To
The Members
Diligent Industries Limited
Your directors have pleasure in presenting herewith the 30th Annual Report on the business of Your Company together with the Audited Accounts for the financial year ended 31st March, 2024.
FINANCIAL SUMMARY:
(Rs. In Lakhs)
REVIEW OF OPERATIONS:
With a view to get hold of, stabilize, compete, and increase the Company's presence in the market the Company is concentrating on the trading along with processing of edible oils including refinery. The move would certainly create good presence and name to the Company, which would enable the Company in future to generate good income from refinery. During the year under review, as the price volatility of trading was very high, the volume of trade restrained to the extent reported.
At present India is the world's largest importer of edible oil in the world. The factors like increasing disposable incomes, rising urbanization, changing dietary habits and the growth of the food processing sector represent some of the key factors driving the demand of edible oil in India. Therefore, the company is positioned in the right revenue path and poised to generate good revenues in future. The growing demands for the edible oil drive the growth story of the company in the future.
CHANGE IN NATURE OF BUSINESS:
During the year under review, the company has further developed the refinery facility and is undergoing more upgradation, apart from that there is no change in business carried out by your Company. The management is focusing on refinery of the edible oils for long term sustainability in the industry along with trading and processing of edible oils and allied agriculture products. The company may also venture in to agro processing sooner.
DIVIDEND:
With an interest to reinvest the profits, the Directors of your Company did not recommend any dividend for the Financial Year 2023-24.
TRANSFER TO RESERVES:
The profit after tax for the period has been transferred to the general reserve / other equity. DEPOSITS:
Your Company has not accepted any deposits falling within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the Financial Year.
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
Your Board consists of Six (6) Directors including Three Independent Non- Executive Directors and One Non-Executive Non- Independent Director. None of the Directors of the Company are disqualified under the Provisions of the Companies Act, 2013 (‘Act') or under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All independent Directors have provided confirmations as contemplated under Section 149(7) of the Companies Act 2013 stating that they meet the criteria of independence, as provided in Section 149(6) and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Appointments / Re-appointments:
During the year under review, pursuant to Section 152(6) Mrs. PHANI ANUPAMA VANKINENI (DIN: 00935032) is being retired by rotation and being eligible she herself offer for reappointment. Therefore, members may appointment her as Non-Executive Director Non- Independent in ensuring Annual General meeting.
Mr. SRINIVAS BABU EDUPUGANTI, (DIN-03637508) one of the Independent Directors of the Company will be ceased to be Independent Director of the Company in view of end of term of his office as an Independent Director w.e.f. 30/09/2024.
Therefore, pursuant to the provisions of Sections 152, 160 and all other applicable provisions contained under the Companies Act, 2013 (“Act”), and in terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has received a notice in writing from a member under Section 160(1) of the Act proposing Mr. Sri Durga Prasad Vajjha (DIN: 10275174) to the office of the Independent Director of the Company, and also recommended by the Nomination and Remuneration Committee. Therefore, the Board in it's meeting held on 07/08/2024 (“Effective Date”), appointed him for a period of five years from effective date to the office of Independent Director of the Company subject your approval in the ensuing AGM. Therefore, members may appointment him as Independent Director in ensuring Annual General meeting.
FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The Board of Directors has carried out an Annual Evaluation of its own performance and has devised a Policy on evaluation of performance of Board of Directors, Committees and Individual Directors, pursuant to the provisions of the Act, the Corporate Governance requirements and as prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Extract of the Policy on Evaluation of Performance of the Board, its committees and individual Directors, is available on the website of the Company at http://www. diligentindustries.com/investor-relations.html.
In a separate meeting of independent directors held on February 14, 2024, the performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, considering the views of Executive directors and non-executive directors. The same was discussed in the Board meeting that followed, at which the performance of the Board, its committees and individual directors was also discussed.
The performance of the Board was evaluated by the Independent Directors, after seeking inputs from all the directors on the basis of the criteria such as the Board's composition, structure, effectiveness of Board processes, information and functioning, etc.
The Independent Directors reviewed the performance of the individual directors based on the criteria such as the contribution of the individual director to the Board like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.
Evaluation by Board (Other than Independent Directors):
In accordance with Regulation 17(10) of SEBI Listing Regulations, the entire Board of Directors of the Company shall evaluate the performance of Independent Directors of the
Company. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.
Criteria for Performance Evaluation:
a. Ability of the candidates to devote sufficient time and attention to his professional obligations as Independent Director for informed and balanced decision making.
b. Adherence to the Code of Conduct in letter and in spirit by the Independent Directors.
c. Bringing objectivity and independence of view to the Board's discussions in relation to the Company's strategy, performance, and risk management.
d. Statutory Compliance and ensuring high standards of financial probity and Corporate Governance.
e. Responsibility towards requirements under the Companies Act, 2013, Responsibilities of the Board and Accountability under the Director's Responsibility Statement.
Familiarization Programmes for Independent Directors:
All Independent Directors inducted into the Board attended an orientation program. The
Familiarization Policy of the Company is available on its website www.diligentindustries.com. A familiarization program for the Independent Directors was held in its separate meeting.
The following are the feminization programmes held during the year.
INDEPENDENT DIRECTORS' DECLARATION
Each of the Independent Directors of the Company have submitted declaration, pursuant to Section 149(7) of the Companies Act, 2013 (“the Act”), stating that they meet the criteria of independence as laid down in Section 149(6) of the Act and Regulation 16 of the SEBI (LODR) Regulations, 2015.
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, 2024 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2024 and of the profit and loss of the Company for the year;
iii) The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
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 the company and that such internal financial controls are adequate and were operating effectively; and
vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
STATUTORY AUDITORS &REPORT:
M/s NSVR & Associates LLP, Chartered Accountants, (Firm Registration No.008801S), the Statutory auditors of the Company, was appointed for the term of 5 years in the 27th Annual General Meeting to hold office till the conclusion of 32nd Annual General Meeting. However, M7s NSVR & Associates LLP tendered their resignation vide their letters dated 06th March, 2024 informing their inability to continue as the Statutory Auditors of the Company in view of their other professional commitments and assignments.
Therefore, the Board in it's meeting held on 03rd May, 2024 appointed M/s. P Suryanarayana & Co. FRN: 009288S, as the Statutory Auditors of the Company to fill the casual vacancy caused as above. Further, the members of the Company in the Extraordinary General Meeting (“EGM”) held on 27th May, 2024 approved the appointment of M/s. P. Suryanarayana &
Co., Chartered Accountants (ICAI Firm Registration No. 009288S), as the Statutory Auditors of the Company to fill the casual vacancy caused on account of resignation of M/s. NSVR & Associates LLP, Chartered Accountants (ICAI Firm Registration No. 008801S/S200060), therefore they holding office from the conclusion of the above stated Extraordinary General Meeting and continue to hold the office till the conclusion of the ensuing Annual General Meeting of the Company.
Therefore, your Board in it's meeting held on 07/08/2024 subject to the shareholders' approval in the ensuing 30th AGM, appointed M/s. P. Suryanarayana & Co., as the Statutory Auditors of the Company for a period of 5 years from FY 24-25 to 28-29.
Accordingly, your Board recommends the shareholders of the Company to approve the appointment of M/s. P. Suryanarayana & Co. FRN: 009288S, as the Statutory Auditors of the Company.
The Statutory Audit Report contains the following observations, reservations or adverse remarks and otherwise it is self-explanatory.
SECRETARIAL AUDITORS & REPORT:
M/s. Ganga Anil Kumar & Associates, Practicing Company Secretaries, were appointed to conduct the secretarial audit of the Company for the financial year 2023-24, as required under Section 204 of the Companies Act, 2013 and Rules there-under. The secretarial audit report for FY 2023-24 forms part of the Annual Report as Annexure-II to the Board's report.
The said Secretarial Audit Report does not contain any observation or qualification or reservation or adverse remark or disclaimer except the late submissions of some of the compliances under SEBI (LODR) Regulations 2015 for the Previous Year. It is clarified that the alleged non-compliance was purely inadvertent, upon realising the mistake, the Company paid the prescribed fine.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. Management has set-up a system to monitor and evaluates the efficacy and adequacy of internal control system in the Company on regular basis, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the audit reports the units undertake corrective action in their respective areas and strengthen the controls. Significant audit observations and corrective 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 Party Transactions policy, Whistle Blower Policy, policy to determine material subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the Board of Directors is of the opinion that the Company's internal financial controls were adequate and effective during the FY 2023-24.
RISK MANAGEMENT:
The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Company's process and policies for determining risk tolerance and review management's measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis. For details, please refer to the Management Discussion and Analysis report which form part of the Board Report.
The Board has framed a Risk Management Policy, inter alia, identifying various elements of risks faced by the Company which, in the Board's opinion, may threaten its existence and providing measures to control and mitigate such risks. The said Policy is posted on the Company's website www.diligentindustries.com.
ANNUAL RETURN:
In accordance with the provisions of Section 92 of the Companies Act, 2013, the Annual Return for the FY 2023-24 will be placed in the website of the Company at https://www. diligentindustries.com/investor-relations.html
CORPORATE SOCIAL RESPONSIBILITY (CSR):
As per the criteria laid down in the Companies Act, 2013, the provisions of Corporate Social Responsibility are not applicable to your Company during the current financial year.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE OUTGO
Information required under section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is enclosed herewith as Annexure - III.
OTHER DISCLOSURES:
Board Meetings
During the year under review Six (6) Board Meetings were held. For further details, please refer Corporate Governance Report which forms part of this Annual Report.
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 Governance Report, which forms part of this Annual Report.
CORPORATE GOVERNANCE
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 - IX
MANAGEMENT DISCUSSION AND ANALYSIS
A brief note on the Management discussion and analysis for the year is annexed as Annexure - VIII
VIGIL MECHANISM:
In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, a Vigil Mechanism for directors and employees to report genuine concerns or grievances about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or Ethics Policy and to provide adequate safeguards against victimization of persons who use such mechanism and to provide direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.
The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at http://www.diligentindustries.com/investor-relations.html.
REMUNERATION RATIO OFTHE DIRECTORS/ KEY MANAGERIALPERSONNEL / EMPLOYEES:
Statement showing disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed herewith as Annexure - IV.
PARTICULARS OF EMPLOYEES
No employee of your Company is in receipt of remuneration during the financial year under review as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Details of the Loans, guarantees and investments if any covered under Section 186 of the Companies Act, 2013 are given in the notes to the financial statements pertaining to the year under review.
SUBSIDIARIES. ASSOCIATE COMPANIES AND JOINT VENTURES:
The Company has no subsidiaries, joint venture, but has one associate company i.e. Genesis IBRC India Limited, which is a listed Company on the BSE. The salient features of the Company's associate company, to the extent applicable, are furnished in form AOC-1 annexed herewith as Annexure - V.
RELATED PARTY TRANSACTIONS:
Related party transactions entered during the financial year under review are disclosed in the Financial Statements of the Company for the financial year ended 31st March, 2024. These transactions were entered at an arm's length basis and in the ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Form AOC-2, containing a note on the aforesaid related party transactions is enclosed herewith as Annexure - VI.
Related Party Disclosures, as per Schedule V of SEBI (LODR) Regulations, 2015 are enclosed herewith as Annexure-VII.
The policy on materiality of Related Party Transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at http:// www.diligentindustries.com/investor-relations.html.
HUMAN RESOURCES:
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 quality employees. The employees are sufficiently empowered, and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Company's vision. Your Company appreciates the spirit of its dedicated employees.
DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION AND REDRESSAL) ACT, 2013:
The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and Redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. Further details pertaining to the same, as required to be disclosed, are furnished in the Corporate Governance Report.
GENERAL:
1. Your Directors state that no disclosure or reporting is required in respect of the following 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 under any scheme.
III. Neither the Managing Director nor the Whole-time Director of the Company receive any remuneration or commission from any of its subsidiaries.
IV. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.
V. No material changes and commitments affecting the financial position of the Company have 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.
VII. Maintenance of Cost Records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 is not required by the Company.
2. The Company has complied with Secretarial Standards, i.e. SS-1 and SS-2 relating to Meetings of the Board of Directors and General Meetings respectively, issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs.
ACKNOWLEDGEMENTS:
Your directors wish to convey their appreciation to business associates for their support and contribution during the year. The Directors would also like to thank the employees, shareholders, customers, suppliers, alliance partners and bankers for the continued support given by them to the Company and their confidence reposed in the management.
By order of the Board of Directors For Diligent Industries Limited