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Directors Report of Sri KPR Industries Ltd.

Mar 31, 2015

Dear Members,

The Directors take the pleasure in presenting the Annual report on the affairs of the Company for the financial year 2014-15 together with the Audited Financial Statements and the report of the Auditors thereon.

FINANCIAL RESULTS (STANDALONE) (Amount in Rs.) Particulars For year ending For year 31st March, ending 31st 2015 March, 2014

Income from Operations 36,72,97,849 43,48,56,138

Other Income 3,74,65,742 80,68,831

Total Income 40,47,63,591 44,29,24,969

Consumption of Raw materials 16,62,36,652 18,23,00,446

Changes in Inventory (38,11,850) 1,41,86,534

Employee benefit expenses 2,51,36,730 1,89,97,145

Finance Cost 1,45,25,061 1,70,12,759

Depreciation 1,92,72,912 2,09,62,626

Manufacturing and other expenses 12,24,18,669 13,42,57,787

Total Expenses 34,37,78,175 38,77,17,297

Profit/(Loss) - Before Tax & Exceptional Items 6,09,85,41 65,52,07,672

Exceptional Items 28,23,477 (81,901)

Prior Period Item - -

Profit/(Loss) - Before Tax 6,38,08,893 5,51,25,771

Current Tax (99,22,250) (1,08,98,426)

Deferred Tax 24,80,278 (53,10,548)

Profit/(Loss) - After Tax 5,63,66,921 3,89,16,797

OPERATIONS

Your Company's strength lies in identification, planning, execution and successful implementation of the projects undertaken by it. To strengthen the long-term prospects and ensuring sustainable growth in assets and revenue, it is important for your Company to evaluate various opportunities in the different business verticals in which your Company operates. Your Company continues to explore new opportunities.

Presently the Company has interest in pipe manufacturing and power generation. The management feels that power generation has enormous scope and potential in the years to come and accordingly new ventures are being contemplated in this area. In addition to the power generation projects, the Company is also exploring new avenues in manufacturing sector. In this regard the Company has commenced the operation of wind mill in Dewas district of Madhya Pradesh in July 2015. The details of the projects as and when finalized will be put forward / informed to the shareholders.

During the year under review the Company has made a turnover of Rs. 36,72,97,849/- against previous year turnover of Rs. 43,48,56,138/- thereby resulting a decrease in the turnover and registered a net profit of Rs. 5,63,66,921/- compared to previous year profit of Rs. 3,89,16,797/-. The Company is expecting good future in the coming years.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of your Company for the Financial Year 2014-15, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and Listing Agreement as prescribed by the Securities and Exchange Board of India (SEBI).

FINANCIAL PERFORMANCE / FINANCIAL POSITION OF SUBSIDIARIES / ASSOCIATE COMPANIES / JOINT VENTURES

The details of Subsidiary Companies are as follows:

1. Sri KPR Infra & Projects Limited (Wholly owned Subsidiary).

2. Sri KPR Renewable Energy Limited (a step down wholly owned subsidiary of Sri KPR Infra & Projects Limited).

There are no associate companies and Joint Ventures associated with the Company.

A separate statement containing the salient features of financial statements of subsidiary of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the subsidiary Company and related information are available for inspection by the members at the Registered Office of your Company during business hours and also at the registered office of the subsidiary Company upto the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013.

The financial performance of the subsidiary included in the consolidated financial statements of your Company is set out in "Annexure A" to this Report.

DIVIDEND

Your Company has a consistent record of declaration of dividend that balances the dual objectives of appropriately rewarding shareholders and retaining adequate funds, in order to maintain a healthy capital adequacy ratio to future growth.

The Company had in the earlier year declared a dividend of 8% on the paid-up share capital of the Company and based on the Company's performance, the directors in the Board meeting held on 31.08.2015 has recommended a final dividend of 7% per equity share of Rs. 10/- (Rupees Ten) each for the financial year 2014 - 2015 amounting to Rs. 1,41,01,987/- (Rupees One Crore Forty One Lakhs One Thousand Nine Hundred and Eighty Seven only).

The proposal for payment of dividend is subject to the approval of shareholders at the ensuing Annual General Meeting.

The Register of Members and Share Transfer Books will remain closed from 24.09.2015 to 30.09.2015 (both days inclusive) for the purpose of payment of final dividend. Dividend will be paid to those members, whose names appear as shareholders of the Company as on 23.09.2015.

The dividend will be tax-free in the hands of shareholders.

RESERVES

Your Company proposes to transfer Rs. 28,18,346/- to the General Reserve.

MATERIAL CHANGES AND COMMITMENTS

There are no such changes or commitments occurred, affecting the financial position of the Company between the end of the financial year (i.e. 31.03.2015) and the date of this report.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There are no events subsequent to the date of Financial Statements.

CHANGE IN THE NATURE OF BUSINESS

There are no such changes occurred in the nature of business of the Company or its subsidiary Company during the financial year under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not entered into any transaction falling under the provisions of Section 186 of the Companies Act, 2013 and rules made there under as such the relevant information is not applicable.

PARTICULARS OF CONTRACTS / ARRANGEMENTS MADE WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as "Annexure B" to the Board's Report.

BOARD MEETINGS

The Board of directors met 8 (Eight) times on 12.05.20104; 14.06.2014; 30.07.2014; 12.09.2014; 14.11.2014; 30.01.2015; 10.03.2015 and 11.03.2015 during the financial year.

DIRECTORS / KEY MANAGERIAL PERSONNEL

During the year under review, there was no change in the composition of the Board of Directors of the Company.

During the current year 2015-16, the Company has passed resolution through postal ballot process pursuant to the provisions of Section 110 and applicable provisions, if any of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 and Clause 35B of the Listing Agreement for change of designation of Sri. Kishan Reddy Nalla (DIN: 00038966) from Managing Director to Whole-Time Director of the Company w.e.f 17.04.2015.

Also Mr. N. Siddha Reddy was appointed as Chief Financial Officer of the Company w.e.f 31.08.2015.

INDEPENDENT DIRECTORS

The Board of the Company consists of 9 Directors, out of which three are independent Directors.

DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of Independence as prescribed under Section 149 of the Companies Act, 2013 read with the Schedules and Rules made there under as well as Clause 49 of the Listing Agreement.

RETIRE BY ROTATION

In accordance with Section 152 of the Companies Act, 2013 read with Articles of Association of the Company, Mr. Bhoopal Reddy Aleti and Mr. Vineel Reddy Nalla, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

A brief profile of directors is given in the notice of the Annual General Meeting.

POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION

The current policy of the Company is to have a mix of Executive and Independent Directors to maintain the independence of the Board. As on 31st March, 2015 there are 9 Directors, four of whom are Executive and Whole-Time Directors, three are Independent Directors and two are Non-Executive Directors. The Board periodically evaluates the need for change in its composition and size. The policy of the Company on director's appointment and remuneration is provided as annexure to the Corporate Governance Report.

EVALUATION OF BOARD EFFECTIVENESS

In terms of provisions of the Companies Act, 2013 read with rules made there under and Clause 49 of the Listing Agreement, the Board of Directors, on recommendation of the Nomination and Remuneration Committee, have evaluated the effectiveness of the Board. Accordingly, the performance evaluation of the Board, each Director and the Committees was carried out for the financial year ended 31st March, 2015.

The evaluation was done using individual questionnaires covering vision and strategy of the Board, Board dynamics, contribution towards development of the strategy, risk management, budgetary controls, functioning, performance & structure of Board Committees, ethics, knowledge & expertise of Directors, leadership, the level of participation in the Board Meetings, understanding of their roles and responsibilities, business of the Company and effectiveness of their contribution. The Directors expressed satisfaction with the evaluation process.

COMMITTEES CONSTITUTED BY THE BOARD OF DIRECTORS

As provided in the Report on Corporate Governance.

AUDITORS

STATUTORY AUDITORS

M/s V. Sridhar & Co, Chartered Accountants, Hyderabad, the Statutory Auditors of the Company retires at the conclusion of ensuing Annual General Meeting and, being eligible offer themselves for reappointment from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

A resolution proposing appointment of M/s. V. Sridhar & Co, Chartered Accountants, Hyderabad as the statutory auditors of the Company pursuant to Section 139 of the Companies Act, 2013 forms part of the notice.

There are no qualifications, reservation or adverse remarks made by the statutory auditors in the audit report.

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 with the approval of its Board, appointed M/s. BS & Company, Company Secretaries LLP to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2015.

The Secretarial Audit Report forms part of the Annual Report as "Annexure C".

The qualifications, reservations or adverse remarks or disclaimers made by the auditor in the report:

1. Company Secretary is yet to be appointed as per Section 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of _Managerial Personnel) Rules, 2014._

DIRECTOR REPLIES

The Company is in the process of appointing Whole-Time Company Secretary.

2. The Company is yet to appoint Internal Auditor as required under Section 138 read with rule 13 of Companies (Accounts) Rules, 2014.

The Company is in the process of appointing internal auditor.

3. The Company has not filed the annual return as required under Payment of Bonus Act, 1965 read with Payment of Bonus Rules, 1975.

The Company is in the process of filing the annual return.

4. The annual return as required under Minimum Wages Act, 1948 read with Minimum Wages (Central) Rules, 1950 was not filed.

The Company is in the process of filing the annual return.

5. The annual return as required under Payment of Wages Act, 1936 read with Andhra Pradesh Payment of Wages Rules, 1937 was not filed.

The Company is in the process of filing the annual return.

6. The returns were not filed as required under Contract Labour (Regulation and Abolition) Central Rules, 1971.

The Company is in the process of filing the annual return.

7. The returns were not filed as required under Employment Exchange Act, 1959.

The Company is in the process of filing the annual return._

8. Registers are not maintained under the following Acts.

- Minimum Wages Act, 1948.

- The Contract Labour (Regulation And Abolition) Act, 1970

- Andhra Pradesh Labour Welfare Fund Act, 1987

The Company is in the process of maintaining the registers.

DIRECTORS' RESPONSIBILITY STATEMENT

As per Section 134(3) of the Companies Act, 2013 the Board of Directors makes the following statement:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures from the same;

(b) 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;

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) The directors had prepared the annual accounts on a going concern basis;

(e) Proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) 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 ANNUAL RETURN

As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 is annexed herewith as "Annexure D".

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

The Company has not received any significant/material orders from the statutory regulatory bodies/courts/tribunals which impact the operations and going concern status of the Company.

DEPOSITS

Your Company has not accepted any deposits from public in terms of Section 73 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company is well equipped with adequate internal financial controls. The Company has a continuous monitoring mechanism which enables the organisation to maintain with the same standard of the control systems and helps them in managing any default on timely basis because of strong reporting mechanisms followed by the Company.

The Audit Committee discusses with the Company's Statutory Auditors their views on the financial statements, including financial reporting system, compliance to accounting policies and procedures, adequacy of internal controls systems followed by the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 3 of the Companies (Accounts) Rules, 2014, is enclosed as "Annexure E" to the Board report.

CORPORATE GOVERNANCE REPORT

The Company continues to strive towards highest standards of Corporate Governance while interacting with all the stakeholders.

In compliance with the provisions of Clause 49 of the Listing Agreement, a separate report on Corporate Governance along with a certificate from the Auditors on its forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management discussion & analysis report for the year under review forms part of the Annual Report. All matters pertaining to industry structure, segment wise performance, outlook, risks and concerns, internal control system and their adequacy, etc are discussed in the said report.

PARTICULARS OF EMPLOYEES

The statement containing particulars of employees as 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 is given as "Annexure F".

HUMAN RESOURCES

Your Company treats its "human resources" as one of its most important assets.

The human resource philosophy and strategy of your Company is to attract and retain the best talent, encourage innovation, and create an engaging and motivating workplace environment.

Your Company continues its focus on building & developing the leadership pipeline and upgradation of workforce skills. Your Company is providing number of programmes for promotion of talent internally through job rotation and job enlargement.

RISK MANAGEMENT POLICY

The Risk Management framework of your Company which ensures regular review by management to proactively identify the emerging risks, to do risk evaluation and risk prioritization along with development of risk mitigation plans and action taken. The various risks, including the risks associated with the economy, regulation, competition, foreign exchange, interest rate etc., are documented, monitored and managed efficiently.

In order to fulfil the objectives and to lay a strong foundation for the development and implementation of a risk management framework, the policy adopted by the Board had be in line with the policy statement as below:

(a) To ensure protection of the shareholder through establishing an integrated risk management framework for monitoring, reporting and mitigating risk.

(b) To provide strong basis for informed decision making at all levels of the organisation.

(c) To strive towards the betterment of the system of risk management on a continuous basis.

Policies approved from time to time by the Board of Directors/Committees of the Board form the governing framework for each type of risk. The business activities are undertaken within this policy framework.

INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

Your Company has always believed in providing a safe and harassment free workplace including providing an environment that is free from discrimination and harassment including sexual harassment for every individual working in the premises through various policies.

The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy.

During the year ended 31 March, 2015, no complaints were received pertaining to sexual harassment.

VIGIL MECHANISM / WHISTLE BLOWER

Your Company is committed to highest standards of ethical, moral and legal business conduct.

Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its Directors, Employees and Stakeholders against unethical behaviour, actual or suspected fraud or violation of Company's code of conduct or ethics. The policy provides for safeguards against victimization and provides direct access to higher levels of supervisors.

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).

ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere appreciation and acknowledge with gratitude the support and consideration extended by the Bankers, Shareholders and employees and look forward for their continued support and cooperation.

For and on behalf of the Board of Directors FOR SRI KPR INDUSTRIES LIMITED

Sd/- (KISHAN REDDY NALLA) CHAIRMAN DIN: 00038966

Place: Secunderabad Date: 31.08.2015


Mar 31, 2014

Dear Members,

The directors, present herewith the Annual Report of the company together with the Audited Financial Statements (Balance Sheet as on March 31, 2014, Statement of Profit & Loss and the Cash Flow Statement for the period ended as on that date) along with the Reports of the Statutory Auditors.

FINANCIAL RESULTS

FOR THE FOR THE YEAR ENDED YEAR ENDED PARTICULARS 31.03.2014 31.03.2013 Rs. In Lacs Rs. In Lacs

Income from Operations 4225.37 3284.77

Other Income 203.88 310.98

Total Income 4429.25 3595.75

Cost of Material Consumed / Purchases and 1964.87 1342.04 changes in inventory

Administrative & Other Expenses 1533.36 1400.39

Financial Expenses 170.13 165.87

Depreciation 209.63 154.54

Total Expenses 3877.99 3062.84

Profit before Tax 551.26 532.91

Tax including deferred tax 162.09 91.60

Profit After Tax 389.17 441.31

OPERATIONS

Your Company''s strength lies in identification, planning, execution and successful implementation of the projects undertaken by it. To strengthen the long-term prospects and ensuring sustainable growth in assets and revenue, it is important for your Company to evaluate various opportunities in the different business verticals in which your Company operates. Your Company continues to explore new opportunities.

Presently the company has interests in pipe manufacturing and power generation. The management feels that power generation has enormous scope and potential in the years to come and accordingly new ventures are being contemplated in this area. In addition to the power generation projects, the company is also exploring new avenues in manufacturing sector. The details of the projects as and when finalized will be put forward / informed to the shareholders.

Your Board of Directors considers the expansions to be in the strategic interest of the Company and believes that this will greatly enhance the long term shareholders'' value. In order to fund these projects in their development, expansion and implementation stages, conservation of funds is of vital importance. Accordingly proposal to empower the Board to borrow monies in accordance with the new provisions of Companies Act, 2013 is moved before the shareholders for approval through appropriate resolutions.

DIVIDEND

The company had in the earlier year declared a dividend of 7% on the paid-up of the company and based on the Company''s performance, the Directors are pleased to recommend a dividend of 8% amounting to Rs.0.80 ps(eighty paiseonly) per equity share of Rs. 10/-each.

The proposal for payment of dividend if approved at the ensuing Annual General Meeting will be paid to those members, whose names appear as shareholders of the Company as on 23-09-2014.

DIRECTORS

RETIRING BY ROTATION

In accordance with Section 152 of the Companies Act, 2013 (Erstwhile Section 256 of the Companies Act, 1956) read with Articles of Association of the Company Mr. Srinath Reddy Nallaand Mr. Raja Reddy Gaddam, directorsretire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

A brief profile of directorsis given in the notice of the Annual General Meeting.

COMMITTEES CONSTITUTED BY THE BOARD OF DIRECTORS

As provided in the Report on Corporate Governance.

AUDITORS

M/s V. Sridhar & Co, Chartered Accountants, Hyderabad, the Statutory Auditors of the Company retire at the conclusion of ensuing Annual General Meeting and are eligible for appointment.

They have confirmed their eligibility and willingness to accept office of the statutory auditors, if appointed.

DIRECTORS'' RESPONSIBILITY STATEMENTS IN ACCORDANCE WITH PROVISIONS OF SECTION 217 (2AA)

In compliance with the provisions of sec. 217(2AA) of the Companies Act, 1956, the directors confirm that:

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgments and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,

1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d. The annual accounts have been prepared on going concern basis.

CORPORATE GOVERNANCE

The Company continues to strive towards highest standards of Corporate Governance while interacting with all the stakeholders.

The report of Board of Directors of the Company on Corporate Governance is given as a separate section titled as "Report on Corporate Governance 2013 - 14" which forms part of this Annual Report.

The requisite Certificate of the Statutory Auditors of the Company regarding compliance with the Corporate Governance requirements, as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, is annexed to the Corporate Governance Report.

SUBSIDIARY COMPANIES

The details of subsidiary companies are as follows:

1. Sri KPR Infra & Projects Limited (a Wholly owned subsidiary).

2. Sri KPR Renewable Energy Limited (a step down Wholly owned subsidiary of Sri KPR Infra & Projects Ltd);

Pursuant to the provision of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs (MCA), Government of India, New Delhi vide its Circular No.2/2011 dated: 08.02.2011 has granted general exemption from attaching the Balance sheet, Statement of profit and loss and other documents of the subsidiary companies with the Balance sheet of the holding Company.

A statement containing the brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2014 is provided as Annexure and forms part of this report. /Accordingly, this Annual report does not contain the reports and other statements of the subsidiary companies. Any member intends to have a certified copy of the Balance Sheet and other financial statements of these subsidiaries may write to the Company. These documents are available for inspection during business hours at the registered office of the company and also at the registered offices of the respective subsidiary companies.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any deposits within the meaning of Sec. 58A of the Companies Act, 1956 and the rules made there under.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO [Sec. 217(l)fef]

The particulars prescribed under the provision of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 is provided in annexure and the same forms part of the annual report.

PARTICULARS OF EMPLOYEES [Sec. 217(2A)

There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees)Rules. 1975 as amended from time to time.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management discussion & analysis report for the year under review is provided separately and the same forms part of the annual report.

ACKNOWLEDGEMENTS

The Board of Directors wish to place on record their sincere appreciation and acknowledge with gratitude the support extended to the company by the bankers,State Bank of India, Commercial Branch, Hyderabad, the shareholders,the employees and look forward for their continued support and cooperation.

By the Order of the Board FOR SRI KPR INDUSTRIES LIMITED

Sd/- Kishan Reddy Nalla Srinath Reddy Nalla Managing Director Director

Place: Secunderabad Date: 30.07.2014


Mar 31, 2013

To the Members of Sri KPR Industries Limited,

The directors, with pleasure present herewith the Annual Report of the company together with the Audited Financial Statements (Balance Sheet as on March 31, 2013, Statement of Profit & Loss and the Cash Flow Statement for the period ended as on that date) along with the Reports of the Statutory Auditors.

HISTORY. OPERATIONS AND MANAGEMENT DISCUSSION AND ANALYSIS

Sri KPR Industries Ltd was incorporated on 13-10-1988 originally under the name of Bhagyanagar Engineering Industries Ltd and was promoted by Mr. Kishan Reddy Nalla, Mr. Prathap Reddy Ande and Mr. Raja Reddy Gaddam.

The company is heading for completion of 25 years of its incorporation and this is the 25th Annual Report

After incorporation, the company established a facility for manufacture of PVC Pipes and PVC foam profiles at Nandikandi Village, Sadashivpet Mandal, Medak District and changed the name to Bhagyanagar Wood Plast Ltd.

The said project was part financed by maiden public issue of the company in the year 1994-95 and with term loan from HUDCO. The working capital facilities were provided by State Bank of Hyderabad.

Over a period of time the company gained experience in marketing the pipes and through its Managing Director Mr. Kishan Reddy Nalla possessed the technical knowledge and expertise in manufacture and marketing of Asbestos Cement Pressure Pipes. This expertise in the AC Pressure Pipes field was extended to Sri Venkateswara Pipes Ltd which was incorporated in the year 1996-97 which earned a royalty to the company for a period of five years.

In addition to extending the technical know-how support, the company also invested in Sri Venkateswara Pipes Ltd and has been a shareholder since the beginning of the said company. Post the five year technical support, the company also lent its expertise in presenting the benefits of Asbestos Cement Pressure Pipes to various government departments and thereby enhanced the business of Sri Venkateswara Pipes Ltd. With the active support of the company, Sri Venkateswara Pipes Ltd has established itself as a leader in Asbestos Cement Pressure Pipes field.

As a logical extension of the manufacture of AC Pressure Pipes, Sri Venkateswara Pipes Ltd formed a 100% subsidiary by name Sri KPR Infra & Projects Ltd, to carry on the business of laying Asbestos Cement Pressure pipe lines. Both Sri Venkateswara Pipes Ltd and its subsidiary have been profit making and dividend paying companies.

In the course of time the PVC Project was disposed-off and the company was exploring various options to augment its business prospects and also to have a progressive growth oriented business. The name of the company was at this time changed to Sri KPR Industries Ltd with a view to reflect a broader objective.

The management of the company and Sri Venkateswara Pipes Ltd noted that the expertise and experience in the field of AC Pressure Pipes is the common strength of these two companies and accordingly it was, after due deliberations deemed fit that the expertise possessed by the company in the area of AC Pressure Pipes and the experience gained by Sri Venkateswara Piped Ltd being strengths of the respective companies could appropriately be synergized and combined for the mutual benefit of both the companies. Therefore a merger proposal was moved before the share holders of both the companies and the same was approved.

The Scheme of merger so approved by the shareholders was presented before the Hon''ble High Court of Andhra Pradesh for sanction, and the same was sanctioned in March, 2013.

Accordingly to the Scheme, the assets, liabilities and the reserves of Sri Venkateswara Pipes Ltd as at April 01, 2010 along with the additions, deletions and accretions thereto from that date, would belong to the company.

The merger has been given effect to in the financial statements for the year ended March 31, 2013 and as such the assets, liabilities and the reserves of Sri''Venkateswara Pipes Ltd as at March 31, 2012 have been taken into the books of the company and the current year (Financial Year 2012-13) operations have been incorporated in the books of the company.

Keeping in view the fact that, as per the Scheme the profits of Sri Venkateswara Pipes Ltd belong to the company upon sanction of the merger and also the fact that Sri Venkateswara Pipes Ltd has been consistently a dividend paying company, it is proposed to recommend to the shareholders to declare a dividend of 7% of the post-merger paid up capital of the company. The shareholders would appreciate this positive aspect of the merger.

As stated earlier, Sri Venkateswara Pipes Ltd is a company engaged in the business of manufacture of AC Pressure Pipes. It has a wholly owned subsidiary by name Sri KPR Infra & Projects Ltd which is a company engaged in the business of construction of water supply pipe lines (laying of pipe lines). The subsidiary Sri KPR Infra & Projects Ltd has recently incorporated a wholly owned subsidiary by name Sri KPR Renewable Energy Ltd with the object of generation of non-conventional / renewable energy. Presently this is a start-up company. Even before forming the step-down subsidiary Sri KPR Renewable Energy Ltd, both Sri Venkateswara Pipes Ltd and Sri KPR Infra & Projects Ltd have been generating renewable energy through the wind-electric generators owned by them.

< As a result of the merger, Sri KPR Infra & Projects Ltd has now become a wholly owned subsidiary of Sri KPR Industries Ltd and consequently Sri KPR Renewable Energy Ltd becomes a step-down subsidiary, The results of this corporate structure are presented to the shareholders in the consolidated Balance Sheet of Sri KPR Industries Ltd. As stated earlier, the merger of Sri Venkateswara Pipes Ltd with the company is given effect to in the Financial Year 2012-13 and therefore the figures of the previous year are not comparable to those of the current year.

The company now is engaged in the manufacture of AC Pressure Pipes and through its subsidiary carries out the activity of construction of pipe lines and through the step down subsidiary would be generating electricity, in the days to come in addition to the electricity being generated through the wind electric generators already owned.

Thus, post the merger the business profile of the company Sri KPR Industries Ltd can be summarized as under: Manufacture and sale of Asbestos Cement Pressure Pipes. r Execution of drinking water supply schemes (by wholly owned subsidiary Sri KPR Infra & Projects Ltd)

- Generation of electricity through own wind electric generators (wind ; mills) i

- -¦ Generation of electricity (by wholly owned subsidiary Sri KPR Infra & -

Projects Ltd).

- Proposed renewable energy, wind and solar (step down subsidiary Sri KPR Renewable Energy Ltd)

The management is confident that its efforts in bringing in the above explained infrastructure into piace will yield the expected results in the years to come.

FINANCIAL RESULTS

PARTICULARS FOR THE YEAR

(On the basis of the amalgamated financial statements. ENDED Hence no previous year''s figures are given) 31.03.2013 Rs. In Lacs

Income from Operations 3284.77

Other Income 310.98

Cost of Material Consumed/ Purchases and changes in 1342.04 inventory

Administrative & Other Expenses 1400.39

Financial Expenses 165.87

Depreciation 154.54

Profit before Tax 532.91

Tax including deferred tax 91.60

Profit After Tax 441.31

DIVIDEND

Before the merger of Sri Venkateswara Pipes Ltd with the company, the paid up capital was Rs. 5,65,33,000 divided into 56,53,300 equity shares of Rs.10/- each fully paid up, The paid up capital of Sri Venkateswara Pipes Ltd on the appointed date (April 1, 2010) stood at Rs. 4,44,06,840 divided into 44,40,684 equity shares of Rs.10/- each fully paid up.

Out of the said total capital of Sri Venkateswara Pipes Ltd, the company already held of 3,00,000/- shares of Rs.10/- fully paid up aggregating to Rs.30,00,000/-. Thus the shareholding other than the shares held by the company amount to 41,40,684 shares.

As per the Scheme of Amalgamation, for every 2 shares held ''(by shareholders other than the company) in Sri Venkateswara Pipes Ltd, 7 shares in the company were issued accordingly 1,44,92,395 shares of Rs.10/- each fully paid up aggregating to Rs. 14,49,23,950/- were issued to the shareholders of Sri Venkateswara Pipes Ltd, thus bringing the total paid up share capital of the company post-merger to Rs.20,14,56,950/- divided into 2,01,45,695 shares of Rs.10/- each fully paid up.

From the current profits of the company (accounted on giving effect to the ,

merger) for the Financial Year 2012-13 the Directors recommend a dividend of 7% on the post-merger paid up share capital of the company. This would result in an outflow by way of distribution of profits to the share holders of an amount of Rs. 1.59 crores (including tax on distributed of the company).

The Directors are optimistic that the foundation being laid now will result in a consistent distribution of profits on a year on year basis. The dividend distributed would be tax free in the hands of the Shareholders.

DIRECTORS

RETIRING BY ROTATION

In accordance with Section 256 of the Companies Act, 1956 read with Articles of Association of the Company, Mr. Jagadeeshwar Reddy Podduturi, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

A brief profile of Sri Jagadeeshwar Reddy Podduturi is given in the notice of the Annual General Meeting.

NEW DIRECTORS

With a view to broad base the Board of Directors of the company and also to bring in the experience of the Directors of the erstwhile Sri Venkateswara Pipes Ltd (since merged with the company) the Board of Directors are of the opinion that the inclusion of the following persons in the Board will add value to the management of the company.

a- Mr. Bhoopal Reddy Aleti

Mr. Bhoopal Reddy Aleti has been the Managing Director of Sri Venkateswara Pipes Ltd right from its inception. With the merger it is proposed that he continue as the Whole Time Director of the company, thus carrying with him the experience of Sri Venkateswara Pipes Ltd. Mr. Bhoopal Reddy Aleti is also proposed to be appointed as a Whole Time Director of the company with remuneration as set out in the resolution.

b. Mr. Vineel Reddv IMalla

A software engineer, with a professional degree from US University and work experience in the USA. He is the Managing Director of a IT Services company have presence in India and USA.

c. Mrs. Vinitha IMalla

A management graduate, having knowledge and aptitude in the general administration of the business.

In addition to the above appointments a resolution for approval of the members by postal ballot is proposed for appointment of Mr Kishan Reddy IMalla, as Managing Director of the company and Mr Srinath Reddy Nalla and Mr Raja Reddy Gaddam as Whole Time Directors of the company.

A brief profile of the Directors is given in the Notice of the Annual General Meeting.

COMMITTEES CONSTITUTED BY THE BOARD OF DIRECTORS

As provided in the Report on Corporate Governance.

AUDITORS

M/s V. Sridhar & Co, Chartered Accountants, Hyderabad, the Statutory Auditors of the Company retire at the conclusion of ensuing Annual General Meeting and are eligible for re-appointment.

They have confirmed their eligibility and willingness to accept office of the statutory auditors, if appointed.

DIRECTORS, RESPONSIBILITY STATEMENTS IN ACCORDANCE WITH PROVISIONS OF SECTION 217 (2AA)

In compliance with the provisions of sec. 217(2AA) of the Companies Act, 1956, the directors confirm that:

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgments and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d. The annual accounts have been prepared on going concern basis.

e. The amalgamation of Sri Venkateswara Pipes Ltd with the company has been given effect to during the Financial Year 2012-13 and accounted for in accordance with Accounting Standard 14, Accounting for Amalgamations issued by the Institute of Chartered Accountants of India.

CORPORATE GOVERNANCE

The Company continues to strive towards highest standards of Corporate Governance while interacting with all the stakeholders.

The report of Board of Directors of the Company on Corporate Governance is given as a separate section titled as "Report on Corporate Governance 2012 - 13" which forms part of this Annual Report.

The requisite Certificate of the Statutory Auditors of the Company regarding compliance with the Corporate Governance requirements, as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, is annexed with the Corporate Governance Report.

SUBSIDIARY COMPANIES

The details of subsidiary companies are as follows:

1. Sri KPR Infra & Projects Limited (a wholly owned subsidiary). *

2. Sri KPR Renewable Energy Limited (step-down, a wholly owned subsidiary of Sri KPR Infra & Projects Ltd).

Pursuant to the provision of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs (MCA), Government of India, New Delhi vide its Circular No.2/2011 dated: 08.02.2011 has granted general exemption from attaching the balance sheet, statement of profit and loss and other documents of the subsidiary companies with the balance sheet of the Company.

A statement containing the brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2013 is provided as Annexure and forms part of this report. Accordingly, this annual report does not contain the reports and other statements of the subsidiary companies. Any member intends to have a certified copy of the Balance Sheet and other financial statements of these subsidiaries may write to the Board. These documents are available for inspection during business hours at the registered office of the company and also at the registered offices of the respective subsidiary companies.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any deposits with in the meaning of Sec. 58A of the Companies Act, 1956 and the rules made there under.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO TSec. 217(1 Ue^l

the particulars prescribed under the provision of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 is provided in annexure and the same forms part of the annual report.

PARTICULARS OF EMPLOYEES TSec. 217f 2A)

There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management discussion & analysis report for the year under review is provided separately and the same forms part of the annual report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere appreciation and acknowledge with gratitude the support and consideration extended by the bankers, Shareholders and employees and look forward for their continued support and cooperation. By the Order of the Board

FOR SRI KPR INDUSTRIES LIMITED

Place: Secunderabad Sd/-

Date: 19.08.2013 N, Kishan Reddy

Chairman & Managing Director


Mar 31, 2011

To The Members of M/s Bhagyanagar Wood Plast Limited (BWPL), Secunderabad

The Directors present herewith the Twenty Third Annual Report on the affairs of the company along with the report of the Auditors on the accounts of the company for the Financial Year 2010-11.

FINANCIAL RESULTS AND PERFORMANCE

The performance of the company is summarised as under;

Rupees in lacs Particulars Current year Previous year

Sales and other Income 36.87 655.29

Profit before interest, depreciation and tax 15.84 (106.02)

Interest 0.48 5.55

Profit before depreciation and tax 15.36 (111.57)

Depreciation 2.10 (2.10)

Profit before tax for the current year 13.26 (113.67)

Profit after tax for the current year 12.42 (71.31)

Reserves as at the end of the year 150.53 138.11

Share Capital 565.33 565.33

Earnings per share 0.22 (12.61)

DIVIDEND

Keeping in view the current economic scenario and the future funds requirements of the Company, the Board of Directors have not recommended any dividend.

MANAGEMENT DISCUSSION. ANALYSIS AND OPERATIONS

OPERATIONS OF 2010-11 AND FUTURE OUTLOOK

The members are aware that the PVC Pipes division was sold after obtaining the required approvals. Even before that, as the business of the company was adversely affected due to unhealthy competition from players in unorganized sector, the division was not yielding the desired results and the company was on a look out for better ventures.

The company had few years ago provided technical know-how for setting up of a Cement Pipe Manufacturing unit to M/s Sri Venkateswara Pipes Limited and also invested in its capital.

M/s Sri Venkateswara Pipes Limited is a company which started its operations with the technical know- how and expertise extended by M/s Bhagyanagar Wood Plast Limited ever since the inception of the said company. Initially M/s Bhagyanagar Wood Plast Limited also invested in the share capital of the company and for the provision of technical consultancy, royalty was also received. Over the period of last few years, the technical and advisory expertise extended by M/s Bhagyanagar Wood Plast Limited to M/s Sri Venkateswara Pipes Limited enabled the said company to become a leader in the field of asbestos cement pressure pipes.

With a view to enter into newer business areas a proposal to amalgamate M/s Sri Venkateswara Pipes Limited with M/s Bhagyanagar Wood Plast Limited was moved and was in consideration for quite some time now.

The Boards of both the companies having approved the amalgamation, a petition has been moved before the Hon'ble Andhra Pradesh High Court for sanction. The management is confident that the petition will be approved and this will take the company and its business activity to greater levels and the management foresees great potential in this area.

MATERIAL CHANGES & COMMITMENTS [Section 217 (1) (d)]

The Company has filed an application vide application No.795 of 2011 for amalgamation with the Hon'ble High Court of Andhra Pradesh for the purpose of merging M/s Sri Venkateswara Pipes Limited with M/s Bhagyanagar Wood Plast Limited u/s 391 and 393 of the Companies Act, 1956. In furtherance to which and as per clause 24(f) the Company has received in. principle approval dated 22nd June, 2011, bearing Reference No.DCS/AMAL/SI/24 (f)/163/2011-12 from the Bombay Stock Exchange Limited. The approval from Hon'ble High Court will be informed to the shareholders by appropriate mode.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

DIRECTOR'S RESPONSIBILITY STATEMENT (SECTION 217 (2AA) OF THE COMPANIES ACT, 1956

As required under Section 217(2AA) of the Companies Act, 1956, and based on the information and Representations received from the operating management, the Board of Directors of the Company confirms that-

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d. The annual accounts have been prepared on going concern basis.

DIRECTORS

Sri P.Jagadeeshwar Reddy and Sri G.Raja Reddy, Directors of the company retires by rotation at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

REPORT ON CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on corporate governance is annexed and form part of the Directors Report.

AUDITORS

M/s V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

The Board of Directors place on record their appreciation of the support extended to the company by the employees and customers of the company and to all the shareholders.

By Order of the Board For Bhagyanagar Wood Plast Limited

Sd/- N. Kishan Reddy Managing Director

Place : Secunderabad Date : 17th August'2011


Mar 31, 2010

The Directors present herewith the Twenty Second Annual Report on the affairs of the company along with the report of the Auditors on the accounts of the company for the Financial Year 2009-10.

FINANCIAL RESULTS AND PERFORMANCE

The performance of the company is summarised as under;

Rupees in lacs

Particulars Current year Previous year

Sales and other Income 655.29 1025.21

Profit before interest, depreciation and tax (106.02) 43.11

Interest 5.55 15.88

Profit before depreciation and tax (111.57) 27.23

Depreciation (2.10) (26.39)

Profit before tax for the current year (113.67) 0.84

Profit after tax for the current year (71.31) 3.45

Reserves as at the end of the year 138.11 209.41

Share Capital 565.33 565.33

Earnings per share (12.61) 0.06



MANAGEMENT DISCUSSION. ANALYSIS AND OPERATIONS



OPERATIONS OF 2009-10 AND FUTURE OUTLOOK

The competition from unorganized sector has been an impediment in the growth of the company for quite some time now. This aspect has adversely effected the operations of the company, severely damaging the profitability and the operational results. In the earlier year the software division of the company was shut down and in the Financial Year 2009-10 with the approval of the members, the PVC Pipe undertaking was sold.

Considering the fact that the PVC pipe division has consistently been weakening, the management for some time now was contemplating a strategic merger with one of its associate concerns viz., Sri Venkateswara Pipes Limited.

Sri Venkateswara Pipes Limited is a company which started its operations with the technical know-how and expertise extended by Bhagyanagar Wood Plast Limited eversince the inception of the said company.

Initially Bhagyanagar Wodplast Limited also invested in the share capital of the company and for the provision of technical consultancy, royalty was also received. Over the period of last few years, the technical and advisory expertise extended by Bhagnagar Woodplast Limited to Sri Venkateswara Pipes Limited enabled the said company to become a leader in the field of asbestos cement pressure pipes.

Considering the long association, both as a investor as well as provider of technical support and considering the present market positioning of Sri Venkateswara Pipes Limited, the management has come to a firm conclusion that the strategic merger of Sri Venkateswara Pipes Limited with Bhagyanagar Wodplast Limited would be in the best interest of the share holders of both the companies. This would also fuel the future growth of the merged entity, particularly in view of the fact that Bhagyanagar Woodplast Limited has the technical expertise and also the cash reserves required for the growth. The management is confident that the operations of the coming year will be on a highly positive path in the post merged entity. The management will approach the share holders in due course of time with the necessary approvals for the merger.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

RESPONSIBILITY STATEMENT (SECTION 217 (2AA) OF THE COMPANIES ACT. 1956

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d. The annual accounts have been prepared on going concern basis.

DIRECTORS

Sri. N. Srinath Reddy and Sri. T. Naveen Chandra, Directors of the company retires by rotation at the conclusion of the ensuing Annual General Meeting and being eligible offer therriselves for reappointment.

REPORT ON CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on corporate governance is annexed and form part of the Directors Report.

AUDITORS

M/s V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

The Board of Directors place on record their appreciation of the support extended to the company by State Bank of Hyderabad, the Bankers to the company, the employees and customers of the company and to all the shareholders.

On behalf of the Board



N.KISHAN REDDY

Chairman.

Secunderabad, May 31, 2010.

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