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BKV Industries Ltd.

BSE: 519500 Sector: Others
NSE: N.A. ISIN Code: INE356C01022
BSE 00:00 | 26 Feb 3.48 -0.02
(-0.57%)
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3.50

HIGH

3.50

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3.43

NSE 05:30 | 01 Jan BKV Industries Ltd
OPEN 3.50
PREVIOUS CLOSE 3.50
VOLUME 262
52-Week high 5.39
52-Week low 2.37
P/E 34.80
Mkt Cap.(Rs cr) 5
Buy Price 3.43
Buy Qty 37.00
Sell Price 3.50
Sell Qty 61.00
OPEN 3.50
CLOSE 3.50
VOLUME 262
52-Week high 5.39
52-Week low 2.37
P/E 34.80
Mkt Cap.(Rs cr) 5
Buy Price 3.43
Buy Qty 37.00
Sell Price 3.50
Sell Qty 61.00

BKV Industries Ltd. (BKVINDUSTRIES) - Director Report

Company director report

Your Directors have pleasure in presenting you the Twenty Sixth Annual Report togetherwith Audited Financial Statements for the year ended 31st March 2019 .

FINANCIAL PERFORMANCE OF THE COMPANY

(Rs. In Lakhs)
Particulars For the year ended 31/03/2019 For the year ended 31/03/2018
Sales & Other Income 33.42 33.45
Profit/(Loss) before interest and Depreciation (21.72) 2.20
Less: Finance Cost 0.39 0.86
Less: Depreciation and Amortisation expenses 0.85 1.04
Profit before Exceptional items& Taxes (22.96) 0.30
Exceptional Items - -
Profit after Exceptional Items & Taxes (22.96) 0.30
Less: Tax expenses - -
Profit / (Loss) after tax (22.96) 0.30
Other Comprehensive Income / (Loss) (Includes Revaluation Gain on Free Hold Land Rs. 65.19 Lakhs) (0.63) 66.04
Total Comprehensive Income/(Loss) attributable to the owners of the company (23.59) 66.34
Less: Appropriations - -
Closing Balance (Including Other Comprehensive Income) for the year (23.59) 66.34

RESULTS OF OPERATIONS AND STATE OF COMPANY AFFAIRS: The Aqua Farm situated atIsakapalli was given on lease during July 2013 for seven years. Operating in volatile anduncertain environment at that time the company had given the farm on long term leaseearned a gross income of Rs. 33.42 lakhs including Income Other Income and incurred a NetLoss of Rs. 23.59 lakhs (Including income considered under Other ComprehensiveIncome/(Loss)). Company is awaiting the operating lease to get completed to considercarrying on the operations.

DIVIDEND AND RESERVES

In view of considerable accumulated losses and marginal income no dividend is declaredand not transferred any amount to reserves.

SUBSIDIARIES AND JOINT VENTURES

The company does not have any subsidiary.

PARTICULARS REGARDING ENERGY CONSERVATION etc.: The information relating toconservation of energy technology absorption and foreign exchange earnings and outgopursuant to Section 134(3) of the Companies Act 2013 read with Rule 8 of the Companies(Accounts) Rules 2014 is given in Annexure V to this Report.

CHANGES AMONG DIRECTORS AND KEY MANAGERIAL PERSONNEL

Re-Appointment of Non-Executive Director in 26th Annual General Meeting. During theyear Smt. Bommidala Anitha (DIN: 00112766) Non-executive Woman Director was re-appointedas Director in 25thAnnual General Meeting.

Retire by Rotation

In accordance with the provisions of Section 152 of the Companies Act 2013 read withthe Articles of Association of the Company Smt. Bommidala Anitha (DIN: 00112766)Non-executive Woman Director liable to retire by rotation at the forthcoming AnnualGeneral Meeting and being eligible offers herself for re-appointment as Director. TheBoard recommends her appointment. A brief resume of her and other relevant informationhave been furnished in the notice convening the AGM.

During the year Mr. Virat Vishnu has been appointed as a Company Secretary andCompliance Officer with effect from 1.10.2018.

During the year Mr. K. Bhanu Kumar has been appointed as a Chief Financial Officer witheffect from 20.9.2018.

Board and Committee Meetings

The Board met 7 times during the financial year 2018-19 the details of which are givenin the Corporate Governance Report.

Committees of the Board

The details of all the Committees along with their composition terms of reference andmeetings held during the year are provided in the "Report on CorporateGovernance" forming part of this Annual Report.

Board evaluation of its own performance:

The Board has carried out an evaluation of its own performance the performance ofCommittees of the Board namely Audit Committee Risk Management Committee StakeholdersRelationship Committee and Nomination and Remuneration Committee and also the directorsindividually. The manner in which the evaluation was carried out and the process adoptedhas been mentioned in the Corporate Governance Report.

Policy for selection and appointment of Directors Senior Management and theirremuneration: The Board on the recommendation of the Nomination & RemunerationCommittee has framed a policy for selection and appointment of Directors SeniorManagement and their remuneration and also framed the criteria for determining experiencequalifications positive attributes and independence of directors.

Declaration Given by Independent Directors:

All the Independent Directors viz. Sri Tunuguntla Rama Krishna (DIN:02324865) and SriNellore Dolendra Prasad (DIN:01816366) have submitted declarations confirming that theycontinued to meet the criteria of independence as prescribed under Section 149(6) of theCompanies Act 2013 and SEBI (LODR) Regulations 2015.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT2013.

During the financial year 2018-19 the Company has not given any guarantees/loan ormade any investments. However during the year the company has repaid an amount of Rs.5.25 Lakhs due as on 31st March 2018 but received Rs. 32.45 Lakhs interest free loanduring the year out of which Rs. 4.25 Lakhs was repaid to Mr. Bommidala Rama KrishnaManaging Director leaving a balance of Rs. 27.95 lakhs payable as at 31st March 2019.

PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is given in Annexure VII to the Board of Directors report.

AUDITORS AND AUDITOR'S REPORT Statutory Auditors:

M/s. Kurapati Subba Rao & Co. Chartered Accountants (Firm Regn.No:001618S) wasappointed as Statutory Auditors of your Company at the Annual General Meeting held on06thSeptember 2017 for a term of five consecutive years. As per the provisions of Section139 of the Companies Act 2013 the appointment of Auditors is required to be ratified byMembers at every Annual General Meeting. But in accordance with the Companies AmendmentAct 2017 enforced on 7th May 2018 by the Ministry of Corporate Affairs the appointmentof Statutory Auditors is not required to be ratified at every Annual General Meeting. TheReport given by the Auditors on the financial statement of the Company is part of thisReport. There has been no qualification reservation adverse remark or disclaimer givenby the Auditors in their Report. Fraud reported by the Auditor under Section 143(12): Nil

EXPLANATION FOR AUDITORS EMPHASIS OF MATTER:

Regarding the preparation of accounts ongoing concern basis the notes in Independentaudit report is self-explanatory and the company had given the farm on long term lease andgot steady income and been able to meet its operational expenses.

Maintenance of Cost Records - Not Applicable
Cost of Audit - Not Applicable

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s K. Srinivasa Rao & Co Company Secretaries as the SecretarialAuditors to undertake the Secretarial Audit of the Company. The Report of the SecretarialAudit is given in Annexure-III to this Report. There were no qualifications reservationsor adverse remarks given by Secretarial Auditor.

There were no qualifications reservations or adverse remarks given by SecretarialAuditors except the following:

1. Noncompliance of section 203 of the Companies Act 2013 and regulation 6 of SEBI(LODR) Regulations 2015 in respect of non-appointment of the Company Secretary for aperiod up to 30.09.2018.

2. Noncompliance of section 203 regarding non-appointment of CFO by the board with in aperiod of six months from the date i.e 25.01.2016 of such vacancy for a period up to19.09.2018.

Board Clarification on Secretarial Auditor qualifications: The Board has made utmosteffort from time to time for appointment of the Company Secretary & Chief FinancialOfficer as KMPs but not able to appoint them due to lack of suitable Candidates to theprofile of the Company in terms of work location job profile and remuneration . Duringthe year the company has appointed Company Secretary with effect from 01.10.2018 and thecompany has appointed a chief financial officer with effect from 20.09.2018.

RISK MANAGEMENT:

The Company has put in place a mechanism to identify assess monitor and mitigatevarious risks to its key business objectives. Major risks identified by the business andfunctions are systematically addressed through mitigating actions on a continuing basis.The Company has formulated a Risk Management Policy which is also available on theCompany's website at www.bkvindustries.in

INTERNAL FINANCIAL CONTROLS:

The Company has adequate Internal Financial Controls with proper checks to ensure thattransactions are properly authorized recorded and reported apart from safeguarding itsassets. These systems are reviewed and improved on a regular basis. It has a comprehensivebudgetary control system to monitor revenue and expenditure against approved budget on anongoing basis. The internal auditors of the Company review the controls across the keyprocesses and submits reports periodically to the Management and significant observationsare also presented to the Audit Committee for review. Follow up mechanism is in place tomonitor the implementation of the various recommendations.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES: Section 135 of the Companies Act2013 provides the threshold limit for applicability of the CSR to a Company i.e. (a) networth of the Company to be '500 crore or more; or (b) turnover of the company to be '1000crore or more; or (c) net profit of the company to be '5 crore or more. As the Companydoes not fall under any of the threshold limits given above the provisions of Section 135are not applicable to the Company.

RELATED PARTY TRANSACTIONS

All contracts/arrangements/transactions entered into during the financial year with therelated parties were on arm's length basis and were in the ordinary course of business.Section 188(1) of the Companies Act 2013 exempts related party transactions that are inthe ordinary course of business and are on arm's length basis. The Board of Directors andthe Audit Committee have also approved the said related party transactions.

There are no materially significant related party transactions with the promotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. The policy on dealing with RelatedParty Transactions as approved by the Board is available at the investors section of theCompany's website at www.bkvindustries.in

The particulars of contracts/arrangements entered into by the Company with relatedparties as required to be disclosed are given in AOC-2 as Annexure IV to this Report.

CORPORATE GOVERNANCE:

During the year your company followed best corporate governance practices and the samewill also be continued in forthcoming years.

MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the SEBI (LODR) 2015 Regulations given in Corporate GovernanceReport which is the part of this Annual Report.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND: The company has not declaredany dividend till date from inception therefore there were no funds which were required tobe transferred to Investor Education and Protection Fund (IEPF).

EXTRACT OF THE ANNUAL RETURN

The details of the extract of the Annual Return in Form MGT-9 are given in Annexure- VIto this Report.

DISCLOSURES:

Vigil Mechanism & Whistle Blower Policy

The Company has a vigil mechanism and a whistle blower policy. The same has been postedon the Company's website and the details of the same are given in the Corporate GovernanceReport.

STOCK EXCHANGES:

As per the requirement of SEBI Listing Regulations the Company declares that itssecurities are listed on the Stock Exchanges of Mumbai& Kolkata. The company confirmsthat it has paid annual listing fees to the Stock Exchange of Mumbai & Kolkata for theYear 2018-19. However in the case of Kolkata Stock Exchange the shares are listed under"suspension" without any intimation to the Company though company had sent allthe resolutions for delisting in 2007 & 2014 and in view of clarification to bereceived from Calcutta Stock Exchange.

DIRECTOR'S RESPONSIBILITY STATEMENT:

Pursuant to the provisions contained in Section 134(3) of the Companies Act 2013 yourDirectors to the best of their knowledge and belief and according to information andexplanations obtained from the management confirm that:

i) In the preparation of the annual accounts for the financial year ended March 312019 the applicable accounting standards have been followed and there are no materialdepartures from the same.

ii) The Directors have 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 as at March 31 2019 and of the cashflows and loss of the Company for the year ended on that date;

iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

iv) The Directors have prepared the Annual Accounts on a going concern basis.

v) The Directors have laid down proper internal financial controls to be followed bythe Company relevant to its nature of operations and such controls are adequate andoperating effectively.

vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

GENERAL:

Your Directors state that no disclosure is required in respect of the following itemsas there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Companies Act 2013.

2. Issue of equity shares with differential rights as to dividend voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.

4. No orders were passed by the Regulators or Courts or Tribunals which impact thegoing concern status and the Company's operations in future.

Material Changes and commitments if any affecting the Financial position ofthe company which has occurred between the end of the Financial year of the company towhich the Financial statements relate and the date of the report:

No Material Changes and commitments affecting the financial position of the companyoccurred for a period which the financial statements relate and the date of the report.

UNSECURED LOANS RECEIVED FROM DIRECTORS DURING THE YEAR 2018-19:

During the year 2018-19 The Company has received the following loans from thefollowing Directors.

S.No Name of the Director Amount Received during the year (Net)
1 Bommidala Rama Krishna 2795000.00

SECRETARIAL STANDARDS:

The Directors have devised proper systems and processes for complying with therequirements of applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and that such systems were adequate and operating effectively.

DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

Your directors confirm that the Company has adopted a policy for prevention of SexualHarassment of Women at workplace and has set up Committee for implementation of saidpolicy. Your directors confirmed that the Company has complied with provisions relating tothe constitution of Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.During the year Company hasnot received any complaint of harassment.

CHANGES IN THE NATURE OF THE BUSINESS

There was no change in the nature of the business of the Company during the financialyear ended 31st March 2019.

PERSONAL RELATIONS AND APPRECIATION:

The Directors gratefully acknowledge all stakeholders of the Company viz. lesseemembers employees stock exchanges and banks for their support during the year. Yourdirectors hereby place on record their appreciation for the services rendered by the staffof the Company for their hard work dedication and commitment.

By order of the Board of Directors
For BKV Industries Limited
BOMMIDALA RAMA KRISHNA
Place: Guntur Managing Director
Date: 29.05.2019 DIN: 00105030

ANNEXURE - I REMUNERATION POLICY

1. Preamble

This Remuneration Policy provides the framework for remuneration of members of theBoard of Directors Key Managerial Personnel and other employees of the Company. ThisPolicy is guided by the principles and objectives as enumerated in Section 178 of theCompanies Act 2013 to ensure reasonableness and sufficiency of remuneration to attractretain and motivate competent resources a clear relationship of remuneration toperformance and a balance between rewarding short and long-term performance of theCompany. This policy reflects the remuneration philosophy and principles of the companyand considers the pay and employment conditions with peers/competitive market to ensurethat pay structures are appropriately aligned.

2. Remuneration of Non-Executive Directors

As the company had earlier incurred substantial losses and do not have any operationsother than the lease Income no remuneration or sitting fees is paid to the Non-ExecutiveDirectors ("NEDs").

Once the company is able to turn around and substantial losses are recovered thecompany wants to pay the sitting fee to the NEDs for attending the Board after Committeemeetings. The remuneration will be fixed subject to the statutory ceiling and the fee willbe reviewed periodically and aligned to comparable best in class companies.

3. Remuneration of Managing Director

The compensation paid to the Managing Director is within the scale approved by theShareholders. The elements of the total compensation are approved by the N&R Committeewithin the overall limits specified under the Companies Act 2013.

The elements of compensation of the Managing Director are described below: As thecompany do not have adequacy of profit in any financial year the remuneration payable tothe Managing Director shall be subject to the relevant provisions of the Companies Act2013 and the same is paid within the limit specified. Remuneration includes SalaryPerquisites not exceeding the salary amount per annum viz. Medical Expenses Leave TravelAssistance Club Fees and Personal Accident Insurance Charges. Further transport chargestelephone expenses provident fund superannuation fund and encashment of leave (ifapplicable to the company) are provided or reimbursed on actual basis. During the yearManaging Director is reappointed for five years and the remuneration is increased fromRs.4.20 Lakhs to Rs.6.00 Lakhs per annum. The increase is considered for the part of theperiod and provision is made accordingly.

4. Remuneration to Key Managerial Personnel/Other Employees

The Company's total compensation for Key Managerial Personnel/other employees consistsof fixed compensation as the company incurred substantial losses and only fixed incomefrom the farm lease.

Fixed compensation is determined on the basis of size and scope of the job typically asreflected by the level or grade of the job trends in the market value of the job and theskills experience and performance of the employee. Fixed compensation includes BasicSalary Housing Allowance Leave Travel Allowance and a cash allowance.

Overall compensation shall be subject to periodic reviews which takes into accountfactors such as affordability based on the Company's performance and the economicenvironment.

5. Adoption Changes and Disclosure of Information

This Remuneration Policy and any changes thereof are approved by the Board of Directorsbased on the recommendation(s) of the HR N&R Committee. The policy may be reviewed atsuch intervals as the Board or the Committee may deem necessary. Such disclosures of thisRemuneration Policy as may be required under the Companies Act 2013 and SEBI (LODR)Regulations 2015.

Annexure - II

Criteria for Board Nominations

The Nomination and Remuneration Committee (N & R Committee) of the Board isresponsible for identifying persons for initial nomination as directors and evaluatingincumbent directors for their continued service. The following are the qualificationspositive attributes and independence criteria laid down by the Committee of BKV IndustriesLtd. in terms of section 178(3) of the Companies Act 2013 to be considered for nominatingcandidates for Board positions/re-appointment of directors.

QUALIFICATIONS:

Personal Traits

Highest personal and professional ethics integrity and values

Shares the values and beliefs of the Company.

Inquisitive and objective perspective practical wisdom and mature judgment

Demonstrates intelligence maturity wisdom and independent judgment

Self-confidence to contribute to board deliberations has a stature that other boardmembers will respect his or her views.

Experience and Background

Well accomplished in his / her respective field. Demonstrated success at policy-settingand strategy development levels in a large organization (such as corporation governmentacademic institution or profession).

Leadership role- at the time a potential director's initial candidacy is evaluated musteither be current or very fresh and recent and incumbent directors should continue todemonstrate a sophisticated understanding and current knowledge of business issues.

Absence of adverse events (e.g. bankruptcy affiliations securities law sanctionsdisqualifications under Companies Act 2013 or other applicable laws etc.) that eitherdisqualify or require adverse disclosures.

Fit and proper

With respect to Directors being nominated for Independent position the candidateshould comply with the "Independence qualifications" as defined by applicablelaws.

Willingness to devote sufficient time to carry out the duties and responsibilitieseffectively including attendance at meetings.

Commitment to representing the long-term interests of the shareholders and balancingthe interests of stakeholders.

Adhere to the code of conduct of the Company.

Absence of unfair obstruction in the functioning of the Board/Committees.

POSITIVE ATTRIBUTES:

The positive attributes for a director would encompass:

Ethical Integrity & transparency.

He/ She acquires sufficient knowledge in the Company's business and operations.

Demonstrate sound judgment gained through experience & expertise in management/technical/ financial governance or regulatory matters.

Foresight - ability to see and prepare for future anticipate needs opportunities andthreats.

Managerial abilities required to lead and guide the management such as effectivecommunication skills cultural sensitivity flexibility team player strategic thinkingand balancing risk with opportunity ability to juggle several variables and makecomplicated decisions etc.

INDEPENDENCE STANDARDS:

A Director is independent if the Board affirmatively determines that he meets theIndependence criteria provided under the applicable laws. In addition to applying theseguidelines the Board will consider all relevant facts and circumstances in making itsdetermination relating to a director's independence.

Two core objectives in selecting board members and continued board service are that theskills experiences and perspectives of the Board as a whole should be broad and diverseand the collective talent should blend together to be as effective as possible.

Annexure - IV FORM NO. AOC-2 Related Party Transactions

[Pursuant to Clause (h) of sub-section (3) of Section 134 of the Companies Act 2013and Rule 8(2) of the Companies (Accounts) Rules 2014

Form for disclosure of particulars of contracts/ arrangements entered into by theCompany with the related parties referred to in sub-section (1) of Section 188 of theCompanies Act 2013 including certain arms-length transactions under third provisothereto.

1. Details of contracts or arrangements or transactions not at arm's length basis:There were no transactions with related parties which were not at arm's length basis.

2. Details of material contracts or arrangements or transactions at arm's length basis:Remuneration to the Managing Director and Key Managerial Personnel Interest FreeUnsecured Loans have been extended by the Managing Director to the company are the onlyrelated party transactions entered during the year by the company which are in the natureof ordinary course of business and not material transactions.

For BKV Industries Limited
BOMMIDALA RAMA KRISHNA BOMMIDALA ANITHA
Managing Director Director
DIN:00105030 DIN:00112766
Place: Guntur
Date: 29.05.2019

Annexure V

Information to be given under Section 134 read with Rule 8(3) of the Companies(Accounts) Rules 2014

A. CONSERVATION OF ENERGY

i The steps taken or impact on conservation of energy Not Applicable
ii The steps taken by the Company for utilizing alternate sources of energy Not Applicable
iii The capital investment on energy conservation equipment NIL Not Applicable

B. TECHNOLOGY ABSORPTION

i The efforts made towards technology absorption Not Applicable
ii The benefits derived like product improvement cost reduction product Development or import substitution Not Applicable
iii In case of imported technology (imported during the last three years reckoned from the Beginning of the financial year) Not Applicable
(a)The details of technology imported
(b) The year of import
(c) Whether the technology been fully absorbed
(d) If not fully absorbed areas where absorption
iv The expenditure incurred on Research and Development NIL Not Applicable

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

The foreign exchange earned in terms of actual inflows during the year and the Foreign exchange outgo during the year in terms of actual outflows. 2018-19 2017-18
in Rs. in Rs.
Foreign exchange earned NIL NIL
Foreign exchange outgo NIL NIL

Annexure VII

The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Pe rsonnel) Rules2014

A. Information as per Rule 5(1) of the Companies (Appointment & Remuneration ofMana gerial Personnel) Rules 2014:

1. Ratio of Remuneration of each Director to the median remuneration of the employeesof the Company for the financial year:

Sl. No. Particulars Median Ratio with that of employees
1 Bommidala Rama Krishna Managing Director 2.13:1
2 Bommidala Anitha Director Nil
3 Nellore Dolendra Prasad Director Nil
4 Tunuguntla Rama Krishna Director Nil

As there is no Sitting Fees paid to Non Executive Directors it has been shown as NIL

2. Percentage increase in remuneration of each Director Chief Financial Officer ChiefExecutive Officer if any in the financial year:

Sl. No. Particulars % Increase in Remuneration
1 Bommidala Rama Krishna Managing Director 0.02%*
2 Bommidala Anitha Director NA
3 Nellore Dolendra Prasad Director NA
4 Tunuguntla Rama Krishna Director NA
5 B.Virat Vishnu (CS) NA**
6 K. Bhanu Kumar (CFO) NA**

* Increase in part of March 19

** Appointed during the year.

3. Percentage increase in the median remuneration of employees in the financial year:24.62%

4. Number of permanent employees on the rolls of company: 5 Nos.

5. 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: The averageincrease/(Decrease) in salaries of employees other than managerial personnel is 24.62%.

There was no increase in the managerial remuneration during the year.

6. Key parameters for any variable component of remuneration availed by the directors:The Non-executive Directors are not paid any remuneration as the company had been havingfixed income and only marginal profit is earned. Managing Director's remuneration wasfixed at Rs.6.00 lakhs per annum (revised from Rs.4.20 Lakhs during March 19) in view ofno profits or profits inadequate subject to the limits laid down by the Companies Act2013 and overall remuneration approved by the Shareholders. No variable component is therein the remuneration payable to the Managing Director.

7. Ratio of the remuneration of the highest paid director to that of the employees whoare not directors but receive remuneration in excess of the highest paid director duringthe year: None

8. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms that the remuneration is as per the Remuneration Policy of theCompany.

A (1) Information as per Rule 5(2) of the Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014: There were no employees covered under these rules.

By order of the Board of Directors
BOMMIDALA RAMA KRISHNA
Place: Guntur Managing Director
Date: 29.05.2019 DIN: 00105030

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