DRS Dilip Roadlines Ltd Directors Report.

Dear Members,

Your Directors take pleasure in presenting the 10th Annual Report on the business and operations of the company together with the audited Financial Statements along with the report of Auditors for the financial year ended March 31, 2019.

FINANCIAL PERFORMANCE

Our Financial Performance for the year ended March 31, 2019 is summarized below:

(Amount in Rs.)

Particulars 2018-19 2017-18
Turnover 1,502,407,456 1,424,865,451
Other Income 588,934 1,305,935
Total Income 1,502,996,390 1,426,171,386
PBIDT 108,354,053 114,969,105
Less: (i) Interest (26,269,704) (25,071,619)
(II)Depreciation (50,588,673) (58,962,193)
Profit Before Exceptional Item and Tax 31,495,676 30,935,293
Exceptional Item - -
Profit Before Tax 31,495,676 30,935,293
Less: Provision for Tax
- Current 64,83,952 6,307,350
Earlier year taxes 16,81,885 -
MAT credit 19,40,093 63,07,350
- Deferred (10,20,898) (58,87,962)
Profit After Tax 2,62,90,830 2,50,47,331
Earnings Per Share (EPS) 1.75 2.31

PERFORMANCE SUMMARY AND STATE OF AFFAIRS

We have achieved an operational turnover of Rs. 150.24 Crore and Profit after Tax (PAT) of Rs.2.63 Crore for the FY 2018-19 as against an operational turnover of Rs.142.49 Crores and profit after tax (PAT) of Rs.2.51 Crores for the FY 2017-18.

Despite macro level issues, which worked against the prospects of the Companys business, we could report revenues and profitability better than that of previous year. We have been persistently working towards increasing the revenues and profitability in every possible manner.

With the aforesaid performance in the hindsight, we, at the management level, are definitely spirited to record better results in the ensuing Financial Year.

TRANSFER TO RESERVES:

We donot propose any amount to be transferred to the Reserves for the current Financial Year.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE COMPANY

There have been no material changes and commitments affecting the financial position of the company between the end of the financial year and the date of this report.

NATURE OF BUSINESS

There has been no change in the nature of business of your Company during the FY ended 31st March, 2019.

DIVIDEND

As you are aware, the capital base of the Company has almost doubled during the FY 2018-19. However, there has been no corresponding increase in the distributable profits for the said FY. In this backdrop, recommending any Dividend would create undue pressure on the financial position of the Company. Hence, the Board of Directors donot recommend any dividend for the financial year ended 31st March, 2019.

CORPORATE RESTRUCTURING:

During the FY ended 31st March, 2019, the following Corporate Restructuring measures were undertaken / completed successfully:

1. The merger of DRS Warehousing (South) Private Limited, the wholly owned subsidiary, with the Company vide a Scheme of Amalgamation between DRS Dilip Roadlines Private Limited (Transferee Company) and DRS Warehousing (South) Private Limited (Transferor Company) and their respective Shareholders and Creditors U/s 233 of the Companies Act, 2013, effective 01st April, 2017 was confirmed by the Regional Director, vide Order, Dated 25.05.2018.

2. Subsequently, the status of the Company was changed from Private Limited to Public Limited Company and the name of the Company was changed to DRS Dilip Roadlines Limited. A fresh certificate of incorporation consequent upon conversion from Private Limited to Public Limited was issued by the Registrar of Companies, Hyderabad, Telangana on September 06, 2018.

3. During the year under review, 38,54,403 equity shares of Rs.10 each were issued and allotted by way of Bonus, in the ratio of 11:20, in order to capitalize a sum of Rs.3,85,44,030 standing against securities premium account in the books of the Company.

4. INITIAL PUBLIC OFFER

As you are aware, your Company conducted an IPO of its equity shares, wherein 42 lacs were subscribed by the Public, thus raising an amount of Rs.31.5 Crores. Your Company got listed on the SME platform of the National Stock Exchange of India, i.e., NSE Emerge. The primary objectives of the issue were to raise funds for setting up new branches, setting up additional warehouses and to repay the debts.:

This will help the Company reduce its dependence on borrowed funds and in turn reduce its debt burden. With the ease of availability of funds at its disposal, your management hopes the Company will be able to overcome the funding obstacles and will be able to plan its future course of action in a better manner.

The capital structure of the Company as on March 31, 2019 stands as mentioned below:

Particulars At the end of FY ended 2019
(Amt. in Rs.)
Authorised Capital 1 170,000,000
17,000,000 Equity Shares of Rs.10 each
Issued, Subscribed & Paid up Capital
2 150,62,403 Equity Shares of Rs.10 each 150,624,030

UTILIZATION OF IPO PROCEEDS - DEVIATION THEREIN:

As mentioned elsewhere in this Report, your Company raised an amount of Rs.31.50 Crores by way of IPO. The said IPO proceeds have been deployed as per the Objects and schedule mentioned in the Offer Document. However, an amount of Rs.2.44 Crores was used towards purchase of trucks and for General Corporate purposes instead of part payment of term loans, due to urgent business needs.

The deployment of IPO proceeds has been reviewed by the Audit Committee of the Company and has been certified by the Statutory Auditors. However, pursuant to the undertaking made during Half yearly results and also as a matter of good Corporate Governance and transparency, relevant draft resolution seeking consent of members for ratifying the said deviation is being proposed in the Notice attached herewith.

In the said regard, necessary disclosures have already been made to the Stock Exchange, pursuant to SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors is duly constituted and has optimum combination of both executive and non-executive directors

Executive Directors:

DIN Name Director wef Change in wef Tenure
designation
0000668 Mr. Dayanand Aggarwal 01.12.2016 Chairman and Managing Director 01.07.2018 For 3 years till 30.06.2021
07064674 Mr. Sugan Chand Sharma 24.07.2015 Whole Time Director 01.07.2018 For 3 years till 30.06.2021

Non-Executive Directors:

DIN Name Designation Appointed w.e.f
07231926 Mr. Ajai Kumar Agarwal Independent Director For 5 years w.e.f 01.07.2018 to 30.06.2023
05356985 Mr. M. B. Suneel Independent Director For 5 years w.e.f 01.07.2018 to 30.06.2023
08165176 Mrs. Shamantha Dodla Non-Executive Woman Director 01.07.2018

Key Managerial Personnel:

Name Designation Appointed w.e.f Resigned w.e.f
Mr. C.S Raghunandan Chief Financial Officer 01.07.2018
Mr. Anjani Kumar Agarwal Chief Executive Officer 01.07.2018
Mr. Anil Kumar Ganga Company Secretary 01.07.2018 22.01.2019
Ms. Pooja Bang Company Secretary 22.01.2019 16.07.2019

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and in accordance with provisions of Articles of Association of the Company, Mrs. Shamantha Dodla, retires by rotation at the ensuing AGM and being eligible, offers herself for re-appointment.

DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received respective declarations from both its Independent Directors confirming that they meet the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations,2015.

COMPOSITION OF BOARD COMMITTEES

We have in place all the Committees of the Board which are required to be constituted under the Companies Act, 2013, and SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015.

The following are the committees of the Board:

Audit Committee

Mr. Ajai Kumar Agarwal - Chairman
Mr. M. B. Suneel - Member
Mr.Dayanand Agarwal - Member
Nomination and Remuneration Committee
Mr. Ajai Kumar Agarwal – Chairman
Mr. M. B. Suneel – Member
Mr. Shamantha Dodla – Member
Stakeholders Relationship Committee
Mr. M. B. Suneel – Chairman
Mr. Ajai Kumar Agarwal – Member
Mr.Sugan Chand Sharma – Member
Internal Complaints Committee
Ms.Malthi – Presiding Officer
Mr.Sugan Chand Sharma – Member
Mr.Jitender shah – Member
Mr.Shiva - Member

BOARD EVALUATION

In terms of the requirements of the Companies Act, 2013 and the Listing Regulations, an annual performance evaluation of the Board is undertaken where the Board formally assesses its own performance with an aim to improve the effectiveness of the Board and the Committees.

During the year, Board Evaluation cycle was completed by the Company internally which included the evaluation of the Board as a whole, its Committees as well as peer evaluation of directors. The exercise was led by the Chairman of Nomination and Remuneration Committee of the Company. The evaluation process focused on various aspects of the functioning of the Board and Committees such as composition of the Board and its committees, experience and competencies, performance of special duties and obligations, governance issues etc. As an outcome of the exercise, it was noted that the Board as a whole is functioning as cohesive body which is well engaged with different perspectives.. Further, performance evaluation was also carried out for Mrs.Shamantha Dodla, who retires by rotation and being eligible has offered herself for reappointment.

Also, the performance of the Independent Directors was evaluated by the entire Board of Directors and all the Independent Directors fulfills the independence criteria and are independent of the management as set out in the provisions of the Companies Act, 2013 read with SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015.

POLICY ON DIRECTORS APPOINTMENT, REMUNERATION, ETC.,

The following policies are attached herewith and marked as Annexure –VII and VIII respectively:

a. Policy for selection of Directors including qualifications, positive attributes and independence of a director evaluation mechanism.

b. Remuneration Policy for Directors, Key managerial Personnel and other employees.

MEETINGS OF THE BOARD OF DIRECTORS

The meetings of the Board are scheduled at regular intervals to discuss and decide on business performance, policies, strategies and other matters of significance.

The Board has duly met 13 times during the Financial Year 2018-19 i.e.,10th April,2018, 20th April,2018, 1st May,2018, 23rd June,2018, 1st July,2018, 20th July,2018, 8th August, 2018, 3rd September,2018, 7th September,2018, 24th September,2018, 6th December,2018, 10th December,2018 and 22nd January,2019. The intervening gap between any two consecutive Board Meetings was within the period prescribed under the provisions of the Companies Act, 2013.

Name Category No. of Board Meetings Attended Promoter & Executive Directors
Mr.Dayanand Agarwal Chairman & Managing 12/13
Director
Mr. Sugan Chand Sharma WholeTime Director 12/13
Non - Promoter &Non - Executive Directors
Mr. M. B. Suneel Independent Director 2/8
Ms. Ajai Kumar Agarwal Independent Director 2/8
Mr. Shamantha Dodla Non-Executive Director 6/8

Attendance in the Board Meetings:

Date of Board Meeting Mr.Dayana nd Agarwal Mr.Sugan Chand Sharma Mr.Mamidi Suneel Bhudevi Mr.Ajai Kumar Agarwal Ms.Shamantha Dodla
1. 10.04.2018 Yes Yes N/A N/A N/A
2. 20.04.2018 Yes Yes N/A N/A N/A
3. 01.05.2018 Yes Yes N/A N/A N/A
4. 23.06.2018 Yes Yes N/A N/A N/A
5. 01.07.2018 Yes Yes N/A N/A N/A
6. 20.07.2018 Yes Yes Yes Yes Yes
7. 08.08.2018 Yes No No No Yes
8. 03.09.2018 Yes Yes No No Yes
9. 07.09.2018 Yes Yes No No No
10. 24.09.2018 Yes Yes No No Yes
11. 06.12.2018 Yes Yes Yes Yes No
12. 10.12.2018 Yes Yes No No Yes
13. 22.01.2019 No Yes No No Yes

INTERNAL FINANCIAL CONTROL SYSTEMS

We have adopted policies and procedures which enables implementation of appropriate internal financial controls across the organization and also ensures the orderly and efficient conduct of business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of fraud, error reporting mechanism, the accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. Internal Financial Controls are an integrated part of the Risk Management Process, addressing financial and financial reporting risks. The Internal Financial Controls have been documented, digitized and embedded in the business process.

Assurance on the effectiveness of the Internal Financial Controls is obtained through our management reviews, control self-assessment, continuous monitoring by functional experts as well as testing of the Internal Financial Control systems by the Internal Auditor during the course of audits. We believe that these systems provide reasonable assurance that our Internal Financial Controls are in commensurate with the requirements of our organization.

AUDITORS

Statutory Auditors:

The tenure of Statutory Auditors, M. Anandam & Co, Chartered Accountants expires on the conclusion of 10th Annual General Meeting.

Hence, it is being proposed to appoint – on approval of members of the Company - M/s Ramanatham & Rao, Chartered Accountants,(Registration No 002934S), as the Statutory Auditors of the Company to hold office for a period of 5 years, i.e.; from the conclusion of the 10th Annual General Meeting till the conclusion of the 15th Annual General Meeting, at such remuneration as may be agreed upon by the Board of Directors and the Auditors, in addition to the reimbursement of all out of pocket expenses incurred in connection therewith.

Internal Auditors

The Board of Directors, based on the recommendations of the Audit Committee, has re-appointed M/s. A Tibrewala & Associates, Chartered Accountants, Hyderabad, as the Internal Auditors of the Company, who are submitting its report on quarterly basis.

Secretarial Auditors:

Pursuant to the provisions of Section 204 of Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Mr. Anand Kumar C. Kasat, Company Secretary in Practice to undertake the secretarial audit of the Company.

The copy of said Secretarial Audit Report is attached herewith and marked as Annexure –II.

Auditors Observation(s):

Statutory Auditors Observations:

Auditors Observations Directors Explanation
The Company is not regular in depositing undisputed statutory dues including PF, ESI, Income Tax, Sales Tax etc The delay was on account of temporary liquidity crunch. The management assures that all the statutory payments henceforth will be paid or deposited within due date
Disputed Service Tax Matters pending before various Tribunals / Authorities
Out of IPO funds, Rs.2.43 Crores utilized for other business non IPO objectives Explanation provided elsewhere in this Report. Ratification of deviation, being proposed for members consideration.

Secretarial Auditors Observations:

We would like to clarify that the instances of delay reported by the Secretarial Auditor were just clerical in nature and self-explanatory. Further, deviation in utilisation of IPO proceeds has been already explained elsewhere in this Report.

In view of the said, no further explanation is being provided thereon.

COST RECORDS:

We confirm that the maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013 and hence accounts and records related thereto are not required to be made or maintained.

SECRETARIAL STANDARDS:

The Company complies with all the applicable Secretarial Standards issued by The Institute of Company Secretaries of India.

CONTRACTS OR AGREEMENTS WITH RELATED PARTIES

During the FY under review, transactions were conducted by the Company pursuant to the Agreements entered into with its Related Parties during previous years / financial year under review; the same were on an arms length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or any related party which may have a potential conflict with the interest of the Company at large.

As a matter of Companys Policy all Related Party Transactions are placed before the Audit Committee and the Board for its approval.

The details of related party transactions which were entered into during the previous years/ current year are provided in the Note No. 31 forming part of the notes to financial statements.

As per Section 134(3)(h) of the Companies act, 2013, the particulars of related party transactions as referred to in Section 188(1) of the Companies act, 2013 have been disclosed in Form No. AOC – 2 which is appended as Annexure –I to this Report.

FIXED DEPOSITS

We have neither accepted nor repaid any deposits during the FY ended 31st March, 2019. Further, there were no outstanding deposits as at the beginning of the FY or at any time during the FY 2019. Hence, there are no details to be provided pursuant to Rule 8 (5) (v) & (vi) of Companies (Accounts) Rules, 2014.

Further, the details of unsecured loans borrowed from Directors during the FY ended 31st March, 2019 and / or outstanding as on the said date are as hereunder:

Name Borrowings / repayment during the year Amt. outstanding as on 31st March, 2019 (Rs. In lacs)
(Rs. In lacs)
1. Mr.Dayanand Agarwal (245.63) 184.94
2. Mr. Sugan Chand Sharma 25.10 42.10

Further, the said Directors have provided declaration(s) in writing that the amounts lent by them are their own funds and not been given out of funds acquired by them by borrowing or accepting loans or deposits from others.

ANNUAL RETURN

In accordance with Section 134 (3) (a) of the Companies Act, 2013, an extract of the Annual Return in the prescribed format i.e. Form MGT -9 is appended as Annexure –IV to this Report and the same is uploaded on the website of the Company www.drsdilip.in.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In terms of the provisions of Section 177 of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formalized the process and institutionalized ‘Whistle Blower Policy within the Company, whereby employees and other stakeholders can report matters such as generic grievances, corruption, misconduct, illegality and wastage/misappropriation of assets to the Company.

The policy safeguards the whistle blowers to report concerns or grievances and also provides direct access to the Chairman of the Audit Committee.

The details of the vigil mechanism are provided in the Annexure IX to this Report.

RISK MANAGEMENT

We have been following the principle of risk minimization vis a vis our business needs and the industry norms.

The Role of Risk Management department includes the implementation of Risk Management Systems and framework, review of the Companys financial and risk management policies, assessment of Risk and Procedures to minimize the same.

The Department has been entrusted with the responsibility to assist the Board in

(a) overseeing and approving the Companys enterprise wide risk management framework and b) overseeing that all the risks that the organization faces such as financial, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and ensuring that there is an adequate risk management mechanism in place capable of addressing those risks.

The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Boards Report.

MANAGEMENT DISCUSSION AND ANALYSIS

In accordance with the provisions of SEBI (LODR) Regulations, 2015, a Report on the Management Discussion and Analysis is set out in AnnexureV attached to this Report

CORPORATE GOVERNANCE:

Highest standards of Corporate Governance practices are maintained and followed in every walk of life of our Company. Corporate Governance is intended to increase the accountability of the company and avoid massive disasters before they occur. Corporate Governance is adopted in order to create a corporate culture of transparency, accountability and disclosure.

DISPATCH OF ANNUAL REPORTS

In compliance of the applicable provisions, we shall dispatch the Annual Report for the FY 2018-19 in electronic format to all our members whose E-Mail addresses are registered and updated with our Registrar & Transfer Agents. To all the other members, the Annual Report will be sent in physical format.

LISTING & TRADING

Our Equity Shares are listed on NSE India Limited, Mumbai. The listing fee for the financial year 2018-19 has been duly paid. You may further note that the listing/ trading was never suspended at any time during the financial year 2018-19.

Series : SM
Symbol : DRSDILIP
ISIN : INE02CV01017

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 ( 1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and as amended in respect of our employees, is attached herewith and marked as Annexure –VI (i).

We do hereby affirm that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

Further, we do not have any employee whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) (i)& (ii) of the Companies ( Appointment and Remuneration of Managerial Personnel) Rules, 2014 i.e.Rs.8.5 lakhs per month or Rs.1.02Crores per annum

Moreover, no employee was in receipt of remuneration in excess of that drawn by the Managing Director or Whole Time Director and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company..

Further, details of top ten employees in terms of remuneration drawn during the financial year ended 31st March, 2019 as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, is attached herewith and marked as Annexure- VI (ii).

LOANS, GUARANTEES OR INVESTMENTS

We have not given any loan or made investment or given guarantee or provided security as envisaged under Section 186 of the Act.

DEMATERIALIZATION OF SHARES

100% of the total paid up equity shares of our Company are in dematerialized form as on 31st March, 2019. (Only 48 Shares are in Physical form, the percentage of which is very negligible).

DIRECTORS RESPONSIBILITY STATEMENT:

As required under Section 134(5) of the Companies Act, 2013, the Directors confirm that:

i. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and that no material departures are made from the same ;

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 a true and fair view of the state of affairs of the company at the end of the Financial year and of the profits of the company for the period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis.

v. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no orders passed by the Regulators / Courts which would impact the going concern status of your Company and its future operations.

Further, we confirm that there were no instances of fraud to be reported by the Auditors vide their Report for the FY 2018-19.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE:

We strongly support the rights of all our employees to work in harassment – free environment. We have adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ( ‘POSH Act") and the Rules made thereunder. The policy aims to provide protection to Employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where Employees feel secure.

Further, we have in place a Committee under the name and style "Internal Complaints Committee" in compliance of POSH Act, which looks into various matters concerning harassment, if any, against women at workplace, addresses concerns and complaints of sexual harassment and recommends appropriate action. Details of composition etc., of the said committee are provided in the section on Corporate Governance.

We further confirm that during the year under review, there were no cases filed pursuant to the said Act.

CORPORATE SOCIAL RESPONSIBILITY

Since our Company does not fall within any of the parameters specified under the provisions of Section 135 of the Companies Act, 2013 read with Rules made thereunder, reporting pursuant to Section 134(3) (o) is Not Applicable.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The Particulars as prescribed pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are provided in Annexure – III to this Report.

ACKNOWLEDGEMENTS AND APPRECIATIONS

We take on record the contribution made by the employees of the Company and acknowledge their hard work and dedication to ensure that the Company consistently outgrows its previous performance. Further, we wish to express our sincere appreciation towards all the customers, suppliers, banks, financial institutions, advisors, Government of India and Government Departments, concerned State Governments and other authorities for their sustained support and co-operation towards contributing to the Companys success.

We are also deeply grateful to our shareholders for the confidence and faith that they have always placed in us.

For and on behalf of the Board
Sd/-
Dayanand Agarwal
Chairman and Managing Director
DIN: 00006668
24th August, 2019
Hyderabad