Your Directors have pleasure in presenting herewith the 23rd Annual Report on thebusiness of Your Company together with the Audited Accounts for the financial year ended31" March 2017.
(Amount in Rs.)
|PARTICULARS ||Financial Year 2016-17 ||Financial Year 2015-16 |
|TOTAL INCOME ||608930628 ||459021765 |
|TOTAL EXPENDITURE ||608194919 ||437324093 |
|Profit/(Loss) before Depreciation & Financial Charges ||20872039 ||21697672 |
|Depreciation ||4470418 ||4494279 |
|Financial Charges ||15765912 ||16686952 |
|Profit/Loss Before Tax ||735709 ||516441 |
|Prior period items ||- ||- |
|Provision for tax ||- ||- |
|Deferred tax ||326271 ||228083 |
|NET PROFIT/(LOSS) ||409437 ||744524 |
REVIEW OF OPERATIONS:
With a view to get hold stabilize compete increase the Company's presence in themarket initially the Company is concentrating on the trading. The move would certainlycreate good presence and name to the Company which would enable the Company in future togenerate good income. During the year under review as the price volatility of trading wasvery high the volume of trade restrained to the extent reported.
CHANGE IN NATURE OF BUSINESS:
During the year under review there is no change in the nature of business carried outby your Company.
In the absence of profits the directors of your Company did not recommend any dividendfor the Financial Year 2016-17.
TRANSFER TO RESERVES:
Your Company has not transferred any amount to the general reserve.
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL
As per the provisions of the Companies Act 2013 Mr.Kiran Kumar Vankineni Director ofthe Company retires at Annual General Meeting and being eligibleoffers himself forre-appointment.
During the year Mr.S Shanmugasundaram (DIN No.02271568) had been coopted as AdditionalDirector. Notice in writing under Section 160 of the Companies Act 2013 proposing hiscandidature for the office of Independent Director of the Company has been received andthe board has proposed to coopt him as Independent Director of the Company for a periodof 5 years and whose period of office shall not be determinable by retirement of Directorby rotation subject to the recommendation of the Nomination and Remuneration Committee.
Further the Board considered and recommended the reappointment of Mr.Kiran KumarVankineni as Executive Director with effect from 1st August 2017.
During the year under review Mr. D.Sripathi who was appointed as Company Secretary&Compliance Officer of the Company resigned w.e.f. 15th May 2016.
FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS COMMITTEESAND INDIVIDUAL DIRECTORS
As required under the provisions of Schedule IV of the Companies Act 2013 theperformance evaluation of independent directors has been done by the entire Board ofDirectors excluding the director being evaluated. The evaluation of all the directors andthe Board as a whole was conducted based on the criteria and framework adopted by theBoard. The Board approved the evaluation results as collated by the nomination andremuneration committee.
INDEPENDENT DIRECTORS' DECLARATION
The Independent Directors have submitted the declaration of independence as requiredunder Section 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as provided in Section 149(6) and Regulation 25 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.
At the 22nd Annual General Meeting M/s NSVR & Associates LLP(Formally known as M/sNekkanti Srinivasu & Co) Chartered Accountants (Firm Registration No.008801S) wereappointed as Statutory Auditor of the Company to hold office till the conclusion of theAnnual General Meeting to be held in the calendar year 2020-21. In terms of the firstproviso to Section 139 of the Companies Act 2013 the appointment of the auditor shall beplaced for ratification at every Annual General Meeting. Accordingly the appointment ofM/s NSVR & Associates LLP(Formally known as M/s Nekkanti Srinivasu & Co)Chartered Accountants as statutory auditors of the Company is placed for ratification bythe shareholders.
In this regard the Company has received a certificate from the auditors to the effectthat if they are reappointed it would be in accordance with the provisions of Section 141of the Companies Act 2013.
M/s.P.S.Rao & Associates Practicing Company Secretaries was appointed to conductthe secretarial audit of the Company for the financial year 2016-17 as required underSection 204 of the Companies Act 2013 and Rules there-under. The secretarial audit reportfor FY 2016-17 forms part of the Annual Report as Annexure-I to the Board's report.
The Board has appointed M/s.P.S.Rao & Associates Practicing Company Secretariesas secretarial auditors of the Company for the financial year 2017-18.
COMMENTS BY THE BOARD ON EVERY QUALIFICATION RESERVATION OR ADVERSE REMARK ORDISCLAIMERS:
As there is no qualification reservation or adverse remark in the reports made by theAuditors your directors need not give their comments on that.
However with regard to the qualification raised by the Secretarial Auditor with regardto appointment of Company Secretary your Company states that as the registered office ofthe Company is situated in a village which is far away fromany near by town none of thequalified personnel are intending to come and work in the village environment howeveryour Company is taking steps to find a suitable candidate.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. Management has set-up a system to monitor and evaluates theefficacy and adequacy of internal control system in the Company on regular basis itscompliance with operating systems accounting procedures and policies at all locations ofthe Company. Based on the audit reports the units undertake corrective action in theirrespective areas and strengthen the controls. Significant audit observations andcorrective actions thereon are presented to the Audit Committee of the Board periodically.
The Board of Directors of the Company have adopted various policies like Related PartyTransactions policy Whistle Blower Policy policy to determine material subsidiaries andsuch other procedures for ensuring the orderly and efficient conduct of its business forsafeguarding its assets the prevention and detection of frauds and errors the accuracyand completeness of the accounting records and the timely preparation of reliablefinancial information.
NOMINATION AND REMUENRATION POLICY
A committee of the Board named as "Nomination and Remuneration Committee" hasbeen constituted to comply with the provisions of section 178 Schedule IV of theCompanies Act and Clause 19 of the SEBI(LODR) Regulations 2015 and to recommend a policyof the Company on directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters and to frame proper systems for identification appointment of Directors &KMPs Payment of Remuneration to them and Evaluation of their performance and to recommendthe same to the Board from time to time. Nomination and Remuneration Policy is hosted onthe website of the Company www.diligentindustries.com.
The Risk Management is overseen by the Audit Committee of the Company on a continuousbasis. The Committee oversees Company's process and policies for determining risktolerance and review management's measurement and comparison of overall risk tolerance toestablished levels. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuous basis. For detailsplease refer to the Management Discussion and Analysis report which form part of the BoardReport.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act 2013 Your Directors' confirm that:
i) In preparation of annual accounts for the financial year ended 31st March 2017 theapplicable Accounting Standards have been followed along with proper explanation relatingto material departures;
ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give true andfair view of the state of affairs of the Company at the end of the financial year ended31st March 2017 and of the profit and loss of the Company for the year;
iii) The Directors have taken proper and sufficient care for their maintenance ofadequate accounting records in accordance with the provisions of the Companies Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
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 thecompany and that such internal financial controls are adequate and were operatingeffectively; and
vi) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure - II.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
As per the criteria laid down in the Companies Act 2013 the provisions of CorporateSocial Responsibility are not applicable to your Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE OUTGO
Information required under section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 is enclosed herewith as Annexure - III.
During the year under review Five Board Meetings were held during the year underreview. For further details please refer report on Corporate Governance Report enclosedherewith.
Committees of Board
Your company has the following committees namely:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders Relationship Committee
The constitution of all the committees is as per the Companies Act 2013 and SEBI(LODR)Regulations 2015. The details of the Constitution are mentioned in Corporate GovernanceReport which forms part of this Annual Report.
The Report on Corporate Governance as stipulated in Regulation 34(3) of SEBI (LODR)Regulations 2015 is attached hereto as a part of this report as Annexure VIII.
MANAGEMENT DISCUSSION AND ANALYSIS
A brief note on the Management discussion and analysis for the year is annexed as AnnexureVII.
In pursuant to the provisions of section 117(9)(& (10) of the Companies Act 2013SEBI (LODR) Regulations 2015 a Vigil Mechanism for directors and employees to reportgenuine concerns has been established. Protected disclosures can be made by a whistleblower through to the Chairman of the Audit Committee. The Policy on vigil mechanism andwhistle blower policy may be accessed on the Company's website.
REMUNERATION RATIO OF THE DIRECTORS/ KEY MANAGERIAL PERSONNEL/ EMPLOYEES:
Statement showing disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is enclosed herewith asAnnexure - IV.
PARTICULARS OF EMPLOYEES
As required under Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 NO employee of your Company is in receipt ofremuneration Rs. 10200000/- (Rupees One Crores Two Lakh) or more or employed for partof the year and in receipt of Rs. 850000/- (Rupees Eight Lakh Fifty Thousand) or more amonth during the financial year under review.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Details of the Loans guarantees and investments if any covered under Section 186 ofthe Companies Act 2013 are given in the notes to the financial statements pertaining tothe year under review.
The Company has no subsidiaries; statement pertaining to the same in AOC-1 is annexedherewith as Annexure - V.
Your Company has not accepted any fixed deposits and as such no principal or interestwas outstanding as on the date of the Balance sheet.
RELATED PARTY TRANSACTIONS:
Relatedparty transactions entered during the financial year under review are disclosedin Note No. 22 of the Financial Statements of the Company for the financial year ended31st March 2017. These transactions entered were at an arm's length basis and in theordinary course of business. There were no materially significant related partytransactions with the Company's Promoters Directors Management or their relatives whichcould have had a potential conflict with the interests of the Company. Form AOC-2containing the note on the aforesaid related party transactions is enclosed herewith as Annexure- VI.
The policy on materiality of Related Party Transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website.
Your Company considers its Human Resources as the key to achieve its objectives.Keeping this in view your Company takes utmost care to attract and retain qualityemployees. The employees are sufficiently empowered and such work environment propels themto achieve higher levels of performance. The unflinching commitment of the employees isthe driving force behind the Company's vision. Your Company appreciates the spirit of itsdedicated employees.
DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013:
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed there under.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
I. Issue of equity shares with differential rights as to dividend voting or otherwise.
II. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
III. Neither the Managing Director nor the Whole-time Director of the Company receiveany remuneration or commission from any of its subsidiaries.
IV. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
V. No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year and date of report.
VI. No frauds were reported by the auditors during the year under review.
Your Directors wish to convey their appreciation to business associates for theirsupport and contribution during the year. The Directors would also like to thank theemployees shareholders customers suppliers alliance partners and bankers for thecontinued support given by them to the Company and their confidence reposed in themanagement.
| ||For and on behalf of the board |
| ||Sd/- |
|Place: Denduluru ||Bhanu Prakash Vankineni |
|Date :16-08-2017 ||Chairman |