DIRECTORS' REPORT To, The Member/s, GOLKUNDA DIAMONDS & JEWELLERY LIMITED Your Directors have pleasure in submitting their 25th Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2015. DIVIDEND: Your Directors are pleased to recommend a final dividend of Rs. 0.50/- i.e. @ 5% per Equity Share for the current financial year. The dividend if approved and declared in the forthcoming Annual General meeting would result a Dividend outflow of Rs. 3,482,040/-and dividend Distribution Tax of Rs. 708,861/- aggregating a total outflow of Rs. 4,190,901/-. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND: Your Company did not have any funds as contemplated under Section 125 of the Companies Act, 2013 lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF). MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT: No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013: There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES: All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with related parties which may have potential conflict with interest of the company at large. The particulars of such contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 are attached herewith in Annexure I in Form No. AOC -2. All Related Party transactions were placed before the Audit Committee and the Board for Approval. The Policy of Related party transactions/Disclosures are approved by the Board is posted on the Company's website viz www.golkunda.com SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES: The Company does not have any Subsidiary, Joint venture or Associate Company. CHANGE IN THE NATURE OF BUSINESS: There has been no change in the nature of Business during the year under review. DEPOSITS: Your Company has neither accepted / renewed any deposits from public during the year nor has any outstanding deposits in terms of Section 77 of the Companies Act, 2013. Further there were no Deposits which are not in compliance of the requirements of Chapter V of the Act. SHARE CAPITAL: As on 31st March, 2015, the issued, subscribed and paid up share capital of your Company stood at Rs. 69,640,800./- (Rupees Six Crores Ninety Six Lacs Forty Thousand Eight Hundred Only), comprising 6,964,080 (Sixty Nine Lacs Sixty Four Thousand Eighty) Equity shares of Rs.10/- each. The Company has neither issued shares with differential voting rights nor granted any stock options or sweat equity or Bonus Shares. Further, the Company has not bought back any of its securities during the year under review. INTERNAL FINANCIAL CONTROLS: The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW: During the financial year under review, the Company had 8 (Eight) Board meetings on 26.05.2014, 10.06.2014, 14.08.2014, 27.09.2014, 13.11.2014, 13.02.2015, 24.02.2015 and 02.03.2015. DIRECTORS AND KEY MANAGERIAL PERSONNEL: Pursuant to provisions of Companies Act, 2013 and in terms of SEBI Circular dated April 17, 2014 requiring all Listed Companies to mandatorily have a 'Woman Director' on the Board, the Company inducted Ms. Roli Gupta (DIN: 07109930), as an Non Executive Independent Director with effect from March 02, 2015. Appointment of Ms. Roli Gupta was approved by the members of the Company vide Extraordinary General Meeting held on 24.04.2015. Mr. Arvind Dadha retire at this Annual General Meeting and being eligible offer themselves for re election. Appointment of Mr. Kanti Kumar Dadha and Mr. Ashish Dadha has been recognized as Key Managerial Personnel of the Company in terms of Section 203 of the Companies Act, 2013 in the position of Managing Director and Chief Financial Officer (CFO) respectively. Ms. Priya Khandelwal has resigned as Company Secretary of the Company w.e.f. 02.06.2014 during the year under review. The Company has appointed Ms. Pooja Sanghavi as Company Secretary and Compliance Officer of the Company w.e.f. 02.05.2015. DIRECTORS RESPONSIBILITY STATEMENT: In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:— (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) 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) 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) the directors had prepared the annual accounts on a going concern basis; (e) that the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year; and (f) 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. BOARD EVALUATION: Pursuant to provisions of Companies Act, 2013, Schedule IV and Clause 49 of the Listing Agreement, the Board has carried out an Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. In line with effective governance requirements, the Board reviews its own performance annually using a pre-determined template designed as a tool to facilitate the evaluation process. The assessment was built around the functioning of the Board as a whole, its Committees and also the evaluation of Individual Directors. While the individual directors' performance was reviewed by the Chairman and the rest of the Board excluding the Director being evaluated, the Chairman's and Non-independent Directors performance was appraised through feedback from Independent Directors. AUDIT COMMITTEE: The Audit Committee consists of the following members: During the year under review, the Board has accepted all the recommendation of the Audit Committee. WHISTLE BLOWER POLICY / VIGIL MECHANISM: In Compliance with the provisions of section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has adopted a Whistle Blower Policy as a vigil mechanism for directors and employees of the Company. The Whistle Blower Policy is disclosed on the Company's website www.golkunda.com FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS: Pursuant to requirements of Clause 49 of the Listing Agreement, the Company has a familiarization programme for Independent Directors with regard to their role, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc. The Board Members are provided with all necessary documents/ reports and internal policies to enable them to familiarise with the Company's procedures and practices and keep themselves abreast of the latest corporate, regulatory and industry developments. The same has been posted on website of the Company viz; www.golkunda.com RISK MANAGEMENT: The Company has constituted Risk Management Committee and it comprises of Mr. Kanti Kumar Dadha as Chairman of the Committee and Mr. Arvind Dadha and Mr. Karan Singh Baid as Members of the Committee. The Company has formulated Risk Management Policy which provides an overview of the principles of risk management, explains approach adopted by the Company for risk management, develops a "risk" culture that encourages all employees to identify risks and associated opportunities and to respond to them. The Risk Management Committee (RMC) maintains comprehensive oversight on all risks and its management and provides guidance on risk Management activities, reviews results of risk assessment and mitigation plan development process, review and monitor working of risk management process and report to the Board of Directors on the status of risk management initiatives and their effectiveness. The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. CORPORATE SOCIAL RESPONSIBILITY: In accordance with the provisions of Section 135 of the Companies Act, 2013 and Companies (CSR Policy) Rules. 2014, the Company has formulated and posted CSR Policy on website of the Company viz; www.golkunda.com The Annual Report on CSR activities in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, undertaken by the Company during the year is attached as an 'Annexure II' to this Report. NOMINATION & REMUNERATION COMMITTEE: In compliance with the provisions of Companies Act, 2013, your Company re-aligned its existing 'Remuneration Committee' as 'Nomination & Remuneration Committee' with an enhanced scope and functions as stipulated under new law. The Nomination & Remuneration Committee comprises of Mr. Mangilal Maloo as Chairman and Mr. Gautam Chand Dadha and Mr. B. K. Ashok as members of the Committee. STAKEHOLDERS RELATIONSHIP COMMITTEE: Your Company re-aligned its existing 'Shareholders Grievance & Share Transfer Committee' as 'Stakeholders Relationship Committee' with enhanced scope and functioning. The Stakeholders Relationship Committee comprises of Mr. Mangilal Maloo as Chairman and Mr. Gautam Chand Dadha and Mr. B. K. Ashok as members of the Committee. SECRETARIAL AUDIT REPORT: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Nilesh Shah & Associates, Company Secretary in Practice, to undertake the Secretarial Audit of the Company for the year ended March 31, 2015. The Secretarial Audit Report is annexed herewith as an 'Annexure III'. "EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS: There are no adverse qualification, reservations or remarks in the statutory auditors report. Other observations made by statutory auditors in their report read together with information and explanation given in financial statements along with notes to accounts are self explanatory and do not call for further explanation. As regards to observation of Secretarial Auditor regarding non-appointment of company secretary in the capacity of Key Managerial Personnel, the Board state that after resignation of previous company secretary, the Company has taken steps to find the suitable candidate and has appointment Ms. Pooja Sanghavi as Company Secretary w.e.f. 02.05.2015." NOMINATION AND REMUNERATION POLICY: Pursuant to provisions of Section 178 of the Companies Act, 2013, the Board has, on recommendation of Nomination & Remuneration Committee, formulated a Policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178(3) of Companies Act, 2013. Nomination and Remuneration Policy has been annexed to the Corporate Governance Report. STATUTORY AUDITORS: M/s. Motilal & Associates, Chartered Accountants, were appointed as the Statutory Auditors for a period of 5 years in the Annual General Meeting held on 27.09.2014. Their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if their appointment is ratified, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. DETAILS OF FRAUD REPORTED BY AUDITORS: There were no frauds which are reported to have been committed by employees or officers of the Company. The statutory auditors of the Company have vide their report of even date confirmed that no fraud by the Company and no material fraud on the Company has been noticed or reported during the year. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. EXTRACTS OF ANNUAL RETURN: The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in 'Annexure IV' and is attached to this Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: (A) CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION Conservation of energy: The Company is engaged in manufacturing of gems and jewellery and as such its operations do not account for substantial energy consumption. However, the Company is taking all possible measures to conserve energy. Several environment friendly measures were adopted by the Company such as Installation of capacitors to save power, Installed Thin Film Transistor (TFT) monitors that saves power, lEd Lights, Creating environmental awareness by way of distributing the information in electronic form, Minimising air-conditioning usage, Shutting off all the lights when not in use. Technology absorption: The Company follows the hybrid model to improve, optimize, cost efficiency, agility and manage costs through usage of infrastructure as per business cycles and needs. The activities and business of the Company are such that it does not involve use of ultra modern technologies. B) FOREIGN EXCHANGE EARNINGS AND OUTGO Foreign Exchange Earning: Rs. 927,593,205/-Foreign Exchange Outgo: Rs. 216,251,335/- EMPLOYEES: Information on particulars of employees' remuneration as per Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is reported to be nil as there are no employees who are in receipt of remuneration above the prescribed limit. The ratio of remuneration of each director to the median employee's remuneration and other details in terms of Sub - Section 12 of Section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this Report as 'Annexure V'. DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: There were no instances / complaints reported under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. CORPORATE GOVERNANCE: A separate section covering the Management Discussion and Analysis and Corporate Governance as per the requirements of Clause 49 of the Listing Agreement is attached herewith and forms a part of this report. CEO / CFO CERTIFICATION: In accordance with the provisions of the Listing Agreement pertaining to Corporate Governance norms, Mr. Kanti Kumar Dadha, Managing Director and Mr. Ashish Dadha, Chief Financial Officer, has certified, inter-alia, on review of financial statements and establishing and maintaining internal controls for the financial year ended 31.03.2015. ACKNOWLEDGMENTS: Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors deeply appreciate the committed efforts put in by employees at all levels, whose continued commitment and dedication contributed greatly to achieving the goals set by your Company. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS GOLKUNDA DIAMONDS AND JEWELLERY LIMITED KANTI KUMAR DADHA Chairman & Managing Director Date: 14.08.2015 Place: Mumbai |