subsidiary/Joint Venture/Associate Company

Pursuant to Section 2(6) of the Companies Act 2013 the Company has an AssociateCompany as on 31.03.2018 i.e. Dhunseri Investments Limited. The Company does not have anySubsidiary or Joint Venture as on 31st March 2018.

Pursuant to Provisions of Section 129(3) of the Act a statement in Form AOC- 1containing the salient features of the financial statements of the Company's Associate isattached with the financial statement of the Company.

7. NBFC Public Deposits Directions

With reference to RBI's NBFC Public Deposit Directions the Board of Directors of theCompany has confirmed by passing a resolution that the Company has neither invited noraccepted any deposit from the public during the financial year 2017-18. The Company doesnot intend to invite or accept any public deposit during the financial year 2018-19. Noamount on account of principal or interest on deposit from public was outstanding as onthe date of the Balance Sheet.

8. Delisting of shares with the Calcutta Stock Exchange (CSE)

The Company has voluntarily delisted equity shares from the Calcutta Stock Exchange(CSE) w.e.f. 31st October 2017. Now the equity shares of the Company are listed on theNational Stock Exchange of India Ltd. (NSE). The Company's shares are compulsorily tradedin dematerialized form.

9. Directors' Responsibility Statement

Based on the framework of internal controls and compliance systems established andmaintained by the Company the work performed by the Internal Statutory and SecretarialAuditors and the reviews performed by the management and the audit committee of the Boardthe Board is of the opinion that the Company's internal financial controls were adequateand effective during the financial year 2017 -18. Accordingly pursuant to Section 134 (3)(c) read with Section 134(5) of the Companies Act 2013 the Directors of your Companyconfirm that :

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

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

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

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

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

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

10. Directors & Key Managerial Personnel

Mr. C. K. Dhanuka (DIN : 00005684) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for reappointment as director of the Company.

Mr. Mrigank Dhanuka (DIN : 00005666) was appointed as Managing Director of the Companyw.e.f 8th February 2018.

Ms. Shilpa Agarwal resigned from the post of Company Secretary w.e.f 1st March 2018.

There are no other changes in the Directors and Key Managerial Personnel of the Companyduring the year.

11. Number of Meetings of the Board

The Board met four times during the financial year 2017-18. The details have beenprovided in the Corporate Governance Report in terms of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 which is annexedto this Report.

12. Annual Performance Evaluation

The Independent Directors at a separate meeting held on 13.11.2017 without anyone fromthe non-independent directors and management considered/evaluated the performance of theBoard as a whole performance of the Chairman and other non-independent Directors.

On the basis of parameters formulated by the Nomination and Remuneration Committee ofthe Board a self-assessment questionnaire forms were sent for evaluation of the Boardthe Committees Director and the Chairman

The Board at its meeting held on 08.02.2018 evaluated the performance of the Board theCommittees and Independent as well as Non Independent Directors (without participation ofthe relevant director). The Board also reviewed the performance of the Chairman. The Boardwas unanimous that the performance of the Board as a whole its Committees and theChairman was satisfactory.

13. Declaration by Independent Directors

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

14. Policy on directors' appointment and remuneration and other details

The Company's policy on directors' appointment and remuneration and other matters asrequired under Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which forms part of this report.

15. Committees of the Board

The Board has constituted various Committees in accordance with the requirement ofCompanies Act 2013. The Company has the following Committees as :

I. Audit Committee

II. Nomination & Remuneration Committee

III. Stakeholders Relationship Committee

IV. Corporate Social Responsibility Committee

V. Share Transfer Committee

VI. Risk Management Committee

Details of all the above Committees along with the Composition and meetings held duringthe year under review are provided in the Report on Corporate Governance forming part ofthis Report.

16. Auditors

Pursuant to provision of Sections 139 142 and other applicable provisions if any ofthe Companies Act 2013 read with the Companies (Audit and Auditors) Rules 2014 M/s.Dhandhania & Associates Chartered Accountants (FRN : 316052E) were appointed as theStatutory Auditors of the Company for a period of 5 years to hold office from conclusionof the 99th Annual General Meeting of the Company (AGM) held on 8th August 2017 till theconclusion of 104th AGM of the Company subject to ratification of their appointment by theMembers at every AGM. The reappointment for the year 2018-19 is required to be ratified bythe shareholders at the ensuing 100th AGM of the Company.

17. Auditors' Report and Secretarial Auditors' Report

The auditors' report and secretarial auditors' report are self-explanatory and does notcontain any qualifications reservations or adverse remarks and have been annexed to thereport.

18. Risk Management

The Company's main activity is investment in shares and securities. The managementconstantly monitors the capital market risks and systematically address them throughmitigating actions on a continuous basis. The audit committee has additional oversight inthe area of financial risks and internal controls.

The development and implementation of risk management policy has been covered in themanagement discussion and analysis which forms part of this report.

19. Particulars of loans guarantees and investments

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

20. Transactions with Related Parties

All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into anycontract/arrangement/transaction with related parties which could be considered materialin accordance with the policy of the Company on materiality of related party transactions.

Your Directors draw attention of the members to Note 27 to the financial statementwhich sets out related party disclosures.

21. Extract of the Annual Return

As required U/s 92(3) 134(3)(a) of the Companies Act 2013 and read with Rule 12(1) ofthe Companies (Management and Administration) Rules 2014 an extract of the Annual Returnis given in Annexure I in the prescribed Form MGT 9 which forms part of this report.

22. Corporate Social Responsibility (CSR)

The Company has in place a CSR Committee in line with the provisions of Section 135 ofthe Companies Act 2013 as stated in the Corporate Governance Report. The brief outline ofthe Corporate Social Responsibility (CSR) Policy of the Company and CSR activitiesundertaken by the Company during the year are set out in Annexure - II of this Report inthe format prescribed in the Companies (Corporate Social Responsibility Policy) Rules2014. The policy is also available on the Company's website www.nagadhunserigroup.com.

23. Particulars of Employees

The information required under Section 197(12) of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow :

a. Ratio of Remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2017-2018.

Sl. No. Name of Director Remuneration (Rs.) Median Remuneration in Lakhs) Ratio
1. Mrs. Aruna Dhanuka 28500/- 3.33 Lakhs 0.09:1
2. Mr. C. K. Dhanuka 33000/- 3.33 Lakhs 0.10:1
3. Mr. Mrigank Dhanuka 629896/- 3.33 Lakhs 2:1
4. Mr. Rajeev Rungta 39000/- 3.33 Lakhs 0.11:1
5. Mr. I. K. Kejriwal 36000/- 3.33 Lakhs 0.11:1
6. Mr. G. R. Goenka 37500/- 3.33 Lakhs 0.11:1

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

Sl. No. Name and Designation % of Increase
1. Mr. C.K. Dhanuka - Non-Executive Chairman NA (Note-1)
2. Mr. Mrigank Dhanuka - Mg. Director(w.e.f. 08.02.2018) NA (Note-2)
3. Mrs. Aruna Dhanuka - Non-Executive Director NA (Note-1)
4. Mr. Rajeev Rungta - Non-Executive Independent Director NA (Note-1)
5. Mr. I. K. Kejriwal - Non-Executive Independent Director NA (Note-1)
6. Mr. G. R. Goenka - Non-Executive Independent Director NA (Note-1)
7. Mr. Ayush Beriwala - CFO No Change
8. Mr. H. P. Bhuwania - CEO No Change
9. Ms. Shilpa Agarwal - CS (Upto 28.02.2018) No Change

Note - 1 : There is no increase in sitting fees payable to the Non-Executive Directors.The sitting fees is paid based on the number of meetings attended by the Directors duringthe F.Y. 2017-18.

Note - 2 : Mr. Mrigank Dhanuka was appointed as Managing Director w.e.f. 8th February2018 subject to the shareholders' approval.

c. The percentage increase in the median remuneration of the employees in thefinancial year : 8.12%

d. The number of permanent employees on the rolls of Company as on 31.03.2018 : 11(Eleven)

e. Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration :

Average percentile increase already made in the salaries of employees other than themanagerial personnel in the financial year 2017-18 was 6.11% but the Comparison of averagepercentile increase already made in the salaries of employees other than the managerialpersonnel with the percentile increase in the managerial remuneration is not applicable asthe Managing Director was appointed w.e.f. 8th February 2018.

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

g. The statement containing particulars of employees as required under Section197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

i) Statement of Particulars of Top 10 Employees

Sr. No. Name of Employee Age Qualification Designation Date of Joining Experience (in years) Remuneration (in Rs.)
1. Mr. Ayush Beriwala 36 Graduate CA CFO 03.11.2016 11 1001650
2. Mr. Mrigank Dhanuka* 37 Graduate Managing Director 08.02.2018 17 609896
3. Mr. Hari Prasad Bhuwania 79 Graduate CEO 10.02.2017 51 600000
4. Mr. Swapan Kumar Das 63 Graduate Accounts Executive 01.11.1979 38 403596
5. Mr. Sumanjit Das 48 Graduate Accounts Executive 18.04.1994 24 373444
6. Mr. Deepak Verma 29 Graduate Accounts Executive 27.07.2015 6 347421
7. Mr. K. Venugopal Nair 57 Graduate Accounts Executive 01.04.2007 32 319092
8. Ms. Shilpa Agarwal * 30 Graduate CS Company Secretary 01.03.2017 1 316042
9. Mr. Rahul Sharma 27 Graduate Accounts Executive 01.08.2016 1 255499
10. Mr. Vinod Singh 29 Graduate Office Assistant 01.10.2014 4 166536

* Employed for part of the year.

Notes :

1. Nature of employment is contractual.

2. Mr. Mrigank Dhanuka holds 1286 shares i.e. (0.13%) in the Company. No otheremployees holds equity shares of the company.

3. Mr. Mrigank Dhanuka is related to Mr. C. K. Dhanuka and Mrs. Aruna Dhanuka. Mr.Mrigank Dhanuka is son of Mr. C. K. Dhanuka and Mrs. Aruna Dhanuka. None of the otheremployees mentioned above are related to any directors of the Company.

(ii) Employed throughout the Financial Year 2017-18 and drawing a remuneration inaggregate not Less Than One Crore Two Lakh Rupees per annum : NIL

(iii) Employed for a part of the Financial Year 2017-18 and drawing a remunerationin aggregate not Less Than Eight Lakh Fifty Thousand Rupees per month : NIL

(iv) Employed throughout the financial year or part thereof was in receipt ofremuneration in that year which in the aggregate or as the case may be at a rate whichin the aggregate is in excess of that drawn by the managing director or whole timedirector or manager and holds by himself or along with his spouse and dependent childrennot less than two percent of the equity shares of the company : NIL

24. Disclosure requirements

The Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 mandate the formulation of certain policies for alllisted companies. All policies are available on the Company's websitewww.nagadhunserigroup.com. The Corporate Governance Report with a Certificate ofPracticing Company Secretary thereon and Management Discussion and Analysis Report areattached which form part of this report.

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

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

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

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

The Company has formulated and published a Whistle Blower Policy to provide VigilMechanism for employees including directors of the Company to report genuine concerns. Thesaid policy is available on the website of the Company(http://www.nagadhunserigroup.com/downloads/naga-vigil-mechanism.pdf)

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

(http://www.nagadhunserigroup.com/downloads/CSR-Policy.pdf)

The Company has formulated a policy related to disclosure of material events affectingthe Company i.e. Policy on Materiality and the same is available on the website of theCompany

(http://www.nagadhunserigroup.com/downloads/determination-of-materiality-of-an-event-or-information-for-disclosure-to-stock-exchanges-policy.pdf)

The policy deals with the retention and archival of corporate records of the Company isalso available on the website of the Company

(http://www.nagadhunserigroup.com/downloads/archival-policy.pdf)

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

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

The Company has formulated Nomination & Remuneration Policy and the same isavailable in the website of the Company

(http://nagadhunserigroup.com/downloads/remuneration-policy.pdf)

The Company has formulated Code of Practices and Procedure for fair disclosure ofunpublished price sensitive information and the same is available in the website of theCompany (http://nagadhunserigroup.com/policy.html)

25. State of Company's Affairs

The Company's principle business is dealing in shares and securities. The Managementregularly monitors the changing market conditions and trends. Further any slowdown of theeconomic growth or volatility in global financial market could adversely affect theCompany's business.

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

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

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

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

28. Particulars of Conservation of Energy and Technology absorption

The particulars in respect of conservation of energy and technology absorption are notapplicable to the Company as it is a NBFC Company not being in any manufacturingactivities.

29. Foreign Exchange Earnings and outgo

During the year under review there was no foreign exchange earnings and the outflow wasRs.28.64 Lakhs.

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

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

The Committee met once during the year on 17th January 2018 No complaints have beenreceived by the Company during the F.Y. 2017-18.

31. Internal Financial Control Systems and their adequacy

The Company has an effective system of Internal Control commensurate with the size ofthe Company and ensures operational efficiency accuracy in financial reporting andcompliance of applicable laws and regulations. The system is also reviewed from time totime for effectiveness.

32. Management Discussion and Analysis Report

The Management's Discussion and Analysis Report for the year under review asstipulated under the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of the Corporate Governance Report

33. Green Initiatives

As part of our green initiative the electronic copies of this Annual Report includingthe Notice of the 100th AGM are sent to all members whose email addresses are registeredwith the Company/Depository Participant(s). For members who have not registered theiremail addresses physical copies of this Annual Report including the Notice of the 100thAGM are sent by permitted mode.

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

34. Acknowledgement

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

For & on behalf of the Board of Directors
C. K. DHANUKA
Place : Kolkata Chairman
Dated The 28th day of May 2018 (DIN : 00005684)