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Divyashakti Granites Ltd.

BSE: 526315 Sector: Others
NSE: N.A. ISIN Code: INE410G01010
BSE 00:00 | 18 Jan 103.80 4.90
(4.95%)
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NSE 05:30 | 01 Jan Divyashakti Granites Ltd
OPEN 98.90
PREVIOUS CLOSE 98.90
VOLUME 5984
52-Week high 117.75
52-Week low 62.70
P/E 12.36
Mkt Cap.(Rs cr) 107
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 98.90
CLOSE 98.90
VOLUME 5984
52-Week high 117.75
52-Week low 62.70
P/E 12.36
Mkt Cap.(Rs cr) 107
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Divyashakti Granites Ltd. (DIVYASHAKTIGRAN) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the 27th Annual Report and the AuditedAccounts for the financial year ended 31st March 2018.

1. FINANCIAL RESULTS

Particulars Year ended 31.03.2018 Year ended 31.03.2017
(Rs. in lakhs) (Rs. in lakhs)
Sales 6858 10836
Gross Operating
Profit before depreciation and exchange variation 757 1637
Profit after depreciation but before exchange variation 692 1524
Profit after depreciation exchange variation and before
Exceptional Items 745 1459
Profit after Exceptional items 745 1469
Profit after Tax 482 947
Appropriations:
General Reserves 297 762
Proposed Dividend 154 154
Tax on dividend 31 31
Total 482 947

2. DIVIDEND

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 2018 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. 297 lakhs to Reserves during thefinancial year under review.

4. Finance:

Cash and cash equivalents as at 31st March 2018 was Rs. 1444 lakhs. The companycontinues to focus on judicious management of it's 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 2017-2018 AND THE FUTURE PROSPECTS ALONGWITH REASONS WHILE COMPARING WITH PREVIOUS YEAR RESULTS:

Your Company has exported polished granite slabs and polished monuments valued atRs.6758 lakhs to U.S.A. during the year under consideration. As regards the Raw Materialsout of the total purchases of Raw Blocks & Slabs valued at Rs.5167 lakhs made duringthe year about 79% of slabs are Traded/ imported from China.

The year closed on a positive note with export orders on hand to the tune of Rs. 210lakhs as compared to Rs.230 lakhs of last year.

Further your Directors are pleased to state that your company could commission solarplant within the Factory and could thus save the power bills to the extent of Rs.58 lakhs.

Your Directors are further pleased to inform that your company has also establishedQuartz Slabs (Engineering Stone Slabs) manufacturing unit in its existing premises. TheQuartz unit is expected to go into production soon in the current year itself.

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 companyconduct audit on regular basis and the Audit Committee periodically reviews internal auditreports and effectiveness of internal control systems.

10. DETAILS OF SUBSIDIARY/JOINT

V E N T U R E S / A S S O C I A T E 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 AND JOINTVENTURE COMPANIES INCLUDED INTHE CONSOLIDATED FINANCIAL STATEMENT.

Since the Company does not have any subsidiaries or Joint Venture or associatecompanies consolidation of financial statements of the Company is not applicable.

12. DEPOSITS

The company has not accepted any fixed deposits from the public.

13. AUDITORS AND OBSERVATIONS

M/s Suryanarayana & Suresh Chartered Accountants Independent Auditors of theCompany were appointed in the Annual General Meeting held on 25th September 2017 for aperiod of Five year till conclusion of Thirty First (31st) Annual General Meeting.

14. SECRETARIAL AUDIT REPORT

Pursuant to provisions of section204 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 placed on the website of the Company. The link toaccess the same is http:// www.divyashakti.com/html/annual-return- extracts.html

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 ofmoney by company for purchase of its own shares by employees or trustees for the benefitof employees

17. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE EARNINGS AND OUTGO: (A) Conservation of energy a) Company ensures thatthe manufacturing operations are conducted in the manner whereby optimum utilization andmaximum possible savings of energy is achieved. b) No specific investment has been made onreduction in energy consumption. c) As the impact of measures taken for conservation andoptimum utilization of energy are not quantitative its impact on cost cannot be statedaccurately. d) Details of electricity consumption are as under:

2017-18 2016-17
1. Electricity
a) Purchased Units 781390 2063501
Total Amount (Rs. in lakhs) 67.51 168.55
Average Cost/ Unit (Rs./KWH) 8.64 8.17
b) Own Generation
i) Through Solar Plant-(w.e.f. Feb.2017) Produced Energy (in Units) 884718 135300
Total Value estimated (Rs. in lakhs) 58.86 8.92
Average Cost/Unit (Rs./KWH) 6.65 6.59
ii) Through Diesel Generator (Total Units) 55456 82167
Total Amount (Rs. in lakhs) 11.06 14.50
Units per liter of Diesel Oil 3.26 3.28
Average Cost/ Unit (Rs./KWH) 19.94 17.65

(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 a) Foreign Exchange Earnings : Rs. 6758 Lakhs b) Foreign ExchangeOutgo : Rs. 4895 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 10.02.2018 during thefinancial year ended 31st March 2018.

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.29.70 lakhs to be spent during the year 2017-18for 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.3.20 lakhs was spent by the company towards the CSR activities in the field ofEducation and Environment during the year 2017-18.

The report on CSR activities is attached as Annexure II to this Report.

19. DIRECTORS AND KEY

MANAGERIAL PERSONNEL A) Changes in Directors and Key managerial personnel: i) SriN.S.R.C. Sekhara Rao tendered resignation from the position of Director with effect from10.02.2018 on the ground that his advanced age is no longer permitting him to dischargehis functions as Director. The same was accepted in the Board meeting held on 10thFebruary 2018. ii) Pursuant to the requirements of the Companies Act 2013 and Articlesof Association of the Company Smt.

Anuradha Anne Director retires by rotation at the ensuing Annual General Meeting andbeing eligible offers herself for re-appointment.

iii) Pursuant to the provisions of Sections 196 197 and 203 read with Schedule V andother applicable provisions if any of the Companies Act 2013 Sri Hari Hara PrasadNallapati has been re-appointed as Managing Director of the Company for Five (5) Yearswith effect from 04th March 2018. The resolution relating to ratification of remunerationis put up for approval of members at the ensuing Annual General Meeting.

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 theSecuritiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 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 10.02.2018 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 Directorsreviewed 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.

Due to the resignation of Sri N.S.R.C. Sekhar Rao member of Audit Committee the AuditCommittee was reconstituted on 10.02.2018 as follows:

Name of the Member Designation
Shri T.R.C. Bose Chairman
Shri T.H.Sastry Member
Shri S. Srinvas Member

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 withthe code. All management staff were given 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 Nomination and Remuneration Committee consist of the following Directors with therole and responsibilities duly defined and in accordance with the applicable statutory andother 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 twice on 27th May2017 and 10th February 2018. With the resignation of Sri N. S. R. C. Sekhar Rao memberof Nomination and Remuneration Committee the Nomination and Remuneration Committee wasreconstituted on 10th February 2018 as follows:

Name of Members Designation
1. Shri T.V.Chowdary Chairman
2. Shri S. Srinivas Member
3. Shri T.R.C. Bose Member

25. PARTICULARS OF CONTRACTS OR

ARRANGEMENTS WITH RELATED PARTIES: All transactions entered with Related Parties forthe year under review were on arm's length basis. The particulars of every contract orarrangements entered into by the Company with related parties referred to in sub-section(1) of section 188 of the Companies Act 2013 including certain arms length transactionsunder third proviso thereto are disclosed in Form No.AOC-2 as Annexure-III to this Report.

Policy on Related Party Transactions as approved by Board has been uploaded onCompany's. Websitehttp:// www.divyashakti.com/images/

8 . % i m a g e s / 8 . % 2 0 p l i c y % .

2 0 R e l a t e d % 2 0 P a r t y % 20Transaction.pdf There were no materiallysignificant transactions with Related Parties during the financial year 2017-18 which werein conflict with the interest of the Company. Suitable disclosures as required under AS-18have been made 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 2017-18 % on total
Directors : Rs. salaries.
(a) N. Hari Hara Prasad
Managing Director
- Salary 2600000 15%
- Perquisites 1590187
Anuradha Anne
(Chief Financial
Officer) - Salary 550000 2%

b) There is no information required pursuant to Section 197 read with 5(2) of the

Companies (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

The Directors reaffirm their commitment to good corporate governance practices. Duringthe year under review the Company was in compliance with the provisions relating tocorporate governance as provided under Regulation 27 of the Securities and Exchange Boardof 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 - IVto 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

Your Company 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 allapplicable laws 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 2018-2019.

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 holding the shares in physical form fordematerialization 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 CompaniesAct2013

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 Disclosure

Requirements) Regulations 2015 with stock exchange forms part of this report asAnnexure V

34. INTERNAL COMPLAINTS

COMMITTEE:

The "Internal Complaints Committee" reconstituted as per section 4 (1) ofSexual harassment of women at work place (Prevention Prohibition and Redressal) Act 2013has the following members.

1. Sri T.R.C.Bose* - Chairperson

2. Sri S. Srinivas - Member

3. Smt Anuradha Anne - Member

* Consequent on resignation of Sri N.S.R.C.Sekhara Rao Member the Committee has beenreconstituted in the Board Meeting held on 10th February 2018 with induction of SriT.R.C.Bose as Member

During the year under review no complaints of harassment at the workplace werereceived by the committee.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation of the financial assistance andsupport extended by HDFC and State Bank of India. The Directors thank the shareholders fortheir continued confidence and trust placed by them with the Company. The Board alsothanks all categories of employees of the Company for their dedicated and sincereservices.

For and on behalf of the Board

(N.HARI HARA PRASAD) (T.H.SASTRY)
Managing Director Director
DIN : 00354715 DIN : 01786600
Place : Hyderabad
Date : 30th May 2018.