Dear Members,
Your Directors have pleasure in submitting their twelfth report alongwith the financial
statements of the Company and the highlights of the performance of subsidiaries,
associates and joint venture companies and their contribution to the overall performance
of the Company for the financial year ended March 31, 2017.
Financial Highlights
|
|
|
|
(Rs Crore) |
Particulars |
Standalone |
Consolidated |
|
FY2016-17 |
FY2015-16 |
FY 2016-17 |
FY2015-16 |
Gross Revenue |
222.51 |
204.31 |
8348.10 |
7262.15 |
Less: Excise Duty |
- |
- |
916.44 |
889.55 |
Net Revenue |
222.51 |
204.31 |
7431.66 |
6372.60 |
Profit before interest, depreciation and tax |
121.06 |
87.41 |
2200.66 |
1821.10 |
Less: Interest and Financial Charges |
21.47 |
2.02 |
889.99 |
730.19 |
Profit before depreciation and tax |
99.59 |
85.39 |
1310.67 |
1090.91 |
Less: Depreciation |
5.36 |
4.36 |
602.71 |
580.87 |
Profit before tax |
94.23 |
81.03 |
707.96 |
510.04 |
Provision for current tax |
29.67 |
20.54 |
265.70 |
132.33 |
Provision for deferred tax |
1.19 |
(2.73) |
23.51 |
113.29 |
Prior year tax charge |
- |
0.74 |
(13.06) |
(0.12) |
Profit / (loss) after tax before share of profit in associates |
63.37 |
62.48 |
431.81 |
264.54 |
Less: Share of minority interest |
- |
- |
87.01 |
74.53 |
Profit / (loss) after tax |
63.37 |
62.48 |
344.80 |
190.01 |
Other Comprehensive Income |
(2.46) |
0.49 |
23.22 |
14.65 |
Total Comprehensive Income |
60.91 |
62.97 |
368.02 |
204.66 |
Add: Surplus brought forward |
192.79 |
161.09 |
942.36 |
825.79 |
Add: Amount transferred from debenture redemption reserve |
- |
- |
25.00 |
95.83 |
Add: Provision for dividend Distribution tax written back |
- |
1.64 |
- |
1.64 |
Profit available for appropriation |
253.70 |
225.70 |
1335.38 |
1127.92 |
Surplus carried forward after appropriations |
253.70 |
192.79 |
1153.25 |
942.36 |
Previous financial year figures have been restated as per IND AS.
Operations and Business Performance
The net revenue of the Company for the financial year 2016-17 has increased by 8.90%
which is Rs 222.51 crore as compared to Rs 204.31 crore in financial year 2015-16 and the
profit before tax for financial year 2016-17 has increased by 16.29% which is Rs 94.23
crore as compared to Rs 81.03 Crore in financial year 2015-16.
The performance of the Company alongwith its subsidiaries, associates and joint venture
companies (collectively "the Group") during financial year 2016-17 is a showcase
of how cement companies that have invested in the right strategy can grow across industry
cycles. The Group has focused on improving all the efficiencies parameter which in turn
has helped to improve the margins. The result is that we have been successful in
increasing gross revenue of the Group for the financial year 2016-17 by 14.95% which is Rs
8348.10 crore as compared to Rs 7262.15 crore in financial year 2015-16 and the profit
before tax for financial year 2016-17 has increased by 38.80% which is Rs 707.96 crore as
compared to Rs 510.04 crore in financial year 2015-16.
Please refer to the chapter on Management Discussion and Analysis for a detailed
analysis of the performance of the Company during the financial year 2016-2017.
The Company continues to be engaged in the same line of business during the financial
year 2016-17. There have been no material changes or commitments affecting the financial
position of the Company which have occurred between the end of the financial year and the
date of this report.
Transfer to reserves
The Company proposes to retain the entire earnings in the profit and loss account and
not to transfer any amount to the General Reserve.
Dividend
Your Directors have recommended a dividend of Rs 2.20/- (110%) per equity share of face
value of Rs 2/- each for the current financial year ended on March 31, 2017 as against
dividend of Rs 2/- (100)% per equity share paid in the immediately preceding year. The
proposed dividend is based on the financial and non-financial factors prevailing during
the year in terms of the Dividend Distribution Policy of the Company.
Credit rating
During the financial year 2016-17, CARE has reaffirmed the rating for long term and the
short term facilities at AA- and A1+ respectively, signifying the sound financial
management and the ability to meet its financial obligations.
Board of Directors, its Committees and their Meetings
During the financial year 2016-17, five Board meetings were held. Reference is invited
to the Corporate Governance Report which forms part of this Report, for the details of
Board of Directors, its Committees and their meetings.
Directors and Key Managerial Personnel
Mr. Jayesh Doshi, Whole-time Director and Chief Financial Officer, retires by rotation
at the ensuing Annual General Meeting and being eligible offers himself for
re-appointment. Mr. Jayesh Doshi has given declaration to the effect that he is qualified
to be reappointed as a Director of the Company.
The Key Managerial Personnel, namely, Mr. Jai Hari Dalmia, Managing Director, Mr. Y.H.
Dalmia, Managing Director, Mr. Jayesh Doshi, Chief Financial Officer and Whole-time
Director and Ms. Nidhi Bisaria, Company Secretary continue to hold their respective
offices during the current financial year.
The Independent Directors, namely, Mr. N. Gopalaswamy, Mr. V.S. Jain and Mr. P.K.
Khaitan have given their respective declaration of independence and have also held a
separate meeting wherein they inter alia reviewed the performance of the Non-Independent
Directors, Chairman and Board as a whole.
The details of familiarisation programmes imparted to the Independent Directors of the
Company during the financial year 2016-17 can be accessed at
https://www.dalmiabl.com/upload/ Familarisation-Programme-for-ID-2016-17.pdf.
The Nomination and Remuneration Policy of the Company on Director's appointment and
remuneration is attached as Annexure 1 and forms part of this Report.
Your Directors have conducted a formal evaluation of its own performance and of the
performance of its Committees and that of individual Directors in accordance with norms
laid down in the Nomination and Remuneration Policy of the Company and SEBI Guidance Note
on Board Evaluation.
Directors' Responsibility Statement
Your Directors state that:
(a) in the preparation of the annual accounts for the year ended March 31, 2017, the
applicable accounting standards have been followed and there are no material departures
from the same;
(b) the Directors have selected such accounting policies and applied them consistently
and made judgements 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;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting frauds and other irregularities;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) 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; and
(f) the Directors have devised proper system to ensure compliance with the provisions
of all applicable laws and that such systems were adequate and operating effectively.
Particulars of Remuneration of Directors', Key Managerial Personnel and Employees'
The particulars of remuneration to Directors and Key Managerial Personnel and other
required particulars are attached as Annexure 2 and forms part of this Report.
Further a statement showing the names and other particulars of the employees drawing
remuneration in excess of the prescribed limits is attached as Annexure 2A and
forms part of this Report.
Employees' Stock Option Scheme
The Nomination and Remuneration Committee of the Company has granted 10,67,000 stock
options, net of lapsed options, to eligible employees of your Company.
During the year, 1,72,500 stock options have vested to eligible employees and the
Nomination and Remuneration Committee allotted 1,66,500 equity shares of Rs 2/- each of
your Company upon exercise of stock options by the employees.
In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations,
2014, the details of the Stock Options granted under the Scheme are available on your
Company's website viz. www.dalmiabharat.com.
A certificate from the Statutory Auditor on the implementation of your Company's
Employees Stock Option Scheme will be placed at the ensuing Annual General Meeting for
inspection by the Members.
Subsidiaries, Associates and Joint Venture Companies
A detailed report on the highlights of performance of each of the Company's
Subsidiaries and joint ventures companies for the financial year ended March 31, 2017 in
Form AOC 1 is attached and marked as Annexure - 3 to this report. The contribution of the
Company's Subsidiaries and joint ventures companies to the overall performance of the
Company during the period under report is given under the financial highlights above.
The Company has 39 subsidiaries including step down subsidiaries, namely, Dalmia Cement
(Bharat) Limited, Dalmia Power Limited, DCB Power Ventures Limited, Kanika Investment
Limited, Adwetha Cement Holdings Limited, and the Subsidiaries of Dalmia Cement (Bharat)
Limited, viz., Ishita Properties Limited, Shri Rangam Properties Limited, Geetee Estates
Limited, D. I. Properties Limited, Hemshila Properties Limited, Arjuna Brokers &
Minerals Limited, Shri Radha Krishna Brokers & Holdings Limited, Dalmia Minerals &
Properties Limited, Sri Subramanya Mines & Minerals Limited, Sri Swaminatha Mines
& Minerals Limited, Sri Shanmugha Mines & Minerals Limited, Sri Dhandauthapani
Mines and Minerals Limited, Sri Trivikrama Mines and Properties Limited, Sri Madhusudana
Mines and Properties Limited, Cosmos Cements Limited, Sutnga Mines Private Limited,
Rajputana Properties Private Limited, Golden Hills Resort Private Limited, Calcom Cement
India Limited, Vinay Cement Limited, SCL Cements Limited, RCL Cements Limited, Adhunik
Cement Limited, Adhunik MSP Cement (Assam) Limited, Alsthom Industries Limited, Dalmia
Bharat Cements Holdings Limited, Shri Rangam Securities & Holdings Limited, JayeVijay
Agro Farms Private Limited, Dalmia Cement East Limited, Bangaru Kamakshiamman Agro Farms
Private Limited, OCL India Limited, OCL Global Limited, OCL China Limited and Odisha
Cement Limited.
During the year under review, Alsthom Industries Limited was incorporated as a
step-down subsidiary of the Company w.e.f. December 20, 2016
During the said financial year no company ceased to be a subsidiary of the Company or
its Subsidiary.
During the financial year 2016-17, Dalmia Renewables Energy Limited became an associate
of Company's subsidiary, Dalmia Cement (Bharat) Limited w.e.f. February, 2017. Apart from
this, the Company's subsidiary, Dalmia Cement (Bharat) Limited has one joint venture
company, Khappa Coal Company Private Limited, and OCL India Limited, the step down
subsidiary, has one joint venture company, Radhikapur (West) Coal Mining Private Limited.
Any Member desirous to inspect the detailed Annual Reports of any of the aforementioned
subsidiaries may inspect the same at the Registered Office of the Company during business
hours.
The policy for determining material subsidiaries may be accessed at the Company's
website at http://www.dalmiabl.com/upload/ policies/DBL-Material-Subsidiary-Policy.pdf
Schemes of Arrangement and Amalgamation
The following Schemes of Arrangement and Amalgamation, involving the subsidiaries /
step down subsidiaries of the Company, their respective shareholders and creditors, as
approved by the respective board of directors of said companies, had been filed with
jurisdictional High Courts and later transferred to jurisdictional NCLTs:
a) Scheme of Arrangement and Amalgamation involving Company's step down subsidiaries
i.e., OCL India Limited ("OCL"), Odisha Cement Limited, Dalmia Cement East
Limited, Shri Rangam Securities & Holdings Limited and Dalmia Bharat Cement Holdings
Limited ("Scheme 1").
b) Scheme of Arrangement and Amalgamation involving Company's subsidiary Dalmia Cement
(Bharat) Limited ("DCBL") and its related parties, DCB Power Ventures Limited,
Dalmia Power Limited and Adwetha Cement Holdings Limited ("Scheme 2").
c) Scheme of Arrangement involving DCBL and its subsidiaries i.e., Adhunik Cement
Limited and Adhunik MSP Cement (Assam) Limited ("Scheme 3").
All the aforesaid schemes have not come into effect since final sanction of the
jurisdictional NCLTs in respect of some of the companies are pending.
Further, the Board of Directors of the Company at their meeting held on November 5,
2016 had approved the scheme of arrangement and amalgamation amongst Odisha Cement
Limited, the Company and Dalmia Cement (Bharat) Limited ("Scheme 4"), which is
inter alia conditional upon the effectiveness of Schemes 1 and 2. Scheme 4 has been
approved by the Stock Exchanges. The said Scheme is expected to be filed before the NCLT,
Chennai, having jurisdiction over the Registered Office of the aforesaid companies
shortly.
Consolidated Financial Statements
This Annual Report also includes Consolidated Financial Statements for the financial
year 2016-17 which have been prepared based on audited Financial Statements of all the
subsidiaries including step down subsidiaries of the Company. In this regard attention is
invited to note no. 33(B) of the notes to accounts to the Consolidated Financial
Statements of the Company for the year ended March 31, 2017 which fully explains the
matter and replies to the Auditors observation under "Emphasis of Matter".
Corporate Governance Report
Your Directors believe that corporate governance is an ethically driven business
process that is committed to values aimed at enhancing the growth for the Company Your
Company's corporate governance practices are driven by strong Board oversight, timely
disclosures, transparent accounting policies and high levels of integrity in
decision-making. The Company's corporate governance practices have been detailed in the
Corporate Governance Report and same is attached together with the Auditors' certificate
thereon and forms part of this Report.
Business Responsibility Report
A separate section on Business Responsibility forms part of this Annual Report.
Extract of Annual Return
The extract of the annual return is attached in Form MGT-9 giving inter-alia details of
shareholding pattern, indebtedness, managerial remuneration and forms part of this report
as Annexure 4.
Corporate Social Responsibility (CSR)
Your Directors have constituted a Corporate Social Responsibility Committee responsible
to identify, monitor and review corporate social responsibility activities of the Company
and provide strategic direction for implementation of the corporate social responsibility
policy of the Company which can be accessed on the website of the Company at
http://www.dalmiabl.com/upload/policies/DBL-CSR-Policy.pdf.
The Committee decided to expend an amount of Rs 0.81 crore on CSR activities covering
eradication of extreme hunger and poverty, promotion of education including special
education, ensuring environmental sustainability and ecological balance, etc. health,
sanitation, education and environment sustainability. Pursuant to the said policy, the
Company has made expenses aggregating to Rs 0.81 crore towards Corporate Social
Responsibility activities during the financial year 2016-17, which is equal to 2% of
average net profits of the Company made during three immediately preceding financial
years. The Annual Report on CSR activities is attached as Annexure - 5 and forms part of
this Report.
The Group as a whole has spent Rs 10.16 crore towards Corporate Social Responsibility
activities during the said financial year.
Related Party Policy and Transactions
The policy on related party transactions may be accessed at the Company's website at
http://www.dalmiabl.com/upload/policies/ DBL-Related-Party-Policy.pdf
The particulars of material contracts or arrangements with the related parties is
attached in Form AOC 2 and forms part of this Report as Annexure - 6.
Risk Management Policy
Your Company has constituted a Risk Management Committee to review the risk management
plan / process of your Company and that the Company has adequate risk management
procedures, which are based upon business environment, operational controls and compliance
procedures. The major risks are assessed through a systemic procedure of risk
identification and classification. Risks are prioritised according to significance and
likelihood. The risk assessment is not limited to threat analysis, but also identifies
potential opportunities. The Risk Management Committee oversees the risk management
process.
Whistle Blower Policy and Vigil Mechanism
The Company has in place the Whistle Blower Policy and Vigil Mechanism with a view to
provide for adequate safeguards against victimisation of persons who use such mechanism
and provide for direct access to the Chairperson of the Audit Committee in appropriate
cases.
The policy can be accessed at the website of the Company at http:// www.dalmiabl.com/
upload/ policies/ DBL-Whistle-Blower-Policy-Vigil-Mechanism.pdf.
Disclosure 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 the Sexual Harassment of Women at the Workplace (Prevention, Prohibition &
Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress
complaints received regarding sexual harassment.
No such complaints have been received by the said Committee during the financial year
2016-17.
Loans, Guarantees, Security and Investments
The particulars of investments made and securities/guarantees given by the Company are
provided at Note Nos. 5, 8 and 29 read with 30(F) of the notes to accounts to the
Standalone Financial Statements of the Company. The details of loans given by the Company
are provided at Note Nos. 37 and 38 of the notes to accounts to the Standalone Financial
Statements of the Company.
Adequacy of Internal Financial Controls
Your Company has in place adequate internal control systems commensurate with the size
of its operations. The Company has requisite policies and procedures for ensuring the
orderly and efficient conduct of its business, including adherence to the Company's
policies, the safeguarding of its assets, the prevention and detection of fraud, error
reporting mechanisms, accuracy and completeness of the accounting records and the timely
preparation of reliable financial disclosures.
The internal control systems are subjected to regular reviews, self-assessments and
audits and based on such reviews, we believe that these systems provide reasonable
assurance that our internal financial controls are designed effectively and are operating
as intended.
Energy Conservation, Technology Absorption and Foreign Exchange Transactions
The particulars of energy conservation, technology absorption are not applicable to the
Company as it is not engaged in any manufacturing activity. The details of foreign
exchange earnings and outgo is an under:
(a) Activities relating to exports; initiatives taken to increase exports; development
of new export markets for products and services, and export plans:
The Company has not undertaken any exports during the year under review.
(b) Total foreign exchange used and earned during the year:
(i) Used: Rs 1.63 crore (ii) Earned: Hnil.
Statutory Auditors
M/s. S.S. Kothari Mehta & Co., were appointed as the Statutory Auditors of the
Company at the Annual General Meeting held on 30th September 2015 for a period of five
years subject to ratification by members of the Company every year. The Board recommends
the ratification of their appointment, till the conclusion of the next following Annual
General Meeting of the Company.
The Company has obtained from them a certificate to the effect that they are eligible
to continue as the Statutory Auditors of the Company and that they comply with the
prescribed requirements.
Secretarial Auditor and Their Report
The Board of Directors of the Company appointed Mr. R. Venkatasubramanian, Practising
Company Secretary, as the Secretarial Auditor to conduct the Secretarial Audit. The Report
of Secretarial Audit is attached in Form MR 3 and forms part of this Report as Annexure -
7.
Comments on Auditors' Observations
The Report submitted by the Statutory Auditors on the Standalone Financial Statements
of the Company and the Report by the Secretarial Auditor does not contain any
qualification, reservation or adverse remark or disclaimer. The Notes on Financial
Statements referred to in the Statutory Auditors' Report are self-explanatory and do not
call for any comments and explanation.
During the year under review, the Auditors have not reported any matter under Section
143 (12) of the Act.
Public Deposits
The Company has not accepted any deposits from public till date.
Orders passed by Regulators
There are no significant and material orders passed by the regulators or courts or
tribunals impacting the going concern status and Company's operations in future.
Acknowledgement
The Board of Directors would like to express their sincere appreciation for the
assistance and co-operation received from the Government authorities, financial
institutions, banks, customers, vendors and members during the year under review. The
Board of Directors also wish to place on record its deep sense of appreciation for the
committed services by the Company's executives, staff and workers.
|
For and on behalf of the Board |
|
P. K. Khaitan |
Place: New Delhi |
Chairman |
Dated: May 10, 2017 |
DIN-0004821 |
|