Your Directors are pleased to present their Report together with the Audited FinancialStatements for the year ended 31st March 2017.
|1. FINANCIAL RESULTS ||(Rs in Lacs) |
|Profit before Depreciation & Tax ||2477.23 |
|Less : Depreciation ||1628.79 |
|Provision for Tax || |
|- Current year ||175.51 |
|- Deferred Tax ||54.37 |
|Net Profit ||618.56 |
|Transfers and Appropriations : || |
|Balance carried forward to ||618.56 |
|Reserves and Surplus || |
The Directors have not recommended any dividend.
3. General Review
During the past year the planned expansion on its Dye House at its Baddi Unit has beencompleted. This translates to a 30% increase in capacity for production of dyed yarnenabling this dye house to additionally feed our Guna unit enabling production of valueadded dyed yarn there. Necessary modifications to the plant and machinery at Guna unithave been undertaken making it suitable for production of better quality yarn.Upgradadation of electricity supply at Baddi unit from 11 KV to 66 KV has been finalisedand is expected to be completed during 2017-18. This will enable your Company to getelectricity at cheaper rate with reduced power tripping and fluctuations. The Company alsohas plans to undertake modifications in the power plant at Guna during 2017-18 aimed atimproving efficiency and reducing operational costs.
4. Internal Financial Control Systems
The Company has an adequate Internal Financial Control System commensurate with thesize scale and nature of its operations which ensure orderly and efficient conduct ofits business including adherence to Company's policies the safeguarding of its assetsprevention and detection of frauds and errors the accuracy and completeness of theaccounting records. Audit Committee evaluates the internal financial control systemperiodically. Internal Audit is conducted by independent Chartered Accountants onquarterly basis. To maintain its objectivity and independence the Internal Auditorsreport directly to the Audit Committee of the Board.
5. Statutory Auditors
As per Section 139 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 the term of M/s. Singhi & Co Chartered Accountants (ICAIRegistration no. 302049E) New Delhi as the Statutory Auditors of the Company expires atthe conclusion of the forthcoming Annual General Meeting.
The Board of Directors of the Company on the recommendations of the Audit Committeehas recommended the appointment of M/s. Jitendra K Agrawal & Associates CharteredAccountants (ICAI Registration no. 318086E) as the Statutory Auditors of the Company bythe members at the 35th Annual General Meeting of the Company for an initial term of 5consecutive years from the conclusion of 35th Annual General Meeting till the conclusionof 40th Annual General Meeting of the Company.
Pursuant to the provisions of Section 139 of the Companies Act 2013 the Company hasobtained written consent from M/s. . Jitendra K Agrawal & Associates CharteredAccountants and a confirmation that they satisfy the criteria under Section 141 of the Actand that their appointment if made would be in conformity with the applicable provisionsof the Act and rules framed thereunder.
6. Auditors' Report
The Auditors' Report to the Shareholders does not contain any reservationqualification or adverse remark. During the year under review the Auditors have notreported any matter under Section 143(12) of the Companies Act 2013 therefore no detailis required to be disclosed under Section 134(3)(ca) of the Act.
7. Secretarial Audit
Secretarial Audit was carried out by M/s. A. Arora & Co. Company Secretaries (PCSRegistration no. 993) for the financial year 2016-17. The Secretarial Audit Report isannexed as Annexure I' and forms integral part of this Report.
There has been no qualification reservation or adverse remark or disclaimer in thereport. During the year under review the Auditors have not reported any matter underSection 143(12) of the Companies Act 2013 therefore no detail is required to bedisclosed under Section 134(3) (ca) of the Act.
8. Cost Audit
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 as amended on the recommendation of the AuditCommittee the Board of Directors had appointed M/s Shakti K. & Associates CostAccountants (ICWAI Registration no. 11338) as Cost Auditors of the Company to carry outcost audit of the products manufactured by the Company.
The Company has received their written consent that the appointment is in accordancewith the applicable provisions of the Act and rules framed there under. The remunerationof Cost Auditors has been approved by the Board of Directors on the recommendation ofAudit Committee and the requisite resolution for ratification of remuneration payable toCost Auditors by members is included in the Notice convening the ensuing Annual GeneralMeeting of the Company.
9. Directors and Key Managerial Personnel :
a) i) In accordance with the provisions of Companies Act 2013 and Articles ofAssociation of the Company Shri Pradip Kumar Daga retires by rotation at the forthcomingAnnual General Meeting and being eligible offers himself for re-appointment. The briefresume and other details as required under the Listing Regulations are provided in theNotice of the 35th Annual General Meeting.
ii) The tenure of Shri Pradip Kumar Daga as Managing Director expires on 15th April2018. In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company the Board recommends re-appointment of Shri Daga for a periodof three years with effect from 16th April 2018 till 15th April 2021 to the members of theCompany at the ensuing Annual General Meeting.
(iii) On the recommendations of Nomination and Remuneration Committee the Board ofDirectors has appointed Shri Binod Kumar Agrawal as an Additional Director of the Companyin the Category of Independent Non-Executive Director with effect from 1st April 2017 fora period of five consecutive years till 31st March 2022 subject to consent ofshareholders in the ensuing Annual General Meeting of the Company. The brief resume andother details as required under the Listing Regulations are provided in the Notice of the35th Annual General Meeting.
(iv) There were no changes in Key Managerial Personnel of the Company.
b) Statement on declaration given by Independent Directors
All Independent Directors have given declarations confirming that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andListing Regulations.
During the year five Board Meetings and four Audit Committee meetings were convenedand held the details of which are given in the Corporate Governance Report.
d) Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations theBoard has carried out an annual evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Committees. At the meetingof the Board all the relevant factors that are material for evaluating the performance ofthe Committees and of the Board were discussed in detail.
Evaluation of the performance of individual Directors was carried out evaluation beingmade on parameters such as level of engagement and contribution independence of judgmentsafeguarding the interest of the Company and its minority shareholders etc. Theperformance evaluation of the Independent Directors was carried out by the entire Board.The performance evaluation of the Chairman and non-independent Directors was carried outby the Independent Directors. The Directors express their satisfaction with the evaluationprocess.
10. Directors' Responsibility Statement
In terms of the provisions of Section 134(5) of the Companies Act 2013 your Directorsconfirm as under
a) That in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
b) That the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;
c) That the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
d) That the Directors had prepared the annual accounts on a going concern basis; and
e) That the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
f) That the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
11. Corporate Social Responsibility
In accordance with the requirements of Section 135 of the Companies Act 2013 theCompany has a Corporate Social Responsibility Committee the terms of reference and otherdetails of which are provided in the Corporate Governance Report. The CSR Policy has beenframed and posted on the website of the Company www. dsl-india.com.
As a good corporate citizen the Company is aware of its social responsibility. Asrequired by Section 134(3)(o) of the Companies Act 2013 and Rule 9 of the Companies(Corporate Social Responsibility) Rules 2014 Annual Report on CSR activities is annexedas Annexure II' to form part of this report.
12. Vigil Mechanism
Vigil Mechanism is available to Directors and employees of the Company to raiseconcerns of any fraud mismanagement negligence violations of legal or regulatoryrequirement on a confidential basis to the Vigil Officer or the Audit Committee as thecase may be. The policy of Vigil Mechanism is an internal policy to make protecteddisclosures in good faith and to raise concerns to be appropriately dealt with. Complaintsreceived by Vigil Officer are investigated by the Vigil Officer and a report thereon issubmitted to the Audit Committee.
It is affirmed that no person was denied access to the Vigil Officer and the AuditCommittee; and no complaints were received during the financial year 2016-17. To ensurethat this mechanism is adhered to and to assure that the concern will be acted uponseriously the Company: 1. ensures that the Complainant and/ or the person processing theProtected Disclosure is not victimized for doing so; 2. ensures complete confidentiality;3. takes disciplinary action if any one destroys or conceals evidence of the ProtectedDisclosure made/to be made; 4. provides an opportunity of being heard to the personsagainst whom the complaint is received.
The Policy on Vigil Mechanism is also posted on the website of the Company.
13. Risk Management Policy
The Company has an efficient Risk Management framework to identify and evaluatebusiness risks and opportunities. Risk Management forms an integral part of the Company'sMid-Term Planning cycle. It defines the risk management approach across the enterprise atvarious levels. The Audit Committee has been delegated the responsibility for monitoringand reviewing risk management assessment and minimization procedures.
14. Nomination and Remuneration Policy
The Board has on the recommendations of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors KMP and Senior Management andtheir remuneration. The details of Company's Remuneration Policy are attached as AnnexureIII'and forms part of this report of the Board of Directors.
15. Related Party Transactions
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 were no materially significant transactions with related parties during thefinancial year which were in conflict with the interest of the Company and hence Form AOC2 is not required. Suitable disclosures as required by the Accounting Standard (AS- 18 )has been made in the notes to the Financial Statements.
All related party transactions are placed before the Audit Committee as also before theBoard for approval. Prior omnibus approval of the Audit Committee is obtained fortransactions which are of foreseen and repetitive nature for a period of one year. Thetransactions entered into pursuant to the omnibus approval so granted are placed beforethe Audit Committee on a quarterly basis. Where the need for Related Party Transactionscannot be foreseen the Audit Committee has granted omnibus approval for such transactionssubject to their value not exceeding Rs. 1 crore per transaction which is valid for aperiod of one year.
The Policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website.
16. Disclosures regarding Employees
a) The Statement of Details of Remuneration as required under Section 197 and Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isattached as Annexure IV' and forms a part of this Board's Report.
b) No employee of the Company was in receipt of remuneration in excess of limits laiddown in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014. Also no employee by himself or along with his spouse and dependent childrenholds 2% or more of the equity shares of the Company.
c) The Company has not received any complaint under The Sexual Harassment ofWomen at Workplace (Prohibition Prevention and Redressal) Act 2013 during the year.
17. Public Deposits
During the year the Company has not accepted any deposits from the public and as suchthere are no outstanding deposits in terms of the Companies (Acceptance of Deposits)Rules 2014.
18. Loans Guarantees and Investments
The Company has not given loans directly or indirectly to any person or other bodycorporate or given guarantee or provided any security in connection with a loan to anyother body corporate or person. The Company has also not made any investments as per theprovisions of Section 186 of the Companies Act 2013.
19. Corporate Governance
A report on Corporate Governance and Management Discussion and Analysis as requiredunder Regulation 34 of SEBI(Listing Obligations and Disclosure Requirements)Regulations2015 (Listing Regulations') is annexed herewith. Compliance Certificate issued byStatutory Auditors of the Company regarding compliance of Corporate Governance is alsoannexed.
20. Extract of Annual Return
The extract of annual return in Form MGT-9 is annexed herewith as Annexure V'.
21. Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo.
As required by Section 134(3)(m) of the Companies Act 2013 and Rule 8(3) of theCompanies (Accounts) Rules 2014 information with regard to Conservation of energytechnology absorption and foreign exchange earnings and outgo are annexed as Annexure VI' to form part of this report.
22. 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 and its future operations.
Your Directors place on record their deep appreciation of the co-operation extended byour Bankers stakeholders business associates Central and State Governments and districtlevel authorities for their co-operation and support and look forward to their continuedsupport in future. They also record their appreciation of the efficient and loyal servicesrendered by the executives staff members and workers of the Company.
24. Cautionary Statement
Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operations include global and domestic demand and supplyconditions affecting selling prices of finished goods input availability and priceschanges in government regulations tax laws economic developments within the country andother factors such as litigation and industrial relations.
| || ||YASHWANT KUMAR DAGA || |
| || ||P. K. DROLIA || |
| || ||VIKRAM PRAKASH || |
|Place : New Delhi ||P. K. DAGA ||NILU AGRAWAL ||Directors |
|Date : 22.05.2017 ||Chairman and Managing Director ||BINOD KUMAR AGRAWAL || |