DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting their 27TH (Twenty Seventh) Annual Report on the business and operations of the Company and the Audited Accounts for the Financial Year ended 31st March, 2016 2. PERFORMANCE : During the year under review, the Company has earned lower profit compared to the previous year due to recession, acute competition and economic slowdown. The situation of heavy pressure on margin continued in the year. Total Revenue stood at Rs. 3,808.14 Lacs from Rs. 7,050.11 Lacs i.e. reduction of 45.98% in the total revenue of the Company as compared to previous year and due to fall in total revenue the Net Profit for the year under review decreased from Rs. 225.06 Lacs to Rs. 128.23 resulting in decrease of about 43.02% of Net Profit of the Company. But overall Performance of the Company was satisfactory as compared to the peers of the Company. Further, the Company continues with its efforts to maintain growth even during the economic downturn and face new challenges. 3. DIVIDEND : Your directors are pleased to recommend the dividend @ 10% p.a. (Rs. 1/- per share) on equity shares for the year ended 31st March, 2016. The total dividend pay-out excluding dividend distribution tax shall be Rs. 30.29 Lacs. 4. SHARE CAPITAL : At present, the Company has only one class of shares - equity shares with face value of Rs. 10.00 each. The authorized share capital of the company is Rs. 350.00 Lacs divided into 35,00,000 equity shares of Rs. 10.00 each. The paid up share capital of the company is Rs. 302.85 Lacs divided into 30,28,500 equity shares of Rs. 10.00 each. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. 5. RESERVES : The Board has transferred Rs. 17.10 Lacs from Revaluation Reserve to General Reserve Account for the Financial Year ended on 31st March, 2016 as per requirement of Schedule II to Companies Act, 2013 6. DEPOSITS : Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. 7. FUTURE OUTLOOK : The Company expects the market for chemicals and dyes to grow moderately. Company is taking effective steps to improve operational efficiency to maintain the earnings. At Present many policies are being formed/adopted by the present Government, which may be beneficial to the Company in future. As crude oil prices fluctuating frequently have directly impact on the economy and in same line we expect many more positive things to happen in the global market which may have positive impact on the Company. India's stable macroeconomic environment and strong growth outlook stand out relative to other emerging markets. Growth in 2014-15 was 7.3 %, substantially higher than 6.9 % in 2013-14. This strong growth performance continued in the first quarter of 2015-16 with 7.0 % growth, compared to 6.7 % in the corresponding period of 201415. With India's ever growing requirements of energy and capacity addition planned by the Government through various initiatives, though demand is subdued at the moment, there exists substantial opportunity for future growth as the Company's products are geared up for the requirements. 8. UNCLAIMED DIVIDEND : As on 31st March, 2016, dividend amounting to Rs. 2.06 Lacs has not been claimed by shareholders of the Company. Shareholders are required to lodge their claims with the Registrar, Sharepro Services (India) Pvt. Ltd., for unclaimed dividend. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of Information regarding unpaid and unclaimed amounts lying with Companies) rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on 14th August, 2015 (date of the last Annual General Meeting) on the website of the Company (www.dynaind.com), as also on the website of the Ministry of Corporate Affairs (www.mca.gov.in). 9. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE : In accordance with the provisions of Clause (m) of Sub Section (3) of Section 134 the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the relevant information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo is given in ANNEXURE - I and forms part of this report. 10. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY : There were no such material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report which can affect the financial position of the Company. 11. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS : No such Orders have been passed by the Regulators/Court or Tribunals which can impact the going concern status and Company's operation in future. 12. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES : The Company has a Wholly Owned Subsidiary Company Named Neo Farbe Private Limited (CIN: U24100GJ2013PTC073930). It has commenced commercial operations from December, 2015. Details relating to Subsidiary Company are provided in AOC-1 the statement also provides the details of performance and financial positions of Subsidiary. 13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT BY THE COMPANY : Details of Loans, Guarantees and Investments, if any covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements. 14. MEETING OF BOARD OF DIRECTORS : During the year under the review, 5 (Five) Board Meetings were held, with gap not exceeding the period prescribed under Companies Act, 2013 and Rules made thereunder. Details of Board and Board Committee Meetings held during the year are given in the Corporate Governance Report. Board meeting dates are finalized in consultation with all Directors and agenda papers backed up by comprehensive notes and detailed background information are circulated well in advance before the date of the meeting thereby enabling the Board to take informed decisions. The intervening gap between the Board Meetings was within the period prescribed under the Companies Act, 2013. 15. EXTRACTS OF ANNUAL RETURN : An extract of Annual Return in Form MGT-9 is attached herewith as ANNEXURE-II. 16. INSURANCE : All the Properties of the Company are adequately insured. 17. RELATED PARTY TRANSACTIONS : There were no materially significant related party transactions entered between the Company, Directors, management, or their relatives except for those disclosed in the financial statements. All the contracts/arrangements/transactions entered into by the Company with the related parties during the financial year 2015-16 were in the ordinary course of business and on an arm's length basis. Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 does not form a part of this report. The Audit Committee has granted omnibus approval for Related Party Transactions as per the provisions and restrictions contained in the Listing Agreement. The company has formulated a policy on "Materiality of Related Party transactions and on dealing with Related Party Transactions'' and the same is on the company's website at <http://www.dynaind.com/investor_zone/Policies/Related%20Party%20Transaction%20Policy.pdf> The details of related party disclosure form a part of the notes to the financial statements provided in the annual report. 18. DIRECTORATE AND KEY MANAGERIAL PERSONNEL : The Board of Directors of your company has various executive and non-executive directors including Independent Directors who have wide and varied experience in different disciplines of corporate functioning. In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Harin Dhanvantrai Mamlatdarna (DIN: 00536250) retires by rotation at the ensuing Annual General Meeting and being eligible in terms of Section 164 of the Act offers himself for re-appointment. The Company had, pursuant to the provisions of Regulation 17 read with Regulation 25 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 entered into with Stock Exchanges, appointed Mr. Jatinbhai Biharilal Surti (DIN: 05195572), Mr. Pravinchandra Devidas Master (DIN: 05195587), Mr. Raghavdas Hiralal Lakhmani (DIN: 05304347) & Ms. Viraj Darshit Shah (DIN: 07220630), as an Independent Directors of the Company. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. There is change in the constitution of Board of Directors during the year Ms. Viraj D. Shah was appointed on 29th June, 2015 as Independent Women Director. As required under Section 203 of the Companies Act, 2013, the Company has Mr. Deepak Navinchandra Chokshi as Managing Director, Mr. Harin Dhanvantrai Mamlatdarna as Whole-time Director, Mr. Dinesh Jasraj Jain as Whole-time Director, Mr. Punit Leelaram Chhattani as Chief Financial Officer, Mr. Chintan Nareshkumar Amlani as Company Secretary (upto 21st April, 2016) and Mr. Harsh Rameshbhai Hirpara as Company Secretary (w.e.f. 21st April, 2016) under Key Managerial Personnel of the Company. Remuneration to Key Managerial Personnel, Senior Management and other employees will involve a balance between fixed and incentive pay reflecting short and long-term performance objectives of the employees in line with the working of the Company and its goals. 19. EVALUATION OF BOARD, COMMITTEES AND DIRECTORS : In compliance with the Companies Act, 2013 and Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the performance evaluation of the Board was carried out during the year under review. More details on the same are given in the Corporate Governance Report. 20. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS : The Board has on the recommendation of the Nomination & Remuneration Committee, formulated criteria for determining Qualifications, Positive Attributes and Independence of a Director and also a Policy for remuneration of Directors, Key managerial Personnel and senior management. 22. INDEPENDENT DIRECTORS' DECLARATION : The Company has received the necessary declaration from each Independent Director, in accordance with Section 149(7) of the Companies Act, 2013, that he/she met the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and the Regulation 16(1)(B) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 23. COMMITTEES OF THE BOARD : During the year, in accordance with the Companies Act, 2013, the Board re-constituted some of its Committees. There are currently four Committees of the Board, as follows: 1. Audit Committee 2. Corporate Social Responsibility Committee 3. Nomination and Remuneration Committee 4. Stakeholders' Relationship Committee Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the "Report on Corporate Governance", a part of this Annual Report. 24. AUDITORS : A. Statutory Auditors M/s. G. K. Choksi & Co., Chartered Accountants, Ahmadabad (FRN 101895W) were appointed as Statutory Auditors of your Company at the Annual General Meeting held on 14th August, 2014 for a term of three consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting. The Company has obtained a written confirmation under section 139 of the Companies Act, 2013 from M/s. G. K. Choksi & Co., Chartered Accountants, Ahmadabad (FRN 101895W) that their appointment, if made, would be in conformity with the limits specified under the Act. It is proposed to ratify the appointment M/s. G. K. Choksi & Co., Chartered Accountants, Ahmadabad (FRN 101895W) to audit the accounts of the Company for the financial year 2016-2017. The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. The notes to the accounts referred to in the Auditors' Report are self-explanatory and therefore do not call for any further comments. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. B. Secretarial Auditors Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Chetan R. Shah, Practicing Company Secretaries, Ahmedabad to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure IV There is no qualification, reservation or adverse remark in the report 25. INTERNAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORK : The Company has an Internal Control System, commensurate with size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. The Company has appointed M/s. VKJD & Associates, Chartered Accountant vide (FRN 128985W) as an Internal Auditors of the Company. The Audit Committee in consultation with the internal auditors formulates the scope, functioning, periodicity and methodology for conducting the internal audit. The internal auditors carry out audit, covering inter alia, monitoring and evaluating the efficiency & adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations and submit their periodical internal audit reports to the Audit Committee. Based on the internal audit report and review by the Audit committee, process owners undertake necessary actions in their respective areas. The internal auditors have expressed that the internal control system in the Company is robust and effective. The Board has also put in place requisite legal compliance framework to ensure compliance of all the applicable laws and that such systems are adequate and operating effectively. 26. RISK MANAGEMENT : Company has implemented an integrated risk management approach through which it reviews and assesses significant risks on a regular basis to help ensure that there is a robust system of risk controls and mitigation in place. Senior management periodically reviews this risk management framework to keep updated and address emerging challenges. Major risks identified for the Company by the management are Currency fluctuation, Compliances of various applicable Laws, Regulatory changes, Manufacturing & Supply, Litigation, Technological Changes and new capital investments return. The management is however, of the view that none of the above risks may threaten the existence of the Company as robust Risk mitigation mechanism is put in place to ensure that there is nil or minimum impact on the Company in case any of these risks materialize. 27. VIGIL MECHANISM AND WHISTLE BLOWER POLICY : In accordance with Section 177 of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Company has constituted a Whistle Blower Policy/ Vigil Mechanism to establish a vigil mechanism for the directors and employees to report genuine concerns in such manner as may be prescribed and to report to the management instances of unethical behavior, actual or suspected fraud or violation of the Company's code of conduct. The detail of the Whistle Blower Policy is explained in the Corporate Governance Report. None of the Non-Executive Directors has any pecuniary relationship or transactions with the Company other than sitting fees payable to them. 28. CORPORATE SOCIAL RESPONSIBILITY (CSR) : Pursuant to the provisions of section 135 of the Act, read with CSR Rules, the Company has constituted CSR committee and formulated CSR policy. The Policy primarily rests on four broad categories: Environment, Health, Education and Community Development. The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 are made and the same is enclosed as Annexure-V 29. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE : As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ('Act') and Rules made thereunder, your Company has assigned the responsibilities to Audit Committee. During the year, no complaint with allegations of sexual harassment was filed with the Company. 30. PREVENTION OF INSIDER TRADING : The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code. 31. DIRECTORS' RESPONSIBILITY STATEMENT : In accordance with the provisions of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013 and to the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors tate that- i. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; ii. 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 31st March, 2016 and of the profit and loss of the company for that period; iii. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 and Rules made thereunder for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; iv. The directors had prepared the annual accounts on a going concern basis; v. 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. vi. 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. 32. CORPORATE GOVERNANCE : As required by the Regulation 27 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 entered into with the Stock Exchanges, a detailed report on Corporate Governance is given as a part of the Annual Report. The Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Auditors' Certificate of the compliance with Corporate Governance requirements by the Company is attached to the Report on Corporate Governance. Report on Corporate Governance is given elsewhere in this Annual Report, herewith attached as ANNEXURE VI. 33. CORPORATE GOVERNANCE CERTIFICATE : The Compliance certificate from the auditors regarding compliance of conditions of Corporate Governance as stipulated in Regulation 27 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 is appended to the report on Corporate Governance, herewith attached as Annexure VII. 34. RELATED PARTY DISCLOSURE : Related Party disclosure as mentioned in Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended to the report of Director herewith attached as Annexure VIII. 35. GENERAL SHAREHOLDER INFORMATION : General Shareholder Information is given in Report on Corporate Governance forming part of the Annual Report. 36. ACKNOWLEDGMENT : Your Directors take this opportunity to express their gratitude for the unstinted commitment, dedication, hard work and significant contribution made by employees at all levels in ensuring sustained growth of the Company. Your Directors also sincerely thank to all the stakeholders, customers, vendors, bankers, business associates, government, other statutory bodies and look forward to their continued assistance, co-operation and support. For and on behalf of the Board HARIN MAMLATDARNA Chairman & Whole Time Director DIN : 00536250 Place : Ahmadabad Date : 30th May, 2016 |