The Board of Directors hereby submits the report of the business and operations of yourCompany along with the audited financial statements (Standalone &.Consolidated) for the financial year ended March 31. 2017.
|FINANCIAL HIGHLIGHTS || || || ||(Amount In Rs.) |
|PARTICULARS || |
| ||2017 ||2016 ||2017 ||2016 |
|Income from operations ||220.127.116.117 ||134316.684 ||18.104.22.1689 ||32.60.05.596 |
|Other income ||1.9809534 ||59728.621 || |
|Gross profit ||22.214.171.1241 ||19.4045305 ||92.99.09927 ||126.96.36.1997 |
|Consumption of Raw materials ||3.20.86.038 ||188.8.131.520 ||184.108.40.206 ||10.8921641 |
|Changes in inventories ||64.19.923 ||(26.21342) ||7.39.21507 ||(25836521) |
|Employee benefit expenses ||123.72.083 ||220.127.116.119 ||1.8140559 ||1.9119261 |
|Finance cost ||1.6774114 ||18.104.22.1685 ||34332474 ||323.41675 |
|Depredation ||2.6356.490 ||242.23.486 ||3.5774521 ||3.3507052 |
|Other expenses ||44990988 ||4.6308.831 ||22.214.171.1244 ||15.09.57677 |
|Total expenses ||13.8999.686 ||12.7241699 ||81.6027.543 ||126.96.36.1995 |
|Profit/ (Loss) before tax &. exceptional items ||279.91.115 ||6.6803606 ||11.3882.3 84 ||633.40.892 |
|Exceptional items ||(13.25.382) ||52.11.186 ||(13.25.382) ||67.33.723 |
|Prior period items ||- ||- ||- ||- |
|Profit/ (Loss) before tax ||188.8.131.523 ||72014.792 ||1125.57.002 ||7.00.4615 |
|Current tax ||(49.35.567) ||(114.79.658) ||184.108.40.2067 ||220.127.116.113 |
|Deferred tax ||14.77405 ||3.15.867 ||68.10446 ||(24.52.946) |
|Profit/ (Loss) after tax ||23207571 ||60851002 ||8.2585149 ||5.97.06948 |
Your Company's strength lies in identification planning execution and successfulimplementation of the projects undertaken by it.
Presently. the Company has interest in pipe manufacturing and wind powergeneration. During the year under review the Company has made a turnover of Rs. 14.71crores as against previous turnover of Rs. 13.43 crores thereby resulting increasein the turnover. Earned net profit of Rs. 2.32 crores as against the previous yearProfit of Rs. 6.08 crores.
On a consolidated basis the Company has achieved a turnover of Rs. 90 crores asagainst the previous year turnover of Rs. 32.60 crores thereby resulting increase in theturnover and achieved net profit of Rs. 8.26 crores as against the previous net profit ofRs. 5.97 crores.
As seen from the above the turnover from pipe manufacturing activity has come down dueto preferring of metal pipes over A.C. pipes by the user departments. You are aware thatto service the large equity the Company has entered into new avenue of execution ofdrinking water supply schemes by owning a 100% subsidiary Company vSriKPR Infra & Projects Ltd." which
is yielding reasonable profits and also dividends to the parent Company and thereby toshareholders of Sri KPR Industries Ltd. Further the Subsidiary company "Sri KPRInfra & Projects Ltd" has also expanded wind power generation by settingup 2.0 MW wind power mil) at Tailimadugula in Anantapuram District of Andhra Pradesh whichhas also been commissioned during March. 2017.
The Company is further trying to exploit other avenues in view of decrease in pipemanufacturing activity.
The board has recommended a dividend of 10% i.e. Rs. 1/- per share.
The board has not transferred any amount to Reserves for the year 2016-17.
Your Company has not accepted any deposits from public and as such no amount onaccount of principal or
interest on deposits from public was outstanding as on the date of the balance sheet.
PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS
During the year under review the Company has not given any loan provided guarantee ormade any investment falling under the provisions of Section 186 of the Companies Act. 2013.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE COMPANY
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the Financial year and date of this report.
STATE OF COMPANY AFFAIRS:
The operations of the Company was not as expected by the Managemnt and the same hasbeen effected due to various reasons.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company. Shri. Raja Reddy Gaddam retire by rotation at the ensuingAnnual General Meeting and being eligible offeredhimself for re-appointment.
Term of Shri. Kishan Reddy Naila. Shri. Srinath Reddy Nalla. and Shri. Raja ReddyGaddam is upto July 31. 20J8 The Board of Directors on the recommendation ofNomination and Remuneration Committee and in supersession to earlier resolution passed bythe members has re-appointed Shri. Kishan Reddy Nalia as Managing DirectorShri. Sr .-iath Reddy Nalla and Shri. Raja Reddy Gaddam as Whole-time Directors of theCompany for a period of 5 (Five) year' w.e.f. October 1. 2017 subject to approval ofmembers at thjy ensuing Annual General Meeting.
During the year Shri. Naveena Chandra Thammishefty resigned w.e.f. August 13. 2016 imdwas again appointed as Additional Independent Director w.e.f. September 2. 2016 andratified as Independent Director for a period of 5 (five) years at the 28thAnnual General Meeting.
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 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 2017 and of the profitof the Company for that period;
iii. the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. the Directors have prepared the annual accounts on a going concern basis:
v. the Directors have laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and operating effectively;
vi. the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of theCompanyas required under Section 149(7) of the Companies Act. 2013 confirming that theymeet the criteria of indpendence prescribed under Section 149(6) of the Companies Act2013.
NUMBER OF MEETINGS OF THE BOARD
The Board of Directors met 5 (Five) times during the year. Particulars of meetingsheld and attended by each Director are detailed in the Corporate Governance Report whichforms part of the report.
COMMITTEES OF THE BOARD
Currently the Board has 3 committees:
a. Audit Committee
b. Nomination and Remuneration Committee
c. Stakeholder Relationship Committee.
A detailed note on the composition of the board and its committees is provided in theCorporate Governance Report. Further during the year all the recommendations madeby Audit committee were accepted by the Board.
DETAILS OF SUBSIDIARIES/ ASSOCIATES/ JOINT VENTURES
During the year the Board of Directors (the Board") reviewed the affairsof its Wholly Owned Subsidiary i.e. Sri KPR Infra &. Projects Limited. Inaccordance with Section 129(3) of the Companies Act. 2013 consolidated financialstatements of the Companyforms part of the
Annual Report. A statement containing the salient features of thefinancial statements of th< Subsidiary Company in the prescribed Form AOC-1 is appendedas "Annexure I" to the Board's report.
In accordance with Section 136 of the Companies Act. 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany arid audited accounts of M/s. Sri KPR Infra & Projects Limited- Wholly ownedsubsidiaiy is available can our These documents will also be available for inspectionduring business hours at our registered office on all working days except on Saturday upto 1 P.M.
PARTICULARS OF CONTRACTS jOR ARRANGEMENTS MADE WITH RELATED PARTIES
During the year your Company has not entered into any fresh contracts/ arrangementsfalling under the provisions of Section 188 of the Companies Act. 20L3.
CONSERVATION of ENERGY. RESEARCH AND QEVE.LOPM E N1 TEC HNOLOGY_ _ A itSORPJION
FOREIGN EXCHANGE EARNINGS AND. OUTGO
Information with respect to conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134(3)fm) of the Act read with Companies(Accounts) Rules. 2014 is prepared and is enclosed as "Annexure II".
.INTERNAL. _ .FINANCIAL CONTROL AND ITS
The Board of your Company has laid down internalfinancial controls to be? followed bythe Company aricl that such internal financial controls are adequate and operatingeffectively. Your Company has adopted policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets th prevention and detection of frauds and errors the accuracyand < ornplclerreo of the accounting records and the timely preparation ofreliable financial disclosures.
The details in respect of internal financial control and their adequacy are included inthe management discussion analysis report which forms part of this report.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 of tire Act. Rule 5(1) and top ten empolyees in terms of remunerationdrawn as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Amendment Pules. 2010 has I appended as "Annexure HI" to thisReport. Further stipulat'd under Rule 5(2)of the Companies (Appointment mdRemuneration of Managerial Personnel) Amendm- rit Rules. 2016. no employee who wasemployed for the whole of the financial year was in receipt of remuneration exceeding Rs.1.020ores per annum and no employe who was employed for part of the financial year w. isin receipt of remuneration of P.s. P> Lakhs per month
POUCY_ ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The Company's policy on Director's appointment and remuneration and other mattersprovided under Section 178(3) of the Companies Act. 2013 has bean div los'-d underCorporate Governance Report which forms part of this report.
AUDITORS Statutory Auditors
As per the provisions of the Act. the period of office of M/s. V. Sridhar & Co..Chartered Accountants. Statutory Auditors of the Company retires at the conclusion of theensuing Annual General Meeting.
It is proposed to appoint M/s. Ayyadevara &. Co. Chartered Accountants asthe new Statutory Auditors of the Company for a period of 5 (Five)consecutive years
i.e.. from the conclusion of 29th Annual Genera! Meeting until the conclusion ofthe 34th Annual General Meeting of the Company.
M/s. Ayyadevara & Co. Chartered Accountants have informed the Company thattheir appointment if made would be within the limits prescribed under Section 141 of theCompanies Act 2013 and they have also furnished a declaration in terms of section 141 ofthe Companies Act. 2013 that they are eligible to be appointed as auditors and that theyhave not incurred any disqualification under the Companies Act. 2013.
The Board recommends appointment of M/s. Ayyadevara &. Co. CharteredAccountants as Statutory Auditors of the Company. Accordingly a resolution proposingappointment of M/s. Ayyadevara & Co. as Statutory Auditors of the Company for aperiod of S years which forms part of the notice is placed before the members for theirapproval.
Hu Board of Directors places on record its appreciation for the services rendered byM/s. V. Sridhar &. Co. Chartered Account ants as the Statutory Auditors of theCompany.
Pursuant to the provisions of Section 204 of the Companies Act. 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. the board hasre-appointefi BS & Company Company Secretaries LLP for a consecutive period of 3consecutive years to conduct Secretarial Audit of the Company. The Secretarial AuditReport for the financial year ended March 31. 2017 is annexed herewith marked as
"Annexure V" to this Report.The Secretarial Audit Report containsthefollowing observations:
!. The consent for operations from the Telangana Pollution Control Board (the Board)expired on 30.09.2014 and is in the process of renewal with the Board. The Company isin the process of renewal of license.
2. The Company has not obtained insurance policy under the Employees CompensationAct and the Payment of Gratuity Act. The Company is in the process of obtaining thesame.
3. The Company is yet to file certain returns under some of the applicable Labour Laws.The Company is in the process of filing the pending returns with the requisiteauthorities.
FRAUDS REPORTED BY AUDITORS
During the year there were no frauds reported by the Auditors falling under Section143 of the Companies Act. 2013.
RISK MANAGEMENT POLICY
Risk Management framework of your Company which ensures regular review by management toproactively identify the emerging risks to do risk evaluation and risk prioritizationalong with development of risk mitigation plans and action taken. The various risksincluding the risks associated with the economy regulation competition foreignexchange interest rate etc. are documented monitored and managed efficiently.
In terms of Schedule V of Listing Regulations a detailed report on CorporateGovernance along with Compliance certificate issued by Statutory Auditors of the Companyis attached and forms integral part of this Annual Report.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report as required under LODR Regulations isdisclosed separately in the current Annual Report.
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION.PROHIBITION &. REDRESSAL1 ACT. 2014
Your Company is committed in creating and maintaining an atmosphere in which employeescan work together without fear of sexual harassment exploitation or intimidation. Asrequired under the provisions of Sexual Harassment of Women at Workplace (Prevention.Prohibition and Redressed) Act. 2013. your Company has constituted an Internal ComplaintsCommittee. No complaints were received by the committee during the year under review.Since the number of complaints filed during the year was NIL the Committee prepared a NILcomplaints report. This is in compliance with section 22 of the Sexual Harassmentof Women at Workplace (Prevention. Prohibition and Redressed) Act. 2013.
SIGNIFICANT AND MATERIAL ORDERS PASSEb BY THE REGULATORS
There were no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
Your Directors take this opportunity to thank the customers shareholders suppliersbankers business partners/ associates financial institutions and Central and StateGovernments for their consistent support and encouragement to the Company.
FOR AND ON BEHALF OF THE BOARD
KISHAN REDDY NALLA
SRINATH REDDY NALLA
WHOLE TIME DIRECTOR
Date: September 2 2017