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Directors Report of Prajay Engineers Syndicate Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Twenty First Directors' Report of your Company along with the Audited Financial Statements for the financial year ended March 31,2015.

FINANCIAL RESULTS

Certain key aspects of your Company's performance during the financial year ended March 31, 2015, as compared to the previous financial year are summarized below:

(Rs. in lacs)

Particulars Year ended 31st March 2015

Standalone Consolidated

Gross Turnover 5812.10 11150.04

Profit before interest and Depreciation (1016.09) (1089.05)

Depreciation 608.49 637.87

Profit before Tax (2368.15) (2482.67)

Provision for taxation (7.97) 15.42

Profit / (Loss) after tax (2360.18) (2469.62)

Transfer to General Reserve - -

Dividend - -

EPS Basic (3.37) (3.53)

Diluted (3.37) (3.53)



Particulars Year ended 31st March 2014

Standalone Consolidated

Gross Turnover 8747.78 7267.17

Profit before interest and Depreciation (317.44) (1218.33)

Depreciation 347.07 358.10

Profit before Tax (797.92) (1756.58)

Provision for taxation (595.01) (576.85)

Profit / (Loss) after tax (202.91) (1216.29)

Transfer to General Reserve - -

Dividend - -

EPS Basic (0.30) (1.74)

Diluted (0.30) (1.74)

Review of Operations:

In FY'15, your Company reported consolidated revenues of 111.50 crore, an increase of 53% from 72.67 crores in FY'14. However, EBIDTA stood at Rs. (12.53) crore, a decrease of 1% from Rs. (12.64) crore in the previous year. Net profit after tax, minority interest and prior period items was at Rs. (24.70) crores, a decline of 103 % from Rs. (12.16) crores. The EPS for FY'15 stood at (3.53) as compared to (1.74) for FY'14.

Due to lackluster demand scenario, continued high borrowing costs and volatile market conditions, your company could achieve a turnover of Rs. 58.12 crores only against Rs. 87.47 crores for the previous year (on standalone basis), a decline of 33.56%. The net loss after tax is Rs. (23.60) crores against a loss of Rs. (2.02) crores for the previous year. The increase in net loss is mainly due to increase in finance and depreciation components.

However, your Company's Balance Sheet as at 31st March, 2015 reflects a healthy position with a net worth of Rs. 636.39 crores. Net debt was Rs. 203.45 crores as on 31st March, 2015. The debt to equity ratio was at 0.32.

Your Company's development business primarily focuses on the development and sale of residential real estate which include houses, villas and apartments of varying sizes and integrated townships, with a focus on the mid income, high end and luxury residential developments.

Future Outlook

Your Company continues to implement its strategy to concentrate on its core business & geographies and to develop a right product mix well suited for the market.

Although FY2014-15 was a difficult year for the real estate sector, the long-term potential for the sector remains intact and it continues to be an important catalyst to the nation's overall economic growth.

Hyderabad's superior infrastructure, affordability and cosmopolitan ethos still make Hyderabad the choice of many home buyers. The Govt. of Telangana is aiming to rebuild brand 'Hyderabad' by concentrating on the information technology sector. Among the companies geared up for expanding their operations in and around Hyderabad are tech major such as Amazon, Google, Facebook, Microsoft, Cognizant and TATA Consultancy Services (TCS).

Yours company expects demand from the mid income residential segment to remain strong as we believe there is significant demand in this category across the country and state as well. Increasing disposable incomes, rapid urbanization and strong demographics are some of the trends favoring the mid-income residential market.

Dividend

Considering the market conditions, company's performance during the year under review, reduced liquidity position in the market as a whole and with a view to conserve the resources for the smooth operations of the company in future, your Directors have not recommended any dividend for the year under review.

Fixed Deposits

The Company has not accepted / renewed any public deposits during the year under review. The company has repaid all the deposits before 31.3.2015 but however an amount of Rs. 1,79,839/- (including interest) is still unclaimed by the depositors.

The company, if necessary, will start accepting deposits after complying with the provisions of Sec. 73 & 74 of Companies Act, 2013 and Companies (Acceptance of Deposits) rules, 2014.

Share Capital

There is no change in the capital structure of the company during the year under review.

Directors & Key Management Personnel

Board of Directors, in compliance with Sec. 149, 161 of the Companies Act, 2013 read with Clause 49 of the Listing Agreement and on the recommendations of the Nomination and Remuneration Committee, appointed Mrs. V. Padma (DIN-07145633) as Additional Director (in the capacity of Independent Director) on 31.3.2015.

Mrs. V. Padma will be holding the office of Director till the date of ensuing Annual General Meeting of the Company. The Company has received notice under Section 160(1) of the Act from a member proposing her candidature for appointment as Director. Mrs. V. Padma possess the required skills, experience and knowledge in the fields of management, administration, business strategy.

Pursuant to the provisions of Sec. 152 of the Companies Act, 2013 and Article 86 of the Articles of Association of the Company, Mr. Sumit Sen (DIN-01028417) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. Further the term of Mr. Sumit Sen as Whole Time Director expired on 31.1.2015. The Board at its meeting held on 28.1.2015, subject to the approval of shareholders, re-appointed him as Whole Time Director for a period of 2 years, effective from 1.2.2015 on the recommendations of the Nomination and Remuneration Committee. Your Board of Directors recommend for his re-appointment.

The term of Mr. D. Vijay Sen Reddy, Managing Director, expired on 13.2.2015.The Board of Directors, on the recommendations of the Nomination and Remuneration Committee, re-appointed Mr. D. Vijay Sen Reddy (DIN-00291185) as Managing Director of the company at the board meeting on 28.1.2015, subject to the approval of shareholders, for a period of 2 years effective from 1.2.2015. Your Board of Directors recommend for his re-appointment.

Brief profile of the aforesaid Directors, is provided seperately in the Report on Corporate Governance.

Mr. P. Bhaskara Rao is the Group Chief Financial Officer and Mrs. Madhavi Latha is the Company Secretary of the Company.

Changes in Directors

Mr. D. Chakradhar Reddy, Independent Director has resigned to his office during the year under review.

Declarations by Independent Director:

All Independent Directors have submitted declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Clause 49 of the Listing Agreement.

Board Meetings:

During the year 2014-15, 09 (Nine) meetings were held by the Board of Directors including the separate meeting of independent directors which was held on 31.3.2015.

The details of board meetings and the attendance of Directors at such meetings are provided in the Corporate Governance Report.

Audit Committee

The Composition of the Audit Committee is provided in the Corporate Governance Report and forms part of this report. All the recommendations made by the Audit Committee were accepted by the Board.

Corporate Governance Report

The Corporate Governance Report, as stipulated under Clause 49 of the Listing Agreement forms part of this Report. The requisite certificate from the Practicing Company Secretary, Mr. P. Konda Reddy confirming compliance with the conditions of corporate governance as stipulated under the aforesaid clause is attached to Corporate Governance Report.

Transfer to the Investor Education & Protection Fund (IEPF)

During the year under review, dividend unclaimed for more than 7 years amounting to 3,94,159/- (Rupees Three Lacs Ninety four thousand One Hundred and Fifty Nine only) pertaining to the financial year 2006-07, was transferred to the Investor Education and Protection Fund.

Industrial relations

Yours directors are happy to report that the industrial relations have been cordial at all levels throughout the year. Your directors record their appreciation for all the efforts, support and co-operation of all employees being extended from time to time.

Policy to prevent Sexual Harassment at the work-place

The Company is committed to creating and maintaining an atmosphere in which employees can work together, without fear of sexual harassment, exploitation or intimidation. Every employee is made aware that the company is strongly opposed to sexual harassment and that such behavior is prohibited both by law and by the Company. To redress complaints of sexual harassment, an Internal Complaints Committee has been formed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made there under. Ms. D. Nayanika Reddy is the Chairperson of the Internal Complaints Committee.

During the year ended March 31,2015, the ICC received nil complaints pertaining to sexual harassment.

Listing at Stock Exchanges

The equity shares of your Company are listed on NSE and BSE (the stock exchanges). The listing fees for the year 2015-16 have been paid to the stock exchanges.

CEO & CFO certification as per Cl. 49 of the Listing Agreement

As required by Clause 49 of the Listing Agreement, the CEO and CFO certification on the Financial Statements and the Internal Control Systems for financial reporting has been obtained from Mr. D. Vijay Sen Reddy - Managing Director & Chief Executive Officer and Mr. P. Bhaskara Rao - Chief Financial Officer and the same was reviewed by the Board of Directors and is annexed to the Corporate Governance Report.

Internal Audit & Controls

The company has appointed Mr. M. Shanker, B.Com. and MBA-Finance, as Internal Auditor of the company and takes his suggestions and recommendations to improve and strengthen the internal control systems. His scope of work includes review of operational efficiency, effectiveness of systems & processes, compliances and assessing the internal control strengths in all areas.

The Audit Committee reviews adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations including those relating to strengthening of the Company's risk management policies and systems.

Management Discussion & Analysis Report

The Management Discussion and Analysis Report as required under Clause 49 of the Listing Agreement with the stock exchanges forms part of this Report.

Subsidiary Companies & Consolidated Financial Statements

As on 31st March, 2015, the Company has 3 subsidiary companies in terms of the Act. A separate section containing a report on performance and financial position of each of subsidiaries, associates and joint ventures in Form AOC-1, is included in the consolidated financial statements of the Company.

The Company shall provide a copy of the annual accounts of its subsidiary companies to the members of the Company on their request. The annual accounts of its subsidiary companies will also be kept open for inspection at the registered office of the Company during business hours.

The consolidated financial statements of the Company and its subsidiaries, prepared in accordance with applicable accounting standards, issued by the Institute of Chartered Accountants of India and forms part of this Annual Report. In terms of Section 136 of the Companies Act, 2013 ('the Act'), financial statements of the subsidiary companies are not required to be sent to the members of the Company.

Significant and material orders passed by the Regulators or Courts or Tribunals:

There are no significant material orders passed by the regulators/courts/tribunals which would impact the going concern status of your Company and its future operations.

Statutory Auditor & his Report:

Auditor:

Mr. S.V. Rangan, Chartered Accountant (M. No. 022037) was appointed as the Statutory Auditor of the Company to hold office from the conclusion of 20th Annual General Meeting till the conclusion of the 23rd Annual General Meeting to be held in 2017, subject to ratification by the shareholders at every Annual General Meeting. Accordingly, your Board recommends for the ratification of appointment of Mr. S.V. Rangan as the Statutory Auditor of the Company for the financial year 2015-2016.

Certificate from the Auditor has been received to the effect that his re-appointment, if made, would be within the limits prescribed under Section 141(3)(g) of the Act and he is not disqualified for re-appointment.

Auditors' Report

(i) Emphasis of Matter given for Note 37(a) of the Standalone Financial Statements -is self explanatory and do not call for any further comments.

(ii) Emphasis of Matter given for Note 37(b) of the Standalone Financial Statements - is self explanatory and do not call for any further comments.

(iii) Explanation for point no.(a) of Consolidated Audit Report - in respect of note 35(c) of CFS.

Secretarial Auditor

The Board has appointed Mr. P. Konda Reddy, Practicing Company Secretary, to conduct Secretarial Audit for the FY 2014-15. The Secretarial Audit Report for the financial year ended 31st March, 2015 is an Annexure to this Report. The said report does not contain any qualification, reservation and adverse remarks.

Establishment of Vigil Mechanism:

The Company has established a vigil mechanism in the form of Whistle Blower Policy in line with Listing Agreement, to deal with instances of unethical and / or improper conduct, actual or suspected fraud, violation of company's code of conduct and suitable steps to investigate and correct the same. The details of the Whistle Blower Policy are furnished in the Corporate Governance Report and the same is posted on the website of the Company.

Extract of Annual Return

The extract of the Annual Return in Form MGT-9 as provided under Section 92(3) of the Act is given as Annexure to this Report.

Particulars of Loans, Guarantees and Investments:

The details of loans given, investments made, guarantees given and securities provided under Section 186 of the Companies Act have been provided in the notes to the standalone financial statements.

Particulars of Contracts or Arrangements with Related Parties

All contracts or arrangements with related parties, entered into or modified during the financial year, were on arm's length basis and in the ordinary course of business. All such contracts or arrangements have been approved by the Audit Committee.

During the year, the Company had certain material transactions referred to in Section 188 of the Companies Act, 2013 with related parties. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) of the Companies Act in Form AOC-2 is applicable and given as annexure to this Report. Attention of Members is drawn to the disclosure of transactions with related parties set out in Notes to Accounts - Note No. 34B forming part of the Standalone financial statements.

The company has formulated a policy on related party transactions in line with Listing Agreement. The policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and related parties.

Material changes and commitments affecting the financial position of the company:

There are no material changes and commitments affecting the financial position of the Company which have occurred between March 31,2015 and the date of this Report.

Risk management:

The company has a risk management policy and framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives, and enhance the company's competitive advantage. This framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

Your company has a Risk Management Committee and further details are set out in the Corporate Governance Report forming part of Directors' Report.

Conservation of Energy, Technology absorption and Foreign Exchange Earnings and Outgo:

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is appended as Annexure to this Report.

Particulars of Employees:

The percentage of increase in remuneration of each director, Chief Financial Officer, and Company Secretary during the financial year 2014-15, ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year 2014-15 and the comparison of remuneration of each KMP against the performance of the company are as under:

Sl. Name of the director/ Remune- % increase in No. KMP and designation ration remuneration of director/ in the financial KMP for year 2014-15 financial year 2014-15

1. Mr. D. Vijay Sen Reddy - 24,00,000 Nil Managing Director

2. Mr. K. Ravi Kumar - 18,00,000 Nil Whole Time Director

3. Mr. Sumit Sen 14,40,000 Nil

4. Mr. P. Bhaskara Rao - 10,44,000 Nil CFO

5. Ms. D. Madhavi Latha 6,36,000 Nil



Sl. Name of the director/ Ratio of remune- Comparison of No. KMP and designation ration of each the remuneration director/to of the KMP median remune- against the ration of performance of employees the company

1. Mr. D. Vijay Sen Reddy - 22.22 The remuneration Managing Director of the Directors & KMPs is well 2. Mr. K. Ravi Kumar - 16.67 within the Whole Time Director industry limits and in tandem with the 3. Mr. Sumit Sen 13.33 performance of the company

4. Mr. P. Bhaskara Rao - 9.67 CFO

5. Ms. D. Madhavi Latha 5.89

During the period under review, no employee of the company is employed throughout the year and in receipt of Rs. 60 lacs or more, or employed for part of the year and in receipt of Rs. 5 laks or more a month, under Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Nomination & Remuneration Committee:

Your company has a Nomination and Remuneration Committee and further details are set out in the corporate governance report forming part of the Directors' Report.

The board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Key Management Personnel and Senior Management including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178(3) of the Companies Act, 2013.

Board Evaluation

Your Company conducted a formal Board Effectiveness Review as part of its efforts to evaluate, identify improvements and thus enhance the effectiveness of the Board of Directors (Board), its Committees, and individual directors. This was in line with the requirements mentioned in the Companies Act and the Listing Agreement.

The Corporate HR team of the company worked directly with the Chairman and the Nomination and Remuneration Committee of the Board, to design and execute this process which was adopted by the Board.

Corporate Social Responsibility:

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2013 the company has constituted a Corporate Social Responsibility Committee and the details forms part of the Corporate Governance Report.

Human Resources:

Your Company recognizes "Human Resource" as its main asset. Your Company HR policy aims at enhancing individual capabilities for future readiness, driving greater employee engagement and strengthening employee relations further.

Considering the present market conditions, your Company has downsized its human resources and retaining only that are directly relevant to its growth at this stage. To attract and retain people, your Company provides a judicious combination of attractive career, personal growth and a lucrative compensation structure. Your Company places great importance on nurturing and retaining the best skills in the industry.

Code of Conduct & Declaration by MD & CEO:

Your Company has laid down a Code of Conduct for all Board members, Senior Management and Independent Directors of the company in line with the provisions of clause 49 of the Listing Agreement and Schedule V to Companies Act, 2013. The Code of Conduct has been posted on the website of the Company.

A declaration by the Managing Director & CEO stating that all the Board Members and senior management personnel have affirmed their compliance with the Code of Conduct for the financial year ended March 31, 2015, is annexed to the Corporate Governance Report.

Directors' Responsibility Statement

In terms of provisions of Section 134(5) of the Act, your Directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and the profit and loss of the Company for that period;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this 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.

Acknowledgements

Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the vendors and stakeholders including financial institutions, banks, Central and State Government authorities, customers and other business associates, who have extended their valuable and sustained support and encouragement during the year under review. It will be the Company's endeavour to build and nurture these strong links with its stakeholders.

Your Directors wish to place on record their sincere appreciation to all the employees for their dedication and commitment. The hard work and unstinting efforts of the employees have enabled the Company to sustain and further consolidate its position in the industry.

On behalf of the Board

Sd/- Place : Hyderabad D. Vijay Sen Reddy Date :14th August, 2015 Chairman & Managing Director


Mar 31, 2014

Dear Members,

The Directors are pleased to present the Twentieth Annual Report, on the business and operations of Prajay Engineers Syndicate Limited together with the audited accounts for the financial year ended 31st March 2014.

FINANCIAL RESULTS

The Company''s revenue, expenditure and results of operations are presented as below showing both the consolidated and standalone financial results.

(Rs. in Lacs)

Year ended Particulars 31st March, 2014

Standalone Consolidated

Gross Turnover 8747.78 7267.17

Profit before interest and Depreciation (317.44) (1218.33)

Depreciation 347.07 358.10

Profit before Tax (797.92) (1756.58)

Provision for taxation (595.01) (576.85)

Profit/(Loss) after tax (202.91) (1216.29)

Transfer to General Reserve - -

Dividend - -

EPS

Basic (0.30) (1.74)

Diluted (0.30) (1.74)

(Rs. in Lacs)

Year ended Particulars 31st March, 2013

Standalone Consolidated

Gross Turnover 13776.53 9670.07

Profit before interest and Depreciation 1026.59 141.84

Depreciation 323.33 332.54

Profit before Tax 548.83 (350.22)

Provision for taxation 350.21 358.94

Profit/(Loss) after tax 198.61 (1220.94)

Transfer to General Reserve - -

Dividend - -

EPS

Basic 0.29 (1.75)

Diluted 0.29 (1.75)

REVIEW OF OPERATIONS AND OUTLOOK OF THE COMPANY:

During FY2013-14, subdued sales, increased unsold inventory levels and high leverage undermined the sector''s performance. Political uncertainty, slow economic growth, sustained weakening of the Indian Rupee, rising inflation and hardening interest rates continued to be the key barriers to improving demand.

The divison of state into two, most talked about elections after bifurcation, the forming of new governments, immensely affected the sentiments of the home buyers in the State especially in Hyderabad and surroundings, and made the investors to adopt a wait and watch policy. Hence the overall performance of the company is affected and the revenues are reduced by around 40% when compared to last year''s revenues.

Although financial year 2013-14 was a difficult year for the real estate sector the long term potential for the sector remains intact and it continues to be an important catalyst to the nations''s overall economic growth.

With the real estate markets and customers sentiments closely correlated to the overall growth in the Indian economy, your company expects that the real estate industry would continue to remain under pressure for the next fiscal year. However, your company is committed to meet and exceed the expectations of all its stakeholders.

DIVIDEND

Considering adverse economic environment during the year 2013-14 and reduced liquidity position in the market as a whole and with a view to conserve the resources for the smooth operations of the company, your Directors have not recommended any dividend for the year under review.

FIXED DEPOSITS:

During the financial year ended 31.3.2014, the company has not accepted fresh deposits. The company has no overdue deposits except unclaimed deposits. Interest is served regularly as per the terms of the deposit scheme.

Broadly Sec. 73 & 74 of Companies Act, 2013 provide that the company may accept deposits from members and / or public on passing the resolution in general meeting of the members of the company. The company, if necessary, will start accepting deposits after complying with the provisions of sec. 73 & 74 and Companies (Acceptance of Deposits) rules, 2014.

SHARE CAPITAL

There is no change in the capital structure of the company during the year under review.

TRANSFER TO THE INVESTOR EDUCATION & PROTECTION FUND (IEPF)

According to Section 205C of the Companies Act, 1956, read with Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001 the unclaimed dividend amounting to 5,16,602/- (Rupees Five Lacs Sixteen Thousand Six Hundred and Two only) for the financial year 2005-06, was transferred to the Investor Education and Protection Fund established by the Central Government during the year under review.

DIRECTORS

The Board of Directors of your Company comprises of 7 (Seven) Directors as on the date of this report representing the optimum blend of professionalism, knowledge and having varied experience in different disciplines of corporate functioning. Of these, 4 (Four) Directors are Non-Executive Directors.

Mr. Ravinder Reddy, Director of the company resigned to his office during the year under review w.e.f. 21.9.2013 and Mr. D. Chakradhar Reddy, Independent Director has resigned to his office w.e.f. 29.4.2014.

Pursuant to the provisions of Sec. 149 of the Companies Act, 2013, Mr. M. Raja Gopal Reddy ceases to be an Independent Director w.e.f. 1.4.2014 (i.e. the date of commencement of the Companies Act, 2013), by virtue of his voting rights (together with his relatives) increasing by more than 2% in the total voting power of the company and is now only a Non-Executive Director Pursuant to provisions of Section 152 of the Companies Act, 2013 and Article 86 of the Articles of Association of the Company, Mr. K. Ravi Kumar is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. Your Board of Directors recommend for his re-appointment.

Brief profile of Mr. K. Ravi Kumar, the nature of his expertise in specific functional areas and the number of companies in which he holds directorships and membership/chairmanships of committees of the Board, as stipulated under Clause 49 of the listing agreement with the stock exchanges, are provided at the end of the notice and forms part of the Report on Corporate Governance section of the Annual Report.

The Companies Act, 2013 provides for appointment of Independent Directors. Sub-section (10) of Section 149 of the Companies Act, 2013 (effective from 1st April 2014) provides that Independent Director shall hold office for a term of up to five consecutive years on the Board of a Company and shall be eligible for re-appointment on passing a special resolution by the shareholders of the Company.

Further sub-section (11) states that no Independent Director shall be eligible for more than two consecutive terms of five years. Sub-section (13) states that the provisions of retirement by rotation as defined in subsections (6) of Section 152 of the Companies Act 2013 shall not apply to such Independent Directors. The Securities and Exchange Board of India (SEBI) vide its circular no. CIR/CFD/POLICY CELL/2/2014 dated 17th April 2014 has amended the Clause 49 of the Listing Agreement and as per the amended clause, the Director who has already served as an Independent Director for five years or more in a Company as on 1st October 2014 shall be eligible for appointment, for one more term of up to five years only.

In view of the above stipulations, the appointment of the following Independent Directors for a term of five years is proposed in the ensuing Annual General Meeting:

1. Mr. Vijay Kishore Mishra

2. Mr. N. Nageshwar Rao

3. Mr. S.K. Rudresh

Brief profile of the aforesaid Directors, the nature of their expertise in specific functional areas and the number of Companies in which they hold directorship and membership/chairmanship of committees of the Board, as stipulated under Clause 49 of the listing agreement with the stock exchanges, are provided at the end of the notice and forms part of the Report on Corporate Governance section of the Annual Report.

CORPORATE GOVERNANCE REPORT

Your Company endeavors to maximize the wealth of the shareholders by managing the affairs of the Company with a pre-eminent level of accountability, transparency and integrity.

A detailed report on corporate governance practices followed by your Company, in terms of Clause 49 of the Listing Agreement with stock exchanges, is provided separately in this annual report. The members are requested to refer to the same.

CERFICATION AS REQUIRED UNDER CL. 49(V) OF THE LISTING AGREEMENT

The Managing Director and Chief Financial Officer have given a certificate to the Board with regard to the financial statements for the year ending 31st March 2014, as contemplated under Clause 49 of the Listing Agreement and the same is annexed to the Corporate Governance Report.

INTERNAL AUDIT & CONTROLS

The company has an internal audit system. Its scope of work includes review of operational efficiency, effectiveness of systems & processes, compliances and assessing the internal control strengths in all areas.

The Audit Committee reviews adequacy and effectiveness of the Company''s internal control environment and monitors the implementation of audit recommendations including those relating to strengthening of the Company''s risk management policies and systems.

Further, the company proposes to strengthens its internal controls by taking appropriate measures from time to time as required by the nature and size of the business of the company or as may be required by the laws applicable from time to time.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A Management Discussion and Analysis Report as required under the Clause 49 of the Listing Agreement is annexed and forms part of the Director''s Report. The members are requested to refer to the same.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 and based on the representations received from the operating management, the Directors hereby confirm that:

i. in the preparation of accounts, the applicable accounting standards have been followed and that no material departure has been made from the same;

ii. selected accounting policies were applied consistently. Judgement and estimates that were reasonable and prudent were made to give a true and fair view of the Company''s state of affairs as at the end of the financial year and of the Company''s profits/loss for the year.

iii. proper and sufficient care has been taken to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, to safeguard the Company''s assets and to prevent and detect fraud and other irregularities.

iv. the annual accounts were prepared on a going concern basis.

SUBSIDIARY COMPANIES & STATEMENT UNDER SECTION 212 OF THE COMPANIES ACT, 1956

As on 31.3.2014 your company has 3 subsidiaries viz. Prajay Holdings Private Limited, Prajay Developers Private Limited (step-down subsidiary), Prajay Retail Properties Private Limited.

Pursuant to the provision of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its circular no. 2/2011 dated February 8, 2011 has granted general exemption from attaching the balance sheet, profit & loss account and other documents of the subsidiary companies with the balance sheet of the Company. The Board of Directors of your Company has, by a resolution, given consent for not attaching the balance sheet of the subsidiaries concerned. Accordingly, the annual accounts and other documents of the subsidiaries for the year ended 31st March 2014 are not attached to this Annual Report.

Pursuant to Section 212 of the Companies Act, 1956 a brief statement related to subsidiary companies has given as annexure to the balance sheet and the same forms a part of this Annual Report.

The annual accounts of subsidiaries and detailed information will be made available for inspection by any member of the Company at the registered office of the Company and also at the registered office of the concerned subsidiaries. The Company shall furnish a copy of annual accounts of subsidiaries to the members on demand.

The Audited Consolidated Financial statements in terms of Clause 32 of the Listing Agreement are prepared in accordance with the Accounting Standard AS-21 on consolidated financial statements read with Accounting Standard AS-23 as specified in the Companies (Accounting Standard) Rules, 2006.

AUDITOR & HIS REPORT

Mr. S.V. Rangan, Chartered Accountant, Statutory Auditor of the Company holds office till the conclusion of the ensuing Annual General Meeting and being eligible offered himself for re-appointment. The Company has received a certificate from the auditors to the effect that his re-appointment, if made, would be in accordance with the conditions as specified under Section 141 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.

The Directors recommend his re-appointment. A resolution proposing appointment of Mr. S.V. Rangan, Chartered Accountant as the Statutory Auditor of the Company pursuant to Section 139 of the Companies Act, 2013 forms part of the Notice.

Considering the observation of the statutory Auditor in his report that the existing internal audit system is not in commensurate with the nature and size of the business of the company, the company proposes to appoint an outside agency to strengthen the present team.

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

The information pertaining to conservation of energy, technology, absorption, foreign exchange earnings and outgo, as 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 is furnished below:

Conservation Of Energy, Technology Absorption:

Even though the company''s nature of business is construction and property development, which are not power intensive, the company is putting every effort to conserve and reduce energy consumption, wherever possible.

HUMAN RESOURCES

Your Company recognizes that "Human Resource" is its main asset. Your Company HR policy aims at enhancing individual capabilities for future readiness, driving greater employee engagement and strengthening employee relations further.

Considering the present market conditions, your Company has downsized its human resources and retaining only that are directly relevant to its growth at this stage. To attract and retain people, your Company provides a judicious combination of attractive career, personal growth and a lucrative compensation structure. Your Company places great importance on nurturing and retaining the best skills in the industry.

PARTICULARS OF EMPLOYEES

No employees of the company is in receipt of remuneration in excess of the limits prescribed under Sec.217(2A) of the Companies Act, 1956, read with the Companies (particulars of employees) rules, 1975 and as amended from time to time.

CODE OF CONDUCT

Your Company has laid down a Code of Conduct for all Board members and Senior Management of the Company. The Code of Conduct has been posted on the website of the Company.

In pursuance of Clause 49 of the Listing Agreement, the declaration by the Managing Director of the Company affirming compliance with the Code of Conduct by the Directors and senior management personnel forms part of the Corporate Governance Report.

APPRECIATIONS AND ACKNOWLEDGEMENTS

Your Company continues to strive to build shareholder value and your Directors look at the future with confidence. Your Directors place on record their appreciation for the co-operation and assistance received from investors, customers, business associates, bankers, vendors/suppliers and financial institutions. The Directors also thank the State Government, other Government Departments and Governmental Agencies for their cooperation and support.

Your Directors are especially thankful to the employees of the Company, its subsidiaries and associates at all levels, whose dedication, co-operation, support has enabled the company to withstand to the prevailing business conditions. Your Directors seek, and look forward to the same support during the future years of it''s'' journey.

On behalf of the Board

Sd/- Sd/- Place : Hyderabad D. Vijay Sen Reddy Sumit Sen Date :14th August, 2014 Managing Director Whole Time Director


Mar 31, 2013

To The Members,

The Directors have pleasure in presenting 19th Annual Report on the business and operations of the Company together with audited results for the financial year ended 31st March, 2013.

FINANCIAL RESULTS:

(Rs.in Lacs)

Year ended 31st March 2013 Year ended 31st March 2012 Particulars Standalone Consolidated Standalone Consolidated

Gross Turnover 13776.53 9670.07 7919.08 6920.30

Profit before interest and 1026.59 141.84 741.90 413.25

Depreciation

Depreciation 323.33 332.54 385.54 391.18

Profit before Tax 548.83 (350.22) 80.60 (254.03)

Provision for taxation 350.21 358.94 658.26 658.28

Profi t / (Loss) after tax 198.61 (1220.94) (577.66) (911.69)

Transfer to General Reserve

Dividend

EPS

Basic 0.29 (1.75) (0.83) (1.31)

Diluted 0.29 (1.75) (0.83) (1.31)

The year 2012-13 was muted for the property sector across Residential, Commercial and Retail Real Estate. An adverse economic environment, high infl ation and high interest rates continued to affect demand. Property developers continued to be constrained by reduced liquidity, rising project costs, approval delays and higher leverage.

Despite the constraints, your company''s gross turnover grew by 74% over the last year''s and posted a profi t after tax of Rs. 198.61 lacs.

For a detailed analysis on the performance of the company for the year under review, please refer to Management''s Discussion and Analysis section of the Annual Report.

DIVIDEND

Considering the adverse economic environment during the year 2012-13 and reduced liquidity position in the market as a whole and with a view to conserve the resources for the smooth operations of the Company, your Directors have not recommended any dividend for the year under review.

DEPOSITS

During the year under review, the company has accepted fresh deposits to the tune of Rs. 0.50 lacs and repaid matured / premature deposits to the tune ofRs. 5.41 lacs. The amount outstanding at the end of the year at 31.3.2012 is Rs. 39.32 lacs (including fresh & renewed deposits). Interest is served regularly as per the terms of the deposit scheme.

REPORT ON CORPORATE GOVERNANCE

A separate section on corporate governance with a detailed compliance report thereon is annexed and forms a part of the annual report in terms of Clause 49 (VI) of the Listing agreement with Stock Exchanges. The auditors'' certifi cate in respect of compliance with the provisions concerning corporate governance, as required by Clause 49 of the Listing Agreement is annexed to this Report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

A report on management discussion and analysis is given in a separate section in this Annual Report forming part of the Directors'' Report.

SUBSIDIARY COMPANIES

As on 31.3.2013 your company has 3 subsidiaries viz. Prajay Holdings Private Limited, Prajay Developers Private Limited (step-down subsidiary) and Prajay Retail Properties Private Limited.

Further to the application by one of the company''s subsidiary M/s. Prajay Realty Private Limited, to the Registrar of Companies under Fast Track Exist Scheme, the same has been approved and the company is dissolved.

As per Section 212 of the Companies Act, 1956, the company is required to attach the Directors'' report, Balance Sheet, and Profi t and Loss Account of the subsidiaries to it''s Annual Report.

The Ministry of Corporate Affairs, Government of India vide its circular no.2/2011 dated 8th February, 2011 has granted general exemption to holding companies from the provisions of Sec. 212 of the Companies Act, 1956 subject to fulfi llment of certain conditions mentioned therein. Accordingly the Annual Report for 2012-13 does not contain the fi nancial statements of the subsidiaries. However, a statement containing the fi nancial data of the subsidiaries has been furnished along with the Statement pursuant to Sec. 212(1) (e) of the Companies Act, 1956 and forms part of the Annual Report.

The Audited Annual Accounts and related information of the subsidiaries will be made available for inspection by any member of the Company/ it''s subsidiaries at the head offi ce of the company at Hyderabad during business hours.

The audited consolidated fi nancial statements in terms of Clause 32 of the Listing Agreement are prepared in accordance with the Accounting Standard AS-21 on consolidate fi nancial statements read with Accounting Standard AS-23 as specifi ed in the Companies (Accounting Standards) Rules, 2006.

DIRECTORS

As per Article 86 of the Articles of Association of the Company, Sri Vijay Kishore Mishra, Sri N. Nageshwara Rao and Sri M. Raja Gopala Reddy, Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment and your directors recommend their re-appointment at the ensuing Annual General Meeting.

Brief profi le of the directors proposed to be re-appointed, nature of their experience in specifi c functional areas is provided in the Corporate Governance Report.

AUDITORS

The Statutory Auditor Mr. S.V. Rangan, Chartered Accountant holds offi ce until the conclusion of the ensuing Annual General Meeting and has confi rmed his eligibility and willingness to accept offi ce of the Statutory Auditor for F.Y. 2013-14, if reappointed.

The Audit Committee and the Board of Directors recommend the re-appointment of Mr. S.V. Rangan, Chartered Accountant as Statutory Auditor of the company for F.Y. 2013-14 for shareholders'' approval.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors hereby confi rm that:

(i) in the preparation of Annual Accounts the applicable accounting standards have been followed and there has been no material departure;

(ii) the selected accounting policies were applied consistently and the directors 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 as at 31st March, 2013 and of the profi t of the Company on that date;

(iii) proper and suffi cient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis;

CEO''s DECLARATION AS REQUIRED UNDER CLAUSE 49 OF THE LISTING AGREEMENT:

Declaration as required under Clause 49(1) (D) (ii) of the Listing Agreement with regard to compliance of Code of Conduct of the Company is annexed to this Report.

PARTICULARS OF EMPLOYEES:

No employee was in receipt of remuneration in excess of the limits prescribed under Sec. 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence the prescribed information is not required to be given.

Clarifi cations to the observations made in Auditor''s Report:

i. Regarding Note 37(a) of the Financial Statements – As a result of economic slowdown and recession in realty sector the realization from customers are slow.

ii. Regarding Note 37(b) of the Financial Statements –Due to long term involvement in such projects, no provision has been considered necessary. Point no. vii of Annexure to Standalone Auditors Report:

The Audit Committee had elaborate discussions on the subject. The company has an equipped Internal Audit System and the team is headed by a fi nancial expert. Since it is been observed by the Auditor that the same is not commensurate with the size and nature of the business of the company, the company has resolved to initiate steps to strengthen the team.

Auditors'' Report on Consolidated Balance sheet:

i. Regarding Note 35(a) of the Consolidated Financial Statements – As a result of economic slowdown and recession in realty sector the realizations from customers are slow.

ii. Regarding Note 35 (b) of the Consolidated Financial Statements - Due to long term involvement in such projects, no provision has been considered necessary

DISCLOSURE OF PARTICULARS:

Information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is furnished below:

Conservation of Energy & Technology Absorption:

Even though the company''s nature of business is construction and property development, which are not power intensive, the company is putting every effort to conserve and reduce energy consumption.

Foreign Exchange Earnings and Outgo:

Foreign Exchange Earnings: Rs. Nil

Foreign Exchange Outgo: Rs. 7,41,000/-

ACKNOWLEDGEMENTS

Your directors take this opportunity to thank the Financial Institutions, Banks, Government and semi-Government agencies, suppliers and regulatory authorities, stock exchanges and all other stakeholders for their continued co-operation and support.

Your Directors also wish to place on record their appreciation for the continued co-operation and support extended by the customers, joint venture partners and associates.

For and on behalf of the Board

Place : Hyderabad D. Vijay Sen Reddy

Date : 17.09.2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting their 18th Annual Report on the business and operations of the Company together with the audited results for the financial year ended 31st March, 2012.

FINANCIAL RESULTS:

(Rs. in Lacs)

Year ended Year ended Particulars 31st March, 2012 31st March, 2011

Standalone Consolidated Standalone Consolidated

Gross Turnover 7919.08 6920.30 8830.87 8645.55

Profit before interest and

Depreciation 741.90 413.25 1707.31 1511.75

Depreciation 385.54 391.18 432.03 437.64

Profit before Tax 80.60 (254.03) 466.06 264.88

Provision for taxation 658.26 658.28 451.75 451.75

Profit after tax (577.66) (911.69) 14.31 (193.99)

Transfer to General Reserve -- -- -- --

Dividend -- -- -- -- EPS

Basic (0.83) (1.31) 0.02 (0.28)

Diluted (0.83) (1.31) 0.02 (0.28)

The year was characterized by sustained rise in inflation, as a result of a sharp increase in the prices of commodities. This was further exacerbated by the supply side constraints and increased borrowing costs. Rising interest rates, heavy taxation and soaring costs of raw materials and production cost has brought the real estate sector under pressure in the last financial year. Despite of all these odds, your company could achieve a gross turnover of Rs. 7919.08 lacs as against Rs. 8830.87 lacs during the previous year.

For a detailed analysis of the performance of the company for the year under review, please refer to Management's Discussion and Analysis section of the Annual Report.

DIVIDEND

The Board of Directors has not recommended any dividend for the financial year ended 31st March, 2012. DEPOSITS

During the year under review, the company has accepted fresh deposits to the tune of Rs. 6.65 lacs and repaid matured deposits to the tune of Rs. 19.60 lacs. The amount outstanding at the end of the year at 31.3.2012 is Rs. 43.58 lacs (including fresh & renewed deposits). As on 31st March, 2012 an amount of Rs. 0.50 lacs were matured but not claimed by the depositors. Interest is served regularly as per the terms of the deposit scheme.

DIRECTORS

Mr. D.S. Chandra Mohan Reddy, Chairman & Managing Director had expired on 24.1.2012 and Mr. D. Vijay Sen Reddy is appointed as new Chairman & Managing Director of the company for 3 years at the board meeting held on 14.2.2012.

Sri D. Chakradhar Reddy, and Sri Rudresh Veerabhadrappa, Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. Your Directors recommend their re- appointment at the ensuing Annual General Meeting.

Brief resume of the directors proposed to be appointed and re-appointed, nature of their experience in specific functional areas are provided in the Corporate Governance report.

DIRECTORS' RESPONSIBILITY STATEMENT

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

(i) in the preparation of Annual Accounts the applicable accounting standards have been followed and there has been no material departure;

(ii) the selected accounting policies were applied consistently and the directors 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 as at 31st March, 2012 and of the loss of the Company on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis;

PARTICULARS OF SUBSIDIARY COMPANIES - SEC. 212 OF THE COMPANIES ACT, 1956

As on 31.3.2012 your company has 4 subsidiaries viz. Prajay Holdings Private Limited, Prajay Developers Private Limited (step-down subsidiary), Prajay Retail Properties Private Limited and Prajay Realty Private Limited.

Your company has decided to close the non-operative subsidiary company namely Prajay Realty Private Limited. Accordingly, company has submitted the necessary application as per Sec. 560 of the Companies Act, 1956 under Fast Track Exit Mode for striking off the name of the company from the Register of Companies.

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors' Report, Balance Sheet, and Profit and Loss account of our subsidiaries to our annual report. The Ministry of Corporate Affairs, Government of India vide its circular no.2/2011 dated 8th February, 2011 granted general exemption to holding companies from the provisions of Sec. 212 of the Companies Act, 1956 subject to fulfillment of certain conditions mentioned therein. Accordingly the company has decided not to attach the details of its subsidiaries. However, a statement containing the financial data of the subsidiaries has been furnished along with the Statement pursuant to Sec. 212(1) (e) of the Companies Act, 1956 forming part of Annual Report.

The Annual Accounts of the subsidiaries and related detailed information will be made available free of cost to any member of the Company/ its subsidiaries seeking such information at any point of time and are also available for inspection by any member of the Company/ its subsidiaries at the registered office of the holding company and of the subsidiary companies concerned.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statements of the company are prepared in accordance with the accounting standard AS-21 on consolidate financial statements read with Accounting Standard AS-23 on accounting for investments in associates, listing agreement as prescribed by the Securities and Exchange Board of India.

AUDITORS

The Statutory Auditor Mr. S.V. Rangan, Chartered Accountant holds office until the conclusion of the ensuing Annual General Meeting and being eligible, is recommended for re-appointment. A certificate from the auditor has been obtained to the effect that the re-appointment, if made, would be within the limits as specified under Sec. 224(1B) of the Companies Act, 1956.

REPORT ON CORPORATE GOVERNANCE

A separate section on corporate governance with a detailed compliance report thereon is annexed and forms a part of the annual report in terms of Clause 49 (VI) of the Listing agreement with Stock Exchange. The Auditors' Certificate in respect of compliance with the provisions concerning corporate governance, as required by clause 49 of the listing agreement is also annexed.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

A report on management discussion and analysis is given in a separate section in this Annual Report forming part of the Directors' Report.

CEO's DECLARATION AS REQUIRED UNDER CLAUSE 49 OF THE LISTING AGREEMENT:

Declaration as required under Clause 49(1) (D) (ii) of the listing agreement with regard to compliance of code of conduct of the company is annexed to this Report.

PARTICULARS OF EMPLOYEES:

No employee was in receipt of remuneration in excess of the limits prescribed under Sec. 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence the prescribed information is not required to be given.

EMPLOYEE RELATIONS

Employee relations were cordial during the year and the Board would like to place on record its appreciation to all the employees of the Company for their continued support and services.

CLARIFICATIONS TO THE OBSERVATIONS MADE IN AUDITORS' REPORT:

PointNo.4 (a), (b) and (c):

i) Regarding Note 39(a) of the Financial Statements - As a result of economic slowdown and recession in realty sector the realizations from customers are slow.

ii) Regarding Note 39(b) of the Financial Statements - The Board has considered these alterations at the request of the respective customers and the formal documentation is being completed soon.

iii) Regarding Note 39(c) of the Financial Statements - Due to long term involvement in such projects, no provision has been considered necessary.

Point no. vii of Annexure to Auditors Report:

The Audit Committee had elaborate discussions on the said point. The company has initiated steps to see that the scope and coverage of internal audit is increased to commensurate with the nature and size of the business of the company.

Point No. 3(a), 3(b) and 3(c) of Auditors' Report on Consolidated Balance sheet:

i) Regarding Note 36(a) of the Consolidated Financial Statements - As a result of economic slowdown and recession in realty sector the realizations from customers are slow.

ii) Regarding Note 36(b) of the Consolidated Financial Statements - The Board has considered these alterations at the request of the respective customers and the formal documentation is being completed soon.

iii) Regarding Note 36(c) of the Consolidated Financial Statements - Due to long term involvement in such projects, no provision has been considered necessary.

DISCLOSURE OF PARTICULARS:

Information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is furnished below:

Conservation of Energy & Technology Absorption:

Even though the company's nature of business is construction and property development, which are not power intensive, the company is putting every effort to conserve and reduce energy consumption.

Foreign Exchange Earnings and Outgo:

Foreign Exchange Earnings: Rs. Nil

Foreign Exchange Outgo: Rs. 9,34,898/- lacs

ACKNOWLEDGEMENTS

Yours directors take this opportunity to thank the financial Institutions, Banks, Government and semi-Government agencies, suppliers and regulatory authorities, stock exchanges and all stakeholders for their continued co- operation and support to the company.

Your Directors also wish to place on record their appreciation for the continued co-operation and support extended by the customers, vendors, joint venture partners / associates.

For and on behalf of the Board

Place : Hyderabad D. Vijay Sen Reddy

Date : 31.08.2012 Chairman


Mar 31, 2010

The Directors have pleasure in presenting the 16th Annual Report together with the Audited Accounts for the year ended 31 st March 2010

FINANCIAL RESULTS:

Your companys performance during the year as compared with that during the previous year is summarized below:

Rs in Lacs

Particulars Year ended 31st March 2010 Year ended 31st March 2009

Standalone Consoli dated Standalone Consoli dated

Grass Turnover 8410.52 7153.09 8283.60 8285.82

Profit before interest and pepreciatiqn 2019.79 1432.94 2296.12 2.133.04

Depreciation 410.31 454.66 402.71 408.24

Profit before Tax 307.66 (323.55) 1.43.86 (273.64)

Provision for taxation 104.44 104.48 242.47 245.33

Profit after tax 203.22 (428.03) (98.61) (518.97)

Transfer to General Reserve - - - -

Dividend - - - -

EPS _ - - -

Basic 0.51 (1.07) (0.25) (1.31)

Diluted 0.29 (0.60) (0.25) (1.31)



The year 2009-10 was a very challenging year for the Company, in view of the overall economic downturn during the year. However, your company could report a gross turnover of Rs. 8410.52 lacs as against Rs. 8283.60 lacs for the previous year. For detailed analysis of the performance, please refer Managements Discussion and Analysis section of the Annual Report.

DIVIDEND

Keeping in view the expansion plans & other significant capital expenditure programmes, your directors have, after due deliberations, decided to plough back the funds available and hence, do not recommend any dividend for the financial year 2009-10.

DEPOSITS

During the year under review, the company has not accepted any deposits as per the provisions of Companies Act, 1956 and Companies (Acceptance of deposits) Rules, 1975.

DIRECTORS

At the board meeting held on 17th February 2010 Sri M. Raja Gopala Reddy has been co-opted as an additional directors of the company and pursuant to Sec. 260 of the Companies Act, 1956 will hold office till the date of the ensuing Annual General Meeting. Mr. Raja Gopala Reddy is a graduate of science with more than 30 years of experience in construction industry. The company has received a notice in writing from a member under Sec. 257 of the Companies Act, 1956 proposing his candidature for the office of director of the company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Sri Vijay Kishore Mishra and Sri N. Nageswara Rao, Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment and therefore the board recommends their re-appointment at the ensuing Annual General Meeting.

The brief resume/details relating to Directors who are to be appointed re-appointed are furnished in the Corporate Governance section.

DIRECTORS RESPONSIBILITY STATER

In compliance with Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

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

(ii) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit/loss of the Company for that period;

(Mi) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 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 going concern basis.

PARTICULARS OF SUBSIDIARY COMPANIES - SEC. 212 OF THE COMPANIES ACT, 1956

Pursuant to the provisions of Sec. 212 of the Companies Act, 1956, documents in respect of subsidiaries viz. Balance Sheet, Profit and Loss Account, Directors Report and Auditors Report are required to be attached to the balance Sheet of the holding company. An application was made to the government of India seeking exemption under Sec. 212 (8) of the Companies Act, 1956. The Government of India, Ministry of Corporate Affairs vide its letter no. 47/633-2010-CL-lll dated 12.08.2010 has granted exemption from the provisions of Sec. 212(1) of the Companies Act, 1956. Accordingly the said documents are not being attached with the balance sheet of the company.

The Annual Accounts of the subsidiaries and related detailed information will be made available free of cost to any member of the Company/ its subsidiaries seeking such information at any point of time and are also available for inspection by any member of the Company/ its subsidiaries at the Registered Office of the Company. The Annual Accounts of the said Subsidiaries will also be available for inspection, as above, at the Head Offices of the respective subsidiary companies.

The financial data of the subsidiaries has been furnished along with the Statement pursuant to Sec. 212(1)(e) of the Companies Act, 1956 forming part of Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 on consolidated financial statements, the audited consolidated financial statements are attached to this Annual Report.

AUDITORS

Mr. S.V. Rangan, Chartered Accountant has been appointed as Statutory Auditor of the company at the Extra Ordinary General Meeting held on 15th March 2010 in the casual vacancy arisen by the resignation of then Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants and holds office until the conclusion of the ensuing Annual General Meeting and being eligible, is recommended for re-appointment. A certificate from the auditor has been received to the effect that the re-appointment, if made, would be within the limits as specified under Sec. 224(1 B) of the Companies Act, 1956.

REPORT ON CORPORATE GOVERNANCE

Committed to good corporate governance practices, your company fully conform to the standards set out by various regulatory authorities and has implemented and complied with all of its major stipulations.

The Report on Corporate Governance along with the compliance certificate issued by Sri P. Konda Reddy, Practicing Company Secretary in line with clause 49 of the Listing Agreement, are attached and forms part of this Report.

MANAGEMENT DISCUSSIONS ANALYSIS REPORT:

Pursuant to clause 49 of the listing agreement, a report on management discussion and analysis (MDA) for the year under review is given in a separate section in this Annual Report.

CEOS DECLARATION AS REQUIRED UNDER CLAUSE 49 OF THE LISTING AGREEMENT:

Declaration as required under Clause 49(1) (D)(ii) of the listing agreement with regard to compliance of code of conduct of the company is annexed to this Report.

PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies ( Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors Report.

EMPLOYEE RELATIONS

Employee relations were cordial during the year and the Board would like to place on record its appreciation to all the employees of the Company for their continued dedicated services and performance.

CLARIFICATIONS TO THE OBSERVATIONS MADE IN AUDITORS REPORT:

PointNo.4(a)and(b):

a. As a result of economic slowdown and recession in realty sector the realizations from customers are slow.

b. Due to long term involvement in such projects, no provision has been considered necessary.

Point no. vi of Annexure to Auditors Report:

The Audit Committee had elaborate discussions on the said point. The company will take all steps to see that the scope and coverage of internal audit is increased to commensurate with the nature and size of the business of the company.

Point No. 3(c) of Auditors Report on Consolidated Balance sheet:

Interest on debentures issued by Prajay Holdings Private Limited (Subsidiary) is not provided for the detailed explanation given forC.16of Schedule 18of Consolidated Balance Sheet.

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

Particulars as prescribed under Section 217(1) (e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are as follows:

Conservation of Energy & Technology Absorption:

Since your company does not own any manufacturing facility, the requirements pertaining to disclosure of particulars relating to conservation of energy, research & development and technology absorption , as prescribed under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are not applicable. However, adequate measures have been taken to conserve and reduce energy consumption.

Foreign Exchange Earnings and Outgo:

Foreign Exchange Earnings Rs. 31.39 lacs

Foreign Exchange Outgo NIL

ACKNOWLEDGMENTS

Yours directors take this opportunity to thank the financial Institutions, Banks, regulatory authorities, stock exchanges and the stakeholders for their continued co-operation and support.

Your Directors also wish to record their appreciation for the continued co-operation and support received from the customers, vendors, employees of the company at various levels.

For and on behalf of the Board

Place: Hyderabad D.S.Chandra Mohan Reddy

Date : 14.08.2010 Chairman & Managing Director



 
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