FINANCIAL PERFORMANCE HIGHLIGHTS
Your Company has achieved consistent robust and continuing growth in the areas of itsbusiness segments. The Company's performance during the year has reached its expected goaland the Company continued to grow its market both domestic and international.
The net income of your Company increased to Rs.17060.89 million from Rs.15113.89million in the previous year registering a growth of 12.88 %. At the same time ProfitBeforeTaxation (PBT) has also increased to Rs.1565.19 million from Rs.1432.96 million inthe previous year registering a growth of 9.23% and Profit After Taxation increased toRs.1114.97 millions from Rs.951.30 million registering a growth of 17.20%.
DIVIDEND & RESERVES
The Board of Directors at its meeting held on 15th May 2017 hasrecommended dividend of 155% i.e Rs.1.55 per share on 102316462 equity shares of Rs.1/-each fully paid up for the financial year ended 31st March 2017 subject toapproval of the shareholders at the ensuing Annual General Meeting.
No amount is proposed to be transferred to General Reserve.
STATE OF COMPANY'S AFFAIR AND CURRENT YEAR'S OUTLOOK
The performance of all verticals of the Company along with future outlook of theCompany is discussed in the Management Discussion & Analysis Report which forms partof this Annual Report.
The Paid-up Equity Share Capital of the Company as on 31st March 2017 wasRs.102316462 divided into 102316462 equity shares of face value of Rs.1 each. Duringthe financial year there has been no change in the Equity Share Capital of the Company.
During the year the Company has granted 775000 options to the eligible employeesunder the 'Skipper Employee Stock Option Plan 2015' of the Company out of which 40000options lapsed during the year. The total number of outstanding options as on 31stMarch 2017 stood at 1145000.
INDIAN ACCOUNTING STANDARDS (IND AS)
Pursuant to the notification issued by The Ministry of Corporate Affairs datedFebruary 16 2015 relating to the Companies (Indian Accounting Standard) Rules 2015"IND AS" becomes applicable to the Company with effect from 1stApril 2017 with comparatives for the previous year ended 31st March 2017. Inorder to ensure smooth transition to IndAS your Company has established a project team andhas dedicated considerable resources.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Mr. Joginder Pal Dua (DIN: 02374358) was appointed as an Additional Director (Category- Independent) of the Company with effect from 1st February 2016 by the Boardof Directors and the shareholders of the Company at the Annual General Meeting held on 8thAugust 2016 approved his appointment as an Independent Director not liable to retire byrotation for a term of 5 (five) consecutive years with effect from the date ofappointment.
The Board of Directors had re-appointed Mr. Sajan Kumar Bansal (DIN: 00063555) as theManaging Director of the Company not liable to retire by rotation for a period of 3years upto 30th September 2019 and Mr. Devesh Bansal (DIN: 00162513) and Mr.Siddharth Bansal (DIN: 02947929) were re-appointed as Whole-time Directors of the Companyliable to retire by rotation for a period of 3 (three) years upto 31st March2019.These appointments were further approved by the shareholder at the Annual GeneralMeeting of the Company held on 8th August 2016.
Mr. Sanjay Kumar Agrawal is continuing as the Chief Financial Officer of the Company.During the year under review Mr. Arbind Kumar Jain resigned from the position of CompanySecretary and Compliance Officer of the Company with effect from 29th December2016. Based on the recommendation of Nomination and Remuneration Committee Mr. ManishAgarwal a qualified Company Secretary has been appointed by the Board of Directors as theCompliance Officer of the Company w.e.f 4th January 2017. Further w.e.f 8thFebruary 2017 Mr. Manish Agarwal was appointed as the Company Secretary & ComplianceOfficer of the Company by the Board of Directors.
None of the Directors of the Company are disqualified for being appointed as Directorsas specified in Section 164(2) of the Companies Act 2013 read with Rule 14(1) of theCompanies (Appointment and Qualification of Directors) Rules 2014.
In accordance with the provisions of the Companies Act 2013 Mr. Devesh Bansal (Din:00162513) retire from office by rotation and being eligible has offered himself forre-appointment at the ensuing Annual General Meeting of the Company.
More details about the Directors of the Company are available in the CorporateGovernance Report forming part of this Annual Report.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTOR UNDER SECTION 149 OF THECOMPANIES ACT 2013 AND SEBI (LISTING OBLIGATIONS & DISCLOSURE REQUIREMENTS)REGULATIONS 2015
All Independent Directors of the Company have confirmed that they meet the criteria ofindependence as prescribed under Section 149(6) of Companies Act 2013 and Regulation 16of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
In accordance with the Regulation 25(7) of the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 the Company follows the process offamiliarizing the Independent Directors through training programmes at regular intervals.
At the time of appointment of an Independent Director the Company issues formal letterof appointment outlining his/her role responsibilities function and duties as aDirector. Copies of all policies and codes are also made available for betterunderstanding of the Company. Presentations are made to the Independent Directors givingan overview of the Company nature of industry business model operations productsmanufacturing process marketing finance and other important areas. This enables theDirectors to take an informed decision and discharge their duties and responsibilities inan efficient manner.
The details of the familiarization programmes imparted by the Company to theIndependent Directors during the financial year 2016-17 are available on the website ofthe Company https://dkfwej267huwn.cloudfront.net/investor-relations/pdf/FAMILIARIZATION-PROGRAM-FOR-INDEPENDENT-DIRECTORS.pdf.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FORDETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES AND INDEPENDENCE OF DIRECTORS
The Company has a policy in place for selection and appointment of Directors/ KeyManagerial Personnel/ Senior Managerial Personnel and for determining their remuneration.The remuneration policy of the Company forms part of this report as Annexure-A.
In accordance with the provisions of Companies Act 2013 and SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 the Nomination & RemunerationCommittee has evaluated the performance of each individual Directors on parameters likelevel of engagement contribution towards strategic planning independence of judgmentsafeguarding interest of the stakeholders along with roles and responsibilities performedby them.
The Independent Directors at their meeting held without the presence of ExecutiveDirectors have evaluated the performance of the Non Independent Directors the Chairman ofthe Company and the Board as a whole.
After taking into consideration the evaluation exercise carried out by the Nominationand Remuneration Committee and by the Independent Directors the Board carried out anevaluation of its own performance and that of its committees and individual Directors.
The Board of Directors expressed their satisfaction on the evaluation process and theperformance of all the Directors the Committees and the Board as a whole.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(5) of the Companies Act 2013 the Boardof Directors to the best of their knowledge and belief confirm that:
(i) in the preparation of the Annual Accounts for the year ended 31st March2017 the applicable accounting standards read with requirements set out under ScheduleIII of the Companies Act 2013 have been followed and there are no material departuresfrom the same;
(ii) the Directors have selected such accounting policies as mentioned in Note-1 to theAccounts and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of state of affairs of theCompany as at 31st March 2017 and of the profit of the Company for the yearended on that day;
(iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) The Annual Accounts for the year ended 31st March 2017 have beenprepared on a "going concern" basis;
(v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
(vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
MEETINGS OF THE BOARD
During the year 4 (four) Board Meetings were held. The details of the aforesaidmeetings and the number of meetings attended by each director are furnished in the Reporton Corporate Governance forming part of this report.
COMMITTEES OF THE BOARD
The Board has constituted the following committees:
a. Audit Committee
b. Nomination and Remuneration Committee
c. Stakeholders Relationship Committee
d. Corporate Social Responsibility Committee
e. Risk Management Committee (Dissolved w.e.f 8th February 2017)
Apart from the above the Company has two non-statutory committees namely the FinanceCommittee and the Executive Committee. The details of all the above Committees along withcomposition and details of meetings held during the year under review are provided in theReport on Corporate Governance forming part of this report. There has been no instancewhere the Board has not accepted the recommendations of the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
The Company has framed and adopted a CSR Policy which is available at the followingweblink https://dkfwei267huwn.cloudfront.net/investor-relations/pdf/CSR-Policv.pdf.The policy indicates the CSR activities to be undertaken by the Company to achieve itssocial commitments.
The Company's conscious endeavour is to serve the socio- economically backward theunder- privileged and the marginalized communities. The Company proactively engages withrelevant stakeholders; understand their concerns and respond to their needs. We believethat growth and sustainability of the organization focuses on creating value in thelong-term for the society as a whole. The CSR committee of the Company identifies theareas which needs focus during the year and recommends the same to the Board. The Boardthen approves a budget for the year and spends are made accordingly.
The Company has contributed its funds in activities like eradication of povertypromotion of education rural development projects health and welfare projects animalwelfare skill development etc.
The annual report on CSR pursuant to the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 is provided in Annexure- B forming part of this report.
The Company has a defined Risk Management Framework to identify assess monitor andmitigate risks involved in its business. The Company understands that risk evaluation andrisk mitigation is an ongoing process within the organization and the Board is fullycommitted to identify and mitigate the risks in the business.
The Company has formulated and implemented a Risk Management Policy in accordance withSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 to identify andmonitor business risk of the Company and assist in measures to control and mitigate suchrisks.
The risk associated with the Company's business is always reviewed by the AuditCommittee along with the management team of the Company and the Board is regularlyinformed about the risk assessment and minimization process conducted by the Company.
The risk management issues are discussed in Management Discussion and Analysis Reportforming part of this Annual Report.
In the opinion of the Board as on date there are no material risks which may threatenthe existence of the Company.
INTERNAL CONTROL SYSTEMS & INTERNAL FINANCIAL CONTROLS
The Company has an Internal Control System and Internal Financial Control Systemcommensurate with the size scale and complexity of its operations. It ensures properrecording of financial and operational information and compliance of various internalcontrol and other regulatory and statutory compliances.
The internal auditor monitors and evaluates the efficiency and adequacy of internalcontrol system including internal financial control in the Company. Based on the report ofinternal audit function process owners undertake corrective action in their respectiveareas and thereby strengthen the controls. All these steps facilitate timely detection ofany irregularities and early remedial measures.
Significant audit observations and recommendations along with corrective actionsthereon are presented to the Audit Committee for their inputs and suggestions.
Regular audit and review processes ensure that such systems are reinforced on anongoing basis. Such controls have been tested during the year and no reportable materialweakness in the design or operation was observed.
Necessary certification by the Statutory Auditors in relation to Internal FinancialControl u/s 143(3) (i) of the Companies Act 2013 forms part of the Audit Report.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has in place a Vigil Mechanism/ Whistle Blower Policy to deal withunethical behavior and to provide a framework to promote responsible and secured reportingof undesired activities.
The Vigil Mechanism/ Whistle Blower Policy is available on the website of the Companyat https://dkfwej267huwn.cloudfront.net/investor-relations/pdf/Whistle-Blower-Policy.pdf
The employees are free to report unethical behavior actual or suspected fraudviolation of applicable laws and regulations violation of code of conduct etc. The AuditCommittee oversees the genuine concerns reported under this policy. The Company has alsomade provisions for adequate safeguard against victimization of employees who expresstheir concerns. The mechanism also provides direct access to the Chairman of the AuditCommittee. No Personnel has been denied access to the Audit Committee.
During the year no case was reported under this policy.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis in the ordinary course of business and were in compliance with theapplicable provisions of Companies Act 2013 and SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015.
All related party transactions are placed before the Audit Committee for priorapproval. The Company had taken omnibus approval from the Audit Committee for few relatedparty transactions which were repetitive in nature.
A statement of all related party transactions is placed before the Audit Committee forits review on a quarterly basis specifying the nature value and terms and conditions ofthe transaction.
The details of the transactions with related parties are provided in the Notes of thefinancial statement.
The Company's Policy on Related Party Transaction as approved by the Board is availableon the website of the Company at https://dkfwei267huwn.cloudfront.net/investor-relations/pdf/RELATED-PARTY-TRANSACTIONS-POLICY.pdf.
During the year under review there were no materially significant related partytransactions made by the Company nor there were any transactions which would require to bereported in Form AOC-2.
PREVENTION OF INSIDER TRADING
Your Company has adopted 'Code of Conduct to Regulate Monitor and Report Trading byInsiders' as per the provisions of SEBI (Prohibition of Insider Trading) Regulations 2015with a view to regulate trading in securities by the directors designated persons andother connected persons of the Company.
The Company endeavours to preserve the confidentiality of un-published price sensitiveinformation and to prevent misuse of such information. The Company is committed totransparency and fairness in dealing with all stakeholders and in ensuring adherence toall laws and regulations.
Every director officer employee of the Company has a duty to safeguard theconfidentiality of all such information obtained in the course of his or her work at theCompany. No director officer or employee may use his or her position or knowledge of theCompany to gain personal benefit or to provide benefit to any third party.
The Company has also adopted 'Code of Practice and Procedures for Fair Disclosure ofUnpublished Price Sensitive Information' in accordance with the Securities and ExchangeBoard of India (Prohibition of Insider Trading) Regulations 2015. This Code aims toformulate a stated framework and policy for fair disclosure of events and occurrences thatcould impact price of the Company's securities. The Company endeavors to preserve theconfidentiality of un-published price sensitive information and to prevent misuse of suchinformation.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loans guarantees or made any investments as prescribedin Section 186 of the Companies Act 2013.
PARTICULARS OF EMPLOYEES AND MANAGERIAL REMUNERATION
Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies ( Appointment andRemuneration of Managerial Personnel) Rules 2014 is attached as Annexure- C tothis report.
The information pursuant to Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 not annexed to this report is readilyavailable for inspection by the members at the Company's Registered Office between 11.00A.M to 1.00 PM on all working days upto the date of ensuing Annual General Meeting. Amember may also receive the required details by making a request to the Company Secretarythrough email on firstname.lastname@example.org.
EMPLOYEE STOCK OPTION PLAN
The Company had formulated 'Skipper Employee Stock Option Plan 2015' in accordance withSEBI (Share Based Employee Benefits) Regulations 2014 to encourage and reward theperforming employees of the Company. The Scheme is monitored by the Nomination andRemuneration Committee (also functioning as Compensation Committee) of the Board.
During the year no changes were made in Skipper Employee Stock Option Plan 2015 andthe scheme is in compliance with SEBI (Share Based Employee Benefits) Regulations 2014.
During the year the Company has issued 775000 stock options to its eligibleemployees out of which 40000 options were lapsed . As on 31st March 2017 thetotal outstanding options stood at 1145000.
The applicable disclosures as required under SEBI (Share Based Employee Benefits)Regulations 2014 is available on the website of the Company at https://dkfwei267huwn.cloudfront.net/investor-relations/pdf/sebi-disclosure-2014.pdf
A Certificate from M/s Singhi & Co. Statutory Auditors with respect to theimplementation of the Company's Employee Stock Option Plan would be placed at the ensuingAnnual General Meeting for inspection by the Members and a copy will also available forinspection at the Registered office of the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHNAGE EARNINGS AND OUTGO
Details of conservation of energy technology absorption and foreign exchange earningsand outgo as per the requirement of Section 134(3) of Companies Act 2013 read with theCompanies (Accounts) Rules 2014 is attached with this Report as Annexure- D.
STATUTORY AUDITORS AND AUDITOR'S REPORT
In accordance with Section 139 of the Companies Act 2013 read with the Companies(Audit and Auditors) Rule 2014 M/s. Singhi & Co. Chartered Accountants (FirmRegistration No.: 302049E) were appointed as the Statutory Auditors of the Company at theAnnual General Meeting of the Company held on 23rd September 2014 for a termof five consecutive years. The continuance of statutory auditors shall be subject toratification by the shareholders at every Annual General Meeting.
M/s. Singhi & Co. has given their consent to act as Auditors and have confirmedtheir eligibility under Section 141 of the Companies Act 2013. The Board of Directorsrecommends their continuation as auditors of the Company for the FY 2017-18.
The resolution proposing continuance of M/s. Singhi & Co. as the Statutory Auditorsof the Company forms part of the Notice convening the Annual General Meeting. Members arerequested to ratify their appointment as the Statutory Auditors of the Company andauthorize the Board of Directors to fix their remuneration.
The Auditor's Report is self-explanatory and free from any qualifications orobservations or adverse remarks nor have the Statutory Auditors reported any incident offraud to the Audit Committee of the Company.
In accordance with Section 148 of the Companies Act 2013 read with Companies (CostRecords and Audit) Rules 2014 the Board of Directors had appointed M/s. AB & Co.Cost Accountants as the Cost Auditors of the Company for the FY 2016-17 and theshareholders have approved their remuneration at the 35th Annual GeneralMeeting of the Company.
The Cost audit report for the year 2016-17 was free from any qualification and wassubmitted to the Ministry of Corporate Affairs within stipulated time.
Your Directors on the recommendation of Audit Committee of the Board has re-appointedM/s. AB & Co. Cost Accountants for conducting the cost audit for the FY 2017-18 andtheir remuneration is sought to be ratified by the shareholders at the forthcoming AnnualGeneral Meeting. A resolution regarding ratification of remuneration payable to costauditors forms part of the Notice convening the Annual General Meeting of the Company andthe members are requested to ratify the same.
In accordance with Section 204 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshad appointed M/s. MKB & Associates Company Secretaries to conduct secretarial auditof the Company for the financial year 2016-17. The Secretarial Audit Report for theFinancial Year ended 31st March 2017 is annexed herewith as Annexure- E.
The Secretarial Audit Report issued by M/s. MKB & Associates does not contain anyqualification reservation or adverse remarks.
In accordance with Section 138 of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 the Board of Directors has appointed M/s. R. Kothari & Co.Chartered Accountants as Internal Auditors of the Company.
The Internal Audit Reports are generally placed before the Audit Committee and theBoard on quarterly basis and necessary actions on audit findings are taken after duediscussions.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure- F.
Your Company has not accepted any deposits from public under Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014 duringthe financial year 2016-17. Further there is no unclaimed deposit as on 31stMarch 2017.
The Company has complied with the Corporate Governance requirements under the CompaniesAct 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations2015.The Report on Corporate Governance is attached with this Annual Report separately.
A certificate issued by M/s. Singhi & Co. Statutory Auditors confirming compliancewith corporate governance requirements is also attached with this Annual Report.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion and Analysis Report is annexed to and forms part of theAnnual Report in compliance of Regulation 34(2)(e) of SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015.
DIVIDEND DISTRIBUTION POLICY
In accordance with Regulation 43A of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 the top five hundred listed companies based on marketcapitalization as on 31st March of every financial year is required toformulate a dividend distribution policy of the Company.
Your Company feels immense pleasure to share with its stakeholders that the Company wasamongst top five hundred listed companies based on market capitalization as on 31stMarch 2016 and has accordingly formulated a Dividend Distribution Policy which isdisclosed on the Company's website https://dkfwei267huwn.cloudfront.net/investor-relations/pdf/dividend.pdf and also forms part of this report as Annexure-G.
BUSINESS RESPONSIBILITY REPORT
In accordance with the Regulation 34(2)(f) of SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 the top five hundred listed companies based onmarket capitalization as on 31st March of every financial year is required todisclose a business responsibility report describing the initiatives taken by thecompanies from an environmental social and governance perspective.
Your Company feels immense pleasure to share with its stakeholders that the Company wasamongst top five hundred listed companies based on market capitalization as on 31stMarch 2016. The Business Responsibility Report of the Company for the financial yearended 31st March 2017 is attached as Annexure- H and forms part of thisReport.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Your Company has 2245 permanent employees as of the year end and comprises of very highquality professionals at various levels and departments from finance engineeringtechnical marketing and legal fields. The employees are provided with various trainingand induction programmes which leads to sustainable growth within the organization and thesociety at a large.
The Company has adopted an Employee Stock Option Plan and intends to use this Plan toattract and retain key talents working with the Company by way of rewarding theirperformance and motivate them to contribute to the overall corporate growth.
The Company is ISO 18001 and ISO 14001 Certified for Health and Safety Standards andEnvironment Management Standards. During the year the Company was awarded for ContinuousHR Innovation for Business Excellence at the Global HR Excellence Awards organized byWorld HRD Congress.
During the year the Company maintained cordial relation with all its employees andworkers.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
Your Company has formulated and adopted a Policy for Prevention Prohibition andRedressal of Sexual Harassment at Workplace as per the provisions of the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013 read with Rulesmade thereunder.
The policy aims to provide protection to employees at the workplace and prevent andredress complaints of sexual harassment and for matters connected or incidental thereto.The Company has constituted an Internal Complaints Committee (ICC) in accordance with theaforesaid act.
The Company has not received any complaint of sexual harassment during the financialyear 2016-17.
Your Directors state that:
1. During the year under review there has been no change in the nature of business ofthe Company.
2. No material changes and commitments affecting the financial position of the Companyhave occurred from the close of the financial year ended 31st March 2017 tillthe date of this Report.
3. During the year no significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operation infuture.
4. The Company does not have any subsidiary or associate or joint venture Companyduring the year ended 31st March 2017.
Your Directors would like to express their sincere appreciation and is thankful for theassistance and co-operation received from the Financial Institution Bank GovernmentAuthorities Customers Suppliers Business Associates Stock Exchanges Shareholders allother stakeholders and the society as a whole.
Your Directors also place on record their sincere appreciation for efforts by theCompany's executives employees staffs and workers for continuous contribution andservice to the Company.