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Directors Report of Balaji Amines Ltd.

Mar 31, 2017

DIRECTOR''S REPORT

Dear Shareholders

The Directors have immense pleasure in presenting the Twenty Ninth Annual Report of the company along with Audited Financial Statements for the year ended 31st March, 2017

FINANCIAL RESULTS

The performance for the current year in comparison to the previous year is as under:

(RUPEES IN LAKHS)

SL.

NO.

PARTICULARS

CURRENT YEAR (2016-17)

PREVIOUS YEAR (2015-2016)

1.

Gross Income

72730.33

68900.29

2.

Net Income

67244.96

63716.75

3.

Expenditure

51205.83

50603.10

4.

Profit before interest, depreciation and tax

16039.13

13113.65

5.

Depreciation

1822.07

1789.72

6.

Interest and Finance Charges

1168.61

2008.49

7.

Profit before tax

13048.45

9315.44

8.

Provision for taxes (including DTL)

4491.13

3188.38

9.

Profit after tax

8557.32

6127.06

10.

Dividend for the year (including corporate dividend tax)

857.95

779.96

11.

Reserves(Excluding Revaluation reserves)

36220.60

28521.23

12.

EPS ( Rs) on face value of Rs. 2/- each share

26.41

18.91

13.

Book value (Rs.) on face value of Rs. 2/- each share

113.79

88.03

OPERATING RESULTS AND BUSINESS

Your company has achieved a Gross Income of Rs. 727.30 Crores during the financial year 2016-17 an increase of 5.57% over the previous year. The Profit After Tax for the year stood at Rs.85.57 Crores as against previous year Profit After Tax of Rs. 61.27 Crores registering an increase of 39.66% over previous year.

During the year, most of the commodity prices have been volatile due to fluctuation of oil and gas supply position. Inspite of this, your Company could post outstanding performance across the board

EXPORTS

The Exports of the company have grown in value and volume with an accompanying increase in product mix. The REACH certification and certificate of suitability has improved our positioning with International Customers. The Company''s products are well established in the Global Market.

DIVIDEND

Your Directors are pleased to recommend for approval of the members a dividend of Rs. 2.20/- per share (110% on paid up value of Rs. 2/- per share). The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs. 857.95 lakhs.

SUBSIDIARIES

The Company has 2 subsidiaries viz. Bhagyanagar Chemicals Ltd. a 100% subsidiary Company and Balaji Greentech Products Ltd. a substantially owned subsidiary.

Wherein, the undertaking of Bhagyanagar Chemicals Limited is limited to only a long term lease to its 100% holding company Balaji Amines Limited who is carrying out manufacturing activity therein. As such the company Bhagyanagar Chemicals Limited does not have any transactions except of lease rentals. Responsibility of safe keeping of the assets of the company vests with the holding company Balaji Amines Limited.

Balaji Greentech Products Limited (BGPL) is into manufacturing of energy efficient lamps and components. The company manufactures, supplies a comprehensive range of Compact Fluorescent Lamps (CFL).

During the year, Company has initiated merger process of its subsidiaries as approved by the respective Boards. Present status of the merger is awaiting for NOC /approval of stock exchanges for the proposed merger.

TRANSFER TO RESERVES

The Company proposes to transfer a sum of Rs. 860.00 lakhs to the General Reserve out of the amount available for appropriations and an amount of Rs. 6839.37 lakhs is proposed to be retained in the statement of Profit and Loss.

RESEARCH & DEVELOPMENT

Continuous R&D initiatives have resulted in excellent results during the year with improved consumption co-efficiencies of raw materials, utilities and utilization of resources. Your company has become one of the leaders in Specialty Chemicals in the International Specialty Chemical arena and plans to be on the top of the table in the years to come in India.

Your Company has been carrying out continuous Research and Development activities in the following activities.

- Identification of new products and development of latest process technologies are continuously worked on.

- Continuous improvement of processes and fine tuning of process parameters to optimize utilization of energy, utilities and raw materials consumption and alternate routes are being looked at.

- Backward and forward integration of products to improve value chain and better utilization of all the resources.

- Adoption of advanced technology in recovering waste water has resulted in minimizing the impact on environment and concentration of core principle of Reduce, Reuse and Recycle of all the resources.

- Several improvements in Polyvinyl Pyrrolidone plant have been initiated and resulting in lower consumption co-efficient as well as research on addition of new stream of k-values being explored for which R&D Pilot plant is successful.

- For sustainable usage of natural resources, the Company has initiated various models in reducing, reusing and recycling of various natural resources.

EXPANSION / DIVERSIFICATION

The following R&D demonstration projects were undertaken during the year 2016-17:

1. Acetonitrile

2. Cartico Steroids

3. PVPK-90, Cross Povidone etc.

The results of these projects will be yielding fruits in the years to come.

CONSOLIDATED FINANCIAL STATEMENTS

In pursuance to Sub Section (3) of Section 129 of The Companies Act, 2013, we are required to prepare consolidated financial statements for the financial year ended 31st March 2017.

The Consolidated Financial Statement of your Company with that of its wholly owned subsidiary Bhagyanagar Chemicals Limited and substantial owned subsidiary Balaji Genentech Products Limited is provided in the Annual Report.

The annual accounts of the Subsidiary Companies and the related detailed information shall be made available to members seeking such information at any point of time. The annual accounts of the Bhagyanagar Chemicals Limited and Balaji Greentech Products Limited shall also be kept for inspection by any of the members at the registered office of the company during the specified working hours.

The Statement containing salient features of the subsidiaries as per Sub-Sections (3) of Section 129 of The Companies Act 2013 in Form AOC -1 is herewith annexed as Annexure-I to this report.

STATUTORY AUDITORS

The term of M/s V. Sridhar & Co., Chartered Accountants, Hyderabad, the Statutory Auditors of the Company, will expire on the conclusion of ensuing Annual General Meeting. Hence it is proposed to appoint M/s. Ayyadevara & Co., Proprietor, Ayyadevara Srinivas as Statutory Auditor for a period of 5 years from FY. 2017-2018 to FY. 2021-2022.

The company has received letter from M/s. Ayyadevara & Co., Chartered Accountants under Section 139(1) of the Companies Act, 2013 and the Rules framed there under confirming their eligibility to the effect, that, their appointment, if made, would be within the prescribed limits under provisions of sections specified under the Act and that, they are not disqualified for such appointment within the meaning of the section of the said Act.

INTERNAL AUDITORS

The Board of Directors based on the recommendation of the Audit Committee have re-appointed M/s. S.P. Jawalkar & Associates, Chartered Accountants, Solapur, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on monthly basis. It is hereby noted that, the previous Internal Auditors Mr. Aherkar''s untimely demise has warranted this new appointment. The Company placed on record the services rendered by Mr. Aherkar.

COST AUDITORS

In accordance with Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013 and The Companies (Audit and Auditors) Rules, 2014, the Audit Committee has recommended and the Board of Directors had appointed Mr. N.V. S Kapardhi, Practicing Cost Accountants, Hyderabad, being eligible and having sought re-appointment, as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company during the financial year 2017-18 on a remuneration of Rs.60000/- (Rupees Sixty Thousand only). The remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their approval. Accordingly, a resolution seeking Members'' approval for the remuneration payable to Mr. N.V.S Kapardhi, Cost Accountants, is included at Item No.5 of the Notice convening the Annual General Meeting.

SECRETARIAL AUDITORS & SECRETARIAL AUDIT REPORT

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 has appointed M/s. P. S. Rao & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure-III" to this report.

Explanation to the Observations of Secretarial Auditors:

"The Promoter has clarified that the same has occurred due to inadvertent transfer of shares from the pool account of Depository Participant. Hence this transaction was missed out and subsequently promoter has made necessary disclosures to the stock exchanges.

DIRECTORS & COMMITTEES

In terms of Article 134 of the Articles of Association of the company Mr. D. Ram Reddy, Director retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting.

His profile and the experience in specific functional areas and other directorships held by him as stipulated in Regulations of the Securities and Exchange Board Of India (Listing Obligations And Disclosure Requirements) Regulations, 2015 is provided in the Additional Information Section forming part of Notice.

The said resolution forms part of the notice of the Annual General Meeting

Every Independent Director, at the first meeting of the Board in which he participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he meets the criteria of independence as provided under the Companies Act, 2013 and the Company has taken the note of the same

None of the directors is disqualified as on 31st March 2017 from being appointed as director in terms of sections 164(2) of the Act. A brief Profile of the Directors of the Company is annexed herewith as ''Annexure-IV'' to this report.

The board has 6 committees, Audit Committee, Stake Holder''s Relationship Committee, Research & Development Committee.

Nomination & Remuneration Committee, Corporate Social Responsibility Committee, Merger Committee. The composition, meetings and the terms of reference of the Committees are given in the corporate governance report, which forms part of this Annual Report

All recommendations made by Audit Committee were accepted by the Board.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

During the year there was no changes in the composition of Board of Directors, none of the directors have resigned during the year. NUMBER OF MEETINGS OF THE BOARD DURING THE YEAR

The Full Board of Directors of the Company met 4 (four times) and there was l(one) Independent Directors meeting held during the year.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

CHANGE IN NATURE OF BUSINESS

There is no change in the nature of business during the year.

MATERIAL CHANGES AND COMMITMENTS

The following material changes and commitments occurred during the year under review affecting the financial position of the Company:

The Board of Directors of the Company in their Meeting held on 06.02.2017, have unanimously approved the Scheme of Amalgamation between Balaji Amines Limited (Transferee Company) and Bhagyanagar Chemicals Limited and Balaji Greentech Products Limited. The implementation of the Scheme of Amalgamation is subject to the approval of Shareholders and Creditors of the Company and all applicable regulatory authorities including SEBI/Stock Exchange and Honourable National Company Law Tribunal of Judicature at Mumbai for the State of Maharashtra.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, and size and complexity of its operations. Internal control systems comprising of policies and procedures designed and implemented to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations, and that all assets and resources are acquired are used economically.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation available to them,

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2016-17 and of the statement of profit of the Company for that period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts for the year 2016-17 have been prepared on a going concern basis.

v. That the proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

vi. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and effectively mentioned under various heads of the departments which are in turn reporting to the Whole Time Directors.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy framed to deal with instances of fraud and mismanagement, if any. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company and the web site is http://www.balajiamines.com/pdf/WbPolicy.pdf

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The Policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company.

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 in Form AOC-2 and disclosures under Schedule V of Securities And Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015, is annexed as ''Annexure-V'' to this report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure- VI" to this report.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Regulation 34(2) (e) of the Securities And Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015, a report on Management Discussion & Analysis forms part of the Annual Report and is herewith annexed as ''Annexure-VII'' to this report.

PARTICULARS OF EMPLOYEES

A statement pursuant to the Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as ''Annexure-VIII'' to this report.

CORPORATE GOVERNANCE

The Company has been making every endeavor to bring more transparency in the conduct of its business. As per the requirements of Listing regulations, a detailed report on Corporate Governance for the year 2016-17 pursuant to Regulation 34 of Securities And Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015 is annexed as "Annexure- X" to this report.

Certificate from the Auditors of the Company regarding compliance of Corporate Governance is furnished along with this Annual Report.

HUMAN RESOURCES

Your Company considers its Human Resource as the major strength to achieve its objectives. Keeping this in view, your Company takes all the care to attract, train and retain well qualified and deserving employees. The employees are sufficiently empowered and enabled to work in an environment that inspires them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind fulfilling the Company''s vision. Your Company appreciates the contribution of its dedicated employees.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section I34(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure-IX" to this report.

CORPORATE SOCIAL RESPONSIBILITY

During the year under review, according to the provisions of Section 135 of The Companies Act, 2013, Corporate Social Responsibility activities are taken up by the Company, the company has constituted a Corporate Social Responsibility committee and has adopted a Corporate Social Responsibility Policy.

A detailed annual report on Corporate Social Responsibility activities under taken by the company during the year is attached as Annexure-II.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year:

- No. of complaints received: Nil

- No. of complaints disposed off : Nil

ACKNOWLEDGMENTS

Your Directors take this opportunity to express their appreciation to the shareholders, customers, bankers, suppliers and other business associates for the excellent support and co-operation extended by them.

Your Directors gratefully acknowledge the ongoing co-operation and support provided by the Central and State Governments, Stock Exchanges, SEBI, Banks, Customers and suppliers.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Place: Secunderabad A. PRATHAP REDDY

Date: 11/05/2017 CHAIRMAN & MANAGING DIRECTOR

DIN: 00003967


Mar 31, 2015

Dear Memers,

The Directors have immense pleasure in presenting the Twenty Seventh Annual Report of the company with Audited Financial Statements for the year ended 31st March, 2015

FINANCIAL RESULTS

The performance for the current year in comparison to the previous year are as under: ( Rs. in Lacs )

CURRENT PREVIOUS YEAR YEAR SR PARTICULARS (2014-15) (2013-14) NO 1. Total Income 60825.01 61272.89

2. Expenditure 50250.32 51911.05

3. Profit before interest, depreciation and tax 10574.69 9361.84

4. Depreciation 1859.02 1646.49

5. Interest and Finance Charges 3141.60 3151.04

6. Profit before tax 5574.07 4564.31

7. Provision for taxes (including DTL) 1938.25 1212.04

8. Profit after tax 3635.82 3352.27

9. Dividend for the year (including corporate dividend tax) 466.55 376.58

10. Reserves(Excluding Revaluation reserves) 23124.54 19576.02

11. EPS (Rs) on face value of Rs. 2/- each share 11.22 10.35

12. Book value (Rs.) on face value of Rs. 2/- each share 73.37 62.42

OPERATING RESULTS AND BUSINESS

Your company has achieved a Gross turnover of Rs.657.97 Crores during the financial year 2014-15.The PAT for the year stood at Rs.36.36 Crores. As against previous year PAT of Rs.33.52 Crores registering an increase of 8.5%.

During the year, most of the commodity prices have fallen globally due to low demand for oil and gas and excess supply position. Your company could post satisfactory performance despite the slow down.

EXPORTS

The Exports of the company have grown marginally in value and there was over all increase in volume and mix of products. The REACH certification and certificate of suitability has improved Exports. The Company's products are well established in the Global Market.

DIVIDEND

Your Directors have pleasure in declaring dividends to shareholders and are pleased to recommend for approval of the members a dividend of Rs. 1.20/- per share (60% on paid up value of Rs. 2/- per share). The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs.466.55 lacs.

SUBSIDIARIES

The company is having a wholly owned subsidiary Bhagyanagar Chemicals Limited and substantially owned subsidiary Balaji Greentech Products Limited.

Wherein, the undertaking of Bhagyanagar Chemicals Limited is limited to only a long term lease to its 100% holding company Balaji Amines Limited who is carrying out manufacturing activity therein. As such the company Bhagyanagar Chemicals Limited does not have any transactions except of lease rentals. Responsibility of safe keeping of the assets of the company vests with the holding company Balaji Amines Limited.

During the year Balaji Amines limited has extended its holdings and have acquired and is holding 66% of shareholdings of Balaji Greentech Products Limited (BGPL).

Balaji Greentech Products Limited (BGPL) is into manufacturing of energy efficient lamps and components. The company manufactures, supplies a comprehensive range of Compact Fluorescent Lamps (CFL).

The Statement containing the salient features of the subsidiaries as per sub -sections (3) of section 129 of the Companies Act 2013 in Form AOC-1 is herewith annexed as Annexure I to this report.

TRANSFER TO RESERVES

The Company proposes to transfer Rs.363.59 lacs to the General Reserve out of the amount available for appropriations and an amount of Rs.2805.68 lacs is proposed to be retained in the statement of Profit and Loss.

RESEARCH & DEVELOPMENT

Continuous R&D initiatives have yielded excellent results during the year with improved efficiencies of raw materials, utilities and utilization of resources. Your company has become one of the leaders in Speciality Chemicals in the International Speciality Chemical Industry and plans to be among the leaders in the years to come.

Your Company has been carrying out continuous Research and Development activities in the following activities.

* Unit - 3 R&D Centre, has been awarded recognition by Government of India, Ministry of Science and Technology.

* DMF (Dimethyl Formamide) and CO (Carbon Monoxide) plants have been recommissioned successfully and yields of the plants are satisfactory considering the intricate process being developed in house R & D.

* Several improvements in Polyvinyl Pyrrolidone plant resulting in lower consumption coefficients as well as research on addition of new stream of k-values being explored.

* Identification of new products and development of latest process technologies are continuously worked on.

* Continuous improvement of processes and fine tuning of process parameters to optimize utilization of energy, utilities and raw materials consumption.

* Backward and forward integration of products to improve value chain and better utilization of all the resources.

* Adoption of advanced technology in improvement of processes resulting in minimizing the impact on environment and concentration of core principle of Reduce, Reuse and Recycle all the resources.

EXPANSION / DIVERSIFICATION

The following expansion/ diversification projects were undertaken during the year 2014-15:

* DMF and CO plants are being re-commissioned with satisfactory results.

CONSOLIDATED FINANCIAL STATEMENTS

In pursuance to the general Circular 08/2014 No. 1/19/2013-CL-V of Ministry of Corporate Affairs Dated 04.04.2014 for Applicability with regard to relevant financial Year , the company have complied with provisions, rules and regulations under the companies Act 1956.

In pursuance to the Sub Section (3) of Section 129 of the Companies Act, 2013, company is required to prepare consolidated financial statements for the financial year ended 31st March 2015.

The Consolidated Financial Statement of your company with that of its wholly owned subsidiary Bhagyanagar Chemicals Limited and substantial holding Company Balaji Greentech Products Limited is provided in the Annual Report.

The annual accounts of the Subsidiary Companies and the related detailed information shall be made available to members seeking such information at any point of time. The annual accounts of the Bhagyanagar Chemicals Limited and Balaji Greentech Products Limited shall also be kept for inspection by any of the members at the registered office of the company.

The Statement containing the salient features of the subsidiaries as per sub -sections (3) of section 129 of the Companies Act 2013 in Form AOC -1 is herewith annexed as 'Annexure I' to this report.

STATUTORY AUDITORS

V. Sridhar & Co, Chartered Accountants (ICAI Firm Registration No. 006206S), Hyderabad were appointed as the statutory auditors of the Company for the Financial year 2014-15 at the Annual General Meeting (AGM) of the Company held on September 29, 2014 and hold office until the conclusion of the ensuing Annual General Meeting.

V. Sridhar & Co, Chartered Accountants have been the Auditors of the Company since FY 1996-97 and have completed a term of 18 years. As per the provisions of Section 139 of the Act, no listed company can appoint or re-appoint an audit firm as auditor for more than two terms of five consecutive years. Section 139 of the Act also provided a period of three years from the date of commencement of the Act to comply with this requirement. In view of the above, V. Sridhar & Co, Chartered Accountants being eligible for re-appointment and based on the recommendation of the Audit Committee, the Board of Directors has, at its meeting held on July 30, 2015, proposed the appointment of V. Sridhar & Co, Chartered Accountants as the statutory auditors of the Company to hold office from the conclusion of this 27th Annual General Meeting (AGM) till the conclusion of next Annual General Meeting of the Company i.e 28th Annual General Meeting to be held in the year 2016.

The company has received letter and a certificate from the Auditors under Section 139(1) of the Companies Act, 2013 and the Rules framed there under of their eligibility and consent for re-appointment to that effect, that, their appointment, if made, would be within the prescribed limits under provisions of sections specified under the Act and that, they are not disqualified for such re appointment within the meaning of the section of the said Act.

INTERNAL AUDITORS

The Board of Directors based on the recommendation of the Audit Committee have re-appointed M/s. Aherkar & Co., Chartered Accountants, Solapur, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on monthly basis.

COST AUDITORS

In accordance with Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013 and The Companies (Audit and Auditors) Rules, 2014, the Audit Committee has recommended and the Board of Directors had appointed M/s. Kapardhi & Associates, Cost Accountants, Hyderabad, being eligible and having sought re-appointment, as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company during the financial year 201516 on a remuneration of Rs. 60000/- (Rupees Sixty Thousand only). The remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their approval. Accordingly, a resolution seeking Members' approval for the remuneration payable to M/s. Kapardhi & Associates, Cost Accountants, is included at Item No.5 of the Notice convening the Annual General Meeting.

SECRETARIAL AUDIT

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 has appointed M/s. P. S. Rao & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure III" to this report.

DIRECTORS

In terms of Article 134 of the Articles of Association of the company Sri A. Srinivas Reddy, Director retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting.

His profile and the experience in specific functional areas and other directorships held by him as stipulated in clause 49 of the listing agreement is provided in the Additional Information Section forming part of Notice and Corporate Governance Report forming part of the Annual Report.

The said resolution forms part of the notice of the 27th Annual General Meeting

Every Independent Director, at the first meeting of the Board in which he participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he meets the criteria of independence as provided under the Companies Act, 2013.

None of the directors is disqualified as on March 2015 from being appointed as director in terms of sections 164(2) of the Act. A brief Profile of the Directors of the Company is annexed herewith as 'Annexure IV' to this report.

Details of Directors or Key Managerial personnel who were appointed or resigned during the year

During the financial year 2014-15 Mr. S. V. Pattabhiraman, Independent Director of the Company has resigned from the company w.e.f. 14-11 -2014 and Mrs. Vimala B. Madon has been appointed as Independent Director of the Company w.e.f. 28-07-2014 Mr. G. Hemanth Reddy who is acting as whole-time Director of the company is also appointed as Chief Financial officer of the company w.e.f. 07-03-2015.

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them,

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with

proper explanation relating to material departures;

ii. Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2014-15 and of the profit or loss of the Company for that period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts for the year 2014-15 have been prepared on a going concern basis.

v. That the proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

vi. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy framed to deal with instances of fraud and mismanagement, if any. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company and the web site is http://www.balajiamines.com.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The Policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company. The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 in Form AOC-2 is herewith annexed as 'Annexure V' to this report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as 'Annexure VI' to this report.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Clause 49 of the Listing Agreement, a report on Management Discussion & Analysis formspart of the Annual Report and is herewith annexed as 'Annexure VII' to this report.

PARTICULARS OF EMPLOYEES

None of the employees fall under the purview of the provisions provided under the Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 who's details are required to be disclosed .

A statement pursuant to the Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is herewith annexed as 'Annexure VIII' to this report.

CORPORATE GOVERNANCE

The Company has been making every endeavor to bring more transparency in the conduct of its business. As per the requirements of the Listing Agreement with the Stock Exchanges, a compliance report on Corporate Governance for the year 2014-15 and a Certificate from the Auditors of the Company are furnished which form part of this Annual Report.

HUMAN RESOURCES

Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes all the care to attract and retain well qualified and deserving employees. The employees are sufficiently empowered and enable to work in environment that propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Company's vision. Your Company appreciates the spirit of its dedicated employees.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as 'Annexure IX' to this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

During the year misappropriation of coal purchase by two employees of the company has been detected by the management and legal proceedings initiated against the said employees. The stock of coal in transit has been misappropriated by the said employees of the company and the amount involved is Rs. 31.71 lacs.

CORPORATE SOCIAL RESPONSIBILITY

During the year under review, according to the provisions of Section 135 of Companies Act, 2013 Corporate Social Responsibility are attracted to the Company. And as required by the provisions, the company have constituted a Corporate Social Responsibility committee and also have adopted a Corporate Social Responsibility Policy.

A detailed annual report on Corporate Social Responsible activities under taken by the company during year is attached as 'Annexure II'.

ACKNOWLEDGMENTS

Your Directors take this opportunity to express their sincere appreciation to the shareholders, customers, bankers, suppliers and other business associates for the excellent support and co-operation extended by them.

Your Directors gratefully acknowledge the ongoing co-operation and support provided by the Central and State Governments, Stock Exchanges, SEBI, Banks, Customers and suppliers.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Sd/- Place: Secunderabad A. PRATHAP REDDY Date : 30/07/2015 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2014

Dear Shareholders

The Directors have immense pleasure in presenting the Twenty Sixth Annual Report of the company with Audited Financial Statements for the year ended 31st March, 2014.

FINANCIAL RESULTS

The performance for the current year in comparison to the previous year are as under :

(RUPEES IN LAKHS)

SL. PARTICULARS CURRENT YEAR PREVIOUS YEAR NO. (2013-2014) (2012-2013)

1. Gross Sales 66741.45 55633.36

2. Less: Excise Duty 5728.82 4453.76

3. Net Sales 61012.63 51179.60

4. Other Income 260.26 371.04

5. Total Income 61272.89 51550.64

6. Expenditure 51911.05 43158.00

7. Profit before interest, 9361.85 8392.63 depreciation and tax

8. Depreciation 1646.49 1268.79

9. Profit before 7715.36 7123.84 interest & tax

10. Interest and Finance 3151.04 2540.12 Charges

11. Prior Period items ---- 11.88

12. Profit before tax 4564.31 4595.60

13. Provision for taxes 1212.04 1477.25 (including DTL)

14. Profit after tax 3352.27 3118.35

15. Dividend for the year 376.58 489.55 (including corporate dividend tax)

16. Transfer to reserve 335.23 311.84

17. Balance carried forward 2640.46 2316.96 to Balance Sheet

18. Reserves(Excluding 19576.20 16600.33 Revaluation reserves)

19. EPS ( Rs) on face value 10.35 9.62 of Rs. 2/- each share

OPERATING RESULTS AND BUSINESS

Your Company achieved exceptional performance though there was general slowdown in economy and bleak outlook of domestic Chemical Companies. Your company has achieved a Gross turnover of Rs. 667.41 Crores as compared to Rs. 556.33 Crores during the previous year. Your company registered an impressive year on year growth of 19.96% in gross sales. Profit after Tax stands at Rs. 33.52 Crores in the current year as compared to Rs. 31.18 Crores for the previous year.

The performances is attributed to increase in value chain of some of the products and plant efficiencies which has impacted the consumption co-efficient of materials compared to previous year and with stringent cost control measures in almost all the areas possible by all the team members at all plants your Company was able to showcase its performance and has demonstrated this performance in these competitive market.

Present anti dumping duties on imports of Morpholine from China PR, EU and USA has resulted in reducing price pressure from such dumped imports on Morpholine produced and supplied by the Company in the Indian market. However, imports (dumped) of Morpholine from the above stated countries are still taking place at significant levels forcing the Company to keep its prices below reasonable levels to match the imported dumped price of Morpholine. Existing duties are essential to re-establish fair play in the market and counter act continued dumped imports from the above said countries. Also, PVPK-30 produced by the Company is facing unfair competition in the Indian market on account of cheap imports of the same primarily from China PR. The Company would pursue the legal options available with it under the WTO regime to prevent this unfair practice so as to observe fair play in the Indian market. Anti dumping duties on both these products will have a significant bearing on the profitability of the Company from this segment.

EXPORTS

The Exports of the company has grown marginally in value and there was over all increase in volume and mix of products. The REACH certification and certificate of suitability has improved Exports growth by 12% over the previous year from Rs. 131.52 Crores to Rs. 148.44 Crores. The Company''s products are well established in the Global Market due to international standard maintained in the quality.

DIVIDEND

Your Directors have pleasure in continuing to maintain the track record of declaring dividends to shareholders and are pleased to recommend for approval of the members a dividend of Re 1/- per share (50% on paid up value of Rs. 2/- per share). The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs. 376.58 lacs.

The auditors vide clause (ix)(b) to the annexure to their report referred to the liability in dispute regarding Income Tax to the tune of Rs. 2.16 Crores and for the penalty amount to the tune of Rs. 1.47 Crores. At the time of the audit the matter was pending before the Hon''ble Income Tax Appellate Tribunal, Pune. Subsequently the Hon''ble Income Tax Appellate Tribunal, Pune has allowed the appeal in favour of the company. Consequent to such order both the Tax liability and penalty will not exist.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 335.23 lacs to the General Reserve out of the amount available for appropriations and an amount of Rs. 2640.46 lacs is proposed to be retained in the statement of Profit and Loss.

RESEARCH & DEVELOPMENT

Continuous R&D initiatives have yielded results during the year with improved efficiencies of raw materials, utilities and utilization of resources. Your company has become one of the leaders in Specialty Chemicals in the International Specialty Chemical Industry and plans to be among the leaders in the years to come.

Your Company has been carrying out continuous Research and Development activities in the following activities.

* Unit - 3 R&D Centre, has been awarded recognition by Government of India, Ministry of Science and Technology.

* Several improvements in Polyvinyl Pyrrolidone plant resulting in lower consumption coefficients as well as research on addition of new stream of k-values being explored.

* Identification of new products and development of latest process technologies are continuously worked on.

* Continuous improvement of processes and fine tuning of process parameters to optimize utilization of energy, utilities and raw materials consumption.

* Backward and forward integration of products to improve value chain and better utilization of all the resources.

* Adoption of advanced technology in improvement of processes resulting in minimizing the impact on environment and concentration of Reduce, Reuse and Recycle all the resources.

EXPANSION / DIVERSIFICATION

The following expansion/ diversification projects were undertaken during the year 2013-14:

* During the year Company''s 5 star Hotel Property has started commercially from 1-11-2013 which is being managed by Sarovar Group of Hotels. The hotel division is consistently showing growth in revenues on month to month basis.

FIXED DEPOSITS

The company has neither accepted nor renewed any deposits falling within the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 from the public during the financial year.

DIRECTORS

In terms of Article 134 of the Articles of Association of the company Shri. N. Rajeshwar Reddy, retire by rotation and being eligible, offer himself for reappointment at the ensuing Annual General Meeting.

The Company had, pursuant to the provisions of Clause 49 of the Listing Agreement entered with the Stock Exchanges, appointed Shri. T. Naveena Chandra, Shri. S.V. Pattabhiraman, Shri. M. Amarender Reddy , Shri. Chavali Satyanarayana Murthy and Shri. Kashinath R. Dhole as Independent Directors at various times, in compliance with the requirements of the said clause.

As per the provisions of Section 149(4) which has come into force with effect from 1st April, 2014, every listed company is required to have at least one-third of the total number of Directors as Independent Directors. Further, Section 149(10) of the Act provides that an Independent Director shall hold office for a term up to five consecutive years on the Board of a company and is not liable to retire by rotation pursuant to Section 149(13) read with Section 152 of the Act.

The Securities and Exchange Board of India (SEBI) has amended Clause 49 of the Listing Agreement which would be effective from October 1st, 2014 inter alia stipulates the conditions for the appointment of Independent Directors by a listed company.

The Nomination & Remuneration Committee has recommended the appointments of these Directors as Independent Directors to hold the office for five consecutive years for a term with effect from the conclusion of this 26th Annual General Meeting.

The above Independent Directors have given a declaration to the Board that they meet the criteria of independence as provided under Section 149 (6) of the Act. In the opinion of the Board, the above Independent Directors fulfill the conditions specified in the Act and the Rules made there under for appointment as Independent Directors and they are independent of the management.

In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of the above Directors as Independent Directors is being placed before the Members in General Meeting for their approval.

Their profile and the experience in specific functional areas and other directorships held by them as stipulated in clause 49 of the listing agreement is provided in the Additional Information Section forming part of Notice and Corporate Governance Report forming part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

In pursuance to the general Circular 08/2014 No. 1/19/2013-CL-V of Ministry of Corporate Affairs Dated 04-04-2014 for Applicability with regard to relevant financial Year , the company have complied with provisions , rules and regulations under the companies Act 1956.

And hence as per Section 212 of the Companies Act, 1956, we are required to attach the, Balance Sheet, Statement of Profit and Loss and other documents of our subsidiary. The Ministry of Corporate Affairs, Government of India vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2013-14 does not contain the financial statements of our subsidiary. The Consolidated Financial Statement of your company with that of its wholly owned subsidiary Bhagyanagar Chemicals limited is provided in the Annual Report. The annual accounts of the Subsidiary and the related detailed information shall be made available to members seeking such information at any point of time. The annual accounts of the Bhagyanagar Chemicals Limited shall also be kept for inspection by any of the members at the registered office of the company.

Statement pursuant to exemption under Section 212 of the Companies Act, 1956 relating to Subsidiary Company is enclosed as Annexure -1 PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956 (the Act), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. However, having regard to the provisions of Section 219 (1)(b)(iv) of the Act, the Annual Report is being sent to all Members of the Company excluding the aforesaid information. Any Member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

AUDITORS

i. Statutory Auditors

V. Sridhar & Co, Chartered Accountants (ICAI Firm Registration No. 006206S), Hyderabad were appointed as the statutory auditors of the Company for the Financial year 2013-14 at the Annual General Meeting (AGM) of the Company held on 30th September, 2013 and hold office until the conclusion of the ensuing Annual General Meeting.

The company has received from the Auditors under Section 139(1) of the Companies Act, 2013 and the Rules framed thereunder a certificate of their eligibility and consent for re-appointment. to the effect that, their appointment, if made , would be within the prescribed limits under provisions of sections specified under the Act and that, they are not disqualified for such re appointment within the meaning of section of the said Act.

Pursuant to the provisions of section 139 of the companies act 2013 and other applicable provisions of the act the board of directors have recommended M/s V. Sridhar & Company as statutory auditor of the company to hold the office with effect from 1st of April 2014 by passing the resolution and have authorized Shri A. Prathap Reddy the Chairman and Managing Director to fix their remuneration.

ii. Internal Auditors

According to section 138 of the Companies Act 2013, read with rule 13 of The Companies (accounts) Rules 2014 requires the company to appoint internal auditor. The current internal Auditor M/s. Aherkar& Co, Chartered accountants, Solapur being eligible, they have offered themselves for their re-appointment. The Board of Directors have reappoint M/s. Aherkar & Co, Chartered accountants, Solapur as Internal Auditor of the company to hold the office w.e.f 1st of April 2014 by passing the resolution and have authorized Shri A. Prathap Reddy the Chairman and Managing Director to fix their remuneration.

iii. Cost Auditors

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors for the Financial Year 2014-15 is proposed for the approval of the shareholders in the Notice of the AGM.

MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

Management''s Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report and is annexed here to.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of section section (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of Annual Accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any;

(ii) the directors 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 statement of profit and loss of the company for that period:

(iii) the directors have 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

(iv) the directors have prepared the annual accounts on a going concern basis.

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

The details regarding Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo as required by section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given as Annexure 2 and forms part of this report.

CORPORATE GOVERNANCE

Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report. Certificate from the Auditors of the Company, confirming compliance of the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

INDUSTRIAL RELATIONS

The relationships with employees, suppliers and customers across the Company are cordial.

CORPORATE SOCIAL RESPONSIBILITY

According to Sec.135 of The Companies Act 2013, our Company requires to constitute a Corporate Social Responsibility Committee and also adopt Corporate Social Responsibility Policy so as to ensure that the company spends, in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years, for the betterment of the society as a whole.

The Board at its meeting held on 28th July 2014 have constituted the CSR Committee and approved the Corporate Social Responsibility (CSR) Policy.

The company during the year to mitigate the water shortages due to severe drought conditions in Solapur and Osmanabad Districts has distributed water tanks of permanent nature (i.e. RCC tanks)of 3000 Litres Capacity and provided water troughs for the livestock in some of the villages apart from providing other facilities for rural people with the association of its Social Organisation "Balaji Foundation and Research Centre."

ACKNOWLEDGMENTS

Your Directors acknowledge with appreciation for the services rendered by the employees of the company at all the levels towards its overall success. Your Directors also express their grateful appreciation for the support and co-operation received from the stake holders.

Your Directors sincerely thank all the Customers, Vendors, investors, Bankers, Insurance companies, Consultants, advisors, stock exchanges and Government authorities for their continuous support throughout the year.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Place : Solapur Date : 28/07/2014 CHAIRMAN


Mar 31, 2012

The Directors have pleasure in presenting the 24th Annual Report of the company with Audited Financial Statements for the year ended 31 March, 2012.

Financial Results

The financial highlights for the current year in comparison to the previous year are as under:

(Rupees in Lakhs)

Sl No Particulars Current Year Previous Year (2011-12) (2010-11)

1. Gross Sales 48595.72 37472.10

2. Less: Excise Duty 3643.37 2795.13

3. Net Sales 44952.35 34676.97

4. Other Income 284.51 174.26

5. Total Income 45236.86 34851.23

6. Expenditure 36886.90 28371.52

7. Profit before interest, depreciation and tax 8350.03 6479.70

8. Depreciation 1034.50 826.10

9. Profit before interest & tax 7261.30 5653.60

10. Interest and Finance Charges 2120.57 1355.83

11. Prior Period items 79.12 _

12. Profit before tax 5274.07 4297.78

13. Provision for taxes (including DTL) 1707.90 1636.42

14. Profit after tax 3566.17 2661.36

15. Dividend for the year (including corporate dividend tax) 301.26 226.69

16. Transfer to reserve 356.62 266.14

17. Balance carried forward to Balance Sheet 2908.29 2168.53

18. Reservest Excluding Revaluation reserves) 13957.84 10706.63

19. EPS (Rs) on face value of Rs. 2/- each share 11.01 8.21

Operating Results and Business

During the year, your company has achieved a Gross turnover of Rs. 485.95 Crore as compared to Rs. 374.72 Crore during the previous year. Your company registered an impressive 'year on year' growth of 29.68%. Profit After Tax achieved is Rs. 35.66 Crore in the current year as compared to Rs. 26.61 Crore recording a growth of 34 % during the current year.

Your Company's excellent performance is primarily attributed to the efficient usage of plants, product mix, increase in value chain and increase in plant efficiencies. These measures have optimised the consumption coefficients of materials compared to previous year. Stringent cost control measures were implemented by alt the team members at all plants.

Exports

The net exports have increased by 39.83% over the previous year figures of Rs. 75.43 Crore to Rs. 105.48 Crore. The Company's products are welt placed in the Global Market. During the year, your company has received Certificate of Suitability for PVP K 30 from EU regulatory authorities which go through stringent Quality checks before awarding the same. Your company is the first company to register for this product from India. Your Company is the only Company to register under REACH for manufacture and supply of NMP and we are also on schedule for registration of other selected products from our portfolio under REACH certification and expects to continue being able to Export to European markets after REACH deadlines.

Dividend

The Directors are pleased to recommend for approval of the members a dividend of Rs 0.80/- per share ( 40% on paid up value of Rs.2/- per share). The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs.301.26 Lakhs.

Transfer to Reserves

The Company proposes to transfer Rs. 356.62 Lakhs to the General Reserve out of the amount available for appropriations and an amount of Rs. 2909.86 Lakhs is proposed to be retained in the Profit and Loss account.

Research & Development

Continuous R&D initiatives have yielded results during the year with major reductions in consumption coefficients and productivity has gone up vis-a-vis utilization of resources. Your company has become one of the leaders in Specialty Chemicals in the International Specialty Chemical Industry and plans to be among the leaders in the years to come.

Your Company has been carrying out continuous Research and Development in the following areas.

- Identification of New products and development of latest process technologies

- Continuous improvement of processes and fine tuning process parameters to optimize utilization of energy, utilities and raw materials consumption.

- Backward and forward integration of products to improve value chain.

During the year, your company has spent in R& D activities as under:

- R&D Capital Expenditure - Rs. 85.35 Lakhs

Expansion / Diversification

The following expansion / diversification projects were undertaken during the year:

Specialty Chemicals Division

- New plant for manufacture of Methylamines with an installed capacity of 30000 MT per annum at MIDC, Chincholi, Solapur, Maharashtra has been commissioned in March 2012 and declared commencement of commercial production.

- New plant construction activities are in advanced stages for manufacture of DMF and DMA derivatives at MIDC Chincholi, Solapur.

Hotel Division

- Construction is in full swing for development of 100-room Hotel Property at Solapur to be operational by March 2013. A formal agreement with Sarovar Group of hotels has been entered for operating / managing the Hotel Property.

Fixed Deposits

The company has not accepted any deposits falling within the provisions of Section 58A of the Companies Act, 1956.

Directors

In terms of Article 134 of the Articles of Association of the company Sri G. Hemanth Reddy and Sri S.V. Pattabhiraman retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting.

Their profile describing the expertise in specific functional area and other directorships held by them as stipulated in clause 49 of the listing agreement is provided in the Additional Information Section forming part of Notice and Corporate Governance Report forming part of the Annual Report.

During the year, Sri M Amarender Reddy and Sri Chavali Satyanaraynna Murthy were appointed as Additional Directors w.e.f 30.01.2012 As per the provisions of Section 260 of the Companies Act, 1956 their term of office is due to expire at the conclusion of this Annual General Meeting. The Company has received notices in writing, proposing their appointment as Directors of the Company. The relevant resolution proposing their appointments as Directors is included in the Notice of the Annual General Meeting for your approval.

Consolidated Financial Statements

The Consolidated Financial Statement of your company with that of its wholly owned subsidiary Bhagyanagar Chemicals Limited is provided in the Annual Report. The annual accounts of the subsidiary and the related detailed information shall be made available to members seeking such information at any point of time. The annual accounts of the Bhagyanagar Chemicals Limited shall also be kept for inspection by any of the members at the administrative and registered office of the company.

Auditors

M/s V.Sridhar & Co, Chartered Accountants, Hyderabad, Statutory Auditors of the company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The company has received letter from the Auditors to the effect that, their appointment, if made , would be within the prescribed limits under section 224 (1B ) of the Companies Act, 1956 and that they are not disqualified for such re-apppintment within the meaning of section 226 of the said Act.

Particulars of Employees

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956 (the Act), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors' Report. However, having regard to the provisions of Section 219 (1)(b)(iv) of the Act, the Annual Report is being sent to all Members of the Company excluding the aforesaid information. Any Member interested in obtaining such particulars may write to the Company Secretary at the Administrative Office of the Company.

Management's Discussion and Analysis Report

Management's Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report and is annexed hereto.

Directors' Responsibility Statement

Pursuant to the provisions of subsection (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm that:

(i) In the preparation of Annual Accounts for the financial year ended 31s* March, 2012, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any;

(ii) The directors 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 statement of profit and loss of the company for that period:

(iii) The directors have 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

(iv) The directors have prepared the annual accounts on a going concern basis.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The details regarding Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo as required by section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given as Annexure A and forms part of this report.

Corporate Governance

Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report. Certificate from the Auditors of the Company, confirming compliance of the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

Industrial Relations

The relationships with employees, suppliers and customers across the Company are cordial.

Corporate Social Responsibility

The Company has undertaken various community projects through its social arm Balaji Foundation and Research Centre in and around Solapur / Osmanabad district areas for the following activities:

- Conducting regular Health camps in villages where there are no doctors.

- Employing rural youth by providing appropriate vocational training.

- Mentoring rural youth for pursuing their dreams in education, sports and other activities.

- Arranging Doctor visits for villages where there is no doctor.

- Providing teaching aids and laboratory equipment for the needy schools in rural villages.

- Helping the libraries in rural areas in procuring latest books.

Acknowledgments

Your Directors acknowledge the value of tremendous services rendered by the employees of the company at all the levels toward its overall success. Your Directors also express their grateful appreciation for the support and co-operation received from Banks, Government authorities, Customers, Vendors and members.

For and Behalf of the Board of Directors

Place : Secunderabad A Prathap Reddy

Date : 3 May 2012 Chairman & Managing Director


Mar 31, 2011

The Directors have pleasure in presenting the Twenty Third Annual Report of the company with Audited Statement of Accounts for the year ended 31st March, 2011.

Financial Results

The financial highlights for the current year in comparison to the previous year are as under:

(Rupees in Lakhs)

Sl. Current Year Previous Year No. Particulars (2010-2011) (2009-2010)

1 Gross Sales 38,504.69 27,713.98

2 Less: Excise Duty 2795.13 1,524.40

3 Sales 35,709.55 26,189.58

4 Other Income 193.14 145.63

5 Expenditure 33,846.50 23,487.12

6 Profit before interest, depreciation and tax 6479.70 4,774.24

7 Depreciation 826.10 683.60

8 Profit before interest & tax 5653.60 4,706.44

9 Interest and Finance Charges 1355.83 970.59

10 Prior Period items 0 36.40

11 Profit before tax 4,297.78 3,156.45

12 Provision for Income tax 955.40 530.00

13 Deferred tax 681.02 561.50

14 Profit after tax 2,661.36 2,064.95

15 Dividend for the year (including corporate dividend tax) 226.69 189.94

16 Transfer to reserve 266.14 210.00

17 Balance carried forward to Balance Sheet 2,168.53 1,665.41

18 Reserves (Excluding Revaluation reserves) 10,706.63 8,271.96

19 EPS (Rs) 8.21* 31.87#

*EPS worked out on Equity Shares of face value of Rs. 2/- # EPS worked out on Equity Shares of face value of Rs. 10/-

Operating Results and Business

During the year, your company has achieved a Gross turnover of Rs. 385.05 Crore as compared to the turnover of Rs. 277.14 Crore during the previous year. Your company registered an impressive year on year growth of 38.94%, Profit After Tax is Rs. 26.61 Crore in the current year as compared to Rs. 20.64 Crore recording a growth of 28.92%.

Your Companys excellent performance is primarily attributed to the product mix, increase in value chain and increase in plant efficiencies which has optimised the consumption co-efficients of materials compared to previous year and stringent cost control measures implemented by the management across the plants.

Exports: The net exports have increased by 12.30% over the previous year figures of Rs. 67.17 Crore to Rs. 75.43 Crore. The Companys products are well placed in the Global Market. During the year, your company has registered under "REACH" for supplying one of the products to EU countries which go through stringent Quality checks. Your company is the first company to register under REACH from India for this product

Dividend

Based on companys performance and track record of declaring dividends to shareholders, the Directors are pleased to recommend for approval of the members a dividend of Rs 0.60/- per share (30% on paid up value of Rs 2/- per share). The total cash outflow on account of dividend payable including dividend distribution tax payable is Rs. 226.69 lacs.

Transfer to Reserves

The Company proposes to transfer Rs. 266.14 lacs to the General Reserve out of the amount available for appropriations and an amount of Rs. 2,168.53 lacs is proposed to be retained in the Profit and Loss account.

Subdivision of Equity Shares

During the year the companys equity shares were sub-divided from Rs. 10/- per share to Rs. 2/- per share as per the special resolution passed by the members of the company at their 22nd Annual General Meeting of the Company held on 8th September, 2010 in order to improve the liquidity of the Companys shares in the stock market and to make it affordable to small investors.

Research & Development

Continuous R&D initiatives have yielded results during the year with major reductions in consumption co-efficients accompanied by increase in utilization of resources. Your company has become one of the leaders in Specialty Chemicals among International Specialty Chemical Industry and plans to be among top five Aliphatic Amines Manufacturing Companies in the years to come.

Your Company has been setting aside sizable money for continuous Research and Development for the following activities.

- Identification of New products and development of latest process technologies for the same.

- Continuous improvement of process and fine tuning process parameters to optimize utilization of energy, utilities and raw materials consumption.

- Backward and forward integration of products to improve value chain.

- During the year, your company has invested in R & D activities as under.

- R & D Capital Expenditure - Rs. 1.33 Crores.

Expansion / Diversification

The following expansion/ diversification projects were undertaken during the year:

-New project of 15000 MT per annum installed capacity of GBL, NMP / 2P at MIDC, Chincholi, Solapur has been commissioned during the year.

-New plant for manufacture of Methylamines and Ethylamines is proposed with an installed capacity of 30000 MT per annum at MIDC, Chincholi which will be commissioned during the last quarter of FY 2011-12.

-1.5 MW capacity wind mill at Satara has been commissioned and has started generating power from September 2010.

-Construction is in full swing for development of 100 Room Hotel Property at Solapur to be operational by mid 201 2. An agreement has been formalized with SAROVAR Group of Hotels for operating / managing the Hotel property.

Fixed Deposits

The company has neither accepted nor renewed any deposits falling within the provisions of Section 58A of the Companies Act, 1 956 read with the Companies (Acceptance of Deposits) Rules, 1 975 from the public during the financial year.

Directors

In terms of Article 134 of the Articles of Association of the company Sri S. Vishnu Rao, Sri N. Rajeshwar Reddy and Sri M.R. Krishnaiah retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting.

Their profile describing the expertise in specif c functional area and other directorships held by them as stipulated in clause 49 of the listing agreement is provided in the Additional Information Section forming part of Notice and Corporate Governance Report which is part of the Annual Report.

Consolidated Financial Statements

The Consolidated Financial Statement of your company with that of its wholly owned subsidiary Bhagyanagar Chemicals limited is provided in the Annual Report. The annual accounts of the subsidiaries and the related detailed information shall be made available to members seeking such information at any point of time. The annual accounts of the Bhagyanagar Chemicals Limited shall also be kept for inspection by any of the members at the administrative and registered office of the company.

Auditors

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

Particulars of Employees

In terms of the provisions of Section 2 17 (2A) of the Companies Act, 1956 (the Act), read with the Companies (Particulars of Employees) Rules, 1 975, the names and other particulars of employees are set out in the Annexure to the Directors Report. However, having regard to the provisions of Section 219 (1)(b)(iv) of the Act, the Annual Report is being sent to all Members of the Company excluding the aforesaid information. Any Member interested in obtaining such particulars may write to the Company Secretary at the Administrative Office of the Company.

Managements Discussion and Analysis Report

Managements Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report and is annexed hereto.

Directors Responsibility Statement

Pursuant to the provisions of subsection (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm that:

-in the preparation of Annual Accounts for the financial year ended 31st March, 2011, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any

-the directors 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 and loss account of the company for that period:

-the directors have 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

-the directors have prepared the annual accounts on a going concern basis.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The details regarding Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo as required by section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given as Annexure A and forms part of this report.

Corporate Governance

Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report. Certificate from the Auditors of the Company, confirming compliance of the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

Industrial Relations

The relationships with employees, suppliers and customers across the Company are cordial.

Social Responsibility

The Company has undertaken various community projects in and around Solapur / Osmanabad districts areas through Balaji Foundation & Research Centre for improving the following:

a. Started a clinic with a visiting Doctor for rural underprivileged, needy people at Tamalwadi in a place provided by Village Gram Panchayat.

b. Conducting regular Health camps in villages where there are no doctors.

c. Mentoring rural youth for pursuing their dreams in education, sports and other activities.

d. Employing rural youth by providing appropriate vocational training.

Acknowledgments

Your Directors acknowledge the tremendous services rendered by the employees of the company at all the levels toward its overall success. Your Directors also express their grateful appreciation for the support and co-operation received from Banks, Government authorities, Customers, Vendors and members.

For and on behalf of the Board of Directors

M.R. Krishnaiah Chairman

Place : Secunderabad Date : April 28, 2011


Mar 31, 2010

The Directors have pleasure in presenting the 22nd Annual Report of the company with Audited Statement of Accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS

The financial highlights for the current year in comparison to the previous year are as under

(Rupees in Lakhs)

S.No. PARTICULARS Current Year Previous Year

2009-2010 2008-2009

1. Gross Sales 27713.98 27358.52

2. Less: Excise Duty 1524.40 2189.84

3. Sales 26189.58 25168.68

4. Other Income 145.63 287.07

5. Expenditure 23487.12 23011.75

6. Profit before interest, depreciation and tax 4774.24 3990.55

7. Depreciation 683.60 481.56

8. Profit before interest & tax 4706.44 3508.98

9. Interest and Finance Charges 970.59 1018.60

10. Prior Period items 36.40 0.00

11. Profit before tax 3156.45 2490.38

12. Provision for Income tax (including FBT) 530.00 325.00

13. Deferred tax 561.50 632.72

14. Profit after tax 2064.95 1532.66

15. Dividend for the year (including corporate dividend tax) 189.54 147.95

16. Transfer to General Reserve 210.00 120.00

17. Balance carried forward to Balance Sheet 1665.41 1264.70

18. Reserves(Excluding Revaluation reserves) 8271.96 6396.55

19. EPS (Rs) 31.87 23.65

OPERATING RESULTS AND BUSINESS

During the year, your company has achieved a Gross turnover of Rs. 277.14 Crore as compared to the turnover of Rs. 273.58 Crore achieved during the previous year. This growth was achieved despite Global slowdown and consequent pressure on prices and volumes. However, even with a marginal increase in turnover, your company registered an impressive year on year growth of 34.70% in Profit After Tax from Rs.15.33 Crore in the previous year to Rs. 20.65 Crore in the Current year.

Your Companys consistent performance can be primarily attributed to increase in plant efficiencies, continuous power supply through captive co-generation power plant and long term purchase contracts entered with suppliers of raw materials which has optimised the consumption co-efficients of materials compared to previous year and stringent cost control measures implemented by the management across the plants.

Exports: Though the Gross turnover increased marginally, the net exports have increased by 14.56% over the previous year figures of Rs. 58.20 Crore to Rs. 67.17 Crore.

DIVIDEND

Based on companys performance and track record of declaring dividends to shareholders, the Directors are pleased to recommend for approval of the members a dividend of Rs 2.50/- per share (25% on paid up value of Rs 10/- per share). The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs. 189.54 lacs.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 210 lacs to the General Reserve out of the amount available for appropriations and an amount of Rs. 1665.41 lacs is proposed to be retained in the Profit and Loss account.

RESEARCH & DEVELOPMENT

The R&D initiatives have yielded results during the year, and have been one of the major contributories in making the company stand by Global majors in Specialty Chemicals, among International Specialty Chemicals business.

Your Company has been setting aside sizable money for continuous Research and Development for the following activities.

- Identification of New products and latest technologies for the same.

- Continuous development of process parameters to optimize energy, utilities and raw materials consumption.

- Backward and forward integration of products.

During the year the company has invested in R& D activities as under: R & D Capital Expenditure - Rs. 622.07 lacs R & D Revenue Expenditure - Rs. 277.70 lacs

EXPANSION / DIVERSIFICATION

The company with a view to expand and diversify into new area of Business, envisaged construction, development and leasing out properties for hotel and other related business has amended its Other Objects Clause in the Memorandum of Association to include these objects and passed a special resolution for the commencement of these businesses. The company plans to utilize the available vacant lands in upcoming areas of Solapur for these purposes. The company has appointed Mahajan & Aibara, experienced consultants in Hotel and Restaurant Industry for giving feasibility report for the usage of existing land, who have submitted a report after thorough study. Accordingly, your Company has proposed to setup a Hotel with 100 rooms and banquet facilities with an investment of Rs. 40 Crore. The project will be completed over a period of 2 years from now.

During the year, the following plants have come into operation:

- 2.5 Mw Co- Generation Power Plant at Tamalwadi, Solapur has been commissioned in July, 2009

- PVP Plant at Chincholi, Solapur has started producing various grades and the mandatory approvals are in final stages.

FIXED DEPOSITS

The company has neither accepted nor renewed any deposits falling within the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 from the public during the financial year.

DIRECTORS

In terms of Article 134 of the Articles of Association of the company Sri T Naveena Chandra and Sri D. Ram Reddy retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting.

The Board of Directors at its Meeting held on 29th April, 2010 has re-appointed Mr. A. Prathap Reddy as Managing Director, Mr. N. Rajeshwar Reddy as Executive Director, Mr. D. Ram Reddy as Director-Commercial & Mr. G. Hemanth Reddy as Whole time director for a period of three years w.e.f from 1st April, 2010, subject to the approval of the Members.

The said resolution forms part of the notice of the Annual General Meeting Their profile describing the expertise in specific functional area and other directorships held by them as stipulated in clause 49 of the listing agreement is provided in the notice of AGM.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statement of your company with that of its wholly owned subsidiary Bhagyanagar Chemicals limited is provided in the Annual Report.

AUDITORS

M/s V.Sridhar & Co, Chartered Accountants, Hyderabad, Statutory Auditors of the company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The company has received letter from the Auditors to the effect that, their appointment, if made , would be within the prescribed limits under section 224 (1B) of the Companies Act, 1956 and that they are not disqualified for such re appointment within the meaning of section 226 of the said Act.

PARTICULARS OF EMPLOYEES

There are no employees whose particulars are required to be furnished under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of employees) Rules, 1975, and as amended from time to time as remuneration of none of the employees is in excess of Rs.2,00,000/- per month, if employed for the part of year or Rs.24,00,000/- per annum during the financial year 2009-10. The remuneration details of the Whole Time Directors have been disclosed in the Corporate Governance Report which forms part of Directors Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement forms the part of the Annual Report and is annexed hereto.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of subsection (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of Annual Accounts for the financial year ended 31st March, 2010, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any;

(ii) the directors 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 and loss account of the company for that period:

(iii) the directors have 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

(iv) the directors have prepared the annual accounts on a going concern basis.

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

The details regarding Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo as required by section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given as Annexure and forms part of this report.

CORPORATE GOVERNANCE

Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report. Certificate from the Auditors of the Company, confirming compliance of the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

INDUSTRIAL RELATIONS

The relationship with employees, suppliers and customers across the Company are cordial.

SOCIAL RESPONSIBILITY

The Company has undertaken various community projects in and around solapur/ osmanabad district areas through Balaji Foundation & Research Centre. The Company has undertaken the following activities during the year.

a. Started a clinic with a visiting Doctor for rural under privilged, needy people at Tammalwadi in a place provided by village Gram Panchayat.

b. Conducting Health camps in villages where there are no doctors.

c. Encouraging rural youth for pursuing their dreams in education, sports and other activities.

d. Employing rural youth by providing appropriate vocational training.

ACKNOWLEDGMENTS

Your Directors acknowledge the tremendous services rendered by the employees of the company at all the levels towards its overall success. Your Directors also express their grateful appreciation for the support and co-operation received from Banks, Government authorities, Customers, Vendors and members.

For and on behalf of the Board of Directors

Secunderabad M. R. KRISHNAIAH

29 July, 2010 Chairman

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