BOARD'S REPORT
Dear Members,
The Board of Directors present herein the 33rd Annual Report of the Company together with the Audited Accounts for the year ended 31st March 2023.
FINANCIAL SUMMARY
The Financial results for the year ended 31st March 2023 are briefly as follows: -
Particulars
|
For the year Ended 31.03.2023
|
For the year Ended 31.03.2022
|
Income through Travel Operations, Finance Services and others
|
59.99
|
108.18
|
Expenditure (Employee & Administrative Expenses)
|
55.02
|
61.55
|
Profit
|
4.97
|
46.63
|
Depreciation
|
15.54
|
15.56
|
Interest & Bank Charges
|
2.09
|
0.73
|
Profit/(Loss) after depreciation & Interest
|
(12.66)
|
30.34
|
Provision for Income Tax
|
|
|
- Current
|
-
|
-
|
- Deferred
|
-
|
-
|
Profit/(Loss) after Tax
|
(12.66)
|
30.34
|
Surplus brought forward
|
-
|
288.59
|
Profit available for appropriation
|
310.21
|
326.76
|
APPROPRIATIONS
|
|
|
Transfer to Statutory Reserves
|
-
|
6.07
|
Proposed Dividend
|
|
-
|
Dividend Distribution Tax
|
|
-
|
Net Surplus carried over
|
310.21
|
320.69
|
PERFORMANCE
The total revenue was Rs. 59.99 lakhs as against Rs.108.18 lakhs in the previous year. The income for this year consists mainly of interest on loans granted to two Companies. Besides interest, the Company also received a sum of Rs. 26.10 lakhs as lease charges for the vehicles given on lease. The loss comes to Rs. 12.66 lakhs as against net profit of Rs.30.34 lakhs in the previous year.
Further, during the year under review there were no changes in nature of business of the company.
OUTLOOK
Your company is also exploring the possibility of increasing its resources by additional capital or borrowings though it has not been able to does during 2022-23. In addition, your Company proposes to increase its financial services activities in the coming years.
RESERVES
Due to absence of profits in the current year no amount is proposed to be transferred to General Reserves account on account of loss during the year.
DIVIDEND
There being no profits for the year your directors are not able to propose to recommend any dividend.
SHARE CAPITAL
There is no change in the Share Capital of the Company- either the Authorized Capital or the issued Capital. The Paid up equity capital as on March 31,2023 continues to remain at Rs.4,99,44,000.00. During the year under review, the company has not issued shares with differential voting rights nor granted stock options or sweat equity or bonus shares. The Company has not bought back any of its securities during the year under review.
ANNUAL RETURN
The Form MGT -7 for the year 2022-23 shall be filed with Registrar of Companies within the prescribed time after the date of 33rd Annual General Meeting (AGM) of your Company. This also available in web address of the Company i.e., www.dharanifinance.com .
BOARD MEETINGS
1. Board consists of five directors including one Woman Director, as given below.
2. During the year 2022-23 FOUR Board Meetings were held on 25.05.2022, 12.08.2022, 30.11.2022 and 13.02.2023. Attendance at these meeting is given below.
Name of the Director
|
Category of Directorship
|
No of Board Meeting Attended
|
Dr Palani G Periasamy (DIN 00081002)
|
Chairman
(Non-Executive) - Promoter
|
4
|
Mrs Visalakshi Periasamy (DIN 00064517)
|
Non-Executive - Promoter
|
1
|
Mr K Kandasamy (DIN 00277906)
|
Executive -Promoter
|
4
|
Mr M Ganapathy (DIN 00234337)
|
Non-Executive - Independent Director
|
4
|
Dr S Muthu (DIN 03331664)
|
Non-Executive - Independent Director
|
4
|
AUDIT COMMITTEE
A qualified Audit Committee is in position consisting of the following directors.
Mr M Ganapathy - Chairman, Dr S Muthu and Mr K Kandasamy, Managing Director.
The Audit Committee met 4 times on 25.05.2022,12.08.2022, 30.11.2022 and 13.02.2023. There was no instance where the recommendation of the Audit Committee was not accepted by the Board.
Name of the Director
|
Category of Directorship
|
No of Meeting Attended
|
Mr K Kandasamy
|
Executive -Promoter
|
4
|
Mr M Ganapathy
|
Non-Executive Independent Director
|
4
|
Dr S Muthu
|
Non-Executive Independent Director
|
4
|
NOMINATION AND REMUNERATION COMMITTEE
As required by Section 178 of the Companies Act, 2013 a Nomination & Remuneration Committee has been set up. Mr M Ganapathy and Dr S Muthu and Mrs Visalakshi Periasamy are the members and Mr M Ganapathy is the Chairman. The Committee has formulated appropriate criteria for appointment of Directors and their remuneration.
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is available in Website. Two Meetings was held during 2022-23. The Committee met on 25.05.2022 and 30.11.2022.
Name of the Director
|
Category of Directorship
|
No of Meeting
|
|
|
Attended
|
Mrs Visalakshi Periasamy
|
Non Executive - Promoter
|
1
|
Mr M Ganapathy
|
Non-Executive Independent Director
|
2
|
Dr S Muthu
|
Non-Executive Independent Director
|
2
|
STAKEHOLDER RELATIONSHIP COMMITTEE
The Stakeholders' Relationship Committee is in position to specifically look into shareholder's / investors complaints, on transfer of shares, non - receipt of balance sheet, non- receipt of declared dividend etc., and also the action taken by the Company on those matters. The Committee met on 25.05.2022. The Members of the Stakeholders Relations Committee are Dr S Muthu, Independent Director (Chairman) and Mr K Kandasamy, Managing Director.
Name of the Director
|
Category of Directorship
|
No of Meeting Attended
|
Dr S Muthu
|
Non-Executive Independent Director
|
1
|
Mr K Kandasamy
|
Executive - Promoter
|
1
|
MANAGEMENT COMMITTEE
No Management Committee meeting was conducted during this period.
POLICY ON APPOINTMENT OF DIRECTORS AND REMUNERATION
The Company's policy on Directors, Senior Management appointment and remuneration and other matters provided in Section 178 (3) of the Companies Act, 2013, is available on the website of the Company at www.dharanifinance.com
DIRECTOR'S RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:
i) In the preparation of the annual accounts, the applicable accounting standards have been followed.
ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial 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 adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system was adequate and operating effectively.
The new accounting standards, viz., Ind AS has become applicable to your Company with effect from the year 2019-20.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors have given their declarations as per Section 149 (6) to the effect that they meet the criteria of Independence.
LOANS, GUARANTEES OR INVESTMENTS
During the year 2022-23, the company has not made investment or given any loans or provided any guarantees covered under the provisions of Section 186 of the Companies Act, 2013.
CONTRACTS, ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013.
All related party transactions that were entered into during the financial year were in the ordinary course of business and were on arm's length basis. The statement in form AOC 2 is attached as Annexure- II. There are no materially significant related party transactions entered into by the Company with Promoters, Key Managerial Personnel or other designated
persons which may have potential conflict with the interest of the Company at large.
MAINTENANCE OF COST ACCOUNTS AND RECORDS
The Company does not fall under the category of Sec 148(1) of Companies Act, 2013 and hence such disclosure and maintenance of cost accounts/cost records is not applicable.
STATUTORY AUDITORS
Pursuant to the provisions of Sections 139 and 141 of the Companies Act, 2013, Mr N Srivatsan, Chartered Accountants, Chennai (Registration No.014921S) were appointed as Statutory Auditors for a period of 5 years in the Annual General Meeting held on 29th December 2022 to hold office until the conclusion of the 37th Annual General Meeting of the Company.
AUDITOR'S REPORT
The observations made in the Auditors' Report read together with relevant notes thereon are self-explanatory and do not call for any further comments under Section 134(3) f of the Companies Act, 2013. Statement on impact of Audit Qualification is attached
Compiled by: Dion Global Solutions Limited
DHARANI FINANCE LIMITED
The following qualification was mentioned in the audit report as of 31st March 2023 by the statutory auditors.
STATEMENT ON IMPACT OF AUDIT QUALIFICATIONS (FOR AUDIT REPORT WITH MODIFIED OPINION SUBMITTED) ALONG WITH AUDITED FINANCIAL RESULTS - (STANDALONE AND CONSOLIDATED SEPARATELY) STATEMENT ON IMPACT OF AUDIT QUALIFICATIONS FOR THE FINANCIAL YEAR ENDED 31st MARCH 2023 (SEE REGULATION 33/52 OF THE SEBI (LODR) (AMENDMENT) REGULATION, 2016)
Sl.No
|
Particulars
|
Audited Figures (as reported before adjusting for qualifications)
|
Audited Figures (audited figures after adjusting for qualifications)
|
I
|
a
|
Turnover/ Total Income
|
59.99
|
59.99
|
|
b
|
Total Expenditure
|
72.65
|
72.65
|
|
c
|
Net Profit/ (Loss)
|
-12.66
|
-12.66
|
|
d
|
Earnings Per share
|
-0.25
|
-0.25
|
|
e
|
Total Assets
|
959.71
|
959.71
|
|
f
|
Total Liabilities
|
149.78
|
149.78
|
|
a
|
Net Worth
|
809.93
|
809.93
|
|
h
|
Any other financial item(s) as felt appropriate by the Management)
|
-
|
-
|
II
|
Audit Qualification (each audit qualification / Disclaimer of Opinion/ Adverse Qualification
|
|
|
Details of Audit Qualifications.
|
(a) Recovery of amount due from major customer aggregating to Rs. 544.30 lakhs which is considered doubtful due to the CIRP proceedings in the case of the customer
(b) Recovery of investments aggregating to Rs. 21.99 lakhs which is considered doubtful due to the CIRP proceedings in the case of the investee company
(c) If the amount stated in (a) is provided for, the Company’s net owned funds will be less than the limit prescribed for NBFCs to carry on business.
(d) Items (a) to (c) cast a significant doubt on the Company’s ability to continue as a going concern.
|
|
b
|
Type of Audit Qualifications: Qualified Opinion / Disclaimer of Opinion / Adverse Opinion
|
Qualified Opinion
|
|
|
Frequency of Qualifications: Whether appeared first time/ repetitive / since how long continuing
|
4th time, Since 31st March 2020.
|
|
d
|
for Audit Qualification(s) where the impact is quantified by the auditor, Management's views:
|
Not Quantified
|
|
|
for Audit Qualification(s) where the impact is not quantified by the auditor:
|
|
|
i. Management’s estimation on the impact of audit qualification.
|
a. Corporate insolvency resolution process (CIRP) and the appointment of a resolution professional was admitted in the case of one of the major customers of the Company by the Hon’ble National Company Law Tribunal (NCLT), Chennai Bench vide its order dated May 5, 2020. The total amount due from the above referred major customer to the Company as at March 31, 2023 is Rs. 544.30 Lakhs (net of provisions). The Company has filed its claims with the Resolution Professional of the said customer.
|
|
|
|
The Hon’ble NCLT has passed an order approving the resolution plan submitted by one of the resolution applicants. In accordance with the approved resolution plan, no payment will be made towards any amount due to the promoters and their related group companies by the successful resolution applicant. Aggrieved by this Order, the customer has filed an application before the Hon’ble National Company Law Appellate Tribunal (“NCLAT”) praying for quashing the order of the Hon’ble NCLT. The Hon’ble NCLAT has set aside the resolution plan approved and ordered to recommence the CIRP process, including the consideration of 12A application filed by the promoters of the customer company. On an appeal against the order of the Hon’ble NCLAT, the Hon’ble Supreme Court has delivered their judgement on May 3, 2023 seeking the Adjudicating Authority to deal with fresh settlement proposal of the promoter, as approved by the CoC in its Nineteenth meeting dated October 12, 2022 while keeping in view the law applicable and the facts of the present case as also the observations as provided in the Judgement.
|
|
|
|
In the opinion of the management, the major part of the assets of the customer comprises of land and commercial buildings (including a well-known brand name in the hotel industry), whose liquidation value is much more than the total dues to its financial and operating creditors (including that of the Company) and accordingly, the Company will be able to recover the entire outstanding dues from the customer, even in the aforesaid CIRP conditions. Based on the above estimate and based on the fact that the customer’s account was a fully performing asset before the admission of the CIRP, no provision towards allowance for expected credit loss/ provision for NPA as per IRAC Noims of Reserve Bank of India in respect of the dues from the aforesaid customer has been considered by the Company in these financial results. Accordingly, the above financial results have been prepared on a going concern assumption and the net owned funds are considered to be above the minimum limits prescribed by the Reserve Bank of India for an NBFC.
|
|
|
ii. Management's is unable to estimate the impact, reasons for the same:
|
NA
|
|
|
iii. Auditor's comments on (i) or (ii) above;
|
Refer” Basis for Qualified Opinion” in audit report read with relevant notes in the financial results the same is self-explanatory.
|
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204(1) of the Companies Act 2013 read along with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules 2020 and other applicable provisions, if any, of the Companies Act 2013, M/s. M Damodaran & Associates LLP, Chennai, (Mem.No.5837 and COP No.5081) were appointed as the Secretarial Auditors of the Company for the financial year 2022-23.
The Secretarial Audit Report for the financial year 2022-23 of the Company is annexed as “Annexure - III.
The Secretarial Audit Report contains some observations as mentioned below:
Observation by Secretarial Auditors
|
Management Reply
|
a. The un-audited Financial Results for the half year and nine months ended 30.09.2022 was not approved at the Board Meeting and was not intimated the same to Stock Exchange within forty-five days of end of the quarter as per regulation 33(2) and 33(3) of SEBI (LODR) Regulation 2015.
|
This non-Compliance was placed before the Board of Directors and the Board of Directors has ensured to comply this regulation in future.
|
b. The Outcome of Board Meeting dated 30.11.2022 in which unaudited financial results approved for the quarter ended 30.09.2022 has been disclosed to the Stock Exchange as required under regulation 30 of SEBI (LODR) Regulations, 2015 with minor delay.
|
This non-Compliance was placed before the Board of Directors and the Board of Directors has ensured to comply this regulation in future.
|
c. The Outcome of Board Meeting dated 13.02.2023 in which unaudited financial results approved for the quarter ended 31.12.2022 has been disclosed to the Stock Exchange as required under regulation 30 of SEBI (LODR) Regulations, 2015 with delay.
|
This non-Compliance was placed before the Board of Directors and the Board of Directors has ensured to comply this regulation in future.
|
d. The Company does not have a qualified Company Secretary as Compliance officer of the Company during the period from 24.05.2022 to 21.11.2022 as per regulation 6(1) of SEBI (LODR) Regulations, 2015.
|
Yes- During the said period Company was in search of Qualified Company Secretary.
However, the company has appointed a new Company Secretary on 22.11.2022.
|
The Company has not complied the regulation 46 of SEBI (LODR), Regulations, 2015.
|
This non-Compliance was placed before the Board of Directors and the Board of Directors has ensured to comply this regulation in future.
|
The Company has not complied with Regulation 3(5) & 3(6) of SEBI (Prohibition of Insider Trading) Regulations, 2015 with respect to Structured Digital Database.
|
Company has not made suitable arrangement for SDD. This non-Compliance was placed before the Board of Directors and the Board of Directors has ensured to comply this regulation in future.
|
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, the provisions of Secretarial Standard - 1 (Board Meetings) and 2 (General Meetings) issued by the Institute of Company Secretaries of India (ICSI) were adhered to while conducting the respective Meetings.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.
FOREIGN EXCHANGE EARNINGS AND OUT-GO, CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION
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.
PARTICULARS OF EMPLOYEES
In accordance with the provisions of Section197 (12) of the Companies Act,2013, read with Rules 5(1),5(2) and 5(3), of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, the name and other particulars of employees are to be set out in the “Annexure -IV' forming part of the Annual Report.
SUBSIDIARY COMPANIES
As on 31st March 2023, 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) of the 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 the existence of the Company. In this context, report against heading ‘Material Changes of Commitments' given above may be referred to.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Dr Palani G Periasamy, (DIN No.00081002) who retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.
Mrs Saloni Jain has been appointed as a Company Secretary and Compliance Officer of the Company with effect from 22.11.2022.
SIGNIFICANT AND MATERIAL ORDERS
There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
During the year under review, the Statutory Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors as prescribed under Section 143(12) of the Companies Act, 2013 and rules made thereunder.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the assignment order. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board & to the Chairman of the Board. The Internal Audit monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of internal auditor, management undertakes corrective action and thereby strengthen the controls. Significant audit observations wherever made and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.
DEPOSITS
The Company does not hold any public deposits as on 31st March 2023. Your Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
The Company has stopped collecting public deposits and had got its Licence amended by Reserve Bank of India to indicate that it is a non deposit taking NBFC. Your Company does not 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 Companies Act and hence not mandated to formulate a Corporate Social Responsibility Policy or spend the prescribed amounts.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation is carried out is based on criteria approved by the Board which is available on the Company's Website.
VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES
A competent Vigil mechanism has been established and a whistle blower policy has been designed to help Directors and Employees to report genuine concerns. The complete mechanism 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 is less 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 Party disclosures are available in Note 36 to the accounts.
PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE
The Company has in place an Anti Sexual harassment policy in line with the requirements of 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 redress complaints 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's Website.
No complaints were received during the year 2022-23.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the Company.
The Code has been posted on the Company's website: www. dharanifinance.com
UNCLAIMED DIVIDEND
The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid last year.
Pursuant to Section 124 & 125 of the Companies Act, 2013, dividend remaining unpaid or unclaimed for a period of 7 years were transferred to the Investor Education and Protection Fund of the Central Government.
Shareholders may claim their unclaimed dividend for the years prior to and including the financial year 2011-12 and the corresponding shares, from the IEPF Authority by applying in the prescribed Form No. IEPF-5. This Form can be downloaded from the website of the IEPF Authority www. iepf.gov.in.
ACKNOWLEDGEMENTS
Your Directors place on record their appreciation of the services rendered by the Staff and Executives of your Company.
Your Directors also thank the Registrar & Transfer Agent and shareholders who have continued to repose their confidence in the Company and its management.
For and on behalf of the Board of Directors For Dharani Finance Limited Dr. PALANI G PERIASAMY
PLACE: CHENNAI CHAIRMAN
DATE : 26.05.2023 (DIN 00081002)
|