DIRECTORS' REPORT To The Members of the Company The Directors have pleasure in presenting the 30,h Annual Report of your Company and the Audited financial statements for the financial year ended 31st March 2015 together with Auditors' Report thereon. DIVIDEND: Your Directors did not recommend dividend for the financial year 2014-15. FIXED DEPOSITS: The Company has not accepted or invited any Deposits and consequently no deposit has matured / become due for re-payment as on 31st March 2015. DIRECTORS: In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and the Articles of Association of the Company, Shri V.J.Sarma and Shri M.T .Sreenivasa Rao, Directors of the Company retire by rotation at this Annual General Meeting and being eligible offer themselves for reappointment. The term of appointment of Shri T.G. Raghavendra and Shri V.J. Sarma as Managing Director and Whole time Director respectively expires on 30/09/2015. The Nomination and Remuneration Committee of the Company recommended their re-appointment and accordingly Board places their appointment before the Members at the ensuing Annual General Meeting. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Further, there has been no change in the circumstances which may affect their status as independent director during the year. The brief particulars of the Directors seeking appointment / re-appointment at this Annual General Meeting are being annexed to the Corporate Governance Report as required under Clause 49 of listing agreement forming part of this Annual Report. Pursuant to the provisions of Section 203 of the Act, the appointment of Shri TG Raghavendra, Chairman & Managing Director and Shri.V.J.Sarma, Whole-time Director, were formalized as the Key Managerial Personnel of the Company. KEY MANAGEMENT PERSONNEL During the year Mr. Praveen Kumar, was CFO of the Company, who resigned on 01.05.2015. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out performance evaluation taking into consideration of various aspects of the Board's functioning, composition of Board, and its Committees, execution, and performance of specific duties, obligations and governance. The Performance of evaluation of Independent Directors was completed. The Performance evaluation of Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with evaluation process. REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy which lays down a framework in relation to selection, appointment and remuneration to Directors, Key Managerial Personnel and Senior Management of the Company. The Remuneration Policy is stated in the Corporate Governance Report. MEETINGS During the year 7 (seven) Board Meetings and 4 (four) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. RELATED PARTY TRANSACTIONS All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval, where ever required. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. A statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee and the Board of Directors on a quarterly basis. The Company has developed a Policy on Related Party Transactions for the purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT: There are no significant and material orders passed by the Regulators/ Courts that would impact the going concern status of the Company and its future operations. AUDITORS: Statutory Auditors Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s.T.Adinarayana & Co, Chartered Accountants, were appointed as statutory auditors of the Company hold office till the conclusion of the ensuing Annual General Meeting of the Company and have confirmed their eligibility and willingness to accept the office of the Statutory Auditors, if re-appointed. 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 has appointed M/s. Rakhi Agarwal & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the Financial Year 2014-15. The Report of the Secretarial Audit Report for Financial Year 2014-15 is annexed herewith as "Annexure-I". Internal Auditors Internal auditors of the Company have done audit and their report is reviewed by the Audit Committee from time to time. CORPORATE SOCIAL RESPONSIBILITY (CSR): The Company is not covered under the criteria mentioned in the provisions of Companies Act, 2013. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the stock exchanges, is presented in a separate section forms part of the Annual Report. CORPORATE GOVERNANCE: The Company has implemented the procedures and adopted practices in conformity with the Code of Corporate Governance enunciated in Clause 49 of the Listing Agreement with the Stock Exchanges. A separate report on corporate governance practices followed by the Company together with a Certificate from the Company's Auditors confirming compliances forms an integral part of this Report. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure-II". INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. RISK MANAGEMENT The Board of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management policy/plan for the Company and ensuring its effectiveness. The Risk Management Committee oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. VIGIL MECHANISM / WHISTLE BLOWER POLICY In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour the company has adopted a vigil mechanism policy. HUMAN RESOURCES: Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which has helped the Organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement. DIRECTORS' RESPONSIBILITY STATEMENT: To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a) That in the preparation of the accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company at the end of the Financial Year and of the Profit or Loss of the Company for the year under review; c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) That the Directors have prepared the accounts for the financial year ended 31st March 2015 on a 'going concern' basis; e) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and f) That devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. PARTICULARS IN RESPECT OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo required to be disclosed under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in the Annexure III forming part of this Report. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2014-15, the Company received no complaints on sexual harassment. PARTICULARS OF EMPLOYEES The Company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. PARTICULARS OF REMUNERATION Disclosures with respect to the remuneration of Directors and employees as required under Section 197(12) of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as follows: (i) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year; (ii) The percentage increase in the median remuneration of employees in the financial year is 5 % (iii) The number of permanent employees on the rolls of company is 22. (iv) The explanation on the relationship between average increase in remuneration and company performance; On an average, employees received an increase of 5%. The increase in remuneration is in line with the market trends. vii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; The average increase in salaries of employees other than managerial personnel in 2014-15 was 5%. Percentage increase in the managerial remuneration for the year was Nil% APPRECIATION: Your Directors wish to place on record their appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry, despite increased competition from several existing and new players. ACKNOWLEDGEMENTS: The Board desires to place on record its sincere appreciation for the support and co-operation that the Company received from the suppliers, customers, strategic partners, Bankers, Auditors, Registrar and Transfer Agents and all others associated with the Company. The Company has always looked upon them as partners in its progress and has happily shared with them rewards of growth. It will be the Company's endeavor to build and nurture strong links with trade based on mutuality, respect and co-operation with each other. For and on behalf of the Board of Directors Sd/- TG RAGHAVENDRA Chairman & Managing Director (DIN : 00186546) Place : Hyderabad Date : 14th August, 2015 |