THE MEMBERS OF D & H INDIA LIMITED
The Directors take pleasure in presenting the 32 Annual Report together with theaudited standalone andconsolidated financial statements for the year ended 31 March 2017and the Management Discussion and Analysis has also been incorporated into this report.
1 HIGHLIGHTS OF PERFORMANCE
Consolidated income for the year was Rs. 6037.67Lakh as compared to Rs. 6289.00Lakh in the previous year a decline of 4.00%.
Consolidated net sales for the year was Rs. 6022.60Lakh as compared to Rs.6256.27 Lakh in the previous year a decline of 3.73%;
Consolidated profit before tax for the year was Rs.48.61Lakh as compared to Rs.47.36 Lakh in the previous year;
Consolidated Profit after tax for the year was Rs. 29.04Lakh as compared to Rs.29.10 Lakh in 2016.
|2. FINANCIAL RESULTS || || || ||(Rs. In Lakh) |
|Particulars ||Consolidated ||Standalone |
| ||31.03.2017 ||31.03.2016 ||31.03.2017 ||31.03.2016 |
|Revenue from Operations (Net) and other income ||6037.67 ||6289.00 ||6017.56 ||6268.26 |
|Profit before Financial Cost & Depreciation ||387.89 ||360.91 ||390.36 ||369.46 |
|Financial Cost ||162.70 ||133.96 ||162.63 ||133.90 |
|Depreciation ||176.58 ||179.59 ||174.33 ||177.33 |
|Adjustment related to Fixed Assets ||0.00 ||0.00 ||0.00 ||0.00 |
|(Net of Deferred Tax) || || || || |
|Profit Before Tax (PBT) ||48.61 ||47.37 ||53.40 ||58.23 |
|Provision for Tax ||19.57 ||18.26 ||17.65 ||18.27 |
|Profit After Tax (PAT) ||29.04 ||29.10 ||35.74 ||39.96 |
|Less: Minority Interest ||0.00 ||0.00 ||0.00 ||0.00 |
|Balance brought forward from previous year ||1083.41 ||1054.27 ||1088.33 ||1048.38 |
|Profit available for Appropriations ||1112.50 ||1083.41 ||1124.07 ||1088.33 |
|Appropriations: || || || || |
|Proposed Final Equity Dividend ||0.00 ||0.00 ||0.00 ||0.00 |
|Tax on Equity Dividends ||0.00 ||0.00 ||0.00 ||0.00 |
|General Reserve ||0.00 ||0.00 ||0.00 ||0.00 |
|Surplus carried to the next year's account ||1112.50 ||1083.41 ||1124.07 ||1088.33 |
|Earning Per Share ||0.39 ||0.39 ||0.48 ||0.54 |
In order to conserve the financial resources your directors regret their inability todeclare any dividend for the financial year 2016-17. (Previous year Nil)
4. SHARE CAPITAL
The paid up Equity Share Capital as on 31 March 2017 was Rs. 740.00 Lakh divided into74.00 Lakh equity shares of Rs. 10/- each. During the year under review there were nochange in the capital structure and the Company has not issued shares with differentialvoting rights nor granted stock options nor sweat equity.
4.1 Transfer of profits to reserves
During the year under review your company has not transferred any amount to the generalreserves. (Previous year Nil)
Cash and cash equivalent as at 31 March 2017 was Rs. 109.94 Lakh (Previous year Rs.133.36Lakh). The Company continues to focus on judicious management of its workingcapital. Receivables inventories and other working capital parameters were kept understrict check through continuous monitoring.
The Company has not accepted deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 and there were no remaining unclaimed deposits as on 31 March 2017. Further that ithas not accepted any deposit in violation of the provisions of the Chapter V of theCompanies Act 2013.
5.2 Particulars of loans guarantees or investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements. Inaddition to the above the Company has given advance against salary or otherwise toemployees of the Company as per the terms of appointment and the Company's policy on whichno interest was charged.
6. ECONOMIC SCENARIO AND OUTLOOK
The low economic growth appears to have bottomed out and a gradual increase in economicactivity is expected in 2017. The medium term to long term growth prospects look positivein view of the Government's determination to bring in reforms. For the year 2017 theeconomy is expected to grow at a higher rate than in 2016. The long term prospect for theeconomy is optimistic.
7. CSR INITIATIVES
In view of the paid up capital profits and turnover of the company during the previousthree years the Company does not fall under the provisions of the section 135 of theCompanies Act 2013 and the rules made their under.
8. OCCUPATIONAL HEALTH & SAFETY (OH&S)
With regard to contractor safety two key areas of focus identified were FacilityManagement for the contractors' employees and Equipment Tools & Material Management.The Facility Management initiative was implemented to ensure adequate welfare facilitiesfor contract labor such as washrooms with bathing facilities rest rooms availability ofdrinking water etc. The Equipment Tools & Material Management program ensured thatthe tools used by contractors were safe. The process of screening of contractors was mademore stringent to ensure that the contractors were aligned with the Company's objectivesto ensure 'Zero Harm'.
9. HUMAN RESOURCES
Many initiatives have been taken to support business through organizational efficiencyprocess change support and various employee engagement programs which have helped theOrganization achieve higher productivity levels. A significant effort has also beenundertaken to develop leadership as well as technical/ functional capabilities in order tomeet future talent requirement.
The Company's HR processes such as hiring and on-boarding fair transparent onlineperformance evaluation and talent management process state-of-the-art workmen developmentprocess and market aligned policies have been seen as benchmark practices in theIndustry.
During the year under review the following Human Resources initiatives receivedgreater focus:
Employer of Choice: Employees are encouraged to express their views and areempowered to work independently. Employees are given the opportunity to learn throughvarious small projects which make them look at initiatives from different perspectives andthus provide them with a platform to become result oriented. This has helped greatly inoverall development of the employee and has significantly arrested the attrition rate.
Leadership Development: As a part of leadership development talented employeeshave been seconded to the senior leadership team to mentor them and prepare them for thenext higher role.
Industrial Relations: The Company's Industrial Relations policy has beenbenchmarked by the manufacturing sector. The Company shares relevant business informationwith the Unions in order to enlighten them and make them sensitive towards businessrequirements. This has helped to build a healthy relationship and resolve issues throughmutual dialogue.
10. RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. These arediscussed at the meetings of the Audit Committee and the Board of Directors of theCompany.
10.1 Internal Control System
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit (IA) functionis defined in the Internal Audit Charter. To maintain its objectivity and independencethe Internal Audit function reports to the Chairman of the Audit Committee of the Board.
Based on the report of internal audit function process owners undertake correctiveaction in their respective areas and thereby strengthen the controls. Significant auditobservations and corrective actions thereon are presented to the Audit Committee of theBoard.
The Statutory Auditors have furnished their report in the Annexure B certifying theInternal Financial Control of the Company.
10.2 Vigil mechanism/Whistle Blower Policy
The Company has a vigil mechanism named vigil mechanism/whistle blower Policy to dealwith instance of fraud and mismanagement if any. The details of the Policy is explainedin the Corporate Governance Report and also posted on the website of the Companywww.dnhindia.com
11. CONSOLIDATED AUDITED FINANCIAL STATEMENTS OF THE COMPANY'S SUB-SIDIARIES
11.1 Statement of the Subsidiary and Associate Company
Pursuant to the Rule 9(5)(iv) of the Companies (Accounts) Rules 2014 the followingparticulars being submitted for the Companies become Subsidiary Associates or ceasedpursuant to the provisions of section 2(6) of the Companies Act 2013.
|Name of the other Company ||Position as on 1 April 2016 ||Date on which become as a Associate ||Date on which ceased as a Associate ||Reasons ||Remarks |
|V & H Fabricators Pvt. Ltd. ||Wholly Owned Subsidiary ||07.07.2012 ||- ||Entire shareholding held by the Company ||10 Shares held by Mr. Harsh Vora as Nominee. |
|Commonwealth Mining Pvt. Ltd. ||Associate ||30.03.2013 ||- ||Holding 50% of share capital ||- |
As on 31st March 2017 the Company Commonwealth Mining Pvt. Ltd. is not carrying anybusiness activities. The Company does not have joint venture Company at the beginning orany time during the year 2016-17.
11.2 Salient features of the financial statements of the subsidiary and AssociateCompany
In accordance with Section 129(3) of the Companies Act 2013 the Company has prepareda consolidated financial statement of the Company which is forming part of the AnnualReport. A statement containing salient features of the financial statements of thesubsidiary and Associate Company is also given in the Form AOC-2 in the Annual Report as AnnexureF.
11.3 Financial statements of the subsidiary companies
In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its standalone and the consolidatedfinancial statements has been placed on the website of the Company www.dnhindia.com.Further as per fourth proviso of the said section audited annual accounts of thesubsidiary company have also been placed on the website of the Company www.dnhindia.com.Shareholders interested in obtaining a copy of the audited annual accounts of thesubsidiary company may write to the Company Secretary at the Company's registered office.
11.4 Compliance of the Accounting Standards
The Consolidated and standalone financial statements are in compliance with theapplicable accounting standards to the Company.
12. BOARD OF DIRECTORS THEIR MEETINGS & KMPs
12.1 Independent Directors
Independent director Mr. Surjit Singh (DIN 00654215) resigns from the Board of Directorw.e.f. 7 February and Independent directors Mr. Basant Singh Johari (DIN 00155715) passesaway on February 13 2017.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and SEBI (LODR)Regulations 2015.Further that the Board has confirmed that all the independent directorsmeet the requirement of the independency during the year 2016-17.
12.2 Executive directors and KMPs
The Company has four executive directors namely Mr. Harsh Vora (DIN: 00149287) as theManaging Director and Mr. Madhusudan Jain (DIN 00145329); Mr. Saurabh Vora (DIN: 00145329)and Mrs. Atithi Vora as the Whole-time directors and functioning as the Key ManagerialPersonnel's. Further that Mr. Rajesh Sen Company Secretary and Mr. Sanat Kumar JainChief Financial Officer (CFO) are the KMPs of the Company under the provisions of section203 of the Companies Act 2013. Further that there is no change in the KMPs during theyear 2016-17.
12.3 Directors seeking re-appointment
In accordance with the provisions of the Companies Act 2013 and in terms of theArticles of Association Mr. Sushil Rawka (DIN 00156990) director retires by rotation andis eligible for re-appointment. Your directors recommend passing necessary resolution asset out in the Item No. 2 of the notice of the annual general meeting.
Mr. Harsh Vora the Managing Director Mrs. Atithi Vora and Mr. Saurabh VoraWhole-time directors whose terms being expired in .Oct. 2017 and 30 Sept. 2017respectively are proposed for further re-appointment for a term of three years as set outin the Notice of the Annual General Meeting.
12.4 Composition of the Board of Directors
The Chairman of the Board is Independent Director. The Company is having total 8directors in the Board out of which 3 directors are Independent and the composition of theBoard is in conformity with the Companies Act 2013 and the SEBI (LODR) Regulations 2015.During the year under review Independent Directors Mr. Surjit Singh (DIN 00654215) resignsfrom the Board of Director w.e.f. 7 February and Mr. Basant Singh Johari (DIN 00155715)passes away on February 13 2017.Except that there is no change in the composition of theBoard of directors of the Company during the year 2016-17.
12.5 Number of meetings of the Board
The Board meets at regular intervals to discuss and decide on Company/business policyand strategy apart from other Board business. The notice of Board meeting is given well inadvance to all the Directors. The Agenda of the Board/Committee meetings is circulated atleast a week prior to the date of the meeting. The Agenda for the Board and Committeemeetings includes detailed notes on the items to be discussed at the meeting to enable theDirectors to take an informed decision.
The Board met 4 (Four) times in financial year 2016-17 viz. on29 May 2016 6August 2016 14 November 2016 and 7 Feb. 2017. The maximum interval between any twomeetings did not exceed 120 days.
12.6 Annual evaluation by the Board
The evaluation framework for assessing the performance of Directors comprises of thefollowing key areas:
i. Attendance of Board Meetings and Board Committee Meetings
ii. Quality of contribution to Board deliberations
iii. Strategic perspectives or inputs regarding future growth of Company and itsperformance
iv. Providing perspectives and feedback going beyond information provided by themanagement
v. Commitment to shareholder and other stakeholder interests
The evaluation involves Self-Evaluation by the Board Member and subsequently assessmentby the Board of Directors.
A member of the Board will not participate in the discussion of his/her evaluation.
13. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Policy of the Company on Directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a Director and othermatters provided under subsection (3) of section 178 is appended as Annexure E tothis Report and hosted at the website of the Company at www.dnhindia.com.
14. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a. that in the preparation of the annual financial statements for the year ended 31March 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures;
b. that such accounting policies as mentioned in Note 2 of the Notes to the FinancialStatements have been selected and applied consistently and judgments and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at March 31 2017 and of the profit of the Company for theyear ended on that date;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
15. COMMITTEES OF THE BOARD
During the year in accordance with the Companies Act 2013 the Board has thefollowing five Committees as follows:
(a) Audit Committee
(b) Nomination and Remuneration Committee
(c) Stakeholders' Relationship Committee
(d) Risk management Committee
(e) Internal Committee for (Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 redressal of complaint at the workplace
Details of all the Committees along with their charters composition and meetings heldduring the year are provided in the "Report on Corporate Governance" a part ofthis Annual Report.
16. RELATED PARTY TRANSACTIONS
16.1 Related Party transaction are not material and on arms length basis in theordinary course of business
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.
16.2 Approval of the related party transactions by the Board and Audit Committee
All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. The transactions entered into are audited and a statement giving details ofall related party transactions is placed before the Audit Committee and the Board ofDirectors for their approval on a quarterly basis. The statement is supported by aCertificate from the CEO &MD and the CFO. The Company has Policy for Related PartyTransactions Standard Operating Procedures for purpose of identification and monitoringof such transactions. The particulars of the related party transactions have been given inthe Form AOC-2 and attached with this Report as an Annexure F.
16.3 Policy on the related party transactions
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website. A disclosure as required under section 134(3)(h) of the Companies Act2013 and the Rule 8(2) of the Companies (Accounts) Rules 2014 being enclosed as AnnexureF with the Board's Report and hosted at the website of the Company atwww.dnhindia.com.
17. SIGNIFICANT AND MATERIAL ORDERSPASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
18. AUDITORS& COMMENTS ON THE OBSERVATION BY THE AUDITORS
18.1 Statutory Auditors Appointment and their Report
The Company's Auditors M/s ABN & Co. Chartered Accountants (F.R.No.004447C ) whowere appointed for a term of three years at the Annual General Meeting of the Company heldon30 September 2014 therefore tenure of M/s ABN & Co. will be over on theconclusion of the ensuing annual general meeting and they will be rotate by anotherauditors . Board of Director proposed the appointment of M/s. M.S. Dahiya & Co.Chartered Accountants Indore (F.R.No. 013855C) as Statutory Auditors of the Company for aterm of 1 years. They have confirmed their eligibility under section 141(3) (g) of theCompanies Act 2013 and the Rules framed thereunder for appointment as Auditors of theCompany. As required under SEBI (LODR) Regulations 2015 the auditors have also confirmedthat they hold a valid certificate issued by the Peer Review Board of the Institute ofChartered Accountants of India.
Your Board is pleased to inform that there is no such observation made by the Auditorsin their report for the year 2016-17which needs any explanation by the Board.
18.2 Cost Auditors Appointment and their Report
Pursuant to provisions of section 148 of the Companies Act2013 read with The Companies(Cost Records and Audit) Amendment Rules 2014 the cost audit records maintained by theCompany in respect of its manufacturing activity is not required to be audited during theyear 2016-17. Hence no appointment of the Cost Auditors for the year 2016-17 was made bythe Company.
18.3 Secretarial Auditors Appointment and their Report
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s D K Jain & Co. a firm of Company Secretaries in Practice to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Audit for the year2016-17is annexed herewith as "Annexure B".
The Secretarial Audit Report for the year 2016-17 is self explanatory except thefollowing observations made and the management submits their comments;
(a) Form CHG- 1 has not been filed for the Auto Loans of Rs 20.00 Lakh taken by theCompany during the year under review.
Management Response to Point No. (a): Your Company is law abiding entity andfiled the necessary forms & returns with the authorities. However there were fewdelays which the management ensures to file the same in time. The Board is hopeful andcommitted to their level best to streamline the same in future.
19. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders.Accordingly your Company's operations are committed to the pursuit of achieving highlevels of operating performance and cost competitiveness consolidating and building forgrowth enhancing the productive asset and resource base and nurturing overall corporatereputation. Your Company is also committed to creating value for its other stakeholders byensuring that its corporate actions positively impact the socio-economic and environmentaldimensions and contribute to sustainable growth and development.
20. CORPORATE GOVERNANCE
As per SEBI (LODR) Regulations 2015 a separate section on corporate governancepractices followed by the Company together with a certificate from the Company's Auditorsconfirming compliance forms an integral part of this Report as Annexure G.
20.1 CEO & CFO certification
Certificate from Mr. Harsh Vora Managing Director and Mr. Sanat Kumar Jain ChiefFinancial Officer pursuant to provisions of the SEBI (LODR) Regulations 2015 for theyear under review was placed before the Board of Directors of the Company at its meetingheld on 29 May 2017.A copy of the certificate on the financial statements for thefinancial year ended March 31 2017 is annexed along with this Report as Annexure A.Further that the Auditors Certificate on the Corporate Governance is annexed along withthis Report as Annexure A.
21. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013read withRule 8 of The Companies (Accounts)Rules 2014 is annexed herewith as "AnnexureC".
22. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report a copy of theannexure may write to the Company Secretary at the Company's registered office.
23. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return for the year 2016-17inform MGT-9 is annexed herewith as "Annexure D".
24. PARTICULARS OF REMUNERATION OF EMPLOYEES
The particulars of the remuneration to the directors pursuant to the section 197(12) ofthe Companies Act 2013 read with the Rule 5(1) of the Companies (Appointment andRemuneration to the Managerial Personnel) Rules 2014 are enclosed as Annexure E.
Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for the continued help and co-operation extended by them. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers vendors banks and other business partners for the excellent supportreceived from them during the year. The Directors place on record their sincereappreciation to all employees of the Company for their unstinted commitment and continuedcontribution to the Company.
| ||For and on behalf of the Board || |
|Place: Indore ||Harsh Vora ||Sushil Rawka |
|Date: 12th August2017 ||Managing Director ||Director |
| ||DIN 00149287 ||DIN 00156990 |