To The Members
Deccan Gold Mines Limited
Your Directors present the 33rd Annual Report of the Company together with the AuditedStatement of Accounts for the year ended March 31 2017.
1. FINANCIAL STATEMENTS & RESULTS:
A. FINANCIAL RESULTS
The Company's performance during the year ended March 31 2017 as compared to theprevious financial year is summarized below: (` in 000)
|Particular ||For the financial year ended March 31 2017 ||For the financial year ended March 31 2016 |
|Income ||4859 ||3459 |
|Less: Expenses ||101109 ||72413 |
|Profit/ (Loss) before tax ||(96250) ||(68954) |
|Less: Provision for tax ||- ||- |
|Profit / (Loss) after Tax ||(96250) ||(68954) |
|Balance brought forward ||(151853) ||(82899) |
|Balance carried to Balance Sheet ||(248103) ||(151853) |
During the year 2016-17 the Company had issued 1450000 equity shares under its ESOP2014 & ESOP 2014 (amended 2016).
Details on the operations of the Company during the year under review are given underthe head "Report on Exploration Activities" and the segment titled "Statusof mineral concession applications" and in "Management Discussion &Analysis" forming part of this Report.
More details about the Company's projects and operations as well as marketannouncements made from time to time can be accessed at (www.deccangoldmines.com). Therewas no change in nature of the business of the Company during the year under review.
C. Report on performance of subsidiaries associates and joint venture companies:
The performance and financial position of Deccan Exploration Services Private Limitedsubsidiary company for the year ended March 31 2017 is attached and marked as Annexure Iand forms part of this Report.
In view of the fact that the Company is yet to commence its commercial operations yourDirectors express their inability to recommend dividend for the financial year underreview.
e. TRANSFER TO RESERVES:
In view of loss incurred during the year under review the Board of Directors has notrecommended transfer of any amount to reserves..
F. Revision of financial statement:
During year under review there was no revision of financial statement of any previousfinancial years.
The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposit) Rules 2014 during the year under review. Hence therequirement for furnishing of details of deposits which are not in compliance with theChapter V of the Act is not applicable.
H. Disclosures under section 134(3)(l) of the companies act 2013:
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and date of this report.
I. Disclosure of internal financial controls:
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been observed for inefficiency or inadequacy of such controls.
J. DISCLOSURE OF ORDERS PASSED BYR EGULATORS OR COURTS OR TRIBUNAL
No orders have been passed by any Regulator or Court or Tribunal which can have impacton the going concern status and the Company's operations in future.
K. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES
During the year under review the Company has not entered into any contracts orarrangements with related parties that fall within the purview of Section 188 of theCompanies Act 2013.
L. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES:
During the year under review the Company did not make any investment or provide anyloan or furnish any guarantees. Details of investments made are furnished in Annexure IIand forms part of this Report.
M. DISCLOSURE UNDER SECTION 43(A)(II) OF THE COMPANIES ACT 2013:
The Company has not issued any shares with differential rights and hence no informationas per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014 is furnished.
N. DISCLOSURE UNDER SECTION 54(1)(D) OF THE COMPANIES ACT 2013:
The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13)of the Companies (Share Capital and Debenture) Rules 2014 is furnished.
O. DISCLOSURE UNDER SECTION 62(1)(B) OF THE COMPANIES ACT 2013:
As per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies(Share Capital and Debenture) Rules 2014 and other applicable Regulations details ofequity shares issued under Employees Stock Option Scheme during the financial year underreview is furnished in Annexure III attached herewith which forms part of this Report.
P. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT 2013:
During the year under review there were no instances of non-exercising of votingrights in respect of shares purchased directly by employees under a scheme pursuant toSection 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures)Rules 2014.
2. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
A) Board Of directors & key managerial personnel
In accordance with the provisions of the Companies Act 2013 none of the IndependentDirectors is liable to retire by rotation.
As per the provisions of Section 152 of the Companies Act 2013 Mr. Charles EdwardEnglish Devenish retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. Your Directors recommend his re-appointment.The required details under the Companies Act 2013 read with applicable SecretarialStandards in respect of Mr Charles E.E. Devenish are furnished as an Annexure to theNotice convening the Annual General Meeting.
b. DECLARATIONS BY INDEPENDENT DIRECTORS:
The Company has received declarations form all the Independent Directors under Section149(6) of the Companies Act 2013 confirming their independence vis-a-vis the Company.
3. DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES A. BOARD MEETINGS:
The Board of Directors met six (6) times during the financial year ended March 31 2017in accordance with the provisions of the Companies Act 2013 and rules made thereunder.
b. DIRECTOR'S RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the CompaniesAct2013 financial statements of theCompany relation to the audited for the year ended March 31 2017 the Board of Directorshereby confirm that:
a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b. such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at March 31 2017 and of theloss of the Company for that year;
c. proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
d. the annual accounts of the Company have been prepared on a going concern basis;
e. internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
f. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively;
c. NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee of Directors was constituted by the Board ofDirectors of the Company in accordance with the requirements of Section 178 of the Act.
The composition of the committee is as under:
1. Mr. K.R. Krishnamurthy Chairman
2. Ms. Pratima Ram Director and
3. Prof V.K. Gaur Director.
The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive Director and policy relating to remuneration for Directors KeyManagerial Personnel and other employees. Major criteria defined in the policy framed forappointment of and payment of remuneration to the Directors of the Company are based upontheir experience qualifications capability to make addition.
d. AUDIT COMMITTEE:
The Audit Committee of Directors was constituted pursuant to the provisions of Section177 of the Companies Act 2013. The composition of the Audit Committee is in conformitywith the provisions of the said section. The Audit Committee comprises of:
1. Ms. Pratima Ram Independent Director - Chairperson
2. Mr. K.R. Krishnamurthy Independent Director Member and
3. Prof V.K. Gaur Independent Director Member.
The scope and terms of reference of the Audit Committee have been aligned in accordancewith the Act and the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015. During the year under review the Board of Directors of the Company had accepted allthe recommendations of the Committee.
e. STAKEHOLDERS RELATIONSHIP COMMITTEE:
During the year under review pursuant to Section 178 of the Companies Act 2013 theBoard of Directors of the Company has constituted the Stakeholder's RelationshipCommittee comprising Mr. K.R. Krishnamurthy Chairman; Ms Pratima Ram and Mr. SandeepLakhwara as its members.
Mr. K.R. Krishnamurthy has been appointed the Chairman of the Stakeholders'Relationship Committee. The Company Secretary acts as the Secretary of the Stakeholders'Relationship Committee.
f. VIGIL MECHANISM POLICYF OR THE DIRECTORS AND EMPLOYEES:
The Board of Directors of the Company has pursuant to the provisions of Section 178(9)of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board and itsPowers) Rules 2014 framed "Vigil Mechanism Policy" for Directors and employeesof the Company to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on raising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc. The employees of the Company have the right/option to report their concern /grievance to the Chairman of the Audit Committee.
The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations.
g. FRAUD REPORTING:
During the year under review no instances of fraud were reported by the StatutoryAuditors of the Company.
h. RISK MANAGEMENT POLICY:
The Board of Directors of the Company has designed Risk Management Policy andGuidelines to avoid events situations or circumstances which may lead to negativeconsequences on the Company's businesses and define a structured approach to manageuncertainty and to make use of these in their decision making pertaining to all businessdivisions and corporate functions. Key business risks and their mitigation are consideredin the annual/ strategic business plans and in periodic management reviews.
i. CORPORATE SOCIAL RESPONSIBILITY POLICY:
Section 135 of the Companies Act 2013 mandates the constitution of a Corporate SocialResponsibility Committee by companies having networth of Rs 500 crore or more OR turnoverof Rs 1000 crore or more OR a net profit of Rs 5 crore or more during any financial year.However considering the said applicability criteria this provision is presently notapplicable in the case of the Company.
j. SEXUAL HARASSMENT:
TThe Company has adopted a policy on prevention prohibition and redressal of sexualharassment at workplace and has also established Investigation and Redressal Committee asstipulated by The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and rules thereunder. During the year under review no complaints inrelation to such harassment at workplace have been reported.
k. ANNUAL EVALUATION OF DIRECTORS COMMITTEE AND BOARD:
A statement indicating the manner for evaluation of performance of the Board and itscommittee individual Directors is attached with the Board Report as Annexure IV and formspart of this Report.
l. INTERNAL CONTROL SYSTEMS:
Adequate internal control systems commensurate with the nature of the Company'sbusiness and size and complexity of its operations are in place and have been operatingsatisfactorily. Internal control systems comprising of policies and procedures aredesigned to ensure reliability of financialreporting timely feedback on achievement ofoperational and strategic goals compliance with policies procedure applicable laws andregulations and that all assets and resources are acquired economically used efficientlyand adequately protected.
m. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURES ASPER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014:
The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year under review has been marked as AnnexureV.
n. PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARYCOMPANIES:
The Managing Director of the Company is not in receipt of remuneration/commission fromthe Holding or Subsidiary Company of the Company. Apart from the Managing Director theCompany does not have any other managerial personnel.
4. AUDITORS AND REPORTS
The matters related to Auditors and their Reports are as under:
a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED MARCH 31 2017:
The observations made by the Statutory Auditors in their report for the financial yearended March 31 2017 read with the explanatory notes therein are self-explanatory andtherefore do not call for any further explanation or comments from the Board underSection 134(3) of the Companies Act 2013.
b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED MARCH 31 2017:
Provisions of Section 204 read with Section 134(3) of the Companies Act 2013 mandatesto obtain Secretarial Audit Report from Practicing Company Secretary. M/s Rathi andAssociates Company Secretaries had been appointed to issue Secretarial Audit Report forthe financial year 2016-17.
Secretarial Audit Report issued by M/s. Rathi and Associates Practicing CompanySecretaries in Form MR-3 for the financial year 2016-17 is attached and forms part to thisreport. The said report does not contain any observation or qualification requiringexplanation or comments from the Board under Section 134(3) of the Companies Act 2013.
c. APPOINTMENT OF STATUTORY AUDITORS:
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Companies(Audit and Auditors) Rules 2014 M/s. P R Agarwal & Awasthi Chartered AccountantsMumbai (Firm Registration No. 117940W) are proposed to be appointed as Statutory Auditorsof the Company to hold office from the conclusion of this 33rd Annual General Meetinguntil the conclusion of the 38th Annual General Meeting subject to ratification by theshareholders at every Annual General Meeting held during their tenure. The consent of theAuditors along with certificate under Section 139 of the Act have been obtained from theAuditors to the effect that their appointment if made shall be in accordance with theprescribed conditions and that they are eligible to hold the office of Auditors of theCompany. The Board recommends the appointment of M/s. P R Agarwal & Awasthi CharteredAccountants Mumbai as the Statutory Auditors of the Company. Necessary resolution forappointment of the said Auditors is included in the Notice of AGM for seeking approval ofmembers.
d. COST AUDITORS:
The provisions of Section 148 of the Companies Act 2013 relating to cost audit are notapplicable to the Company.
5. OTHER DISCLOSURES
Other disclosures as per provisions of Section 134 of the Act read with Companies(Accounts) Rules 2014 are furnished as under:
a. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the financial year ended March 31 2017 made under the provisions ofSection 92(3) of the Act is attached as Annexure VI which forms part of this Report.
b. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy and technology absorption have not been furnished considering thenature of activities undertaken by the Company during the year under review. During theyear under review the Company has neither earned nor used any foreign exchange.
c. CORPORATE GOVERNANCE:
As per the provisions of Section II of the Schedule V of the Companies Act 2013 thedetails of remuneration paid to Mr. Sandeep Lakhwara Managing Director are furnished asunder:
|All elements of remuneration package such as salary benefits bonuses stock options ||` 7 lakhs per month |
|Details of fixed component and performance linked incentives along with the performance criteria Service contracts notice period severance fees Stock option details if any and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable ||Nil |
| ||Notice period of 3 months. No stipulation of severance fee. |
| ||Granted 1500000 stock options under the Deccan Gold Mines Limited Employee Stock Option Scheme 2014. |
| ||Granted further 750000 stock options under the Deccan Gold Mines Limited Employee Stock Option Scheme 2014 (amended 2016). |
| ||The said Options have been granted at the price of `. 7/- per option and the Managing Director shall have right to subscribe for shares within the period of 12 months from the date of vesting. |
6. ACKNOWLEDGEMENTS AND APPRECIATION:
Your Directors take this opportunity to express their gratitude to all the businessassociates and to the investors / shareholders for the confidence reposed in the Companyand its management. The Directors also convey their appreciation to the employees at alllevels for their enormous personal efforts as well as collective contribution.
| ||For and on behalf of the Board |
|Place : Bengaluru ||Charles E.E. Devenish |
|Date : September 14 2017 ||Chairman |
| ||DIN : 01252091 |