Directors Report of Crane Infrastructure Ltd.

Mar 31, 2015

The directors submit 7th annual report of Crane Infrastructure Limited along with the audited financial statements for the financial year ended March 31, 2015.

Financial Results :

Particulars 2014-15 2013-2014 (Rs.InLacs) (Rs.inLacs)

Revenue from 223.77 191.78

Operations & Other Income

Profit/(Loss) Before Interest 63.38 15.75 & Depreciation

Interest - -

Depreciation 10.33 15.75

Profit before exceptional 53.05 35.45 and extraordinary items

Profit/ (Loss) before Tax 53.05 35.45

Income Tax-(Current Tax) 16.79 10.10

Previous Year Tax - -

Deferred-tax (expenses)/ - - Income

Profit (Loss) after Taxation 36.27 25.35

EPS-Basic 0.5 0.35

EPS-Diluted 0.5 0.35

Dividend :

The management believes that the profits earned during the financial year must be retained and redeployed for the operations of the Company. As the Company needs further funds to enhance its business operations, upgrade the efficiency. No dividend is being recommended by the Directors for the Financial Year 2014-15.

Transfer to reserves :

The Company proposes to be retained an amount of Rs. 2,684, 939 in the profit and loss account.

SHARE CAPITAL:

The paid up Equity Share Capital as on 31st March, 2015 was Rs. 7,24,20,000. The Company not issued shares with differential voting rights nor granted stock options nor sweat equity.

Company's performance :

During the Year under review revenue from operations for the financial year 2014-15 at 223.77 lacs was higher by 17% over last year (191.78 lacs in 2013-14). Profit after tax (PAT) for the financial year 2014-15 at 36.27 Lacs was higher by 44 %over last year (25.35 Lacs in 2013-14)

Opportunities & Industry out Look :

India's infrastructure sector is poised to grow at 7-8% next year following the forward looking plans and policies of the new government. The strong mandate will stimulate economic growth, positive surge by implementing desired policies, removal of barriers to foreign investment and other initiatives being taken that will boost infrastructure development and the out look for the sector appears positive. The sector did lag behind due to delay in land acquisitions and environment clearances. With strong government emphasis on infrastructure development, the outlook sector appears to be quite optimistic in 2015.

Extract of annual return :

As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure I 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 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 in accordance 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.

Changes among Directors and key managerial personnel Appointment of company Secretary During the year Mr. CS. V.S.Naga Raju Naramsetti Appointed as Company Secretary of the company with effect from 01.01.2015

Resignation of Director:

Mr. G. Subba Rao resigned from the office of director due to his old age and personal reasons.

Resignation of Managing Director :

Mr. G.V.S.L.Kantha Rao resigned from the office of Managing director due to his personal reasons and he is continued as director of the company.

Appointment of Executive Director :

During the year Mr. K.Praveen Appointed as an Additional Director and he was also appointed as Executive director of the company on 30.03.2015.

Appointment of Woman Director :

During the year Mrs. Gradhi Himaja Appointed as an Additional Director of the company on 30.03.2015.

Appointment of Chief Financial Officer :

Mr. Ch.V.S.S Kishore Kumar director of the company designated as chief Financial Officer under section 203 of the companies Act 2013 with effect from 30.03.2015 for a period of five years.

Retire by Rotation :

Mr. G.V.S.L. Kantha Rao, 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.

Number of meetings of the board :

Five meetings of the board were held during the financial year 2014-15 on 30.04.2014, 31.07.2014, 30.10.2014, 31.12.2014 and 30.03.2015, with a gap between not exceeding the period of 120 days as prescribed under the Act.

Board evaluation :

Pursuant to the Provisions of the Companies Act, 2013, the Board evaluated its own performance and the working of its Committees and Independent Directors.

Major implications under companies act, 2013 & listing agreement with BSE :

As required by the Companies Act, 2013, and as Listing Agreement, your Company has constituted following committees and their policies, namely:

l Audit Committee

l Nomination and Remuneration Committee & Policy

l Reconstitute Stakeholder Relationship Committee

l Prevention of Insider Trading Policy.

All other changes as required by the Act have been in place and we re-affirm our commitment to the highest level of Corporate Governance.

Policy on directors' appointment and remuneration and other details :

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board and separate its functions of governance and management. As on March 31, 2015, the Board consists of six members, two of whom are independent directors. The Board periodically evaluates the need for change in its composition and size.

The policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of section 178 of the Companies Act, 2013, adopted by the Board is recommended by the Nomination and Remuneration Committee. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company.

Nomination and Remuneration Committee :

(a) Terms of Reference

During the year the Company had constituted the Nomination and Remuneration Committee under Section 178 of the Companies Act, 2013. The broad terms of reference are to determine and recommend to Board, Compensation payable to Executive Directors, appraisal of the performance of the Managing Directors / Whole- time Directors and to determine and advise the Board for the payment of annual commission/compensation to the Non-Executive Director and to recommend to the Board appointment/ reappointment and removal of Directors. To frame criteria for determining qualifications, positive attributes and Independence of Directors and to create an evaluation framework for Independent Directors and the Board.

(b) Composition, Meetings and Attendance during the year

The Nomination and Remuneration Committee comprises of total three Non-Executive Directors in which two are Independent Directors. During the year one Meeting was on 31.03.2015 and all members are present at that meeting.

The committee comprises as follows:

1. Mr. M.V.SubbaRao (Chairman)

2. P. Bhaskara Rao - Member

3. G. Himaja - Member

(c) Selection and Evaluation of Directors:

The Board has based on recommendations of the Nomination and Remuneration Committee, laid down following policies:

1. Policy for Determining Qualifications, Positive Attributes and Independence of a Director.

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 Independent Directors, the Board carried out the annual performance evaluation of Board Committees and the Independent Directors, whereas at a separate meeting, Independent Directors evaluated the performance of Executive Directors, Board as a whole and of the Chairman. Nomination and 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 of vision, mission, objectives and values for the Company; laying down strategic road map for the Company & annual plans; growth attained by the Company; providing leadership and directions to the Company and employees; effectiveness in ensuring statutory compliances and discharging its duties / responsibilities towards all stakeholders; Identification, monitoring & mitigation of significant corporate risks; composition of various committees, laying down terms of reference and reviewing committee's working etc.

ii) Performance evaluation criteria for Executive Directors inter alia include: level of skill, knowledge and core competence; performance and achievement vis-à-vis budget and operating plans; Effectiveness towards ensuring statutory compliances; discharging duties/responsibilities towards all stakeholders; reviewing/monitoring Executive management 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 & constructivity while exercising duties; providing independent judgment on strategy, performance, risk management and Board's deliberations; devotion of sufficient time for informed decision making; exercising duties in bona fide manner; safeguarding interests of all stakeholders, particularly minority shareholders; upholding ethical standards of integrity & probity; updating knowledge of the Company & its external environment etc

iv) Committees of the Board are evaluated for their performance based on: effectiveness in discharging duties and functions conferred; setting up and implementation of various policies, procedures and plans, effective use of Committee's powers as per terms of reference, periodicity of meetings, attendance and participation of committee members; providing strategic guidance to the Board on various matters coming under committee's purview etc

(e) Remuneration Policy for Directors:

The Committee has formulated Policy for Remuneration of Directors, KMP & other employees. As per the Policy, remuneration to Non-executive Independent Directors includes:

(a) Sitting Fees for attending meetings of the Board as well as Committees of the Board as decided by the Board within the limits prescribed under the Companies Act.

(b) Travelling and other expenses they incur for attending to the Company's affairs, including attending Committee and Board Meetings of the Company.

Remuneration to Executive Directors:

The appointment and remuneration of Executive Directors including Managing Director, Joint Managing Director and Whole Time Director is governed by the recommendation of the Remuneration and Nomination Committee, resolutions passed by the Board of Directors and Shareholders of the Company. The remuneration package of Managing Director, Joint Managing Director and Whole Time Director comprises of salary, perquisites, allowances and other retirement benefits as approved by the shareholders at the General Meetings of the Company.

Remuneration to Non-Executive Directors:

The Non-Executive Directors are paid remuneration by way of Sitting Fees. The Non Executive Directors are paid sitting fees for each meeting of the Board and Committee of Directors attended by them.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report in Annexure -IV. The above information is not being sent along with this Report to the Members of the Company as per the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Managing Director at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by Members at the Registered Office of the Company, 21 days before the 7th Annual General Meeting and up to the date of the Annual General Meeting during the business hours on working days.

There were no employees in the Company as per Rule 5(2) of Chapter XIII, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Statement On 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

Auditors :

Pursuant to the provisions of Section 139 of the Act and the rules framed there under, Umamaheswara Rao & Co., Chartered Accountants,Guntur, retiring auditors are eligible for re appointment as Statutory Auditors of the company for the financial year 2015-16.

Auditors' report and secretarial auditors' report :

The auditors' report and secretarial auditors' report does not contain any qualifications, reservations or adverse remarks. Report of the secretarial auditor is given as an annexure which forms part of this report.

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, Guntur to conduct the Secretarial Audit of the Company for the financial year ended March 31st, 2015. There were no qualifications, reservations or adverse remarks given by Secretarial Auditors of the Company. The detailed reports on the Secretarial Standards and Secretarial Audit in Form MR- 3 are appended as an Annexure III 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.

Audit committee

A. Brief description of terms of reference

The Terms of Reference of this committee cover the matters specified for Audit Committee under Section 177 of the Companies Act, 2013, and as follows:

a. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

b. Recommending the appointment and removal of external auditor, fixation of audit fee and also approval for payment for any other services.

c. Reviewing with management the annual financial statements before submission to the Board, 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 financial statements

- Any related party transactions i.e. transactions of the company of material nature, with promoters or the management, their subsidiaries or relatives etc., that may have potential conflict with the interests of the Company at large.

d. Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

e. Discussion with internal auditors of any significant findings and follow up there on.

f. Reviewing the findings of any internal investigations by the internal auditors into matters where is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board

g. Discussion with external auditors, before the audit commences, the nature and scope of 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 of internal control systems.

j. Other matters as assigned/specified by the Board from time to time.

B. Composition, Meetings and Attendance during the year :

During the year, the Audit Committee was constituted under Section 177 of the Companies Act, 2013 and its meetings and attendance shall be as per the terms of reference as on 31st March, 2015.

The Audit Committee comprises of Two Independent cum Non-Executive Directors and One Non- Executive Director (Woman Director). The committee comprises as follows:

1. Mr. P.Bhaskara Rao (Chairman)

2. Mr. M.V.Subba Rao (Member)

3. Mrs. G.Himaja (Member)

Stakeholders' relationship committee :

The Company had a shareholders / investors grievance committee of directors to look into the redressal of complaints of investors such as transfer or credit of shares, non-receipt of dividend /notices / annual reports, etc. The nomenclature of the said committee was changed to stakeholders' relationship committee in the light of provisions of the Act.

The composition of the Stakeholders' Relationship Committee and the details of meetings attended by its members are given below As on 31.03.2015 the Stakeholders' relationship Committee comprises of One Independent cum Non-Executive Director, P.Bhaskara Rao (appointed with effect W.e.f. 30.03.2015) and One Non- Executive Director, G.Himaja (appointed with effect W.e.f. 30.03.2015) and One Non Executive Director (Mr.G.V.S.L.Kantha Rao) during the year Mr. G. Subba Rao resigned as Member of the committee w.e.f. 30.03.2015.

Two meetings of the stakeholders' relationship committee was held during the Year on 31st December 2014 and 30th March, 2015.

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.

Internal financial control systems and their adequacy :

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15.

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 operations through initiatives like

(a) green infrastructure,

(b)Procurement of renewable energy through onsite solar power generating units. CIL continues 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 and quality of its services.

Foreign exchange earnings and outgo :

Your Company does not have foreign exchange earnings and outgo Export 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).The Company. No complaints were received in this regard during the year.

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.

Report 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 of Clause 49 of Listing Agreement shall not be mandatory for the Company.

Listing : During the year your company listed in Bombay Stock Exchange (BSE), Mumbai.

Vigil Mechanism :

The company has set up vigil mechanism to enable the employees and directors to report genuine concerns and irregularities, if any in the company, noticed by them.

Prevention Of Insider Trading :

During the financial year your Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. All Board Directors and the designated employees have confirmed compliance with the code.

SCORES :

SEBI vide Circular Ref: CIR/OIAE/2/2011 dated June 3, 2011 informed the company that they had commenced processing of investor complaints in a web based complaints redress system "SCORES". Under this system, all complaints pertaining to companies are electronically sent through SCORES and the companies are required to view the complaints pending against them and submit Action Taken Report (ATRs) along with supporting documents electronically in SCORES.

Transfer of Amounts to Investor Education and Protection Fund:

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 Crane Infrastructure Limited.

for and on behalf of the board

for Crane Infrastructure Ltd

Sd/- Sd/-

Place: Guntur (G.V.S.L. Kantha Rao) (K.Praveen)

Date : 10.08.2015 Director Executive Director (Din: 01846224) (Din: 07143744)