Crane Infrastructure Ltd Directors Report.

To

The members,

Crane Infrastructure Limited

Guntur

The directors submit 11th annual report of Crane Infrastructure Limited along with the audited financial statements for the financial year ended March 31,2019.

Financial Results :

Particulars 2018-19 2017-18 2016-17 2015-16
(Rs in lacs) (Rs in lacs) (Rs in lacs) (Rs in lacs)
Revenue from Operations & Other Income 82.95 79.91 78.81 68.22
Profit/(Loss) Before Interest & Depreciation 66.74 56.64 63.73 43.20
Interest - - - -
Depreciation 13.07 13.07 12.99 10.67
Profit Before exceptional & extraordinary items 53.67 43.57 50.74 32.53
Profit/(Loss) Before Tax 53.67 43.57 50.74 32.53
Income Tax (Current Tax) 11.33 08.45 13.61 12.26
Profit/(Loss) after Taxation 42.34 35.12 37.12 20.26
EPS-Basic 0.58 0.48 0.51 0.28
EPS-Diluted 0.58 0.48 0.51 0.28

Dividend

The management wants 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 2018-19

Transfer to reserves :

The Company proposes to retain an amount of Rs. 42,33,950 in the profit and loss account.

Share Capital

The paid up Equity Share Capital as on 31st March, 2019 was Rs. 7,24,20,000. The Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

Companys performance

During the Year under review revenue from operations for the financial year 2018-19 is Rs.82.95 lakhs was improved by 3.80 % over last year (Rs.79.91 lakhs in 2017-18). Profit after tax (PAT) for the financial year 2018-19 is Rs.42.33 Lakhs was increased by 20.55 %over last year (Rs.35.12 Lakhs in 2017-18).

Opportunities & Industry out Look

The real estate sector is one of the most recognized sectors. In India, real estate is the second largest employer after agriculture and is slated to grow at 30% over the next decade. The real estate sector comprises of four sub sectors - housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. The global warehousing and storage industry has witnessed significant growth during the last five years. The Indian warehousing industry is set to grow at a CAGR of 8%-10% and modern warehousing at 25%- 30% over the next 5 years due to various factors including the anticipated increase in global demand, growth in organized retail and increasing manufacturing activities, presence of extremely affordable and desirable e-commerce options and growth in international trade. The Government of India along with the governments of the respective states have taken several initiatives to encourage the development in the sector. The Smart City Project, where there is a plan to build 100 smart cities, is a prime opportunity for the real estate companies. While Goods and Services Tax (GST) continues to remain in a state where several loose ends still need to be tied up, logistics companies - both domestic and global, are not just bullish about the sector but are actively making investment plans for the coming fiscals as well. It may increase the demand of hi-tech large modern Warehouses, Logistics Parks etc. As India awaits policy reforms to pick up speed, your Company firmly believes that the demand for Real Estate & Warehousing in India should remain strong in the medium to long term.

Management Discussion & Analysis

A detailed management discussion & analysis forms part of this annual report, which is attached to this report in Annexure iii

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.

The Web Address, if any, where Annual return referred to in subsection (3) of section 92 is placed:

True, the Annual return U/s 92 (3) is placed in www.cranegroup.in

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

I. Reappointment of Mr. CH.V.S.S Kishore Kumar (Din: 01823606) whose office was liable to retire by rotation at annual general meeting of the company:

Mr. CH.V.S.S Kishore Kumar, director liable to retire by rotation under the Articles of Association of the Company, in 10th Annual General Meeting and being eligible, offer himself for reappointment as Director. The Shareholders approved his re-appointment as Director of the company at 10th Annual General Meeting of the company held on 28.09.2018.

Directors Liable to Retire by Rotation In the ensuing Annual General Meeting:

Mrs. Himaja Manepalli (DIN 06505782), director liable to retire by rotation in ensuing Annual General Meeting under the Articles of Association of the Company and being eligible, offer herself for reappointment as Director. The Board recommends her re-appointment.

ii. Appointment of company secretary and compliance officer:

During the financial year the board appointed Mrs. Madhuri Arora (ICSI Membership No:41272), company secretary, an Associate member of institute of company secretaries of india as a company secretary and compliance officer of the company 13.03.2019

Meetings of the Board

Seven meetings of the board were held during the financial year 2018-19 on 30.05.2018, 13.08.2018, 14.11.2018, 14.12.2018,14.02.2019, 04.03.2019 and 13.03.2019 with a gap between any of the two meetings not exceeding the period of 120 days as prescribed under the Act and all members are present at the above meetings.

Board evaluation

The board of directors has carried out an annual evaluation of its own performance, Board committees and Individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under regulation 27 of the SEBI(LODR) Regulations 2015.The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non- executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

i. Observations of Board evaluation carried out for the year: Nil

ii. Previous Years observations and actions taken: Nil

iii. Proposed actions based current year Observations: Nil

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 31,2019, the Board consists of six members, two of them 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

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. The scope of the Committee also includes matters which are set out in SEBI (LODR) Regulations 2015 and the rules made there under, as amended from time to time

(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 and one director is non executive non independent director (woman director).

The committee comprises as follows:

1. Mr. M.V. Subba Rao (Chairman)

2. Mr.P. Bhaskara Rao -Member

3. Mrs.M. Himaja- Member

Five Nomination and Remuneration Committee meetings were held during the year and the gap between two meetings did not exceed 120 days. The dates on which the said meetings were held on 30.05.2018, 13.08.2018, 14.11.2018 14.02.2019 and 13.03.2019..The necessary quorum was present for all the meetings.

(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 committees working etc.

ii) Performance evaluation criteria for Executive Directors inter alia include: level of skill, knowledge and core competence; performance and achievement vis-a-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 & constructively while exercising duties; providing independent judgment on strategy, performance, risk management and Boards 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 Committees 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 committees 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 Companys affairs, including attending Committee and Board Meetings of the Company.

f) 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.

g) 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.

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, 2013SEBI(LODR) Regulations 2015 and as follows:

a. Oversight of the Companys 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 Companys 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.

k. The scope of the Audit Committee also includes matters which are set out in SEBI (LODR) Regulations 2015, read with Section 177 of the Companies Act, 2013 and the rules made there under, as amended from time to time.

B. Composition, Meetings and Attendance during the year :

The Audit Committee comprises of total three Non-Executive Directors in which two are Independent Directors and One Non- Executive non independent Director (Woman Director). The committee comprises as follows:

1. Mr. P. Bhaskara Rao (Chairman)

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

3. Mrs. M. Himaja (Member)

Four Audit Committee meetings were held during the year and the gap between two meetings did not exceed 120 days. The dates on which the said meetings were held on 30.05.2018, 13.08.2018, 14.11.2018 and 14.02.2019.The necessary quorum was present for all the meetings.

Stakeholders relationship committee:

The Company had a stakeholders relationship committee of directors to look into the redressal of complaints of investors

Composition, Meetings and Attendance during the year

The Stakeholders relationship Committee comprises of One Independent cum Non-Executive Director and two non executive non independent directors. The committee comprises as follows:

1. Mr.GVSL Kantha Rao (Chaiman)

2. Mr. P. Bhaskar Rao (Member)

3. Mrs. Himaja (Member)

Four stakeholder relationship committee meetings were held during the year and the gap between two meetings did not exceed 120 days. The dates on which the said meetings were held on 30.05.2018, 13.08.2018, 14.11.2018 and 14.02.2019.The necessary quorum was present for all the meetings.

Particulars of Employees and Related Disclosures :

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below

A. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year: NIL

During the financial year 2018-19 The Company has not paid any remuneration to Non- Executive Directors

b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year: Nil

c. The percentage increase in the median remuneration of employees in the financial year: NIL

d. The number of permanent employees on the rolls of Company: Nil

e. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: Nil

Revenue Rs.82.95 Lakhs

Remuneration of KMPs as a percentage of revenue: NIL

f. Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars 31-03-2019 31 -03-2018 % Change
Market Capitalization 8,83,52,400 4,56,24,600 93.65
Price Earnings Ratio 21.03 13.12 7.91

Increase in the managerial remuneration for the year was: Nil

There was no exceptional circumstances for increase in the managerial remuneration

g. Comparison of each remuneration of the key managerial personnel against the performance of the Company:

Remuneration in FY 2018-19 Nil
Revenue Rs.82.95 Lakhs
Remuneration (% of Revenue) Nil
Profit before Tax Rs. 53.67Lakhs
Remuneration (as % of PBT) Nil

h. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.

i. The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: NA

Statement on Declaration Given By Independent Directors:

In terms with Section 149 (7) 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 SEBI (LODR) regulations,2015.Hence that there is no change in status of Independence.

Meetings of the Independent Directors

During the year under review, four meetings of independent directors were held on 28.05.2018, 14.08.2018,16.11.2018 and 13.02.2019 in compliance with the requirements of schedule IV of the companies Act,2013.

Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, Umamaheswara Rao & Co., Chartered Accountants, are eligible for re appointment as Statutory Auditors of the company for the financial year 2018- 19 and the Board proposes for appointment of Statutory auditors for a period of five years which ends on until the conclusion of 13th Annual General Meeting of the company to be held in the Year 2021

In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting. The Report given by the Auditors on the financial statement of the Company is part of this Report.

There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Statutory Auditors report and

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

The Auditors Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self- explanatory and do not call for any further comments

The Notes to Accounts forming part of the financial statements are self-explanatory and need no further explanation. The detailed reports on the Statutory Audit is appended as an Annexure V to 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 & Nagaraju Associates, Company Secretaries in Practice, Vijayawada has conducted the Secretarial Audit of the Company for the financial year ended March 31,2019.

Secretarial Audit Report:

The detailed reports on the Secretarial Audit in Form MR- 3 are appended as an Annexure IV to this Report. There were no qualifications, reservations or adverse remarks given by Secretarial Auditors of the Company except During the year the Company has not appointed a company secretary in terms of the provisions of sections 204 of the companies Act, 2013 regulation 6 (1) a of the SEBI (LODR) Regulations, 2015, for a period upto 12-03-2019.

Board Clarification on Secretarial Auditors Qualifications:

We are sincerely committed for good corporate governance practices with letter and spirit of law and we made all sincere efforts to appoint a company secretary who is perfectly suitable for our companys compliance needs. But we were unable to appoint a company secretary during the year since 1st April 2018 to 12th march 2019..

Cost Audit and Maintanance of Cost Records

Cost Audit and Mantanance of cost Records is not applicable to the Company for the Financial Year 2018-19.

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.

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.

Un secured loans taken from the Directors

During the year the company has not received any of the un secured loans from the directors.

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 Companys internal financial controls were adequate and effective during the financial year 2018-19

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

Foreign exchange earnings and outgo Export in financial year 2018-19: Nil

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

Your directors confirm that the company has adopted a policy regarding the prevention of sexual harassment of women at work place and has constituted Internal Complaints Committees (ICC) 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.

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 on 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 Corporate Governance was not be mandatory for the Company for the financial year 2018-19.

Vigil Mechanism

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

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 Companys 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 of Crane Infrastructure Ltd
Sd/- Sd/-
(P. Bhaskara Rao) (K. Praveen)
Date : 14-08-2019 Director Executive Director
Place : Gu ntu r (DIN:01846243) (Din: 07143744)