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Directors Report of Gayatri BioOrganics Ltd.

Mar 31, 2016

To

The Members of

Gayatri BioOrganics Limited

The Directors present the Twenty Fifth Annual Report along with the Audited Financial Statements and the Auditor’s Report thereon for the period ended 31st March, 2016.

FINANCIAL SUMMARY

(Rs. in lakhs)

31.03.2016

31.03.2015

Net Sale Income from Operations

13,764.33

25,570.12

Other Operating Income

51.085

85.64

Income from operations

13,815.41

25,655.76

Other Income

96.14

25.98

Total Income

13,911.55

25,681.74

Total Expenditure

16,296.84

24,124.73

Finance Charges

1,274.03

939.41

Depreciation

213.39

237.38

Provision for Taxation

—

—

Net Profit / (Loss)

-3,872.71

393.21

PERFORMANCE DURING THE YEAR UNDER REVIEW STARCH DEPARTMENT

The Company has a Crushing Capacity of 1,35,000 MTPA considering Medak plant Crushing Capacity of 90,000 MTPA and the Second Unit located at Biccavole, East Godavari District Crushing Capacity of 45,000 MTPA. The Company crushed 68,950 MTs maize as against 88,836 MTs maize during the previous year.

SORBITOL DIVISION

The Company has present crushing capacity of Sorbitol at 17000 TPA and produced 5282MTs of Sorbitol during the Financial Year ended 31st March, 2016.

The Company recorded net loss of Rs.3872.71 Lakhs as against a net profit of Rs.393.21 Lakhs.

EXPORTS

The Company has not made any exports during the year.

REPORT TO BIFR

Company has submitted a report as required under Section 23 of the “Sick Industrial Companies (Special Provisions) Act”, 1985 to the Board for Industrial & Financial Reconstruction Government of India (BIFR) since the accumulated losses have resulted in erosion of more than 50% of net worth of Company during the four financial years immediately preceding the financial year ended on 31st March, 2016.

AMOUNT TO BE TRANSFERRED TO RESERVES AND DIVIDEND PROPOSED:

In the current financial year, No amount was transferred to reserves and the Board of Directors of the Company does not recommend any dividend for the financial year under review.

PUBLIC DEPOSITS:

During the year, the Company has not accepted any deposits covered under the Chapter V of the Companies Act, 2013

STATUTORY AUDITORS:

At the 23rd Annual General Meeting (AGM) held on 30th September 2014, M/s M Bhaskara Rao & Co., Chartered Accountants, were appointed as Statutory Auditor of the Company to hold office from the conclusion of AGM held on September 30, 2014 to the conclusion of the 28th AGM (subject to ratification of the appointment by the members at every AGM held after that AGM) at such remuneration as may be decided by the Board of Directors. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditor shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s M Bhaskara Rao & Co., Chartered Accountants, as statutory auditors of the Company, is hereby placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

INTERNAL AUDITORS:

The Board of Directors based on the recommendation of the Audit Committee has re-appointed M/s. M O S & Associates, Chartered Accountants, Hyderabad, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on quarterly basis.

SECRETARIAL AUDITORS:

Mr. Y. Koteswar Rao, Practicing Company Secretary, was appointed to conduct the Secretarial Audit of the Company for the financial year 2015-16, as required under Section 204 of the Companies Act, 2013 read with Rule 9 there-under. The secretarial audit report for FY 2015-16 annexed to this Board’s Report as Annexure-I.

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, and in accordance with the Audit Committee recommendation the Board of Directors had appointed M/s N.S.V. Krishna Rao & Co, Cost Accountants, Hyderabad to Conduct the Cost Audit for the Financial Year 2016-2017. M/s. N.S.V. Krishna Rao & Co, Cost Accountants, submitted the Cost Audit Report for the Financial Year ended 31st March, 2016.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

Sri.T. Sandeep Kumar Reddy (DIN: 00005573), retires by rotation at the forth coming annual general meeting and being eligible, offers himself for re-appointment.

The independent directors of the company are highly qualified and stalwarts in their respective filed with wide and varied experience. They actively participate in the discussions at the board meeting and their suggestions have helped the company to grow at a rapid pace.The independent directors are paid sitting fees for attending the board and committee meetings. The nomination and remuneration committee has in place their criteria for determination of qualifications, positive attributes and independence of the directors, which they would consider as and when the company would be required to appoint the new independent directors. Pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of working of its audit committee, nomination and remuneration committee, and stakeholders relationship committee. The manner in which the evaluation has been carried out has been explained in the corporate governance report. The manner in which the remuneration is paid to the directors, executive directors and senior level executives the company has also been explained in the corporate governance report. During the year, five board meetings and four audit committee meetings were convened and held the details of which are given in the corporate governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

S. Narasappa, Company Secretary has resigned from the office w.e.f. 30.5.2015 and on 02.03.2016, Mr. V. Kali Prasad, Chief Financial Officer (CFO) of the Company has resigned from the office of CFO of the Company. The Management is in the process of short listing and finalizing the suitable candidates for the office of CFO and CS of the Company.

INDEPENDENT DIRECTORS:

The Company has received disclosures from the Independent Directors confirming their independence in terms of the SEBI(Listing Obligations and Disclosure Requirements)Regulations,2015 and Section 149(6) of the Companies Act, 2013.

The Letter of Appointment issued to the Independent Directors containing the terms and conditions are available under investors section on the website of the Company http://www.gayatribioorganics.com

A Brief Profile of the Directors of the Company is annexed herewith to this report as Annexure II RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were at arm’s length basis. There are no materially significant related party transactions made by the company with promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the company at large. A detailed report on material contracts and arrangements made during the year 2015-16, being arm’s length transactions have been reported and annexed hereto in form AOC-2 as Annexure - III and forms part of this report.

EXTRACT OF ANNUAL RETURN:

The extract of annual return in form no. MGT-9 as provided under section 92 (3) of the Companies Act,2013 read with Rule 12 of the Companies (Management & Administration) Rules 2014 is annexed hereto as Annexure-IV and forms the part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT a. Business Environment

In FY 2015-16 the global economy showed signs of recovery with growth in demand from the developed countries in the second half of the year. Emerging markets, including India, had to face multiple challenges of rising current account deficit, depreciation of the local currency and additional pressure due to capital outflows.

Your Company’s performance for the year 2015-16 has to be viewed in the context of aforesaid economic and market environment.

b. Industry Structure and Developments

The Company is engaged in the business of producing Sorbitol and Starch. Sorbitol is a water soluble polyhydric alcohol having sweet taste and high stability besides properties of plasticizing. It finds application as input material in various industrial sectors such as Tooth Paste, Pharmaceuticals, Vitamin-C, Cosmetics, Paper and Paints etc. Sorbitol and Starch industries in India are very much fragmented and scattered throughout India. In case of Sorbitol at present only four major players are there in South India. When it comes to Starch, nearly 50% of Indian Starch production comes from Gujarat where four major Starch Factories are located.

The consumer industry i.e. Tooth Paste, Pharma, Cosmetic, Paint etc have shown growth which may lead to further improved business to the company. However, the growth in demand for Sorbitol is fluctuating and presently the prices are encouraging. When it comes to Starch, since 60% of starch goes for food based industry, the demand is not even throughout the year. Further the industry is also suffering from excess capacity and can be compensated only when the demand picks up continuously.

c. Opportunities and threats

The Starch Industry at time shown good future, the raw material availability at reasonable prices and cheaper imports of starch from the neighboring Countries will have an impact on the profitability of the Industry and Your Company is not an exception to it. The company has been facing the threat of import of Sorbitol.

However, your Company is likely to face competition from other competitors; there may be risks inherent in meeting unforeseen situations not uncommon in the industry. Your Company is aware of these challenges and is geared to meet them.

d. Out look

The outlook for the company’s products is reasonably good but the management feels that the Company should be provided with sufficient working capital to achieve higher operations levels. The Company is improving its operating efficiencies in terms of better utilization of plant capacities. The Company is optimistic about its growth prospects in the future. During the year the Company explored exports markets for the products and achieved significant business. It has ambitious plans to capture more new markets to expand the business.

e. Risks and Concerns

The Company faces risk of lower realization in the event of cheap imports. Other risk faced by the Company is that Sorbitol is based on the agro commodity which is exposed to factors of Monsoon in the Country. Besides the factors mentioned above agricultural income, economic scenario, wholesale and consumer price level, impact of trade agreements with other countries and trade blocks etc. are some of the factors which affects the performance of the Company.

f. Internal Control Systems and their adequacy

The Company is in the process of adopting an Internal Control System to balance the financial, operational, compliance and other risks and explore its business opportunities at the fullest to achieve its desired objectives.

g. Operational performance

This has already been discussed in this report.

h. Human Financial Resources / Industrial Relations

People are the most valued assets of the Company. They work individually and collectively contributing to the achievement of the objectives of the business. The relation between the employees and the Company remained harmonious and cordial throughout the year. Your Company’s corporate culture and the vision and values help unite the workforce and provide standards for how your Company conducts the business. Your Company has successfully aligned human capital with business and organizational objectives. The emphasis has been on team work, skill development and development of leadership and functional capabilities of the employees. The Industrial relations remained cordial at all units of the Company.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1),5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as Annexure-V to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE OUTGO:

Information required under section 134(3) (m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed to this Board’s Report as Annexure-VI.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company is in the process of adopting an Internal Control System, commensurate with the size, scale and complexity of its operations.

SUBSIDIARIES:

The Company has no subsidiaries as on the date of 31st March, 2016.

NOMINATION AND REMUENRATION POLICY:

A committee of the Board named as "Nomination and Remuneration Committee" has been constituted to comply with the provisions of section 178, Schedule IV of the Companies Act to recommend a policy of the Company on directors’ appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and Evaluation of their performance and to recommend the same to the Board from time to time. The policy is also posted in the investors section of the company’s website.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

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.

MATERIAL CHANGES:

The Company has obtained the Special Resolution of shareholders by carrying out the postal ballot for the sell, lease, transfer, assign or otherwise dispose of the "Unit-II of the Company situated at Balabadrapuram Village, BiccavoleMandal, East Godavari District, Andhra Pradesh- 533 343" with related assets and liabilities (as identified)on Slump Sale basis and submitted the voting results along with the scrutinizer report to the stock exchange and all other regulatory authorities.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

During the year, the company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directors’ confirm that:

i) In the preparation of annual accounts for the financial year ended 31st March, 2016 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

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 true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2016 and of the profit and loss of the Company for the year;

iii) The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The Directors had prepared the annual accounts on a ’going concern’ basis;

v) The directors are in the process of laying down the internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company has a Whistle Blower Policy framed to deal with instance of fraud and mismanagement, if any in the Company. The details of the Policy are explained in the Corporate Governance Report and also posted under investors section on the website of the Company http://www.gayatribioorganics.com

RISK MANAGEMENT:

Your Directors have constituted a Risk Management Committee and defined its roles and responsibilities, which focuses that all the risks that the organization faces such as Strategic, Operational, Compliance, Financial and other risks have been identified and assessed and there is adequate risk management infrastructure in place capable of addressing those risks.

STATEMENT ON DEVELOPMENT AND IMPLEMENATION OF RISK MANAGEMENT POLICY:

The statement on development and implementation of risk management policy is given under the management discussion and analysis report which is attached with this annual report.

CORPORATE SOCIAL RESPONSIBILTY (CSR) POLICYAND CSR INITIATIVES:

Your Company does not fall under the purview of Sec.135 of the Companies Act,2013.Hence the Company not required to Constitute Corporate Social Responsibility Committee.

CORPORATE GOVERNANCE REPORT:

Your Company has complied with the requirements of Clause 49 of the Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on corporate governance forms part of the annual report. A certificate from the auditors regarding compliance of conditions of corporate governance also forms the part of the annual report.

HUMAN RESOURCES:

Your Company considers its Human Resources as the key to achieve its objectives. The unflinching commitment of the employees is the driving force behind the Company’s vision. Your Company appreciates the spirit of its dedicated employees.

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.

OUTLOOK FOR THE FINANCIAL YEAR 2016-17:

It is gratifying to say that the products of this Company are well accepted in the market and are being patronized by the major clients. The Company is hopeful of achieving 100% of the installed capacity. However, the availability of maize crop and working Capital will be the key factors for achieving the targeted results of the Company.

CAUTIONARY STATEMENT:

Statements in this "Management Discussion & Analysis" may be considered to be "forward looking statements" only. Actual results could differ materially from those expressed or implied within the meaning of applicable securities laws or regulations.

LISTING OF SECURITIES:

(a) The Company’s Shares are listed with BSE Limited, PhirozeJeejeebhoy Towers, Dalal Street, Mumbai - 400 023.

(b) The Company paid Listing fees for the year 2016-17 to BSE Limited.

REPLY TO ADVERSE REMARKS OF AUDITORS'' REPORT:

With regard to qualified opinion on trade receivables which includes certain trade receivables amounting to Rs.77,978,564 /- which are overdue and outstanding for a period of more than one year, the management believes that the same are fully recoverable as it is and the company is in the process of collecting the amounts and no provisions are required as on date.

Point No. (vii) (a) of Annexure to Auditors’ Report, with regard to irregularity and serious delays in remitting statutory dues including provident fund, income-tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues were due to working capital constraints.

Point No. (viii)of Annexure to Auditors’ Report, on default/delays in payment of dues to bankers and financial institution are also owing to working capital constraints.

REPLY TO ADVERSE REMARKS OF SECRETARIAL AUDITORS'' REPORT:

The company was under the process of short listing and finalizing the suitable candidate for the office of Company Secretary of the Company. Despite best efforts from the management, process of selection of appropriate candidate for the above mentioned office got delayed due to shortage of suitable candidates to meet the requirements of the Company.

ACKNOWLEDGEMENTS:

Your Directors would like to place on record their sincere appreciation and gratitude to all Financial Institutions, Company’s Bankers, Shareholders, Government Agencies, Suppliers, Customers Co-operation and support during the year and their confidence in its management. The Directors wish to convey their appreciation to all the employees for their enormous personal efforts as well as their collective contribution to the Company’s performance. The Directors are also thankful to all other stakeholders for their valuable sustained support to the Company.

By Order of the Board

Place: Hyderabad

T. Sandeep Kumar Reddy

Date: 13.08.2016_ Chairman_


Mar 31, 2015

Dear Members,

Your Directors present the Twenty Fourth Annual Report along with the Audited Financial Statements and the Auditor's Report thereon for the period ended 31st March, 2015.

FINANCIAL RESULTS (Rs. in lakhs)

31.03.2015 31.03.2014

Net Sale Income from Operations 25,570.12 21,374.81

Other Operating Income 85.64 101.19

Income from operations 25,655.76 21,476.00

Other Income 25.98 30.41

Total Income 25,681.74 21,506.41

Total Expenditure 24,124.73 20,188.53

Finance Charges 939.41 757.50

Depreciation 237.38 425.03

Provision for Taxation — —

Net Profit / (Loss) 393.21 135.35

PERFORMANCE DURING THE YEAR UNDER REVIEW

STARCH DEPARTMENT

The Company has a Crushing Capacity of 1,35,000 MTPA considering Medak plant Crushing Capacity of 90,000 MTPA and the Second Unit located at Biccavole, East Godavari District Crushing Capacity of 45,000 MTPA. The Company crushed 88,836 MTs maize as against 71,935 MTs maize during the previous year. The management is also trying to achieve crushing of installed Capacity of both Units of the Company.

SORBITOL DIVISION

The Company has present crushing capacity of Sorbitol at 17000 TPA and produced 8,754 MTs of Sorbitol during the Financial Year ended 31st March, 2015. The Company also trying to achieve installed capacity of the Sorbitol Plant.

The Company recorded net profit of Rs.393.21 Lakhs as against a net profit of Rs.135.35 Lakhs and the management is hoping that performance of the Company will improve further in the years to come.

AMOUNT TO BE TRANSFERRED TO RESERVES AND DIVIDEND PROPOSED

In the current financial year, No amount was transferred to reserves and the Board of Directors of the Company does not recommend any dividend for the financial year under review.

PUBLIC DEPOSITS:

During the year, the Company has not accepted any deposits covered under the Chapter V of the Companies Act, 2013

STATUTORY AUDITORS:

At the 23rd Annual General Meeting(AGM) held on 30th,September 2014, M/s M Bhaskara Rao & Co., Chartered Accountants, were appointed as Statutory Auditor of the Company to hold office from the conclusion of AGM held on September 30, 2014 to the conclusion of the 28th AGM (subject to ratification of the appointment by the members at every AGM held after that AGM) at such remuneration as may be decided by the Board of Directors. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditor shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s M Bhaskara Rao & Co., Chartered Accountants, as statutory auditors of the Company, is hereby placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

INTERNAL AUDITORS:

The Board of Directors based on the recommendation of the Audit Committee has re-appointed M/s. M O S & Associates, Chartered Accountants, Hyderabad, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on quarterly basis.

SECRETARIAL AUDITOR:

Mr. Y. Koteswar rao, Practicing Company Secretary, was appointed to conduct the Secretarial Audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 read with Rule 9 there-under. The secretarial audit report for FY 2014-15 annexed to this Board's Report as Annexure-I.

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, and In accordance with the Audit Committee recommendation the Board of Directors had appointed M/s. K.K. Rao & Associates, Cost Accountants, Hyderabad to Conduct the Cost Audit for the Financial Year 2014-2015 . M/s. K.K. Rao & Associates, Cost Accountants, submitted the Cost Audit Report for the Financial Year ended 31st March, 2015.

The company has received a letter from M/s N.S.V.Krishna Rao & Co, Cost Accountants, for the appointment as the Cost Auditor of the Company to the effect that their appointment, if made, would be within the prescribed limits under section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for appointment. The Board of directors of the company 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, and also in accordance with the Audit Committee recommendation at its meeting held on 14th August, 2015 appointed M/s N.S.V.Krishna Rao & Co, Cost Accountants,as the cost auditors of the company to conduct the audit of cost records maintained by the company as required by the Companies (Cost Records and Audit) Rules 2014 as amended from time to time.

DIRECTORS:

Smt. T. Sarita Reddy (DIN: 00017122), retires by rotation at the forth coming annual general meeting and being eligible offers herself for re-appointment Smt. T. sarita Reddy did her Master of Business Administration.

The independent directors of the company are highly qualified and stalwarts in their respective filed with wide and varied experience. They actively participate in the discussions at the board meeting and their suggestions have helped the company to grow at a rapid pace. The independent directors are paid sitting fees for attending the board and committee meetings. The nomination and remuneration committee has in place their criteria for determination of qualifications, positive attributes and independence of the directors, which they would consider as and when the company would be required to appoint the new independent directors. Pursuant to the provisions of Companies Act, 2013 and clause 49 of the listing agreement, the board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of working of its audit committee, nomination and remuneration committee, and stakeholders relationship committee . The manner in which the evaluation has been carried out has been explained in the corporate governance report. The manner in which the remuneration is paid to the directors, executive directors and senior level executives the company has also been explained in the corporate governance report. During the year, five board meetings and four audit committee meetings were convened and held the details of which are given in the corporate governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

INDEPENDENT DIRECTORS:

The Company has received disclosures from the Independent Directors confirming their independence in terms of the Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act, 2013. The Letter of Appointment issued to the Independent Directors are available under investors section on the website of the Company http://www.gayatribioorganics.com

A Brief Profile of the Directors of the Company is annexed herewith to this report as Annexure II

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were at arm's length basis. There are no materially significant related party transactions made by the company with promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the company at large. A detailed report on material contracts and arrangements made during the year 2014-15, being arm's length transactions have been reported and annexed hereto in form AOC-2 as Annexure - III and forms part of this report.

EXTRACT OF ANNUAL RETURN:

The extract of annual return in form no. MGT-9 as provided under section 92 (3) of the Companies Act,2013 read with Rule 12 of the Companies (Management & Administration) Rules 2014 is annexed hereto as Annexure-IV and forms the part of this report.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014 are provided as Annexure-V to this Report.

No employee of the Company draws remuneration in excess of the limits set out in the Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE OUTGO:

Information required under section 134(3) (m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed to this Board's Report as Annexure-VI.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has in place an Internal Control System, commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

SUBSIDIARIES:

The Company has no subsidiaries as on the date of 31st March, 2015.

NOMINATION AND REMUENRATION POLICY:

A committee of the Board named as "Nomination and Remuneration Committee" has been constituted to comply with the provisions of section 178, Schedule IV of the Companies Act and Clause 49 of the Listing Agreement and to recommend a policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and Evaluation of their performance and to recommend the same to the Board from time to time.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

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.

MATERIAL CHANGES:

There are no material changes and commitments, affecting the financial position of the company which has occurred between the end of the financial year under review of the company to which the financial statements relate and the date of this board report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

During the year, the company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directors' confirm that:

i) In the preparation of annual accounts for the financial year ended 31st March, 2015 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

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 true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2015 and of the profit and loss of the Company for the year;

iii) The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The Directors had prepared the annual accounts on a 'going concern' basis;

v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a Whistle Blower Policy framed to deal with instance of fraud and mismanagement, if any in the Company. The details of the Policy are explained in the Corporate Governance Report and also posted under investors section on the website of the Company http://www.gayatribioorganics.com

RISK MANAGEMENT

Your Directors have constituted a Risk management Committee and defined its roles and responsibilities, which focuses that all the risks that the organization faces such as Strategic, Operational, Compliance, Financial and other risks have been identified and assessed and there is adequate risk management infrastructure in place capable of addressing those risks.

INTERNAL COMPLAINTS COMMITTEE

In Pursuance of Section 4 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to protect women from sexual harrassment at the work palce, your Company constituted a committee known as "Internal Complaints Committee' to ensure proper compliance of the Act.

STATEMENT ON DEVELOPMENT AND IMPLEMENATION OF RISK MANAGEMENT POLICY:

The statement on development and implementation of risk management policy is given under the management discussion and analysis report which is attached with this annual report.

CORPORATE SOCIAL RESPONSIBILTY (CSR) POLICY AND CSR INITIATIVES:

Your Company does not fall under the purview of Sec.135 of the Companies Act, 2013. Hence the Company not required to Constitute Corporate Social Responsibility Committee.

CORPORATE GOVERNANCE REPORT:

Your Company has complied with the requirements of Clause 49 of the Listing Agreement entered with the Stock Exchange. A separate report on corporate governance forms the part of the annual report. A certificate from the Practicing Company Secretary regarding compliance of conditions of corporate governance also forms the part of the annual report.

HUMAN RESOURCES:

Your Company considers its Human Resources as the key to achieve its objectives. The unflinching commitment of the employees is the driving force behind the Company's vision. Your Company appreciates the spirit of its dedicated employees.

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.

OUTLOOK FOR THE FINANCIAL YEAR 2015-16

It is gratifying to say that the products of this Company are well accepted in the market and are being patronized by the major clients. The Company is hopeful of achieving 100% of the installed capacity of both the units. However, the availability of maize crop and working Capital will be the key factors for achieving the targeted results of the Company.

CAUTIONARY STATEMENT

Statements in this "Management Discussion & Analysis" may be considered to be "forward looking statements" only. Actual results could differ materially from those expressed or implied within the meaning of applicable securities laws or regulations.

LISTING OF SECURITIES

(a) The Company's Shares are listed with BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 023.

(b) The Company paid Listing fees for the year 2015-16 to BSE Limited.

REPLY TO ADVERSE REMARKS OF AUDITORS' REPORT

With regard to qualified opinion on trade receivables which includes certain trade receivables amounting to Rs.2,25,75,901/- which are overdue and outstanding for a period of more than three years, the management believes that the same are fully recoverable as it is and the company is in the process of collecting the amounts and no provisions are required as on date. Point No. VII (a) of Annexure to Auditors' Report, with regard to irregularity and serious delays in remitting the Provident fund, Employees State Insurance, Service Tax, Income Tax, Customs Duty Excise duty, Sales tax and other material statutory dues were due to working capital constraints.

Point No. IX of Annexure to Auditors' Report, delays in payment of dues to bankers and financial institution are also owing to working capital constraints.

ACKNOWLEDGEMENTS:

Your Directors would like to place on record their sincere appreciation and gratitude to all Financial Institutions, Company's Bankers, Shareholders, Government Agencies, Suppliers, Customers Co-operation and support during the year and their confidence in its management. The Directors wish to convey their appreciation to all the employees for their enormous personal efforts as well as their collective contribution to the Company's performance. The Directors are also thankful to all other stakeholders for their valuable sustained support to the Company.

By Order of the Board

Place: Hyderabad T. Sandeep Kumar Reddy Date: 14.08.2015 Chairman


Mar 31, 2014

Dear Members,

The Directors present the Twenty Third Annual Report along with the Audited Financial Statements and the Auditor''s Report thereon for the period ended 31st March, 2014.

FINANCIAL RESULTS (Rs. in lakhs) 31.03.2014 31.03.2013

Net Sale Income from Operations 21,374.81 15,120.60

Other Operating Income 101.19 72.41

Income from operations 21,476.00 15,193.01

Other Income 30.41 11.88

Total Income 21,506.41 15,204.89

Total Expenditure 20,188.53 13,973.13

Finance Charges 757.50 747.60

Depreciation 425.03 394.57

Provision for Taxation — —

Net Profit / (Loss) 135.35 89.59

PERFORMANCE DURING THE YEAR UNDER REVIEW STARCH DEPARTMENT

The Company has a Crushing Capacity of 1,35,000 MTPA considering Medak plant Crushing Capacity of 90,000 MTPA and the Second Unit located at Biccavole, East Godavari District Crushing Capacity of 45,000 MTPA. The Company crushed 67,409 MTs maize as against 71,935 MTs maize during the previous year. The management is also trying to achieve optimum level of crushing of installed Capacity of both Units of the Company.

SORBITOL DIVISION

The Company has present crushing capacity of Sorbitol at 17000 TPA and produced 8,236 MTs of Sorbitol during the Financial Year ended 31st March, 2014. The Company also trying to achieve optimum level of installed capacity of the Sorbitol Plant.

The Company recorded net profit of Rs.135.35 Lakhs as against a net profit of Rs.89.59 Lakhs and the management is hoping that performance of the Company will improve further in the years to come.

EXPORTS

The Company made exports of Starch amounting to Rs. 4,42,67,160/- during the year and the company is foreseeing good opportunities in export market for the years to come.

OUTLOOK FOR THE FINANCIAL YEAR 2014-15

It is gratifying to say that the products of this Company are well accepted in the market and are being patronized by the major clients. The Company is hopeful of achieving 100% of the installed capacity of both the units. However, the availability of maize crop, power and working Capital will be the key factors for achieving the targeted results of the Company.

CAUTIONARY STATEMENT

Statements in this "Management Discussion & Analysis" may be considered to be "forward looking statements" only. Actual results could differ materially from those expressed or implied within the meaning of applicable securities laws or regulations.

LISTING OF SECURITIES

(a) The Company''s Shares are listed with BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 023.

(b) The Company has paid Listing fees for the year 2014-15 to BSE Limited.

DIRECTORS

In accordance with the provisions of the Companies Act, 2013 Sri. T. Sandeep Kumar Reddy and Smt. T. Sarita Reddy, who retires by rotation in this Annual General Meeting and being eligible offers themselves for reappointment.

Sri C. V. Rayudu, Whole Time Director has been re-appointed by the Board w.e.f. 28th May, 2014 subject to the approval of members and the Central Government.

Sri. T.G. Pandya, Sri. T. R. Rajagopalan and Sri. J. N. Karamchetti, Independent Directors are being appointed for a term of 5(five) consecutive years as per provisions of Sec.149 of the Companies Act, 2013 and the rules made there under.

Sri. P. Maruthi Babu, Director on the Board has resigned from the office of the Director w.e.f. 14th August, 2014. The Board has approved his resignation and appreciated his services during his tenure as Director of the Company

APPOINTMENT OF AUDITORS

The Members are requested to consider the re-appointment of M/s. M. Bhaskara Rao & Co, (Reg. No. 00459S) Chartered Accountants, 5-D, Fifth Floor, 6-3-652, Kautilya Apartment, Raj Bhavan Quarters Colony, Somajiguda, Hyderabad, Telangana 500082 as Statutory Auditors for a term of 5 (Five) consecutive years i.e. till the conclusion of the 28th AGM as per the provisions of Section 139 of the Companies Act, 2013 and the rules made thereunder.

COST AUDITORS

The Cost Auditors M/s. K.K. Rao & Associates, Cost Accountants, Hyderabad has submitted the Cost Audit Report for the Financial Year ended 31st March, 2014 to the Board and the said report should be filed with the Central Government on or before 30th September, 2014.

The Board has reappointed M/s. K.K. Rao & Associates, Cost Accountants as the Cost Auditor to carry out the Cost Audit of the Company for the financial year 2014-15.

PARTICULARS OF EMPLOYEES

There are no employees drawing remuneration exceeding the limits as specified under the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended time to time.

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

The information required under Section 217 (1) (e) of the Companies Act 1956, read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings/ Outgo is appended hereto and forms part of this report as Annexure - A.

REPLY TO ADVERSE REMARKS OF AUDITORS'' REPORT

With regard to qualified opinion on trade receivables which includes certain trade receivables amounting to Rs. 3,11,63,794/- which are overdue and outstanding for a period of more than one year, the management believes that the same are fully recoverable as it is and the company is in the process of collecting the amounts and no provisions are required as on date.

Point No. 9 (a) of Annexure to Auditors'' Report, with regard to irregularity and serious delays in remitting the Provident fund, Employees State Insurance, Service Tax, Income Tax, Customs Duty Excise duty, Sales tax and other material statutory dues were due to working capital constraints.

Point No. 11 of Annexure to Auditors'' Report, on default/delays in payment of dues to bankers and financial institution are also owing to working capital constraints. However, there are no overdues to banks and Financial Institutions as on date.

CORPORATE GOVERNANCE

Your Company is fully committed to the philosophy of transparency and believes in conducting its business with due compliance of all the applicable laws, rules and regulations. Pursuant to Clause 49 of the Listing Agreement, a report on Corporate Governance along with Practicing Company Secretary Certificate on its compliance, a certificate of the Chairman regarding adoption of Code of Conduct and Certificate by the Whole Time Director and CFO in respect of financial reporting is given in the Annexure - B, Annexure- C, Annexure-D and Annexure - E respectively which forms part of this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

According to Section 217 (2AA) of the Companies Act, 1956 your directors state:

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

(ii) that 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 ended 31st March, 2014 and of the profit and loss of the company for that period:

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

PUBLIC DEPOSITS

The Company has not accepted any deposits as per Section 58A of the Companies Act, 1956 during the year under review.

ACKNOWLEDGEMENTS

Your Directors would like to place on record their sincere appreciation and gratitude to all Financial Institutions, Company''s Bankers, Shareholders, Government Agencies, Suppliers, Customers Co-operation and support during the year and their confidence in its management. The Directors wish to convey their appreciation to all the employees for their enormous personal efforts as well as their collective contribution to the Company''s performance. The Directors are also thankful to all other stakeholders for their valuable sustained support to the Company.

By Order of the Board Place: Hyderabad T. Sandeep Kumar Reddy Date: 14.08.2014 Chairman


Mar 31, 2012

To The Members of Gayatri BioOrganics Limited

The Directors present the Twenty First Annual Report along with the Audited Financial Statements and the Auditor's Report thereon for the period ended 31st March, 2012.

FINANCIAL RESULTS (Rs. in lakhs)

31.03.2012 31.03.2011

Net Sale Income from Operations 12880.08 8,652.64

Other Operating Income 211.26 59.11

Income from operations 13091.31 8,711.75

Other Income 8.96 31.40

Total Income 13100.26 8,743.15

Total Expenditure 12238.09 7,798.38

Finance Charges 763.96 312.81

Depreciation 378.76 306.39

Provision for Taxation - 38.50

Net Profit / (Loss) (280.54) 287.07

PERFORMANCE DURING THE YEAR UNDER REVIEW

STARCH DIVISION

The performance of this plant is better when compared to the previous year as the Company crushed 81,536 MTs maize as against 53,730 MTs maize during the previous year. The management is also trying to achieve 100% installed Capacity of both Units of the Company.

SORBITOL DIVISION:

The Company produced 7,325 MTs of Sorbitol during the Financial Year ended 31st March, 2012 which is nearly 86% of the installed capacity. The Company also targeting to achieve 100% installed capacity of the Sorbitol Plant.

The Company registered good business in terms of turnover but the operations of the Company for the whole Financial Year recorded a net loss due to High cost of Raw Material and unremunerative pricing of finished products of the Company. There has been a general slump in the Starch market because of lack of demand from textile industry, which is one of the largest consumers.

EXPORTS

The Company made exports of Starch amounting to Rs. 2,74,63,666/- during the year and the company is foreseeing good opportunities in export market for the years to come.

OUTLOOK FOR THE FINANCIAL YEAR 2012-13

It is gratifying to say that the products of this Company are well accepted in the market and are being patronized by the major clients. The Company is hopeful of achieving 100% of the installed capacity of both the units. However, the maize crop during the year in the state is low and there is shortage of Maize and we are hopeful that the market will be settled in the second half of the year.

Your company has completed expansion of the production capacity recently. With this expansion the crushing Capacity is enhanced to 135000 MTPA. Further, Two more Auto claves have been installed in Sorbitol division. As a result, the Sorbitol production can go up to 16000 MTPA. To overcome power shortage, the company is proposing to install a 3 MW power plant at Nandikandi Unit.

CAUTIONARY STATEMENT:

Statements in this "Management Discussion & Analysis" may be considered to be "forward looking statements" only. Actual results could differ materially from those expressed or implied within the meaning of applicable securities laws or regulations.

LISTING OF SECURITIES

(a) The Company's Shares are listed with Bombay Stock Exchange Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 023.

(b) The Company paid Listing fees for the year 2012-13 to Bombay Stock Exchange Limited.

DIRECTORS

Sri. T.R. Rajagopalan, who retires by rotation at the ensuing Annual General Meeting is eligible for reappointment and offered himself for re appointment

Sri. J.N. Karamchetti, who retires by rotation at the ensuing Annual General Meeting is eligible for reappointment and offered himself for re appointment

Smt. T. Sarita Reddy, who retires rotation at the ensuing Annual General Meeting is eligible for reappointment and offered herself for re appointment.

APPOINTMENT OF AUDITORS

The Members are requested to consider the re-appointment of M/s. B S R and Co, Chartered Accountants as Statutory Auditors from this Annual General Meeting to the conclusion of the next Annual General Meeting. The Board recommends their re-appointment.

COST AUDITORS

The Board of directors re-appointed M/s. Narasimha Murthy & Co, Cost Accountants, 3-6-365, 104 &105, Pavani Estates, Y.V.Rao Mansion, HimayathNagar, Hyderabad- 500 029, A. P. as cost auditors to carry out the Cost Audit for the Financial Year 2012-13.

PARTICULARS OF EMPLOYEES

There are no employees drawing remuneration exceeding the limits as specified under the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended time to time.

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

The information required under Section 217 (1) (e) of the Companies Act 1956, read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings/ Outgo is appended hereto and forms part of this report as Annexure - A.

AUDITORS REPORT

With regard to Point No. ix (a) of Annexure to Auditors' Report, there have been slight delays in remitting the Provident fund, Employees State Insurance, Service Tax, Income Tax, Excise duty and Sales tax due to administrative reasons.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement, a report on Corporate Governance along with Company Secretary Certificate on its compliance, certificate of the Chairman regarding adoption of Code of Conduct and Certificate by the Chairman and Vice President (Operations) in respect of financial reporting is given in the Annexure - B, Annexure- C, Annexure-D and Annexure - E respectively which forms part of this report.

The Ministry of Corporate Affairs has announced the Corporate Governance Voluntary Guidelines 2009. The preamble mentioned about good practices for adoption by the Companies, which are in addition to the existing ones and recommendatory in nature.

Your Company has reviewed the above guidelines to ensure the adherence of the same voluntarily to the extent possible, in line with the requirements. Accordingly, the recommendatory voluntary guideline pertaining to the tenure of Independent Director for a period not exceeding 6 years, the attention of the members drawn to the fact that in your Company the tenure of Sri P. Maruthi Babu and Sri. T.G. Pandya, as Independent Directors was crossed the recommendatory limit of 6 years. However, the Board felt the valuable guidance and contributions made by both the directors during their tenure as Independent directors in the growth of the Company are invaluable and decided to avail their guidance and wisdom for some more time for the better performance of the Company in the years to come. Hence, the Company could not able to adhere to the above referred recommendatory Corporate Governance Voluntary Guideline for the time being.

DIRECTORS' RESPONSIBILITY STATEMENT:

According to Section 217 (2AA) of the Companies Act, 1956 your directors state:

(i) that in the preparation of Annual Accounts for the year ended 31st March, 2012, the applicable accounting standards have been followed along with the proper explanation relating to material departures:

(ii) that 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 ended 31st March, 2012 and of the profit and loss of the company for that period:

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

PUBLIC DEPOSITS:

The Company has not accepted any deposits as per Section 58A of the Companies Act, 1956 during the year under review.

ACKNOWLEDGEMENTS:

Your Directors would like to place on record their sincere appreciation and gratitude to Financial Institutions, Bankers, Shareholders, Government Agencies, Suppliers, Customers and the Employees of the Company for their Co-operation and support during the year.

By Order of the Board

Place: Hyderabad T. Sandeep Kumar Reddy

Date: 13.08.2012 Chairman


Mar 31, 2011

The Members of

Gayatri Bio Organics Limited

The Directors present the Twentieth Annual Report along with the Audited Financial Statements and the Auditor's Report thereon for the period ended 31st March, 2011.

FINANCIAL RESULTS Rs. in lakhs

31.03.2011 31.03.2010

Income from Operations 8,652.64 6,164.41

Other Income 90.51 62.67

Total Income 8,743.16 6,227.08

Total Expenditure 7,798.38 5,698.64

Finance Charges 312.81 84.58

Depreciation 306.39 294.68

Provision for Taxation 38.50 -

Net Profit / (Loss) 287.07 149.18

PERFORMANCE DURING THE YEAR UNDER REVIEW

SORBITOL DIVISION

The Company produced 7,313 MTs of Sorbitol during the Financial Year ended 31st March, 2011 which is nearly 85.53 % of the installed capacity. The Company also targeted achieving 100% installed capacity of the Sorbitol Plant and succeeded in achieving the same by end of the quarter.

STARCH DEPARTMENT

Even though the performance of this plant is better when compared to previous year, there is still scope for improvement if the market conditions are more conducive. The Company crushed 53,730 MTs maize as against 40,007 MTs maize during the previous year.

The Company has also acquired another existing Starch Plant with a installed capacity of 45000 MTPA located at Balabhadrapuram Village, Biccavole Mandal, East Godavari District, Andhra Pradesh and also commenced the commercial production at the said unit. The benefits from this unit is expected to accrue from the second half of the year.

EXPORTS

The Company did not do any exports during the year since the prices in international markets continue to be un- remunerative.

OUTLOOK FOR THE FINANCIAL YEAR 2010-11

It is gratifying to say that the products of this Company are well accepted in the market and are being patronized by the major clients. The Company is hopeful of achieving 100% of the installed capacity.

The maize crop during the year in the state is good and bumper harvest is expected. With this scenario we are hopeful of achieving higher operational levels at both the units of the company.

LISTING OF SECURITIES

(a) The Company's Shares are listed with Bombay Stock Exchange Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 023.

(b) The Company paid Listing fees for the year 2011-12 to Bombay Stock Exchange Limited.

DIRECTORS

Sri. T.G. Pandya, who retires by rotation at the ensuing Annual General Meeting is eligible for reappointment and offered himself for re appointment

Sri. P.Maruthi Babu, who retires by rotation at the ensuing Annual General Meeting is eligible for reappointment and offered himself for re appointment

Sri. T. Sandeep Kumar Reddy, who retires rotation at the ensuing Annual General Meeting is eligible for reappointment and offered himself for re appointment.

Sri. C.V. Rayudu, Additional Director be regularized as Director at the ensuing General Meeting and his appointment as a Whole time Director also put before the members for their approval at ensuing Annual General Meeting.

APPOINTMENT OF AUDITORS

The Members are requested to consider the re-appointment of M/s. B S R and Co, Chartered Accountants as Statutory Auditors from this Annual General Meeting to the conclusion of the next Annual General Meeting. The Board recommends their re-appointment.

COST AUDITORS

The Board of directors during the year appointed M/s. Narasimha Murthy & Co, Cost Accountants, 3-6-365, 104 & 105, Pavani Estates, Y.V. Rao Mansion, Himayathnagar, Hyderabad 500029 as cost auditors for the financial year 2010-11.

PARTICULARS OF EMPLOYEES

There are no employees drawing remuneration exceeding the limits as specified under the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended time to time.

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

The information required under Section 217 (1) (e) of the Companies Act 1956, read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings/ Outgo is appended hereto and forms part of this report as Annexure - A.

AUDITORS REPORT

With regard to Point No. ix (a) of Annexure to Auditor's Report, there was a slight delays in remitting the Provident fund, Employees State Insurance and Sales tax due to administrative reasons. However, there were no outstanding dues to above authorities as on date except to Service Tax authorities for an amount of Rs 86,267/-.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement, a report on Corporate Governance along with Company Secretary Certificate on its compliance, certificate of the Chairman regarding adoption of Code of Conduct and Certificate by

Whole Time Director and GM (Finance) in respect of financial reporting is given in the Annexure - B, Annexure- C, Annexure-D and Annexure - E respectively which forms part of this report.

The Ministry of Corporate Affairs has announced the Corporate Governance Voluntary Guidelines 2009. The preamble mentioned about good practices for adoption by the Companies, which are in addition to the existing ones and recommendatory in nature.

Your Company has reviewed the above guidelines to ensure the adherence of the same voluntarily to the extent possible, in line with the requirements. Accordingly, the recommendatory voluntary guideline pertaining to the tenure of Independent Director for a period not exceeding 6 years, the attention of the members drawn to the fact that in your Company the tenure of Sri P. Maruthi Babu and Sri. T.G. Pandya, as Independent Directors was crossed the recommendatory limit of 6 years. However, the Board felt the valuable guidance and contributions made by both the directors during their tenure as Independent directors in the growth of the Company are invaluable and decided to avail their guidance and wisdom for some more time for the better performance of the Company in the years to come. Hence, the Company could not able to adhere to the above referred recommendatory Corporate Governance Voluntary Guideline for the time being.

Sri. C.V. Rayudu, Additional Director be regularized as Director at the ensuing General Meeting and his appointment as a Whole time Director also put before the members for their approval at ensuing Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT:

According to Section 217 (2AA) of the Companies Act, 1956 your directors state:

(i) that in the preparation of Annual Accounts for the year ended 31st March, 2011, the applicable accounting standards have been followed along with the proper explanation relating to material departures:

(ii) that 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 ended 31st March, 2011 and of the profit and loss of the company for that period:

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

PUBLIC DEPOSITS:

The Company has not accepted any deposits as per Section 58A of the Companies Act, 1956 during the year under review.

ACKNOWLEDGEMENTS:

Your Directors would like to place on record their sincere appreciation and gratitude to all Financial Institutions, Company's Bankers, Shareholders, Government Agencies, Suppliers, Customers and all the Employees of the Company for their Co-operation and support during the year.

By Order of the Board

Sd/-

Place: Hyderabad T. Sandeep Kumar Reddy

Date: 11.08.2011 Chairman

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