DIRECTORS' REPORT DEAR SHAREHOLDERS, Your Directors have pleasure to present the 24th Annual Report and the Audited Accounts for the financial year ended 31st March, 2015. 2. DIVIDEND Your Directors are pleased to recommend for your consideration a Dividend of Rs. 1.50 per share (15% of face value Rs.10/-) on the equity capital of the company for the financial year ended 31st March, 2015, aggregating an amount of Rs.154.03 lakhs. 3. TRANSFERS TO RESERVES AND RETENTION IN THE PROFIT AND LOSS ACCOUNT ETC: The Company has proposes to transfer an amount of Rs. 749.21 lakhs to Reserves during the financial year . . Finance: Cash and cash equivalents as at 31st March, 2015 was Rs. 4272.88 lakhs. The company continues to focus on judicious management of its working capital , receivables, inventories and other working capital parameters and they were kept under strict check through continuous monitoring. 5. COMPANY'S WORKING DURING THE CURRENT YEAR 2014-2015 AND THE FUTURE PROSPECTS ALONG WITH REASONS WHILE COMPARING WITH PREVIOUS YEAR RESULTS Your Company has exported polished granite slabs and polished monuments valued at Rs.6164 lakhs to U.S.A. during the year under consideration. As regards the Raw Materials, out of the total purchases of Raw Blocks valued at Rs.1516 lakhs made during the year, about 16% are imported from Brazil, Finland, Norway etc. The year closed on a positive note with export orders on hand to the tune of Rs.220 lakhs as compared to Rs.260 lakhs of last year. In spite of the problems faced by the Granite Industry and the all-round downward economic slide in the International Arena, your company has managed to improve the performance during the current year. The improvement is to the extent of about Rs. 218 lakhs. 6. CHANGE IN NATURE OF BUSINESS: During the year the company has not changed its business . The Shareholders approved the resolution by postal Ballot for addition of object relating to generation, production and storage of solar, hydel and all other forms of energy. 7. 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 : There are no material changes and commitments that have bearing on the financial position of the Company. 8. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE: There are no significant and material orders by the Regulators or Courts or Tribunals impacting the going concern status and company's operations in future. 9. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY: The Management continuously reviews the internal control systems and procedures for the efficient conduct of the company's business. The Company adheres to the prescribed guidelines with respect to the transactions, financial reporting and ensure that all its assets are safeguard and protected against losses. The Internal Auditors of the company conducts the audit on regular basis and the Audit Committee periodically reviews internal audit reports and effectiveness of internal control systems. 10. DETAILS OF SUBSIDIARY / JOINT VENTURES/ASSOCIATE COMPANIES The Company does not have any subsidiaries or Joint Venture or associate companies. 11. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT. : Not Applicable 12. DEPOSITS The company has not accepted any fixed deposits from the public. 13. AUDITORS AND OBSERVATIONS : M/s Rambabu & Co, Chartered Accountants, Independent Auditors of the Company were appointed in the last Annual General meeting for a period of three years till conclusion of Twenty sixth Annual General Meeting . The resolution relating to ratification of the appointment is placed before the members in the ensuing Annual general meeting. 14. SECRETARIAL AUDIT REPORT Pursuant to provisions of section 204 of the Companies Act, 2013 , the Company has appointed Puttaparthi Jagannatham and Co., Company secretaries, a firm of company secretaries to undertake the secretarial audit of the Company. The Secretarial Audit Report obtained is annexed within as Annexure -1. 15. EXTRACT OF ANNUAL RETURN : The extract of the Annual Return is attached as Annexure 2 16. SHARE CAPITAL None of the following issues were taken up during the year and hence details thereof were not required to be furnished A) Issue of shares with differential rights B) Issue of sweat equity shares C) Issue of employee stock options D) Provision of money by company for purchase of its own shares by employees or trustees for the benefit of employees 17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: (A) Conservation of energy a) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilisation and maximum possible savings of energy is achieved. b) No specific investment has been made on reduction in energy consumption . c) As the impact of measures taken for conservation and optimum utilisation of energy are not quantitative, its impact on cost cannot be stated accurately. B) Technology Absorption: No outside technology is being used for manufacturing activities, therefore no technology absorption is required The Company constantly strives for maintenance and improvement in quality of its products and entire research and development activities are directed to achieve the aforesaid goal. (C) Foreign exchange earnings and outgo : Details of foreign exchange earnings and outgo are as follows 18. CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE COMMITTEE The Company has constituted the CSR committee as per the CSR Policy Rules and has identified the Education, Environment as the broad areas towards providing clean and hygienic water , and health related areas as the focus areas for CSR activities. The Company could not spend the earmarked money because of the problems in identifying the areas and beneficiaries." 19. DIRECTORS A) Changes in Directors and Key managerial personnel: In the last AGM held on 29th September 2014, the appointment of Sri T. Ramesh Chandra Bose and Sri S. Srinivas, Reappointed of Sri MV Subba Rao as Independent directors of the Company and the regularization of appointment of Smt. Jaisree Nallapati as whole time Director of the company, were approved. In accordance with the Companies Act, 2013 and the Articles of Association of the Company, Shri N.Bhanu Prasad is due to retire by rotation in the ensuing Annual General Meeting and though eligible, has not so far offered himself for reappointment and hence the vacancy is proposed not to be filled in and be kept vacant. B) Declaration by the independent Directors of the company that that they meet the criteria of independence as provided in Sec 149(6) of the companies act. All the independent Directors have given declarations that they meet the criteria of independence as provided in subsection (6) of Section 149 of the Companies Act, 2013 and Cl.49 of the Listing Agreement. C) Formal evaluation statement by the Board of its own performance, it's committees and individual Directors: Pursuant to the provisions of the Companies Act, 2013 and clause 49 of the Listing Agreement, the Board has formulated a policy for evaluation of its Board . Board Committee, Director's and their performances and carried out an evaluation of them. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 20. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS: The Directors met for 5 times during the year. A calendar of meetings is prepared and circulated in advance to all the Directors. Meeting of Independent Director took place on 02.03.2015. 21. AUDIT COMMITTEE: The Board of Directors of the Company constituted Audit Committee consisting of the following Directors, with the roles and responsibilities duly defined in accordance with the applicable statutory and other requirements. During the year, in all 4 meetings of the Committee took place. The Board has accepted all the recommendation of the Audit Committee. 22. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES: The Company at present has the vigil mechanism to deal with the instances of fraud and mismanagement if any . The company ensures that strict confidentiality is maintained while dealing with the concerns and also that no discrimination is meted out to any person for a genuinely raised concern. It is taken care of by the audit committee of the company. The Company has also formulated Whistle Blower Policy through which its Directors, Employees and Stake Holders can report their genuine concern about unethical behavior, actual or suspended fraud, or violation of the company's code of conduct or ethics Policy. 23. CODE OF CONDUCT: The Board of Directors have approved a code of conduct which is applicable to the members of the Board and all employees in the course of day to day business operations of the Company. The company believes in " Zero Tolerance" against bribery, corruption and unethical dealings / behaviours of any form and the board has laid down the directives to counter such acts. The code laid down by the Board is known as "Code of Business Conduct." which forms an appendix to the code. The code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders . All the Board members and senior Management Personnel have confirmed compliance with the code. All management staff were given training in this regard. 24. PREVENTION OF INSIDER TRADING: The Company has adopted a code of conduct for prevention of insider trading with a view to regulate trading 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's shares by the Directors and 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. The Board is responsible for implementation of the code. All the Board Members and the designated employees have confirmed compliance with the Code. 25. NOMINATION AND REMUNERATION COMMITTEE: The Board of Directors of the Company has constituted a Nomination and Remuneration Committee consisting of the following Directors, with the role and responsibilities duly defined and in accordance with the applicable statutory and other requirements. The Board has formulated a policy in consultation with the Nomination and Remuneration Committee for selection and appointment of Directors, Senior management and fixation of their remuneration keeping in view the requirements given in section 178 of the companies Act, 2013 and it also involves in the evaluation of the Board and its remuneration policies. 26. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto shall be disclosed in Form No. AOC -2 as Annexure-3. 27. MANAGERIAL REMUNERATION: Details of the ratio of the remuneration of each Director to the median employee's remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. • c) No Director is in receipt of any commission from the company and the Managing Director Whole-time Director of the Company have not received any remuneration or commission from any other Company subject to its disclosure by the Company in the Board's Report. 28. CORPORATE GOVERNANCE As per Clause 49 of the Listing Agreement, a Report on Corporate Governance, forming part of this Report, together with the Auditors' Certificate regarding the compliance of the conditions of Corporate Governance is annexed as Annexure - 4 to Report. 29. RISK MANAGEMENT AND INSURANCE Your Company continuously monitors business and operational risk through business process, re-engineering and reviewing areas such as production, finance, legal and other issues. An exhaustive exercise is underway to bring a model regulating risk management mechanism. Your Company's assets are adequately insured against the risk from fire and earthquake 30. DIRECTORS' RESPONSIBILITY STATEMENT: The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that- (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (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 and loss 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; and (e) the Directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (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. 31. FORFEITURE OF PARTLY PAID SHARES: As per Clause 36(7)(V) of the Listing Agreement, and as per the Provisions of the Companies Act,2013 the Company has forfeited 81,200 partly paid up equity shares on which the final call money of Rs. 5/- per share was not paid by due date of final notice as per the regulations on the subject and consequently the paid up share capital of the Company stands reduced by Rs. 4.06 lakhs, and hence the total paid up capital as at end of the year is Rs.1026.89 lakhs. 32. ALTERATION / ADDITION OF OBJECTS CLAUSE OF MEMORANDUM OF ASSOCIATION: Your Directors are pleased to inform that in accordance with the provisions of Section 4,13 and all other applicable provisions, if any, of Companies Act, 2013, the Objects Clause of the Memorandum of association was altered to enable the company to setup solar power plant for captive consumption and further, exploring the possibility of generation/production, storage, transmission/ distribution/supply and sale of electricity by way of conventional or non-conventional sources of energy such as solar, hydel, fuel cells, thermal, atomic, gas, wind, tidal and all form of energy for own use/consumption. 33 PAYMENT OF LISTING FEE At present the equity shares of the Company are listed on the Bombay Stock exchange at Mumbai. The company confirms that it has paid Annual Listing Fees due to the Bombay Stock Exchange for the year 2015-2016. 34. DEPOSITORY SYSTEM As the Members are aware, your Company's shares are tradable compulsorily in electronic form and your Company has established connectivity with Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the depository system, the Members are requested to avail the facility of Dematerialization of the Company's shares on NSDL & CDSL. The ISIN allotted to the Company's Equity shares is INE410G01010. The company is pursuing the share holders, including the promoters , holding the shares in physical form for dematerialization of their shares. 35. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 : There are no loans, guarantees or investments made under section 186 of the Companies Act, 2013 36. MANAGEMENT DISCUSSION & ANALYSIS REPORT The Management Discussion and Analysis Report as required under 49 of the listing agreement with stock exchange forms part of this report. 37. INTERNAL COMPLAINTS COMMITTEE: The company has constituted "Internal Complaints Committee" as required under section 4 (1) of Sexual harassment of women at work place (prevention, prohibition and redressal) act, 2013. This committee consists of following members: 1. Smt. Jaishree Nallapati 2. Sri S. Srinivas 3. Sri N.S.R.C.Sekhara Rao During the year under review , no complaints of harassment at the workplace were received by the committee. ACKNOWLEDGEMENTS Your Directors place on record their appreciation of the financial assistance and support extended by State Bank of Mysore. The Directors thank the shareholders for their continued confidence and trust placed by them with the Company. The Board also thanks all categories of employees of the Company for their dedicated and sincere services. For and on behalf of the Board (N.HARI HARA PRASAD) Managing Director (T.H.SASTRY) Director Place : Hyderabad, Date : 28th May, 2015. |