Virat Crane Industries Ltd Directors Report.

To

The Members,

Virat Crane Industries Limited ,

Guntur.

The directors submit 27th annual report of Virat Crane Industries Limited along with the audited financial statements for the financial year ended March 31,2019.

Standalone 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 8572.24 8805.01 7148.30 6086.20
Proflt/(Loss) Before Interest & Depreciation 1034.63 1053.75 392.76 893.34
Interest 43.77 65.07 5.022 16.20
Depreciation 30.36 28.47 27.01 18.19
Profit before exceptional and extraordinary items 960.50 960.19 360.72 858.95
Profit/ (Loss) before Tax 960.50 957.05 360.72 867.55
Income Tax -(Current Tax) 27.00 330.00 121.91 282.23
Previous Year Tax 05.00 3.14 0.017 7.23
Deferred -tax (expenses)/ Income 04.46 6.38 7.73 5.90
Profit (Loss) after Taxation 680.96 620.66 228.39 572.15
EPS-Basic 3.33 3.04 1.12 2.80
EPS-Diluted 3.33 3.04 1.12 2.80

Dividend

The Board of Directors has not recommended any dividend for the financial year 2018-19. The Board of Directors wanted to keep the profits at the company for utilizing the construction of new plant which is being constructed, since management did not want to have burden of external debt on the company.

Transfer to reserves

The Company proposes to transfer Rs. 68.09 Lakhs to the general reserve out of the amount available for appropriation and an amount of489.96 Lakhs is proposed to be retained in the profit and loss account.

Material changes affecting the Company

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this Report. There has been no change in the nature of business of the Company.

Companys performance

During the Year under review revenue from operations for the financial year 2018-19 is Rs.85.78 Crores. It was decreased by 2.57% over the last financial year (Rs.88.05 Crores in 2017-18). Profit after tax (PAT) for the financial year 2018-19 is Rs.6.80 Crores. It was increased by 09.72% over last year (Rs.6.20 Crores in 2017-18).The revenue was increased though the company was facing rigid competition in the industry. It was due to management commitment and high quality products of the company.

Directors responsibility statement

Pursuant to Section 134(5) ofthe 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.Venkata Sri Hari.Puvvada whose office was liable to retire by rotation at 26th annual general meeting of the company:

Mr.Venkata Sri Hari.Puvvada, director liable to retire by rotation under the Articles of Association of the Company,in 26th Annual General Meeting and being eligible, offer himself for reappointment as Director. The Shareholders approved his re-appointment as Director of the company at the 26th Annual General Meeting of the company held on 28.09.2018.

ii. Reappointment of Managing Director:

Sri GVSL Kantha Rao was reappointed as Managing Director, not liable to retire by rotation, and to hold office for the second term of five consecutive years in the board of the company with effective from 1st November, 2018 to 31st October 2023.

iii. Directors liable to retire by rotation in ensuing Annual General Meeting:

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

Meetings of the Board & Committees

Details of the meetings of the board and board Committees, given in corporate governance report, which forms part of this report.

Board evaluation

The board of directors has carried out an annual evaluation of its own performance, Board committees and Individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under 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 Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors report.

Declaration Given By Independent Directors

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.

Independent Directors Meeting

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. The Independent Directors at the meeting, inter alia, reviewed the Performance of Non-Independent Directors and Board as a whole. Performance of the Chairperson of the Company, taking into account the views of Managing Director and Non-Executive Directors and Assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Extract Of The Annual Return

The details forming part of the extract of the Annual Return in form MGT-9 as required under Section 92 of the Companies Act, 2013 is included in this Report as Annexure - I and forms an integral part of this Report.

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

Internal financial control systems and their adequacy

The details in respect of internal financial control and their adequacy are included in the Management Discussion& Analysis, which forms part of this report.

Statutory Auditor:

Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s Anantha & Associates, Chartered Accountants (FRN: 010642S) as the statutory Auditors of the company for a period of five consecutive years from the conclusion of the 25th Annual General Meeting of the company schedule 29th September, 2017, till the conclusion of the 30th Annual General Meeting to be held in the year 2022,for this The shareholders of the company had given their consent by way of ordinary resolution in the annual general meeting held on 29-092017.

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.

Auditors report

The auditors report does not contain any qualifications, reservations or adverse remarks. Audit Report is given as an annexure -x which forms part of this report.

The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013 (including any statutory modification(s) or re enactment(s) for the time being in force).

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 .They had conducted the Secretarial Audit of the Company for the financial year ended on March 31,2019.

Secretarial auditor 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

The Company did not ensure that the limited review or audit reports submitted to the stock exchange(s) on a quarterly or annual basis were given by an auditor who has subjected himself to the peer review process of Institute of Chartered Accountants of India and holds a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Board Clarification on Secretarial Auditors Qualification:

The Board of directors of the company has received confirmation from the statutory auditor of the company that he had already made an application to the peer review board of institute of charted accountants of india (ICAI) for issuance of peer review certificate and the matter of issuance of peer review certificate to the statutory auditor is pending with the ICAI.

Maintenance of Cost Records and Cost Audit:

Cost Audit 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 ofthis report.

Corporate social responsibility

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the Initiatives undertaken by the Company on CSR activities during the year are set out in Annexure III of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on www.cranegroup.in

Particulars of employees

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

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

Name of the Executive director Ratio to median remuneration G V S L KANTHA RAO 1:65

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

b. The percentage increase in remuneration of total directors, chief executive officer, chief financial officer, company secretary in the financial year: 41.19%

c. The percentage increase in the median remuneration of employees in the financial year: 54.58%

d. The number of permanent employees on the rolls of Company: 70

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:

Increase in the managerial remuneration for the year was: 41.19%

The percentage increase in the median remuneration of employees in the financial year: 54.58%

Justification:

Percentage of Employees median remuneration was increased more than fifty four percent during the financial year compared to the previous financial year. The percentage of increase of managerial remuneration was forty one. The employees median remuneration increased more than 13% of increase of median remuneration of managerial remuneration. Managerial remunerations were increased with respect to the growth and revenue perspective of the company. The increase in Managerial remuneration was justified as there were no exceptional circumstances for increase in the managerial remunerations.

g. 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.

Deposits from public

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

Conservation of energy:

VCIL continues to work on reducing carbon footprint in all its areas of operations through initiatives like

(a) Green infrastructure,

(b) Operational energy efficiency,

Technology absorption, adaption and innovation:

The Company continues to use the latest technologies for improving the productivity and quality of its services.

Foreign exchange earnings and outgo

Your Company did not have any foreign exchange earnings and outgos during the financial year 2018-19.

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.

Joint Ventures/Subsidiaries/Associates

The company has no Joint Ventures /Subsidiaries /Associates.

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.

Number of Complaints Received During the Year: Nil

Human resources

Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

Management Discussion & Analysis

A detailed Management Discussion and Analysis forms part of this annual report, which is attached to this Report in Annexure V

Report on Corporate Governance

Your Directors are pleased to inform you that your Company has implemented all the stipulations prescribed under regulation 27 ofthe SEBI (LODR) Regulations 2015. The Statutory Auditors of the Company have examined the requirements of the Corporate Governance with reference to SEBI (LODR) Regulations 2015and have certified the compliance, as required under SEBI (LODR) Regulations 2015.

A separate report on Corporate Governance in Annexure VI is provided together with a Certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated regulation 27 of the SEBI (LODR) Regulations 2015. A Certificate of the CFO of the Company in terms of regulation 17(8) of the SEBI (LODR) Regulations 2015, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed.

Whistle Blower Policy

The Company established Whistle Blower Policy for directors and employees to report concerns about un-ethical behavior, actual or suspected fraud or violation of the Companys code of conduct or ethics policy. The details are reported in Report on corporate Governance which forms part of this Report as Annexure VII

Transfer of Amounts to Investor Education and Protection Fund

Pursuant to the provisions of section 124 of the companies Act, 2013, the declared dividends which remained un paid or unclaimed for a period of seven years, have to be transferred by the company to the Investor Education and Protection Fund (IEPF) established by the Central Government :

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

Acknowledgement

The directors thank the 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 Virat Crane Industries family.

On behalf of the board of directors,

G.V.S.L.Kantha Rao
Place: Guntur Managing Director
Date: 14.08.2019 (DIN :01846224)