Dear Members.

The Board of Directors hereby submits the report of the business and operations of your Company, along with the audited financial statements, for the financial year ended March 31, 2016. The Consolidated performance of the Company and its subsidiaries has been referred to wherever required.

FINANCIAL HIGHLIGHTS

(Amount in Rs.)

BUSINESS OPERATIONS

Your Company's strength lies in identification, planning execution and successful implementation of the projects undertaken by it.

Presently. the Company has interest in pipe manufacturing and wind power generation. During the year under review the Company has made a turnover of Rs. 13.43 crores as against previous turnover of Rs. 36.73 crores thereby resulting a decrease in the turnover. However, profit after tax is Rs. 6.08 crores as against Rs. 5.63 crores.

On a consolidated basis, the Company has made a turnover of Rs. 32.60 crores as against the previous year turnover of Rs. 70.62 crores thereby resulting a decrease in turnover by 53.84 %. The net profit for the current year is Rs. 5.97 crores as against the previous year net profit of Rs. 8.70 crores.

As seen from the above, the turnover from pipe manufacturing activity has come down due to preferring of metal pipes over A.C. pipes by the purchasing departments. You are aware that to service the large equity, the Company has entered into new avenue of execution of drinking water supply schemes by forming a 100% subsidiary company "Sri KPR Infra & Projects Ltd.*’ which is yielding reasonable profits and also dividends to the parent company. Further, your company has also expanded wind power generation by setting up 2MW wind power mill at Dewas District in Madhya Pradesh which has also been commissioned during July 2015.

The Company is further trying to explore other avenues in view of decrease in pipe manufacturing activity.

DIVIDEND

The board in its meeting held on September 2. 2016 has recommended a final dividend of Rs. 0.70 per equity share for the financial year ended March 31. 2016. The proposal is subject to approval of shareholders at the ensuing Annual General meeting to be held on September 30. 2016.

RESERVES

The board has not transferred any amount to Reserves for the year 2015-16.

DEPOSITS

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.

PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS

During the year under review, the Company has not given any loan, provided guarantee or made any investment falling under the provisions of Section 186 of the Companies Act. 2016.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT

There have been no material changes and commitments, affecting the financial position of the Company which occurred from the end of the financial year up to the date of this report.

STATE OF COMPANY AFFAIRS;

The operations of the Company was not as expected by the Management and the same has been effected due to various reasons.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the Articles of Association of the Company. Mrs. Vinitha Reddy Nalla retire by rotation at the ensuing Annual General Meeting and being eligible offers herself for re appointment.

During the year, the non executive directors of the Company had no pecuniary relationship or transactions with the Company.

During the year, the Company has made the following appointments:

a. Re designation of Mr. Kishan Reddy Nalla from Chairman cum Whole time Director to Managing Director.

b. Appointment of Mr. Jagadeeshwar Reddy Prodduturi. Non executive Independent Director as Chairman of the Company.

c. Appointment of Ms. Meenakshi Deepak Navalakhe as Company Secretary & Compliance Officer of the Company.

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. they have 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. they have 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. they have prepared the annual accounts on a going concern basis:

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declarations from each of the Independent Director as required under Section 149(7) of the Companies Act. 2013. that he/ she meets the criteria of independence laid down in Section 149(6) of the Companies Act. 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations. 2015.

NUMBER OF MEETINGS OF THE BOARD

The board met 6 (Six) times during the financial year, the details of which are given in the Corporate Governance Report.

COMMITTEES OF THE BOARD

Currently the Board has 4 committees:

a. Audit Committee

b. Nomination and Remuneration Committee

c. Corporate Social Responsibility Committee

d. Stakeholder Relationship Committee.

A detailed note on the composition of the board and its committees is provided in the Corporate Governance Report.

DETAILS OF SUBSIDIARIES/ ASSOCIATES/ JOINT VENTURES

During the year, the Board of Directors ('the Board’) reviewed the affairs of its Wholly Owned Subsidiary i.e. Sri KPR Infra & Projects Limited. In accordance with Section 129(3) of the Companies Act. 2013 consolidated financial statements of the Company forms part of the Annual Report. A statement containing the salient features of the financial statements of the Subsidiary Company in the prescribed Form AOC-1 is appended as “Annexure I” to the Board’s report.

In accordance with Section 136 of the Companies Act. 2013 the audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of M/s. Sri KPR Infra &. Projects Limited. Wholly owned subsidiary is available on our website, www.kprindustries.in. These documents will also be available for inspection during business hours at our registered office on all working days except Saturday up to 2.00 P.M. Further during the year the Company has not made any further investment in its subsidiary.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The details with respect to related party transactions in Form AOC-2 are set out in ’Annexure-U’ and forms part of this Report. The Related party transaction policy is available at the Company's website.

CONSERVATION OF ENERGY. RESEARCH AND DEVELOPMENT. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO

Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules. 2014 is prepared and is enclosed as "Annexure III”.

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

The Board of your Company has laid down internal -financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Act, and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as “Annexure IV” to this Report. There are no employees who are either employed for the whole/ part of the financial year are in receipt of remuneration exceeding Rs. 5 Lakhs per month or Rs. 60 Lakhs per annum as stipulated under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014. However the Govt vide notification dated June 30. 2016 has revised the above limits.

POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION

The Company's policy on Director's appointment and remuneration and other matters provided under Section 178(3) of the Companies Act. 2013 has been disclosed in the Corporate Governance Report, which forms part of this report.

CHANGE IN THE NATURE OF BUSINESS

During the year, there was no change in the nature of business carried out by the Company.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as "Annexure V” to the Board's 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 (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulations").

The performance of the board and committees constituted was evaluated after seeking inputs from all the Directors such as effectiveness of board processes, information and functioning, 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.

AUDITORS Statutory Auditors

M/s. V. Sridhar & Co.. Chartered Accountants. Hyderabad, the Statutory Auditors of the Company retires at the ensuing annual general meeting and being eligible offers themselves for re appointment till the conclusion of 29"’ Annual General Meeting of the Company.

A certificate from the Auditors has been received to the effect that their reappointment, if made, would be within the prescribed limits. The Auditor's Report for the FY15-16 does not contain any qualification, reservation, adverse remark or disclaimer.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act. 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014. the board has appointed BS & Company Company Secretaries LLP to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31. 2016 is annexed herewith marked as “Annexure VI” to this Report. The Secretarial Audit Report contains the following observations:

/. The Company Secretary was appointed with effect from 16th November. 2015. The Company was in the process of identifying suitable candidate for the post.

2. The Company has delayed in submitting certain disclosures and intimations under respective clauses of Listing Agreement and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations. 2015. Due to non availability of full time secretary there was delay in certain cases.

3. The Annual Return as required under Payment of Bonus Act. 1965 read with Payment of Bonus Rules. 1975 was not filed: The Company is in the process of filing the same.

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 same.

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 same.

6. The returns were not filed as required under Employment Exchange Act. 1959: The Company is in the process of filing the same.

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 fulfill 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 been 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 organization.

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

MANAGEMENTS DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report as required under LODR Regulations, is disclosed separately in the current Annual Report.

LISTING AGREEMENT

The Securities and Exchange Board of India (SEBI). on September 2. 2015 issued SEBI (Listing Obligations & Disclosure Requirements) Regulations. 2015 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective from December 1. 2015. Accordingly all listed entities were required to enter into the new Listing Agreement within six months from the effective date. The

Company entered into new listing agreement with the BSE during the month of February. 2016.

CORPORATE GOVERNANCE

As required by the existing Regulation 34(3) of the Listing Regulation, a detailed report on Corporate Governance is included in the Annual Report. The Auditors have certified the Company's compliance of the requirements of Corporate Governance in terms of Regulation 34(3) of the Listing Regulation and the same is annexed to the Report on Corporate Governance.

FRAUDS REPORTED BY AUDITORS

During the year, there were no frauds reported by the Auditors falling under Section 143 of the Companies Act. 2013.

INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION & REDRESSAL) ACT. 2014

Your Company is committed in creating and maintaining an atmosphere in which employees can work together without fear of sexual harassment, exploitation or intimidation. As required under the provisions of Sexual Harassment of Women at Workplace (Prevention. Prohibition and Redressed) Act. 2013. your Company has constituted an Internal Complaints Committee. No complaints were received by the committee during the year under review. Since the number of complaints filed during the year was NIL. the Committee prepared a NIL complaints report. This is in compliance with section 22 of the Sexual Harassment of Women at Workplace (Prevention. Prohibition and Redressed) Act. 2013.

CORPORATE SOCIAL RESPONSIBILITY

The terms of reference of CSR Committee forms part of the Corporate Governance Report. Contents of the CSR Policy are also available on the Company's Website at

http://www.kprindustries.in/investor.html

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

ACKNOWLEDGMENTS

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/ associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company.

FOR AND ON BEHALF OF THE BOARD

Sd/-

JAGADEESHWAR REDDY PRODDUTURI

CHAIRMAN

DIN: 02582809

Place: Secunderabad

Date: September 2, 2016