To the members
Crane Infrastructure Limited Guntur
The directors submit 9th annual report of Crane Infrastructure Limited alongwith the audited financial statements for the financial year ended March 31 2017.
|Particulars ||2016-2017 ||2015-16 ||2014-15 |
| ||(Rs. InLacs) ||(Rs. InLacs) ||(Rs. InLacs) |
|Revenue from ||78.81 ||68.22 ||223.77 |
|Operations & || || || |
|Other Income || || || |
|Profit/(Loss) Before Interest & Depreciation ||63.73 ||43.20 ||63.38 |
|Interest ||- ||- ||- |
|Depreciation ||12.99 ||10.67 ||10.33 |
|Profit before exceptional and extraordinary items ||50.74 ||32.53 ||53.05 |
|Profit/ (Loss) before Tax ||50.74 ||32.53 ||53.05 |
|Income Tax- ||13.61 ||12.26 ||16.79 |
|(Current Tax) || || || |
|Previous Year Tax ||- ||- ||- |
|Deferred-tax (expenses)/ Income ||- ||- ||- |
|Profit (Loss) after Taxation ||37.13 ||20.26 ||36.27 |
|EPS-Basic ||0.51 ||0.28 ||0.5 |
|EPS-Diluted ||0.51 ||0.28 ||0.5 |
The management believes that the profits earned during the financial year must beretained and redeployed for the operations of the Company. As the Company needs furtherfunds to enhance its business operations upgrade the efficiency. No dividend is beingrecommended by the Directors for the Financial Year 2016-17.
Transfer to reserves:
The Company proposes to be retained an amount of Rs. 3713 032 in the profit and lossaccount.
The paid up Equity Share Capital as on 31st March 2017 was Rs. 72420000. TheCompany not issued shares with differential voting rights nor granted stock options norsweat equity.
During the Year under review revenue from operations for the financial year 2016-17 at72.99 lacs was improved by 12.60 % over last year (64.82 lacs in 2015-16). Profit aftertax (PAT) for the financial year 2016-17 at 37.13 Lacs was incresed by 83.17 %over lastyear (20.27 Lacs in 2015-16).
Opportunities & Industry out Look:
The real estate sector is one of the most recognized sectors. In India real estate isthe second largest employer after agriculture and is slated to grow at 30% over the nextdecade. The real estate sector comprises of four sub sectors - housing retailhospitality and commercial. The growth of this sector is well complemented by the growthof the corporate environment and the demand for office space as well as urban andsemi-urban accommodations. The construction industry ranks third among the 14 majorsectors in terms of direct indirect and induced effects in all sectors of the economy.The global warehousing and storage industry has witnessed significant growth during thelast five years. The Indian warehousing industry is set to grow at a CAGR of 8%10%and modern warehousing at 25% 30% over the next 5 years due to various factorsincluding the anticipated increase in global demand growth in organized retail andincreasing manufacturing activities presence of extremely affordable and desirablee-commerce options and growth in international trade. The Government of India along withthe governments of the respective states have taken several initiatives to encourage thedevelopment in the sector. The Smart City Project where there is a plan to build 100smart cities is a prime opportunity for the real estate companies. While Goods andServices Tax (GST) continues to remain in a state where several loose ends still need tobe tied up logistics companies -both domestic and global are not just bullish about thesector but are actively making investment plans for the coming fiscals as well. It mayincrease the demand of hi-tech large modern Warehouses Logistics Parks etc. As Indiaawaits policy reforms to pick up speed your Company firmly believes that the demand forReal Estate & Warehousing in India should remain strong in the medium to long term.
Extract of annual return:
As provided under Section 92(3) of the Act the extract of annual return is given in AnnexureI in the prescribed Form MGT-9 which forms part of this report.
Directors' responsibility statement:
Pursuant to Section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm that:
i. in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
ii .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 andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;
iii. the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 theCompany and such internal financial controls are adequate and operating effectively;
vi. the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Changes among Directors and key managerial personnel:
Reappointment of Mrs. Himaja manepalli whose office was liable to retire by rotation ateighth annual general meeting of the company: Mrs.G.Himaja director liable to retire byrotation under the Articles of Association of the Company in 9thAnnual GeneralMeeting and being eligible offer himself for reappointment as Director. The Shareholdersapproved her re-appointment as Director of the company at 9th Annual GeneralMeeting of the company held on 29.09.2017.
Directors Liable To Retire By Rotation In Ensuing Annual General Meeting : Mr.GVSLKantha Rao (DIN 01846224) director liable to retire by rotation under the Articles ofAssociation of the Company in ensuing Annual General Meeting and being eligible offerhimself for reappointment as Director. The Board recommends his re-appointment
Meetings of the Board:
Five meetings of the board were held during the financial year 2016-17 on 26.05.201608.08.2016 12.11.2016 14.02.2017 and 31.03.2017 with a gap between not exceeding theperiod of 120 days as prescribed under the Act and all members are present at the abovemeetings. All the Directors of the Board Attended to 8th AGM of the Company held on26-09-2016.
Pursuant to the Provisions of the Companies Act 2013 the Board evaluated its ownperformance and the working of its Committees and Independent Directors.
Policy on directors' appointment and remuneration and other details:
The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on March 31 2017 the Board consists of six members two of them areindependent directors. The Board periodically evaluates the need for change in itscomposition and size.
The policy of the Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided under Sub-section (3) of section 178 of the Companies Act2013 adopted by the Board is recommended by the Nomination and Remuneration Committee. Weaffirm that the remuneration paid to the directors is as per the terms laid out in thenomination and remuneration policy of the Company.
1. Nomination and Remuneration Committee:
(a) Terms of Reference
The Company had constituted the Nomination and Remuneration Committee under Section 178of the Companies Act 2013 The broad terms of reference are to determine and recommend toBoard Compensation payable to Executive Directors appraisal of the performance of theManaging Directors / Whole-time Directors and to determine and advise the Board for thepayment of annual commission/compensation to the Non-Executive Director and to recommendto the Board appointment/ reappointment and removal of Directors. To frame criteria fordetermining qualifications positive attributes and Independence of Directors and tocreate an evaluation framework for Independent Directors and the Board. The scope of theCommittee also includes matters which are set out in SEBI (LODR) Regulations 2015 and therules made there under as amended from time to time
(b) Composition Meetings and Attendance during the year:
The Nomination and Remuneration Committee comprises of total three Non-ExecutiveDirectors in which two are Independent Director.
The committee comprises as follows:
1. Mr. M.V. Subba Rao (Chairman)
2. P. Bhaskara Rao Member
3. G. Himaja- Member
During the year Five Meetings was held on 26.05.2016 08.08.2016 03.10.201620.01.2017 and 31.03.2017 and all members were present at that meetings.
(c) Selection and Evaluation of Directors:
The Board has based on recommendations of the Nomination and Remuneration Committeelaid down following policies:
1. Policy for Determining Qualifications Positive Attributes and Independence of aDirector
2. Policy for Board & Independent Directors' Evaluation
(d) Performance Evaluation of Board Committees and Directors
Based on the criteria laid down in the Policy for evaluation of Board and IndependentDirectors the Board carried out the annual performance evaluation of Board Committees andthe Independent Directors whereas at a separate meeting Independent Directors evaluatedthe performance of Executive Directors Board as a whole and of the Chairman. Nominationand Remuneration Committee also evaluated individual directors' performance.
i) As per the said Policy evaluation criteria for evaluation Board inter alia covers:Composition in light of business complexities and statutory requirements; establishment ofvision mission objectives and values for the Company; laying down strategic road map forthe Company & annual plans; growth attained by the Company; providing leadership anddirections to the Company and employees; effectiveness in ensuring statutory compliancesand discharging its duties / responsibilities towards all stakeholders; Identificationmonitoring & mitigation of significant corporate risks; composition of variouscommittees laying down terms of reference and reviewing committee's working etc.
ii) Performance evaluation criteria for Executive Directors inter alia include: levelof skill knowledge and core competence; performance and achievement vis--vis budget andoperating plans; Effectiveness towards ensuring statutory compliances; dischargingduties/responsibilities towards all stakeholders; reviewing/monitoring Executivemanagement performance adherence to ethical standards of integrity & probity;employment of strategic perception and business acumen in critical matters etc.
iii) Performance of Independent Directors is evaluated based on: objectivity &constructively while exercising duties; providing independent judgment on strategyperformance risk management and Board's deliberations; devotion of sufficient time forinformed decision making; exercising duties in bona fide manner; safeguarding interests ofall stakeholders particularly minority shareholders; upholding ethical standards ofintegrity & probity; updating knowledge of the Company & its external environmentetc
iv) Committees of the Board are evaluated for their performance based on: effectivenessin discharging duties and functions conferred; setting up and implementation of variouspolicies procedures and plans effective use of Committee's powers as per terms ofreference periodicity of meetings attendance and participation of committee members;providing strategic guidance to the Board on various matters coming under committee'spurview etc
(e) Remuneration Policy for Directors:
The Committee has formulated Policy for Remuneration of Directors KMP & otheremployees. As per the Policy remuneration to Non-executive Independent Directorsincludes:
a. Sitting Fees for attending meetings of the Board as well as Committees of the Boardas decided by the Board within the limits prescribed under the Companies Act.
b. Travelling and other expenses are incurred by them for attending to the Company'saffairs including attending Committee and Board Meetings of the Company.
Remuneration to Executive Directors:
The appointment and remuneration of Executive Directors including Managing DirectorJoint Managing Director and Whole Time Director is governed by the recommendation of theRemuneration and Nomination Committee resolutions passed by the Board of Directors andShareholders of the Company. The remuneration package of Managing Director Joint ManagingDirector and Whole Time Director comprises of salary perquisites allowances and otherretirement benefits as approved by the shareholders at the General Meetings of theCompany.
Remuneration to Non-Executive Directors:
The Non-Executive Directors are paid remuneration by way of Sitting Fees. The NonExecutive Directors are paid sitting fees for each meeting of the Board and Committee ofDirectors attended by them.
2. AUDIT COMMITTEE:
A. Brief description of terms of reference :
The Terms of Reference of this committee cover the matters specified for AuditCommittee under Section 177 of the Companies Act 2013SEBI (LODR) Regulations 2015 and asfollows:
a. Oversight of the Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible.
b. Recommending the appointment and removal of external auditor fixation of audit feeand also approval for payment for any other services.
c. Reviewing with management the annual financial statements before submission to theBoard focusing primarily on:
Any changes in accounting policies and practices
Major accounting entries based on exercise of judgment by management
Qualifications in draft Auditors' Report
Significant adjustments arising out of audit
The going concern assumption
Compliance with stock exchange and legal requirements concerning financialstatements
Any related party transactions i.e. transactions of the company of materialnature with promoters or the management their subsidiaries or relatives etc. that mayhave potential conflict with the interests of the Company at large.
d. Reviewing the adequacy of internal audit function including the structure of theinternal audit department staffing and seniority of the official heading the departmentreporting structure coverage and frequency of internal audit.
e. Discussion with internal auditors of any significant findings and follow up thereon.
f. Reviewing the findings of any internal investigations by the internal auditors intomatters where is suspected fraud or irregularity or a failure of internal control systemsof a material nature and reporting the matter to the board
g. Discussion with external auditors before the audit commences the nature and scopeof audit as well as have post audit discussion to ascertain any area of concern.
h. Reviewing the Company's financial and risk management policies.
i. Reviewing with the management external and internal auditors and the adequacy ofinternal control systems.
j. Other matters as assigned/specified by the Board from time to time.
k. The scope of the Audit Committee also includes matters which are set out in SEBI(LODR) Regulations 2015 read with Section 177 of the Companies Act 2013 and the rulesmade there under as amended from time to time.
B. Composition Meetings and Attendance during the year :
The Audit Committee comprises of total three Non-Executive Directors in which two areIndependent Director. The Audit Committee comprises of Two Independent cum Non-ExecutiveDirectors and One Non- Executive Director (Woman Director). The committee comprises asfollows:
1. Mr. P.Bhaskara Rao (Chairman)
2. Mr. M.V.Subba Rao(Member)
3. Mrs. G.Himaja (Member) During the year Five Meetings was held on 26.05.201608.08.2016 12.11.2016 14.02.2017 and 31.03.2017 and all members are present at thatmeetings.
3. Stakeholders' relationship committee:
The Company had a stakeholders' relationship committee of directors to look into theredressal of complaints of investors
Composition Meetings and Attendance during the year
The Stakeholders' relationship Committee comprises of One Independent cum Non-ExecutiveDirector P.Bhaskara Rao and One Non- Executive Director G.Himaja and One Non ExecutiveDirector (Mr.G.V.S.L.Kantha Rao) .
During the year Four Meetings was held on 26.05.2016 08.08.2016 12.11.2016 and14.02.2017 and all members were present at that meetings.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year: 1:1 During the financial year 2016-17 TheCompany does not pay remuneration to Non- Executive Directors
b. The percentage increase in remuneration of each director chief executive officerchief financial officer company secretary in the financial year: NA
c. The percentage increase in the median remuneration of employees in the financialyear: NA
d. The number of permanent employees on the rolls of Company: Nil
e. The explanation on the relationship between average increase in remuneration &Company Performance: Nil
f. Comparison of the remuneration of the key managerial personnel against theperformance of the Company Aggregate remuneration of key managerial personnel in FY2016-17 was 3.00Lacs Revenue Rs.72.99 Lacs Remuneration of KMPs (as 4.11% of revenue) g.Variations in the market capitalization of the Company price earnings ratio as at theclosing date of the current financial year and previous financial year:
|Particulars ||March 31 2017 ||March 31 2016 ||% Change |
|Market Capitalizati on Price ||Rs. 55835820 ||Rs.45841860 ||21.80 |
|Earnings Ratio ||15.11 ||22.60 ||(33.14) |
h. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: NilIncrease in the managerial remuneration for the year was : Nil There was no exceptionalcircumstances for increase in the managerial remuneration
i. Comparison of each remuneration of the key managerial personnel against theperformance of the Company:
|Remuneration ||3.00 Lacs |
|in FY 2015-16 ||K.Praveen(ED) |
|Revenue ||Rs.72.99 Lacs |
|% on Revenue ||4.11% |
|Profit before Tax ||Rs. 50.74Lacs |
|Remuneration (as % of PBT) ||5.91% |
j. The key parameters for any variable component of remuneration availed by thedirectors: Nil k. The ratio of the remuneration of the highest paid director to that ofthe employees who are not directors but receive remuneration in excess of the highest paiddirector during the year: None.
*As on 31.03.2017 there was no employees in company expect executive director henceabove comparisons are not given.
l. Affirmation that the remuneration is as per the remuneration policy of the Company:The Company affirms remuneration is as per the remuneration policy of the Company. m. Thestatement containing particulars of employees as required under Section 197(12) of the Actread with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014: NA.
Further the report and the accounts are being sent to the members excluding theaforesaid annexure. In terms of Section 136 of the Act the said annexure is open forinspection at the Registered Office of the Company. Any shareholder interested inobtaining a copy of the same may write to the Company Secretary.
Statement on Declaration Given By Independent Directors:
All the independent directors of the company have declared that they met the criteriaof independence in terms of section 149(6) of the companies act 2013 and that there is nochange in status of independence.
Meetings of the Independent Directors:
During the year under review Four meetings of independent directors was held26.05.2016 08.08.2016 12.11.2016 and 31.03.2017 in compliance with the requirements ofschedule IVof the companies Act 2013.
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderUmamaheswara Rao & Co. Chartered Accountants are eligible for re appointment asStatutory Auditors of the company for the financial year 2017-18 and the Board proposesfor appointment of Statutory auditors for a period of five years which ends on until theconclusion of 13th
Annual General Meeting of the company to be held in the Year 2021.
Auditor's report and Secretarial auditor's report:
The auditors' report and secretarial auditors' report does not contain anyqualifications reservations or adverse remarks. Report of the secretarial auditor isgiven as an annexure which forms part of this report. Pursuant to section 139 and otherapplicable provisions if any of the Companies Act 2013 and the Rules farmed thereunder as amended from time to M/s. Umamaheswara Rao & Co. Chartered AccountantsChartered Accountants Guntur were appointed as statutory Auditors of the company in 8thAGM of the company until the conclusion of 13th Annual General Meetingto be held in the year 2021 (Subject to ratification of their appointment at every AnnualGeneral Meeting).Your directors propose to ratify their appointment for the financial year2017-18.
The Auditors' Report does not contain any qualification. Notes to Accounts and Auditorsremarks in their report are self-explanatory and do not call for any further comments.
The Notes to Accounts forming part of the financial statements are self-explanatory andneed no further explanation.
Pursuant to provisions of Section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany engaged the services of M/s. K. Srinivasa Rao & Nagaraju Associates CompanySecretaries in Practice Vijayawada to conduct the Secretarial Audit of the Company forthe financial year ended March 31 2017.
Secretarial Audit Report:
The detailed reports on the Secretarial Audit in Form MR- 3 are appended as an AnnexureIII to this Report. There were no qualifications reservations or adverse remarks given bySecretarial Auditors of the Company except non-compliance of section 203 of the CompaniesAct 2013 and regulation 6 of SEBI (LODR) Regulations 2015 in respect to appointment theCompany Secretary as Key Managerial Person Compliance officer and non-compliance ofregulation 31(2) of SEBI (LODR) Regulations 2015 in respect to maintenance of hundredpercent of shareholding of promoter(s) and promoter group in dematerialized andnon-appointment of internal Auditors in compliance of section 138 of the companiesAct2013.
Board Clarification on Secretarial Auditors Qualifications:
We are sincerely committed for good corporate governance practices with letter andspirit of law and we are sincerely trying to appoint a company secretary who is perfectlysuitable for our company's compliance needs. But we are unable to appoint a companysecretary during the year due to non availability of company secretaries we hope that theposition is to be filled in the near future. The company directs all the promoters toconvert their physical shares into demat form and the majority were converted their sharesinto demat form. but some promoters are not interested to convert their shares into dematform but the company is sincerely trying to compliance of hundred percent promoters shareholding into demat form and the company is also trying to appoint a internal auditor innear future.
Cost Audit is not applicable to the Company for the Financial Year 2016-17.
The Board of the Company has formed a risk management committee to frame implement andmonitor the risk management plan for the Company. The committee is responsible forreviewing the risk management plan and ensuring its effectiveness. The audit committee hasadditional oversight in the area of financial risks and controls. Major risks identifiedby the businesses and functions are systematically addressed through mitigating actions ona continuing basis. The development and implementation of risk management policy has beencovered in the management discussion and analysis which forms part of this report.
Particulars of loans guarantees and investments:
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
Transactions with related parties:
None of the transactions with related parties falls under the out of the scope ofSection 188(1) of the Act. Information on transactions with related parties pursuant toSection 134(3)(h) of the Act read with rule 8(2) of the Companies(Accounts) Rules 2014are given in Annexure II in Form AOC-2 and the same forms part of this report.
Corporate social responsibility:
Your Directors are pleased to inform that the provisions of section 135 of the Actread with Companies (Corporate Social Responsibility Policy) Rules 2014 are notapplicable to the Company.
Deposits from public:
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
Un secured loans taken from the Directors:
During the year the company has received the following un secured loans from thedirectors Amount Rs. 247500/-.
Internal financial control systems and their adequacy:
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants and the reviews performed by management andthe relevant board committees including the audit committee the board is of the opinionthat the Company's internal financial controls were adequate and effective during thefinancial year 2016-17.
Conservation of energy technology absorption foreign exchange earnings and outgo:Conservation of energy:
CIL continues to work on reducing carbon footprint in all its areas of operationsthrough initiatives like. (a) green infrastructure.
(b)Procurement of renewable energy through onsite solar power generating units. CILcontinues to add LEED certified green buildings to its real estate portfolio.
Technology absorption adaption and innovation:
The Company continues to use the latest technologies for improving the productivity andquality of its services
Foreign exchange earnings and outgo:
Foreign exchange earnings and outgo Export in financial year 2016-17: Nil
Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report:
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report.
Significant and material orders passed by the regulators or courts or tribunalsimpacting the going concern status of the company.
There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company.
Change of Registered Office within the local limits of the City
During the registered office of the company was changed from D.No.25-2-1 G.T RoadOpp: Mastan Darga Guntur -522004 to D.No:25-18-54 Opp: Crane Betel Nut Powder worksMain Road Sampath Nagar Guntur -522004.
Prevention of Sexual Harassment of Women At Workplace
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (Act') and Rules made there under yourCompany has constituted Internal Complaints Committees (ICC).The Company. No complaintswere received in this regard during the year
Your Company treats its "human resources" as one of its most importantassets. Your Company continuously invests in attraction retention and development oftalent on an ongoing basis. A number of programs that provide focused people attention arecurrently underway. Your Company thrust is on the promotion of talent internally throughjob rotation and job enlargement.
Report on Corporate Governance
Your Directors are pleased to inform that as per SEBI Amended Circular No.CIR/CFD/POLICY CELL/7/ 2014 dated September 15 2014 compliance with the provisions ofCorporate Governance shall not be mandatory for the Company.
The company has set up vigil mechanism to enable the employees and directors to reportgenuine concerns and irregularities if any in the company noticed by them.
Transfer of Amounts to Investor Education and Protection Fund
Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF). .
The directors thank the Company's employees customers vendors investors and academicinstitutions for their Continuous support. The directors also thank the government ofvarious countries government of India the governments of various states in India andconcerned government departments / agencies for their co-operation. The directorsappreciate and value the contributions made by every member of the Crane InfrastructureLimited
For and on behalf of the board of M/s. Crane Infrastructure Ltd
|Place : Guntur. ||Sd/- ||Sd/- |
|Date : 12-08-2017 ||(G.V.S.L. Kantha Rao) ||(K.Praveen) |
| ||Director ||Executive Director |