The Board of Directors are pleased to present their Report of the business andoperations of your Company together with the Audited Financial Statements for the yearended 31*' March 2020.
1. Financial Results
(Rs. in Lakhs)
|Profit before Depreciation & Tax ||2849.79 |
|Less: Depreciation ||1608.60 |
|Tax Expense || |
|-Current year ||453.00 |
|-Deferred Tax ||(700.32) |
|Add; Other Comprehensive Income ||3.74 |
|Total Comprehensive Income for the vear ||1492.25 |
|Transfers and appropriations: || |
|Dividend for 2018-19 paid during the vear (including dividend tax) ||130.01 |
|Interim Dividend 2019-20 paid during the vear (including dividend tax) ||130.01 |
|Balance carried forward to Reserves and Surplus ||1232.23 |
The above figures are extracted from the audited financial statements as per IndianAccounting Standards (Ind AS). There has been no change in the nature of businessactivities of the Company during the year.
For financial year 2019-20 based on the Company's performance the Directors haddeclared interim dividend of 15% that is Rs. 1.50 (Rupee one and paise fifty) per equityshare of the face value of Rs. 10/- each aggregating to total dividend payout of Rs.107.84 Lacs. The Directors after considering the relevant circumstances have decidedthat it would be prudent not to recommend any final dividend.
3. General Review
Modernisation and technological up gradations of our assets are undertaken each year tomaintain competitiveness and quality. During the year the Company has spent about Rs. 6crores on modernization and up gradation at both the units of the Company. The approvalfor setting up of upgraded electricity supply from 11 KV to 66 KV at the Baddi Unit of theCompany has been obtained. Work is in progress for installing the same.
In the last month of financial year 2019-20 the COVID 19 pandemic developed into aglobal crisis forcing governments to enforce lock downs of all economic activity.Accordingly the factories of the Company located at Baddi Guna and offices respectivelyhad closed its operations with effect from 23'"' March 2020. Flowever the Companyhas since partially resumed its operations and is currently in the process of scaling upits operations. Full capacity utilization will take some more time given the variousconstraints continuing due to COVID 19.
In view of the outbreak of the pandemic the Company undertook timely and essentialmeasures to ensure the safety and well being of all its employees at its plants andoffices. The Company is taking all necessary measures in terms of mitigating the impact ofthe challenges posed due to Covid 19. The key priorities of the Company would be toclosely monitor costs optimize the use of its financial resources while continuing toinvest in some of the growth areas.
Currently the pandemic has brought about slowdown in the business of the Company dueto shortage of labour less demand crisis in receipt of payment etc. Flowever we expectrevival in the second half of the year.
4. Credit Rating
During the year 2019-20 the Company has got the following credit rating from M/s.India Ratings & Research Private Limited.
|Facility ||Sanctioned Limit (million) ||Rating/Outlook |
|Fund Based Limits ||INK 600 ||INDBBB/Stable |
|Fund Based Limits ||INK 50 ||INDA3+ |
|Non Fund Based Limits ||INK 60 ||INDA3+ |
|bng Term Loans ||INK 340 ||INDBBB/Stable |
|COVID-19 Emergency Credit Line (Term ban) ||INK 60 ||INDBBB/Stable |
5. Internal Financial Control Systems
The Company has in place proper policies and procedures for ensuring orderly andefficient conduct of its business. Internal Financial Control System commensurate with thesize scale and nature of its operations. The internal financial control systems of theCompany are appropriate for the safeguarding of its assets prevention and detection offrauds and errors the accuracy and completeness of the accounting records and timelypreparation of reliable financial information. During the year under review the Companyhas not come across any incidence of fraud. The Company has adopted accounting policieswhich are in line with the applicable accounting standards and the Companies Act 2013.
Internal Audit is conducted by independent Chartered Accountants on quarterly basis.The Internal Auditors monitor and evaluate the efficacy and adequacy of internal controlsystems in the Company. Based on the reports of the Internal Auditors the respectivedepartments undertake corrective actions in their respective areas and thereby strengthenthe controls. Significant audit observations and corrective actions thereon are presentedto the Audit Committee of the Board of Directors.
6. Statutory Auditors
Pursuant to Section 139 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 the members of the Company in its 35"' Annual General Meetingheld on 3r* August 2017 approved appointment of M/s. J K V S & Co. CharteredAccountants (formerly Jitendra K Agarwal & Associates) (ICAI Registration no. 318086E)as the Statutory Auditors of the Company for an initial term of 5 consecutive years fromthe conclusion of SS*" Annual General Meeting till the conclusion of AO*" AnnualGeneral Meeting of the Company.
7. 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.
8. Secretarial Audit
Pursuant to Section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Secretarial Audit was carried outby M/s. A. Arora & Co. Company Secretaries (PCS Registration no. 993) for thefinancial year 201920. The Secretarial Audit Report is annexed as 'Annexure -1' to thisReport.
There has been no qualification reservation or adverse remark or disclaimer in thereports. 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.
9. Cost Audit
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the cost records maintained by the Company inrespect of its manufacturing activities are required to be audited.
The Board of Directors have on the recommendation of the Audit Committee appointedM/s Shakti K. 8i Associates Cost Accountants (ICWAI Registration no. 11338) as CostAuditors of the Company to carry out cost audit of the products manufactured by theCompany for the year 2020-21.
The remuneration of the Cost Auditor has been approved by the Board of Directors on therecommendation of Audit Committee. As required under the Companies Act 2013 In terms ofthe provisions of Section 148(3) of the Companies Act 2013 read with Rule 14(a) (ii) ofthe Companies (Audit and Auditors) Rules 2014 the remuneration payable to the CostAuditor is required to be placed before the members in a general meeting for theirratification. Accordingly necessary resolution is proposed for ratification for theremuneration payable to M/s. Shakti K. 8i Associates Cost Auditors in the Noticeconvening the SR*" Annual General Meeting.
10. Directors and Key Managerial Personnel
a) i) Pursuant to Section 152 of Companies Act 2013 and Articles of Association of theCompany Shri Yashwant Kumar Daga (DIN 00040632) retires by rotation at the forthcomingAnnual General Meeting and being eligible offers himself for re-appointment. The Boardrecommends his re-appointment. The brief resume and other detaiis as required under theSEBI (Listing Obligations and Disciosure Requirements) Reguiations 2015 (ListingReguiations) read with the Secretariai Standard 2 are provided in the Notice of the38"' Annuai Generai Meeting.
(ii) The tenure of Shri Pradip Kumar Daga (DIN 00040692) as Managing Director expireson IS*" April 2021. In accordance with the provisions of the Companies Act 2013 andArticles of Association of the Company pursuant to recommendation of the Nomination andRemuneration Committee and approval of the Audit Committee the Board recommendsre-appointment of Shri Daga as Managing Director for a period of three years with effectfrom 16"' April 2021 till IS'" April 2024 to the members of the Company at theensuing Annual General Meeting.
II) There were no other changes in Key Managerial Personnel of the Company.
(b) Statement on declarations given by Independent Directors
Declarations have been received from all Independent Directors confirming that theymeet the criteria of independence as laid down under Section 149(6) of the Companies Act2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (Listing Regulations).
All the Independent Directors are compliant of Rule 6 of the Companies (Appointment andQualifications of Directors) Rules 2014
(c) Meetings of Board of Directors
During the year five Board Meetings were convened and held the details of which aregiven in the Corporate Governance Report. The intervening gap between any two consecutivemeetings did not exceed the gap prescribed by the Companies Act 2013 and the ListingRegulations.
(d) Committees of the Board
As on 31st March 2020 the Board had four Committees - the Audit Committee theCorporate Social Responsibility Committee the Nomination and Remuneration Committee andthe Stakeholders Relationship Committee. During the year all recommendations made by theCommittees were approved and accepted by the Board.
A detailed note on the composition of the Board and its Committees is provided in theCorporate Governance Report.
(e) Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annual evaluationof its own performance the Directors individually as well as of the working of itsvarious Committees. The Board on the recommendations of the Nomination and RemunerationCommittee lays down the evaluation criteria for evaluation. All the relevant factors thatare material for evaluating the performance of the Committees and of the Board werediscussed in detail by the Board of Directors.
A structured questionnaire for evaluation of the Board and its various Committees andindividual Directors was prepared and recommended to the Board by the Nomination &Remuneration Committee for doing the required evaluation after taking into considerationthe inputs received from the Directors covering various aspects of the Board'sfunctioning.
A separate exercise was carried out to evaluate the performance of individual Directorswho were evaluated on parameters such as level of engagement and contributionindependence of judgment safeguarding the interest of the
Company and its minority sharehoiders etc. The performance evaiuation of theIndependent Directors was carried out by the entire Board excluding the Director beingevaluated. The performance evaluation of the Chairman and nonindependent Directors wascarried out by the Independent Directors. The Directors expressed their satisfaction withthe evaluation process.
11. 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.
12. 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 required 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 - M' to form part of this report.
13. Vigil Mechanism
Pursuant to Section 177(9) of the Companies Act 2013 and Regulation 22 of listingRegulations The Company has in place a Vigil Mechanism for Directors and employees of theCompany to report genuine concerns of any wrongful conduct with respect to the Company orits business or affairs. The policy covers malpractices fraud violation of Company'spolicies or rules misappropriation of monies and other matters on account of which theinterest of the Company is affected or is likely to be affected. The policy of VigilMechanism is an internal policy to make protected disclosures on a confidential basis ingood faith and to raise concerns to be appropriately dealt with. The policy provides thatall protected disclosures can be addressed to the Vigil Officer or the Chairman AuditCommittee in certain cases
It also provides for adequate safeguards against the victimization of employees whoavail of the mechanism. Complaints received by Vigil Officer are investigated by the VigilOfficer and a report thereon is submitted to the Audit Committee. It is affirmed that noperson was denied access to the Vigil Officer and the Audit Committee; and no complaintswere received during the financial year 201920.
The Policy on Vigil Mechanism is also posted on the Company's website www.dsl-india .com.
DEEPAK SPINNERS LIMITED
WD-content/uDloads/2019/05/DSL Vigil Mechanism.pdfl
14. Risk Management Policy
Several factors such as advancements in technology prevalent geo-politicalenvironment stringent regulatory and environmental requirements have consequentialImpacts across the value chain of a business. The Company has an efficient Risk Managementframework to Identify and evaluate business risks and opportunities. The Audit Committeehas been delegated the responsibility for monitoring and reviewing risk managementassessment and minimization procedures. On the recommendations of Audit Committee Boardof Directors has formulated a Risk Management Policy for dealing with different kinds ofrisks which It faces In day to day operations of the Company. The risk managementprocedures are reviewed by the Audit Committee and the Board of Directors on a quarterlybasis at the time of review of the quarterly financial results of the Company.
15. Nomination and Remuneration Poiicy
The Board has on the recommendations of the Nomination and Remuneration Committeeadopted a policy for selection and appointment of Directors KMP and Senior Management andtheir remuneration. During the year there have been no changes to the Policy. The detailsof Company's Remuneration Policy are attached as 'Annexure-lir and forms part of thisreport of the Board of Directors.
16. Related Party Transactions
All related party transactions that were entered Into during the financial year were onan arm's length pricing basis and were In the ordinary course of business and do notattract the provisions of Section 188 of the Companies Act 2013.
There were no materially significant transactions with related parties during thefinancial year which were in conflict with the interest of the Company and henceenclosing of Form AOC 2 Is not required. Suitable disclosures as required by theAccounting Standard (Ind AS - 24) has been made In the notes to the Financial Statements.
All related party transactions are placed before the Audit Committee and also beforethe Board for approval. Prior omnibus approval of the Audit Committee Is obtained onyearly basis for transactions which could be foreseen and are of repetitive nature for aperiod of one year. The transactions entered Into pursuant to the omnibus approval sogranted for review are placed before the Audit Committee on a quarterly basis.
The Policy on Related Party Transactions as approved by the Board Is uploaded on theCompany's website. None of the Directors has any pecuniary relationship or transactionvls-a- vis the Company.
17. 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) The Information required under Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and forming part of this report Is givenIn separate annexure to this Report.
The said annexure Is not being sent along with this Report to the Members of theCompany In line with the provisions of Section 136 of the Companies Act 2013. Any memberInterested In obtaining a copy of the said statement may write to the Company Secretary atthe Registered Office of the Company. The aforesaid annexure Is also available forInspection by the Members at the Registered office of the Company twenty one days beforethe 38th Annual General Meeting and up to the date of the said Annual General Meetingduring the business hours on working days.
c) No employee other than the Chairman and Managing Director by himself or along withhis spouse and dependent children holds 2% or more of the equity shares of the Company.
d) The Company has not received any complaint under 'The Sexual Harassment of Women atWorkplace (Prohibition Prevention and Redressal) Act 2013 during the year.
18. Public Deposits
During the year the Company has neither accepted nor renewed any deposits from thepublic and as such there are no outstanding deposits in terms of the Chapter V of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
19. 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.
20. Management Discussion and Analysis Report
A report for the year under review as required under Regulation 34 and as stipulatedunder Part B of Schedule V of Listing Regulations is annexed herewith and forms part ofthis report.
21. Corporate Governance:
A report on Corporate Governance as required under Regulation 34 and as stipulated inPart C of Schedule V of Listing Regulations is annexed herewith and forms part of thisreport. Compliance Certificate issued by Statutory Auditors of the Company regardingcompliance of Corporate Governance is also annexed.
22. Extract of Annual Return
Companies Act 2013 and Rule 12 of the Companies (Management and Administration) Rules2014 is annexed with this report as 'Annexure-V'.
23. 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.
24. 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.
25. Compliance with Secretarial Standards
The Company has complied with applicable Secretarial Standards issued by the Instituteof Company Secretaries of India.
We express our sincere appreciation and thank our valued stakeholders of the Companyviz. shareholders customers. Bankers stakeholders and business associates for supportreceived from them during the year. We thank Central and State Governments and districtlevel authorities for their continued support and encouragement to the Company.
We are pleased to record our appreciation of the loyal services and continuedcontribution rendered by each and every employee and workmen of the Company at all levels.
|P. K. Daga ||Yashwant Kumar Daga ||P. K. Drolia |
|Chairman and Managing Director ||Director ||Director |
|(DIN 00040692) ||(DIN 00040632) ||(DIN 00291966) |
| ||Nilu Agrawal ||Binod Kumar Agrawal |
|Place: Kolkata ||Director ||Director |
|Date ; 30.06.2020 ||(DIN 03107052) ||(DIN 00515967) |