DIRECTORS’ REPORT Your Directors have pleasure in presenting their 33rd Annual Report and the audited financial statement for the financial year ended March 31, 2015. STATE OF COMPANY’S AFFAIRS & BUSINESS OPERATIONS The Company’s Net Revenue from operations has increased from Rs. 513,952,947/- (Rupees Fifty One Crore Thirty Nine Lakhs Fifty Two Thousand Nine Hundred And Forty Seven) during the FY 2014-15 as compared to the Revenue of Rs. 31,094,911/- (Rupees Three Crores Ten Lakhs Ninety Four Thousand Nine Hundred and Eleven) earned from the FY 2013-14. Total expenses (including depreciation and finance costs) incurred during the FY 2014-15 have increased to Rs. 511,991,477.61 as compared to the total expenses of Rs. 30,097,117.09 incurred during the FY 2013-14. The Profit after tax (PAT) for the FY 2014-15 was at Rs. 1,355,375.39 as compared to Rs. 698,481.91 reported in the previous year. TRANSFER TO RESERVES:- The credit balance of Profit and Loss account is transferred to reserves in Balance sheet. DIVIDEND: Your Directors decided to plough back the profit and therefore dividend is not declared. HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES The Company did not have any Holding Company during the financial year 2014-15. EXTRACT OF THE ANNUAL RETURN An extract of the Annual Return for the year ended March 31, 2015 as provided under sub-section (3) of Section 92 and prescribed under Rule 12 of Companies (Management & Administration) Rules, 2014 is attached as “ANNEXURE-I” and forms part of this report. SHARE CAPITAL During the year under review, there was no change in the capital structure of the Company. Company was having Authorized share capital of Rs. 202,500,000/- at the beginning of the year and it was same till the end. RELATED PARTIES TRANSACTIONS All the transactions with related parties are in the ordinary course of business and on arm’s length basis. The details of the transactions entered into between the Company and the related parties on an arms length basis is given in AOC-2 as “ANNEXURE II”. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013 The particulars of loans are mentioned under schedule 8 of the Balance Sheet hereunder. All the loans provided are repayable on demand and carried interest rates as per the industrial standards.. The details of the investments under Section 186 of the Companies Act, 2013 are provided above. MATERIAL EVENTS THAT HAVE OCCURRED AFTER THE BALANCE SHEET DATE No material events have occurred in the Company after the date of Balance Sheet. IMPACTING ON GOING CONCERN STATUS AND COMPANY’S OPERATIONS There have been no significant and material orders passed by any regulators or courts or tribunals impacting the going concern status and company’s operations in future. COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION The Policy of the Company on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178, is appended as Annexure I to this Report. DIRECTORS: At present Board of the Company consist of 7 (Seven) Directors who are eligible to act as Director of the Company. None of the Directors are pending for confirmation at this 33rd Annual General Meeting of the Company. However, Mr. Vineet Chowdhary (DIN:00182931) who holds office longest in the Board is liable to retire by rotation and being eligible offer himself for re-appointment. Mrs. Sarika Chowdhary (DIN: 00182952) has resigned from the Board of the Company during the year under review w.e.f. December 2, 2014. DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 with respect to the directors’ responsibility statement, it is hereby confirmed that: (a) in the preparation of the annual accounts for the year ended March 31, 2015 the applicable Accounting standards had been followed along with proper explanation relating to the material departures; (b) the directors of the Company had selected such accounting policies and 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, as at March 31, 2015 and profit of the Company for the year ended March 31, 2015. (c) the directors of the Company had taken proper and sufficient care for the maintenance of proper accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the directors of the Company had prepared the accounts of the Company for the financial year ended March 31, 2015 on a going concern basis and; (e) the directors of the Company had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. RISK MANAGEMENT The Company, like any other enterprise, is exposed to business risk which can be an internal risks as well as external risks. Any unexpected changes in regulatory framework pertaining to fiscal benefits and other related issue can affect our operations and profitability. However the Company is well aware of the above risks and as part of business strategy has formulated a Risk Management Policy The Risk Policy approved by the Board, clearly lays down the roles and responsibilities of the various functions in relation to risk management covering a range of responsibilities, from the strategic to the operational. These role definitions, inter alia, provide the foundation for your Company's Risk Management Policy and Framework that is endorsed by the Board and is aimed at ensuring formulation of appropriate risk management procedures, their effective implementation across the Company and independent monitoring and reporting by Internal Audit. Backed by strong internal control systems, the Company is in the process of implementing the current Risk Management Framework that consists of the following key elements: • The Corporate Risk Management policy facilitates the identification and prioritization of strategic and operational risks, development of appropriate mitigation strategies and conducts periodic reviews of the progress on the management of identified risks • A combination of risk policy and unit wise evolved procedures brings robustness to the process of ensuring that business risks are effectively addressed. • Appropriate structures are in place to proactively monitor and manage the inherent risks in businesses with unique / relatively high risk profiles. • A strong and independent Internal Audit function at the corporate level carries out risk focused audits across all businesses, enabling identification of areas where risk management processes may need to be strengthened. The Board of Directors reviews Internal Audit findings, and provides strategic guidance on internal controls. The Board of Directors closely monitors the internal control environment within the Company including implementation of the action plans emerging out of internal audit findings. • At the Business level, Internal Audit Department personnel continuously verify compliance with laid down policies and procedures, and help plug control gaps by assisting operating management in the formulation of control procedures for new areas of operation. • The periodical planning exercise requires all units to clearly identify their top risks and set out a mitigation plan with agreed timelines and accountability. Top Management and Unit heads confirm periodically that all relevant risks have been identified, assessed, evaluated and that appropriate mitigation systems have been implemented. The combination of policies and processes as outlined above is expected to adequately address the various risks associated with your Company's businesses. Annual evaluation by the Board The evaluation framework for assessing the performance of Directors comprises of the following key areas: i. Attendance of Board Meetings and Board Committee Meetings ii. Quality of contribution to Board deliberations iii. Strategic perspectives or inputs regarding future growth of Company and its performance iv. Providing perspectives and feedback going beyond information provided by the management v. Commitment to shareholder and other stakeholder interests The evaluation involves Self-Evaluation by the Board Member and subsequently assessment by the Board of Directors. A member of the Board will not participate in the discussion of his / her evaluation. BOARD COMMITTEES The Company has the following Committees of the Board: 1. Audit Committee 2. Stakeholders Relationship Committee 3. Nomination & Remuneration Committee The composition of each of the above Committees, their respective role and responsibility is as detailed in the Report of Corporate Governance. BOARD INDEPENDENCE: Our definition of ‘Independence’ of Directors is derived from Clause 49 of the Listing Agreement with Stock Exchanges and Section 149(6) of the Companies Act, 2013. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act,2013:- CORPORATE SOCIAL RESPONSIBILITY (CSR) Social Welfare Activities has been an integral part of the Company since inception. The Company is committed to fulfill its social responsibility as a good corporate citizen. The Companies Act, 2013, pursuant to the provision of Section 135, has laid down the requirement for constitution of Corporate Social Responsibility Committee, which shall be responsible for laying down the CSR Policy, to a certain class or classes of Companies. However, our Company does not fall under the requisite criteria and thus the compliance with the relevant provision of the Companies Act, 2013 is not applicable. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Board of Directors of Dalmia Industrial Development Limited is committed to maintain the highest standard of honesty, openness and accountability and recognize that employees have important role to play in achieving the goal. The Company's Whistleblower Policy encourages Directors and employees to bring to the Company's attention, instances of unethical behavior and actual or suspected incidents of fraud or violation of the conduct that could adversely impact the Company's operations, business performance and / or reputation. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes appropriate action to ensure that the requisite standards of professional and ethical conduct are always upheld. It is the Company's Policy to ensure that no employee is victimized or harassed for bringing such incidents to the attention of the Company. The practice of the Whistleblower Policy is overseen by the Board of Directors and no employee has been denied access to the Committee. The Whistleblower Policy is available on the Company's website www.dalmiaindustry.co.in INTERNAL FINANCIAL CONTROL The Company believes that internal control is a necessary concomitant of the principle of prudent business governance that freedom of management should be exercised within a framework of appropriate checks and balances. The Company remains committed to ensuring an effective internal control environment that inter alia provides assurance on orderly and efficient conduct of operations, security of assets, prevention and detection of frauds/errors, accuracy and completeness of accounting records and the timely preparation of reliable financial information. The Company's independent and Internal Audit processes, both at the Business and Corporate levels, provide assurance on the adequacy and effectiveness of internal controls, compliance with operating systems, internal policies and regulatory requirements. The Financial Statements of the Company are prepared on the basis of the Significant Accounting Policies that are carefully selected by management and approved by the Board. These, in turn are supported by a set of divisional Delegation Manual & Standard Operating Procedures (SOPs) that have been established for individual units/ areas of operations. The Company has in place adequate internal financial controls with reference to the Financial Statements. Such controls have been tested during the year and no reportable material weakness in the design or operation was observed. Nonetheless the Company recognizes that any internal financial control framework, no matter how well designed, has inherent limitations and accordingly, regular audit and review processes ensure that such systems are reinforced on an ongoing basis. The Company is in process of appointing an internal auditor to oversee the internal audit mechanism and the same will be done at the earliest. CHANGE OF MANAGEMENT / OPEN OFFER: During the previous year under review, there has been no change in the management of the Company. SHIFTING OF REGISTERED OFFICE: The registered office of the Company has not changed during the year under review. NO. OF MEETINGS OF THE BOARD: The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. The Board / Committee Meetings are pre-scheduled and a tentative annual calendar of the Board and Committee Meetings is circulated to the Directors in advance to facilitate them to plan their schedule and to ensure meaningful participation in the meetings. However, in case of a special and urgent business need, the Board’s approval is taken by passing resolutions through circulation, as permitted by law, which are confirmed in the subsequent Board meeting. The Board met 13(Thirteen) times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013. The maximum interval between any two meetings did not exceed 120 days as prescribed under the Companies Act, 2013.. DECLARATION BY INDEPENDENT DIRECTORS The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. BOARD EVALUATION Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the nomination and remuneration committee. None of the independent directors are due for re-appointment. AUDITORS AND AUDITOR’S OBSERVATIONS: M/s R.K.P Associates, Chartered Accountants, Mumbai, hold office up to the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their appointment for a term of four consecutive years from the conclusion of thirty third Annual General Meeting up to the conclusion of thirty seventh Annual General Meeting of the Company in the calendar year 2019. The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment. COMMENTS ON AUDITORS’ REPORT There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. R.K.P Associates, Chartered Accountants, in their Audit Report. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review. All observations of Auditors are self explanatory and therefore do not call for any further comments by Directors in this report. SECRETARIAL AUDITOR & SECRETARIAL AUDITORS’ REPORT Mr. Amit R Dadheech & Associates, Practicing Company Secretaries, Mumbai was appointed to conduct the Secretarial Audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules there under. The secretarial audit report for FY 2014-15 forms part of the Annual Report as “ANNEXURE III” to the Board Report. DEPOSITS The Company has not accepted any deposits within the meaning of Chapter V of The Companies Act, 2013 during the year under review. No deposit remained unpaid or unclaimed as at the end of the year and accordingly there has been no default in repayment of deposits or payment of interest thereon during the year. COST AUDITORS Cost Audit is not applicable to the Company during the financial year under review. CORPORATE GOVERNANCE: The Company is committed to maintaining the highest standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by Securities and Exchange Board of India. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 is also published elsewhere in this Annual Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH &DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO (a) Energy conservation measures taken : Nil (b) Additional investments and proposals if any, being implemented for reduction of consumption of energy : Nil (c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods : Nil (d) Total energy consumption and energy consumption per unit of production : Nil FORM-A: FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY A. Power and fuel consumption : Nil B. Consumption per unit of production : Nil TECHNOLOGY ABSORPTION FORM-B: FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION ETC., I Research and Development : Nil II Technology Absorption, Adaptation and Innovation : Nil FOREIGN EXCHANGE EARNINGS AND OUTGO I. Earnings in Foreign Exchange during the year : Nil II. Foreign Exchange outgo during the year : Nil ANTI SEXUAL HARASSMENT POLICY The Company is committed to provide a protective environment at workplace for all its women employees. To ensure that every woman employee is treated with dignity and respect and as mandated under “The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013”. The Company has in place an Anti Sexual Harassment Policy in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. An Internal Committee has been set up to redress the complaints received regarding sexual harassment at workplace. All employees including trainees are covered under this policy. The following is the summary of sexual harassment complaints received and disposed off during the current financial year. Number of Complaints received : Nil Number of Complaints disposed off : Nil PARTICULARS OF EMPLOYEES Particulars of employees as required to be disclosed in terms of Section 134 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are made available at the registered office of the Company. The members desirous of obtaining the same may write to the Company Secretary at the registered office of the Company. ACKNOWLEDGEMENTS Your directors express their appreciation for the sincere co-operation and assistance of Central and State Government authorities, bankers, suppliers, customers and business associates. Your directors also wish to place on record their deep sense of appreciation for the committed services by your company’s employees. Your directors acknowledge with gratitude the encouragement and support extended by our valued shareholders. By order of the Board Dalmia Industrial Development Limited SD/- Vikash Chowdhary Chairman and Managing Director DIN: 00182941 Date: September 01, 2015 Place: Kolkatta |