Mar 31, 2023
Your Directors have pleasure in presenting the Forty-Third Annual Report together with Audited Accounts of the Company for the Financial Year ended 31st March, 2023.
The summarized financial results for the year are as under: Sr. Particulars |
(Rs. in Lakhs) Standalone Consolidated |
|||
No. |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
1 Total Revenue (including Other Operating Revenues) |
2,34,982 |
2,28,944 |
1,130,069 |
7,66,329 |
2 Profit before tax |
39,014 |
26,620 |
181,552 |
1,01,253 |
3 Less: |
||||
a) Current Tax (Net) |
8,855 |
6,705 |
55,178 |
31,489 |
b) Deferred Tax |
1,025 |
137 |
4,286 |
1,016 |
4 Net Profit after tax (2 - 3) |
29,134 |
19,778 |
59,464 |
32,505 |
5 Net profit attributable to: |
||||
a) Owners of the Company |
29,134 |
19,778 |
1,21,010 |
67,827 |
b) Non-controlling interest |
NA |
NA |
1,078 |
921 |
6 Other comprehensive income for the year: |
||||
a) Owners of the Company |
(965) |
671 |
(1,039) |
745 |
b) Non-controlling interest |
NA |
NA |
(76) |
59 |
7 Total Comprehensive Income for the year |
||||
a) Owners of the Company |
28,169 |
20,449 |
1,19,971 |
68,572 |
b) Non-controlling interest |
NA |
NA |
1,002 |
980 |
8 Add: Surplus brought forward |
1,48,423 |
1,36,757 |
262,953 |
2,04,771 |
9 Amount available for Appropriations (5a 8) |
1,77,557 |
1,56,535 |
3,83,963 |
2,72,598 |
10 Appropriations: |
||||
a) Increase in non-controlling interest due to issuance of share capital |
- |
- |
(339) |
(1,533) |
b) Dividend on Equity Shares (Net) |
(10,853) |
(8,112) |
(10,853) |
(8,112) |
c) Tax on Proposed Dividend (Net) |
- |
- |
- |
- |
11 Surplus carried to Balance Sheet (9 10) |
1,66,704 |
1,48,423 |
373,110 |
2,62,953 |
STATE OF AFFAIRS OF THE COMPANY
Your Company has achieved a total revenue of '' 2,350 Crore (including '' 230 Crore from trading operations) during the year under review as against previous year''s level of ''2,289 Crore (including '' 525 Crore from trading operations). Profit Before Tax (PBT) for the year under review was '' 390 Crore as against '' 266 Crore in the previous year. Net Profit for the current year was recorded at '' 291 Crore as against '' 198 Crore in the previous year.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis (MDA), which forms part of this Report, inter alia, deals adequately with the operations and also current and future outlook of the Company on a consolidated basis.
ISSUE OF FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)
As reported in the previous annual reports, the Company had issued Foreign Currency Convertible Bonds (FCCBs) to
International Finance Corporati |
on (IFC). The details of FCCBs issued |
are as given below: |
||
Date |
Tranche |
No. of FCCBs |
Face value |
Amount |
19th October, 2019 |
First |
30 |
US$ 500,000 each |
US$ 15 million (Approx. '' 107 Crore) |
30th September 2020 |
Second |
30 |
US$ 500,000 each |
US$ 15 million (Approx. '' 109 Crore) |
CONVERSION OF FIRST TRANCHE OF FCCB''S
In the previous year i.e., FY 2021-22, the Company upon receipt of conversion notice from IFC on 23rd June, 2021, requesting the Company to convert First Tranche of FCCBs into equity shares, has allotted 54,76,831 equity shares of the Company at '' 195/- per share on 1st July 2021.
CONVERSION OF SECOND TRANCHE OF FCCB''S
During the year under review, the Company upon receipt of conversion notice from IFC on 29th August, 2022, requesting the Company to convert Second Tranche of FCCBs into equity shares, has allotted 56,44,877 equity shares of the Company at '' 195/- per share on 1st September 2022.
As on 31st March, 2023, no FCCBs issued under the First and Second Tranche are outstanding.
ISSUE OF COMPULSORY CONVERTIBLE DEBENTURES (CCDS) BY MATERIAL SUBSIDIARY i.e., MAHADHAN AGRITECH LIMITED (FORMERLY KNOWN AS SMARTCHEM TECHNOLOGIES LIMITED)
As reported in the previous Annual Reports, Mahadhan AgriTech Limited, Wholly Owned Material Subsidiary has issued CCDs, on a private placement basis to International Finance Corporation Limited. The details of CCDs issued are as given below:
Date |
Tranche |
No. of CCDs |
Face value |
Amount ('' in Crores) |
16th October, 2019 |
First |
1,050 |
'' 10,00,000 each |
105 |
5th October 2020 |
Second |
1,050 |
'' 10,00,000 each |
105 |
Total |
2,100 |
210 |
As on 31st March, 2023, the aforesaid CCDs issued in the First Tranche and in the Second Tranche are outstanding.
ISSUE OF EQUITY SHARES THROUGH QUALIFIED INSTITUTIONS PLACEMENT (QIP)
During the year under review, no shares were issued through qualified institutions placement.
DETAILS OF UTILISATION OF FUNDS RAISED THROUGH PREFERENTIAL ALLOTMENT OR QUALIFIED INSTITUTIONS PLACEMENT
During the year under review, the Company has not raised any amount through preferential allotment or qualified institutions placement or any amount that was raised in the earlier financial years were fully utilised as on 31st March, 2022 and hence the provisions of Regulation 32 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, were not applicable to the Company during the year under review.
Considering the performance of the Company, the Board of Directors of the Company recommends a dividend @ 100%
i.e., '' 10/- per Equity Share (Previous year '' 9 per Equity Share) of '' 10 each of the Company for the year ended 31st March, 2023.
The proposed dividend is in line with the ''Dividend Distribution Policy'' adopted by the Board at its meeting held on 30th June, 2017. The Policy is available on the Company''s website: DividendDistributionPo1icyDFPCL30June2017.pdf
The closing balance of retained earnings of the Company for Financial Year 2022-23 after all appropriations and adjustments was '' 166,704 Lakhs. During the year, the Company has not transferred any amount to general reserve.
During the year under review, the Company has allotted 56,44,877 equity shares of the Company pursuant to the conversion of second tranche of FCCBs. The details of the issue of aforesaid shares have been provided in the General Shareholder Information. The Company has not issued shares with differential voting rights or sweat equity shares, nor has it granted any stock options.
The paid-up equity share capital of the Company as on 31st March, 2023 was '' 126.23 Crores.
CHANGES IN THE BOARD OF DIRECTORS Appointment
Appointment of Independent Directors
During the year under review, the Board of Directors, based on the recommendation of Nomination and Remuneration Committee, had approved the appointment of following persons as Additional Directors in the Capacity of Independent Director of the Company as per the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, subject to the approval of shareholders:
Sr. No. |
Name of the Director |
Tenure and years |
Effective from |
1 |
Mr. Sanjay Gupta |
First term of 3 consecutive years |
2nd February, 2023 |
2 |
Mr. Sitaram Kunte |
First term of 3 consecutive years |
2nd February, 2023 |
3 |
Mr. Terje Bakken |
First term of 3 consecutive years |
20th February, 2023 |
Further, the shareholders of the Company through Postal Ballot have provided their approval for the aforesaid appointments. The results of Postal Ballot have been intimated to the Stock Exchanges on 2nd May, 2023. All the relevant details of the Postal Ballot have been provided in the General Shareholder Information, which is the part of this Annual Report.
Re-appointment of Independent Director
During the year under review, the Board of Directors, based on the recommendation of Nomination and Remuneration Committee, had approved the re-appointment of Mr. Bhuwan Chandra Tripathi as an Independent Director of the Company for the Second Term for 5 consecutive years w.e.f. 13th February, 2023 pursuant to applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, subject to the approval of shareholders.
Further, the shareholders of the Company through Postal Ballot have provided their approval for the aforesaid re-appointment. The results of Postal Ballot have been intimated to the Stock Exchanges on 2nd May 2023. All the relevant details of the Postal Ballot have been provided in the General Shareholder Information, which is the part of this Annual Report.
Re-appointment of Shri Sailesh C. Mehta as Chairman and Managing Director of the Company
The Shareholders of the Company at their Annual General Meeting held on 18th September, 2018, based on the recommendation of Nomination and Remuneration Committee and the Board, had approved the re-appointment of Mr. Sailesh C. Mehta as Chairman and Managing Director of the Company for a period of 5 years w.e.f. 1st August, 2018.
The Board of Directors, at their meeting held on 24th March, 2023 based on the recommendation of the Nomination and Remuneration Committee, has approved, subject to approval of Members, re-appointment of Mr. Mehta as the Chairman and Managing Director of the Company for a further period of 5 years with effect from 1st April, 2023 with revised monthly salary band within the overall limit of ten percent of the net profits of the Company as per the provisions of the Companies Act, 2013.
Further, the shareholders of the Company through Postal Ballot have provided their approval for the aforesaid re-appointment of Mr. Mehta as Chairman and Managing Director of the Company. The results of Postal Ballot have been intimated to the Stock Exchanges on 2nd May, 2023. All the relevant details of the Postal Ballot have been provided in the General Shareholder Information, which is the part of this Annual Report.
Cessation
Mr. Alok Perti and Dr. Amit Biswas
The shareholders of the Company at their Annual General Meeting held on 14th August, 2019 had approved the appointment of Mr. Alok Perti and Dr Amit Biswas as Independent Directors of the Company for the first term of 3 consecutive years with effect from 22nd April, 2019.
Subsequently, on the completion of first term of 3 consecutive years on 21st April, 2022, Mr. Alok Perti and Dr. Amit Biswas have ceased to be Independent Directors of the Company.
Mr. Ashok Purwaha
The shareholders of the Company at their Annual General Meeting held on 21st September, 2017 had approved the appointment of Mr. Ashok Purwaha as an Independent Director of the Company for the first term of 5 consecutive years with effect from 7th July 2017.
Subsequently, on the completion of first term of 5 consecutive years on 6th July 2022, Mr. Ashok Purwaha has ceased to be an Independent Director of the Company.
The Board places on record its sincere appreciation to the valuable guidance provided by Mr. Alok Perti, Dr. Amit Biswas and Mr Ashok Purwaha during their tenure as Independent Directors of the Company.
Re-appointment - retiring by rotation
Smt. Parul S. Mehta retires by rotation at the ensuing Annual General Meeting pursuant to provisions of Section 152 of the Companies Act, 2013 and rules made thereunder and being eligible, offers herself for re-appointment at the ensuing Annual General Meeting.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS
A calendar of meetings is prepared and circulated in advance to the Directors. During the year under review, seven board meetings were held. These meetings were held on 25th May, 2022, 29th July, 2022, 18th October 2022, 10th November, 2022, 15th December, 2022, 2nd February, 2023 and 24th March, 2023.
CHANGES IN KEY MANAGERIAL PERSONNEL (KMP)
During the year under review, Mr. Ritesh Chaudhry, VP- Legal and Company Secretary has resigned from the services of the Company w.e.f. 31st March, 2023 and consequently Mr. Gaurav Munoli, Assistant Company Secretary has been designated as Company Secretary and Compliance Officer of the Company.
A STATEMENT REGARDING THE OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR
During the year under review, Mr. Sanjay Gupta, Mr. Sitaram Kunte and Mr. Terje Bakken were appointed as an Independent Director of the Company. Further Mr. Bhuwan Chandra Tripathi was re-appointed as an Independent Director of the Company.
The Board is of the opinion that Mr. Sanjay Gupta, Mr. Sitaram Kunte, Mr. Terje Bakken and Mr. Bhuwan Chandra Tripathi are persons of high integrity and reputation and has the requisite expertise and experience including the proficiency.
COMPOSITE SCHEME OF ARRANGEMENT BETWEEN SUBSIDIARIES OF THE COMPANY
The Board of Directors of the Company has approved Composite Scheme of Arrangement between Mahadhan AgriTech Limited (MAL) (Formerly Known as Smartchem Technologies Limited) (Demerged Company or Transferee Company), Deepak Mining Solutions Private Limited (DMSPL) (Resulting Company) and Mahadhan Farm Technologies Private Limited (MFTPL) (Transferor Company) and their respective shareholders in accordance with the provisions of Sections 230 to 232 read with Section 52 and other applicable provisions of the Companies Act, 2013 and the rules framed thereunder.
The Scheme provides for demerger of the TAN Business from Demerged Company to the Resulting Company and Amalgamation of the Transferor Company with the Demerged Company.
This will result into creating holistic business entities housed in identified corporate entities.
SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / STATUTORY AUTHORITIES
1. As disclosed in the last year''s report, effective 15th May, 2014, domestic gas supply to the Company was arbitrarily stopped by the Ministry of Petroleum and Natural Gas. The Company successfully challenged the same before the Hon''ble Delhi High Court, which, by its Orders dated 7th July 2015 and 19th October, 2015 directed the Government of India (GoI) to restore the supply of gas. Against the cited order, a review petition filed by the GoI, challenging the said Orders was rejected by the said Court. Further, the GoI also filed the Special Leave Petition (SLP) before the Hon''ble Supreme Court of India against the Order of Hon''ble Delhi High Court, which was also disposed without granting any relief
to the GoI. The GoI has filed an affidavit before the Hon''ble Delhi High Court stating that Inter Ministerial Committee (IMC) has decided to recommend supply of pooled gas to the Company subject to approval of the Competent Authority. GoI has further filed an application in the Hon''ble Delhi High Court seeking dismissal of the matter. The Company is contesting the said application since the Competent Authority has not decided based on the recommendation of the said IMC and the application so filed is pre-mature. The Hon''ble Delhi High Court asked GoI to bring the IMC decision/ report on record, if not filed then the matter will be proceeded further without the report. The hearing in the Delhi High Court is now posted on 31st August, 2023.
INDIAN ACCOUNTING STANDARDS, 2015
The annexed financial statements for the Financial Year 2022-23 and corresponding figures for 2021-22 comply in all material aspects with Indian Accounting Standards notified under section 133 of the Companies Act, 2013 (the Act), the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.
CONSOLIDATED FINANCIAL STATEMENTS
The audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries, and prepared in compliance with the Companies Act, 2013, applicable Accounting Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 form part of this Annual Report.
A separate statement containing the salient features of Company''s subsidiaries, associates and joint venture subsidiary in the prescribed form AOC-1 is annexed separately and forms part of this Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and based on the guidance and insights from the Auditors and pursuant to the provisions of sub-section (5) of Section 134 of the Companies Act, 2013, your Directors confirm that:
i. in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. the accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of
the Financial Year on 31st March, 2023 and of the profit and loss of the Company for that period;
iii. proper and sufficient care have been taken for maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the annual accounts are prepared on a going concern basis;
v. internal financial controls, to be followed by the Company are duly laid down and these controls are adequate and were operating effectively; and
vi. systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143 (12) of the Companies Act, 2013
During the year under review, there were no frauds reported by the auditors to the Audit Committee or the Board under Section 143(12) of the Companies Act, 2013.
STATUTORY AUDITORS AND THEIR REPORT
The Shareholders of the Company at the Forty-First Annual General Meeting held on 26th August, 2021 had accorded their approval pursuant to the provisions of Sections 139, 141 and other applicable provisions of the Companies Act, 2013 and Rules made thereunder to appoint, M/s. P G BHAGWAT LLP, Chartered Accountants as the Statutory Auditors of the Company for a period of five years commencing from the conclusion of Forty-First Annual General Meeting until the conclusion of Forty-Sixth Annual General Meeting.
The Auditors'' Report to the Shareholders for the year under review does not contain any qualification, reservation or adverse remark or disclaimer.
SECRETARIAL AUDITORS & SECRETARIAL STANDARDS
The Secretarial Auditors, M/s. SVD & Associates, Practising Company Secretaries, have issued Secretarial Audit Report (Form MR-3) for the Financial Year 2022-23 pursuant to Section 204 of the Companies Act, 2013 and pursuant to Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which is annexed to Directors'' Report as Annexure-1.
In respect of observations made out in the Secretariat Audit Report, it is informed, as under:
Observation |
Explanation/ Comment |
Pursuant to section 124 read with clause (a) of Sub rule (3) of Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund ) Rules, 2016, the publication of notice in newspaper regarding transfer of equity shares to IEPF have been mad e beyond the time prescribed therefor in case of Interim Dividend declared on March 11, 2016. |
Due to oversight there was delay in publication of the notice in newspaper. As a corrective measure and to ensure non-recurrence of such events of noncompliance like above, the Secretarial team has put in place a more robust checklist cum Standard Operating Procedure. |
Certain E-Forms which were to be filed with Ministry of Corporate Affairs (MCA) could not be filed due to technical glitches on the website of MCA. |
The observation is selfexplanatory. |
Pursuant to Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. Jog Limaye & Associates, Practising Company Secretary, the Secretariat Auditor of Mahadhan AgriTech Limited (Formerly known as Smartchem Technologies Limited) and Performance Chemiserve Limited, material untisted subsidiaries, has issued Secretariat Audit Report (Form MR-3) for the Financial Year 2022-23. The said reports thereon are annexed as Annexure 8 and Annexure 9 to the Board''s Report.
The Company has in place proper systems to ensure comptiance with the provisions of the appticabte secretariat standards issued by the Institute of Company Secretaries of India and such systems are adequate and operating effectivety.
Your Directors, at the meeting held on 17th May 2023 based on the recommendation of the Audit Committee, have appointed M/s Harshad S. Deshpande & Associates, Cost Accountants, as the Cost Auditors for the Financial Year 2023-24 at a remuneration of '' 2,25,000 /- (Rupees Two Lakhs Twenty Five Thousand only) plus GST as applicable and reimbursement of travel and out-of-pocket expenses, which shall be subject to the approval of the shareholders at the ensuing Annual General Meeting.
Further, M/s Harshad S. Deshpande & Associates, Cost Accountants will submit the cost audit report along with
annexure for the Financial Year 2022-23 to the Central Government (Ministry of Corporate Affairs) in the prescribed form within specified time and at the same time forward a copy of such report to your Company.
The Cost Audit Report for the Financial Year ended 31st March, 2022 was duly filed with the Central Government (Ministry of Corporate Affairs) on 23rd November, 2022.
In accordance with the provisions relating to maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, the Company is required to maintain respective cost records and accordingly, such accounts and records were made and maintained.
Ernst & Young LLP (EY) are the Internal Auditors of the Company since Financial Year 2016-17.
Further, the Board, on the recommendation of the Audit Committee, has re-appointed EY as the Internal Auditors of the Company for the Financial Year 2023-24.
PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES
Details of investments made, loans advanced and guarantees given by the Company are given in the notes to the Financial Statements.
All contracts/arrangement/transactions entered by the Company during the period under review with related parties were in compliance with the applicable provisions of the Companies Act, 2013 (Act) and SEBI Listing Regulations. Prior omnibus approval of the Audit Committee is obtained for all related party transactions which are foreseen and of repetitive nature. Pursuant to the said omnibus approval, details of transaction entered into is also reviewed by the Audit Committee on a quarterly basis.
All related party transactions entered during the financial year 2022-23 were in the ordinary course of business, at arm''s length and not material under the Act and SEBI Listing Regulations. None of the transactions required members'' prior approval under the Act or SEBI Listing Regulations.
Details of transactions with related parties during financial year 2022-23 are provided in the notes to the financial statements. There were no transaction requiring disclosure under section 134(3)(h) of the Act. Hence, the prescribed Form AOC-2 does not form a part of this Report.
Pursuant to provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section titled ''Corporate Governance'' is attached to this Annual Report.
Further, a certificate form the Statutory Auditors of the Company regarding compliance with the requirements of Corporate Governance as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also forms part of this report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
Report on the performance and financial position of subsidiaries, associates and joint venture company in specified format is annexed to Board''s Report as Annexure-2.
Please refer to section âAwards and Recognitions" in this Annual Report for details of the awards received by the Company during the year under review.
NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors of the Company has constituted Nomination and Remuneration Committee and also approved the Nomination and Remuneration Policy which inter-alia contains appointment criteria, qualifications, positive attributes and independence of Directors, removal, retirement and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel of the Company.
The Board of Directors of the Company on the recommendation of the Nomination and Remuneration Committee, have revised the Nomination and Remuneration Policy of the Company, at their meeting held on 25th May, 2022. A copy of Nomination and Remuneration Policy is enclosed as Annexure 3 and is also available on the website of the Company at https://www.dfpcl.com/uploads/2021/07/ Nomination-and-Remuneration-Policy-25-05-2022.pdf
The Board of Directors of the Company has constituted a Risk Management Committee to assess risks in the operations of business units of the Company to mitigate and minimize risks assessed in the operations of business units, periodic monitoring of risks in the operations of business units, to look after cyber security and other matters delegated to the Committee by Board of Directors of the Company from time to time.
Information on the development and implementation of Risk Management Policy of the Company including identification therein of elements of risk which, in the opinion of the
Board may threaten the existence of the Company is given in Management Discussion and Analysis.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Your Company as a responsible Corporate Citizen, is engaged in concerted CSR initiatives through Ishanya Foundation, as Implementing Agency for CSR activities.
The details of the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure-4 forming part of this report.
The Board of Directors of the Company has approved a comprehensive CSR Policy as per the amended provisions of the Companies Act, 2013. The CSR policy as also the CSR Projects as approved by the Board of Directors are available on the website of the Company at the following links: https://www.dfpcl.com/uploads/2021/05/CSR-Policy DFPCL. pdf
The details of composition of Corporate Social Responsibility Committee and other details are provided in the Corporate Governance Report.
The details of composition of Audit Committee and other details are provided in the Corporate Governance Report.
In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at the link: https://www.dfpd. com/investors/annual-return/
PERFORMANCE EVALUATION OF CHAIRMAN, DIRECTORS, BOARD AND COMMITTEES
Information on the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors is given in the Corporate Governance Report.
All the Independent Directors of the Company have given declaration that they meet the criteria of independence as provided in Sub-Section (6) of Section 149 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and they are not aware of any circumstances or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.
The Board of Directors have taken on record the declaration and confirmation received from the Independent Directors and verified the veracity of such disclosures.
In terms of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, all Independent Directors of the Company have enrolled themselves on the Independent Directors'' Databank as on the date of this Report and will undergo the online proficiency self-assessment test within the specified timeline unless exempted under the aforesaid Rules.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company follows the practice of conducting familiarisation programme of the independent directors as detailed in the Corporate Governance Report which forms part of the Annual Report.
WHISTLE BLOWER POLICY
The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical conduct. The Company has a Whistle Blower Policy under which the employees are free to report violations of the applicable laws and regulations and the Code of Conduct. Further, as per the provisions of Regulation 18 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 (Listing Regulations) read with Part C of Schedule II to Listing Regulations, the Audit Committee, on a quarterly basis reviews the functioning of whistle blower mechanism of the Company and found the same satisfactory.
A copy of the Whistle Blower Policy is available on the website of the Company at the following weblink: https://www.dfpd. com/uploads/2018/12/WhistleBlowerPolicy.pdf
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company''s internal financial control systems commensurate with the nature, size and complexity of the businesses and operations. These are periodically tested and certified by Statutory as well as Internal Auditors. Significant audit observations and the follow up actions are reported to the Audit Committee.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Pursuant to the provisions of Section 136 (1) of the Act and as advised, the statement containing particulars of employees as required under Section 197 (12) of the Act read with Rule 5 (1) and 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be available for inspection. Members interested in obtaining a copy of the same may write to the Company Secretary at [email protected] and the same will be furnished on request. Hence, the Annual Report is being sent to all the Members of the Company excluding the aforesaid information.
The details of remuneration drawn by Mr. Sailesh C. Mehta, Chairman and Managing Director of the Company from the Company and also from the subsidiary of the Company in terms of Section 197(14) of the Companies Act, 2013 is provided in the Corporate Governance Report.
COMPANIES WHICH HAVE BECOME OR CEASED TO BE THE SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
During the year under review, there were no such instances. However, the status of Ishanya Realty Corporation Limited has changed from associate to subsidiary of the Company.
FIXED DEPOSITS
Your Company has not accepted any deposits, covered under Chapter V of the Companies Act, 2013 and hence no details pursuant to Rule 8 (5) (v) and 8 (5) (vi) of the Companies (Accounts) Rules, 2014 are reported.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Pursuant to Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rules made thereunder, the internal committee constituted under the said act has confirmed that no complaint / case has been filed / pending with the Company during the year. The said policy has been uploaded on the internal portal of the Company for information of all employees.
The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required by the Companies (Accounts) Rules, 2014, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed to Board''s Report as Annexure - 5.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended, inter alia, provides that the annual report of the top 1,000 listed entities based on market capitalisation (calculated as on 31st March of every financial year), shall include a Business Responsibility and Sustainability Report.
As the Company is one of the top 1,000 listed entities, the Company has presented its first Business Responsibility and Sustainability Report (BRSR) for the financial year 2022-23, which is part of this Annual Report.
As a green initiative, the BRSR Report has been hosted on the Company''s website and can be accessed at the link https://www.dfpcl.com/uploads/2023/07/Business-Responsibility-and-Sustainability-Report-2022-23.pdf
MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT INCLUDING PEOPLE EMPLOYED
The overall industrial relations in the Company were cordial. The manpower employed is around 941 employees.
ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation to the Company''s bankers, customers, vendors, investors and all other stakeholders for their continued support during the year. Your Directors are also pleased to record their appreciation for the dedication and committed contribution made by employees at all levels who, through their competence and hard work, have enabled your Company to achieve good performance amidst challenging times and look forward to their support in the future as well.
For and on behalf of the Board
Place: Pune S. C. Mehta
Dated: 17th May, 2023 Chairman and Managing Director
Mar 31, 2022
Your Directors have pleasure in presenting the Forty-Second Annual Report together with Audited Accounts of the Company for the Financial Year ended 31st March, 2022.
The summarized financial results for the year are as under:
('' in Lakhs) |
|||||
Sr. |
Particulars |
Standalone |
Consolidated |
||
No. |
2021-22 |
2020-21 |
2021-22 |
2020-21 |
|
1 |
Total Revenue (including Other Operating Revenues) |
2,28,944 |
1,81,131 |
7,66,329 |
5,80,849 |
2 |
Profit before tax |
26,620 |
27,236 |
1,01,253 |
58,832 |
3 |
Less: a) Current Tax (Net) |
6,705 |
5,240 |
31,489 |
18,672 |
b) Deferred Tax |
137 |
1,097 |
1,016 |
(484) |
|
4 |
Net Profit after tax (2 - 3) |
19,778 |
20,899 |
32,505 |
40,644 |
5 |
Net profit attributable to: |
||||
a) Owners of the Company |
19,778 |
20,899 |
67,827 |
40,031 |
|
b) Non controlling interest |
NA |
NA |
921 |
613 |
|
6 |
Other comprehensive income for the year: |
||||
a) Owners of the Company |
671 |
(67) |
745 |
294 |
|
b) Non controlling interest |
NA |
NA |
59 |
309 |
|
7 |
Total Comprehensive Income for the year: |
||||
a) Owners of the Company |
20,449 |
20,832 |
68,572 |
40,325 |
|
b) Non controlling interest |
NA |
NA |
980 |
922 |
|
8 |
Add: Surplus brought forward |
1,36,757 |
1,18,537 |
2,04,771 |
1,72,011 |
9 |
Amount available for Appropriations (5a 8) |
1,56,535 |
1,39,436 |
2,72,598 |
2,12,042 |
10 |
Appropriations: |
||||
a) Increase in non-controlling interest due to issuance of share capital |
- |
(1,533) |
(4,592) |
||
b) Dividend on Equity Shares (Net) |
(8,112) |
(2,679) |
(8,112) |
(2,679) |
|
c) Tax on Proposed Dividend (Net) |
- |
- |
- |
||
11 |
Surplus carried to Balance Sheet (9 10) |
1,48,423 |
1,36,757 |
2,62,953 |
2,04,771 |
STATE OF AFFAIRS OF THE COMPANY
Your Company has achieved a total revenue of '' 2,289 Crore (including '' 525 Crore from trading operations) during the year under review as against previous year''s level of '' 1,811 Crore (including '' 589 Crore from trading operations).
Profit Before Tax (PBT) for the year under review was '' 266 Crore as against '' 272 Crore in the previous year Net Profit for the current year was recorded at '' 198 Crore as against '' 209 Crore in the previous year
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis (MDA), which forms part of this Report, inter alia, deals adequately with the operations and also current and future outlook of the Company on a consolidated basis.
ISSUE OF FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)
As reported in the Annual Reports of Financial Year 201920 and 2020-21, the Company has issued Foreign Currency Convertible Bonds (FCCBs) to International Finance
Corporation (IFC). The details of FCCBs issued |
are as given below: |
|||
Date |
Tranche |
No. of FCCBs |
Face value |
Amount |
19th October, 2019 |
First |
30 |
US$ 500,000 each |
US$ 15 million (Approx. '' 107 Crore) |
30th September, 2020 |
Second |
30 |
US$ 500,000 each |
US$ 15 million (Approx. '' 109 Crore) |
As per the FCCB Subscription Agreement, IFC had the right, at its option, to partially or fully convert the first tranche FCCBs into equity shares of the Company within 6 years from the date of subscription of the first tranche of FCCBs. Accordingly the Company upon receipt of conversion notice from IFC on 23rd June, 2021, requesting the Company to convert First Tranche of FCCBs into equity shares, has allotted 54,76,831 equity shares of the Company at '' 195/- per share on 1st July 2021.
As on 31st March, 2022, the FCCBs issued in the Second Tranche are outstanding.
ISSUE OF COMPULSORY CONVERTIBLE DEBENTURES (CCDs) BY MATERIAL SUBSIDIARY i.e. SMARTCHEM TECHNOLOGIES LIMITED
As reported in the Annual Report of the Financial Year 2019-20 and 2020-21, Smartchem Technologies Limited has issued CCDs, on a private placement basis to IFC. The details of CCDs issued are as given below:
Date |
Tranche |
No. of CCDs |
Face value |
Amount |
16th October, 2019 |
First |
1,050 |
10,00,000 each |
105 Crores |
5th October, 2020 |
Second |
1,050 |
10,00,000 each |
105 Crores |
Total |
2,100 |
210 Crores |
As on 31st March, 2022, the aforesaid CCDs issued in the First Tranche and in the Second Tranche are outstanding.
ISSUE OF EQUITY SHARES THROUGH QUALIFIED INSTITUTIONS PLACEMENT (QIP)
Pursuant to the approval of the shareholders of the Company by way of a special resolution passed in their Annual General Meeting held on 26th August, 2021, for raising of funds through various modes including by way of QIP, the Securities Issue Committee of the Company in its meeting held on 22nd October, 2021 allotted 1,24,39,029 Equity Shares at an issue price of '' 410 per Equity Share (including a premium of '' 400.00 per Equity Share), aggregating to '' 510 Crores to Qualified Institutional Buyers.
DETAILS OF UTILISATION OF FUNDS RAISED THROUGH PREFERENTIAL ALLOTMENT OR QUALIFIED INSTITUTIONS PLACEMENT
As stated above, during the year under review, the Company has raised funds aggregating to '' 510 Crores through Qualified Institutions Placement (QIP).
The Company has utilised the funds raised through issue of QIP for the purpose as stated in the Placement Document.
Pursuant to the provisions of Regulation 32 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has informed the Stock Exchanges that there has been no deviation or variation in utilisation of the funds raised through issuance of shares to Qualified Institutional Buyers.
Considering the performance of the Company the Board of Directors of the Company recommends a dividend @ 90% i.e., '' 9 per Equity Share (Previous year '' 7.5 per Equity Share) of '' 10 each of the Company for the year ended 31st March, 2022.
The proposed dividend is in line with the âDividend Distribution Policy'' adopted by the Board at its meeting held on 30th June, 2017. The Policy is available on the Company''s website: www.dfpcl.com/company-policies
The closing balance of retained earnings of the Company for Financial Year 2021-22 after all appropriations and adjustments was '' 1,48,423 Lakhs. During the year, the Company has not transferred any amount to general reserve.
During the year under review, the Company has allotted 54,76,831 equity shares of the Company pursuant to the conversion of first tranche of FCCBs and allotted 1,24,39,029 equity shares under Qualified Institutions Placement. The details of the issue of aforesaid shares have been provided in the General Shareholder Information. The Company has not issued shares with differential voting rights or sweat equity shares, nor has it granted any stock options.
The paid-up equity share capital of the Company as on 31st March, 2022 was '' 120.59 Crores.
CHANGES IN THE BOARD OF DIRECTORS Appointment
During the year under review, the Board of Directors, based on the recommendation of Nomination and Remuneration Committee, had approved the appointment of Mr Jayesh Hirji Shah as an Additional Director in the Capacity of Independent Director of the Company as per the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with effect from 20th December, 2021 for the first term of 3 (three) consecutive years, subject to approval of the shareholders.
Further, in the ensuing Annual General Meeting, the item w.rt. appointment of Mr Jayesh Hirji Shah as an Independent Director will be taken up. All the information as required pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the Notice of the ensuing Annual General Meeting. The shareholders are requested to approve the appointment in the ensuing annual general meeting.
Mr Berjis Minoo Desai, Independent Director of the Company has tendered his resignation as an Independent Director of the Company with effect from 27th December, 2021 due to heavy pressure on his professional time and in order to accommodate other newly listed/ to be listed companies as an independent director
Mr Desai has also given confirmation to the Company that other than the reasons mentioned above, there are no other material reasons for his resignation as an Independent Director of the Company and the same was intimated by the Company to the Stock Exchanges.
The Board places on record its sincere appreciation to the valuable guidance provided by Mr Berjis Desai during his tenure as an Independent Director of the Company.
Cessation after the closure of the Financial Year
The shareholders of the Company at their Annual General Meeting held on 14th August, 2019 had approved the appointment of Mr Alok Perti and Dr Amit Biswas as Independent Directors of the Company for the first term of 3 consecutive years with effect from 22nd April, 2019.
Subsequently on the completion of first term of 3 (three) consecutive years on 21st April, 2022, Mr Alok Perti and Dr. Amit Biswas have ceased to be Independent Directors of the Company.
The Board places on record its sincere appreciation to the valuable guidance provided by Mr Alok Perti and Dr Amit Biswas during their tenure as Independent Directors of the Company.
Re-appointment
Mr. M. P. Shinde retires by rotation at the ensuing Annual General Meeting pursuant to provisions of Section 152 of the Companies Act, 2013 and rules made thereunder and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS
A calendar of meetings is prepared and circulated in advance to the Directors. During the year under review, five board meetings were held. These meetings were held on 28th May 2021, 10th August, 2021, 12th November, 2021, 28th January 2022 and 29th March, 2022.
CHANGES IN KEY MANAGERIAL PERSONNEL (KMP)
During the year under review, there were no changes in key managerial personnel.
A STATEMENT REGARDING THE OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR
During the year under review, Mr Jayesh Hirji Shah was appointed as an Independent Director of the Company:
The Board is of the opinion that Mr Jayesh Hirji Shah is person of high integrity and reputation and has the requisite expertise and experience including the proficiency.
SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / STATUTORY AUTHORITIES
1. As disclosed in the last year''s report, effective 15th May, 2014, domestic gas supply to the Company was arbitrarily stopped by the Ministry of Petroleum and Natural Gas. The Company successfully challenged the same before the Hon''ble Delhi High Court, which, by its Orders dated 7th July, 2015 and 19th October, 2015 directed the Government of India (GoI) to restore the supply of gas. Against the cited order, a review petition filed by the GoI, challenging the said Orders was rejected by the said Court. Further, the GoI also filed the Special Leave Petition (SLP) before the Hon''ble Supreme Court of India against the Order of Hon''ble Delhi High Court, which was also disposed without granting any relief to the GoI. The GoI has filed an affidavit before the Hon''ble Delhi High Court stating that Inter Ministerial Committee (IMC) has decided to recommend supply of pooled gas to the Company, subject to approval of the Competent Authority. GoI has further filed an application in the Hon''ble Delhi High Court seeking dismissal of the matter The Company is contesting the said application since the Competent Authority has not decided based on the recommendation of the said IMC and the application so filed is pre-mature. The Hon''ble Delhi High asked GoI to bring the IMC decision/ report on record, if not filed then the matter will be proceeded
further without the report. The hearing in the Delhi High Court is now posted on15th July, 2022.
INDIAN ACCOUNTING STANDARDS, 2015
The annexed financial statements for the Financial Year 2021-22 and corresponding figures for 2020-21 comply in all material aspects with Indian Accounting Standards notified under section 133 of the Companies Act, 2013 (the Act), the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.
CONSOLIDATED FINANCIAL STATEMENTS
The audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries, and prepared in compliance with the Companies Act, 2013, applicable Accounting Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 form part of this Annual Report.
A separate statement containing the salient features of Company''s subsidiaries, associates and joint venture subsidiary in the prescribed form AOC-1 is annexed separately and forms part of this Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and based on the guidance and insights from the Auditors and pursuant to the provisions of sub-section (5) of Section 134 of the Companies Act, 2013, your Directors confirm that:
i. i n the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. the accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year on 31st March, 2022 and of the profit and loss of the Company for that period;
iii. proper and sufficient care have been taken for maintenance of adequate accounting records in accordance with the provisions of this Act for
safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the annual accounts are prepared on a going concern basis;
v. internal financial controls, to be followed by the Company are duly laid down and these controls are adequate and were operating effectively; and
vi. systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143 (12)
During the year under review, there were no frauds reported by the auditors to the Audit Committee or the Board under Section 143(12) of the Companies Act, 2013.
STATUTORY AUDITORS AND THEIR REPORT
The Shareholders of the Company at the Forty-First Annual General Meeting held on 26th August, 2021 had accorded their approval pursuant to the provisions of Sections 139, 141 and other applicable provisions of the Companies Act, 2013 and Rules made thereunder to appoint, M/s. P G BHAGWAT LLP, Chartered Accountants as the Statutory Auditors of the Company for a period of five years commencing from the conclusion of Forty-First Annual General Meeting until the conclusion of Forty-Sixth Annual General Meeting.
The Auditors'' Report to the Shareholders for the year under review does not contain any qualification, reservation or adverse remark or disclaimer
SECRETARIAL AUDITORS & SECRETARIAL STANDARDS
The Secretarial Auditors, M/s. SVD & Associates, Practising Company Secretaries, have issued Secretarial Audit Report (Form MR-3) for the Financial Year 2021-22 pursuant to Section 204 of the Companies Act, 2013 and pursuant to Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which is annexed to Directors'' Report (Refer Annexure-1).
In respect of observations made out in the Secretarial Audit Report, it is informed, as under: -
Observation |
Explanation/Comment |
Prior Intimation to Stock Exchange w.rt. Notice of Board Meeting pursuant to Regulation 29 (2) & (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 |
The Company could serve the advance notice of 3 days as against the required advance notice of 5 days (excluding the date of the intimation and date of the meeting) for the Board meeting held on 12th November, 2021 for consideration of Q2 2021-22 Unaudited Financial Results due to sudden medical exigencies faced by the two employees internally responsible within the Secretarial team for the compliance and other employees being on leave because of Diwali vacation as the office was closed from 4th November to 7th November, 2021. |
Observation |
Explanation/Comment |
As a corrective measure and to ensure non-recurrence of such events of non-compliance like above, the Secretarial team has put in place a more robust checklist cum Standard Operating Procedure for various compliances (pre and post board meeting) including the introduction of the concept of primary and secondary responsibility for each compliance, intimation of leave to each secretarial team members. |
|
Statement of deviation(s) or variation(s) to be filed with the Stock Exchanges pursuant to Regulation 32 (1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 |
Due to oversight, the Statement of deviation(s) or variation(s) for quarter ended 30th September, 2021 was filed on 23rd November, 2021 which was beyond the limit as prescribed by the Regulation 32 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. |
The Company has filed some of the forms which are covered under Companies Fresh Start Scheme (CFSS), 2020. However, the relevant form for seeking immunity certificate has not been filed due to technical issue faced by the Company. |
The Company was unable to file the relevant form under Companies Fresh Start Scheme (CFSS), 2020 due to technical reasons. |
Pursuant to Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. Jog Limaye & Associates, Practising Company Secretary, the Secretarial Auditor of Smartchem Technologies Limited and Performance Chemiserve Limited, material unlisted subsidiaries, has issued Secretarial Audit Report (Form MR-3) for the Financial Year 2021-22. The said reports thereon are annexed as Annexure 8 and Annexure 9 to the Board''s Report.
The Company has in place proper systems to ensure compliance with the provisions of the applicable secretarial standards issued by The Institute of Company Secretaries of India and such systems are adequate and operating effectively.
Your Directors, at the meeting held on 25th May 2022 based on the recommendation of the Audit Committee, have appointed M/s Harshad S. Deshpande & Associates, Cost Accountants, as the Cost Auditors for the Financial Year 2022-23 at a remuneration of '' 2,25,000 /- (Rupees Two Lakhs Twenty Five Thousand only) plus GST as applicable and reimbursement of travel and out-of-pocket expenses, which shall be subject to the approval of the shareholders at the ensuing Annual General Meeting.
Further, M/s Harshad S. Deshpande & Associates, Cost Accountants will submit the cost audit report along with annexure for the Financial Year 2021-22 to the Central Government (Ministry of Corporate Affairs) in the prescribed form within specified time and at the same time forward a copy of such report to your Company.
The Cost Audit Report for the Financial Year ended 31st March, 2021 was duly filed with the Central Government (Ministry of Corporate Affairs) on 06th October, 2021.
In accordance with the provisions relating to maintenance of cost records as specified by the Central Government under
sub-section (1) of Section 148 of the Companies Act, 2013, the Company is required to maintain respective cost records and accordingly such accounts and records were made and maintained.
Ernst & Young LLP (EY) are the Internal Auditors of the Company since Financial Year 2016-17.
Further, the Board, on the recommendation of the Audit Committee, has re-appointed EY as the Internal Auditors of the Company for the Financial Year 2022-23.
PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES
Details of investments made, loans advanced and guarantees given by the Company are given in the notes to the Financial Statements.
The Company has entered into contract / arrangements with the related parties in the ordinary course of business and at arm''s length basis. Thus, provisions of Section 188(1) of the Companies Act, 2013 are not applicable.
Pursuant to provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section titled âCorporate Governance'' is attached to this Annual Report.
Further, a certificate form the Statutory Auditors of the Company regarding compliance with the requirements of Corporate Governance as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also forms part of this report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
Report on the performance and financial position of subsidiaries, associates and joint venture company in specified format is annexed to Board''s Report (Refer Annexure-2).
Please refer to section "Awards and Accolades" in this Annual Report for details of the awards received by the Company during the year under review.
NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors of the Company has constituted Nomination and Remuneration Committee and also approved the Nomination and Remuneration Policy which inter-alia contains appointment criteria, qualifications, positive attributes and independence of Directors, removal, retirement and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel of the Company.
The Board of Directors of the Company, on the recommendation of the Nomination and Remuneration Committee, have revised the Nomination and Remuneration Policy of the Company at their meeting held on 25th May 2022. The modified Nomination and Remuneration Policy is enclosed as Annexure 3 and is also available on the website of the Company at https://www. dfpcl.com/wp-content/uploads/2021/07/Nomination-and-Remuneration-Policy
The Board of Directors of the Company has constituted a Risk Management Committee to assess risks in the operations of business units of the Company to mitigate and minimize risks assessed in the operations of business units, periodic monitoring of risks in the operations of business units, to look after cyber security and other matters delegated to the Committee by Board of Directors of the Company from time to time.
Information on the development and implementation of Risk Management Policy of the Company including identification therein of elements of risk which, in the opinion of the Board may threaten the existence of the Company is given in the Corporate Governance Report and Management Discussion and Analysis.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Your Company as a responsible Corporate Citizen, is engaged in concerted CSR initiatives through Ishanya Foundation, as Implementing Agency for CSR activities.
The details of the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure forming part of this report (Refer Annexure-4).
The Board of Directors of the Company has approved a comprehensive CSR Policy as per the amended provisions
of the Companies Act, 2013. The CSR policy as also the CSR Projects as approved by the Board of Directors are available on the website of the Company at the following links:
https://www.dfpcl.com/uploads/2021/05/CSR-Policy DFPCL. pdf
The details of composition of Corporate Social Responsibility Committee and other details are provided in the Corporate Governance Report.
The details of composition of Audit Committee and other details are provided in the Corporate Governance Report.
In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at the link: https://www.dfpd. com/investors/annual-return/
PERFORMANCE EVALUATION OF CHAIRMAN, DIRECTORS, BOARD AND COMMITTEES
Information on the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors is given in the Corporate Governance Report.
All the Independent Directors of the Company have given declaration that they meet the criteria of independence as provided in Sub-Section (6) of Section 149 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and they are not aware of any circumstances or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.
The Board of Directors have taken on record the declaration and confirmation received from the Independent Directors and verified the veracity of such disclosures.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company follows the practice of conducting familiarisation programme of the independent directors as detailed in the Corporate Governance Report which forms part of the Annual Report.
The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty integrity and ethical conduct. The Company has a Whistle Blower Policy under which the employees are free to report violations of the applicable laws and regulations and the Code of Conduct.
and the said Company is dissolved. Subsequently CMSPL has ceased to be subsidiary of the Company.
Except above, no other company has become or ceased to be subsidiary, joint venture or associate of the Company.
FIXED DEPOSITS
Your Company has not accepted any deposits, covered under Chapter V of the Companies Act, 2013 and hence no details pursuant to Rule 8 (5) (v) and 8 (5) (vi) of the Companies (Accounts) Rules, 2014 are reported.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Pursuant to Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rules made thereunder, the internal committee constituted under the said act has confirmed that no complaint / case has been filed / pending with the Company during the year The said policy has been uploaded on the internal portal of the Company for information of all employees.
The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required by the Companies (Accounts) Rules, 2014, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed to Board''s Report (Refer Annexure - 5).
BUSINESS RESPONSIBILITY REPORT
Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended, inter alia, provides that the annual report of the top 1,000 listed entities based on market capitalisation (calculated as on 31st March of every financial year), shall include a Business Responsibility Report.
As the Company is one of the top 1,000 listed entities, the Company has presented its Business Responsibility Report for the financial year 2021-22, which is part of this Annual Report.
As a green initiative, the BR Report has been hosted on the Company''s website i.e. www.dfpcl.com
INITIATIVES FOR SOCIETY AND EMPLOYEE SAFETY DURING COVID-19 PANDEMIC
Your Company has remained equally focused like last year to address the prevention and protection measures for Covid. From encouraging mental wellness to ensuring that employees are financially secure during the outbreak, to
Further, as per the provisions of Regulation 18 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 (Listing Regulations) read with Part C of Schedule II to Listing Regulations, the Audit Committee at its meeting held on 28th March, 2022 has reviewed the functioning of whistle blower mechanism of the Company and found the same satisfactory.
A copy of the Whistle Blower Policy is available on the website of the Company at the following weblink: https://www.dfpd. com/uploads/2018/12/WhistleBlowerPolicy.pdf
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company''s internal financial control systems are commensurate with the nature, size and complexity of the businesses and operations. These are periodically tested and certified by Statutory as well as Internal Auditors. Significant audit observations and the follow up actions are reported to the Audit Committee.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Pursuant to the provisions of Section 136 (1) of the Act and as advised, the statement containing particulars of employees as required under Section 197 (12) of the Act read with Rule 5 (1) and 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be available for inspection. Members interested in obtaining a copy of the same may write to the Company Secretary at investorgrievance@ dfpcl.com and the same will be furnished on request. Hence, the Annual Report is being sent to all the Members of the Company excluding the aforesaid information.
The details of remuneration drawn by Mr Sailesh C. Mehta, Chairman and Managing Director of the Company from the Company and also from the subsidiary of the Company in terms of Section 197(14) of the Companies Act, 2013 is provided in the Corporate Governance Report.
COMPANIES WHICH HAVE BECOME OR CEASED TO BE THE SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
The Company had a subsidiary viz. Complete Mining Solutions Private Limited (CMSPL). CMSPL was in the business of mining consultancy. In the last few years, CMSPL was not able to deliver the planned business objectives and also had no visibility of any business in near future.
Considering the above, the Board of Directors of the Company at their meeting held on 10th August, 2021 approved for the dissolution of CMSPL. The Registrar of Companies, Pune has issued notice dated 14th February 2022 stating that the name of CMSPL has been struck off from the register of companies
continuous awareness sessions on COVID-19, precautions, dos & don''ts, through posters bringing visual display awareness on Covid has helped considerably. Wearing of face mask, social distancing, thermal scanning, use of hand sanitizers at various places, body disinfection, are some of the major actions being taken.
MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT INCLUDING PEOPLE EMPLOYED
The overall industrial relations in the Company were cordial. The manpower employed is around 942 employees.
ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation to the Company''s bankers, customers, vendors, investors and all other stakeholders for their continued support during the year. Your Directors are also pleased to record their appreciation for the dedication and committed contribution made by employees at all levels who, through their competence and hard work, have enabled your Company to achieve good performance amidst challenging times and look forward to their support in the future as well.
Mar 31, 2018
To the Members,
The Board of Directors have pleasure in presenting the Thirty Eighth Annual Report together with Audited Accounts of the Company for the Financial Year ended 31st March, 2018.
- FINANCIAL RESULTS
The summarized financial results for the year are as under:
(Rs. In Lacs)
Particulars |
Standalone |
Consolidated |
||
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
Total Revenue (including Other Operating Revenues) |
3,21,421 |
2,15,693 |
6,06,155 |
4,37,812 |
Profit Before Tax (PBT) |
13,093 |
13,701 |
23,288 |
23,276 |
Less: a) Current Tax (Net) |
2,221 |
3,823 |
2,348 |
3,889 |
b) Deferred Tax |
(417) |
848 |
4,291 |
3,694 |
Net Profit for the year after share in (loss) of associates |
11,289 |
9,030 |
16,410 |
15,462 |
Minority Interest |
NA |
NA |
139 |
30 |
Net Profit / (Loss) for the period |
11,289 |
9,030 |
16,267 |
15,431 |
Total Comprehensive Income |
11,362 |
8,864 |
16,119 |
15,219 |
Add: Surplus brought forward |
1,13,051 |
1,05,271 |
1,56,256 |
1,50,122 |
Amount available for Appropriations |
1,24,340 |
1,14,301 |
1,72,520 |
1,65,555 |
Appropriations: |
||||
a) Transferred to Debenture Redemption Reserve |
6,250 |
(1,250) |
6,250 |
(1,250) |
b) Transferred to General Reserve |
- |
- |
(55) |
- |
c) Dividend on Equity Shares (Net) |
(5,292) |
- |
(5,292) |
(25) |
d) Tax on Proposed Dividend (Net) |
(1,054) |
- |
(2,000) |
|
Deferred Tax Adjustment |
- |
- |
(5,560) |
(8,074 ) |
Surplus carried to Balance Sheet |
1,24,244 |
1,13,051 |
1,65,863 |
1,56,256 |
- STATE OF AFFAIRS OF THE COMPANY
Your Company has achieved the top line of Rs.3,214 Crore (including Rs.2,027 Crore from trading operations) during the year under review as against previous yearâs level of Rs.2,157 Crore (including Rs.1,139 Crore from trading operations). Profit before Tax (PBT) for the year under review was Rs.131 Crore as against Rs.137 Crore in the previous year. Net Profit for the current year was recorded at Rs.113 Crore as against Rs.90 Crore in the previous year. A Management Discussion and Analysis (MDA), which forms part of this Report, inter-alia, deals adequately with the operations and also current and future outlook of the Company.
- DIVIDEND
Considering the performance of the Company, the Board of Directors of the Company recommends a dividend @ 60% i.e. Rs.6 per Equity Share (Previous year Rs.6 per Equity Share) of Rs.10 each of the Company for the year ended 31st March, 2018.
The proposed dividend (including tax on proposed dividend) will absorb Rs.64 Crore and the same is in line with the âDividend Distribution Policyâ adopted by the Board at its meeting held on 30th June, 2017.
- CHANGES IN THE BOARD OF DIRECTORS
The current term of Shri U. P. Jhaveri, Shri S. R. Wadhwa, Shri Anil Sachdev, Independent Directors is coming to an end after the conclusion of Annual General Meeting to be held for the financial year 2017-2018. i.e. on 18th September 2018.
Shri R. A Shah retires by rotation at the ensuing Annual General Meeting pursuant to provisions of Section 152 of the Companies Act, 2013 anThe is not seeking reappointment in the ensuing annual general meeting in line with the retirement policy of the Company for Directors.
- NUMBER OF MEETINGS OF BOARD OF DIRECTORS
During the year under review, eight meetings of the Board of Directors were held on 6th April, 2017, 8th May, 2017, 30th June, 2017, 10th August, 2017, 21st September, 2017, 2nd November, 2017, 8th February, 2018 and 28th March, 2018.
CHANGES IN KEY MANAGERIAL PERSONNEL (KMP)
Shri Vipin Agarwal stepped down as âChief Financial Officerâ, a Key Managerial Personnel of the Company with effect from 2nd November 2017 and Shri Amitabh Bhargava has been appointed as âChief Financial Officerâ, a Key Managerial Personnel on the same date.
- SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / STATUTORY AUTHORITIES:
1. As disclosed in the last yearâs report, effective 15th May, 2014, domestic gas supply to the Company was arbitrarily stopped by the Ministry of Petroleum and Natural Gas. The Company successfully challenged the same before the Honâble Delhi High Court, which by its Orders dated 07th July, 2015 and 19th October, 2015 directed the Government of India (Gol) to restore the supply of gas. Review petition filed by the GoI, challenging the said Orders was rejected by the said Court. Further the Gol also filed the Special Leave Petition (SLP) before the Honâble Supreme Court of India against the Order of Honâble Delhi High Court, which was disposed of last year without granting any relief to the Gol. The Gol has filed an affidavit before the Honâble Delhi High Court stating that Inter Ministerial Committee (IMC) has decided to recommend supply of pooled gas to the Company, subject to approval of the Competent Authority. Gol has further filed an application in the Honâble Delhi High Court seeking dismissal of the matter. The Company is contesting the said application since the Competent Authority has not decided based on the recommendation of the said IMC and the application so filed is pre- mature.
2. The Department of Fertilisers (DoF), Ministry of Chemicals and Fertilisers, had withheld subsidy due to the Company in accordance with applicable Nutrient Based Subsidy (NBS) Scheme of the Government of India (GoI), alleging undue gain arising to the Company on account of supply of cheap domestic gas. The Company had filed a Writ Petition in the Honâble High Court of Judicature at Bombay, challenging the withholding of subsidy. Based on the directive of the High Court, the Gol released the subsidy amounting to Rs.463 Crore and subsidy amounting to Rs.310 Crore was withheld pending final decision. On the request of the Company, the DoF has released subsidy amounting to Rs.310 Crore against a Bank Guarantee pending final decision.
- INDIAN ACCOUNTING STANDARDS, 2015
The annexed financial statements for the Financial Year 2017-18 and corresponding figures of 2016-17 comply in all material aspects with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.
- CONSOLIDATED FINANCIAL STATEMENTS
The Board presents the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries, and as prepared in compliance with the Companies Act, 2013, applicable Accounting Standards and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
A separate statement containing the salient features of its subsidiaries in the prescribed form AOC-1 is annexed separately.
- DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the provisions of sub-section (5) of Section 134 of the Companies Act, 2013, your Directors confirm that:
i) in the preparation of annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
ii) the accounting policies had been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year on 31st March, 2018 and of the profit and loss of the Company for that period;
iii) proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) the annual accounts had been prepared on a going concern basis;
v) internal financial controls, to be followed by the Company are duly laid down and these controls are adequate and were operating effectively; and
vi) systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
- STATUTORY AUDITORS AND THEIR REPORT
The Shareholders of the Company in their Thirty Seventh Annual General Meeting held on 21st September, 2017 had accorded their approval pursuant to the provisions of Sections 139, 141 and other applicable provisions of Companies Act, 2013 and Rules made thereunder to appoint, M/s. B S R & Associates LLP (Chartered Accountants) (Firm Registration number: 11623IW/W-100024), as the Statutory Auditors of the Company for the period of five years commencing from the conclusion of Thirty Seventh Annual General Meeting until the conclusion of Forty Second Annual General Meeting.
The Auditorsâ Report to the Shareholders for the year under review does not contain any qualification, reservation or adverse remark or disclaimer.
- SECRETARIAL AUDITORS
The Secretarial Auditors, M/s. SVD & Associates, Company Secretaries, has issued Secretarial Audit Report for the Financial Year 2017-18 pursuant to Section 204 of the Companies Act, 2013, which is annexed to this Boardâs Report. (Refer Annexure-1)
The observations of the secretarial auditors in their report are self- explanatory and therefore, the Board of Directors do not have any further comments to offer on the same.
- COST AUDITORS
Your Board had appointed M/s Y. R. Doshi & Company, Cost Accountants, as the Cost Auditors for the Financial Year 2017-18. M/s Y. R. Doshi & Company, Cost Accountants will submit the cost audit report along with annexure to the Central Government (Ministry of Corporate Affairs) in the prescribed form within specified time and at the same time forward a copy of such report to your Company.
The Cost Audit Report for the Financial Year ended 31st March, 2017 was duly filed with the Central Government (Ministry of Corporate Affairs).
Pursuant to the provisions of Section 148 of Companies Act, 2013, the Board of Directors of the Company has appointed M/s Y. R. Doshi & Company, Cost Accountants, for conducting Cost Audit of the Company for the Financial Year ending 31st March, 2019 at a remuneration, of Rs.3,00,000/- (Rupees Three Lacs only) plus GST as applicable and reimbursement of actual travel and out-of-pocket expenses, which shall be subject to the approval of the shareholders at the ensuing Annual General Meeting.
- PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES
Details of investments made and loans advanced and guarantees given by the Company have been given in notes to the Financial Statement.
- RELATED PARTY TRANSACTIONS
The Company has entered into contract / arrangements with the related parties in the ordinary course of business and at an armâs length basis. Thus provisions of Section 188(1) of the Companies Act, 2013 are not applicable.
- CORPORATE GOVERNANCE
Pursuant to the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a separate section titled âCorporate Governanceâ is attached to this Annual Report.
- SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
Report on the performance and financial position of subsidiaries, associates and joint venture companies in specified format is annexed to Boardâs Report. (Refer Annexure-2).
- AWARDS AND ACCOLADES
Please refer to section âAwards and Accoladesâ in this Annual Report for details of the awards received by the Company during the year under review.
- NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors of the Company has constituted Nomination and Remuneration Committee and also has approved the Nomination and Remuneration (NRC) Policy which inter alia contains appointment criteria, qualifications, positive attributes and independence of Directors, removal, retirement and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel of the Company.
Nomination and Remuneration Policy is available on the website of the Company on the following weblink : http:// www.dfpcl.com/DFPCL/company-policies.asp. There is no change in the Nomination and Remuneration Policy during the year under review. The Nomination and Remuneration Policy is provided in Annexure - 3 of the Boardâs Report.
- RISK MANAGEMENT COMMITTEE
The Board of Directors of the company has constituted a Risk Management Committee to assess risks in the operations of business units of the Company, to mitigate and minimize risks assessed in the operations of business units, periodic monitoring of risks in the operations of business units and other matters delegated to the Committee by Board of Directors of the Company from time to time.
Information on the development and implementation of a Risk Management Policy for the Company including identification therein of elements of risk which in the opinion of the Board may threaten the existence of the Company is given in the Corporate Governance Report.
- CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board of Directors of the Company has constituted Corporate Social Responsibility (CSR) Committee having following members as on 31st March, 2018;
1. Shri Pranay Vakil Chairman
2. Smt. Parul Mehta Member
4. Shri S R Wadhwa Member
Your Company is engaged in concerted CSR initiatives through Ishanya Foundation and with the introduction of statutory requirements for CSR initiatives as per the Companies Act, 2013, the CSR initiatives of your Company have been reaffirmed and the entire approach has become more structured. The Board of Directors of the Company has approved a comprehensive CSR Policy which is available on the website of the Company at www.dfpcl.com
The details of the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure forming part of this Boardâs Report. (Refer Annexure-4)
- ANNUAL RETURN
The extract of Annual Return is annexed to Boardâs Report. (Refer Annexure-5).
- PERFORMANCE EVALUATION OF CHAIRMAN, DIRECTORS, BOARD AND COMMITTEES
Information on the manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual directors is given in the Corporate Governance Report.
- INDEPENDENCE OF DIRECTORS
Independent Directors have given declaration that they meet the criteria of independence as provided under sub-section (6) of Section 149 of the Companies Act, 2013.
- FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
The Company has practice of conducting familiarization program of the independent directors as detailed in the Corporate Governance Report which forms part of the Annual Report.
- WHISTLE BLOWER POLICY
The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical conduct. The Company has a Whistle Blower Policy under which the employees are free to report violations of the applicable laws and regulations and the Code of Conduct.
Whistle Blower Policy is available on the website of the Company at the following weblink : http://www.dfpcl.com/DFPCL/company-policies.asp
- ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Companyâs internal financial control systems are commensurate with the nature, size, and complexity of the businesses and operations. These are periodically tested and certified by Statutory as well as Internal Auditors. Significant audit observations and the follow up actions are reported to the Audit Committee.
- MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this Report.
- PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Pursuant to the provisions of Section 136(1) of the Act and as advised, the statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be available for inspection at the Registered Office of the Company during working hours. Members interested in obtaining a copy of the same may write to the Company Secretary and the same will be furnished on request. Hence, the Annual Report is being sent to all the Members of the Company excluding the aforesaid information.
- FIXED DEPOSITS
Your Company has not accepted any deposits, covered under Chapter V of the Companies Act, 2013 anThence no details pursuant to Rules 8 (v) and 8 (vi) of the Companies (Accounts) Rules, 2014 are reported.
- DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Pursuant to Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14, the internal committee constituted under the said act has confirmed that no complaint/case has been filed/ pending with the Company during the year.
- CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required by the Companies (Accounts) Rules, 2014 the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed to Boardâs Report. (Refer Annexure-6).
- SECRETARIAL STANDARDS
The Company has in place proper systems to ensure compliance with the provisions of the applicable secretarial standards issued by The Institute of Company Secretaries of India and such systems are adequate and operating effectively.
- BUSINESS RESPONSIBILITY REPORT
The business responsibility report is attached as (Annexure-7) to this report.
- ACKNOWLEDGEMENT
Your Board of Directors wish to place on record their sincere appreciation to the Companyâs bankers, customers, vendors, investors and all other stakeholders for their continued support during the year. Your Board of Directors are also pleased to record their appreciation for the dedicated and committed contribution made by employees at all levels who through their competence and hard work have enabled your Company to achieve good performance amidst challenging times and look forward to their support in the future as well.
For and on behalf of the Board,
Mumbai S. C. MEHTA
Dated :30th May, 2018 Chairman & Managing Director
Mar 31, 2017
To the Members,
The Directors have pleasure in presenting the Thirty Seventh Annual Report together with Audited Accounts of the Company for the Financial Year ended 31st March, 2017.
- FINANCIAL RESULTS
The summarized financial results for the year are as under:
(Rs. in Lacs)
Particulars |
Standalone |
Consolidated |
||
2016-17 |
2015-16 |
2016-17 |
2015-16 |
|
Total Revenue (including Other Operating Revenues) |
4,25,725. 39 |
4,46,851.61 |
4,37,812.72 |
4,53,882.14 |
Profit Before Tax (PBT) |
22,329.13 |
16,750.71 |
23,134.81 |
17,711.33 |
Less: a) Current Tax (Net) |
6,513.14 |
4,920.00 |
5,549.80 |
6,134.76 |
b) Deferred Tax |
(199.43) |
(152.19) |
(216.93) |
(146.29) |
Profit for the year before Minority Interest |
16,015.41 |
11,982.80 |
17,570.88 |
11,565.80 |
Minority Interest |
NA |
NA |
40.13 |
(61.26) |
Net Profit / (Loss) for the period |
16,015.41 |
11,982.80 |
17,530.75 |
11,627.06 |
Total Comprehensive Income |
15,806.48 |
12,071.30 |
17,321.82 |
11,712.90 |
Add: Surplus brought forward |
1,14,687.82 |
1,08,195.82 |
1,08,188.36 |
1,02,929.22 |
Amount available for Appropriations |
1,30,494.30 |
1,20,267.12 |
1,25,510.18 |
1,14,642.12 |
Appropriations: |
||||
a) Transferred to Debenture Redemption Reserve |
1,250.00 |
(3,104.13) |
1,250.00 |
(3,104.13) |
b) Transferred to General Reserve |
- |
- |
||
c) Dividend on Equity Shares (Net) |
- |
8,511.33 |
- |
8,611.34 |
d) Tax on Proposed Dividend (Net) |
- |
172.09 |
5.23 |
946.30 |
Surplus carried to Balance Sheet |
1,29,244.32 |
1,14,687.82 |
1,24,255.19 |
1,08,188.36 |
- STATE OF AFFAIRS OF THE COMPANY
Your Company has achieved the top line of Rs.4,257.25 Crore (including Rs.1,726.21 Crore from trading operations) during the year under review as against previous yearâs level of Rs.4,468.52 Crore (including Rs.1,957.63 Crore from trading operations). Profit before Tax (PBT) for the year under review was Rs.223.29 Crore as against Rs.167.51 Crore in the previous year. Net Profit for the current year was recorded at Rs.160.15 Crore as against Rs.119.83 Crore in the previous year. A detailed analysis of the performance is available in the Management Discussion and Analysis (MDA), which forms part of this Report, inter-alia, deals adequately with the operations and also current and future outlook of the Company.
- SCHEME OF ARRANGEMENT WITH SCM FERTICHEM LIMITED AND SMARTCHEM TECHNOLOGIES LIMITED (BOTH WHOLLY OWNED SUBSIDIARIES OF THE COMPANY)
Further to an update provided in the Directorsâ Report for the previous year, the Mumbai Bench of the National Company Law Tribunal (NCLT), vide its Order dated 30th March, 2017 (a certified copy has been received on 13th April, 2017) has approved the Scheme of Arrangement amongst the Company, SCM Fertichem Limited (SCM Fertichem) and Smartchem Technologies Limited (Smartchem) and their respective shareholders and creditors involving:
- The slump exchange of (a) the Technical Ammonium Nitrate (âTANâ) undertaking of the Company together with its business and operations including its manufacturing and related facilities located at (i) Taloja & Pune, Maharashtra (ii) Jawaharlal Nehru Port, Maharashtra and (iii) Paradeep and its marketing & corporate office(s) (âTAN Undertakingâ), and (b) the Fertiliser undertaking of the Company together with its business and operations including its manufacturing and related facilities located at (i) Taloja and Pune, Maharashtra (ii) Jawaharlal Nehru Port, Maharashtra and (iii) Panipat, Haryana and its marketing & corporate office(s) (âFertiliser Undertakingâ) (and collectively, (a) and (b) are hereinafter referred to as the âTransferred Undertakingsâ) of the Company to SCM Fertichem, on a going concern basis (âSlump Exchangeâ); and
- Thereafter, the subsequent demerger of the Transferred Undertakings and vesting of the same from SCM Fertichem in Smartchem, on a going concern basis, in accordance with Section 2(19AA) of the Income Tax Act, 1961 (âDemergerâ) with effect from the Appointed Date, 01st January, 2015.
A certified copy of the Order passed by the NCLT was filed with the Registrar of Companies, Pune, Maharashtra on 01st May, 2017. Thus the Scheme of Arrangement has become effective with effect from 01st May, 2017 in terms of the provision of the said Scheme of Arrangement.
In terms of the requirements of IND AS 105, the Transferred Undertakings have been disclosed as âDiscontinuing Operationsâ while preparing the stand-alone financial statements for the year ended 31st March, 2017. The Company continues to control the Transferred Undertakings through its Wholly Owned Subsidiary and hence there has no impact on the consolidated financial statements for the year under review.
- SCHEME OF AMALGAMATION WITH THE WHOLLY OWNED SUBSIDIARY
Further to an update provided in the Directorsâ Report for the previous year, the National Company Law Tribunal, vide its Order dated 22nd June, 2017, has approved the âScheme of Amalgamationâ providing for amalgamation of SCM Soilfert Limited, a Wholly Owned Subsidiary of the Company, with the Company. The Appointed Date for the said Scheme is 01st April, 2015. A certified copy of the Scheme is yet to be received.
The detailed Scheme is available on the website of the Company, www.dfpcl.com
- DIVIDEND
Considering the performance of the Company, the Board of Directors of the Company recommends a dividend @ 60 % i.e. Rs.6 per Equity Share (Previous year Rs.5 per Equity Share) of Rs.10 each of the Company for the year ended 31st March, 2017.
The proposed dividend (including tax on proposed dividend) will absorb Rs.64 Crore and the same is in line with the âDividend Distribution Policyâ adopted by the Board at its meeting held on 30th June, 2017.
- CHANGES IN THE BOARD OF DIRECTORS
During the year under review, Shri Madhumilan Parshuram Shinde was appointed as an Additional Director in the category of Non-Executive and Non Independent Director with effect from 10th February, 2017 based on the recommendation of Nomination and Remuneration Committee.
The Company has received a notice in writing under Section 160(1) of the Companies Act, 2013 from a member of the Company, proposing the candidature of Shri Madhumilan Parshuram Shinde for the office of Director at the ensuing Annual General Meeting of the Company.
Shri Partha Sarathi Bhattacharyya retires by rotation at the ensuing Annual General Meeting pursuant to provisions of Section 152 of the Companies Act, 2013 and being eligible, offers himself for re-appointment.
Shri N. C. Singhal, Dr. Rama Iyer and Shri D. Basu, Non Executive Independent Directors of the Company and whose terms were expiring on 30th July, 2017 have since resigned from the Board in the first quarter of the Financial year 2017-18 due to family commitments and failing health. The Board places on record the significant valuable contribution made by the said Directors over the last two decades.
The current term of Shri U. P. Jhaveri, Shri S. R. Wadhwa, Shri Anil Sachdev and Shri Pranay Vakil, Independent Directors is expiring on 30th July, 2017.
Shri U. P. Jhaveri, Shri Anil Sachdev and Shri S. R. Wadhwa are proposed to be re-appointed as Independent Directors of the Company for a second term of one year commencing from 31st July, 2017 and ending on 30th July, 2018 or upto the conclusion of Annual General Meeting for the Financial Year 2017-18, whichever date is later and the term shall not be subject to retirement by rotation.
Shri Pranay Vakil is proposed to be re-appointed as an Independent Director of the Company for a second term of three years commencing from 31st July, 2017 and ending on 30th July, 2020 or upto the conclusion of Annual General Meeting for the Financial Year 2019-20, whichever date is later and the term shall not be subject to retirement by rotation.
The Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, has recommended appointment of Shri Anil Singhvi, Shri Mahesh Chhabria, Shri Ashok Kumar Purwaha and Shri Berjis Minoo Desai as Independent Directors to hold office for 5 consecutive years commencing from 07th July 2017 and ending on 06th July 2022 or upto the conclusion of Annual General Meeting for the Financial Year 2021-22 whichever date is earlier.
- NUMBER OF MEETINGS OF BOARD OF DIRECTORS
During the year under review, five meetings of the Board of Directors were held on 26th May, 2016, 12th August, 2016, 17th November, 2016, 10th February, 2017 and 30th March, 2017.
Independent Directors have given declaration that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.
- CHANGES IN KEY MANAGERIAL PERSONNEL (KMP)
Shri Mandar Velankar, Assistant Company Secretary stepped down as âCompany Secretaryâ, a Key Managerial Personnel of the Company with effect from 12th August, 2016 and Shri K. Subharaman, Executive Vice President - Legal & Company Secretary has been appointed as âCompany Secretaryâ a Key Managerial Personnel with effect from 12th August, 2016.
- SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / STATUTORY AUTHORITIES
1. Details about the Order dated 30th March, 2017 passed by the Mumbai Bench of National Company Law Tribunal (NCLT) sanctioning the Scheme of Arrangement amongst the Company and its wholly owned subsidiary companies viz. SCM Fertichem Limited and Smartchem Technologies Limited are given in the earlier part of this report.
2. As disclosed in the last yearâs report, effective 15th May, 2014, domestic gas supply to the Company was arbitrarily stopped by the Ministry of Petroleum and Natural Gas. The Company successfully challenged the same before the Honâble Delhi High Court, which by its Orders dated 07th July, 2015 and 19th October, 2015 directed the Government of India (GoI) to restore the supply of gas. Review petition filed by the GoI, challenging the said Orders was rejected by the Court. Further the GoI also filed the Special Leave Petition (SLP) before the Honâble Supreme Court of India against the Order of Honâble Delhi High Court, which was disposed of during the year under review without granting any relief to the GoI. The GoI has filed an affidavit before the Honâble Delhi High Court stating that Inter Ministerial Committee (IMC) has decided to recommend supply of pooled gas to the Company, subject to approval of the Competent Authority.
3. The Department of Fertilisers (DoF), Ministry of Chemicals and Fertilisers, had withheld subsidy due to the Company in accordance with applicable Nutrient Based Subsidy (NBS) Scheme of the Government of India (GoI), alleging undue gain arising to the Company on account of supply of cheap domestic gas. The Company had filed a Writ Petition in the Honâble High Court of Judicature at Bombay, challenging the withholding of subsidy. Based on the directive of the High Court, the GoI released the subsidy amounting to Rs.463 Crore and subsidy amounting to Rs.310 Crore was withheld pending final decision. On the request of the Company, the DoF has agreed to release subsidy amounting to Rs.310 Crore against a Bank Guarantee pending final decision.
- INDIAN ACCOUNTING STANDARDS, 2015
The financial statements up to year ended 31st March 2016 were prepared in accordance with the Accounting Standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act.
The annexed financial statements for the Financial Year 2016-17 comply in all material aspects with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. These financial statements are the first financial statements of the Company under Ind AS.
Detailed information on the impact of the transition from previous GAAP to Ind AS is provided in the annexed financial statements.
- CONSOLIDATED FINANCIAL STATEMENTS
The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries, and as prepared in compliance with the Companies Act, 2013, applicable Accounting Standards and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as prescribed by Standards and Securities and Exchange Board of India.
A separate statement containing the salient features of its subsidiaries in the prescribed form AOC-1 is annexed separately.
- DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the provisions of sub-section (5) of Section 134 of the Companies Act, 2013, your Directors confirm that:
i) in the preparation of annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
ii) the accounting policies had been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year on 31st March, 2017 and of the profit and loss of the Company for that period;
iii) proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) the annual accounts had been prepared on a going concern basis;
v) internal financial controls, to be followed by the Company are duly laid down and these controls are adequate and were operating effectively; and
vi) systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
- STATUTORY AUDITORS AND THEIR REPORT
The Shareholders of the Company in their Thirty Fourth Annual General Meeting held on 31st July, 2014 had accorded their approval pursuant to the provisions of Sections 139, 141 and other applicable provisions of Companies Act, 2013 and Rules made thereunder to appoint M/s. B. K. Khare & Co., Chartered Accountants, as the Statutory Auditors of the Company for the period of three years commencing from the conclusion of Thirty Fourth Annual General Meeting until the conclusion of Thirty Seventh Annual General Meeting.
Therefore, the term of M/s. B. K. Khare & Co., Chartered Accountants comes to an end at the ensuing Annual General Meeting.
The Board of Directors of the Company has, pursuant to the provisions of Section 139, recommended the appointment of M/s. B S R & Associates LLP (Chartered Accountants) (Firm Registration number: 116231W/W-100024), for the approval of the Shareholders from the conclusion of Thirty Seventh Annual General Meeting till the conclusion of Forty Second Annual General Meeting subject to ratification by shareholders at the Annual General Meeting.
The Auditorsâ Report to the Shareholders for the year under review does not contain any qualification, reservation or adverse remark or disclaimer.
- SECRETARIAL AUDITORS
The Secretarial Auditors, M/s. SVD & Associates, Company Secretaries, has issued Secretarial Audit Report for the Financial Year 2016-17 pursuant to Section 204 of the Companies Act, 2013, which is annexed to Directorsâ Report. (Refer Annexure-1)
The Secretarial Audit Report for the year under review does not contain any qualification, reservation or adverse remark or disclaimer.
- COST AUDITORS
Your Directors have appointed M/s Y. R. Doshi & Company, Cost Accountants, as the Cost Auditors for the Financial Year 2017-18. M/s Y. R. Doshi & Company, Cost Accountants will submit the cost audit report alongwith annexure to the Central Government (Ministry of Corporate Affairs) in the prescribed form within specified time and at the same time forward a copy of such report to your Company.
The Cost Audit Report for the Financial Year ended 31st March, 2016 was duly filed with the Central Government (Ministry of Corporate Affairs).
Pursuant to the provisions of Section 148 of Companies Act, 2013, the Board of Directors of the Company has appointed M/s Y. R. Doshi & Company, Cost Accountants, for conducting Cost Audit of the Company for the Financial Year ending 31st March, 2018 at a remuneration, of Rs.300,000/- (Rupees Three lacs only) plus taxes as applicable and reimbursement of travel and out-ofpocket expenses, which shall be subject to the approval of the shareholders at the ensuing Annual General Meeting.
- PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES
Details of investments made and loans advanced and guarantees given by the Company have been given in notes to the Financial Statement.
- RELATED PARTY TRANSACTIONS
The Company has entered into contract / arrangements with the related parties in the ordinary course of business and on armâs length basis. Thus provisions of Section 188(1) of the Act are not applicable.
- CORPORATE GOVERNANCE
Pursuant to provisions of Standards and Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, a separate section titled âCorporate Governanceâ is attached to this Annual Report.
- SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
Report on the performance and financial position of subsidiaries, associates and joint venture companies in specified format is annexed to Directorsâ Report. (Refer Annexure-2).
- AWARDS AND ACCOLADES
Please refer to section âAwards and Accoladesâ in this Annual Report for details of the awards received by the Company during the year under review.
- NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors of the Company has constituted Nomination and Remuneration Committee and also has approved the Nomination and Remuneration (NRC) Policy which, inter alia, contains appointment criteria, qualifications, positive attributes and independence of Directors, removal, retirement and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel of the Company.
Nomination and Remuneration Policy is annexed to Directorsâ Report. (Refer Annexure-3) and is also available on the website of the Company www.dfpcl. com
- RISK MANAGEMENT COMMITTEE
The Board of Directors of the company has constituted a Risk Management Committee to assess risks in the operations of business units of the Company, to mitigate and minimize risks assessed in the operations of business units, periodic monitoring of risks in the operations of business units and other matters delegated to the Committee by Board of Directors of the Company from time to time.
Information on the development and implementation of a Risk Management Policy for the Company including identification therein of elements of risk which in the opinion of the Board may threaten the existence of the Company is given in the Corporate Governance Report.
- CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board of Directors of the Company has constituted Corporate Social Responsibility (CSR) Committee having following members as on 31st March, 2017;
1. Shri Pranay Vakil Chairman
2. Smt. Parul Mehta Member
4. Shri S R Wadhwa Member
Your Company is engaged in concerted CSR initiatives through Ishanya Foundation and Deepak Foundation and with the introduction of statutory requirements for CSR initiatives as per the Companies Act, 2013, the CSR initiatives of your Company have been reaffirmed and the entire approach has become more structured. The Board of Directors of the Company has approved a comprehensive CSR Policy which is available on the website of the Company at www.dfpcl.com
The details of the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure forming part of this report. (Refer Annexure-4)
- ANNUAL RETURN
The extract of Annual Return is annexed to Directorsâ Report. (Refer Annexure-5).
- PERFORMANCE EVALUATION OF CHAIRMAN, DIRECTORS, BOARD AND COMMITTEES
Information on the manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual directors is given in the Corporate Governance Report.
- FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
The Company has practice of conducting familiarization program of the independent directors as detailed in the Corporate Governance Report which forms part of the Annual Report.
- WHISTLE BLOWER POLICY
The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical conduct. The Company has a Whistle Blower Policy under which the employees are free to report violations of the applicable laws and regulations and the Code of Conduct.
Whistle Blower Policy is available on the website of the Company at www.dfpcl.com
- ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Companyâs internal financial control systems are commensurate with the nature, size, and complexity of the businesses and operations. These are periodically tested and certified by Statutory as well as Internal Auditors. Significant audit observations and the follow up actions are reported to the Audit Committee.
- MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this Report except for the Order of the National Company Law Tribunal (NCLT) dated 30th March, 2017 sanctioning the Scheme of Arrangement involving the Company and its Wholly Owned Subsidiaries.
- PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Pursuant to the provisions of Section 136(1) of the Act and as advised, the statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be available for inspection at the Registered Office of the Company during working hours. Members interested in obtaining a copy of the same may write to the Company Secretary and the same will be furnished on request. Hence, the Annual Report is being sent to all the Members of the Company excluding the aforesaid information.
- FIXED DEPOSITS
Your Company has not accepted any deposits, covered under Chapter V of the Companies Act, 2013 and hence no details pursuant to Rules 8 (v) and 8 (vi) of the Companies (Accounts) Rules, 2014 are reported.
- DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Pursuant to Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14, the internal committee constituted under the said act has confirmed that no complaint/case has been filed/ pending with the Company during the year.
- CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required by the Companies (Accounts) Rules, 2014 the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed to Directorsâ Report. (Refer Annexure-6).
- ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation to the Companyâs bankers, customers, vendors, investors and all other stakeholders for their continued support during the year. Your Directors are also pleased to record their appreciation for their dedication and committed contribution made by employees at all levels who through their competence and hard work have enabled your Company to achieve good performance amidst challenging times and look forward to their support in the future as well.
For and on behalf of the Board,
Mumbai S. C. MEHTA
Dated 30th June, 2017 Chairman & Managing Director
Mar 31, 2013
To the Members,
The Directors have pleasure in presenting the Thirty Third Annual
Report together with Audited Accounts of the Company for the Financial
Year ended 31st March, 2013.
- FINANCIAL RESULTS
The summarised financial results for the year are as under:
(Rs. in Lacs)
2012-13 2011-12
Total Revenue (including Other Income) 2,66,824.04 2,38,219.02
Profit Before Exceptional and
Extraordinary Items and Tax 20,057.73 29,005.55
Less: Exceptional and Extraordinary Items - -
Profit Before Tax (PBT) 20,057.73 29,005.55
Less: a) Current Tax (Net) 3,263.44 5,645.01
b) Deferred Tax 2,103.78 2,063.16
Profit / (Loss) for the period 14,690.51 21,297.38
Add: Surplus brought forward 83,055.02 71,225.48
Amount available for Appropriations 97,745.53 92,522.86
Appropriations:
a) Transferred to Debenture Redemption
Reserve 1,165.63 1,792.00
b) Transferred to General Reserve 1,475.00 2,135.00
c) Proposed Dividend on Equity Shares (Net) 4,851.40 4,851.22
d) Tax on Proposed Dividend (Net) 754.55 689.62
Surplus carried to Balance Sheet 89,498.95 83,055.02
- MANAGEMENT DISCUSSION AND ANALYSIS
During the year under review, despite tough economic conditions, Total
Revenue (including Other Income) increased to Rs. 2,668.24 Crores
(including Rs. 652.61 Crores from trading operations) as against Rs.
2,382.19 Crores (including Rs. 487.13 Crores from trading operations)
for the previous year. PBT for the year under review stood at Rs.
200.58 Crores as against Rs. 290.06 Crores in the previous year. Profit
for the current year was recorded Rs. 146.90 Crores as compared to Rs.
212.97 Crores in the previous year. A further analysis of the
performance is available in the Management Discussion and Analysis
(MDA), which forms part of this Report, and inter alia, deals
adequately with the operations as also current and future outlook of
the Company.
- DIVIDEND
Considering the performance of the Company during the year under
review, your Directors recommend a dividend @ 55% i.e. Rs. 5.50 per
Equity Share (Previous Year 55% i.e. Rs. 5.50 per Equity Share) of Rs.
10 each of the Company for the year ended 31st March, 2013. The
proposed dividend (including tax on proposed dividend) will absorb Rs.
56.22 Crores.
- SECURED DEBENTURES
In accordance with the terms of issue of Secured Non-Convertible
Debentures of Rs. 10 Lacs each aggregating Rs. 50 Crores and Rs. 125
Crores, earlier issued in favour of Banks / Financial Institutions,
your Company during the year under review, has fully redeemed the
Debentures of Rs. 50 Crores on its due date, 9th February, 2013 and has
redeemed one-third amount of the Debentures of Rs. 125 Crores on its
due date, 1st September, 2012.
During the year under review, for General Corporate Purpose (including
long term working capital), your Company has issued Secured
Non-Convertible Debentures of Rs. 10 Lacs each aggregating Rs. 100
Crores at coupon rate of 9.70% for a period of 3 years and Rs. 250
Crores at coupon rate of 9.71% for a period of 5 years, on Private
Placement Basis and these Debentures are listed on the Bombay Stock
Exchange Limited (BSE).
- DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of sub-section (2AA) of Section 217 of the
Companies Act, 1956, your Directors confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures, if any;
(ii) the accounting policies selected had been applied consistently and
judgements and estimates made were reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company at the end
of the Financial Year on 31st March, 2013 and of the profit of the
Company for that period;
(iii) proper and sufficient care had been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
(iv) the annual accounts had been prepared on a ''going concern''
basis.
- CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section titled ''Corporate Governance'' is
attached to this Annual Report.
- CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR initiatives taken by the Company continued during the year
under review. A separate section titled ''Corporate Social
Responsibility'' is attached to this Annual Report.
- SUBSIDIARY COMPANIES
During the year under review, your Company''s subsidiary, Deepak
Mining Services Private Limited (DMSPL) has formed Joint Venture
Company, namely, RungePincockMinarco India Private Limited with
International Mineral Assets Transactions Pty. Limited (IMAT), a wholly
owned subsidiary of RungePincockMinarco Limited, Australia, wherein
DMSPL will have 51% equity participation and IMAT will have 49% equity
participation, to provide services across the mining sector of India
and the surrounding geographies.
Consequently, your Company has now five subsidiaries viz. Smartchem
Technologies Limited, Deepak Nitrochem Pty. Limited, Yerrowda
Investments Limited, Deepak Mining Services Private Limited and
RungePincockMinarco India Private Limited.
A statement pursuant to Section 212 of the Companies Act, 1956 in
respect of these subsidiaries is appended to the Balance Sheet. In
terms of General Circular No.: 2/2011 dated 8th February, 2011 issued
by the Ministry of Corporate Affairs, Government of India, the annual
accounts and other reports specified in Section 212(1) of the Companies
Act, 1956 in respect of the subsidiary companies have not been attached
to the Balance Sheet. The Company will make available these documents /
details to the members of the Company and the subsidiary companies upon
request made in this regard to the Company. The Annual Accounts of the
subsidiary companies will also be kept for inspection by any member of
the Company at its Registered Office and also at the Registered Office
of the concerned subsidiary company.
In accordance with the requirements of Accounting Standards prescribed
by the Institute of Chartered Accountants of India and aforesaid
circular issued by the Ministry of Corporate Affairs, the Consolidated
Financial Statements of the Company and its subsidiaries are annexed to
this Annual Report.
- INDUSTRIAL RELATIONS
Following a dispute over disciplinary action taken by the management,
productivity issues and wage settlement, the workers at Company''s
Plant situated at Plot No. K-1, MIDC Industrial Area, Taloja, went on
strike on 3rd January, 2013. However, in the absence of the workers,
the management staff was operating the Plant, to the extent possible.
The workers have called off strike on 30th May, 2013, upon amicable
settlement of the aforesaid issues and signing of a Long Term Wage
Agreement.
- CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required by the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, the relevant data pertaining to
conservation of energy, technology absorption and foreign exchange
earnings and outgo is given in the Annexure forming part of this
Report.
- SAFETY, HEALTH AND ENVIRONMENT (SHE) INITIATIVES
The main manufacturing location of your Company at Taloja successfully
went through the re-certification for renewal of ISO 9001, ISO 14001
and OHSAS 18001. Implementation of the new initiative of 5 S has also
been started. It is pertinent to note that for the first time your
Company has completed 1,000 days of operation without any reportable
accident. Your Company has also accelerated Greening Drive in line with
its priorities.
- AWARDS AND ACCOLADES
Your Company has received following recognitions based on its
continuing efforts towards conservation of energy and performance:
- Award for excellence in Energy Conservation & Management from
Maharashtra Energy Development Agency for consecutive two years.
- Award for excellence in Energy Conservation & Management from
Indian Chemical Council.
- An "Energy Efficient Unit" award from Confederation of Indian
Industry.
- Fertiliser Association of India Award for the year 2012 for the
overall performance in Agri Business.
- DIRECTORS
During the year under review, Shri C. K. Mehta relinquished the
position as the Non-Executive Chairman and Director of the Company. The
Board of Directors of your Company placed on record its deep and
heartfelt appreciation of the services and herculean contribution
rendered by Shri C. K. Mehta and appointed him as Chairman-Emeritus.
Shri S. C. Mehta who was Vice-Chairman & Managing Director of the
Company took over as Chairman & Managing Director of the Company.
Shri R. A. Shah, Shri D. Basu and Shri U. P. Jhaveri, retire by
rotation at the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment.
The present term of Shri S. C. Mehta, Chairman & Managing Director of
the Company shall be expiring on 31st July, 2013. The Board of
Directors has re-appointed, subject to approval of Members, Shri S. C.
Mehta as Chairman & Managing Director of the Company for a further
period of 5 years with effect from 1st August, 2013.
The Board of Directors has appointed, subject to approval of Members,
Shri Partha Bhattacharyya as Whole-Time Director of the Company and
designated him as an Executive Director for a period of five years with
effect from 31st October, 2012.
- AUDITORS
M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, the Auditors of
the Company hold office until the conclusion of the ensuing Annual
General Meeting. The Company has received a letter from them to the
effect that their appointment, if made, by the Company for the year
2013-14 will be within the limit prescribed under Section 224(1B) of
the Companies Act, 1956. The Board of Directors commends their
appointment.
- COST AUDITOR
Your Directors have appointed Shri Y. R. Doshi, Cost Accountant as the
Cost Auditor for the Financial Year 2012-13. Shri Y. R. Doshi will
submit the cost audit report and annexure to the Central Government
(Ministry of Corporate Affairs) in the prescribed form within specified
time and at the same time forward a copy of such report to your
Company.
The Cost Audit Report for the Financial Year ended 31st March, 2012
which was due for filing on 28th February, 2013 was filed with the
Central Government (Ministry of Corporate Affairs) on 12th February,
2013.
- PERSONNEL
As required by the provisions of Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of employees are set out in
the Annexure to the Directors'' Report. However, as per the provisions
of Section 219(1)(b)(iv) of the said Act, the annual report and
accounts are being sent to all members of the Company excluding the
aforesaid information. Any member interested in obtaining such
particulars may write to the Company Secretary at the Registered Office
of the Company.
- ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation to
the Governmental authorities, Company''s bankers, customers, vendors,
investors and all other stakeholders for their continued support during
the year.
Your Directors are also pleased to record their appreciation for the
dedication and contribution made by employees at all levels who through
their competence and hard work have enabled your Company achieve good
performance and look forward to their support in the future as well.
For and on behalf of the Board,
Mumbai S. C. MEHTA
Dated 30th May, 2013 Chairman & Managing Director
Mar 31, 2012
The Directors have pleasure in presenting the Thirty Second Annual
Report together with Audited Accounts of the Company for Financial Year
ended 31st March, 2012.
FINANCIAL RESULTS
The summarized financial results for the year are as under:
(Rs.in Lacs)
2011-12 2010-11
Total Revenue (including
Other Income) 2,38,219.01 1,60,064.04
Profit Before Exceptional and
Extraordinary Items and Tax 29,005.55 26,443.74
Less: Exceptional Items - 338.09
Profit Before Tax (PBT) . 29,005.55 26,105.65
Less: (a) Current Tax (Net) 5,645.01 5,591.98
(b) Deferred Tax 2,063.16 1,851.26
Profit/(Loss) for the period , 21,297.38 18,662.41
Add: (a) Surplus brought
forward 71,225.48 60,917.64
(b) Transferred from Debenture
Redemption Reserve - 380.00
Amount available for
Appropriations . 92,522.86 79,960.05
Appropriations :
(a) Transferred to Debenture
Redemption Reserve 1,792.00 1,792.00
(b) Transferred to General
Reserve 2,135.00 1,870.00
(c) Proposed Dividend on
Equity Shares (Net) 4,851.22 4,408.65
(d) Tax on Proposed Dividend (Net) 689.62 663.92
Surplus carried to
Balance Sheet 83,055.02 71,225.48
Total Revenue (including Other Income) increased to Rs 2,382.19 crores
(including Rs 487.13 crores from trading operations) as against Rs
1,600.64 crores (including Rs 268.86 crores from trading operations) for
the previous year. PBT for the year under review improved to Rs 290.06
crores as against Rs 261.06 crores in the previous year. Profit for the
current year was Rs 212.97 crores as compared to Rs 186.62 crores in the
previous year.
DIVIDEND
Considering the continued good performance of the Company during the
year under review, your Directors recommend a dividend @ 55% i.e. Rs
5.50 per Equity Share (Previous Year 50% i.e. Rs 5.00 per Equity Share)
of Rs 10/- each of the Company for year ended 31st March, 2012. The
proposed dividend (including tax on proposed dividend) will absorb Rs
55.90 crores.
MANAGEMENT DISCUSSION AND ANALYSIS
A report on Management Discussion and Analysis (MDA), which forms part
of this Report, inter-alia, deals adequately with the operations as
also current and future outlook of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of sub-section (2AA) of Section 217 of the
Companies Act, 1956 your Directors confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures, if any;
(ii) the accounting policies selected had been applied consistently and
judgments and estimates made were reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company at the end
of the financial year 31st March, 2012 and of the profit of the Company
for that period;
(iii) proper and sufficient care had been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
(iv) the annual accounts had been prepared on a 'going concern' basis.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section titled 'Corporate Governance' is
attached to this Annual Report.
SUBSIDIARY COMPANIES
During the year under review, the Company has acquired additional
equity shares of Yarrow Investments Ltd., an associate company, by
virtue of which it has become the Subsidiary of the Company under the
provisions of the Companies Act, 1956.
Consequently, the Company has now four subsidiaries viz. Smart hem
Technologies Limited, Deepak Nitro hem Pty. Limited, Deepak Mining
Services Private Limited and Yarrow Investments Limited.
A statement pursuant to Section 212 of the Companies Act, 1956 in
respect of these subsidiaries is appended to the Balance Sheet. In
terms of General Circular No: 2/2011 dated 8th February, 2011 issued by
the Ministry of Corporate Affairs, Government of India, the annual
accounts and other reports specified in Section 212(1) in respect of
the subsidiary companies have not been attached to the Balance Sheet.
The Company will make available these documents/details to the members
of the Company and the subsidiary companies upon request made in this
regard to the Company. The Annual Accounts of the subsidiary companies
will also be kept for inspection by any member of the Company at its
Registered Office and also at the Registered Office of the concerned
subsidiary company.
In accordance with the requirements of Accounting Standard prescribed
by the Institute of Chartered Accountants of India and aforesaid
circular issued by the Ministry of Corporate Affairs, the Consolidated
Financial Statement of the Company and its subsidiaries is annexed to
this Annual Report.
* INDUSTRIAL RELATIONS
Industrial Relations during the year under review continued to be
cordial.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required by the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 the relevant data pertaining to
conservation of energy, technology absorption and foreign exchange
earnings and outgo are given in Annexure forming part of this Report.
DIRECTORS
Shri Pranay Vakil, Shri Anil Sachdev and Smt. Parul S. Mehta, retire by
rotation at the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment.
- AUDITORS
M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, the Auditors of
the Company hold office until the conclusion of the ensuing Annual
General Meeting. The Company has received a letter from them to the
effect that their appointment, if made, by the Company for the year
2012-13 will be within the limit prescribed under Section 224(1B) of
the Companies Act, 1956. The Board of Directors commends their
appointment.
- COST AUDITOR
Your Directors have appointed Shri Y. R. Doshi, Cost Accountant as Cost
Auditor for the financial year 2011-12 and the same has been approved
by the Central Government.
- PERSONNEL
As required by the provisions of Section 217 (2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of employees are set out in
the Annexure to the Directors' Report. However, as per the provisions
of Section 219(1)(b)(iv) of the said Act, the annual report and
accounts are being sent to all members of the Company excluding the
aforesaid information. Any member interested in obtaining such
particulars may write to the Company Secretary at the Registered Office
of the Company.
- ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation to
the Governmental authorities, Company's bankers and customers, vendors
and investors for their continued support during the year.
Your Directors are also pleased to record their appreciation for the
dedication and contribution made by employees at all levels who through
their competence and hard work have enabled your Company achieve good
performance year after year and look forward to their support in the
future as well.
For and on behalf of the Board,
Mumbai C. K. MEHTA
Dated 18th May, 2012 Chairman
Mar 31, 2011
The Directors have pleasure in presenting the Thirty First Annual
Report together with Audited Accounts of the Company for Financial Year
ended 31st March, 2011.
FINANCIAL RESULTS
The summarised financial results for the year are as under :
(Rs, in Lacs)
2010 - 11 2009 - 10
Sales (including other income) 1,60,064.04 1,33,288.13
Profit before Depreciation 33,807.44 27,708.34
Less : a) Depreciation 7,146.71 6,433.21
b) Prior years adjustments (net) 175.99 1.73
Profit before Exceptional Items 26,484.74 21,273.40
Less : Exceptional Items 338.09 (2,504.36)
Profit Before Tax (PBT) 26,146.65 23,777.76
Less : a) Provision for Current Tax 5,591.98 6,839.61
b) Provision for Deferred Tax 1,851.26 (295.30)
c) Provision for Wealth Tax 41.00 28.65
Net Profit 18,662.41 17,204.80
Add : a) Balance brought forward 60,917.64 51,177.84
b) Transferred from Debenture Redemption
Reserve 380.00 285.00
Amount available for Appropriations 79,960.05 68,667.64
Appropriations
a) Transferred to Debenture Redemption
Reserve 1,792.00 1,542.00
b) Transferred to General Reserve 1,870.00 1,750.00
c) Dividend on Equity Shares (net) 4,408.65 3,971.00
d) Corporate Dividend Tax (net) 663.92 487.00
Surplus carried to Balance Sheet 71,225.48 60,917.64
Sales (including other income) increased to Rs. 1,600.64 crores
(including Rs. 268.86 crores from trading operations) as against Rs.
1,332.88 crores (including Rs. 293.37 crores from trading operations)
for the previous year. PBT for the year under review improved to Rs.
261.47 crores as against Rs. 237.78 crores in the previous year. Net
Profit for the current year was Rs. 186.62 crores as compared to Rs.
172.05 crores in the previous year.
DIVIDEND
Considering the continued good performance of the Company during the
year under review, your Directors recommend a dividend @ 50 % i.e. Rs.
5.00 per share (Previous Year 45% i.e. Rs. 4.50 per share) on Equity
Shares of Rs.10/- each of the Company for year ended 31st March, 2011.
The proposed dividend (including Corporate Dividend Tax) will absorb
Rs. 51.26 crores.
SECURED DEBENTURES
In accordance with the terms of issue of Secured Non-Convertible
Debentures of Rs. 10 lakhs each aggregating Rs. 20 crores and Rs. 18
crores, earlier issued in favour of Financial Institutions, your
Company during the year under review has fully redeemed the Debentures
on the due date 15th September, 2010 and 30th September, 2010
respectively.
During the year under review, for augmenting the long term resources
and for meeting general corporate expenditure, your Company has issued
Secured Non-Convertible Debentures of Rs. 10 lakhs each aggregating Rs.
50 crores on Private Placement Basis and these Debentures are listed on
the National Stock Exchange of India Limited. These Debentures carry
coupon rate of 9.31% and are due for repayment at the end of five years
from the date of allotment as per the terms and conditions of issue.
MANAGEMENT DISCUSSION AND ANALYSIS
A report on Management Discussion and Analysis (MDA), which forms part
of this Report, inter-alia, deals adequately with the operations as
also current and future outlook of the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of sub-section (2AA) of Section 217 of the
Companies Act, 1956 your Directors confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures, if any;
(ii) the accounting policies selected had been applied consistently and
judgements and estimates made were reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company at the end
of the financial year on 31st March, 2011 and of the profit of the
Company for that period;
(iii) proper and sufficient care had been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
(iv) the annual accounts had been prepared on a going concern basis.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section titled Corporate Governance is attached
to this Annual Report.
SUBSIDIARY COMPANIES
The Company has three subsidiaries viz. Smartchem Technologies Limited,
Deepak Nitrochem Pty. Limited and Deepak Mining Services Private
Limited.
A statement pursuant to Section 212 of the Companies Act, 1956 in
respect of these subsidiaries is appended to the Balance Sheet. In
terms of General Circular No: 2 / 2011 dated 8th February, 2011 issued
by the Ministry of Corporate Affairs, Government of India, the annual
accounts and other reports specified in Section 212(1) in respect of
the subsidiary companies have not been attached to the Balance Sheet.
The Company will make available these documents/ details to the members
of the Company and the subsidiary companies upon request made in this
regard to the Company. The Annual Accounts of the subsidiary companies
will also be kept for inspection by any member of the Company at its
registered office and also at the registered office of the concerned
subsidiary company.
In accordance with the requirements of Accounting Standard AS-21
prescribed by the Institute of Chartered Accountants of India, the
Consolidated Financial Statement of the Company and its subsidiaries is
annexed to this Annual Report.
INDUSTRIAL RELATIONS
Industrial Relations during the year under review continued to be
cordial.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required by the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 the relevant data pertaining to
conservation of energy, technology absorption and foreign exchange
earnings and outgo are given in Annexure forming part of this Report.
DIRECTORS
Dr. S. Rama Iyer, Shri N. C. Singhal and Shri S. R. Wadhwa, retire by
rotation at the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment.
AUDITORS
M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, the Auditors of
the Company hold office until the conclusion of the ensuing Annual
General Meeting. The Company has received a letter from them to the
effect that their appointment, if made, by the Company for the year
2011-12 will be within the limit prescribed under Section 224(1-B) of
the Companies Act, 1956. The Board of Directors commends their
appointment.
PERSONNEL
As required by the provisions of Section 217 (2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of employees are set out in
the Annexure to the Directors Report. However, as per the provisions
of Section 219(l)(b)(iv) of the said Act, the annual report and
accounts are being sent to all members of the Company excluding the
aforesaid information. Any member interested in obtaining such
particulars may write to the Company Secretary at the Registered Office
of the Company.
IS ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation to
the Governmental authorities, Companys bankers and customers, vendors
and investors for their continued support during the year.
Your Directors are also pleased to record their appreciation for the
dedication and contribution made by employees at ail levels who through
their competence and hard work have enabled your Company achieve good
performance year after year and look forward to their support in the
future as well.
For and on behalf of the Board,
C. K. MEHTA
Mumbai Chairman
Dated 11th May, 2011
Mar 31, 2010
The Directors present their 30th Annual Report and the audited
statement of accounts for the year ended 31st March 2010.
Financial Results 2009/10 2008/09
Net Sales 23335.89 32424.79
Total Expenditure 23724.33 30136.88
Operating profit / (loss) (388.44) 2287.91
Other Income 464.47 623.78
Earnings before Interest, Tax,
Depreciation and Amortization 76.03 2911.70
Interest 25.11 28.62
Cash Profit 50.92 2883.08
Provision for Depreciation & Amortization 422.64 342.51
Profit / (loss) before prior period income,
exceptional item and Tax (371.72) 2540.57
Prior period Income Exceptional Item - 275.97
Provision for Tax (net) (157.57) 880.46
Excess provision for tax in respect of
earlier years written back (net) - 9.20
Balance in Profit & Loss A/c brought
forward from the previous year 3830.95 2850.97
Profit available for appropriation 3616.80 4796.25
Appropriations:
Equity Dividend 64.22 642.16
Corporate Dividend tax 10.91 109.14
Transfer to General Reserve - 214.00
Balance carried to Balance Sheet 3541.67 3830.95
Rs. In Lakhs
Dividend
Your Directors have recommended payment of Re. 1/- per share as
dividend on the equity shares of the Company for the year (previous
year Rs. 10/- per share) out of the carried forward profits of previous
years.
Operations
Operations at both the business segments of the Company suffered during
the year under review due to a combination of factors. Overall sales
volume and turnover were lower and there was a sharp decline in value
addition.
Labour unrest which began by end of February, 2010 seriously affected
sales during the peak month of March, 2010.
The gross revenue for the year under review was Rs. 238.00 Crores
(Rs.330.49 Crores in the previous year). The loss before taxes was
Rs.3.71 Crores (Rs. 28.16 Crores profit in the previous year) and loss
after taxes was Rs.2.14Crores (Rs. 19.42 Crores profit in the previous
year)
Pressings Business Segment *
After the steep fait in volumes during the last quarter of 2008/09, the
demand grew cautiously during the early part of the year peaking during
the last quarter of 2009/10. Realisations however, were much lower
resulting in erosion in value addition considerably.
The unfortunate labour unrest over the demand for settlement of wages
which started from around 27,h February and lasted right till end
March, 2010 at the Goa factories seriously crippled operations and
resulted in the principal buyer withdrawing almost all the tooling to
ensure uninterrupted production of vehicles. This has dealt a serious
blow to the business segment. In the event, the pressings business from
Goa factories has almost ground to a trickle - mainly catering to the
requirement of engine components of Tata Cummins Ltd.
Bus Body Business Segment
2,373 buses were sold during the year as against 4,509 buses during the
previous year. As informed in the last report, the main Bus Body
building plant at Goa. which was closed in January 2009 due to lack of
demand was re-opened only in June, 2009 albeit, with a far lower
capacity utilization due to low demand. But for the timely orders from
Tata Motors for domestic buses, the year under review would have been
far worse.
The demand for export buses picked up gradually from December 2009 and
peaked during the last quarter but the company could not take advantage
of this demand pick up due to the unfortunate labour unrest over
settlement of wages. Since restoration of normalcy in April, 2010, the
demand for buses has been rising. The Directors believe that the
set-back suffered in the year gone by were temporary and the Company
looks forward to regain lost ground in the coming years.
The Hi Deck bus on the Hispano platform has been undergoing major
improvements with higher horsepower engine and other modifications. The
proto type buses are currently on trial runs and it is hoped that
regular production will commence during the second half of the current
year.
HRD and Industrial Relations
Settlement of wages with labour unions effective Is April, 2009
resulted in protracted negotiations eventually leading to a labour
unrest beginning February 27* 2010. Production at the Goa factories was
severely affected during the last month of the year leading to loss of
sales, it is a matter of deep regret that despite all the efforts to
revive the Company from its desperate position in 2001/02 to its
current position, the workers unions resorted to such uncalled for
actions which ultimately harms the workers more than anyone else among
all the stakeholders. In the event, firm steps taken by the Company and
the help and support received from the promoters and the Govt, resulted
in a settlement for three years effective from 1st April, 2009.
Training and other HRD initiatives continued during the year. Despite
the incidents at the end of the year, relations with the workers unions
were cordial and continue to be so.
Corporate Social Responsibility
Notwithstanding the financial setback suffered, the Company continued
with its CSR initiatives during the year under review. Assistance to
local students in the form of scholarships and uniforms, emergency
ambulance service to the local community, help and assistance in the
Polio vaccination drive, Blood donation drive etc., were continued
during the year. The Company also contributed to the Eye Camp organized
by a local NGO
for the benefit of the local communities.
The Company also participated in sports and cultural activities
conducted by various local social organizations.
Corporate Governance
A separate section on Corporate Governance forming part of the
Directors Report and the certificate from the Companys auditors
confirming compliance of Corporate Governance norms as stipulated in
the revised clause 49 of the Listing Agreement with the Stock Exchange
is included in the Annual Report.
Finance
As the members are aware, Rs. 703,908,675/- were raised through a
Rights issue of shares in 2007-08 out of which a sum of Rs. 92,08,436/-
was incurred towards the expenditure for the issue.
Out of the unspent amount of the Rights issue proceeds a sum of Rs.
311,326,387 has been spent as at the end of the year under review and
the balance amount is being held as current investment in units of
Mutual Funds and Inter Corporate Deposits as on 31s* March, 2010, in
line with the resolution passed by the members at the last AGM held on
8.8.2009.
Directors
In line with the retirement policy for Directors adopted by the Board,
Mr. D N Naik relinquished office on 8m August, 2009. Mr. Naik was one
of the first directors and played an active role in the formative years
of the Company. Through-out his long association of 29 years, Mr. Naik
made significant contributions for the growth and development and
guided the Company effectively during the turbulent years of 2000/01.
The Board has placed on record the valuable contributions made by Mr.
Naik during his tenure as Director of the Company.
Mr. N R Menon completes his term as the Managing Director of the
Company on 31st July 2010. Over the last six years, Mr. Menon has lead
the Company admirably and has been instrumental in the all round
development of the Company. The Directors place on record their sincere
appreciation of the contribution made by Mr. Menon during his tenure
as the Managing Director of the Company.
Mr. Steven A. Pinto, an accomplished banker and finance professional
was appointed as an Additional Director by the Board on 28th June, 2010
and holds office till the forthcoming Annual General Meeting of the
members of the Company. Notice under Section 257 of the Companies Act,
1956 has been received from a member signifying his intention to
propose Mr. Pintos appointment as a Director. The Board considers the
appointment of Mr. Pinto to be in the interest of the Company.
In accordance with the requirements of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. P M Telang and Mr. R S
Thakur retire by rotation and are eligible for re-appointment.
Particulars of employees
Information required under Section 217 (2A) of the Companies Act 1956,
is annexed to this report.
Energy conservation. Technology absorption and Foreign Exchange
earnings/ outgoings
Information required under Section 217 (1) (e) of the Companies Act
1956 read with Companies (Disclosure of Particulars in the Report of
Directors) Rules, 1988 and forming part of the Directors Report is
given as an annexure to this report.
Audit
Messrs Deloitte Haskins & Sells (DHS), who are the Statutory Auditors
of the Company, hold office until the ensuing Annual General Meeting.
It is proposed to re-appoint them to examine and audit the accounts of
the Company for the financial year 2010-11. The auditors have, under
Section 224(1) of the Companies Act, 1956, furnished a certificate of
their eligibility for re-appointment.
Directors Responsibility Statement
The Company complies with accounting and financial reporting
requirements in respect of the financial statements for the year under
review. Pursuant to Section 217 (2AA) of the Companies Act 1956 in
respect of the annual accounts for the year under review, based on the
representations received from the operating management, the Directors
confirm that:
i. in the preparation of the annual accounts, the applicable accounting
standards have been followed and that there are no material departures;
ii. they have, in the selection of the accounting policies, consulted
the Statutory Auditors and have applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company at the end of
the financial year and of the profit of the Company for that period;
iii. they have taken proper and sufficient care, to the best of their
knowledge and ability, for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956,
for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
iv. they have prepared the annual accounts on a going concern basis.
Acknowledgements
The Directors place on record their sincere thanks for the help and
support received from the Govt, of Goa and the Govt, and semi-Govt.
agencies. The Directors also place on record the excellent co-operation
received from the promoters, customers, vendors and the employees of
the Company.
On behalf of the Board of Directors
S V Salgaocar
Chairman
Place : Vasco-da-Gama, Goa.
Date : 1st July, 2010
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