Dear Shareholders,
The Board of Directors of your Company (Board) is pleased to present
their 41st Annual Report and the Audited Financial Statements for the Financial
year ended 31st March 2023.
1. Financial Results
(Rs. in Lakhs)
|
31st March 2023 |
31st March 2022 |
| Profit before Depreciation & Tax |
7003.61 |
6826.87 |
| Less : Depreciation |
1601.42 |
1568.00 |
| Tax Expense |
|
|
| -Current year |
1350.00 |
1496.48 |
| -Deferred Tax |
43.49 |
(166.12) |
| Add: Other Comprehensive Income |
28.49 |
11.27 |
| Total Comprehensive Income for the year |
4037.19 |
3939.78 |
| Transfers and appropriations: |
|
|
| Dividend for 2022-23 paid during the year |
179.73 |
143.79 |
| Proposed dividend |
179.73 |
179.73 |
| Balance carried forward to Reserves and Surplus |
3677.73 |
3616.26 |
The above figures are extracted from the audited financial statements
as per Indian Accounting Standards (Ind AS). There has been no change in the nature of
business activities of the Company during the year.
2. Dividend
The Board of Directors has recommended a dividend of 25% that is, Rs.
2.50 (Rupees Two and Paise Fifty Only) per equity share of the face value of Rs. 10/- each
for approval of the members at the 41st Annual General Meeting (AGM) which will
be subject to applicable tax in the hands of shareholders. This dividend will be paid when
approved by the shareholders in accordance with law and would involve a cash outflow of
Rs. 179.73 lacs.
3. General Review
Your Companys policy of undertaking modernization and upgradation on a
regular basis continues as before. During the year under review, investment on this
account has been in the region or Rs. 48.37 crores. The 3MW solar power plant at Guna unit
has been successfully commissioned and savings therefrom is expected to accrue during the
current year.
We are committed to achieve manufacturing excellence through adopting
new technology and de-bottlenecking our constraints. Savings from the modernization is
expected to be achieved during current year. War between Russia and Ukraine is resulting
in supply chain disruptions and slowdown in the manufacturing sector all over the world
particularly in Europe and America. This resulted in substantial decrease in exports due
to lack of demand overseas, over supply in domestic market affected yarn prices adversely.
Also, due to high cotton prices a part of cotton yarn production was diverted to synthetic
yarn which has caused serious over supply in the market.
Your Company, is reasonably optimistic and is evaluating all possible
avenues to maintain profitability. The efforts to keep costs under control continue with
emphasis on improved productivity and profitability.
4. Credit Rating
The Company has got the following credit rating from M/s. ICRA Limited
on 14th February 2022.
| Facility |
Amount (Rs. Crore) |
Rating / Outlook |
| On Long Term Scale |
|
|
| Fund Based Limits (Cash Credit) |
55.00 |
[ICRA] A- (Stable) |
| Fund Based Limits (Term Loan) |
16.10 |
|
| Non Fund Based Limits (Bank Guarantee) |
3.00 |
|
| Total |
74.10 |
|
| On Short Term Scale |
|
|
| Fund Based - Standby Line of Credit |
5.00 |
|
| Fund Based - Export Packing Credit (Interchangeable within
the overall fund based working capital limit) |
(15.00) |
[ICRA] A2+ |
| Fund Based - Bill Discounting (Interchangeable within the
overall fund based working capital limit) |
(15.00) |
|
| Non Fund Based |
13.00 |
|
| Total |
18.00 |
|
5. Internal Financial Control Systems
The Company maintains an adequate and effective Internal Financial
Control System commensurate with the size, scale and nature of its operations. These are
designed for safeguarding of its assets, prevention and detection of frauds and errors.
These internal control systems provide, among other things, a reasonable assurance that
transactions are executed with management authorization and that they are recorded in all
material respects to permit timely preparation of financial statements in conformity with
established accounting principles. During the year under review, the Company has not come
across any incidence of fraud.
An independent audit function is an important element of the Companys
internal control system. Internal Audit is conducted by independent Chartered Accountants,
on quarterly basis. The Internal Auditors monitor and evaluate the efficacy and adequacy
of internal control systems in the Company. Based on the reports of the Internal Auditors,
the respective departments undertake corrective actions in their respective areas and
thereby strengthen the controls. Significant audit observations and corrective actions
thereon are presented to the Audit Committee of the Board of Directors.
6. Statutory Auditors
As per Section 139 of the Companies Act, 2013, read with the Companies
(Audit and Auditors)
Rules, 2014, the members of the Company in 40th AGM had approved
appointment of M/s. Salarpuria & Partners, Chartered Accountants (ICAI Registration
No. (302113E) ("M/s. S&P") as the Statutory Auditors of the Company for a
term of five consecutive years, that is, from conclusion of 40th AGM of the Company till
the conclusion of the 45th AGM of the Company.
7. Auditors Report
The Auditors Report to the Shareholders given by M/s. Salarpuria &
Partners, Chartered Accountants, on Financial Statements of the Company for the Financial
Year 2022-23 is part of the Annual Report. The Auditors Report does not contain any
reservation, qualification or adverse remark. During the year under review, the Auditors
have not reported any matter under Section 143(12) of the Companies Act, 2013, therefore,
no detail is required to be disclosed under Section 134(3)(ca) of the Act.
8. Secretarial Audit
Pursuant to Section 204 of the Companies Act 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit
was carried out by M/s. A. Arora & Co., Company Secretaries (PCS Registration No. 993)
for the financial year 202223. The Secretarial Audit Report is annexed as Annexure - I,
and forms an integral part of this Report.
The Secretarial Report has given a comment with regard to appointment
of Smt. Asha Devi Daga aged 81 years stating that no prior approval for her appointment as
per Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015 (Listing Regulations), but in compliance with Regulation 17(1C) of
Listing Regulations, the approval of the members was taken within 3 months of her
appointment.
Your Directors have acted on good faith with regard to appointment of
Smt. Asha Devi Daga and comment as follows -
a) Although Regulation 17(1A) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (Listing Regulations) came into effect on
1.4.2019, another clause (1C) was inserted with effect from 1.1.2022 which laid down -
The listed entity shall ensure that approval of shareholders for appointment of a person
on the Board of Directors is taken at the next general meeting or within a time period of
three months from the date of appointment, whichever is earlier.
b) Even On 29th June 2021 the Board of Securities and
Exchange Board of India in its meeting held on 29.06.2021 approved the resolution for
insertion of regulation 17(1C) in SEBI (LODR) 2015 wherein Para III of the minutes stated
that approval of shareholders for appointment of all directors including independent
directors shall be taken at the next general meeting or within three months of the
appointment on the Board, whichever is earlier. The intention of the legislature for
bringing regulation 17(1C) was to give relaxation in the matter of compliance related to
the prior approval of all appointments / reappointments of directors
As per Secretarial Report, the remuneration payable to the members of
senior management of the Company was amended and enhanced by the Chairman of the Company
without the recommendation or approval of Nomination and Remuneration Committee. The
Chairman acted in good faith and approved the increase in remuneration as a routine
matter. Caution in this regard shall be taken in future.
During the year under review, the Auditors have not reported any matter
under Section 143(12) of the Companies Act, 2013, therefore, no detail is required to be
disclosed under Section 134(3) (ca) of the Act.
In terms of Section 204 of the Companies Act, 2013 read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of
Directors have appointed M/s A. Arora & Co., Company Secretaries (PCS Registration No.
993) as the Secretarial Auditors of the Company in relation to the Financial year 2023-24.
The Company has received their written consent that the appointment is
in accordance with the applicable provisions of the Act and rules framed thereunder. The
Secretarial Auditors have confirmed that they are not disqualified to be appointed as the
Secretarial Auditors of the Company for the financial year 2023-24.
9. Cost Audit
Pursuant to Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is required to make
and maintain cost records in respect of its manufacturing activities and get them audited
by a qualified Cost Accountant.
The Board of Directors have, on the recommendation of the Audit
Committee, appointed, M/s Shakti K. & Associates, Cost Accountants (ICWAI Registration
no. 11338), as Cost Auditors of the Company, to carry out cost audit of the products
manufactured by the Company for the year 2023-24. The Company has received their written
consent that the appointment is in accordance with the applicable provisions of the
Companies Act, 2013 and rules framed thereunder. They have also confirmed that they are
not disqualified to be appointed as Cost Auditors of the Company for the year 2023-24.
The remuneration of the Cost Auditor has been approved by the Board of
Directors on the recommendation of Audit Committee. As required under the Companies Act,
2013, In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with
Rule 14(a)
(ii) of the Companies (Audit and Auditors) Rules, 2014, the
remuneration payable to the Cost Auditor is required to be placed before the members in a
general meeting for their ratification. Accordingly, necessary resolution is proposed for
ratification for the remuneration payable to M/s. Shakti K. & Associates, Cost
Auditors in the Notice convening the 41st AGM.
10. Directors and Key Managerial Personnel (KMP)
(a) i) The designation of Shri Yashwant Kumar Daga (DIN 00040632), was
changed from Vice Chairman and Senior Joint Managing Director to Vice Chairman and
Joint Managing Director by removing the word Senior.
(ii) Pursuant to Section 152 of Companies Act, 2013 and Articles of
Association of the Company, Shri Yashwant Kumar Daga (DIN 00040632), retires by rotation
at the forthcoming AGM and being eligible, offers himself for re-appointment. The Board
recommends his re-appointment. The brief resume and other details as required under the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing
Regulations) read with the Secretarial Standard 2 are provided in the Notice of the 41st
AGM.
(iii) The tenure of Shri Pradip Kumar Daga (DIN 00040692) as Chairman
and Managing Director expires on 15th April 2024. In accordance with the provisions of the
Companies Act, 2013 and Articles of Association of the Company, pursuant to recommendation
of the Nomination and Remuneration Committee and approval of the Audit Committee, the
Board recommends re-appointment of Shri Daga as Chairman and Managing Director for a
period of five years with effect from 16th April 2024 till 15th April 2029 to the members
of the Company at the ensuing AGM. A suitable resolution in this behalf is being proposed
at the forthcoming AGM for the approval of the members. The brief resume and other details
as required under the Listing Regulations are provided in the Notice of the 41st AGM.
(iv) In accordance with the provisions of the Companies Act, 2013 and
Articles of Association of the Company, pursuant to recommendation of the Nomination and
Remuneration Committee and approval of the Audit Committee, Shri Shantanu Daga (DIN
08757724), Non-Executive Director of the Company has been appointed as Whole Time Director
of the Company for a period of five years with effect from 15th April 2023, till 14th
April 2028, subject to confirmation of shareholders in the forthcoming AGM. A suitable
resolution in this behalf is being proposed at the forthcoming AGM for the approval of the
members, for his appointment as Whole
Time Director of the Company. The brief resume and other details as
required under the Listing Regulations are provided in the Notice of the 41st
AGM
(v) Smt. Nilu Agrawal (DIN - 03107052) resigned from the position of
NonExecutive Independent Director with effect from 17.01.2023 due to reason of other
commitments and as a result time constraints in managing her duties towards the Company.
Your Directors wish to place on record their appreciation for the contribution made by
Mrs. Nilu Agrawal towards progress of the Company and in maintaining the efficiency of
corporate governance practices.
(vi) On the recommendations of Nomination and Remuneration Committee,
the Board of Directors has appointed Shri Sharad Agarwal (DIN - 06490590) as an Additional
Director of the Company in the Category of Independent Non-Executive Director with effect
from 15th April 2023 for a period of five consecutive years till 14th
April 2028, subject to consent of shareholders in the ensuing AGM of the Company. The
brief resume and other details as required under the Listing Regulations are provided in
the Notice of the 41st AGM.
(vii) There were no other changes in Key Managerial Personnel of the
Company.
(b) Statement on declarations given by Independent Directors
All the Independent Directors of your Company have submitted the
declarations confirming that they meet the criteria of independence as laid down under
Section 149(6) of the Companies Act 2013 and Regulation 25 read with Regulation 16 of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing
Regulations) and are eligible for continuing as Independent Directors.
All the Independent Directors of the Company have confirmed compliance
of relevant provisions of Rule 6 of the Companies (Appointment and Qualifications of
Directors) Rules, 2014.
The Board is of the opinion that the Independent Directors of the
Company possess requisite qualifications, experience and expertise and they hold highest
standards of integrity.
(c) Meetings of Board of Directors
During the year, five Board Meetings were convened and held, the
details of which are given in the Corporate Governance Report. The intervening gap between
any two consecutive meetings did not exceed the gap prescribed by the Companies Act, 2013
and the Listing Regulations.
(d) Committees of the Board
As on 31st March 2023, the Board had four Committees - the
Audit Committee, the Corporate Social Responsibility Committee, the Nomination and
Remuneration Committee and the Stakeholders Relationship Committee. During the year, all
recommendations made by the Committees were approved and accepted by the Board.
A detailed note on the composition of the Board and its Committees is
provided in the Corporate Governance Report.
(e) Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 an annual evaluation has been
made by the Board of its own performance and that of its Committees and individual
directors. A structured questionnaire for evaluation of the Board and its various
Committees and individual Directors was prepared and recommended to the Board by the
Nomination & Remuneration Committee for doing the required evaluation, after taking
into consideration the inputs received from the Directors, covering various aspects of the
Boards functioning.
A separate exercise was carried out to evaluate the performance of
individual Directors who were evaluated on parameters such as level of engagement and
contribution, independence of judgment, safeguarding the interest of the Company and its
minority shareholders, etc. The performance evaluation of the Independent Directors was
carried out by the entire Board excluding the Director being evaluated.
The performance evaluation of the Chairman and non-independent
Directors was carried out by the Independent Directors at their meeting held on
16.03.2023. The Directors expressed their satisfaction with the evaluation process.
11. Directors Responsibility Statement
The Board of Directors acknowledge the responsibility for ensuring
compliance with the provisions of Section 134(3)(c ) read with Section 134(5) of the
Companies Act, 2013 in the preparation of the annual accounts for the year ended on 31st
March 2023 and confirm as under -
a) That in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation relating to material
departures;
b) That the Directors 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 at the end of the
financial year and of the profit and loss of the Company for that period;
c) That the Directors had taken proper and sufficient care for the
maintenance 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;
d) That the Directors had prepared the annual accounts on a going
concern basis; and
e) That the Directors, had laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and were
operating effectively.
f) That the Directors had devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were adequate and
operating effectively.
12. Corporate Social Responsibility
In accordance with the requirements of Section 135 of the Companies
Act, 2013, the Company has a Corporate Social Responsibility Committee, the terms of
reference and other details of which are provided in the Corporate Governance Report. The
CSR Policy has been framed and posted on the website of the Company, www.dsl-india.com.
As required by Section 134(3)(o) of the Companies Act, 2013 and Rule 9
of the Companies (Corporate Social Responsibility) Rules, 2014, Annual Report on CSR
activities is annexed as Annexure - II and forms integral part of this report.
13. Vigil Mechanism
Pursuant to Section 177(9) of the Companies Act, 2013, read with Rule 7
of the Companies (Meetings of board and its Powers) Rules, 2014 and Regulation 22 of
listing Regulations, the Company has in place a Policy for Vigil Mechanism for reporting
of concerns of any wrongful conduct with respect to the Company or its business or
affairs.
The policy provides a framework for raising concerns by its employees
and directors against any kind of malpractices, fraud, violation of Companys policies or
rules, and other matters on account of which the interest of the Company is affected or is
likely to be affected. The policy of Vigil Mechanism is an internal policy, to make
protected disclosures on a confidential basis, to raise concerns to be appropriately dealt
with. The policy provides that all protected disclosures can be addressed to the Vigil
Officer or the Chairman, Audit Committee in certain cases.
Adequate safeguards are provided against the victimization of those who
avail of the mechanism. Complaints received, if any, by Vigil Officer are investigated by
the Vigil Officer and a report thereon is submitted to the Audit Committee.
It is affirmed that no personnel was denied access to the Vigil Officer
and the Audit Committee; and no complaints were received during the financial year
2022-23.
The Policy on Vigil Mechanism is also posted on the Companys website
www.dsl-india.com. (weblink: http://www.dsl-india.com/policies- code-of-conduct)
14. Risk Management Policy
On the recommendations of Audit Committee, Board of Directors has
formulated a Risk Management Policy for dealing with different kinds of risks which it
faces in day to day operations of the Company. The Company has an efficient Risk
Management framework to identify and evaluate business risks and opportunities.
The Audit Committee has been delegated the responsibility for
monitoring and reviewing risk management, assessment and minimization procedures. The risk
management procedures are reviewed by the Audit Committee and the Board of Directors on a
quarterly basis at the time of review of the quarterly financial results of the Company.
15. Nomination and Remuneration Policy
The Board has on the recommendations of the Nomination and Remuneration
Committee adopted a policy for selection and appointment of Directors, KMP and Senior
Management and their remuneration. The extract of Companys Remuneration Policy are
attached as Annexure-III and forms part of this report of the Board of Directors. The
weblink of the said Policy on the Companys website is http://
www.dsl-india.com/policies-code-of-conduct
16. Related Party Transactions
During the financial year 2022-23, all contracts / arrangements /
transactions entered into by your Company with Related Parties were on an arms length
pricing basis and were in the ordinary course of business and do not attract the
provisions of Section 188 of the Companies Act, 2013.
There were no materially significant transactions with related parties
during the financial year which were in conflict with the interest of the Company and
hence, enclosing of Form AOC 2 is not required. Suitable disclosures as required by the
Accounting Standard (Ind AS - 24) has been made in the notes to the Financial Statements.
All related party transactions are placed before the Audit Committee
and also before the Board for approval. Prior omnibus approval of the Audit Committee is
obtained on yearly basis for transactions which could be foreseen and are of repetitive
nature for a period of one year. The transactions entered into pursuant to the omnibus
approval so granted for review are placed before the Audit Committee on a quarterly basis.
The Policy on Related Party Transactions, as approved by the Board is
uploaded on the Companys website. None of the Directors has any pecuniary relationship or
transaction vis-avis the Company.
17. Disclosures regarding Employees
a) The Statement of Details of Remuneration as required under Section
197 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 is attached as Annexure - IV and forms a part of this Boards Report.
b) The information required under Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of
this report is given in separate annexure to this Report.
The said annexure is not being sent along with this Report to the
Members of the Company in line with the provisions of Section 136 of the Companies Act,
2013. Any member interested in obtaining a copy of the said statement may write to the
Company Secretary at the Registered Office of the Company. The aforesaid annexure is also
available for inspection by the Members at the Registered office of the Company,
twenty-one days before the 41st AGM and up to the date of the said AGM during
business hours on working days.
c) No employee, except Shri Y. K. Daga, Vice Chairman and Joint
Managing Director by himself or along with his relatives holds 2% or more of the equity
shares of the Company.
d) The Company has not received any complaint under The Sexual
Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013, during
the year. The Company is compliant of all the provisions relating to the constitution of
an Internal Complaint Committee under the said Act and rules thereunder.
18. Public Deposits
During the year, the Company has neither accepted nor renewed any
deposits from the public and as such, there are no outstanding deposits in terms of the
Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules,
2014.
19. Loans, Guarantees and Investments
The Company has not given loans, directly or indirectly to any person
or other body corporate or given guarantee or provided any security in connection with a
loan to any other body corporate or person. The Company has also not made any investments
as per the provisions of Section 186 of the Companies Act, 2013.
20. Management Discussion and Analysis Report
A report for the year under review as required under Regulation 34 and
as stipulated under Part B of Schedule V of Listing Regulations, is annexed herewith and
forms part of this report.
21. Corporate Governance :
A report on Corporate Governance as required under Regulation 34 and as
stipulated in Part C of Schedule V of Listing Regulations is annexed herewith and forms
part of this report. Compliance Certificate issued by Statutory Auditors of the Company,
regarding compliance of Corporate Governance is also annexed therewith.
22. Annual Return
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 weblink
http://www.dsl-india.com/annual-return.
23. Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo.
As required by Section 134(3)(m) of the Companies Act, 2013 and Rule
8(3) of the Companies (Accounts) Rules, 2014, information with regard to Conservation of
energy, technology absorption and foreign exchange earnings and outgo are annexed as
Annexure - V to form part of this report.
24. Statement on Investor Education and Protection Fund
Pursuant to the provisions of Section 124 of the Companies Act, 2013,
Investor Education and Protection Fund Authority (Accounting, Audit, transfer and Refund)
Rules, 2016 (IEPF Rules) read with the relevant circulars and amendments thereto, the
amount of dividend remaining unpaid or unclaimed for a period of seven years from the due
date is required to be transferred to the Investor Education and Protection Fund (IEPF
Fund) constituted by the Central Government.
Pursuant to the provisions of IEPF Rules, all shares in respect of
which dividend has not been paid or claimed by the members for seven consecutive years or
more shall also be transferred to the designated demat account of the IEPF Authority
(IEPF Demat Account) within a period of thirty days of such shares becoming due to be
transferred to the IEPF Account.
In respect of Interim Dividend for the financial year 2015-16 due for
transfer to IEPF on 21st April 2023, the Company had sent individual notices
and also advertised in the newspapers seeking action from the members who had not claimed
their dividends for seven consecutive years or more. Thereafter, the Company has
transferred such unpaid or unclaimed dividends and corresponding shares to IEPF.
Members/ claimants whose shares or unclaimed dividend have been
transferred to the IEPF Demat Account or the IEPF Fund, as the case may be, may claim the
shares or apply for a refund by making an application to the IEPF Authority in Form IEPF
-5 (available on http:// www.iepf.gov.in) . The member / claimant can file only one
consolidated claim in a financial year as per the IEPF Rules.
Details of the shares / shareholders in respect of which dividend has
not been claimed are provided on the website of the Company at
http://www.dsl-india.com/unclaimed-dividends
25. Significant and Material Orders Passed by the Regulators or Courts
There are no significant material orders passed by the regulators /
courts which would impact the going concern status of the Company and its future
operations.
26. Material Changes and Commitments
There are no material changes and commitments affecting the financial
position of the Company which occurred between the end of the financial year of the
Company to which the financial statements related to and the date of this report.
27. Compliance with Secretarial Standards
The Company has complied with applicable Secretarial Standards issued
by the Institute of Company Secretaries of India.
28. Acknowledgement
We express our sincere appreciation of the support and co-operation
extended by our Bankers, stakeholders, business associates, Central and State Governments
and district level authorities and look forward to their continued support in future. We
are pleased to record our appreciation of the efforts by each and every employee and
workman of the Company at all levels for achieving satisfactory results.
+91-9892691696
