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EQUITY - MARKET SCREENER

Dhani Services Ltd
Industry :  Finance & Investments
BSE Code
ISIN Demat
Book Value()
532960
INE274G01010
95.7982342
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
DHANI
257.45
3106.05
EPS(TTM)
Face Value()
Div & Yield %
0.2
2
0
 

As on: Apr 20, 2024 12:01 AM

Dear Shareholders,

Your Directors are pleased to present the Twenty Eighth Annual Report of the Company alongwith the audited statement of accounts for the financial year ended March 31, 2023.

The first six months of 2023 have been eventful for financial markets - an artificial intelligence (AI) inspired tech stock surge, a bounce back of the cryptocurrency and a triggering of tensions in the banking sector behind the collapse of Silicon Valley Bank and Signature Bank in the US. There has also been a relentless rise in interest rates, which was exactly what battered markets in 2022.

Global inflation is however on a downward trajectory thanks to falling commodity prices. Easing of supply chain pressures and a resilient labor market will also support recovery. However the pace of recovery could be slow due to a relatively tight economic environment in some countries.

India on the other hand has staged a broad based recovery across sectors and is well on it's way to an ascending pre- pandemic growth path. The Indian economy is well placed to grow faster in the coming decade once the global shocks of the pandemic and the spike in commodity prices in 2022 fade away.

With improved and healthier balance sheets of the banking, non-banking and corporate sectors, a fresh credit cycle has already begun, evident from the double-digit growth in bank credit over the past months. Indian economy has also started benefiting from the efficiency gains resulting from greater formalisation, higher financial inclusion, and economic opportunities created by digital technology-based economic reforms.

The buoyancy in the Capital Markets and the Real Estate sector augurs well for the Indian Economy. The burgeoning E-commerce market is also predicted to overtake the US in the next decade. The Company is well positioned to ride this wave across these volatile, but exciting and rewarding sectors.

FINANCIAL HIGHLIGHTS (STANDALONE)

The financial highlights of the Company, for the financial year ended March 31, 2023, are as under:

Figures in Rs. Lakhs

Year ended March 31, 2023 Year ended March 31, 2022
Profit/(Loss) before Depreciation & Amortisation expenses and Tax 5,504.15 (1,750.61)
Less: Depreciation & Amortisation expenses 22.43 21.88
Profit/(loss) before Tax 5,481.72 (1,772.49)
Less: Tax Expense 2,967.89 698.97
Profit/(loss) from continuing operations after tax 2,513.83 (2,471.46)
Profit /(loss) from discontinued operations after tax - -
Profit/(loss) for the year 2,513.83 (2,471.46)
Other comprehensive income (net of taxes) 35.29 1,131.48
Total comprehensive income for the year 2,549.12 (1,339.98)
Balance in retained earnings at the beginning of the year 17,951.24 20,419.81
Profit/(loss) for the year 2,513.83 (2,471.46)
Other comprehensive income (net of taxes) -0.97 2.89
Other comprehensive income - Sale for equity instruments 1480.88 -
Balance in retained earnings at the end of the year 21,944.98 17,951.24

The total revenue of the Company during the financial year ended March 31, 2023 stood at Rs. 10,929.29 lakh with a net profit of Rs. 2,513.83 lakh. The Company proposes to retain the entire amount of Rs. 21,944.98 lakh in the statement of profit & loss. The consolidated revenue of the Company stood at Rs. 73,972.98 lakh and the consolidated net loss after tax stood at Rs. 48,131.08 lakh.

DIVIDEND

The Company has not declared any dividend during the financial year 2022-23.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Gurbans Singh (DIN: 06667127), was appointed by the board as an Additional Director designated as Whole- time Director & Key Managerial Personnel designated as Executive Chairman of the Company, for a period of 5 years w.e.f. June 18, 2023. The existing term of Ms. Swati Jain (DIN: 09784228) as Non-Executive Independent Director of the Company is upto November 10, 2023. On the recommendation of the Nomination & Remuneration Committee, the Board of directors of the Company in its meeting held on August 11, 2023 has re-appointed Ms. Swati Jain (DIN: 09784228) as Non-Executive Independent Director of the Company for second consecutive term of 2 years effective from November 11, 2023 and has also appointed Mr. Prem Prakash Mirdha (DIN: 01352748) as Non-Executive Independent Director of the Company for a period of 2 years w.e.f. August 11, 2023. In compliance with applicable provisions under the Companies Act, 2013 and regulation 17(1C) of the SEBI Listing Regulations and in terms of Board authorisation dated August 11, 2023, Postal Ballot Notice dated August 11, 2023 has been sent to the shareholders of the Company on August 14, 2023 in compliance with relevant circulars issued by the Ministry of Corporate Affairs, seeking their approval to the appointment of Mr. Gurbans Singh, Ms. Swati Jain and Mr. Prem Prakash Mirdha, as aforesaid. The e-voting period shall be from August 16, 2023 upto September 14, 2023. The results of postal ballot will be declared on or before, September 16, 2023.

All the Independent Directors have given declaration that they meet the criteria of independence laid down under Section 149 (6) of the Act, and in Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI LODR Regulations'). The brief resume of the Directors proposed to be appointed/ reappointed, nature of their expertise in specific functional areas, terms of appointment, names of companies in which they hold directorships, memberships/ chairmanships of Board Committees, along with names of listed entities from which they have resigned in the past three years, are provided in the Notice convening the Twenty Eighth Annual General Meeting of the Company.

To ensure the continuity of guidance, vast experience, knowledge and managerial skills, on the recommendation of the Nomination & Remuneration Committee the Board has appointed Mr. Divyesh B. Shah (DIN: 00010933) Whole-time Director & Key Managerial Personnel as Chief Executive Officer of the Company, w.e.f. March 31, 2023. In compliance with the applicable regulatory provisions, the Board has recommended the re-appointment of Mr. Divyesh B. Shah, who retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, has offered himself for re-appointment as director.

On completion of tenure Mrs. Fantry Mein Jaswal, (DIN: 07011247), Mr. Praveen Kumar Tripathi, (DIN: 02167497), Mr. Rakesh Mohan Garg, (DIN: 08970794), Mr. Vijay Chugh (DIN: 07112794), and Mr. Mohanbir Singh Sawhney (DIN: 07136864) have ceased to be Non-Executive Independent Director(s) of the Company w.e.f. August 22, 2022, September 15, 2022, November 24, 2022, December 20, 2022, October 6, 2022, respectively.

Effective from August 17, 2022, Mr. Vikas Khandelwal was appointed as Company Secretary in place of Mr. Lalit Sharma. Mr. Vikas Khandelwal had resigned on December 30, 2022 and in his place, Mr. Ram Mehar (FCS 6039) has been appointed as Company Secretary of the Company with effect from December 30, 2022.

During the financial year 2022-23 and upto the date of this report, the following changes have also taken place in the Board:

(a) Mr. Anish Williams (DIN: 03314110), Non-Executive Director and Mr. Pinank Jayant Shah (DIN: 07859798), Executive Director resigned due to personal reasons and other commitments, w.e.f. September 23, 2022 and January 1, 2023, respectively;

(b) Mr. Sandeep Kadam (DIN: 09343578) ceased to be Non-Executive Director of the Company w.e.f. January 1, 2023;

(c) In compliance with applicable provisions under the Companies Act, 2013 and regulation 17(1C) of the SEBI Listing Regulations, the appointment of Ms. Swati Jain (DIN: 09784228) and Mr. Aishwarya Katoch (DIN: 00557488) as Non-Executive Independent Directors and of Mr. Amit Ajit Gandhi (DIN: 07606699) as Non-Independent Non- Executive Director of the Company have been approved by the shareholders of the Company through Postal Ballot; and

(d) Mr. Sameer Gehlaut (DIN: 00060783), who had moved to the role of Non-Executive Chairman of the Company w.e.f. March 31, 2023, had resigned due to his personal reasons and other commitments w.e.f. June 17, 2023.

SHARE CAPITAL

During the financial year 2022-23 and upto the date of this report, the Company has issued and allotted 22,00,000 (Twenty Two Lacs) fully paid-up equity shares of face value INR 2/- each, to eligible employees upon exercise of options vested in their favour under 'Dhani Services Limited Employees Stock Option Scheme - 2008'.

Consequently, the paid up share capital of the Company increased to Rs. 121,62,96,148.40 divided into 60,32,59,386 fully paid up equity shares of face value Rs. 2/- each and 88,88,524 partly paid-up equity shares of face value of Rs. 2 each, paid up Rs. 1.10 each (PPS). Voting rights in respect of PPS are proportionate to the amount paid-up thereon.

ESOP/SAR SCHEMES

During the year under review ESOPs aggregating to 1.16 Cr and SARs aggregating to 1.97 Cr. granted pursuant to shareholders' authorisation(s) in compliance with applicable SEBI Regulations, were surrendered by the employees due to various reasons. During the year under review 1,16,00,000 ESOPs representing an equal number of fully paid- up equity shares of face value of Rs. 2/- each in the Company under "Dhani Services Limited Employees Stock Option Scheme(s) - 2008 & 2009" were granted to the eligible employees and 22,00,000 (Twenty Two Lacs) fully paid-up equity shares of face value INR 2/- each, were issued and allotted to eligible employees upon exercise of options vested in their favour under 'Dhani Services Limited Employees Stock Option Scheme - 2008'.

There has been no variation in the terms of the options granted under any of the ESOP/SAR schemes and all the schemes are in compliance with SBEB Regulations.

The disclosures required to be made under SBEB Regulations and the Act read with Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014, in respect of all existing ESOP Schemes/SARs of the Company have been placed on the website of the Company www.dhani.com.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any deposits from the public, falling within the ambit of Chapter V of the Act and the Companies (Acceptance of Deposits) Rules, 2014.

LISTING WITH STOCK EXCHANGES

The fully paid up Equity Shares (ISIN: INE274G01010) and partly paid up Rights Equity Shares (ISIN: IN9274G01034) of the Company continue to remain listed at BSE Limited and National Stock Exchange of India Limited. The listing fees payable to both the exchanges for the financial year 2023-24 have been paid. The GDRs issued by the Company continue to remain listed on Luxembourg Stock Exchange (LSE). However, in view of very low number of GDR's being outstanding vis-a-vis very thin volume of trading in GDR's, the Company has initiated the process of getting these GDRs delisted from LSE in response of which LSE has informed that delisting of GDRs will be effective from October 2, 2023.

SCHEME OF ARRANGEMENT

In line with the long term business objectives of the Company to further accelerate the scaling up of the operations and to provide synergy of consolidated business operations and management and to streamline the operations of the Company and /or its identified subsidiaries to have a simplified and streamlined holding structure with pooled resources, the Board of Directors of the Company, has approved the composite Scheme of Arrangement inter-alia involving Amalgamation of the Company along with its certain subsidiary companies with and into Yaari Digital Integrated Services Limited ("Amalgamated Company" / "Resulting Company "Yaari") and subsequent automatic dissolution of Amalgamating Companies.

Under the proposed Scheme subsidiaries of the Company getting amalgamating with Yaari are Savren Medicare Limited, Auxesia Soft Solutions Limited, Gyansagar Buildtech Limited, Pushpanjli Finsolutions Limited, Devata Tradelink Limited, Evinos Developers Limited, Milky Way Buildcon Limited, Indiabulls Consumer Products Limited, Indiabulls Infra Resources Limited, Jwala Technology Systems Private Limited, Mabon Properties Limited and Juventus Estate Limited.

The Scheme is subject to all applicable statutory and regulatory approvals, including approval from the stock exchanges, SEBI, shareholders and creditors of the company and the jurisdictional bench of the NCLT. The Company has already filed the Scheme with National Stock Exchange of India Limited and BSE Limited for seeking their & SEBI's NOC to the Scheme, which is awaited.

Upon the Scheme coming into effect, the fully paid-up equity shares of Yaari will be issued to the shareholders of the Company, basis the swap ratio as mentioned in the scheme i.e.

"294 equity shares of Yaari INR 2/- each fully paid-up for every 100 equity shares of DSL of INR 2/- each fully paid-up"

"162 equity shares of Yaari INR 2/- each fully paid-up for every 100 equity shares of DSL of INR 2/- each partly paid-up. The paid-up value of partly paid-up share is 55% i.e. INR 1.1. The exchange ratio has been computed in proportion to paid up value."

CHANGE IN REGISTERED OFFICE OF THE COMPANY

The Registered Office of the Company was shifted from 'M - 62 & 63, First Floor, Connaught Place, New Delhi - 110001' to '1/1E, First Floor, East Patel Nagar, New Delhi-110008', with effect from May 1, 2022. Pursuant to shareholders' authorization through postal ballot dated May 25, 2023, the Company has initiated the process of shifting its registered office from Delhi to the State of Haryana.

STATEMENT OF DEVIATION(S) OR VARIATION(S) PURSUANT TO REGULATION 32 OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

On the utilization of proceeds of Rights Issue of the Company, there was no deviation from the Objects stated in the Letter of Offer for Company's Rights Issue.

INFORMATION PURSUANT TO SECTION 134 AND SECTION 197 OF THE COMPANIES ACT, 2013 READ WITH THE RELEVANT RULES AND SEBI LODR REGULATIONS

The information required to be disclosed pursuant to Section 134 and Section 197 of the Act read with the relevant rules (to the extent applicable) and SEBI LODR Regulations, not elsewhere mentioned in this Report, are given in "Annexure A" forming part of this Report.

AUDITORS

(a) Statutory Auditors

The appointment of M/s Sharp & Tannan Associates, Chartered Accountants (Firm Registration Number 109983W) (a member firm of Russell Bedford International ("RB") as Statutory Auditors of the Company was approved in the 27th Annual General Meeting of the Company held on September 29, 2022, to hold office from the conclusion of 27th AGM until the conclusion of 29th AGM to be held in the calendar year 2024, including the payment of remuneration for FY 2022-23 and FY 2023-24. In terms of applicable regulatory provisions, M/s Sharp & Tannan Associates, Chartered Accountants have confirmed that they are eligible to hold the office of Statutory Auditors of the Company for FY 2023-24.

Management response on the qualification as mentioned in the Auditor's report on consolidated Financial Statements of the Company as at March 31, 2023, forming part of this Annual Report is as under:

"The Reserve Bank of India issued a communication to the industry dated 20 June 2022 which impacted one of the Company's products/services offered to its customers. Considering the exceptional circumstances which arose on account of the impact of the above RBI communication, the Company on an exceptional and conservative basis had created a provision for impairment losses on financial instruments of Rs.72,961.20 lakhs (net of deferred tax) from the outstanding balance in the securities premium account. Also, there is no resultant impact on the carrying value of the total equity, assets and liabilities of the Company due to this exceptional treatment."

The Notes to the Accounts referred to in the Auditors' Report are self - explanatory and therefore do not call for any further explanation. No frauds have been reported by the Auditors of the Company in terms of Section 143(12) of the Act.

(b) Secretarial Auditors & Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Act read with the rules made thereunder, the Company has appointed M/s Say & Associates (formerly known as M/s A. K. Kuchhal & Co.), a firm of Company Secretaries in practice as its Secretarial Auditors, to conduct the secretarial audit of the Company, for the Financial Year 2022-23. The Company has provided all assistance, facilities, documents, records and clarifications etc. to the Secretarial Auditors for conducting their audit. The Report of Secretarial Auditors for the Financial Year 2022-23, is annexed as "Annexure 1" and forming part of this Report. The Secretarial Audit Report is self-explanatory and therefore do not call for any further explanation.

The Secretarial Compliance Report as prescribed by SEBI is annexed as "Annexure 2" and forming part of this Report.

The Secretarial Audit Report of material subsidiary companies, namely, Dhani Loans and Services Limited, Indiabulls Asset Reconstruction Company Limited, Dhani Healthcare Limited and Transerv Limited are annexed as "Annexure 3", "Annexure 4", "Annexure 5" and "Annexure 6", respectively.

(b) Cost Records

The Company is not required to prepare and maintain cost records pursuant to Section 148(1) of the Act. CORPORATE SOCIAL RESPONSIBILITY

The Company firmly believes that for an organisation to succeed in long term, it is imperative to keep the overall well-being of the society at the core of its values and purpose. Our main objective in this regard is to do meaningful work with measurable output and maximum impact on the society. The Company's vision is to contribute towards a society where quality healthcare, education and livelihood opportunities converge to create an equitable future for all families and communities. Corporate Social Responsibility is not mere an obligation for us but we yearn to transform Bharat into a stronger and healthier nation.

Indiabulls Foundation (IBF) is the CSR arm of the Company and drives its various social engagement initiatives. As the Social Development arm, IBF assesses the pressing needs of the marginalized communities and delivers tailor-made, technology-driven solutions aimed at improving overall living standards of the communities it works with.

As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken CSR projects in the area of Education, as per its CSR Policy (available on Company's website)

https://www.dhani.com/services/wp-content/uploads/2020/12/csr-policy-isl_1564987829.pdf and the details are contained in the Annual Report on CSR Activities given in "Annexure 7", forming part of this Report. The project is in accordance with Schedule VII of the Act read with the relevant rules.

During the FY 2022-23, the Company had paid an amount of Rs. 41.81 lacs being 2% of average net profits of the Company for three immediately preceding financial years, to Indiabulls Foundation towards effectuation and implementation of CSR activities for FY 2022-23, on the promotion of Health/Education, on ongoing basis. The said amount remained unspent upto March 31, 2023 and Indiabulls Foundation had, on April 29, 2023, transferred the same to Unspent CSR Account as per section 135(6) of the Companies Act 2013. April 30, 2023 and May 1, 2023 being holidays, the amount got credited in the said account on May 2, 2023. In terms of provisions of Section 10 of The General Clauses Act, 1897, the said transfer is within the prescribed timelines.

Further, during the current financial year, an expenditure of Rs17.90 lakh being 2% of average net profits of the Company for three immediately preceding financial year, has been approved towards CSR activities for FY 2023- 24, in accordance with CSR Policy of the Company and notified CSR Rules, to implement the CSR activities through any company established under Section 8 of the Act or registered trust or society, for the purpose of undertaking programs or projects, on ongoing basis, within the preview of notified CSR Rules.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of SEBI LODR Regulations, Management's Discussion and Analysis Report, for the year under review, is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE REPORT

Pursuant to Regulation 34 of the SEBI LODR Regulations, Corporate Governance Practices followed by the Company, together with a certificate from a practicing Company Secretary confirming compliance, is presented in a separate section forming part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to Regulation 34 of the SEBI LODR Regulations, Business Responsibility and Sustainability Report (BRSR) is presented in a separate section forming part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134 of the Act:

a) that in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in the Notes to the Financial Statements had been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company, as at March 31, 2023 and of the profit and loss of the Company for the year ended on that date;

c) that proper and sufficient care had been taken 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 fraud and other irregularities;

d) that the annual accounts had been prepared on a going concern basis;

e) that proper internal financial controls were in place and that such financial controls were adequate and were operating effectively; and

f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Company has been able to operate efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all functional areas and the efficient utilization of all its resources for sustainable growth. Your Directors wish to place on record their appreciation of the contributions made and committed services rendered by the employees of the Company at various levels. Your Directors also wish to express their gratitude for the continuous assistance and support received from the investors, clients, bankers, regulatory and government authorities, during the year.

For Dhani Services Limited
Sd/- Sd/-
Gurbans Singh Divyesh B. Shah
Place: Mumbai Executive Chairman Whole-time Director & CEO
Date: August 11, 2023 (DIN: 06667127) (DIN: 00010933)