Prime Focus Ltd.
|BSE: 532748||Sector: Media|
|NSE: PFOCUS||ISIN Code: INE367G01038|
|BSE 00:00 | 20 Mar||63.60||
|NSE 00:00 | 20 Mar||63.40||
|Mkt Cap.(Rs cr)||1,903|
|Mkt Cap.(Rs cr)||1902.91|
Prime Focus Ltd. (PFOCUS) - Director Report
Company director report
The Members of Prime Focus Limited
Your Company's Directors are pleased to present the Twentieth Annual Report togetherwith Audited Financial Statements for financial year ended March 31 2017.
1. FINANCIAL PERFORMANCE SUMMARY
The Consolidated and Standalone Audited Financial Results for the financial year endedMarch 31 2017 are as follows:
(Rs. In Lacs)
Your Company and its subsidiaries had adopted IND AS with effect from April 1 2016pursuant to Ministry of Corporate Affairs notification dated February 162015 notifyingthe Companies (Indian Accounting Standards) Rules 2015 as amended by the Companies(Indian Accounting Standards) (Amendment) Rules 2016 and the relevant provisions of theCompanies Act 2013 ("the Act") and guidelines issued by the Securities andExchange Board of India (SEBI). The Consolidated Financial Statements havebeen prepared in accordance with the provisions of the Act read with the Companies(Accounts) Rules 2014 applicable Indian Accounting Standards and the relevant provisionsof the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (theListing Regulations"). Your Company has published Ind AS Financials for the yearended March 312017 along with comparable as on March 312016 and Opening Statement ofAssets and Liabilities as on July 12015.
2. OPERATIONS AND PERFORMANCE REVIEW
During the year under review on consolidated basis total income of the Company andits subsidiaries stood at ' 215362.47 lacs as compared to ' 138281.46 lacs in theprevious period.
On standalone basis total income during the year was ' 15451.35 lacs as compared to '11906.59 lacs in the previous period. Profit/ (loss) before exceptional items and taxduring the year was ' (3055.68) lacs as compared to ' 1180.82 lacs in the previousperiod. The Net profit/ (loss) after tax was ' (1104.11) lacs as compared to ' 551.33lacs in the previous period.
A detailed analysis on the Company's performance both Consolidated & Standaloneis included in the Management Discussion & Analysis" Report which formspart of this Annual Report.
In view of the losses in Financial Year 2016-17 your Board did not recommend anydividend for its equity shares.
4. DIVIDEND DISTRIBUTION POLICY
Securities and Exchange Board of India ('SEBI') by its notification dated 8th July2016 has amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 ('Listing Regulations') introducing new Regulation 43A mandating the top 500 listedentities based on market capitalization calculated as on 31st March of every financialyear to formulate a Dividend Distribution Policy and disclose the same in their AnnualReports and on their websites.
Accordingly the Board of Director of the Company has adopted a Dividend DistributionPolicy which is attached as Annexure A. The Policy is also available on the website ofthe Company:
5. TRANSFER TO RESERVES
Your Company has not transferred any amount to Reserves for the financial year underreview.
6. SHARE CAPITAL
The paid-up equity share capital of the Company as on March 31 2017 was ' 298878974comprising of 298878974 equity shares of Re. 1/- each. There was no change in theCompany's Share Capital during the financial year under review.
During the year under review the Company has not issued share with differential votingrights nor sweat equity. However the ESOP Compensation committee of the Board of Directorsat its meeting held on August 12 2016 approved grant of 17932738 stock option (ESOP's)to the eligible employees. As on March 31 2017 none of the Directors of the Company holdinstruments convertible into equity shares of the Company.
7. EMPLOYEE STOCK OPTION SCHEME (ESOP)
The Company has implemented 'PFL-ESOP Scheme 2014' compliant with the SEBI (Share BasedEmployee Benefits) Regulations 2014 to reward and retain the qualified and skilledemployees and to give them an opportunity to participate in the growth of the Companythese schemes are administered by the Compensation Committee of the Company.
A certificate from the Statutory Auditors of the Company as required under Regulation13 of the SEBI (Share Based Employee Benefits) Regulations 2014 shall be placed at theensuing Annual General Meeting for inspection by the Members. The disclosures as requiredunder Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations 2014 readwith SEBI Circular dated June 16 2015 are accessible on Company's website i.e.
8. MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of financial year of the Company to which theFinancial Statements relate and the date of this Report.
9. PRIME FOCUS WORLD N.V. (PFW NV) REDEEMED PREFERENCE CAPITAL
I n 2013 PFW NV [subsidiary of PFL] had raised US$38mn in the form of OptionallyConvertible Redeemable Preference Capital from Macquarie Capital. The instrument wascompulsorily convertible into Equity of PFW NV in case of a qualifying IPO with aredemption feature at 5% Cash IRR + Equity IRR. In 2017 PFW successfully redeemedMacquarie Capital by paying US$45mn in Cash. It has further issued ~4.5% stake in PFW toMacquarie Capital on the basis of an independent valuation exercise by a Big 4 AccountingFirm in lieu of the Equity IRR associated with the Instrument.
10. AMBIT PRAGMA INVESTED IN PRIME FOCUS TECHNOLOGIES LIMITED
Prime Focus Technologies Limited (PFT [subsidiary of PFL]) India's leading technologymedia powerhouse and subsidiary of the Company had secured investment from Ambit Pragma agrowth capital private equity (PE) fund based in Mumbai during the year under review. PFTproposes to use the investment for intensifying development efforts of the SaaS productsincluding CLEAR Media ERP and gaining deeper penetration and growth in strategic marketssuch as North America and EMEA with increased Sales and Marketing efforts.
11. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review there were no significant or material orderspassed by the Regulators or Courts or Tribunal which would impact the going concern statusof the Company and its future operation.
12. RISK MANAGEMENT
The Company is exposed to inherent uncertainties owing to the sectors in which itoperates. A key factor in determining a company's capacity to create sustainable value isthe risks that the company is willing to take (at strategic and operational levels) andits ability to manage them effectively. Many risks exist in a company's operatingenvironment and they emerge on a regular basis. The Company's Risk Management processesfocuses on ensuring that these risks are identified on a timely basis and addressed.
The Company is well aware of the above risks and as part of business strategy has putin a mechanism to ensure that they are mitigated with timely action. The Company has aRisk Management framework to identify evaluate business risks and opportunities. Thisframework seeks to create transparency minimize adverse impact on the business objectivesand enhance the Company's competitive advantage.
13. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Audit Committee reviews adequacy and effectiveness of the Company's internalcontrol environment and monitors the implementation of audit recommendations includingthose relating to strengthening of the Company's risk management policies and systems. Forfurther details please refer to the Management Discussion and Analysis Report which formsa part of the Annual Report.
14. HUMAN RESOURCES
Human Resource is considered as one of the most critical resource in the business whichcan be continuously smoothened to maximize the effectiveness of the organization. HumanResource build the Enterprise and the sense of belonging would inculcate the spirit ofdedication and loyalty amongst them towards strengthening the Company's Policies andSystems. All personnel continue to have healthy cordial and harmonious approach therebyenhancing the contributory value of the Company. The Company has generally enjoyed cordialrelations with its personnel. Further the total number of permanent employees of theCompany as on March 31 2017 is 459.
15. PREVENTION OF SEXUAL HARASSMENT
The Company has zero tolerance for sexual harassment at workplace and has a mechanismin place for prevention prohibition and redressal of sexual harassment at workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules thereunder for prevention and redressalof complaints of sexual
harassment at workplace. The Company is committed to providing equal opportunitieswithout regard to their race caste sex religion colour nationality disability etc.All employees are treated with dignity with a view to maintain a work environment free ofsexual harassment whether physical verbal or psychological. All employees (permanentcontractual temporary trainees) are covered.
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. An Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment at workplace. During the year underreview Company has not received any complaints on sexual harassment.
During the financial year under review Company has not raised funds by issuingdebenture pursuant to the provision of the Companies Act 2013.
17. PUBLIC DEPOSITS
The Company has not accepted any deposits from the public falling within the ambit ofSection 73 of the Act read with the Companies (Acceptance of Deposits) Rules 2014.
18. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return in Form MGT-9 pursuant to Section 92(3) of the Act andRule 12 of the Companies (Management and Administration) Rules 2014 is annexed asAnnexure-B to this Report.
19. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company and its subsidiaries have beenprepared in accordance with the provisions of the Act read with the Companies (Accounts)Rules 2014 applicable Accounting Standards and the SEBI (Listing Obligation andDisclosure Requirement) Regulations 2015 and it forms part of the Annual Report. Pursuantto Section 129(3) of the Act a statement containing the salient features of the financialstatements of the subsidiary companies for the Financial year 201617 is attached in FormAOC-1. The Company will make available the said financial statements and related detailedinformation of the subsidiary companies upon request by any member of the Company or itssubsidiary companies. These financial statements will also be kept open for inspection byany Member at the Registered Office of the Company.
Pursuant to the provisions of section 136 of the Act the Audited financial statementsof the Company consolidated financial statements along with relevant documents andseparate Audited Accounts in respect of subsidiaries are available on the website of theCompany viz. www.primefocus.com
20. SUBSIDIARY COMPANIES JOINT VENTURE AND ASSOCIATE COMPANIES
During the financial year the following changes have taken place in subsidiarycompanies:-
a. Companies which have become subsidiary Company :
1. Prime Focus Academy of Media and Entertainment Studies Private Limited- Wholly OwnedSubsidiary of Prime Focus World Creative Services Private Limited.
2. Prime Focus Animation UK Ltd - Wholly Owned Subsidiary of Prime Focus InternationalServices UK Limited.
3. Double Negative LA LLC - Subsidiary of Double Negative Holdings UK Limited
b. Name changes:
Prime Focus Technologies Private Limited has been converted from a private limitedcompany to a public limited company and consequently it is named as Prime FocusTechnologies Limited w.e.f. February 8 2017.
c. Joint Venture / Associate Companies :
During the financial year under review there are no Companies which has become orceased to be Associate / Joint Venture.
21. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
A. CONSERVATION OF ENERGY
i. The steps taken to or impact on conservation of energy-
Although the Company is not engaged in manufacturing activities. However as aresponsible corporate citizen we continue to pursue and adopt appropriate energyconservation measures. The Company makes every effort to conserve energy as far aspossible in its postproduction facilities Studios Offices etc. The Company also takessignificant measures to reduce energy consumption by using energy efficient computers andby purchasing energy efficient equipment. The Company purchases PCs laptops airconditioners etc. that meet environment standards wherever possible and replace oldequipment with more energy-efficient equipment.
ii. The Steps taken by the Company for utilizing alternate sources of energy - Notapplicable.
iii. The capital investment on energy conservation equipment's - The Company constantlyevaluates new developments and invests into latest energy efficient technology.
B. TECHNOLOGY ABSORPTION
i. The efforts made towards technology absorption - The
Company adopts the latest trends in the technology development and introduces the sameso as to ensure reduction in cost with best quality output.
ii. The benefits derived like product improvement cost reduction Product developmentor import substitution
- Not applicable.
C. IMPORTED TECHNOLOGY
i. The details of technology imported - Not Applicable
ii. The year of import - Not applicable
iii. Whether the technology has been fully absorbed -
iv. If not fully absorbed - Not applicable Expenditure incurred on Research andDevelopment (R&D):
Your company is predominantly a service provider and therefore has not set up a formalR&D unit however continuous research and development is carried out at variousdevelopment centers as an integral part of the activities of the Company.
Particulars of foreign currency earnings and outgo are as under:
22. MANAGEMENT DISCUSSION AND ANALYSIS
Management's Discussion and Analysis Report for the financial year ended March 31 2017as stipulated under Regulation 34 of Securities and Exchange Board of India (ListingObligation and Disclosure Requirement) Regulations 2015 is included as a separatesection forming part of the Annual Report.
23. CORPORATE GOVERNANCE REPORT
A separate section on Corporate Governance forming part of the Directors' Report andthe certificate from the Practicing Company Secretary confirming compliance of CorporateGovernance norms as stipulated in Regulation 34 read along with schedule V of SEBI ofIndia (Listing Obligation and Disclosure Requirement) Regulations 2015 is included in theAnnual Report for the Financial Year 2016-17.
As per the relevant provisions of Companies Act 2013 and SEBI (Listing ObligationDisclosure Requirement) Regulations 2015 during the financial year under review thefollowing changes in Directors are detailed as follows:
Resignation of Director
Mr. Nainesh Jaisingh (DIN: 00061014) (nominee of Standard Chartered Private Equity(Mauritius) III Limited and Standard Chartered Private Equity Mauritius Limited) resignedas NonExecutive Director w.e.f. December 14 2016 due to pre-occupation. Consequent tohis resignation Mr. Vibhav Parikh ceased to be an Alternate Director of the Companyw.e.f. December 14 2016. The Board placed on record its appreciation for the servicesrendered by them during their tenure with the Company.
Appointment of Director
Nomination and Remuneration Committee and Board of Directors have recommended the belowmentioned appointments:-
a. Appointment of Mr. Udai Dhawan (DIN: 03048040) who was appointed as Additional NonExecutive Director [(Nominee of Standard Chartered Private Equity (Mauritius) III Limitedand Standard Chartered Private Equity Mauritius Limited)] by Board of Directors effectivefrom December 14 2016 in respect of whom the Company has received a notice in writingunder Section 160 of the Act from a member proposing Mr. Udai Dhawan as Director of yourCompany.
b. Appointment of Mr. Samu Devarajan (DIN: 00878956) who was appointed by the Board ofDirectors effective from December 14 2016 as Additional Non Executive Independentdirector in respect of whom the Company has received a notice in writing under Section160 of the Act from a member proposing Mr. Samu Devarajan as Director of your Company
Re-appointment of Director
Pursuant to the resolutions passed by the Nomination and Remuneration Committee theBoard of Directors at their meeting held on May 22 2017 had subject to the approval ofthe members and approvals under applicable laws if any re-appointed Mr. Namit Malhotra(DIN: 00004049) as a Chairman and Executive Director and Mr. Ramakrishnan Sankaranarayanan(DIN: 02696897) as a Managing Director respectively w.e.f June 25 2017 for a period of 3years.
The proposal for re-appointment of Mr. Namit Malhotra and Mr. RamakrishnanSankaranarayanan and terms and conditions of their re-appointment are set out in theexplanatory statement of the notice of ensuing Annual General Meeting.
In accordance with the provisions of Section 152 of the Act and Articles of Associationof the Company Mr. Naresh M. Malhotra (DIN: 00004597) will retire by rotation at theensuing Annual General Meeting of the Company and being eligible offer himself forre-appointment.
The Board recommends for the above appointment / reappointment. Items seeking yourapproval on the above is included in the Notice convening the Annual General Meeting.Brief resume of the directors being appointed / re-appointed forms part of the Notice ofthe ensuing Annual General Meeting.
25. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
26. RECEIPTOF REMUNERATION OR COMMISSION FROM HOLDING COMPANY OR SUBSIDIARY COMPANY
Mr. Ramakrishnan Sankaranarayanan Managing Director of the Company was re-appointed asan Whole Time Director in Prime Focus Technologies Limited ("PFT") a subsidiarycompany on June 25 2017. He is in receipt of ' 4120730/- p.a. as remuneration in hiscapacity as an Whole-Time Director of PFT.
27. KEY MANAGERIAL PERSONNEL
During the year under review there were no changes in the Key Managerial Personnel ofthe company
The following directors / executives continued as KMPs during Financial Year 2016-17:
^ Mr. Ramakrishnan Sankaranarayanan Managing Director ^ Mr. Namit Malhotra ExecutiveDirector ^ Mr. Vikas Rathee Chief Financial Officer ^ Ms. Parina Shah Company Secretary
28. BOARD EVALUATION
Pursuant to the provisions of the Act and the corporate governance requirements asprescribed by SEBI (Listing Obligation and Disclosure requirements) Regulations 2015 theBoard of Directors ("Board") has carried out an annual evaluation of its ownperformance and that of its Committees and individual Directors. The performanceevaluation of the Independent Directors was carried out by the entire Board excluding theDirector being evaluated. The performance evaluation of the Chairman and the NonIndependent Directors were carried out by the Independent Directors who also reviewed theperformance of the Board as a whole. The Nomination and Remuneration Committee alsoreviewed the performance of the Board its Committees and of the Directors. The criteriafor performance evaluation of the Board included aspects like Board composition andstructure; effectiveness of Board processes information and functioning etc. The criteriafor performance evaluation of Committees of the Board included aspects like composition ofCommittees effectiveness of Committee meetings etc. The criteria for performanceevaluation of the individual Directors included aspects on contribution to the Board andCommittee meetings like preparedness on the issues to be discussed meaningful andconstructive contribution and inputs in meetings etc. In addition the Chairperson was alsoevaluated on the key aspects of his role. The Criteria for performance evaluation ofIndependent Directors included aspects like Invests time in understanding the company andits unique requirements; Brings in external knowledge and perspective to the table fordiscussions at the meetings; Expresses his / her views on the issues discussed at theBoard; and keeps himself/herself current on areas and issues that are likely to bediscussed at the Board level.
Selection and procedure for nomination and appointment of Directors
The Nomination and Remuneration Committee is responsible for developing competencyrequirements for the Board based on the industry and strategy of the Company. The Boardcomposition analysis reflects in-depth understanding of the Company including itsstrategies environment operations financial condition and compliance requirements.
The Committee is also responsible for reviewing and vetting the CVs of potentialcandidates' vis-a-vis the required competencies undertake a reference and due diligenceand meeting potential candidates prior to making recommendations of their nomination tothe Board. At the time of appointment specific requirements for the position includingexpert knowledge expected is communicated to the appointee.
Criteria for Determining Qualifications Positive Attributes and Independence of aDirector
The Nomination and Remuneration Committee has formulated the criteria for determiningqualifications positive attributes and independence of Directors in terms of provisionsof Section 178 (3) of the Act and Regulation 19 of the Securities and Exchange Board ofIndia (Listing Obligation and Disclosure requirements) Regulations 2015 which is annexedas Annexure C.
Familiarisation Programme for Independent Directors Pursuant to requirement ofSecurities and Exchange Board of India vide Circular no. CIR/CFD/POLICY CELL/7/2014 datedSeptember 15 2014 the Company has in place a programme for familiarisation of theIndependent Directors with the Company details of which is available on the website ofthe company: http://www.primefocus.com/sites/default/files/pdf/Familiarisation programme for Independent Directors.PDF
29. NOMINATION AND REMUNERATION POLICY
The Company has in place a Remuneration Policy for the Directors Key ManagerialPersonnel Senior Management and other Employees pursuant to the provisions of the Act andRegulation 19 of the SEBI (Listing Obligation and Disclosure requirements) Regulations2015. The Nomination and Remuneration policy forms a part of this report and is annexed asAnnexure-D.
30. BOARD MEETINGS
During the financial year under review Six (6) Board Meetings were held. The detailsof which are given in the Corporate Governance Report. The intervening gap between themeetings was within the period prescribed under the Act and Regulation 17 of SEBI (ListingObligation and Disclosure requirements) Regulations 2015. Currently the Board has Five(5) committees namely Audit Committee Nomination and Remuneration Committee CorporateSocial Responsibility ("CSR") Committee Stakeholders'
Relationship Committee and ESOP Compensation Committee. Details of the composition ofthe Board and its Committees and of the Meetings held attendance of the Directors at suchMeetings and other relevant details are provided in the Corporate Governance Report.
31. AUDIT COMMITTEE
The Audit Committee comprises of following members:
*Mr. Samu Devarajan was appointed as a Member in the Audit Committee w.e.f. December14 2016.
**Mr. Nainesh Jaisingh resigned from the Audit Committee w.e.f. April 18 2016 andconsequent to his resignation Mr. Vibhav Parikh ceased to be member of the Committee.
Further details relating to the Audit Committee are provided in the CorporateGovernance Report.
32. VIGIL MECHANISM
The Company has adopted a Whistle Blower Policy establishing vigil mechanism toprovide a formal mechanism to the Directors and employees to report their concerns aboutunethical behaviour actual or suspected fraud or violation of the Company Code of Conductor ethics policy. The Policy provides for adequate safeguards against victimization ofemployees who avail of the mechanism and also provides for direct access to the Chairmanof the Audit Committee. It is affirmed that no personnel of the Company has been deniedaccess to the Audit Committee.The policy of vigil mechanism is available on the Company'swebsite (Weblink: http://www.primefocus.com/sites/default/files/pdf/VigilMechanism Policy.pdf)
33. PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed to the Report as Annexure E.
Details of employee remuneration as required under provisions of Section 197 of theCompanies Act 2013 and Rule 5(2) and 5(3) of Rules are available at the Registered officeof the Company during working hours 21 days before the Annual General Meeting and shallbe made available to any shareholder on request. Such details are also available on yourCompany's website http://www.primefocus.com
34. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The brief outline of the CSR Policy of the Company alongwith the Annual Report on CSRactivities is set out in Annexure F of this report. The policy is available on theCompany's website. (Weblink:
35. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of Loans given Investments made Guarantees given and Securitiesprovided during the financial year under Section 186 of the Act are stated in the Notes toAccounts which forms part of this Annual Report.
36. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/ transactions entered by the Company with the RelatedParties during the financial period
were on an Arm's length basis and were in compliance with the applicable provisions ofthe Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.There are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large.
All Related Party Transactions were entered into only with prior approval of the AuditCommittee except transactions which qualify under Omnibus approval as permitted under thelaw. A statement of all Related Party Transactions is placed before the Audit Committeeand Board for its review on a quarterly basis specifying the nature value and terms andconditions of the transactions.
The policy on Related Party Transactions is available on the Company's website (URL:
http://www.primefocus.com/sites/default/files/pdf/Policyon Related parties.pdf )
There are no transactions that are required to be reported in Form AOC-2 and as suchdoes not form part of the Report.
37. BUSINESS RESPONSIBILITY REPORT
Regulation 34(2) of the SEBI Listing Regulations 2015 as amended inter aliaprovides that the annual report of the top 500 listed entities based on marketcapitalisation (calculated as on 31 March of every financial year) shall include aBusiness Responsibility Report. Since Prime Focus Limited. is one of the top 500 listedentities the Company has presented its Business Responsibility Report for the financialyear 2016-17 which is part of this Annual Report.
38. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to provisions of Section 124(6) of the Companies Act 2013 (Act) read withInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 (IEPF Rules) the Company is required to transfer the shares for whichdividend has not been claimed for 7 (seven) consecutive years or more to InvestorEducation and Protection Fund (IEPF). Further the corresponding shares will be transferredas per the requirement of IEPF Rules.
At the AGM held on December 24 2014 Deloitte Haskins & Sells (DHS) CharteredAccountants (Registration No. 117364W) were appointed as Statutory Auditors of theCompany to hold office from the conclusion of 17th Annual General Meeting till theconclusion of 22nd Annual General Meeting of the Company subject to ratification of theirappointment by the Members at every Annual General Meeting. Further DHS have underSection 139(1) of the Act and the Rules framed thereunder furnished a certificate of theireligibility and consent for appointment.
The members are requested to ratify the appointment of Deloitte Haskins & SellsChartered Accountants as Auditors from the conclusion of the ensuing Annual GeneralMeeting till the conclusion of the next Annual General Meeting in 2018 and to authorizethe Board to fix their remuneration for the year 2017-18.
The Auditors Report for the Financial year 2016-17 does not contain any qualificationreservation or adverse remark.
Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s. D M Zaveri andCompany Practicing Company Secretaries has been appointed as Secretarial Auditor toundertake Secretarial Audit of the Company for the financial year 2016-17. The report ofthe Secretarial Auditor is annexed to this report as Annexure G. The Secretarial Auditors'Report for the Financial year 2016-17 does not contain any qualification reservation oradverse remark.
40. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12)
During the year under review there were no frauds reported by the auditors to theAudit Committee or the Board under section 143(12) of the Companies Act 2013.
41. DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors acknowledge the responsibility for ensuring compliances with theprovisions of section 134(3)(c) read with section 134(5) of the Companies Act 2013 in thepreparation of the annual accounts for the year ended on March 31 2017 and to the best oftheir knowledge and ability confirm that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates
that are reasonable and prudent so as to give a true and fair view of the state ofaffairs of the company as at the March 31 2017 and of the profit and loss of the companyfor that year on that date;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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;
e) the directors had laid down proper systems of internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively;
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
42. MANAGING DIRECTOR & CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION
In terms of Regulation 17(8) of SEBI (LOOR) Regulations 2015 the Company has obtainedcompliance certificate from Managing Director and CFO.
Your Directors would like to express their sincere appreciation to its stakeholdersfinancial institutions bankers and business associates Government authorities customersand vendors for their co-operation and support and looks forward to their continuedsupport in future. Your Directors also place on record their deep sense of appreciationfor the committed services by the employees of the Company.