DIRECTORS' REPORT TO THE MEMBERS Your Directors have pleasure in presenting the 23rd Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2015. 2) STATE OF COMPANY'S AFFAIRS : During the year under review, the Company had achieved a sales turnover of Rs 4474.61 lakhs during the current year as against Rs.4207.08 lakhs made during the previous year. For the year 2014-15, the company earned a net profit of Rs.117.22 lakhs as against the net profit of Rs.110.40 Lakhs made during the previous year. (3) DIRECTORS AND KEY MANAGERIAL PERSONNEL : Details of directors as per Section 152 read with section 149 of the Companies Act, 2013 and particulars of key managerial personnel as per Section 203 of the Act read with Clause49 of the Listing Agreement, the Board is duly constituted and is balanced. During the year under review, Sri. R. Shiv Kumar, Executive Vice Chairman of the company will retire by rotation and being eligible, offers himself for re-appointment at the ensuing annual general meeting. Sri. P. Ramamoorthy resigned from the office of Director and the Board placed on record its appreciation for his support and guidance during his tenure. The company appointed key managerial personnel as required under the Companies Act, 2013 and there is no change that took place during the year. (4) DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to Section 134 (3) (C) of the Companies Act, 2013, the Directors confirm that: (a) in the preparation of annual accounts, the applicable accounting standards had been followed and there are no material departures from the same. (b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and the profit and loss of the company for that period. (c) proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities (d) annual accounts were prepared on a going concern basis., and (e) 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. (f) the proper system was devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. (5) DECLARATION BY INDEPENDENT DIRECTORS : The Company has received necessary declaration from all the independent Directors under section 149(7) of the Companies Act, 2013 that they meet the criteria of independence laid down in section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. (6) BOARD MEETINGS : The Board met five times during the year under review the details of which are given in the Corporate Governance Report that forms part of this Report. (7) POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION : The company's policy lays down the criteria for determining qualifications, positive attributes, independence of a director and other matter as provided under sub-section (3) of Section 178 of the Companies Act, 2013. The Current Policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board. The board consists of two executive directors and two non executive directors with two independent directors. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the company. (8) AUDIT COMMITTEE : Pursuant to the provisions of section 177 of the Companies Act, 2013, the company board constituted the audit committee with the following directors: (i) M. Narasimha Rao, Independent Director as Chairman (ii) K.V. Prasad, Independent Director (iii) K.V. Nagalalitha, Non- Executive Director (9) AUDITORS : (a) Statutory Auditors: At the Annual General Meeting held on 26th September, 2014, M/s C. Ramachandram & Co., Chartered Accountants were appointed as statutory auditors of the company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, M/s C. Ramachandram & Co., Chartered Accountants as statutory auditors of the company, is placed for ratification by the shareholders. 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. b) Cost Auditors: Nageswararao & Co., Cost Accountants are the Cost Auditors appointed by the company Board for auditing the cost accounts of the company for the year ended 31.03.2014 and the cost audit report for the year 2013-14 was filed. (c) Secretarial Auditor: K. Swamy & Co., Company Secretaries are the Secretarial Auditors appointed by the board of directors of the company for the year 2014-15 and the Report is attached to this Directors' Report vide Annexure-DR-1. (10) VIGIL MECHANISM : Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 read with clause 49 of the Listing Agreement, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The company has not denied access to any personnel to approach the management on any issue. (11) LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 : No Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are made by the Company. (12) CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES : Pursuant to the provisions of Section 134(3)(h) read with Rule8(2) of the Companies (Accounts) Rules, 2014, 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. Your Directors draw attention of the members to note 23 to the financial statement which sets out related party disclosures. (13) REMUNERATION OF DIRECTORS, KMP'S AND EMPLOYEES : The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managing Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Director is given in a separate annexure to this Report vide Annexure-DR- 6: Particulars of employees as per the Rule-5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are not applicable as there is no employee who was in receipt of remuneration in excess of the limits specified. (14) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in the Annexure-DR-2 to this report. (15) RISK MANAGEMENT POLICY: The Company has been addressing various risks impacting the Company and the policy of the Company on risk management is set out in the Management Discussion and Analysis which forms past of this report. (16) BOARD EVALUATION: The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate governance report section in this Annual Report. The Board approved the evaluation results as collated by the nomination and remuneration committee. None of the independent directors are due for re-appointment. (17) EXTRACT OF ANNUAL RETURN: In accordance with the provisions of Section 134(3)(a) of the Companies Act, 2013 The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-DR-3. (18) MANAGEMENT DISCUSSION AND ANALYSIS REPORT: As required under Clause-49 of the Listing Agreement a statement on the Management Discussion and Analysis Report is attached to this Report vide Annexure-DR-4. (19) CORPORATE GOVERNANCE REPORT : Pursuant to the claused-49 of the Listing Agreement the company complied with the guidelines and a statement on the corporate governance report for the year 2014-15 is attached vide Annexure-DR-5. (20) GENERAL: Your Directors state that no disclosure or reporting is required in respect of the following items as they are not applicable there were no transaction on these items during the year under review: 1. Details relating to deposits covered under Chapter-V of the Act. 2. No significant or material orders were passed by the Regulators or courts or tribunal which impact the going concern status and the companies operations in future. 3. No cases were filed pursuant to the sexual harassment of women at workplace (prevention, prohibition and reduresal) Act, 2013. 4. Dividend recommended by the Board. 5. Issue of Equity shares with differential rights as to Dividend, voting or otherwise. 6. Issue of shares to Employees of the Company under any revenue. 7. Corporates Social Responsibility Policy. ACKNOWLEDGEMENT: Your Directors take this opportunity to express their sincere appreciation for the cooperation received from the various departments of the Government, Bankers, Suppliers, Customers and Shareholders. The Directors also wish to place on record their appreciation for the committed services by the company's Executives, staff and workers. For and on behalf of the Board N. KRISHNA MOHAN CHAIRMAN K VIJAY KUMAR Managing Director Place: Hyderabad Date : 29-05-2015 |