Your Directors have pleasure to present the 26th Annual Report and the Audited Accountsfor the financial year ended 31st March 2017.
1. FINANCIAL RESULTS
|Particulars ||Year ended 31.03.2017 ||Year ended 31.03.2016 |
| ||(Rs. in lakhs) ||(Rs. in lakhs) |
|Sales ||10833.62 ||6827.99 |
|Gross Operating || || |
|Profit before depreciation and exchange variation ||1636.17 ||1259.01 |
|Profit after depreciation but before exchange variation ||1523.52 ||1149.16 |
|Profit after depreciation exchange variation and before Exceptional Items ||1458.64 ||1534.83 |
|Profit after Exceptional items ||1468.75 ||1534.83 |
|Profit after Tax ||957.09 ||1013.66 |
|Appropriations: || || |
|General Reserves ||771.70 ||828.27 |
|Proposed Dividend ||154.03 ||154.03 |
|Tax on dividend ||31.36 ||31.36 |
|Total ||957.09 ||1013.66 |
Your Directors are pleased to recommend for your consideration a Dividend of Rs. 1.50per share (15% of face value Rs.10/-) on the equity capital of the company for thefinancial year ended 31st March 2017 aggregating an amount of Rs. 154.03 lakhs.
3. TRANSFERS TO RESERVES AND RETENTION IN THE PROFIT AND LOSS ACCOUNT ETC:
The Company proposes to transfer an amount of Rs. 771.70 lakhs to Reserves during thefinancial year under review.
Cash and cash equivalents as at 31st March 2017 was Rs. 3840.28 lakhs. The companycontinues to focus on judicious management of its working capital receivablesinventories and other working capital parameters and they were kept under strict checkthrough continuous monitoring.
5. COMPANY'S WORKING DURING THE CURRENT YEAR 2016-2017 AND THE FUTURE PROSPECTS ALONGWITH REASONS WHILE COMPARING WITH PREVIOUS YEAR RESULTS:
Your Company has exported polished granite slabs and polished monuments valued atRs.10811 lakhs to U.S.A. during the year under consideration. As regards the RawMaterials out of the total purchases of Raw Blocks & Slabs valued at Rs.7804 lakhsquartz made during the year about 63% of slabs are Traded/ imported from China. The yearclosed on a positive note with export orders on hand to the tune of Rs. 230 lakhs ascompared to Rs.240 lakhs of last year. In spite of the problems faced by the GraniteIndustry and the all-round downward economic slide in the International Arena yourcompany has managed to improve the performance during the current year. The improvement isto the extent of about Rs. 4006 lakhs.
|S.No. ||Items ||Previous year ||Current year |
|1 ||Sales (Indian) in Rs. ||13551589 ||2303377 |
|2 ||Sales (Exports) in Rs. ||669247661 ||1081059115 |
6. CHANGE IN NATURE OF BUSINESS:
During the year the company has not changed its business.
7. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
There are no material changes and commitments that have bearing on the financialposition of the Company.
8. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
There are no significant and material orders by the Regulators or Courts or Tribunalsimpacting the going concern status and company's operations in future.
9. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY :
The Management continuously reviews the internal control systems and procedures for theefficient conduct of the company's business. The Company adheres to the prescribedguidelines with respect to the transactions financial reporting and ensure that all itsassets are safeguarded and protected against losses. The Internal Auditors of the companyconducts audit on regular basis and the Audit Committee periodically reviews internalaudit reports and effectiveness of internal control systems.
10. DETAILS OF SUBSIDIARY/JOINT VENTURES / ASSOCIATE COMPANIES:
The Company does not have any subsidiaries or Joint Venture or associate companies.
11. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES ANDJOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED
The company has not accepted any fixed deposits from the public.
13. AUDITORS AND OBSERVATIONS
M/s Rambabu & Co Chartered Accountants Independent Auditors of the Company whowere appointed in the Annual General Meeting held on 30th September 2014 for a period ofthree years will retire at the forthcoming Annual General Meeting and are not eligible forreappointment based on the criteria of completion of maximum tenure permitted under theCompanies Act 2013. It is therefore proposed based on the recommendation of AuditCommittee to appointed M/s. Suryanarayana & Suresh Chartered Accountants as StatutoryAuditors from the conclusion of this Annual General Meeting till the conclusion of Twentyninth (31st) Annual General Meeting for a period of five years subject to the approval ofshareholders.
14. SECRETARIAL AUDIT REPORT
Pursuant to provisions of section 204 of the Companies Act 2013 the Company hasappointed Puttaparthi Jagannatham & Co. Company secretaries a firm of companysecretaries to undertake the secretarial audit of the Company. The Secretarial AuditReport obtained is annexed within as Annexure- I
15. EXTRACT OF ANNUAL RETURN:
The extract of the Annual Return is attached as Annexure II
16. SHARE CAPITAL
None of the following issues were taken up during the year and hence details thereofwere not required to be furnished
A) Issue of shares with differential rights
B) Issue of sweat equity shares
C) Issue of employee stock options
D) Provision of money by company for purchase of its own shares by employees ortrustees for the benefit of employees
17. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO:
(A) Conservation of energy
a) Company ensures that the manufacturing operations are conducted in the mannerwhereby optimum utilization and maximum possible savings of energy is achieved.
b) No specific investment has been made on reduction in energy consumption.
c) As the impact of measures taken for conservation and optimum utilization of energyare not quantitative its impact on cost cannot be stated accurately.
d) Details of electricity consumption is as under:
| ||2016-17 ||2015-16 |
|1. Electricity || || |
|a) Purchased Units ||2063501 ||2485779 |
|Total Amount (Rs. in lakhs) ||168.55 ||190.33 |
|Average Cost/ Unit (Rs./KWH) ||8.17 ||7.66 |
|b) Own Generation || || |
|i) Through Solar Plant-(w.e.f. Feb.2017) || || |
|Produced Energy (in Units) ||135300 || |
|Total Value estimated (Rs. in lakhs) ||8.92 || |
|Average Cost/Unit (Rs./KWH) ||6.59 || |
|ii) Through Diesel Generator (Total Units) ||82167 ||107508 |
|Total Amount (Rs. in lakhs) ||14.50 ||17.88 |
|Units per liter of Diesel Oil ||3.28 ||3.26 |
|Average Cost/ Unit (Rs./KWH) ||17.65 ||16.64 |
(B) Technology Absorption:
No outside technology is being used for manufacturing activities therefore notechnology absorption is required. The Company constantly strives for maintenance andimprovement in quality of its products and entire research and development activities aredirected to achieve the aforesaid goal.
(C) Foreign exchange earnings and outgo : Details of foreign exchange earnings andoutgo are as follows : Details of foreign exchange earnings and outgo are as follows :
a) Foreign Exchange Earnings : Rs. 10810.59 Lakhs
b) Foreign Exchange Outgo : Rs. 5420.19 Lakhs
18. CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE COMMITTEE
Pursuant to Section 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 your Company has constituted the CSR committeeconsisting of the following Directors with the roles and responsibilities duly defined inaccordance with the CSR Policy Rules. The committee met once on 30.01.2017 during thefinancial year ended 31st March 2017.
|Name of the Member ||Designation |
|Shri T.R.C. Bose ||Chairman |
|Shri T.H.Sastry ||Member |
|Shri S. Srinivas ||Member |
The Committee reviewed the CSR Policy and has identified the Education and Environmentas the broad areas towards providing clean and hygienic water and health related areas asthe focus areas for CSR activities.
The Company allocated an amount of Rs.30.02 lakhs to be spent during the year 2016-17for Corporate Social Responsibility. However the Company couldn't spend the amountearmarked for Corporate Social Responsibility in full due to problems in identifying thebetter areas and beneficiaries as per its approved CSR Policy. However an amount ofRs.16.55 lakhs was spent by the company towards the CSR activities in the field ofEducation and Environment during the year 2016-17.
The report on CSR activities is attached as Annexure III to this Report.
19. DIRECTORS AND KEY MANAGERIAL PERSONNEL
A) Changes in Directors and Key managerial personnel:
i) In accordance with the provisions of Section 197 198 and 203 of the Companies Act2013 and the rules made thereunder and the Articles of Association of the Company ShriN.S.R.
Chandra Sekhar Rao who retires by rotation at the forthcoming Annual General Meetingand being eligible has offered himself for reappointment as Director of the Company.
ii) Sri M.V.Subba Rao vide his letter dt.04.10.2016 addressed to the Board submittedhis resignation from the post of Director with effect from 04.10.2016 on the ground thathis advanced age is no longer permitting him to discharge his functions as Director. Thesame was accepted in the Board meeting held on 15th October 2016.
iii) Smt. Jaishree Nallapti vide her letter dt.10.02.2017 addressed to the Boardsubmitted her resignation from the post of Director with effect from 10.02.2017 due to herpreoccupation and personal commitments. The same has been accepted in the Board Meetingheld on 27th May 2017. iv) Pursuant to the provisions of Section 161 of the Companies Act2013 Smt Anuradha Anne has been appointed as additional Director of the Company witheffect from 12th May 2017 to hold office upto the date of the ensuing Annual GeneralMeeting. The Company has received requisite notice in writing from a member proposing thename of Smt.
Anuradha Anne for re-appointment as Director. v) In the Board Meeting held on 30thJanuary 2017 Ms. Priyanka Baldewa was appointed as the Company Secretary and ComplianceOfficer of the Company in terms of Section 203 of Companies Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 with effect from 01stJanuary 2017 based on the recommendation of the Nomination and Remuneration Committee.vi) Pursuant to the provisions of Section 203 of the Companies Act 2013 Smt Anuradha Annehas been appointed as Chief Financial Officer of the Company with effect from 12th May2017 based on the recommendation of the Nomination and Remuneration Committee.
B) Declaration by the Independent Directors of the Company that they meet the criteriaof independence as provided in Sec 149(6) of the Companies Act 2013.
All the independent Directors have given declarations under Section 149(7) of theCompanies Act 2013 that they meet the criteria of independence as provided in sub-section(6) of Section 149 of the Companies Act 2013 and Regulation 16(2) and 25 of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 and that there is no change in their status of Independence.
C) Formal evaluation statement by the Board of its own performance it's committees andindividual Directors:
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard has formulated a policy for evaluation of its Board Board Committee Director's andtheir performances and carried out an evaluation of them. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.
D) Number of meetings of the Board of Directors:
The Directors met for 4 times during period under review. A calendar of meetings isprepared and circulated in advance to all the Directors. The number and details of themeetings of the Board are furnished in the Corporate Governance Report.
E) Meeting of Independent Directors:
A separate meeting of Independent Directors of the Company was held on 30.01.2017 asrequired under Schedule IV to the Companies Act 2013 (Code for Independent Directors) andRegulation 17 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.
At the Meeting the Independent Directors:
Reviewed the performance of Non?Independent Directors and the Board as a whole;
F) Familiarization Programme for Independent Directors
The Company proactively keeps its Directors informed of the activities of the Companyits management and operations and provides an overall industry perspective as well asissues being faced by the industry. The Familiarisation programme for IndependentDirectors is disclosed on the Company's website.
20. AUDIT COMMITTEE:
The Board of Directors of the Company constituted Audit Committee consisting of thefollowing Directors with the roles and responsibilities duly defined in accordance withthe applicable statutory and other requirements. During the year four (4) meetings of theCommittee took place.
|Name of the Member ||Designation |
|Shri T.R.C. Bose ||Chairman |
|Shri T.H.Sastry ||Member |
|Shri N.S.R.C.Sekhara Rao ||Member |
The Board has accepted all the recommendations of the Audit Committee.
21. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES:
The Company at present has the vigil mechanism to deal with the instances of fraud andmismanagement if any. The company ensures that strict confidentiality is maintained whiledealing with the concerns and also that no discrimination is meted out to any person for agenuinely raised concern. It is taken care of by the audit committee of the company.
The Company has also formulated Whistle Blower Policy through which it's DirectorsEmployees and Stake Holders can report their genuine concern about unethical behavioractual or suspected fraud or violation of the company's code of conduct or ethics Policy.
The Company hereby affirms that no Director/ employee have been denied access to theChairman of the Audit Committee and that no complaints were received during the year.
22. CODE OF CONDUCT:
The Board of Directors have approved a code of conduct which is applicable to themembers of the Board and all employees in the course of day to day business operations ofthe Company. The company is against bribery corruption and unethical dealings /behaviours of any form and the board has laid down the directives to counter such acts.The code laid down by the Board is known as "Code of Business Conduct" anddeclaration with respect to its compliance forms an appendix to the Report.
The code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders .
All the Board members and senior
Management Personnel have confirmed compliance with the code. All management staff weregiven training in this regard.
23. PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct as per Securities and Exchange Board of India(SEBI) (Prohibition of Insider Trading) Regulations 2015 for prevention of insidertrading with a view to regulate trading in securities by the Directors and designatedemployees of the Company. The code requires pre clearance for dealing in the Company'sshares and prohibits the purchase or sale of Company's shares by the Directors anddesignated employees while in possession of unpublished price sensitive information inrelation to the company and during the period when the trading window is closed. The Boardis responsible for implementation of the code.
During the year under review there has been due compliance with SEBI (Prohibition ofInsider Trading) Regulations 2015.
24. NOMINATION AND REMUNERATION COMMITTEE:
The Board of Directors of the Company has constituted a Nomination and RemunerationCommittee consisting of the following Directors with the role and responsibilities dulydefined and in accordance with the applicable statutory and other requirements.
|Name of Members ||Designation |
|1. Shri T.V.Chowdary ||Chairman |
|2. Shri S. Srinivas ||Member |
|3. Shri N.S.R.C.Sekhara Rao ||Member |
The Board has formulated a policy in consultation with the Nomination and RemunerationCommittee for selection and appointment of Directors Senior management and fixation oftheir remuneration keeping in view the requirements given in section 178 of the companiesAct 2013 and it also involves in the evaluation of` the Board and its remunerationpolicies. During the Financial Year under review the Committee has met once on 11thJanuary 2017.
25. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All transactions entered with Related Parties for the year under review were on arm'slength basis. The particulars of every contract or arrangements entered into by theCompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso theretoare disclosed in Form No.AOC-2 as Annexure-IV to this Report.
Policy on Related Party Transaction as approved by Board had been unloaded on Company'swebsite http://www. divya shakti.com/images/8.%20Policy%20on%20Related%20Party%20Party&20 Trnasaction.pdf There were no materially significanttransactions with Related Parties during the financial year 2016-17 which were in conflictwith the interest of the Company. Suitable disclosures as required under AS-18 have beenmade in Note 3.07 of the Notes to the financial statements.
26. MANAGERIAL REMUNERATION:
Details of the ratio of the remuneration of each Director to the median employee'sremuneration and other details as required pursuant to Rule 5(1) of the Companies(Appointment and
Remuneration of Managerial Personnel) Rules 2014.
|Remuneration to Directors : ||2016-17 Rs. ||% on total salaries. |
|(a) N. Hari Hara Prasad || || |
|Managing Director || || |
|- Salary ||2400000 ||15% |
|- Perquisites ||1327276 || |
|Jaishree Nallapati (Chief Financial Officer) || || |
|- Salary ||600000 ||2% |
b) There is no information required pursuant to Section 197 read with 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as noemployee of the Company is covered by these rules.
c) No Director is in receipt of any commission from the company and the ManagingDirector and Whole-time Director of the Company have not received any remuneration orcommission from any other Company subject to its disclosure by the Company in the Board'sReport.
27. CORPORATE GOVERNANCE
As The Directors reaffirm their commitment to good corporate governance practices.During the year under review the Company was in compliance with the provisions relatingto corporate governance as provided under Regulation 27 of the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015. Thecompliance report together with the Auditors' Certificate on compliance with theconditions of Corporate Governance of the Listing Regulations is enclosed as Annexure - Vto this Report.
The Managing Director and Chief Financial Officer of the Company have issued necessarycertificate pursuant to the provisions of Regulation 17(8) of the Listing Regulations andthe same forms part of this Report.
28. RISK MANAGEMENT AND INSURANCE
YourCompany continuously monitors business and operational risk through businessprocess re-engineering and reviewing areas such as production finance legal and otherissues. An exhaustive exercise is underway to bring a model regulating risk managementmechanism. Your Company's assets are adequately insured against the risk from fire andearthquake.
There is no identification of risks which in the opinion of the Board may threaten theexistence of the Company
29. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that-(a) In the preparation of the annualaccounts the applicable accounting standards had been followed and that there are nomaterial departures; (b) We have selected such accounting policies in consultation withthe Statutory Auditors and have applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairsof the company at the end of the financial year and of the profit of the company for thatperiod; (c) We have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities; (d) The annual accounts have been prepared on a going concern basis; (e)The Company had laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively; and (f)We have devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.
30 PAYMENT OF LISTING FEE
At present the equity shares of the Company are listed on the Bombay Stock exchange atMumbai. The Company confirms that it has paid Annual Listing Fees due to the Bombay StockExchange for the year 2017-2018.
31. DEPOSITORY SYSTEM
As the Members are aware your Company's shares are tradable compulsorily in electronicform and your Company has established connectivity with Central Depository Services(India) Limited (CDSL). In view of the numerous advantages offered by the depositorysystem the Members are requested to avail the facility of Dematerialization of theCompany's shares on NSDL & CDSL. The ISIN allotted to the Company's Equity shares isINE410G01010.
The company is pursuing the share holders including the promoters holding the sharesin physical form for dematerialization of their shares.
32. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
There are no loans guarantees or investments made under section 186 of the CompaniesAct 2013
33. MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion and Analysis Report as required Regulation 34(3) and 53(f) ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 with stock exchange forms part of this report as AnnexureVI
34. INTERNAL COMPLAINTS COMMITTEE:
The company constituted "Internal Complaints Committee" as required undersection 4 (1) of Sexual harassment of women at work place (Prevention Prohibition andRedressal) Act 2013 with the following members. This committee consists of followingmembers:
1. Smt Jaishree Nallapati*-Chairperson (upto 10.02.2017)
2. Sri S. Sreenivas - Member
3. Sri N.S.R.C. Sekhara Rao
* Consequent on resignation of Smt. Jaishree Nallapti the Committee has beenreconstituted with Smt. Anuradha Anne as Chairperson in the Board Meeting held on 27thMay 2017. During the year under review no complaints of harassment at the workplace werereceived by the committee.
Your Directors place on record their appreciation of the financial assistance andsupport extended by State Bank of Mysore. The Directors thank the shareholders for theircontinued confidence and trust placed by them with the Company. The Board also thanks allcategories of employees of the Company for their dedicated and sincere services.
For and on behalf of the Board
|(N.HARI HARA PRASAD) ||(T.H.SASTRY) |
|Managing Director ||Director |
|Place : Hyderabad || |
|Date : 27th May 2017. || |
Divyashakti Granites Limited
Our report of even date is to be read with this letter:
1. Maintenance of secretarial record is the responsibility of the management of thecompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company.
4. Wherever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.
|Place : Hyderabad ||For Puttaparthi Jagannatham & Co. |
|Date : 27.05.2017 ||Navajyoth Puttaparthi |
| ||Partner |
| ||ACS No: 28843 C P No.: 16041 |