BOARD's REPORT TO THE MEMBERS, VIRAT CRANE INDUSTRIES LIMITED The directors submit 23rd annual report of Virat Crane Industries Limited along with the audited financial statements for the financial year ended March 31, 2015. Dividend: Your Directors are pleased to recommend a Final Dividend of Rs. 1/- per equity share of face value of Re. 10/- each for the year ended 31st March, 2015. The Final Dividend, subject to the approval of Members at the Annual General Meeting on 28th September, 2015, will be paid on or after 3rd October, 2015 to the Members whose names appear in the Register of Members, as on the date of book closure, i.e. from 25th September, 2015 to 28th September, 2015 (both days inclusive). The total dividend for the financial year, including the proposed Final Dividend, amounts to Rs. 1/- per equity share and will absorb Rs. 2.45 crores, including Dividend Distribution Tax of Rs. 0.41 crores. Transfer to reserves: The Company proposes to transfer Rs. 26.87 Lacs to the general reserve out of the amount available for appropriation and an amount of 510.72 Lacs is proposed to be retained in the profit and loss account. Company's performance: During the Year under review revenue from operations for the financial year 2014-15 at 62.95 crores was higher by 37.95% over last year (45.63 crores in 2013-14). Profit after tax (PAT) for the financial year 2014-15 at 5.37 Crores was higher by 280% over last year (1.41 Crores in 2013-14). Directors' responsibility statement: Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that: i.) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; ii.) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are 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 of the Company for that period; iii.) the directors had taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets 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 the Company and such internal financial controls are adequate and operating effectively; vi.) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. EXTRACT OF THE ANNUAL RETURN As PER MGT-9: The details forming part of the extract of the Annual Return in form MGT-9 as required under Section 92 of the Companies Act, 2013 is included in this Report as Annexure - I and forms an integral part of this Report. Changes among Directors and key managerial personnel: Retire by rotation: Mr. P. V. Srihari director liable to retire by rotation under the Articles of Association of the Company in forth coming Annual General Meeting and being eligible, offer himself for reappointment as Director. The Board recommends his re appointment Appointment of Woman Director: During the year Mrs. Grandhi Himaja Appointed as Additional Director of the company with effect from 30.03.2015 Resignation of Director: Mr. R.Jagadeesh Kumar resigned from the office of director due to his personal reasons with effect from 30.03.2015 Appointment of Chief Financial Officer: Mr. P. V. Srihari director of the company designated as chief Financial Officer under section 203 of the companies Act 2013 with effect from 30.03.2015 Number of meetings of the board: Six meetings of the board were held during the year, details of the meetings of the board, given in corporate governance report, which forms part of this report. Board evaluation: The board of directors has carried out an annual evaluation of its own performance, Board committees and Individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49").The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. Policy on directors' appointment and remuneration and other details: The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors' report. Declaration Given By Independent Directors: During the year under review, one meeting of independent directors was held on 30th march, 2015 in compliance with the requirements of schedule iv of the companies act, 2013. All the independent directors of the company have declared that they meet the criteria of independence in terms of section 149(6) of the companies act, 2013 and that there is no change in status of independence Internal financial control systems and their adequacy: The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis as Annexure III, of this report. Audit committee and Other Board Committees: The details pertaining to composition of audit committee and other Board Committees are included in the Corporate Governance Report, which forms part of this report. Auditors: Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s Nagaraju & Co., Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the 22nd annual general meeting (AGM) of the Company held on September 29, 2014 till the conclusion of the Twenty fifth AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. Your directors propose to ratify their appointment for the financial year 2015-16. Auditors report: The auditors' report does not contain any qualifications, reservations or adverse remarks. Audit Report is given as an annexure which forms part of this report. Cost Auditor: Pursuant to the Provisions of the Section 148 of the Companies Act, 2013, The Board had appointed M/s. Annavarapu & Co., Cost Accountants, as a Cost Auditors for the financial year 2014-15 to carry out the cost audit of Company's cost records. For financial year 2015-16 Cost Audit is Not applicable our company. secretarial Auditors: Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, your Company engaged the services of M/s. K. Srinivasa Rao & Co, Company Secretaries in Practice, Guntur to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2015. secretarial auditors' report: There were no qualifications, reservations or adverse remarks given by Secretarial Auditors of the Company except non-compliance of section 203 of the Companies Act, 2013 in respect to appointment the Company Secretary as Key Managerial Person. The detailed reports on the Secretarial Standards and Secretarial Audit in Form MR- 3 are appended as an Annexure V to this Report. Risk management: The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. 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. The development and implementation of risk management policy has been covered 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 the financial statements. Transactions with related parties: None of the transactions with related parties falls under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies(Accounts) Rules, 2014 are 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 Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable to the Company for financial year 201415. Particulars of employees: The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year: During the financial year 2014-15 The company does not pay remuneration to Non- Executive Directors b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year: Nil c. The percentage increase in the median remuneration of employees in the financial year: 10% d. The number of permanent employees on the rolls of Company: 41 e. The explanation on the relationship between average increase in remuneration and Company: The Average increase in remuneration given in the company was to offset the average inflation of 8.5% in the year 2014-15,as also to prevent any significant employee attrition at lower levels. The increase was a reflection of company performance. f. Comparison of the remuneration of the key managerial personnel against the performance of the Company j. The key parameters for any variable component of remuneration availed by the directors: Nil k. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: None. l. Affirmation that the remuneration is as per the remuneration policy of the Company: The Company affirms remunera tion is as per the remuneration policy of the Company. m. The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: NA Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Compliance Officer. Disclosure requirements: As per Clause 49 of the listing agreements entered into with the stock exchanges, corporate governance report with auditors' certificate thereon and management discussion and analysis are attached, which form part of this report. The Company has formulated a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and the revised Clause 49 of the Listing Agreement with stock exchange. Deposits from public: The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. Conservation of energy, technology absorption, foreign exchange earnings and outgo Conservation of energy: VCIL continues to work on reducing carbon footprint in all its areas of operations through initiatives like (a) Green infrastructure, (b) Operational energy efficiency, Technology absorption, adaption and innovation: The Company continues to use the latest technologies for improving the productivity and quality of its services. Foreign exchange earnings and outgo: Your Company does not have foreign exchange earnings and outgo in financial year 2014-15. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report: No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report. significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the company: There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company. Prevention of sexual Harassment Of Women At Workplace: As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ('Act') and Rules made there under, your Company has constituted Internal Complaints Committees (ICC). Number of Complaints Received During the Year: NiL Human resources: Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. Management Discussion & Analysis: A detailed Management Discussion and Analysis forms part of this annual report, which is attached to this Report in Annexure III. Report on Corporate Governance: Your Directors are pleased to inform that your Company has implemented all the stipulations prescribed under clause 49 of listing agreement with the stock exchange(s). The Statutory Auditors of the Company have examined the requirements of the Corporate Governance with reference to Clause 49 of the Listing Agreement and have certified the compliance, as required under Clause 49 of the Listing Agreement. A separate report on Corporate Governance is provided together with a Certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Equity Listing Agreement with the Stock Exchange(s). A Certificate of the CEO and CFO of the Company in terms of sub-clause IX of Clause 49 of Equity Listing Agreement, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed. Whistle Blower Policy: The Company established Whistle Blower Policy for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. The details are reported in the Reported in the Report on corporate Governance which forms part of this Report. Transfer of Amounts to Investor Education and Protection Fund: Pursuant to the provisions of section 124 of the companies Act, 2013, the declared dividends which remained un paid or unclaimed for a period of seven years, have been transferred by the company to the Investor Education and Protection Fund (IEPF) established by the Central Government. Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF). Acknowledgement: The directors thank the Company's employees, customers, vendors, investors and academic institutions for their Continuous support. The directors also thank the government of various countries, government of India, the governments of various states in India and concerned government departments / agencies for their co-operation. The directors appreciate and value the contributions made by every member of the Virat Crane Industries family. for and on behalf of the board for Virat Crane Industries Ltd (P.Bhaskara Rao) Director (Din:01846243) (G.V.S.L.Kantha Rao) Managing Director (Din: 01846224) Date: 10.08.2015 Place: Guntur |