DIRECTORS' REPORT To The Members of M/s. Sri KPR Industries Limited Secunderabad Your Directors take the pleasure in presenting the Annual report on the affairs of the Company for the financial year 2014-15 together with the Audited Financial Statements and the report of the Auditors thereon. OPERATIONS Your Company's strength lies in identification, planning, execution and successful implementation of the projects undertaken by it. To strengthen the long-term prospects and ensuring sustainable growth in assets and revenue, it is important for your Company to evaluate various opportunities in the different business verticals in which your Company operates. Your Company continues to explore new opportunities. Presently the Company has interest in pipe manufacturing and power generation. The management feels that power generation has enormous scope and potential in the years to come and accordingly new ventures are being contemplated in this area. In addition to the power generation projects, the Company is also exploring new avenues in manufacturing sector. In this regard the Company has commenced the operation of wind mill in Dewas district of Madhya Pradesh in July 2015. The details of the projects as and when finalized will be put forward / informed to the shareholders. During the year under review the Company has made a turnover of Rs. 36,72,97,849/- against previous year turnover of Rs. 43,48,56,138/- thereby resulting a decrease in the turnover and registered a net profit of Rs. 5,63,66,921/- compared to previous year profit of Rs. 3,89,16,797/-. The Company is expecting good future in the coming years. CONSOLIDATED ACCOUNTS The Consolidated Financial Statements of your Company for the Financial Year 2014-15, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and Listing Agreement as prescribed by the Securities and Exchange Board of India (SEBI). FINANCIAL PERFORMANCE / FINANCIAL POSITION OF SUBSIDIARIES / ASSOCIATE COMPANIES / JOINT VENTURES The details of Subsidiary Companies are as follows: 1. Sri KPR Infra & Projects Limited (Wholly owned Subsidiary). 2. Sri KPR Renewable Energy Limited (a step down wholly owned subsidiary of Sri KPR Infra & Projects Limited). There are no associate companies and Joint Ventures associated with the Company. A separate statement containing the salient features of financial statements of subsidiary of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the subsidiary Company and related information are available for inspection by the members at the Registered Office of your Company during business hours and also at the registered office of the subsidiary Company upto the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. The financial performance of the subsidiary included in the consolidated financial statements of your Company is set out in "Annexure A" to this Report. DIVIDEND Your Company has a consistent record of declaration of dividend that balances the dual objectives of appropriately rewarding shareholders and retaining adequate funds, in order to maintain a healthy capital adequacy ratio to future growth. The Company had in the earlier year declared a dividend of 8% on the paid-up share capital of the Company and based on the Company's performance, the directors in the Board meeting held on 31.08.2015 has recommended a final dividend of 7% per equity share of Rs. 10/-(Rupees Ten) each for the financial year 2014 - 2015 amounting to Rs. 1,41,01,987/- (Rupees One Crore Forty One Lakhs One Thousand Nine Hundred and Eighty Seven only). The proposal for payment of dividend is subject to the approval of shareholders at the ensuing Annual General Meeting. The Register of Members and Share Transfer Books will remain closed from 24.09.2015 to 30.09.2015 (both days inclusive) for the purpose of payment of final dividend. Dividend will be paid to those members, whose names appear as shareholders of the Company as on 23.09.2015. The dividend will be tax-free in the hands of shareholders. RESERVES Your Company proposes to transfer Rs. 28,18,346/- to the General Reserve. MATERIAL CHANGES AND COMMITMENTS There are no such changes or commitments occurred, affecting the financial position of the Company between the end of the financial year (i.e. 31.03.2015) and the date of this report. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS There are no events subsequent to the date of Financial Statements. CHANGE IN THE NATURE OF BUSINESS There are no such changes occurred in the nature of business of the Company or its subsidiary Company during the financial year under review. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The Company has not entered into any transaction falling under the provisions of Section 186 of the Companies Act, 2013 and rules made there under as such the relevant information is not applicable. PARTICULARS OF CONTRACTS / ARRANGEMENTS MADE WITH RELATED PARTIES Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as "Annexure B" to the Board's Report. BOARD MEETINGS The Board of directors met 8 (Eight) times on 12.05.20104; 14.06.2014; 30.07.2014; 12.09.2014; 14.11.2014; 30.01.2015; 10.03.2015 and 11.03.2015 during the financial year. DIRECTORS / KEY MANAGERIAL PERSONNEL During the year under review, there was no change in the composition of the Board of Directors of the Company. During the current year 2015-16, the Company has passed resolution through postal ballot process pursuant to the provisions of Section 110 and applicable provisions, if any of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 and Clause 35B of the Listing Agreement for change of designation of Sri. Kishan Reddy Nalla (DIN: 00038966) from Managing Director to Whole-Time Director of the Company w.e.f 17.04.2015. Also Mr. N. Siddha Reddy was appointed as Chief Financial Officer of the Company w.e.f 31.08.2015. INDEPENDENT DIRECTORS The Board of the Company consists of 9 Directors, out of which three are independent Directors. DECLARATION OF INDEPENDENCE Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of Independence as prescribed under Section 149 of the Companies Act, 2013 read with the Schedules and Rules made there under as well as Clause 49 of the Listing Agreement. RETIRE BY ROTATION In accordance with Section 152 of the Companies Act, 2013 read with Articles of Association of the Company, Mr. Bhoopal Reddy Aleti and Mr. Vineel Reddy Nalla, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. A brief profile of directors is given in the notice of the Annual General Meeting. POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION The current policy of the Company is to have a mix of Executive and Independent Directors to maintain the independence of the Board. As on 31st March, 2015 there are 9 Directors, four of whom are Executive and Whole-Time Directors, three are Independent Directors and two are Non-Executive Directors. The Board periodically evaluates the need for change in its composition and size. The policy of the Company on director's appointment and remuneration is provided as annexure to the Corporate Governance Report. EVALUATION OF BOARD EFFECTIVENESS In terms of provisions of the Companies Act, 2013 read with rules made there under and Clause 49 of the Listing Agreement, the Board of Directors, on recommendation of the Nomination and Remuneration Committee, have evaluated the effectiveness of the Board. Accordingly, the performance evaluation of the Board, each Director and the Committees was carried out for the financial year ended 31st March, 2015. The evaluation was done using individual questionnaires covering vision and strategy of the Board, Board dynamics, contribution towards development of the strategy, risk management, budgetary controls, functioning, performance & structure of Board Committees, ethics, knowledge & expertise of Directors, leadership, the level of participation in the Board Meetings, understanding of their roles and responsibilities, business of the Company and effectiveness of their contribution. The Directors expressed satisfaction with the evaluation process. COMMITTEES CONSTITUTED BY THE BOARD OF DIRECTORS As provided in the Report on Corporate Governance. AUDITORS STATUTORY AUDITORS M/s V. Sridhar & Co, Chartered Accountants, Hyderabad, the Statutory Auditors of the Company retires at the conclusion of ensuing Annual General Meeting and, being eligible offer themselves for reappointment from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014. A resolution proposing appointment of M/s. V. Sridhar & Co, Chartered Accountants, Hyderabad as the statutory auditors of the Company pursuant to Section 139 of the Companies Act, 2013 forms part of the notice. There are no qualifications, reservation or adverse remarks made by the statutory auditors in the audit report. SECRETARIAL AUDITORS Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company with the approval of its Board, appointed M/s. BS & Company, Company Secretaries LLP to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2015. The Secretarial Audit Report forms part of the Annual Report as "Annexure C". The qualifications, reservations or adverse remarks or disclaimers made by the auditor in the report: CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 3 of the Companies (Accounts) Rules, 2014, is enclosed as "Annexure E" to the Board report. CORPORATE GOVERNANCE REPORT The Company continues to strive towards highest standards of Corporate Governance while interacting with all the stakeholders. In compliance with the provisions of Clause 49 of the Listing Agreement, a separate report on Corporate Governance along with a certificate from the Auditors on its forms part of the Annual Report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT The Management discussion & analysis report for the year under review forms part of the Annual Report. All matters pertaining to industry structure, segment wise performance, outlook, risks and concerns, internal control system and their adequacy, etc are discussed in the said report. PARTICULARS OF EMPLOYEES The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as "Annexure F". HUMAN RESOURCES Your Company treats its "human resources" as one of its most important assets. The human resource philosophy and strategy of your Company is to attract and retain the best talent, encourage innovation, and create an engaging and motivating workplace environment. Your Company continues its focus on building & developing the leadership pipeline and upgradation of workforce skills. Your Company is providing number of programmes for promotion of talent internally through job rotation and job enlargement. RISK MANAGEMENT POLICY The Risk Management framework of your Company which ensures regular review by management to proactively identify the emerging risks, to do risk evaluation and risk prioritization along with development of risk mitigation plans and action taken. The various risks, including the risks associated with the economy, regulation, competition, foreign exchange, interest rate etc., are documented, monitored and managed efficiently. In order to fulfil the objectives and to lay a strong foundation for the development and implementation of a risk management framework, the policy adopted by the Board had be in line with the policy statement as below: (a) To ensure protection of the shareholder through establishing an integrated risk management framework for monitoring, reporting and mitigating risk. (b) To provide strong basis for informed decision making at all levels of the organisation. (c) To strive towards the betterment of the system of risk management on a continuous basis. Policies approved from time to time by the Board of Directors/Committees of the Board form the governing framework for each type of risk. The business activities are undertaken within this policy framework. INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013 Your Company has always believed in providing a safe and harassment free workplace including providing an environment that is free from discrimination and harassment including sexual harassment for every individual working in the premises through various policies. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. During the year ended 31 March, 2015, no complaints were received pertaining to sexual harassment. VIGIL MECHANISM / WHISTLE BLOWER Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its Directors, Employees and Stakeholders against unethical behaviour, actual or suspected fraud or violation of Company's code of conduct or ethics. The policy provides for safeguards against victimization and provides direct access to higher levels of supervisors. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF). ACKNOWLEDGEMENTS Your Directors wish to place on record their sincere appreciation and acknowledge with gratitude the support and consideration extended by the Bankers, Shareholders and employees and look forward for their continued support and cooperation. For and on behalf of the Board of Directors FOR SRI KPR INDUSTRIES LIMITED Sd/- (KISHAN REDDY NALLA) CHAIRMAN DIN: 00038966 Place: Secunderabad Date: 31.08.2015 |