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Directors Report of Divyashakti Granites Ltd.

Mar 31, 2014

Dear Shareholders,

The Directors have pleasure to present the 23rd Annual Report and the Audited Accounts for the financial year ended 31st March, 2014

OPERATIONS

2013-2014

Your Company has exported polished granite slabs and polished monuments valued at Rs.5944 lakhs to U.S.A. during the year under consideration. As regards the Raw Materials, out of the total purchases of Raw Blocks valued at Rs.2294 lakhs made during the year, about 45% are imported from Brazil, Finland, Norway etc.

The year closed on a positive note with export orders on hand to the tune of Rs.260 lakhs as compared to Rs.280 lakhs of last year. Inspite of the problems faced by the Granite Industry and the all-round downward economic slide in the International Arena, your company has managed to improve the performance during the current year. The improvement is to the extent of about Rs.987 lakhs.

FINANCIAL RESULTS

Year ended Year ended 31.03.2014 31.03.2013 (Rs.in lakhs) (Rs.in lakhs)

Sales 6078.07 5090.71

Gross Operating Profit 1213.06 933.64 before depreciation and exchange variation

Profit after depreciation but 1109.63 832.33 before exchange variation

Profit after depreciation, 1515.94 1088.77 exchange variation and before Exceptional Items

Profit after Exceptional 1515.94 2133.97 items

Profit after Tax 989.04 1557.92

DIVIDEND

Your Directors are pleased to recommend for your consideration a Dividend of 15% (Rs. 1.50 per share of face value Rs.10/-) on the equity capital of the company for the financial year ended 31st March, 2014, aggregating an amount of Rs.154.51 lakhs.

CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE COMMITTEE

During the year, your directors have constituted the corporate social responsibility committee (CSR Committee) comprising Shri T. Ramesh Chandra Bose as the Chairman and Mr. T.H. Sastry and Shri S. Srinivas as other Members.

HUMAN RESOURCE MANAGEMENT, BRANDING AND QUALITY

The Company has created a favorable work environment that encourages creativity, innovation and opportunity for growth. The Company is building up its image on timely scheduled deliveries and payments. The Company is a Member of Export Promotion Council and has been participating in the Annual fairs conducted.

The maintenance of good quality is one of the reasons for getting success in the global market. Various initiatives have been taken by your Company to take care of the quality standards at every stage.

DEPOSITS

The company has not accepted any fixed deposits from the public.

AUDITORS

M/s Rambabu & Co, Chartered Accountants, Independent Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for reappointment. In accordance with the Companies Act 2013, it is proposed to appoint them from the conclusion of this Annual General Meeting till the conclusion of Twentysixth Annual General Meeting, subject to the approval of shareholders

DIRECTORS

1. In accordance with the Companies Act, 2013, Shri N.S.R Chandra Sekhar Rao retires by rotation and being eligible, offers himself for reappointment.

2. Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and Articles of Association of the Company, Shri T. Ramesh Chandra Bose and Shri S. Srinivas were appointed as additional Directors designated as Independent Directors of the Company with effect from 1st November, 2013, and they shall hold the office upto the date of the ensuing Annual General Meeting. The Company has received requisite notices in writing from members proposing Shri T. Ramesh Chandra Bose and Shri S. Srinivas for appointment as Independent Directors.

3. Pursuant to the provisions of Sections 149(9) 161(1) of the Companies Act, 2013 Smt Jaishree Nallapati was appointed as additional Director of the Company with effect from 1st June, 2014 and she shall holds the office upto the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing Smt. Jaishree Nallapati for appointment as Director.

4. In respect of Shri. Movva Venkata Subba Rao, Shri. Tadepalli Hanumath Sastry and Shri. Thati Venkataswamy Chowdary, the Company has received requisite notices in writing from members proposing them for appointment as Independent Directors.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

1. In the preparation of the annual accounts for the year ended March 31, 2014, the applicable accounting standards have been followed;.

2. 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 March 31, 2014 and of the profit of the Company for the year ended on that date;

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

4. The Directors have prepared the annual accounts of the Company on a going concern basis.

RISK MANAGEMENT AND INSURANCE

Your Company continuously monitors business and operational risk through business process, re-engineering and reviewing areas such as production, finance, legal and other issues. An exhaustive exercise is underway to bring a model regulating risk management mechanism. Your Company''s assets are adequately insured against the risk from fire and earthquake.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement, a Report on Corporate Governance, forming part of this Report, together with the Auditors'' Certificate regarding the compliance of the conditions of Corporate Governance is given in a separate section in the Annual Report.

PERSONNEL

There are no employees whose particulars are required to be furnished pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975 as amended.

DISCLOSURE OF PARTICULARS

In accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956, the required information relating to Conservation of Energy, Technology Absorption are provided in the Annexure to this Report.

PAYMENT OF LISTING FEE

At present the equity shares of the Company are listed on the Bombay Stock exchange at Mumbai. The company confirms that it has paid Annual Listing Fees due to the Bombay Stock Exchange for the year 2013-2014.

FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Foreign Exchange Earnings : Rs. 5944.48 Lakhs

b) Foreign Exchange Outgo : Rs. 1632.45 Lakhs

DEPOSITORY SYSTEM

As the Members are aware, your Company''s shares are tradable compulsorily in electronic form and your Company has established connectivity with Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the depository system, the Members are requested to avail the facility of Dematerialization of the Company''s shares on NSDL & CDSL. The ISIN allotted to the Company''s Equity shares is INE410G01010.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report as required under 49 of the listing agreement with stock exchange forms part of this report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation of the financial assistance and support extended by State Bank of Mysore. The Directors thank the shareholders for their continued confidence and trust placed by them with the Company. The Board also thanks all categories of employees of the Company for their dedicated and sincere services.

For and onbehalf of the Board

(N.HARI HARA PRASAD) (T.H.SASTRY) Managing Director Director

Place : Hyderabad Date : 30th May, 2014.


Mar 31, 2013

Dear Shareholders,

The Directors present the 22nd Annual Report and the Audited Accounts for the financial year ended 31st March, 2013, on a very sad note by informing the members that Sri N.V.Rattaiah, CMD of our company expired on 09.02.2013 suddenly in harness due to a massive heart attack while attending to official duties in the office leaving a huge void in the organization. Born in an illustrious family of Narasaraopet, Guntur District on 31.07.1941, he qualified as a Civil Engineer from Manipal. After completion of academics, he served in BHEL, BHPV etc. for brief period before coming out on his own to establish M/s N.V.Rattaiah & Co., and earn an impeccable name as a reputed Builder showcasing landmarks like Divyashakti Complex and Apartments. The ongoing Divya Sree Shakti Township project is another blossoming project promoted by him. Never content with resting on his laurels, he envisaged and built up M/s Divyashakti Granites Limited (EOU) brick by brick starting way back in 1991. Today it has grown into a very reputed company exporting processed granite, which name is synonymous to quality. Another note worthy contribution to the company is that he has made the company debt free. The void created by his sudden and untimely departure is well nigh impossible to be filled.

OPERATIONS

2012-2013

Your Company has exported polished granite slabs and polished monuments valued at Rs.4933 lakhs to U.S.A. during the year under consideration. As regards the Raw Materials, out of the total purchases of Raw Blocks valued at Rs.1403 lakhs made during the year, about 52% are imported from Brazil, Finland, Norway etc.

The year closed on a positive note with export orders on hand to the tune of Rs.280 lakhs as compared to Rs.300 lakhs of last year. Inspite of the problems faced by the Granite Industry and the all-round downward economic slide in the International Arena, your company has managed to improve the performance during the current year. The improvement is to the extent of about Rs.478 lakhs.

FINANCIAL RESULTS

Year ended Year ended 31.03.2013 31.03.2012 (Rs.in lakhs) (Rs.in lakhs)

Sales 5090.71 4612.43

Gross Operating Profit before 933.64 84274 depreciation and exchange variation

Profit after depreciation but 832.33 699.21 before exchange variation

Profit after depreciation, 1088.77 1127.85 exchange variation and before Exceptional Items_

Profit after Exceptional items 2133.97 1127.85

Profit after Tax 1557.92 732.06



Your Directors are pleased to recommend for your consideration a Dividend of 15% on the equity capital of the company for the financial year ended 31st March, 2013, aggregating to an amount of Rs.154.51 lakhs.

HUMAN RESOURCE MANAGEMENT, BRANDING AND QUALITY

The Company has created a favourable work environment that encourages creativity, innovation and opportunity for growth. The Company is building up its image on timely scheduled deliveries and payments. The Company is a Member of Export Promotion Council and has been participating in the Annual fairs conducted.

The maintenance of good quality is one of the reasons for getting success in the global market. Various initiatives have been taken by your Company to take care of the quality standards at every stage.

DEPOSITS

The company did not accept any deposits within the meaning of section 58A of the Companies Act, 1956 and Rules made thereunder.

AUDITORS

M/s Rambabu & Co, Chartered Accountants, 31,Pancom Chambers, Rajbhavan Road, Hyderabad, retire at the conclusion of this Annual General Meeting and being eligible, offer their services for reappointment.

DIRECTORS

1. Shri N.V.Rattaiah ceased to be a Director with effect from 09.02.2013 consequent on demise.

2. Shri N.S.R.C.Sekhar Rao and Shri N.Bhanu Prasad retire by rotation and being eligible, offer themselves for reappointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors declare that:

1. The Annual Accounts are prepared as per the applicable accounting standards.

2. The accounting policies are applied to give a true and fair view of the State of Affairs of the Company for the year ended 31st March 2013 and Statement of Profit and Loss for the period from April 2012 to March 2013.

3. Proper care has been taken 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. Internal Audit is being conducted by separate Internal Auditor.

4. The annual accounts have been prepared on a going concern basis.

RISK MANAGEMENT AND INSURANCE

Your Company continuously monitors business and operational risk through business process, re-engineering and reviewing areas such as production, finance, legal and other issues. An exhaustive exercise is underway to bring a model regulating risk management mechanism. Your Company''s assets are adequately insured against the risk from fire and earthquake

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement, a Report on Corporate Governance, forming part of this Report, together with the Auditors'' Certificate regarding the compliance of the conditions of Corporate Governance is given in a separate section in the Annual Report.

PERSONNEL

There are no employees whose particulars are required to be furnished pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975 as amended.

DISCLOSURE OF PARTICULARS

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, the required information relating to Conservation of Energy, Technology Absorption are provided in the Annexure to this Report.

PAYMENT OF LISTING FEE

At present the equity shares of the Company are listed on the Mumbai Stock exchange at Mumbai. The company confirms that it has paid Annual Listing Fees due to the stock exchange, Mumbai for the year 2012-2013.

FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Foreign Exchange Earnings : Rs. 4933.19 Lakhs

b) Foreign Exchange Outgo : Rs. 1288.27 Lakhs

DEPOSITORY SYSTEM

As the Members are aware, your Company''s shares are tradable compulsorily in electronic form and your Company has established connectivity with Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the depository system, the Members are requested to avail the facility of Dematerialization of the Company''s shares on NSDL & CDSL. The ISIN allotted to the Company''s Equity shares is INE410G01010.

MANAGEMENT DISCUSSION &

ANALYSIS REPORT

The Management Discussion and Analysis Report as required under 49 of the listing agreement with stock exchange forms part of this report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation of the financial assistance and support extended by State Bank of Mysore. The Directors thank the shareholders for their continued confidence and trust placed by them with the Company. The Board also thanks all categories of employees of the Company for their dedicated and sincere services.



For and onbehalf of the Board

(N. HARI HARA PRASAD)

Managing Director

Place : Hyderabad,

Date: 27th May, 2013.


Mar 31, 2012

Dear Shareholders,

The Board of Directors of your Company have pleasure in presenting their 21st Annual Report and the Audited Statement of Accounts of the Company for the year ended 31st March, 2012.

OPERATIONS

2011-2012

Your Company has exported polished granite slabs and polished monuments valued at Rs.4490 lakhs to U.S.A. during the year under consideration. As regards the Raw Materials, out of the total purchases of Raw Blocks valued at Rs1970 lakhs made during the year, about 58% are imported from Saudi Arabia, Finland, Brazil etc.

The year closed on a positive note with export orders on hand to the tune of Rs.300 lakhs as compared to Rs.280 lakhs of last year. Inspite of the problems faced by the Granite Industry, and the allround downward economic slide in the International Arena. Your company has managed to improve the performance during the current year. The improvement is to the extent of about Rs.1098 lakhs.

FINANCIAL RESULTS

Year ended Year ended 31.03.2012 31.03.2011 (Rs.in lakhs) (Rs.in lakhs)

Sales 4612.43 3514.88

Gross Operating Profit 842.74 979.50 before depreciation and exchange variation

Profit after depreciation but 699.21 810.57 before exchange variation

Profit after depreciation 1127.85 786.07 and exchange variation

Profit after Tax 732.06 661.13

DIVIDEND

Your Directors are pleased to recommend for your consideration a Dividend of 15% on the equity capital of the company for the financial year ended 31st March, 2012, aggregating an amount of Rs. 154.51 lakhs.

HUMAN RESOURCE MANAGEMENT, BRANDING AND QUALITY

The Company has created a favourable work environment that encourages creativity, innovation and opportunity for growth. The Company is building up its image on timely scheduled deliveries and payments. The Company is a Member of Export Promotion Council and has been participating in the Annual fairs conducted.

The maintenance of good quality is one of the reasons for getting success in the global market. Various initiatives have been taken by your Company to take care of the quality standards at every stage.

DEPOSITS

The company did not accept any deposits within the meaning of section 58A of the Companies Act, 1956 and Rules made thereunder.

AUDITORS

M/s Rambabu & Co, Chartered Accountants, 31,Pancom Chambers, Rajbhavan Road, Hyderabad, retire at the conclusion of this Annual General Meeting and being eligible, offer their services for re appointment.

DIRECTORS

1. Shri T.H.Sastry and Shri T.V.Chowdary retire by rotation and being eligible, offer themselves for reappointment.

2. The Board of Director regret to inform the members that Sri K.Gopi Raju one of the seniormost Directors of our company, expired on 18.11.2011 after a brief illness. Before becoming a Director in our company, Sri Gopi Raju retired from BHEL after a distinguished service as General Manager. Sri Gopi Raju had been a great source of strength to us in Divyashakti Granites Ltd by always lending a wise counsel.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors declare that:

1) The Annual Accounts are prepared as per the applicable accounting standards.

2) The accounting policies are applied to give a true and fair view of the State of Affairs of the Company for the year ended 31st March 2012 and Profit and Loss account for the period from April 2011 to March 2012.

3) Proper care has been taken 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. Internal Audit is being conducted by separate Internal Auditor,

4) The annual accounts have been prepared on a going concern basis.

RISK MANAGEMENT AND INSURANCE

Your Company continuously monitors business and operational risk through business process, re-engineering and reviewing areas such as production, finance, legal and other issues. An exhaustive exercise is underway to bring a model regulating risk management mechanism. Your Company's assets are adequately insured against the risk from fire and earthquake.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement, a Report on Corporate Governance, forming part of this Report, together with the Auditors' Certificate regarding the compliance of the conditions of Corporate Governance is given in a separate section in the Annual Report.

PERSONNEL

There are no employees whose particulars are required to be furnished pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975 as amended.

DISCLOSURE OF PARTICULARS

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, the required information relating to Conservation of Energy, Technology Absorption are provided in the Annexure to this Report.

PAYMENT OF LISTING FEE

At present the equity shares of the Company are listed on the Mumbai Stock exchange at Mumbai. The company confirms that it has paid Annual Listing Fees due to the stock exchange, Mumbai for the year 2012-2013.

FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Foreign Exchange Earnings : Rs. 4490.13 Lakhs

b) Foreign Exchange Outgo : Rs. 1674.95 Lakhs

DEPOSITORY SYSTEM

As the Members are aware, your Company's shares are tradable compulsorily in electronic form and your Company has established connectivity with Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the depository system, the Members are requested to avail the facility of Dematerialization of the Company's shares on NSDL & CDSL. The ISIN allotted to the Company's Equity shares is INE410G01010

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation of the financial assistance and support extended by State Bank of Mysore. The Directors thank the shareholders for their continued confidence and trust placed by them with the Company. The Board also thanks all categories of employees of the Company for their dedicated and sincere services.

For and on behalf of the Board

Place : Hyderabad, N.V. RATTAIAH

Date : 30th May, 2012. CMD


Mar 31, 2011

Dear Shareholders,

The Board of Directors of your Company have pleasure in presenting their 20th Annual Report and the Audited Statement of Accounts of the Company for the year ended 31st March, 2011.

OPERATIONS

2010-2011

Your Company has exported polished granite slabs and polished monuments valued at Rs.3432 lakhs to U.S.A. during the year under consideration. As regards the Raw Materials, out of the total purchases of Raw Blocks valued at Rs. 1722 lakhs made during the year, about 58% are imported from Saudi Arabia, Finland, Brazil etc.

The year closed on a positive note with export orders on hand to the tune of Rs.280 lakhs as compared to Rs.250 lakhs of last year. Inspite of the problems faced by the Granite Industry, and the allround downward economic slide in the International Arena, your company has managed to improve the performance during the current year. The improvement is to the extent of about Rs. 538 lakhs.

FINANCIAL RESULTS

Year ended Yearended 31.03.2011 31.03.2010 (Rs.in lakhs) (Rs.in lakhs)

Sales 3514.88 2977.37

Gross Operating Profit before depreciation and exchange variation 979.50 1041.28

Profit after depreciation but before exchange variation 810.57 876.90

Profit after depreciation and exchange variation 786.07 546.45

Profit after Tax 661.13 485.99

DIVIDEND

Your Directors are pleased to recommend for your consideration a Dividend of 15% on the equity capital of the company for the financial yearended 31st March, 2011, aggregating an amount of Rs.153.48 lakhs.

HUMAN RESOURCE MANAGEMENT, BRANDING AND QUALITY

The Company has created a favourable work environment that encourages creativity, innovation and opportunity for growth. The Company is building up its image on timely scheduled deliveries and payments. The Company is a Member of Export Promotion Council and has been participating in the Annual fairs conducted.

The maintenance of good quality is one of the reasons for getting success in the global market. Various initiatives have been taken by your Company to take care of the quality standards at every stage.

DEPOSITS

The company did not accept any deposits within the meaning of section 58A of the Companies Act, 1956 and Rules made thereunder.

AUDITORS

M/s Rambabu & Co, Chartered Accountants, 31, Pancom Chambers, Rajbhavan Road, Hyderabad, retire at the conclusion of this Annual General Meeting and being eligible, offer their services for reappointment.

DIRECTORS

Shri M. Ramakrishnayya IAS (Retd) retires by rotation and is not willing to offer himself for re- appointment due to advanced age and the attendant problems.

Shri M.V. Subba Rao and Shri K. Gopi Raju retire by rotation and being eligible, offer themselves for reappointment.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors declare that:

1) The Annual Accounts are prepared as per the applicable accounting standards.

2) The accounting policies are applied to give a true and fair view of the State of Affairs of the

Company for the year ended 31st March 2011 and Profit and Loss account for the period from April 2010 to March 2011.

3) Proper care has been taken 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. Internal Audit is being conducted by separate Internal Auditor.

4) The annual accounts have been prepared on a going concern basis.

RISK MANAGEMENT AND INSURANCE

Your Company continuously monitors business and operational risk through business process, re-engineering and reviewing areas such as production, finance, legal and other issues. An exhaustive exercise is underway to bring a model regulating risk management mechanism. Your Company's assets are adequately insured against the risk from fire and earthquake.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement, a Report on Corporate Governance, forming part of this Report, together with the Auditors' Certificate regarding the compliance of the conditions of Corporate Governance is given in a separate section in the Annual Report.

PERSONNEL

There are no employees whose particulars are required to be furnished pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975 as amended.

DISCLOSURE OF PARTICULARS:

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, the required information relating to Conservation of Energy, Technology Absorption are provided in the Annexure to this Report.

PAYMENT OF LISTING FEE

At present the equity shares of the Company are listed on the Mumbai stock exchange at Mumbai. The company confirms that it has paid Annual Listing Fees due to the stock exchange, Mumbai for the year 2011-2012.

FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Foreign

Exchange Earnings : Rs.3431.61 Lakhs

b) Foreign

Exchange Outgo : Rs. 1278.02 Lakhs

DEPOSITORY SYSTEM

As the Members are aware, your Company's shares are tradable compulsorily in electronic form and your Company has established connectivity with Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the depository system, the Members are requested to avail the facility of Dematerialization of the Company's shares on NSDL & CDSL. The ISIN allotted to the Company's Equity shares is INE410G01010

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation of the financial assistance and support extended by State Bank of Mysore. The Directors thank the shareholders for their continued confidence and trust placed by them with the Company. The Board also thanks all categories of employees of the Company for their dedicated and sincere services.

For and on behalf of the Board

N.V. RATTAIAH Managing Director

Place : Hyderabad Date : 30.05.2011.


Mar 31, 2010

The Board of Directors of your Company have pleasure in presenting their 19th Annual Report and the Audited Statement of Accounts of the Company for the year ended 31st March, 2010.

OPERATIONS

2009-2010

Your Company has exported polished granite slabs and polished monuments valued at Rs.2975.25 lakhs to U.S.A. during the year under consideration. As regards the Raw Materials, out of the total purchases of Raw Blocks valued at Rs. 932 lakhs made during the year, about 28% are imported from Saudi Arabia, Finland, Brazil etc.

The year closed on a positive note with export orders on hand to the tune of Rs.250 lakhs as compared to Rs.240 lakhs of last year. Inspite of the problems faced by the Granite Industry, and the allround downward economic slide in the International Arena, Your company has managed to improve the performance during the current year. The improvement is to the extent of about Rs. 343 lakhs.

FINANCIAL RESULTS

Year ended Yearended

31.03.2010 31.03.2009

(Rs.in lakhs) (Rs.in lakhs)

Sales 2977.37 2634.03

Gross Operating Profit before

depreciation and exchange variation 1041.28 854.88

Profit after depreciation but

before exchange variation 876.90 677.32

Profit after depreciation and

exchange variation 546.45 1302.55

Profit after Tax 485.99 1164.75

The loss due to Exchange Variation in the year 2009-10 is Rs. 330.45 lakhs whereas there was a heavy gain to the extent of Rs. 625.23 lakhs on this account in the previous year thus making a heavy difference in net profit although the gross profit of both the years is comparable.

DIVIDEND

Your Directors are pleased to recommend for your consideration a Dividend of 15% on the equity capital of the company for the financial year ended 31st March, 2010, aggregating an amount of Rs. 153.42 lakhs.

HUMAN RESOURCE MANAGEMENT,

BRANDING AND QUALITY

The Company has created a favourable work environment that encourages creativity, innovation and opportunity for growth. The Company is building up its image on timely scheduled deliveries and payments. The Company is a Member of Export Promotion Council and has been participating in the Annual fairs conducted.

The maintenance of good quality is one of the reasons for getting success in the global market. Various initiatives have been taken by your Company to take care of the quality standards at every stage.

DEPOSITS

The company did not accept any deposits within the meaning of section 58A of the Companies Act, 1956 and Rules made thereunder.

AUDITORS

M/s Rambabu & Co, Chartered Accountants, 31, Pancom Chambers, Rajbhavan Road, Hyderabad, retire at the conclusion of this Annual General Meeting and being eligible, offer their services for reappointment.

DIRECTORS

Shri T.H. Sastry, Shri N.S.R.C. Sekhara Rao and Shri N. Bhanu Prasad retire by rotation and being eligible, offer themselves for reappointment.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors declare that :

1) The Annual Accounts are prepared as per the applicable accounting standards.

2) The accounting policies are applied to give a true and fair view of the State of Affairs of the Company for the year ended 31 st March 2010 and Profit and Loss account for the period from April 2009 to March 2010.

3) Proper care has been taken 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. Internal Audit is being conducted by separate Internal Auditor.

4) The annual accounts have been prepared on a going concern basis.

RISK MANAGEMENT AND INSURANCE

Your Company continuously monitors business and operational risk through business process, re-engineering and reviewing areas such as production, finance, legal and other issues. An exhaustive exercise is underway to bring a model regulating risk management mechanism. Your Companys assets are adequately insured against the risk from fire and earthquake.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement, a Report on Corporate Governance, forming part of this Report, together with the Auditors Certificate regarding the compliance of the conditions of Corporate Governance is given in a separate section in the Annual Report.

PERSONNEL

There are no employees whose particulars are required to be furnished pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975 as amended.

DISCLOSURE OF PARTICULARS:

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, the required information relating to Conservation of Energy, Technology Absorption are provided in the Annexure to this Report.

PAYMENT OF LISTING FEE

At present the equity shares of the Company are listed on the Mumbai stock exchange at Mumbai. The company confirms that it has paid Annual Listing Fees due to the stock exchange, Mumbai for the year 2010-2011.

FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Foreign

Exchange Earnings : Rs.2975.25 Lakhs

b) Foreign

Exchange Outgo : Rs. 526.85 Lakhs

DEPOSITORY SYSTEM

As the Members are aware, your Companys shares are tradeable compulsorily in electronic form and your Company has established connectivity with Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the depository system, the Members are requested to avail the facility of Dematerialization of the Companys shares on NSDL & CDSL. The ISIN allotted to the Companys Equity shares is INE410G01010

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation of the financial assistance and support extended by State Bank of Mysore. The Directors thank the shareholders for their continued confidence and trust placed by them with the Company. The Board also thanks all categories of employees of the Company for their dedicated and sincere services.

For and on behalf of the Board

M. RAMAKRISHNAYYA, IAS (Retd)

CHAIRMAN

Place: Hyderabad

Date : 26.05.2010.