DIRECTORS' REPORT Dear Members, The Board of Directors present herein the TWENTYFIFTH Annual Report of the Company together with the Audited Accounts for the year ended 31st March 2015. PERFORMANCE Total income of the Company is Rs.289.87 lakhs as against Rs.315.80 lakhs in the previous year though income through travel operations has increased from Rs. 198.23 lakhs to Rs.224.74 lakhs an increase of Rs.20.51 lakhs. Company provides travel services to the guests of the Group's 5 star hotels at Chennai and Coimbatore. The Company's expenses have increased to Rs.262.45 lakhs as compared to the previous year's Rs.223.50 lakhs. The gross profits have come down to Rs.27.42 lakhs from Rs.92.30 lakhs. Sale of long term investments at the appropriate time resulted in a gain of Rs. 52.15 lakhs, contributing to the profits. Software services, which the Company commenced last year, could not bring in much business. After providing Rs.6.13 lakhs towards depreciation and Rs.0.23 lakhs as interest etc., net profit comes to Rs.21.06 lakhs as against a profit of Rs. 24.50 lakhs in the previous year. OUTLOOK Taking into account the economic situation during 2014-15 and the pointers for the coming year, state f world economy, performance of the hotel industry on which the Company's travel division's earnings depend, the monetary tightening and further stringent measures by Reserve Bank of India over Non Banking Financial Companies (NBFC), the outlook does not appear to be too bright. However, Government of India is confident of an improvement in the economy as a result of various measures taken by them during the last one year and also proposed to be taken, to boost investments especially FDI, manufacture and trade. Your Company continues to explore various options to increase its business operations over different fields like providing advertising agency services with a view to increase its revenues. DIVIDEND As the profits for the year are not sufficient enough, your directors regret their inability to recommend any dividend. RESERVES A sum of Rs.3.07 lakhs is being transferred to the Statutory Reserves, as required by RBI regulations. With this, total Statutory Reserves comes to Rs.1,04,54,167/- SHARE CAPITAL There is no change in the Share Capital of the Company either the Authorised Capital or the Issued Capital. The paid up equity capital as on March 31, 2015 was Rs. 4,99,44,000. The Company has not issued any shares during the period. EXTRACT OF ANNUAL RETURN Extract of the Annual Return in form MGT-9 as provided under Section 92(3) of the Companies Act 2013 is attached herewith. (Annexure - I). BOARD MEETINGS Board consists of the following directors including one Woman Director. LOANS, GUARANTEES OR INVESTMENTS The Company has not given any loans or provided any guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the notes to the financial statements. CONTRACTS, ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) All related party transactions that were entered into during the financial year were in the ordinary course of the business and were on arm's length basis. The statement in form AOC 2 is attached (Annexure - II). There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. 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 of the Companies Act, 2013. There are no qualifications reservations, or adverse remarks. MATERIAL CHANGES AND COMMITMENTS There were no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year 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 are not applicable to this Company. SUBSIDIARY COMPANIES The Company does not have any subsidiary or any associate Company. Hence no report on subsidiary, associate, joint venture Company is proposed. 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. DIRECTORS AND KEY MANAGERIAL PERSONNEL (i). Dr Palani G Periasamy, (DIN 00081002) retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. (ii) Mr K Kandasamy was re-appointed as Managing Director for a further term of 5 years from 25/06/2014 and approval of the Shareholders obtained in the last Annual General Meeting held on 25th September 2014. (iii) Mr R Muralidharan was appointed as the Chief Financial Officer with effect from 01.09.2014. 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. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIRADEQUACY 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. 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 undertake 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 2015. 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 has got its Licence amended by Reserve Bank of India accordingly. Your Company does not propose to collect public deposits in the coming year. DECLARATION BY INDEPENDENT DIRECTOR The Independent Directors have given their declarations as per Section 149 (7) to the effect that they meet the criteria of Independence. The 3 Independent Directors were appointed as Independent Directors in the Annual General Meeting 25th September 2014 and will hold office for 5 years from 25.09.2014 to 24.09.2019. SECRETARIAL AUDIT Pursuant to provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Mr M Damodaran & Associates Company Secretaries in practice to undertake the Secretarial Audit of the Company. Their Audit report as on 31.03.2015 is annexed herewith as (Annexure -III). There were no qualifications or observations requiring Board comments. 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 form Corporate Social Responsibility Policy or to spend the prescribed amounts. AUDIT COMMITTEE A qualified Audit Committee is in position consisting of the following Independent directors. Mr M Ganapathy - Chairman, Mr R. K Viswanathan and Dr S Muthu The Company Secretary is the Secretary to this Committee. The Audit Committee met 4 times on 29.05.2014, 13.08.2014, 12.11.2014 and 11.02.2015. There was no instance where the recommendation of the Audit Committee was not accepted by the Board. 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 has been carried out is attached (Annexure - IV) 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, Mr R K Viswanathan and Dr S Muthu with Mr. M. Ganapathy as the Chairman are the members of this Committee. The Committee has formulated the 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 stated in the annexure. (Annexure - V) 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. Brief details of this policy are given in this (Annexure - VI), while the complete mechanism is given in the company's website. CORPORATE GOVERNANCE CERTIFICATE This requirement is not applicable to this Company at present, as per amendments made to clause 49 of the Listing Agreement, its paid up capital being less than Rs. 10 crores and Net worth being less than Rs.25 crores. MANAGERIAL REMUNERATION As the profits of the Company for the year were inadequate, remuneration within the prescribed limits is to be paid to the Managing Director with the approval of the Shareholders in accordance with Schedule V Part 11 Section 11 of the Companies Act, 2013. PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE The Company has in place an Anti Sexual harassment policy in line with the requirements of the 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. The following is a summary of such complaints received & disposed during the year 2014-15. No. of Complaints received – Nil, No of complaints disposed off – NIL. STATUTORY AUDITORS M/s K. Ramkrish & Co., Chartered Accountants (Firm Regn. No. 1030125), Chennai retire as Statutory Auditors on the conclusion of this Annual General Meeting. They can be continued for a further period of 2 years, though they have completed the two terms of 5 years each on 31.03.2014. They have conveyed 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 system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. MANAGEMENT COMMITTEE The Directors on the Management Committee are: Dr Palani G Periasamy, Mrs Visalakshi Periasamy and Mr K Kandasamy. No meeting of this Committee was held. STAKEHOLDERS RELATIONSHIP COMMITTEE The Stakeholders’ Relationship Committee is in position to specifically look into shareholders / 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 29.05.2014. The Directors of the Stakeholders Relations Committee are Mr. R K Viswanathan, Independent Director(Chairman) and Mr. K Kandasamy (Member). 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.in The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard. PREVENTION OF INSIDER TRADING The Company has adopted a Code of disclosures & a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. This has been disclosed in the Company’s website. The Code requires pre-clearance for dealing in the Company’s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code. UNCLAIMED DIVIDEND Pursuant to Section 124 & 125 of the Companies Act, 2013, dividend remaining unpaid or unclaimed for a period of 7 years will be transferred to the Investor Education and Protection Fund of the Central Government. Reminders were sent to the shareholders as per records every year, for the unpaid dividends. MCA by notification GSR 352 (E) dated 10.05.2012 has stipulated publication of details of unclaimed/ unpaid dividend in the Company website and MCA website. This will enable investors track unclaimed dividend by checking the status online and real time. Our company has already uploaded the requisite details that will get updated every year within 90 days of Annual General Meeting. ACKNOWLEDGEMENTS All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard. Your Directors place on record their appreciation of the services rendered by the Staff and Executives of your Company. Your Directors also thank the shareholders who have continued to repose their confidence in the Company and its management. For and on behalf of the Board of Directors DR PALANI G PERIASAMY CHAIRMAN (DIN 00081002) Place : Chennai Date : 27.05.2015 |