Your Directors have great pleasure in presenting the 28th Annual Report on theOperations of the Company together with audited statement of accounts for the year endedMarch 31 2016.
FINANCIAL RESULTS - AN OVERVIEW:
Members would be happy to note that your company has had a successful year ofoperation which resulted in an after tax profit of Rs.1039.41 Lacs.
(Rs. In Lacs)
|Particulars ||2015-16 ||2014-15 |
|Sales & Other Income ||62136.80 ||73527.04 |
|Profit before Depreciation & Tax ||2809.94 ||3056.89 |
|Depreciation ||1277.97 ||1249.55 |
|Profit before Tax ||1531.97 ||1807.34 |
|Provision for Taxation including Deferred Taxes ||492.56 ||617.57 |
|Profit after Tax ||1039.41 ||1189.77 |
|Profit brought forward from previous year ||4295.49 ||3595.95 |
|Profit available for appropriation ||5334.91 ||4785.72 |
|Appropriation || || |
|Transfer to General Reserve ||422.52 ||200.00 |
|Interim Dividend @ 15% ||166.89 ||133.51 |
|Proposed Final Dividend @ 12 % ||133.51 ||89.00 |
|Corporate Dividend Tax ||61.15 ||44.49 |
|Profit carried to Balance Sheet ||4550.84 ||4295.4 |
The year witnessed good performance with all- round growth from Domestic and overseassales. Your company registered sales growth of 4.7% to Rs. 620.94 Cr. from Rs. 593.04 Cr.in the previous year. The growth was achieved at a time when the overall textile marketdeclined in the current scenario. Company's existing product portfolio was praiseworthy asthey improved their market shares both domestically and globally. Total Export Turnoverwas Rs.347 Cr. or approx 56% of revenues in 2015-16.
The Board in its meeting held on February 2 2016 declared an interim dividend ofRs.1.50 per equity shares. Further The Board in its meeting held on May 27 2016 hasrecommended a final dividend of Rs.1.20 per equity shares for the financial year endedMarch 312016. The proposal is subject to the approval of shareholders at the ensuingAnnual General Meeting to be held on August 20 2016. Together with the Interim dividendof Rs.1.50/- per share total dividend for the financial year ended March 312016 worksout to be Rs. 2.70/- per equity share of Rs. 10/- each. The total dividend pay out(including dividend distribution tax) for the current year is Rs. 300.40 Lacs. as againstRs. 222.52 Lacs. in the previous year. The Company have paid Dividend Distribution Tax ofRs. 61.15 Lacs for the year March 312016.
The Company has allotted 2225162 fully paid up equity shares of face value Rs. 10 inSeptember 2015 to shareholders of the Company in proportion of 4:1 and consequently thenumber of issued and fully paid equity shares increased from 8900650 to 11258112.
TRANSFER TO RESERVES:
The Company proposes to transfer Rs. 422.52 Lacs to the General Reserve out of theamount available for appropriations and an amount of Rs. 4550.84 Lacs is proposed to beretained in the Profit and Loss Account.
RESERVE AND SURPLUS:
Reserves and Surplus stood at to Rs. 7741.78 Lacs as at March 312016 compared to Rs.7286.43 Lacs as at March 312015. The increase was due to retained earnings.
The Board of Directors duly met 8 times during the financial year from 1st April 2015to 31st March 2016. The dates on which the meetings were held are as follows:
May 27 2015 August 04 2015 August 07 2015 September 8 2015 October 30 2015November 8 2015 February 2 2016 and February 9 2016.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
The current policy is to have an appropriate mix of executive and independentdirectors. On March 312016 the Board consists of seven members three of whom areexecutive directors or whole Time Director and four are independent directors.
The policy of the Company on directors' appointment and remuneration including criteriafor determining qualification positive attributes independence of director and othermatters as required under sub- section (3) of Section 178 of the Companies Act2013 isavailable on our website http://damodargroup.com/pdf/ DIL_policies.pdf. There has been nochange in the policy since the last fiscal year. We affirm that remuneration paid todirectors is as per the terms laid out in the nomination and remuneration policy of thecompany.
DECLARATION BY INDEPENDENT DIRECTOR(S):
The Company has received necessary declaration from each independent director undersection 149 (7) of the Companies Act 20113 that he/she meet the criteria of independencelaid down in Section 149 (6) of the Companies Act2013 and Regulation 25 of SEBI (ListingObligations and Disclosure requirements) Regulations 2015.
Pursuant to the provisions of Companies Act2013 and Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations2015 the Board hascarried out annual performance evaluation of its own performance the directorsindividually as well the evaluation of the working of its Audit Nomination &Remuneration and Stakeholder Relationship committee. The manner in which the evaluationhas been carried out has been explained in Corporate Governance Report.
FAMILIARIATION PROGRAMME FOR INDEPENDENT DIRECTORS:
All new independent directors inducted into the Board attend an orientation programme.The Details of training and familiarisation programme are provided in the corporategovernance Report and also available on our websitehttp://damodargroup.com/pdf/DIL_policies.pdf
CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING:
The Board of Directors has adopted the Insider Trading Policy in accordance with therequirement of SEBI (Prohibition of Insider Trading) Regulations 2015 and the InsiderTrading Policy of the Company covering code of practices and procedures for fairdisclosure of unpulished price sensitive information and code of conduct for prevention ofinsider trading is available on our websitehttp://damodargroup.com/investors/code-conduct.php
The Securities and Exchange Board of India on September 22015 issued SEBI (ListingObligations and Disclosure Requirements) Regulations2015 and the said Regulation wereeffect from December 1 2015. All listed entities were required to enter into the ListingAgreement within six months from the effective date. The Company entered into ListingAgreement with BSE Limited during December2015.
The SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 mandatedthe formulation of certain policies for all listed Companies. All our corporate governancepolicies are available on our website www.damodargroup.com . All our corporate policiesare reviewed periodically by the Board and undated based on need and new compliancerequirement.
In addition to its Code of Conduct and Ethics key policies that have adopted by theCompany are as follows:
Nomination and Remuneration Policy: The policy formulates the criteriafor determining qualification competencies positive attributes and independence of adirector and also criteria for determining the remuneration of the directors' keymanagerial personnel and other employees.
Related Party Transaction Policy: The Policy regulated all transactionbetween the Company and its related party.
Corporate Social Responsibility Policy: The Policy outlines the Companystrategy to bring about a positive impact on society through programme relating to hungereducation healthcare and environment.
Policy on Material Subsidiaries: The policy used to determine thematerial subsidiaries and material non listed Indian subsidiaries of the Company.
Whistleblower Policy : The Company adopted the whistleblower mechanismfor director and employee to report concerns about unethical behaviour actual orsuspended fraud violation of Company rules of other matters or activity on account ofwhich the interest of the company affected.
Insider Trading Policy: The policy provides the framework in dealing withsecurities of the Company.
CHANGE IN NATURE OF BUSINESS IF ANY:
During the year there was no changes in the nature of business of the Company
DIRECTORS AND KEY MANAGERIAL PERSONNEL CESSATION:
There is no director and Key Managerial personnel had resigned from the services of theCompany.
Mr. Arunkumar Biyani - Retiring Director:
As per the provisions of Companies Act2013 Mr. Arunkumar Biyani shall retire byrotation at the forthcoming Annual General Meeting of the Company and being eligibleoffers himself for re-appointment. The Board is pleased to recommend their re-appointment.
DIRECOTR'S RESPONSIBILITY STATEMENT:
In terms of Section 134(3) of the Companies Act 2013 the Directors would like tostate:
a) that in the preparation of the annual financial statements for the year ended March312016 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
(b) that such accounting policies as mentioned in the Notes to the Financial Statementshave been selected and applied consistently and judgment and estimates have been made thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at March 312016 and of the profit of the Company for the year ended onthat 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 werein place and were adequate and operating effectively.
COMMITTEE OF THE BOARD:
The Board has five committees the Audit committee the Nomination and Remunerationcommittee the Stake holders Relationship Committee the Corporate Social ResponsibilityCommittee and the Risk Management Committee. The detailed note on the composition of theBoard and its committees is provided in the corporate Governance report section of thisAnnual Report.
Auditors' observations are suitably explained in notes to the Accounts and areself-explanatory.
i) Statutory Auditors:
Your Company's Auditors M/s. Jitendra Mishra & Co. Chartered Accountants wereappointed as the Statutory Auditors at the 27th Annual General Meeting for a term of 5years. Their appointment is to be ratified by the shareholders under Section 139 of theCompanies Act 2013 at the ensuing Annual General Meeting.
The Statutory Auditor's Report does not contain any qualification reservation oradverse remark.
ii) Cost Auditor:
Your Company's Cost Accountant M/s. Dilip M. Bathija was appointed by the Board ofDirectors at its meeting held on May 27 2015 to audit the Cost Accounting records as maybe applicable to the Company for the financial year 2015-16 and their remuneration hasbeen approved at the previous Annual General Meeting.
iii) Secretarial Auditor:
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. Pramod Jain & Co. Company Secretaries as its Secretarial Auditor toundertake the Secretarial Audit for the financial year 2015-16. The Secretarial AuditReport certified by our Secretarial Auditors in the specified form MR-3 is annexedherewith and forms part of this report. (Annexure-A)
iv) Internal Auditor:
As per requirements of Section 138(1) of the Companies Act 2013 read with rule 13 ofthe Companies (Accounts) Rules 2014 the Board of Directors of the Company appointed M/sShailendra Jain & Associates
Chartered Accountants as Internal Auditor of the Company to conduct Internal Audit ofbusiness processes financial reporting controls compliance with applicable lawsregulations etc.
Details relating to Fixed Deposits covered under Chapter V of the Act as under
|a. Accepted during the year ||: Rs.126780000/- |
|b. Remained unpaid or unclaimed as at the end of the year ||: Rs.377000/- |
|c. Whether there has been any default in repayment of deposits or payment of interest thereon during the year ||: Nil |
SIGNIFICANT AND MATERIAL ORDERS PASSED 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.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:
Pursuant to the provisions of Section 124 and 125 of the Companies Act 2013 relevantamounts which remained unpaid or unclaimed for a period of seven years have beentransferred by the Company from to time to time on due dates to the Investor Educationand Protection Fund.
Pursuant to the provisions of Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed amounts lying with the Company ason August 7 2015 (date of last Annual General Meeting) on the Company's website(www.damodargroup.com ) as also on the Ministry of Corporate Affairs' website.
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.
MANAGEMENT DISCUSSION AND ANALYSIS:
Management's Discussion and Analysis for the year under review as stipulated underSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 is presented in a separate section forming part of the Annual Report.
VIGIL MECHANISM (Whistle Blower Policy):
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company athttp://damodargroup.com/pdf/DIL_Vigil_Mechanism_Policy.pdf
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
Your Company is committed to provide a work environment which ensures that every womanemployee is treated with dignity respect and equality. There is zero- tolerance towardssexual harassment and any act of sexual harassment invites serious disciplinary action.
The Company has established a policy as per under Section 22 of Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 against SexualHarassment for its employees. The policy allows any employee to freely report any such actand prompt action will be taken thereon. The Policy lays down severe punishment for anysuch act. Further your Directors state that during the year under review there were nocases of sexual harassment reported to the Company.
MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL DATE OF REPORT:
There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report other than those disclosed inthe financial statements.
The Company has adopted the best possible Corporate Governance norms and it has beenour endeavour to comply and upgrade to the changing norms.
A separate section on corporate governance and a certificate from the PracticingCompany Secretary regarding compliance of conditions of Corporate Governance as stipulatedunder SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
In terms Schedule (V)(D) of SEBI (Listing Obligations and Disclosure Requirements)Regulations2015 a certificate of the Managing Director inter alia confirming thecorrectness of the financial statements adequacy of the internal control measures andreporting to matters to the Audit Committee in terms of the said Clause is also enclosedas a part of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The information required under section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules2014 is given in the Annexure-B to thisreport.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure-C.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
Corporate Social Responsibility is the Companies intent to make a positive differenceto the society. As per Companies Act 2013 which requires Companies contribute some partof its profits towards the CSR activities. we have adopted Corporate Social Responsibilityas a strategic tool for sustainable growth. With the CSR Vision Build a powerfulpartnership Society for Sustainable Development and to improve the quality of life of thecommunities we serve through long term stakeholders' value creation. We are committed tooperate our business with emphasis on CSR in all areas of our operation. The CorporateSocial Responsibility Policy enumerating the CSSR activities to be undertaken by theCompany in accordance with Schedule VII to the Companies Act2013 was recommended to theBoard and the Board adopted the same.
The said policy was also available on the websitehttp://damodargroup.com/pdf/DIL_CSR_Policy.pdf . The Annual Report under CSR activities isannexed to the report as Annexure D.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The prescribed particulars of Employee required under section 197 read with Rule 5 ofthe Companies (Appointment and remuneration of Managerial Personnel) Rules 2014 isattached as Annexure-E as form the part of Board's report.
RELATED PARTY TRANSACTIONS:
Related party transactions that were entered during the financial year were on an arm'slength basis and were in the ordinary course of business. There were no materiallysignificant related party transactions with the Company's Promoters Directors Managementor their relatives which could have had a potential conflict with the interests of theCompany. Transactions with related parties entered by the Company in the normal course ofbusiness are periodically placed before the Audit Committee and the particulars ofcontracts entered during the year as per Form AOC-2 is enclosed as Annexure-F.
The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act 2013 the Rulesthere under and the Listing Regulations. This Policy was considered and approved by theBoard has been uploaded on the website of the Company at http://damodargroup.com/pdf/DIL_RPT _Policy.pdf
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY:
The Company has been addressing various risks impacting the Company and the policy ofthe Company on risk management is provided elsewhere in this Annual Report in ManagementDiscussion and Analysis.
INTERNAL CONTROL SYSTEM AND AUDIT:
In terms of Section 134 of the Companies Act 2013 and provisions of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Company has an InternalControl System commensurate with the size scale and complexity of its operations. Tomaintain its objectivity and independence the Internal Auditors report to the Chairman ofthe Audit Committee of the Board.
The Internal Auditors monitor and evaluate the efficacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function process owners undertake corrective action in their respective areas andthereby strengthen the controls. Significant audit observations and corrective actionsthereon are presented to the Audit Committee on a regular basis.
M/s. Shailendra Jain & Associates Chartered Accountants acts as the InternalAuditor of the Company under Section 138 of the Companies Act 2013.
Your Directors would like to acknowledge and place on record their sincere appreciationof all stakeholders - shareholders bankers dealers vendors and other business partnersfor the excellent support received from them during the year under review. Your Directorsrecognise and appreciate the efforts and hard work of all the employees of the Company andtheir continued contribution to its progress.
| ||For and on behalf of the Board |
| ||Sd/- |
|Place: Mumbai ||Arunkumar Biyani |
|Date: May 27 2016 ||Chairman |
Conservation of energy research and Development Technology absorption foreignexchange earnings and outgo. (Particulars pursuant to the Companies (Account) Rules 2014
Conservation Of Energy
The nature of the Company's Operation entails a very High Level of Energy Consumption.However adequate measures have been taken to conserve energy. Total energy consumptionand energy consumption per unit of production:
|Particulars ||2015-16 ||2014-15 |
|[A] Power and fuel consumption || || |
|1. Electricity || || |
|A) Purchased unit ||36025490 ||38369010 |
|Amount (' Rs.000) ||153404505 ||171846203 |
|Rate/Unit (') ||4.26 ||4.48 |
|B) Own Generation || || |
|I Through Diesel Generator Unit ||32752 ||34120 |
|ii) Unit/Liter of Diesel Oil 4 ||4 || |
|iii) Fuel cost/unit (Rs.) ||12.20 ||14.82 |
|[B] Electricity units Consumption in || || |
|Production of Yarn per KG. (Unit/Kg) ||2.42 ||2.22 |
RESEARCH AND DEVELOPMENT
a. Specific areas in which R & D was carried out by the Company
The Company is actively engaged in product up gradation design development.
b. Benefits derived as a result of the above R & D
Improved product designs resulted in higher value added products and betterrealisations.
c. Future plan of action
Emphasis on the above activities is the on going exercise.
d. Expenditure on R & D
Since the expenditure incurred on research and development activities were notsubstantial no separate account for the same were being maintained.
TECHNOLOGY ABSORPTION ADOPTION AND INNOVATION
Since the Company's products are being developed by an in-house R & D team nofurther information under this head is required to be given.
FOREIGN EXCHANGE EARNINGS AND OUTGO
a. Initiatives taken to increase exports and exports plans
Your Company has been constantly promoting new products and developing new customersaround the world. It is also taking part in various trade fairs to develop exportbusiness.
b. Development of new export markets for synthetic yarn.
Your Company is consistently exploring possibilities of exporting its products to newmarkets. This is an on going process.
c. Total Foreign Exchange Earnings and outgo
(Rs. In Lacs)
|Particulars ||2015-16 ||2014-15 |
|Foreign Exchange outgo (used) ||347.51 ||409.17 |
|Earned (FOB Value of Export goods) ||32852.99 ||27954.97 |