To,
The Members,
Your Directors have pleasure in submitting their 32nd Annual Report of the Company together with the Audited Statements of Accounts for the year ended March 31, 2024.
1. FINANCIAL RESULTS:
The summarized standalone results of your Company are given in the table below:
(Rs. in Lakh except per share)
2. DIVIDEND:
As the Company is incurring the lossess during the year under review, your Directors do not recommend Dividend for the financial year 2023-24..
3. FINACIAL PERFORMANCE AND OPERATIONAL REVIEW:
During the year under review, the Company earned total revenue of Rs. 71.11 Lakh in FY24 as compared to Rs. 104.70 Lakh in FY23. Loss After Tax stood at Rs. 190.22 Lakh in FY24 as compared to
Rs. 213.36 Lakh in FY23.
4. SHARE CAPITAL:
As on March 31, 2024, the Authorized share capital of the Company stood at Rs. 6,50,00,000/- (Rupees Six Crore Fifty Lakh Only) divided into 65,00,000 (Sixty Five Lakh) equity shares of Rs. 10/- ( Rs. Ten) Each.
As on March 31, 2024, the issued, subscribed and paid up Equity share capital of your Company stood at Rs. 6,00,00,000/- ( Rupees Six Crore Only) divided into 60,00,000 (Sixty Lakh) Equity shares of Rs. 10/- ( Rs. Ten) each.
5. TRANSFER TO GENERAL RESERVES:
The Company doesn't propose to transfer any amount to General Reserve.
6. INTERNAL FINANCIAL CONTROLS:
The internal financial controls with reference to the Financial Statements commensurate with the size and nature of business of the Company. Further Directors have personally overviewed the adequacy of internal controls and also appointed M/s. SPSJ & Associates LLP. as the Internal Auditor to manage the internal controls of the Company w.e.f April 01, 2024.
In addition to Internal Audit, the Company has implemented well established internal financial practices, tool for mitigating risk in order to ensure adequate internal financial control commensurate with the size of the Company.
7. FINANCIAL LIQUIDITY:
Cash and Cash Equivalent as at March 31, 2024 was Rs. 751.91 Lakh. The Company's working capital management is based on a well-organized process of continuous monitoring and control on Receivables, Inventories and other parameters.
8. RELATED PARTY TRANSACTIONS:
All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted. Thus, disclosure in form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. Further, there are no material related party transactions entered during the year under review with the Promoters, Directors or Key Managerial Personnel. All Related Party Transactions, if any, are placed before the Audit Committee. Further all the Related Party Transaction are disclosed in Financial Statement forming part of the Annual Report
9. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Company has a Vigil Mechanism/Whistle Policy under which it established a Whistle Blower Policy/Vigil Mechanism.
This policy seeks the support of employees, channel partners and vendors to report Significant deviations from key management policies and report any non-compliance and wrong practices, e.g., unethical behavior, fraud, violation of law, inappropriate behavior/conduct etc.
The Vigil Mechanism/Whistle Blower policy cover serious concerns that could have grave impact on the operations and performance of the business of Daikaffil Chemicals India Limited. A Vigil (Whistle Blower) mechanism provides a channel to the employees and directors to report to the management concerns ethical behavior, actual or suspected fraud or violation of the code of conduct mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and provide for direct access to the Chairman of the Audit Committee in exceptional cases.
The policy neither releases employees from their duty of confidentiality in the course of their work nor can it be used as a route for raising malicious or unfounded allegations against people in authority and/or colleagues in general.
The detailed Vigil Mechanism/Whistle Blower Policy of the Company is uploaded on the Company's website may be accessed on the Company's website.
10. CODE OF CONDUCT:
All the Board Members and the Senior Management personnel have confirmed compliance with the Code.
11. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
The Nomination and Remuneration Committee of the Board formulated a Policy relating to the remuneration of Directors, Key Managerial Personnel and other Employees which, inter alia, prescribes the criteria for determining qualifications, positive attributes and independence of Directors. The Policy is available on the web site of the Company www.daikaffil.com.
12. PREVENTION OF INSIDER TRADING:
Pursuant to the SEBI (Prohibition of insider trading) Regulations, 2015, the Company has formulated and adopted a Code for 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.
13. CORPORATE GOVERNANCE REPORT:
The paid-up capital of the Company is Rs. 6,00,00,000/- (Rupees Six crore) i.e. less than Rs. 10 crore and the Net-worth of the Company is less than 25 crore as on the last day of the previous financial year.
Pursuant to regulation 15(2) of SEBI (LODR) Regulations, 2015 the compliance with the corporate governance provisions as specified in regulations 17, 18, 19, 20, 21,22, 23, 24, 24A, 25, 26, 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C, D and E of Schedule V SHALL NOT apply, in respect of those listed entities whose paid up equity share capital does not exceed rupees ten crore and net worth does not exceed rupees twenty five crore, as on the last day of the previous financial year. Accordingly, your Company is exempt from attaching Corporate Governance report
14. RISK MANAGEMENT POLICY:
The Board has been vested with specific responsibilities in assessing of risk management policy, process and system. The Board has evaluated the risks which may arise from the external factors such as economic conditions, regulatory framework, competition etc. The Executive management has embedded risk management and critical support functions and the necessary steps are taken to reduce the impact of risks. The Independent Directors expressed their satisfaction that the systems of risk management are defensible.
15. INDUSTRIAL RELATIONS:
During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.
16. CORPORATE SOCIAL RESPONSIBILITY:
The provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, were not applicable to the Company for the financial year ended March 31, 2024.
17. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does't have Subsidairy or Associate Company. However, during the year under review. Share Purchase Agreement dated November 08, 2023 ("Share Purchase Agreement") was executed among the Promoter Sellers, Other Selling Shareholders of Daikaffil Chemicals India Limited ("Daikaffil") and Mikusu India Private Limited (Mikusu) along with Heranba Industries Limited ("Heranba").
Pursuant to the said Share Purchase Agreement, Mikusu acquired 29,08,719 (Twenty Nine Lakh Eight Thousand Seven Hundred and Nineteen) Equity Shares, which constitutes 48.48% (Forty Eight point Forty Eight percent) of the Equity and Voting Share Capital of Daikaffil from the Promoter Sellers and Other Selling Shareholders of Daikaffil.
As Mikusu is 100% Wholly owned Subsidiary Company of Heranba and the Mikusu has a defacto control on Daikaffil being the single largest shareholder who has controlling votes at the AGM of the Company. Hence, Daikaffil is considered as the Subsidiary Company of Mikusu and in turn a Step-Down Subsidiary of Heranba Industries Limited.
18. DIRECTORS & KMP: a. Appointment/Re-appointment/Resignation of Directors:
At the ensuring Annual General Meeting, Mr. Sadashiv K. Shetty (DIN: 00038681), would retire by rotation and being eligible for the re-appointment, offers himselves for re-appointment.
During the year under review following appointments and resignations took place:
During the year under review, the Non-Executive Directors of the Company had no material pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.
Details of the Directors seeking appointment/re-appointment including a profile of these Directors, are given in the Notice convening the 32nd Annual General Meeting of the Company.
Based on the confirmations received, none of the Directors are disqualified for appointment under Section 164(2) of Companies Act, 2013.
b. Key Managerial Personnel (KMP):
Pursuant to Section 2(51) read with Section 203 of the Companies Act, 2013 read with Rules made thereunder, the following persons has been designated as Key Managerial Personnel of the Company as on March 31, 2024 under the Companies Act, 2013: (a) Ms. Alesha Khan, Company Secretary
(b) Mr. Sunil Shedge, Chief Financial Officer
c. 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 read with rules framed thereunder and SEBI (LODR) Regulation.
In the opinion of the Board, the independent directors are, individually, person of integrity and possess relevant expertise and experience.
In terms of regulation 25(8) of the Listing Regulations, they have confirmed that they are not aware of any circumstances or situation which exist or may be reasonably anticipated that could impair or impact their ability to discharge their duties. Based on the declarations received from the independent directors, the Board has confirmed that they meet the criteria of independence as mentioned under regulation 16(1)(b) of the Listing Regulations and that they are independent of the management.
d. Annual Evaluation:
Pursuant to the provisions of the Companies Act, 2013 the Board has carried out the annual performance evaluation of its own performance, its committees and that of its individual Directors. The evaluation was done based on set questionnaires which were given to them at the time of evaluation.
e. Personnel:
Industrial relations at the Company's factory and other establishments remained cordial during the year. We appreciate the contribution made by the employees.
f. Remuneration Policy for the Directors, Key Managerial Personnel and other Employees:
In terms of the provisions of Section 178(3) of the Act, the Nomination & Remuneration Committee is responsible for formulating the criteria for determining qualification, positive attributes and independence of a Director. The Nomination & Remuneration Committee is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personal and other employees. In line with this requirement, the Board has decided to form Remuneration Committee.
19. MEETING OF BOARD AND COMMITTEEE:
During the financial year under review the Board met 7 times, Audit Committee met 4 times, Nomination and Remuneration Committee met 2 times and Stakeholders Relationship Committee met 1 time. The details are given below:
a. Meetings of the Board and Attendance thereof:
The Board met 7 (Seven) times during the financial year ended March 31, 2024 on the below mention date:
* Separate Board Meeting of Independent Director.
Directors Attendance Record:
*Note: Mr. Sudhir Patel was resigned from the Board with effect from November 07, 2023.
b. Meetings of the Audit Committee and Attendance thereof:
The committee met 4 (Four) times during the financial year ended March 31, 2024. Thsese meetings were held on May 22, 2023, August 11, 2023, November 03, 2023 and February 12, 2024.
c. Meetings of the Nomination and Remuneration Committee and Attendance thereof:
The committee met 2 (Two) times during the financial year ended March 31, 2024. Thsese meetings were held on May 22, 2023 and November 03, 2023.
d. Meetings of the Stakeholders Relationship Committee and Attendance thereof:
The committee met 1 (One) time during the financial year ended March 31, 2024 on November 03, 2023.
20. AUDITORS: a. Statutory Auditor:
M/s. NGST & Associates, Chartered Accountants, Mumbai, bearing Firm Registration Number: 135159W were appointed by the members at their 30th Annual General Meeting held in 2022 for five years.
Further, there is no qualification, adverse remark or observation in their audit report. However, there is emphasis on matter cited by the auditor which is self-explanatory.
No instance of fraud was reported by the Auditors during the year.
The Company has received Eligibility certificate letter from NGST & Associates, Chartered Accountants, Mumbai, to the effect that their appointment, is within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for appointment.
b. Secretarial Standards:
The Directors confirm that the Company is in compliance with applicable secretarial standards issued by Institute of Company Secretaries of India.
c. Secretarial Auditors & Secretarial Audit Report:
As on the date of this report, M/s. K. C. Suthar & Co.,Practicing Company Secretary was the Secretarial Auditor of the Company.
The Secretarial Audit Report issued by the aforesaid in the Form MR-3 given by the Company secretary in practice is annexed with the report as Annexure-A.
The Secretarial Audit Report does not contain any qualification(s), reservation(s), adverse remark(s) or disclaimer(s).
The Company has complied with the applicable secretarial standards issued by the Institute of Company Secretaries of India.
21. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report for the year under review, as stipulated under SEBI (LODR) Regulations is given separately and forms part of this 32nd Annual Report of the Company as Annexure-B.
22. EXPLANATION OR COMMENTS ON
QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS: a. Auditors Qualification:
There were no qualifications, reservations or adverse remarks made by the Auditor in his report made for the financial year under review.
b. Secretarial Audit Report By Practicing Company Secretary:
There were no qualifications, reservations or adverse remarks made by the Secretarial Auditor in his report made for the financial year under review.
c. 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.
23. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
Pursuant to provisions of Section 124(5) of the Companies Act, 2013, dividend amount aggregating to Rs. 1,93,463/- pertaining to F.Y. 2015-16 lying with the Company for a period of seven years were transferred during the financial year 2023- 24, to the Investor Education and Protection Fund established by the Central Government.
Information in respect of such unclaimed dividend when due for transfer to the fund is given below:
Those Members who have so far not encashed their dividend warrants from the final dividend from F.Y. 2016 - 17 onwards, may approach the Registrar and Share Transfer Agents, M/s. Link Intime India Pvt. Ltd, for making their claim without any further delay as the said unpaid dividends shall be transferred to the Investor Education and Protection Fund of the Central Government pursuant to the provisions of Companies Act.
In terms of Section 124(6) of Companies Act, 2013 and the Rules notified there under, including amendments thereof, the shares in respect of which dividend has not been paid or claimed for a period of seven consecutive years or more, are required to be transferred by the Company to the IEPF Suspense Account.
Accordingly, the Company has transferred shares to IEPF Suspense Account in respect of which dividend has not been paid or claimed. The summary for the same is given below:
The break-up/details of total number of shares transferred to Investor Education and Protection Fund (IEPF) is provided below:
The details of unpaid / unclaimed dividend and number of shares transferred are available on our website: (www.daikaffil.com).
Shareholders are requested to note that no claim shall lie against the Company in respect of any amounts which were unclaimed and unpaid for a period of seven years and transferred to Investor Education and Protection Fund of the Central Government. However, Shareholders may claim from IEPF Authority both unclaimed dividend amount and the shares transferred to IEPF Suspense Account as per the applicable provisions of Companies Act, 2013 and rules made thereunder.
24. OTHER DISCLOSURE: a. Change in the nature of business:
There has been no change in the Nature of Business during the year under review. Further no material changes or commitments have occurred between the end of the financial year and the date of this report which affect the financial statements of the Company.
b. Material Changes and Commitments, If Any affecting the Financial Position of the Company:
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.
c. Deposits:
The Company has neither accepted nor renewed any deposits from public during the year nor has any outstanding Deposits in terms of Section 73 of the Companies Act, 2013. Further there were no Deposits which are not in compliance of the requirements of Chapter V of the Act.
d. Loans, Guarantees and Investments:
Details of Loans, Guarantees and Investments covered under the provision of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
e. Annual Return:
The extracts of Annual Return [MGT-9] pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 has been placed on the website of the Company and can be accessed at www.daikaffil.com.
f. Particulars of employees:
The Statement of Disclosure of Remuneration under Section 197 of the Companies Act, 2013 read Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-C.
g. Status of Listing Fees:
The Shares of the Company are continued to be listed on the BSE Limited ("BSE").
Listing Fees till date have been duly paid to BSE, where Company's shares are Listed.
h. Registrar and Share Transfer Agent:
M/s Link Intime India Pvt. Ltd, C 101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai – 400 083 Tel No.: 022-4918 6270 is the Registrar and Share Transfer Agent of the Company for the physical and Demat shares. The members are requested to contact directly for any requirements.
i. Complaints relating to Child Labour, Forced Labour, Involuntary Labour, Sexual Harassment:
The Company has adopted a policy on prevention, prohibition and Redressal of Sexual harassment at workplace and has duly constituted an Internal Complaints Committee in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. No case of child labour, forced labour, involuntary labour, sexual harassment and discriminatory employment was reported during the FY 2023-24. The Company has a policy on sexual harassment under which employees can register their complaints against sexual harassment. The policy ensures a free and fair enquiry with clear timelines
j. Material Orders passed by Regulators, Courts or Tribunal:
There were no significant or material orders passed by the Regulators, Courts or Tribunal which impact the going concern status of the Company and the Company's operations in future.
k. Research and Development and Quality Control:
The activities of R & D consist of improvement in the process of existing products, decrease of effluent load and to develop new products and by-products.
The management is committed to maintain the quality control and it is the strength of the Company. All raw material and finished products and materials at various stages of process pass through stringent quality check for the better result and product.
25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
As required under Section 134 (3) (m) of the Companies Act, 2013 read together with the Rule 8 of the Companies (Accounts) Rules, 2014 the relevant information is given below.
Conservation of Energy and Technology Absorption:
Your Company has installed a wet scrubber on boiler which will reduce the consumption of coal and more importantly protect the environment.
This will minimize the carbon particles being released in the atmosphere. A tertiary treatment plant on line to reduce the water pollution load has also been installed.
The electrical instruments have been connected on line which has reduced the power consumption. Our Japanese collaborators have guided us on regular basis and we thereby conserve energy and reduce our waste water load.
Foreign Exchange Earnings and Outgo:
26. DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits 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; and
(e) 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.
27. ACKNOWLEDGEMENTS:
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 anddedication 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.