To,
The Members,
DHANADA CORPORATION LIMITED
The Board of Directors of your Company has pleasure in presenting the
35th Annual Report of the Company together with the Audited statements of
accounts for the year ended on 31st March 2021.
1. Financial summary or highlights / performance of the Company:
Your Company's financial summary / performance during the year under
review as compared to the previous year are summarized below:
|
|
(Rs. in Crores) |
| Particulars |
2020 - 21 |
2019 - 20 |
| Turnover |
2.94 |
9.28 |
| Profit / (Loss) before Finance charges, Tax, Depreciation /
Amortization |
(1.10) |
0.97 |
| Finance Charges |
4.10 |
3.54 |
| Profit / (Loss) before Tax, Depreciation / Amortization |
(5.21) |
(2.57) |
| Depreciation |
0.70 |
0.76 |
| Profit / (Loss) before Tax |
(5.91) |
(3.33) |
| Provision for Tax |
Nil |
Nil |
| Profit / (Loss) after Tax |
(5.91) |
(3.33) |
| Proposed Dividend |
Nil |
Nil |
2. Dividend:
In view of the losses, the Board of Directors does not recommend any
dividend for the year ended on 31st March 2021.
3. Reserves:
No amount is proposed to be transferred to the Reserves.
4. State of Affairs (Standalone):
As per the Orders passed by Additional Sessions Judge, Aurangabad dated
05.02.2019, 24.05.2019 and 24.10.2019 the office of the Sub Divisional Officer and
Competent Authority (MPID Act), Aurangabad after attaching VITS Hotel had taken its
possession and continued the supervision of the Hotel premises and management of day to
day affairs of the said hotel operations.
In the last week of March 2020 (23rd March 2020) there was
lockdown announced due to COVID-19 pandemic. The guests' bookings were cancelled, and no
fresh bookings were taken till 31st July 2020. Subsequently, as per the order
of SDO dated 05.05.2020, the hotel was announced as COVID Centre for the stay of doctors /
medical officers till February 2021. Accordingly, during the year under review, the
turnover of the Company in respect of accommodation and food & beverages has
substantially gone down as compared to the previous year.
The operating margins were under pressure due to fix operating costs
especially power and employee benefit cost. As a result, the Company could not register
profit.
Finance
The shortage of finance continues to be the major challenge before the
Company. The parent company was not able to extend its helping hand due to its own
problems.
Due to the NPA status, all the sources of raising further finance are
blocked. The Promoters are doing whatever is possible in their individual capacity to
remedy the situation.
The Company somehow managed its working capital needs through internal
resources. Current Year Prospects
The lockdown has had an unfortunate impact on the hospitality sector
where the occupancy levels have taken a major hit and are at an alarming all-time low,
resulting in some hotel having to either shut operations or run with very limited
facilities. Almost 53% of the total leading hotel operators have shut down more than 80%
of their inventory during the nation-wide lockdown period. The COVID-19 pandemic has
brought the world to a standstill, with the hospitality, travel and tourism sector being
the most affected due to travel restrictions across the world and within India.
Being one of the high contact sectors, hospitality has been one of the
first and worst-hit sectors due to the pandemic, and the second wave has only added to
their woes as it has come at a time when the industry was on its path to recovery.
Majority of hotel operators expect that it will take 13 to 24 months for their hotels to
return to revenue per available room (RevPAR) levels of last year. Luxury hotel operators
are expected to ramp up much slower with some expecting that their portfolio may take more
than 2 years to reach 2019 performance levels, the survey said. However, with the slowdown
of hotel developments, capital assistance is needed to help hotels to sustain until demand
returns.
The tourism and hospitality sectors were first to be affected by
COVID-19 and probable will be the last to come out of this.
The chances of improvement in financial situation during the year look
dim.
5. Change(s) in the nature of business, if any:
There is no change in the nature of business of the Company.
6. Material changes and commitments, if any, 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:
Nil. No such material changes and commitments have occurred.
7. Details of significant and material orders passed by the regulators
/ courts / tribunals impacting the going concern status and the Company's operations in
future:
The Court of District and Session Judge, Aurangabad had passed an order
for attachment and sale of the property / assets of the Company under Maharashtra
Protection of Interest of Depositors (In Financial Establishment) Act, 1999 (MPID Act).
The Company had filed Petitions for Special Leave to Appeal in Supreme
Court of India, Delhi, against the order passed by the Aurangabad High Court and the
Hon'ble High Court, Mumbai for attachment and sale of the property / assets of the Company
under MPID Act, to challenge the said orders. The Petitions were called on for hearing on
30th November 2018. Upon hearing, the Hon'ble Court passed the order of
dismissal of the Special Leave Petitions.
Accordingly, the office of the Sub Divisional Officer and Competent
Authority (MPID Act), Aurangabad had taken possession of the Hotel premises and attached /
debit - freeze the bank accounts of the Company and had put the property / commercial
building of the Company i.e. Hotel Vits, CTS No. 18349/1-2-3, Vedant Nagar, Near Goldy
Cinema, Railway Station Road, Aurangabad for e-Auction in the months of February and March
2019. However, the said e-Auction is not yet taken place.
As per the Orders passed by Additional Sessions Judge, Aurangabad dated
05.02.2019, 24.05.2019 and 24.10.2019, the Competent Authority (MPID Act), Aurangabad,
after attaching VITS Hotel, continued the supervision of the Hotel premises and management
of day-to-day affairs of the said hotel operations. The Competent Authority has formed a
committee for the supervision of the Hotel premises through the staff of the Hotel. The
Competent Authority has opened a separate bank account to manage the day-to-day financial
operations of the Company.
Further, the Court has directed the Competent Authority to deposit the
amount lying in its bank account in the Court and to deposit the income of the VITS Hotel
in the Court every fortnight along with the account statements and to make payments to the
applicants of the case out of the amount deposited in Court. Accordingly, the Competent
Authority has deposited / transferred certain amount to the account head 'Additional
Session Judge Aurangabad'. The Company has not received any intimation from the court
authority till date about any payments made under MPID Act to the applicants. The Company
has been running the hotel under an arrangement with Vitizen Hotels Ltd. (VHL) to whom
management and other charges are payable. The Sessions Court, Aurangabad, under the
ongoing MPID case, vide its further Order dated 17th March 2021 had appointed
an independent auditor to examine the books of the Company. The Court ordered VHL to
deposit an amount of Rs. 41.00 lakhs with the Competent Authority. Against this, VHL has
deposited an amount of Rs. 32.52 lakhs which has been included in amount with 'Additional
Session Judge Aurangabad' Further, the VHL is directed to deposit a certain amount on or
before 10th of every month w.e.f. April 2021 till further order. The Court also
ordered Competent Authority to initiate the process of auction sale of attached property
within a period of 6 weeks from the order date on the price reserved earlier. However, the
auction is not yet concluded.
8. Statement in respect of adequacy of internal financial controls with
reference to the Financial Statements:
Internal Financial controls are adequate and operating effectively
commensurate with the size, nature of operations of the Company.
The separate report of the Auditors about the existence of internal
financial controls system and its operations is attached to the Auditor's Report as an
Annexure A to the Auditor's Report.
Explanation to Auditor's comment on Internal Financial Controls:
The management has noted the discrepancies pointed out by the Auditor
and is taking steps to strengthen the controls in those areas.
9. Details of Subsidiary / Associate Companies / Joint Ventures:
Nil. The Company has no Subsidiary / Associate / Joint Venture.
10. Performance and financial position of each of the subsidiaries
included in the consolidated financial statement:
Not Applicable.
11. Particulars of loans / advances / guarantees / investments
outstanding during the financial year:
The particulars of loans / advances / guarantees / investments covered
under Sections 185 and 186 of the Companies Act, 2013 and as per SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 are given in the notes to the financial
statements provided in the Annual Report.
12. Deposits:
The Company has not accepted deposits from the public within the
meaning of Section 73 of the Companies Act, 2013 and the rules framed there under. The
Company has not taken any loans or advance from directors during the year.
13. Auditors:
Statutory Auditors
M/s. Shashank Patki & Associates, Firm of Chartered Accountants,
Pune having Firm Registration No. 122054W, were appointed as Statutory Auditors of the
Company in the 30th Annual General Meeting held on 30th September
2016 to hold office upto the conclusion of 35th Annual General Meeting.
Pursuant to the provisions of Section 139 of the Companies Act, 2013
read with the rules made thereunder, a listed entity can appoint an Audit Firm as
Statutory Auditors for two terms of 5 (Five) consecutive years. However, the same Audit
Firm shall not be reappointed after completion of both terms. The first term of M/s.
Shashank Patki &
Associates would be completed at the conclusion of the ensuing Annual
General Meeting.
Based on the recommendation of Audit Committee, the Board of Directors
further recommended to re-appoint the aforesaid Audit Firm as Statutory Auditors of the
Company for another term of 5 (Five) consecutive years i.e. upto the conclusion of 40th
Annual General Meeting subject to the compliance of applicable provisions of the
Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. The Company has received Consent letter and Eligibility Certificate
from the said Audit Firm in terms of the provisions of Section 141 of the Companies Act,
2013 and Rule 4 of Companies (Audit and Auditors) Rules, 2014.
Secretarial Auditor
Ms. Sanjana Hinge, Practicing Company Secretary was appointed to
conduct the secretarial audit of the Company for the financial year 2020 - 2021, as
required under Section 204 of the Companies Act, 2013 and rules made there under. The
Secretarial Audit Report for the financial year 2020 - 2021 in Form MR-3 is attached as
Annexure 1 to the Directors' Report.
14. Explanations or comments on qualification, reservation or adverse
remark or disclaimer in Auditor's Report:
The Audit Report contains certain observations and we offer our
comments in this regard as under:
a. Auditors Comment: As mentioned in note no. l of Note - 22 B, the
accounts have been compiled on the basis of the records and documents available with the
Company due to seizure of records and documents by various authorities on various
occasions. The impact on accounts (financial as well as disclosure) due to such
non-availability of the records is not ascertainable.
There will be no significant impact on accounts (financial as well as
disclosure) of the Company.
b. Auditors Comment: During last year, in the last week of March 2020
(23rd March 2020), there was lockdown announced due to Covid-19. Further vide the order of
SDO dated 05.05.2020 the hotel has been declared as a Covid centre for the stay of
doctors, as per the order of session judge. The hotel was occupied for the doctors stay
till February 2021.This created an impact on the operations of the concern; financial
implication of the same is not ascertainable.
There will be no significant impact on accounts (financial as well as
disclosure) of the Company.
c. Auditors Comment: As mentioned hereinabove, a lockdown was announced
w.e.f. 23rd March 2020 throughout the State of Maharashtra, and the same was
reimposed again in April 2021. Due to the restriction on inter-district movements, we
could not visit the Place of business at Aurangabad. We have carried out our audit on the
basis of the accounts maintained in the system and scanned copies of various records and
documents submitted to us. As far as the bills, vouchers and documents pertaining to the
business place at Aurangabad are concerned, we have been constrained to keep reliance on
the internal audit reports and stock verification reports submitted by an independent firm
of Chartered Accountants appointed as Internal Auditors of the Company. Our audit and
certification is subject to the non-availability of these records also.
The Auditors remarks are self-explanatory.
d. Auditors Comment: As mentioned in foot note no. 1 of Note no. 1 and
foot note no. 2 of Note no. 8, pending conveyance of land at Nande, pending payment of
stamp duty applicable to scheme of arrangement & amalgamation sanctioned by Hon'ble
Bombay High Court vide their judgment dated 16th July 2009 and pending legal
formalities of allotment of shares (the subject matter of the aforesaid scheme),
accounting has been done of Fixed Assets (Land) of Rs. 1,59,65,999.74, Issued, Subscribed
and Paid up Share Capital of Rs. 17,96,254.00, Share Premium of Rs. 1,06,69,748.76 and
Current Liabilities (Amount payable to Dr. Laxman V. Kulkarni) of Rs. 34,99,996.98.
Pending completion of all legal formalities, the respective amounts on the aforesaid
accounts are overstated to that extent.
The Company has acquired land at Nande from Dr. Laxman V. Kulkarni
pursuant to the Scheme of Amalgamation approved by the High Court. As per the Scheme, the
Company was required to allot 17,96,254 Equity Shares and pay Rs. 34,99,996.98,
additionally, as a consideration for the said land to Dr. Kulkarni, by executing separate
Conveyance Deed. However, the management was advised that the allotment is required to be
made before the execution of the Conveyance Deed. Accordingly, in good faith the Board
allotted the necessary shares to Dr. Kulkarni and prepared the deed for registration.
However, Dr. Kulkarni, expressed his desire for upward revision of the total
consideration, as the prices of the land have gone up considerably since 01.04.2008 i.e.
the appointed date and the market price of the equity shares of the Company have not
appreciated in line with the same. Due to this, the conveyance deed with Dr. Laxman V.
Kulkarni is not yet done. The management is exploring ways and means to sort out the issue
and hopes that the same will be resolved amicably. However, until the financial
difficulties are resolved, a solution to this issue appears remote. After settlement of
the issue and completion of all legal formalities, the aforesaid amounts accounted for
under Fixed Assets, Share Capital, Share Premium will stand confirmed.
e. Auditors Comment: In the absence of the records, the nature of
Capital Work in Progress (pending since long), as mentioned in foot note no. 3 of Note no.
1, could not be ascertained. As such the probable accounting thereof, capital or revenue,
is pending. Further, the impairment of Assets (including Capital Work in Progress), if
any, as per the requirements of Ind AS 36 has not been ascertained, and as such, the
consequent financial impact on accounts is not ascertainable.
The management believes that there will be no significant impact on
accounts (financial as well as disclosure) of the Company. Till the underlying asset is
put to use the amount will stay under Capital work in progress.
f. Auditors Comment: Details and supporting documents of the amount of
Rs. 3,91,00,000/- paid as Advance to Dr. Laxman V. Kulkarni (Foot note 2 of Note no. 4)
are not available with the Company. As such, we are unable to express our opinion on the
genuineness of the payment, recoverability thereof and correctness of the accounting
treatment. Financial impact on accounts is not ascertainable.
The Company has acquired land at Nande from Dr. Laxman V. Kulkarni
pursuant to the Scheme of Amalgamation approved by the High Court. As per the Scheme, the
Company was required to allot 17,96,254 Equity Shares and pay Rs. 34,99,996.98,
additionally, as a consideration for the said land to Dr. Kulkarni, by executing separate
Conveyance Deed. However, Dr. Kulkarni, expressed his desire for upward revision of the
total consideration, as the prices of the land have gone up considerably since 01.04.2008
i.e. the appointed date and the market price of the equity shares of the Company have not
appreciated in line with the same. The Company has paid Rs.3,91,00,000/- to Dr. Kulkarni
as Advance against the said land. However, due to financial difficulties, the Company is
not able to pay the balance amount as desired by Dr. Kulkarni. Due to this, the conveyance
deed with Dr. Laxman V. Kulkarni is not yet done. The management is exploring ways and
means to sort out the issue and hopes that the same will be resolved amicably. However,
until the financial difficulties are resolved, a solution to this issue appears remote.
After settlement of the issue, the amount of Rs. 3,91,00,000/- will be added to the Fixed
Assets under Land.
g. Auditors Comment: As mentioned in foot note no. 6 of Note No. 7,
Balances with Banks in current account include as amount of Rs. 179,75,000/- kept in bank
account in the individual name of a director. As informed to us, this amount has been kept
in No Lien Account as part of the negotiation with a lender bank for One Time Settlement.
Further, this account is subject to confirmation, reconciliation and consequential
adjustments, if any. Financial impact on accounts is not ascertainable. The Company has
assured us that no such other bank account (other than those recorded in the books of the
Company) has been opened by the Company, on which reliance has been placed.
The Company has received a proposal from Bank of Maharashtra to avail
the "MAHA MUKTI YOJANA" Scheme introduced by it for One Time Settlement (OTS) of
outstanding dues of the Company. A No Lean Account was opened in the name of Director of
the Company and the amount of Rs. 1,79,75,000/- was deposited in the said account as a
part of the negotiation with a lender bank. After finalization of OTS proposal, this
amount of Rs. 1,79,75,000/- will be adjusted by the Bank against its dues. As a result,
the amount will be reduced from Current assets and Current liabilities.
h. Auditors Comment: As mentioned in foot note no. f of Note No. 22B,
the outstanding balances of sundry creditors, sundry debtors, and advances (taken or
given), bank current accounts (as specified in foot note 8 and 9 of Note 7), bank deposit
accounts, all loan/overdraft accounts are subject to confirmation, reconciliation and
consequential adjustments if any. Financial impact on accounts is not ascertainable.
The management believes that there will be no significant impact on
accounts (financial as well as disclosure) of the Company.
i. Auditors Comment: As mentioned in various notes, no provision has
been made for interest on Sales Tax Deferment and interest / penalties for non-payment /
late payment of statutory dues and for non-compliance of legal formalities under different
statutes and laws, interest payable to MSME creditors etc., if any. The amount is not
ascertainable. Financial impact on accounts is not ascertainable.
Phoenix ARC Pvt. Ltd. / Saraswat Co.-Op. Bank Ltd. are not providing
the statement of dues / interest / penal interest / other charges, if any. Hence, the
Company has provided in its books as per the contractual rate of interest. As far as Sales
Tax demand is concerned, the Company has provided as per the Assessment Order. The penal
interest / penalties for late payment of statutory dues, non-compliance of legal
formalities etc. are not provided for due to financial difficulties. The management is
unable to estimate the impact of audit qualification.
j. Auditors Comment: As mentioned in Note No. 16 and 20, in the absence
of details, the interest on borrowings and on bank deposits has been accounted for at
contractual rates. Financial impact on accounts is not ascertainable.
Phoenix ARC Pvt. Ltd. / Saraswat Co.-Op. Bank Ltd. are not providing
the statement of dues / interest / penal interest / other charges, if any. Hence, the
Company has provided in its books as per the contractual rate of interest. The penal
interest / penalties are not provided for due to financial difficulties. The management is
unable to estimate the impact of audit qualification.
k. Auditors Comment: The company's gross investments in equity shares
of the then three subsidiary companies of Rs. 883.13 lakhs were sold during the Financial
Year 2017-18 for an amount of Rs. 0.48 lakh only. The value of these investments was
diminished progressively by charging to profit and loss accounts for the years from
2014-15 to 2017-18. We have not examined the propriety of this sale, which was based on
the management's assessment on the recoverability of these financial assets and of the
consequent loss.
These the then three subsidiary companies are non-operational. Their
net-worth is completely eroded. They did not contribute anything to the Company but added
the work of consolidation. The Company is not in a position to infuse funds in these
companies for their revival. The management has chopped of some dead wood from its Balance
Sheet.
l. Auditors Comment: The Company has not obtained confirmations from
debtors and other parties for the amount due from them. Further, in the absence of the
records, seized by various authorities at various points of time, the recoverability of
these amounts could not be ascertained. The company has written off / provided for the
credit loss and non-recoverability of debtors, based on its own assessment. However, the
company has not applied any scientific / verifiable basis for arriving at such write off
or provision for doubtful of recovery.
All the outstanding balances of debtors are from ordinary course
business activity of the Company. Due to Covid 19 pandemic most of the offices of concern
parties are still closed or doing their work from home and unable to provide confirmation
of balances.
The Company has identified debtors of which the balances standing with
them was old outstanding and could not be recovered in spite of putting continuous efforts
in appropriate manner or some of are not in exist in their business. Finally, it has been
decided to written off such amount in the books of accounts. The Company has identified
such debtors and made provision thereof for doubtful recovery which is having some
disputes and possibility that amount may not be recovered from them.
m. Auditors Comment: In the earlier years, an advance was paid to a
Director (outstanding balance as on 31st March, 2020 - Rs. 3,01,44,128/-
swapped in the name of Dhanada Holding Pvt. Ltd. in earlier year and again transferred
during the year in the name of the director) which was in contravention of Section 185 of
the Companies Act, 2013. As mentioned in note no. j of Note no. 22 B, the director has
cleared this advance by bringing in money from his own business activity at various times
in the current year.
In the absence of any supporting documentary evidence, we are
constrained to rely on the declaration of the Director that the said amount has been
brought in from his own business activity.
Out of such money brought in by the director, the cheques amounting to
Rs. 2,59,04,128/- were lying with the company as at the Balance Sheet date. They are
reflected as Cheques on Hand as at 31st March, 2021. However, the amounts have
actually been credited in the bank account in the months of April and May 2021. Further,
pay-in-slips for these credits have not been produced for our verification. Though there
are actual credits in the bank statements in the ensuing months, we are unable to
ascertain whether really these were the cheques on hand as at 31st March, 2021.
Further, any interest, fines and penalties for contravention of the
provisions of Section 185 & 186 (for a small intervening period) of the Companies Act,
2013, if any, is not ascertainable. Impact on accounts is not ascertainable.
The Auditor's Comment is self explanatory. The director has cleared the
advance by bringing in money from his own business activity at various times in the
current year. The Company has deposited Cheques on Hand as at 31st March 2021,
received from a director, in its bank account by putting account number and other details
on the back of the cheques as instructed by the bank and dropped them in the drop box. The
Company has not received any pay-in-slips from the bank. The amounts credited in the bank
accounts in the month of April and May 2021 are against the clearance of the said cheque
numbers only. The necessary entries are appearing in the bank statement. There will be no
significant impact on accounts (financial as well as disclosure) of the Company.
n. Auditors Comment: As mentioned in Foot note 4 of Note no. 6, the
company has been running the hotel under an arrangement with Vitizen Hotels Ltd. (VHL) to
whom Management and other charges are payable. Sessions Court, Aurangabad, under the
ongoing MPID case, had appointed an independent auditor to examine the books of the
Company. Pursuant to his audit report, the Court ordered VHL to deposit an amount of Rs.
41.00 lakhs with the Competent Authority. Against this, VHL has deposited an amount of Rs.
32.52 lakhs which has been included in amount with 'additional session judge Aurangabad'.
Management and other charges in respect of revenue from the Doctors stay at Hotel during
pandemic have not been accounted for pending discussion with VHL. VHL has now submitted
their account statement which is in the process of reconciliation. In view of the
foregoing, the account of VHL is subject to confirmation, reconciliation and consequential
adjustments, if any. Impact on accounts is not ascertainable.
The Auditor's Comment is self explanatory. The management believes that
there will be no significant impact on accounts (financial as well as disclosure) of the
Company.
o. Auditors Comment: As mentioned in Foot note 9 of Note 4, An amount
of Rs.96.42 lakhs (Previous Year Rs. 63.90 lakhs) has been transferred to the account of
'Additional Sessions Judge Aurangabad' till 31st March 2021, pursuant to an order dated
24.05.2019 and 17-03-2021, passed by the Sessions Judge under MPID Act. The balance is
subject to confirmation. Vide order dated 24.10.2019, Spl. Judge (MPID), Aurangabad has
ordered to make payment to the applicants of the said case under MPID Act, out of this
amount deposited in the Court. The Company has not received any intimation from the Court
Authority till date about any payments made under MPID Act to the applicants. Pending such
intimation, the amount is shown as advance in the name of Spl. Judge, MPID Aurangabad. As
informed to us, on receiving the official intimation, appropriate accounting would be
done. Impact on accounts is not ascertainable.
The Auditor's Comment is self explanatory. The management is unable to
estimate the impact of audit qualification.
p. Auditors Comment: Statutory dues
The default made in payment of certain statutory dues is due to
financial difficulties. Management is unable to estimate the financial impact of the same.
Rest of the Auditor's observations / comments are either
self-explanatory or are dealt with / replied earlier in this report.
15. Explanations or comments on qualification, reservation or adverse
remark or disclaimer in Secretarial Audit Report:
The Secretarial Audit Report contains certain observations and we offer
our comments in this regard as under:
1. An amount of Rs. 3,01,44,128/- is advanced to the Managing Director
and execution of Tri-partite Financial Liability Takeover Agreement in contravention of
the provisions of Section 185 of the Companies Act, 2013.
The Auditor's comment is self explanatory. The Managing Director has
repaid / cleared the entire outstanding amount / advance as at 31st March 2021
receivable from him to the Company.
2. Non - publishing of notices etc. in the newspapers regarding
availability of electronic voting facility, cut-off date etc. required u/s 108 of the Act
and rule 20 of Companies (Management & Administration) Rules, 2014 read with
Secretarial Standards.
Due to financial difficulties, the Company did not publish notices etc.
in the newspapers.
3. Non - publishing of book closure notice in the newspapers and also
not submitted the same to BSE.
Due to financial difficulties, the Company did not publish notice in
the newspapers. Also, non - submission of book closure notice to BSE was due to oversight.
4. Non - filing of Form PAS - 3 (earlier Form-2) for allotment of
Equity shares made on 30th April 2010.
In respect of allotment of Equity shares against consideration other
than cash, the Company has to file stamped document with the Registrar of Companies along
with Form PAS - 3 (earlier Form 2) i.e. Return of Allotment. Due to the pendency of
payment of stamp duty on High Court Order dated 16th July 2009, the Company is not able to
file the said form with the Registrar of Companies in respect of Equity Shares allotted to
Dr. Laxman V. Kulkarni.
5. Discrepancies in the issued share capital and listed share capital.
Due to technical issues and financial difficulties, some formalities in
respect of issue of shares made under the Scheme of Arrangement and Amalgamation are not
yet completed; hence those shares and the shares further issued by the Company through
private placement are yet to be listed. The Company would like to resolve the issue.
However, until the financial difficulties are resolved, a solution to this issue appears
remote.
6. Non - submission of Certificate under regulation 74(5) of SEBI
(Depositories and Participants) Regulations, 2018 for the quarters ended on 31.03.2020,
30.06.2020, 30.09.2020 and 31.12.2020.
The non - submission was due to oversight.
7. Non - submission of disclosures under regulation 29(2) of SEBI
(SAST) Regulations, 2011 for changes made in shareholding of promoters during the period
from 01.04.2019 to 31.03.2021.
The non - submission was due to oversight / COVID-19 situations. The
management is in the process of submission of the said pending disclosures.
8. Delay in submission of disclosures under regulation 29(2) of SEBI
(SAST) Regulations, 2011 for changes made in shareholding of one of the promoters during
the month of March 2021.
The delay was due to some technical issues.
9. The promoters of the Company had sold certain shares / did trading
in the securities of the Company when trading window was closed pursuant to SEBI (PIT)
Regulations, 2015.
As lockdown announced by the Government due to COVID-19 pandemic, the
office and Hotel VITS situated at Aurangabad was closed and not generating any revenue.
Further, due to financial crises, the Company was not in a position to pay salary of its
employees / staff and certain immediate statutory dues. Considering the urgent requirement
of funds and in the best interest of and for the benefit of the Subsidiary Company and its
employees / staff, the promoters sold certain shareholding. The transactions were placed
for urgent necessities and after pre-clearance / approval obtained from the Compliance
Officer. Further, at the time of execution of trade, promoters were not in possession of
any such unpublished price sensitive information.
10. Non - submission of disclosures under regulation 7(2) of SEBI (PIT)
Regulations, 2015 for changes made in shareholding of promoters during the period from
01.04.2019 to 31.12.2020.
The non - submission was due to oversight / COVID-19 situations. The
management is in the process of submission of the said pending disclosures.
11. Delay in submission of disclosures under regulation 7(2) of SEBI
(PIT) Regulations, 2015 for changes made in shareholding of promoters during the month of
March 2021.
The delay was due to some technical issues.
12. There was no qualified Company Secretary as Compliance Officer
during the period 07.12.2020 to 08.04.2021 pursuant to regulation 6 of SEBI (LODR)
Regulations, 2015.
The previous Company Secretary had resigned w.e.f. 07.12.2020. The
vacancy was filled by the Company in the Board Meeting held on 09.04.2021. The said non -
compliance is rectified now.
13. Delay in payment of Annual Listing Fees (ALF) to the Bombay Stock
Exchange Limited pursuant to regulation 14 of SEBI (LODR) Regulations, 2015.
Due to financial difficulties, the delay was made in payment of Annual
Listing Fees (ALF) to the Bombay Stock Exchange Limited.
14. Delay in submission of disclosures of related party transactions
for the half year period ended on 31.03.2020 and 30.09.2020 pursuant to regulation 23(9)
of SEBI (LODR) Regulations, 2015.
The delay was due to COVID-19 situations / oversight.
15. Delay in submission of disclosure of default on payment of interest
/ repayment of principal amount on loans from banks / financial institutions for the
quarter ended on 31.03.2020 pursuant to regulation 30 of SEBI (LODR) Regulations, 2015
read with SEBI Circular dated 21.11.2019.
As lockdown announced by the Government due to COVID-19 pandemic, the
office was closed. Hence, the management was not able to collect the necessary information
/ figures required for such disclosure within the prescribed time limit. However, the said
disclosure was submitted later on 20.08.2020.
16. Non - submission of disclosure of default on payment of interest /
repayment of principal amount on loans from banks / financial institutions for the
quarters ended on 30.06.2020, 30.09.2020 and 31.12.2020 that are required to be submitted
within 7 days of the end of the quarter pursuant to regulation 30 of SEBI (LODR)
Regulations, 2015 read with SEBI Circular dated 21.11.2019.
The non - submission was due to oversight.
17. Hundred percent of shareholding of promoters and promoters group is
not in dematerialized form.
Due to technical issues, some formalities in respect of 29,00,879
Equity shares issued under the Scheme of Arrangement and Amalgamation to promoter are not
yet completed; hence those shares and 54,17,000 Equity shares further issued by the
Company through private placement to promoter are yet to be listed. As the allottee cannot
dematerialize the securities issued to him before listing of the same on the relevant
stock exchange, the 83,17,879 Equity shares held by the promoter(s) / promoter group are
in physical form. The Company would like to resolve the issue. However, until the
financial difficulties are resolved, a solution to this issue appears remote.
18. Delay in submission of audited annual and quarterly financial
results for the year ended 31.03.2020 along with Statement on Impact of Audit
Qualifications pursuant to regulation 33(3)(d) of SEBI (LODR) Regulations, 2015.
Inadvertently, the Statement on Impact of Audit Qualifications was not
submitted along with the results. The said non - compliance was rectified by it later on.
19. The financial results in respect of the last quarter along-with the
results for the entire financial year ended on 31.03.2020 submitted by the Company did not
contain a note that the figures of last quarter are the balancing figures between audited
figures in respect of the full financial year and the published year-to-date figures upto
the third quarter of the current financial year pursuant to regulation 33(3)(d) of SEBI
(LODR) Regulations, 2015.
The non - compliance was due to oversight.
20. Delay in serving of / submission of Annual Report for the year
ended on 31.03.2020 along with the Notice of Annual General Meeting and other attachments
thereto. The said notice and documents were served / submitted at a shorter period.
The delay was due to some technical issues.
21. Dealings with unclaimed shares.
The Auditor's comment is self explanatory. The management has started
the process of compliance with the same.
22. Non - publishing notices etc. in the newspapers as required under
Listing Regulations.
The Company has submitted notices, quarterly unaudited financial
results and audited financial statements etc. required under SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 to the Bombay Stock Exchange Ltd. within the
prescribed time and the same were also made available on the website of the Company.
However, due to financial difficulties, the Company did not publish notices, results and
statements etc. in the newspapers.
23. Non - payment of fine to BSE for non - submission / late submission
of disclosures / documents required under regulations 23(9) and 34 of SEBI (LODR)
Regulations, 2015.
Due to financial difficulties the Company is not in a position to pay
the amount of fine. The management will request BSE to waive the fine amount.
24. Non - submission of disclosure / undertaking for Large Corporate
Entities for the year ended on 31.03.2020 as required under SEBI Circular No.
SEBI/HO/DDHS/CIR/P/2018/144 dated 26th November 2018.
The non - submission of undertaking was due to oversight. Further, the
Company is not falling under the criteria of Large Corporate Entities. Hence, the Company
was not required to submit any disclosure to the exchange under SEBI Circular.
25. Complaints against Chairman, Directors and the Company
The complaints and cases are still pending in the respective court/s.
The Chairman and the Directors are not yet convicted.
Rest of the Secretarial Auditor's observations / comments are
self-explanatory or dealt with / replied earlier in this Report.
16. Share Capital:
There were no changes in the share capital during the year under
review.
17. Extract of the Annual Return:
Pursuant to the provisions of Section 92 of the Companies Act, 2013,
the Annual Return of the Company in Form No. MGT-7 filed with the Registrar of Companies,
Pune for the F.Y. 2019 - 20 is available on the website of the Company. The web link
thereto is http://www.dhanadacorp.com/pdf/Form MGT-7 310320.pdf. As the ensuing Annual
General Meeting of the Company is proposed to be held on 30th September 2021,
the Company shall upload a copy of Annual Return for the F.Y. 2020 - 21 on its website as
soon as it has been filed with the Registrar of Companies, Pune.
18. Conservation of energy, technology absorption, foreign exchange
earnings and outgo:
The Company through constant monitoring, selection of energy saving
equipments and education of staff and guests endeavors to conserve and optimize the use of
energy.
The Company does not undertake any research and development activity
neither does it use any imported technology.
Foreign Exchange Earnings : Nil
Foreign Exchange Outgo : Nil
19. Corporate Social Responsibility (CSR):
The provisions of Section 135 of the Companies Act, 2013 are not
applicable to the Company.
20. Directors:
Change in Directors and Key Managerial Personnel (KMP)
Mr. Ramesh R. Havele (DIN 00007580), was re-appointed as a Managing
Director of the Company w.e.f. 25th October 2020 for a further period of 5
(Five) years.
Mrs. Smita A. Mishra, Company Secretary and Compliance Officer of the
Company resigned w.e.f. 7th December 2020. The Company has appointed Ms. Parul
Rathore as Company Secretary and Compliance Officer of the Company w.e.f. 9th
April 2021.
Appointments
Mrs. Veena R. Havele (DIN 00007593), Director of the Company is liable
to retire by rotation at the ensuing Annual General Meeting and being eligible offers
herself for reappointment. The Board recommends her re-appointment at the ensuing Annual
General Meeting.
Mr. Dilip A. Prabhune (DIN 01779383), was appointed as a Non -
Executive Independent Director of the Company for a term of 5 (Five) consecutive years
w.e.f. 30th September
2016. Pursuant to the provisions of Sections 149, 152 of the Companies
Act, 2013 read with the rules made thereunder and regulation 25(2) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, an Independent Director shall
hold office for a term up to 5 (Five) consecutive years on the Board of the Company.
However, the Company by passing a special resolution can re-appoint him for a further term
of 5 (Five) consecutive years. However, Independent Director shall not hold office for
more than two consecutive terms.
The first term of 5 (Five) consecutive years of Mr. Dilip A. Prabhune
(DIN 01779383) would be completed on 29th September 2021. Based on the
recommendation of Audit Committee and Nomination and Remuneration Committee, the Board
recommends to re-appoint him as an Independent Director for another term of 5 consecutive
years w.e.f. 30th September 2021. The Company has received consent letters and
necessary declarations from him.
Statement on declaration given by Independent Directors
The Company has received necessary declaration from Independent
Directors under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 that they meets the
criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
Relationship between directors inter-se
Mr. Ramesh R. Havele (DIN 00007580) and Mrs. Veena R. Havele (DIN
00007593) are related to each other as husband and wife.
Formal Annual Evaluation
The evaluation of the Board and its committees, evaluation of
performance of individual directors and independent directors in compliance with SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, Schedule IV and other
applicable provisions of the Companies Act, 2013 was conducted based on the criteria such
as the Board composition and structures, effectiveness of board processes, information and
functioning, contribution of the individual Director to the Board and Committee meetings
like preparedness on the issues to be discussed, meaningful and constructive contribution
and inputs in meetings, etc.
The performance of independent directors was evaluated by the entire
Board of Directors.
Details of familiarisation programmes of Independent Directors
The Company has a policy to keep the Independent Directors informed and
updated about the business and the operations of the Company, on a continuous / as needed
basis. In order to familiarise the Independent Directors with the Company and to inform
them about their roles, rights and responsibilities, the Company conducts the orientation
programs for them. The Company conducts an induction program for every new Independent
Director joining the Company's Board covering the organization structure, Company's
business and its group companies.
The Company issues detailed letter of appointment to the Independent
Directors detailing their roles and duties to be performed as an Independent Director on
the Board of the Company.
The details of familiarisation programmes are available on the website
of the Company. The web link thereto is
http://www.dhanadacorp.com/pdf/Details%20of%20Familiarisation%20programme%20for%20IDs.pdf
21. Number of meetings of Board of Directors:
During the financial year 2020 - 2021, the Board of Directors met 6
(Six) times on 30th July 2020, 17th August 2020, 25th
August 2020, 24th October 2020, 11th November 2020 and 14th
February 2021 and all the directors were present at the meeting.
22. Audit Committee:
The Company has in place duly constituted Audit Committee. The Audit
Committee consists of three members i.e. Mr. Dilip A. Prabhune (DIN 01779383), Chairman of
the Committee and Mr. Shreeniwas G. Kale (DIN 00150957) and Mrs. Veena R. Havele (DIN
00007593).
All recommendations made by the Committee during the year were accepted
by the Board.
23. Stakeholders Relationship Committee:
The Company has in place duly constituted Stakeholders Relationship
Committee. The Committee consists of three members i.e. Mr. Shreeniwas G. Kale (DIN
00150957), Chairman of the Committee and Mrs. Veena R. Havele (DIN 00007593) and Mr. Dilip
A. Prabhune (DIN 01779383).
The Committee reviews and ensures redressal of investor grievances.
There were no investor complaints received during the year.
24. Nomination and Remuneration Committee:
The Company has in place duly constituted Nomination and Remuneration
Committee. The Committee consists of three members i.e. Mr. Shreeniwas G. Kale (DIN
00150957), Chairman of the Committee and Mrs. Veena R. Havele (DIN 00007593) and Mr. Dilip
A. Prabhune (DIN 01779383).
The Committee has formulated policy on nomination and remuneration of
Directors, Key Managerial Personnel, Senior Management Personnel and other employees
including criteria for determining qualifications, positive attributes and independence of
director, performance evaluation and other matters in compliance with Section 178 of the
Companies Act, 2013 read with rules made there under and SEBI (Listing Obligations and
Disclosure Requirement) Regulations 2015.
The said policy is also available on the website of the Company. A web
link thereto is
http://www.dhanadacorp.com/pdf/Nomination%20and%20Remuneration%20Policy.pdf.
The Committee operates as per the policy adopted by the Board. All
recommendations made by the Committee were accepted by the Board.
25. Details of establishment of vigil mechanism for directors and
employees:
The Company has established Whistle Blower / Vigil Mechanism Policy for
directors and employees to report concerns about unethical behaviour, actual or suspected
fraud or violation of the Company's Code of Conduct and Ethics. The said policy is also
available on the website of the Company. A web link thereto is
http://www.dhanadacorp.com/pdf/Vigil%20Mechanism%20Policy.pdf
26. Particulars of contracts or arrangements with related parties:
The Company has not entered in any contract or transaction with related
parties during the year under review as referred to in Section 188 of the Companies Act,
2013.
The Company has formulated policy on materiality of Related Party
Transactions and also on dealing with Related Party Transactions in compliance with SEBI
(Listing Obligations and Disclosure Requirement) Regulations 2015.
The said policy is available on the website of the Company. A web link
thereto is http://www.dhanadacorp.com/pdf/Related-Partv-Transactions-Policv-Amended.pdf
27. Managerial Remuneration:
No director draws any remuneration from the Company.
Remuneration of Key Managerial Personnel (KMP)
| Name of KMP |
Designation |
Remuneration in 2020 - 21 (Rs.) |
Remuneration in 2019 - 20 (Rs.) |
% Increase of remuneration |
| Mr. Ramesh Pradhan |
Chief Financial Officer |
5,73,048 |
5,82,644 |
-1.65 |
| Mrs. Smita Mishra* |
Company Secretary |
2,74,107 |
3,95,044 |
1.71** |
*Resigned w.e.f. 7th December 2020.
**Computed on the basis of proportionate salary for FY 2019-20.
Median Remuneration of Employees (MRE) was Rs. 13,535/- and Rs.
12,950/- in the financial year 2020-21 and 2019-20 respectively. The increase in MRE in
the financial year 2020-21, as compared to financial year 2019-20 is 4.52%.
The number of permanent employees on the rolls of the Company as on
31.03.2021 and 31.03.2020 are 42 and 38 respectively.
The revenue of the Company has declined by 68.35%. The Company has
suffered losses. The remuneration of the employees has declined by 30.60%.
The closing price of the Company's equity shares on BSE as of
31.03.2021 was Rs.6.68 representing 33.20% decrease over IPO price.
It is affirmed that the remuneration of employees and KMPs is as per
the remuneration policy of the Company.
A statement showing information of the top ten employees of the Company
in terms of remuneration drawn is attached as Annexure 2 to the Directors Report. Further,
no employee of the Company is receiving remuneration exceeding the limits prescribed under
Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014.
28. Risk Management Policy:
In compliance with SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Company has laid down procedures to inform Board
members about the risk assessment and minimization procedures. The Board of Directors has
also framed Risk Management Policy / Plan. The said policy is available on the website of
the Company. A web link thereto is
http://www.dhanadacorp.com/pdf/Risk%20Management%20Policy.pdf
29. Corporate Governance and Management Discussion and Analysis Report:
The Company is committed to achieve business excellence and
stakeholders' welfare through good corporate governance and adhere to the corporate
governance requirements set out by SEBI. As per SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, Management Discussion and Analysis Report and Report on
Corporate Governance along with Certificate of Compliance from Auditors are annexed and
form part of the Directors' Report.
30. Directors' Responsibility Statement:
The Directors of the Company hereby state 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 the
Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting frauds and other irregularities;
d) the Directors had prepared the annual accounts on a going concern
basis;
e) 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;
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.
31. Sexual Harassment of Women at workplace (Prevention, Prohibition
and Redressal) Act, 2013:
The Company has in place a Prevention of Sexual Harassment Policy in
line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention,
Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to
redress complaints received regarding sexual harassment. All employees (permanent,
contractual, temporary, trainees) are covered under this policy. During the year under
review the Internal Complaints Committee has not received any complaint.
32. Maintenance of Cost Records:
The Company is not required to maintain cost records pursuant to
Section 148(1) of the Companies Act, 2013 read with rules made thereunder. Hence, no such
accounts and records maintained.
33. Compliance with Secretarial Standard
Your directors confirm that the Secretarial Standards issued by the
Institute of Companies Secretaries of India, as applicable to the Company, have been duly
complied with.
34. Investor Education and Protection Fund (IEPF)
There were no funds which required to be transferred to Investor
Education and Protection Fund (IEPF).
35. General Information:
In the last week of March 2020 (23rd March 2020) there was
lockdown announced by Central Government due to COVID-19 pandemic. The guests' bookings
were cancelled, and no fresh bookings were taken till 31st July 2020.
Subsequently, as per the order of SDO dated 05.05.2020, the hotel was announced as COVID
centre for the stay of doctors / medical officers till February 2021.
In case of future revenue flows, COVID-19 has hit our future business
very hard. Many confirmed bookings especially international travelers have been cancelled
due to ban on flights and other strict SOPs of COVID-19 by respective governments. Even
domestic corporate guests have been reduced to large extent due to lockdowns as well as
encouragement for work from solutions by respective corporate. In order to promote room
sales, we are promoting various travel friendly solutions like staycation and quarantine
packages for guests with added facilities to attract guest and client.
As a result of COVID 19, even the contracted companies are now
negotiating for lower tariff in order to give further business. The Company offered them
very competitive tariff along with enhanced facilities so that companies continue to have
business relations with the Company.
36. Acknowledgements:
The Directors express their sincere thanks to Dhanada Holdings Private
Limited, the associate company, the Bankers, employees and stakeholders for their
continued support and the faith and belief shown by them.
