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Directors Report of Dhanuka Commercial Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 21st Annual Report and Audited Accounts of the Company for the year ended March 31, 2015.

1. FINANCIAL RESULTS:

Your Company's performance during the financial year 2014-15 is summarized below:

(Amount in Rupees) For the year For the year ended 31.03.2015 ended 31.03.2014 Rs. Rs.

Total Revenue from operation 22089115.00 13305632.75

Total Expenditure 22734650.02 11202467.25

Profit/(loss) from Ordinary activities before tax (645535.02) 2103165.50

Less: Tax Expenses 124222.00 483658.00

Net Profit/(loss) from Ordinary activities after tax (769757.02) 1619507.50

Add: balance brought forward 265649.08 (1014481.95)

Less: Provision for Standard Assets 78869.80 15474.47

Less: Statutory Reserves creation 0 323902.00

Less: Transfer from Fixed Asset 17143.00 0

Less: Provision for Proposed dividend 0 0

Less: Dividend Tax 0 0

Balance carried forward to Balance Sheet (600120.74) 265649.08

2. BUSINESS PERFORMANCE

The Company has not divisions therefore division wise working details are not applicable. The company has mainly engaged in the business of providing unsecured loans and dealing in securities market. The company has earned a net loss of Rs 769757.02/- as compared to last year's profit of Rs. 1619507.50/-. Depressed results are due to loss in securities market dealings. The company has doing well till the first half of the year but in second half the loss in securities market has wiped off the profit from the lending business.

3. SHARE CAPITAL

The paid up equity capital as on March 31, 2015 was Rs.167, 434,590. During the year under review, the Company has not issued bonus shares nor issued shares with differential voting rights nor granted stock options nor sweat equity and nor buy back its own securities.

During the year under review, the company has issued 44, 40,000 equity shares of face value of Rs. 10 each at fixed price of Rs. 10 per share to the public via IPO.

4. DIVIDEND:

Due to the loss of the company, your Board of Director's have not recommended any dividend for the financial year 2014-15.

5. RESERVES AND PROVISIONS

The amounts, which the Board carries to any reserves/provisions, are given below:-

As Per RBI Guidelines

Statutory Reserve Fund (SRF) @ 20% of Not created any sum towards Net Profit under Section 45-IC of the Statutory Reserve Fund as RBI Act 1934: - the company has loss during the year.

Net amount in SRF=Rs.665479/-

Provision for Standard Assets (PSA) Created Rs. 78869.80/- towards @ 0.25% on Standard Assets: - PSA.

Net amount in PSA=Rs. 416047.01/-

6. RBI GUIDELINES

Your Company has complied with all the applicable rules, regulations & guidelines as prescribed by the Reserve Bank of India from time to time and as are applicable to Non-deposit accepting, Non- Systematically Important NBFC's .

7. DEPOSITS

I. The details relating to deposits, covered under Chapter V of the Act,-

(a) accepted during the year; Nil

(b) remained unpaid or unclaimed as at the end of the year; Nil

(c) whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved- NA

(i) at the beginning of the year; Nil

(ii) maximum during the year; Nil

(iii) at the end of the year; Nil

II. The details of deposits which are not in compliance with the requirements of Chapter V of the Act; Nil

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

Since, the company's main business activities are providing of loans and trading of securities of other companies and the company is registered with RBI as a Non-Banking Finance company hence the provisions of section 186 except sub section 1 of section 186 of the companies Act, 2013 read with Rule 11 & 13 of the Companies (Meetings of Board and its power) Rules, 2014 are not applicable to the company.

9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has a well-placed proper and adequate internal control system commensurate with the size and nature of its business. The Board has appointed Internal Auditors to more strengthen the internal control system. Internal Auditors directly reports to the Audit Committee or Board of Directors of the Company. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations.

The primary objective of the internal control system is to ensure that all its assets are safeguarded and protected and prevent any revenue leakage and losses to the Company. The Company has proper system of checking and/or review of functioning of the employees. Every employee has to report to his/her immediate boss. Audit Committee of the Board periodically reviews the functioning of the company to examine the adequacy and effectiveness of the internal control systems.

10. The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

A) Conservation of energy:

(i) The steps taken or impact on conservation of energy; Nil

(ii) The steps taken by the company for utilizing alternate sources of energy; Nil

(iii) The capital investment on energy conservation equipments; Nil

Note: - The Company has not any manufacturing activities which require heavy consumption of energy. The company uses latest technology low energy consumption products in its office.

B) Technology absorption:

i. The efforts made towards technology absorption;-Nil

ii. The benefits derived like product improvement, cost reduction, product development or import substitution; -Nil

iii. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - Nil

a) The details of technology imported;-Nil

b) The year of import; Nil

c) Whether the technology been fully absorbed; Nil

(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof; Nil and

iv. The expenditure incurred on Research and Development. Nil

Note: - In respect of the Nature of the Business of the company there was no requirement of any technology.

C) Foreign exchange earnings and Outgo:

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows. -No Foreign Exchange is earned or spent by the company during the year under review.

11. Number of meetings of the Board of Directors

The Board has met 10 times during the year on 02-04-2014, 03-05-2014, 08-05-2014, 10-05-2014, 05- 06-2014, 21-07-2014, 28-08-2014, 12-11-2014, 15-12-2014 and 17/02/2015 of which meetings proper notices has been given.

12. Details of Subsidiary/Joint Ventures/Associate Companies

The company has not any subsidiary companies or joint venture companies or associate companies during the year under review. Also, there was no company which have become or ceased to be the subsidiaries/joint ventures/associate company (ies) during the year.

13. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR provisions were not applicable on the company during the year under review.

14. Directors:

A) Changes in Directors and Key Managerial Personnel

Mr. Vinod Kumar Aggarwal has been re-designated as the Chief Financial Officer of the company as per the provisions of companies Act, 2013.

Mr. Surinder Kumar Bangia and Ms. Rajni Garg appointed as additional independent director by the board of directors in its meetings on 19/02/2014 and 03/05/2014 respectively had regularized in the last AGM. Mr. Sandeep Kumar Aggarwal, independent director of the company, had resigned from his office vide his resignation letter dated 09/07/2014 received on 10/07/2014.

Mr. Sanjeev Mittal appointed as a Non-executive Director/Chairman in the EGM held on 17/02/2014 being longest in tenure, is retiring by rotation in this AGM and being eligible, offered himself for reappointment as a Non-executive Director/Chairman liable to retire by rotation as per the provisions of Companies Act, 2013.

Mr. Mukesh Bansal appointed as an independent director in the EGM held on 17/02/2014 as per the provisions of companies Act 1956 and liable to retire by rotation in this AGM but due to the provisions of the Companies Act, 2013 (being an independent director) is no longer liable to retire by rotation and who is required to be appointed as an independent director under the provisions of Companies Act, 2013 and being eligible, the board has approved his reappointment as an independent director for 5 consecutive years as per provisions of Companies Act, 2013 subject to the approval of members in AGM.

B) Declaration by an Independent Director(s) and re- appointment, if any

All the independent directors have given declaration regarding their compliance of conditions of sub- section 6 of section 149 of the Companies Act, 2013 in the first board meeting of the FY 2014-15 as per the provisions of sub-section 7 of section 149 of the said Act. No independent director has been reappointed for second term on passing of a special resolution by the Company.

C) Formal Annual Evaluation

The Nomination & Remuneration Committee (hereinafter known as 'N & R Committee') has formulated a policy (approved by the board) on performance evaluation of the whole board, its committees, individual directors and KMP's. As per the Policy, performance evaluation of

* independent directors has been done by the whole board excluding the director being evaluated and submit its report to N & R Committee;

* whole board and non-independent directors including chairman has been done by independent directors and submit its report to N & R Committee;

* Committees of the board and KMP's have been done by the board of directors and submit its report to N & R Committee.

Specific questioner sheet has been set-up for performance evaluation of each category of persons mentioned above in the policy. N & R Committee reviews the reports of the Independent Directors and Board and accordingly, recommends the appointment/re-appointment/continuation of Directors to the Board. Based on the recommendation of N & R Committee, Board will take the appropriate action.

15. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has established vigil mechanism for directors and employees to report genuine concerns of fraud & misconduct in the company and the vigil policy is uploaded on the website of the company www.dhanukacommercial.com . Further, the company has not received any protected disclosures as per the vigil policy framed by the board.

16. PREVENTION OF INSIDER TRADING:

The Company has adopted 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. 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 of Directors and the designated employees have confirmed compliance with the Code.

17. RELATED PARTY TRANSACTIONS:

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto is disclosed in Form No. AOC -2 annexed as Annexure-A with this report.

18. MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES

Details of Managerial remuneration required pursuant to Section 197 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-B.

19. EXTRACT OF THE ANNUAL RETURN

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

20. AUDITORS AND AUDITORS'REPORT

The appointment of Statutory Auditors of the Company, M/s DSP & Associates, Chartered Accountants, (Firm Registration No. 006791N), who were appointed as Statutory Auditors by the members for four years in the last AGM, would be ratified in the ensuing Annual General Meeting.

The observations of the Auditors and the relevant notes on the accounts are self-explanatory and therefore do not call for any further comments.

21. SECRETARIAL AUDIT REPORT

The Board had appointed M/s Grover Ahuja & Associates, Practicing Company Secretaries, Delhi as Secretarial Auditor pursuant to the provisions of Section 204 of the Companies Act, 2013. The Report of the Secretarial Auditor is annexed to the Report as per Annexure 'D'.

22. LISTING WITH STOCK EXCHANGES:

The Company is listed on SME Platform of Bombay Stock Exchange Ltd. and confirms that it has paid the Annual Listing Fees for the year 2015-2016 to BSE Ltd. where the Company's Shares are listed.

23. BUSINESS RISK MANAGEMENT:

Business risk evaluation and management is an ongoing process within the Company as per the risk management policy established by the board. During the year under review, a detailed exercise on 'Risk Assessment and Management' was carried out covering the entire gamut of business operations and the Board was informed of the same.

In view of the activities of the company the board has opinion that the company has two major inherent risks which may threaten the existence of the company are "default in payment of loans by the customers" and "risks associated in the equity market". However, the company has followed the principal of assessing the risk and accordingly managing the business.

24. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

Your company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. A Report on Corporate Governance along with a certificate from Secretarial Auditors M/s Grover Ahuja & Associates, Practising Company Secretaries regarding compliance of conditions of corporate governance as stipulated in Clause 52 of the SME Listing Agreement entered by the company with the BSE Ltd. is annexed to this report and forms part of this report.

A detailed analysis of the Company's performance is discussed in the Management Discussion and Analysis Report, annexed to this report and forms part of this Report.

25. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. There were no complaints received from any employee during the financial year 2014- 2015 and hence no complaint is outstanding as on 31.03.2015 for redressal.

26. Other Details

* No Change in the nature of the business of the company during the year;

* No change of the name of the company during the year;

* No material changes has been occurred subsequent to the close of the financial year of the company to which the balance sheet relates and the date of the report like settlement of tax liabilities, operation of patent rights, depression in market value of investments, institution of cases by or against the company, sale/purchase of capital assets or destruction of any assets etc;

* No significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future;

* Refer Corporate Governance Report for details of Audit Committee; and

* Refer Corporate Governance Report for details of Nomination & Remuneration Committee.

* Refer Corporate Governance Report for details of Remuneration Policy.

27. Directors' Responsibility Statement

As required under the provisions contained in clause (c) of sub-section (5) of Section 134 of the Companies Act, 2013, your Directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are 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 and loss of the company for that period;

(c) the directors had 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;

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

(e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

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

28. ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank Regulatory and Government Authorities the Company's shareholders, investors, customers, bankers, and other stakeholders for their continued support to the company. Your Directors express their deep sense of appreciation towards all the employees and staff of the company and wish the management all the best for achieving greater heights in the future.

For and on behalf of the Board of Directors Dhanuka Commercial Ltd

-Sd- Chairman Sanjeev Mittal Date: 03-07-2015 Place: Delhi


Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting the 20th Annual Report of the Company together with the audited financial statements for the year ended 31st March, 2014.

FINANCIAL RESULTS

The financial results for the year ended 31st March, 2014 are summarized below:

(Rs. in Lacs) YEAR ENDED YEAR ENDED PARTICULARS 31.03.2014 31.03.2013

Total Revenue from operation 133.06 124.38

Total Expenditure 112.03 107.63

Profit/(loss) from Ordinary activities before tax 21.03 16.75

Less: Tax Expenses 4.84 8.19

Net Profit/(loss) from Ordinary activities after tax 16.19 8.56

Paid-up equity share capital

(Face Value of the share Rs.10/-) 1,230.35 178.31

Reserves and Surplus* 227.26 1,263.26

*During the year Board has capitalize Rs. 10, 52, 03,490/- from Securities premium Account with the permission of the Shareholders for issue of fully paid bonus shares to the shareholders.

COMPANY''S PERFORMANCE

Under the challenging conditions of the economy like inflation, high fiscal deficit, lack of liquidity, policy uncertainty and currency volatility, it is very difficult to survive and expand to any business organization but still our company responds in very positive way and shows the growth of 89.03% in profit after tax as compared to last year and our revenue during the year under review increased by 6.98% to 133.06 Lacs.

DIVIDEND

With a view to strengthening the financial position of the company, Your Board of Director''s have not recommended any dividend for the financial year 2013-14.

RBI GUIDELINES

Your Company has complied with all the applicable regulations prescribed by the Reserve Bank of India from time to time. According to Section 45-IC of the Reserve Bank of India Act, 1934, every NBFC shall create a reserve fund and transfer therein a sum not less than 20% of its Net Profit every year as disclosed in the Statement of Profit and Loss Account and before declaration of dividend, your Board transfers a sum of Rs 3.24 Lacs to the Statutory Reserve maintained under Section 45 IC of the RBI Act, 1934.

The Reserve Bank of India vide its Notification No.-DNBS 223/CGM (US)-2011 dated 17.01.2011 has issued directions to all NBFC''s to make provision of 0.25% on standard assets. Accordingly, the company has made provision @ 0.25% on standard assets in accordance with RBI directions.

INTERNAL CONTROL

DCL has adequate internal control systems which provide reasonable assurance that the assets of the Company are safeguarded and transactions executed in accordance with the Management''s authorization which is properly recorded and accounted for. The Company''s internal control has strengthened post the induction of Mr. Sanjeev Mittal and Mr. Gopal Krishan Bansal directors of the company both by qualification Chartered Accountants having immense experience, supported by efficient staff of the organization. To more strengthen the internal control system and to comply with the section 139 and 204 of the Companies Act, 2013, the Board has appointed Internal and Secretarial auditors respectively to periodically review the internal control systems and verify their effectiveness and coverage. The internal audit and secretarial audit is conducted by professionals external to the Company. The internal auditor is M/s Naresh K. Sharma & Associates, Chartered Accountants and Secretarial Auditor is M/s Grover Ahuja & Associates Practising Company Secretaries. The internal audit report will help the Management to identify areas which need to be attended to and those which require compliance with statutory requirements.

CORPORATE EVENTS

1. Share Capital

During the year under review, the Authorised Share Capital of the Company is increased to Rs 17,00,00,000/- (Rs. Seventeen Crore) from Rs. 1,80,00,000/- (Rs. One Crore Eighty Lacs only) by alteration in Capital Clause of Memorandum of Association in its Extra-ordinary General Meeting held on 31st day of December, 2013. The Board of Directors of the Company, with the approval of the shareholders, allotted 1, 05, 20,349 fully paid-up equity Shares as Bonus shares to existing Equity Shareholders in proportion to their shareholding by capitalizing Securities Premium Account to the extent of Rs. 10,52,03,490/-.

2. Change of Registered Office

During the year under review, the company has shifted its registered office from the state of Kolkata (West-Bengal) to Delhi by passing special Resolution in the Extra-ordinary General Meeting and pursuant to order of Regional Director (North-eastern Region) Kolkata Bench dated 10th October, 2013.

3. LISTING OF SHARES

Your company has got listed on the SME platform of BSE Ltd (Stock Exchange) vide exchange''s letter dated 10th June 2014 and trading of shares of the company started from 11th June, 2014.

PUBLIC DEPOSITS

During the year under report, your Company did not accept any deposits from public in terms of the provisions of Section 58A of the Companies Act, 1956 and the rules there under and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of Balance Sheet.

DIRECTORS

Mr. Gopal Krishan Bansal appointed as an additional director by the Board of Directors in their meeting held on 25th day of January 2014 was appointed as regular director in the Extra-ordinary General Meeting held on 17th day of February 2014 whose period of office is liable to retire by rotation.

Mr. Mahesh Kumar Dhanuka director of the company was appointed as Managing Director of the company in the Extra-ordinary General Meeting held on 17th day of February 2014.

Mr. Sanjeev Mittal as Chairman cum Director and Mr. Mukesh Bansal & Mr. Sandeep Kumar Aggarwal both as Independent Directors, all were appointed as regular directors by the company in the Extra- ordinary General Meeting held on 17th day of February 2014 whose period of office is liable to retire by rotation. Hence, Mr. Gopal Krishan Bansal is retiring by rotation in the ensuing Annual General Meeting and being eligible offered himself for reappointment.

Mr. Surinder Kumar Bangia and Ms. Rajni Garg both appointed as an additional directors by the Board of Directors in their meeting held on 19th day of February, 2014 and 03rd day of May 2014 respectively pursuant to the Provisions of the Section 161 of the Companies Act, 2013. Both are retiring in the ensuing Annual General Meeting and being eligible offered himself/herself for reappointment.

Mr. Vinod Kumar Aggarwal and Mr. Sandeep Kumar Aggarwal both the directors of the company resigned on 19th day of February 2014 and 09th day of July 2014 respectively. The Board Members placed on record their deep sense of gratitude and appreciation for the invaluable contribution and guidance provided by them.

COMMITTEES OF DIRECTORS

The Board of Directors has aligned the existing Committees of the Board with the provisions of the Companies Act, 2013. Accordingly, the Company has renamed its existing Remuneration & Compensation Committee as "Nomination & Remuneration Committee" and has delegated to it powers as required under section 178 of the Act. The existing Shareholder''s/Investor''s Grievance and Share Transfer Committee have been renamed as "Stakeholders Relationship Committee".

The scope of Audit Committee has also been widened so as to bring it in accordance with the requirement of Section 177 of the Companies Act, 2013.

AUDITORS

M/s DSP & Associates, Chartered Accountants, [Firm Registration No: 006791N] the Statutory Auditor of the Company, hold office in accordance with the provisions of the Act up to the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and analysis Report for the year under review as stipulated under Clause 52 of the SME Listing Agreement, is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE REPORT

The report on Corporate Governance as stipulated under Clause 52 of the SME Listing Agreement forms part of the Annual Report.

The requirement of Certificate from the Statutory Auditors M/S DSP & Associates, Chartered Accountants, regarding compliance with the conditions of the Corporate Governance as stipulated under Clause 52 of the SME Listing Agreement with stock Exchange was not applicable to the company as the company was not listed during the year under review.

Your company has taken adequate steps for strict compliance with the Corporate Governance guidelines, as amended from time to time.

The Company has established a Vigil Mechanism as required under section 177 of the Companies Act, 2013 and has framed the "Whistle Blower Policy" for implementation thereof.

PARTICULARS OF EMPLOYEES

The company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under the provisions contained in Section 217(2AA) of the Companies Act, 1956 ("the Act"), your Directors hereby confirm that:

1. In the preparation of Annual Accounts for the financial year 2013-14, the applicable Accounting Standards have been followed and there are no material departures;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are 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 of the Company for financial year;

3. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

4. The annual accounts have been prepared on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Since the Company does not carry on manufacturing activities, disclosure requirements under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1956 in this connection are not applicable. However, your Company, being a responsible corporate citizen, has been taking various measures for reducing the energy consumption.

Total Foreign Exchange Earned: NIL Total Foreign Exchange Expended: NIL

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank Regulatory and Government Authorities the Company''s share holders, investors, customers, bankers, and other stakeholders for their continued support to the company. Your Directors express their deep sense of appreciation towards all the employees and staff of the company and wish the management all the best for achieving greater heights in the future.

For and on Behalf of the Board of Directors -Sd-

(SANJEEV MITTAL)

CHAIRMAN

 
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