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Directors Report of Sree Rayalaseema Hi-Strength Hypo Ltd.

Mar 31, 2016

DIRECTORS’ REPORT

To

The Members

The Directors have pleasure in presenting the Eleventh Annual Report of the Company for the year ended 31st March, 2016.

Financial Results: ( Rs. in lakhs )

Particulars

2015 - 2016

2014 - 2015

Profit before interest, Depreciation and Tax

4457.54

4712.51

Less : Interest

935.26

1160.97

Depreciation

971.68

975.77

Profit before Tax

2550.60

2575.77

Provision for Taxation & Deferred Income Tax

678.83

638.69

Profit after Tax

1871.77

1937.08

Add: Balance brought forward from previous year

12196.21

10051.56

Other adjustments

(359.47)

207.56

Balance carried forward to next year

13708.51

12196.21

Performance:

During the year the Company achieved turnover of Rs. 38106.37 lakhs against previous year turnover of Rs. 41114.96 lakhs. The profit before tax stood at Rs.2550.60 lakhs as against Rs.2575.77 lakhs for the previous year.

Dividend:

Your Directors have recommended a final dividend of Rs.1.50 (i.e.,15%) per equity share of face value Rs.10/- each for the financial year ended 31st March,2016 . The dividend payment is subject to approval of members at the ensuing Annual General Meeting. The total cash outflow on account of dividend on equity shares for the financial year 2015-16 would aggregate Rs.2,20,94387/-. The dividend will be paid to members whose names appear in the Register of Members as on 21.09.2016. The dividend payment date is 25.10.2016.

Scheme of Arrangement:

The Board of Directors of the Company in their meeting held on 19th September, 2015 approved draft Scheme of Arrangement between Company and its four Wholly Owned Subsidiary Companies. After receipt of NOC from Stock Exchanges BSE and NSE where the shares of the Company are listed, draft scheme was filed with Hon''ble High Court of Judicature at Hyderabad for the State of Telengana and Andhra Pradesh. The draft Scheme of Arrangement was approved by members in the Court convened Extra Ordinary General Meeting with Appointed date as 01.04.2016. Due to technical matters and subsequent developments the Company could not file the Company Petitions. The Board of Directors in their meeting held on 29.08.2016 had decided not to proceed with Scheme of Arrangement as it is not viable due to technical issues in respect of thermal and wind power generation undertakings, legal and tax matters. As per advice of counsels, the Company decided to drop the Scheme of Arrangement by not filing Company Petitions. There are no demerger of any undertakings as per proposed Scheme of Arrangement and status quo continue.

Board Meetings:

During the year 9(nine) Board meeting and 5(five) Audit Committee Meetings were held and the details of which are mentioned in Corporate Governance Report.

Reserves:

During the year the Company had transferred an amount of Rs.93,58,857/- to General Reserves.

Subsidiaries, Joint Ventues and Associate Companies :

As on 31.03.2016 your Company has four Wholly Owned Subsidiary Companies and one Associate Company. As required under SEBI(LODR) Regulations, 2015 and Sec129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the consolidated financial statements of your Company, its subsidiaries and Associate Company are provided in the Annual Report. The Consolidated financial statements have been prepared in accordance with AS 21, Consolidated Financial Statements and AS 23, Accounting treatment of investments of associate companies, issued under the Company(Accounting Rules),2006 which are deemed accounting standards under section 133 of the Companies Act, 2013. The consolidated financial statements have been prepared on the basis of audited financial statements of its subsidiaries and associate company as approved by their respective Board of Directors. The Consolidated financial statement shows the financial resources, assets, liabilities, income, profits and other details of your Company and its subsidiaries after elimination of inter- company transactions and in case of associate accounting for its share of profits by a single entity after eliminating un-realized profits. A separate statement is annexed to the Notes on accounts explaining salient features of the financial statements of the Company and its subsidiaries and associates in AOC-1 (Annexure-A) pursuant to Rule 8(5) (iv) of the Companies (Accounts) Rules, 2014 and the name of subsidiaries and associates of the Company formed/ acquired and /or companies ceased to be subsidiary companies and associate company during the year are provided in (Annexure-B).

Insurance:

All assets of the Company and other potential risks have been adequately insured.

Deposits:

The Company has not accepted any public deposit and as such, no amount on account of principle or interest on public deposits was outstanding as on the date of the balance sheet.

Listing of Shares:

The Equity shares of your Company are listed on BSE Ltd. and National Stock Exchange of India Ltd. The Company has paid the Annual Listing fees to each of these Stock Exchanges for the financial year 2016-17.

Directors:

Sri. H.Gurunath Reddy, Director is retiring by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. Dr. A.H.Praveen, Independent Director resigned from the Board with effect from 30.05.2016 and Sri.A.Kailashnath appointed as Director on 30.05.2016 in casual vacancy caused due to resignation of Dr.A.H.Praveen.

The brief particulars of the Directors seeking appointment / re-appointment at this Annual General Meeting are being annexed.

Evaluation of Board Performance

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of SEBI(LODR)Regulations, 2015, the Board has carried out performance evaluation taking into consideration of various aspects of the Board''s functioning, composition of Board, and its Committees, execution, and performance of specific duties, obligations and governance. The Performance of evaluation of Independent Directors was completed. The Performance evaluation of Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with evaluation process.

Company’s policy on Directors’ appointment and remuneration

The Nomination and Remuneration Committee had been constituted by the Board which ensures the selection, appointment of persons having wide exposure in their respective fields and remuneration to Directors, Key Managerial Personnel and Senior Management of the Company. The Board on the recommendation of the Nomination & Remuneration Committee takes necessary steps and decisions.

Statement of declaration given by Independent Directors under section 149(6)

The company has received the necessary declarations from each Independent Director in accordance with Section 149(7) of the Companies Act, 2013 that he/ she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013.

Particulars of loans, guarantees or investments under section 186

The Company had not given any loans, guarantees during the year 2015-16. But investments to the extent of Rs.4,00,000/- in wholly owned subsidiary companies were made during the year.

Particulars of contracts or arrangements with related parties

All transactions entered with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval, where ever required. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. A statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee and the Board of Directors on a quarterly basis. Form AOC-2 is annexed as (Annexure-C).

Risk Management Policy

A special team with senior executives had been formed to assist the Board (a) Overseeing and approving the Company''s enterprise risk management framework and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit , market, liquidity, security, property, IT, legal and other risks and there is an adequate risk management infrastructure. The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives.

Vigil Mechanism / Whistle Blower Policy

In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the company has adopted a vigil mechanism policy.

Extract of Annual Return :

The details forming part of the extract of Annual Return (Form-MGT-9) is annexed as (Annexure-D.)

Particulars of Energy conservation, Technology Absorption and Foreign Exchange earnings and outgo:

Information as per Section 134 (3) of the Companies Act, 2013 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are forming part of the Directors'' Report for the year ended 31st March, 2016 is annexed to this Report (Annexure-E).

Corporate Governance:

A separate report on Corporate Governance (Annexure-F) is being incorporated as a part of the Annual Report along with a Certificate from the Auditors of the Company regarding the compliance of the conditions of Corporate Governance as stipulated under regulation 34(3) and 53(f) read with Schedule V of SEBI(LODR) Regulations, 2015.

Management Discussion and Analysis Report :

Further to comply with regulation 34(3) and 53(f) read with Schedule V of SEBI(LODR) Regulations, 2015, ‘Management Discussion and Analysis ‘has been given as Annexure-G to the Directors’ Report.

Corporate Social Responsibility :

Composition of CSR Committee : CSR Committee reconstituted on 30.05.2016 with Sri A Kailashnath as Chairman and Smt.D S Sai Leela and Sri P Ramachandra Gowd as members. During the financial year 2015-16, the company had spent Rs.2,52,189/- for providing drinking water, Rs.10,90,000 for promotion of education and Rs.2,33,200 towards animal welfare.

Amount to be spent as per section 135 of Companies Act, 2013 - Rs. 32,76,921/-

Total amount spent by Company during financial year - Rs. 15,75,389/-

Cost Auditors:

The Cost Audit under Section 148 of Companies Act, 2013 is carried out in respect of the products of the Company by M/s. Kapardhi & Associates, (M 9488) - Cost Auditor of the Company for the financial year 2014-15 and Cost Audit Report ( Form-I )in XBRL format had been filed with Central Government .

Statutory Auditors:

The Statutory Auditors M/s. S.T. Mohite & Co., Chartered Accountants, Hyderabad, were appointed at the 9th Annual General Meeting held on 29.09.2014 for a period of 3 years. As per the provisions of Section 139 of Companies Act, 2013 , the appointment of auditor is required to be ratified by members at every Annual General Meeting.

Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has re-appointed M/s. Geetha Serwani & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the Financial Year 2015-16. The Report of the Secretarial Audit Report is annexed herewith as “Annexure-H”.

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under.

During the financial year 2015-16, the Company received no complaints on sexual harassment.

Directors’ Responsibility Statement:

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that the preparation of the 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) that the Directors have selected such accounting policies and applied them consistently and made judgments 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 of the Company for the year under review;

(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; and

(iv) that the Directors had prepared the accounts for the financial year ended 31st March, 2016 on a ‘going concern'' basis.

(v) that 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.

(vi) that 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.

Explanations or comments on qualifications, reservations or adverse remarks or disclaimers made by the Auditors and the Practicing Company Secretary in Practice.

There are no qualifications, reservation or adverse remark or disclaimer made by Statutory auditor in his report and Company secretary in practice in the secretarial audit report.

Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

There are no material changes which affects the financial position of the Company according to the date of financial year and the date of its report .

Particulars of Employees:

No employee of the Company is drawing remuneration as prescribed under Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014.

Particulars of Remuneration:

Disclosures with respect to the remuneration of Directors and employees as required under Section 197(12) of Companies Act,2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.:

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Name of the Director

Ratio to Median Remuneration

Sri T.G.Bharath , CMD

47.74

Dr. A.H.Praveen , Director

0.12

Sri H.Gurunath Reddy, Director

0.08

Smt. D.Sai Leela , Director

0.12

Sri P.Ramachandra Gowd , Director

0.11

Sri Krishnamoorthy Chandraiah Naik, Director

0.09

Sri N.Ramachandra Rao, Director (up to 15.06.2015)

0.02

(ii) The percentage increase in remuneration of each Director, Chief financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Sri T.G.Bharath - Chairman & Managing Director

0%

Sri Ifthekhar Ahmed - Chief Financial Officer

11.68 %

Smt.V Surekha - Company Secretary

6.36 %

(iii) The percentage increase in the median remuneration of employees in the financial year - 5%

(iv) The number of permanent employees on the rolls of Company - 400

(v) Average percentile increase already made in the salaries of employees other than managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration :

The average increase in salaries of employees other than managerial personnel in 2015-16 was 5%. Percentage increase in the managerial remuneration for the year was Nil.

(vi) Affirmation that the remuneration is as per the remuneration policy of the Company : YES

Acknowledgements:

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from Customers, Banks, Suppliers, Shareholders, Government departments and other statutory authorities and others associated with the Company. Your directors also wish to place on record their appreciation for the contributions made by employees at all levels, during the year under review.

For and on behalf of the Board

Sd/-

T.G. BHARATH

Place : Kurnool Chairman & Managing Director

Date : 29th August, 2016 DIN : 00125087


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Tenth Annual Report and the Audited Accounts of the Company for the year ended 31st March, 2015.

Financial Results: ( Rs. in lakhs )

Parituculars 2014 - 2015 2013 - 2014

Profit before interest, Depreciation and Tax 4712.51 3581.20

Less : Interest 1160.97 924.13

Depreciation 975.77 1491.08

Prior period adjustments - 0.18

Profit before Tax 2575.77 1165.81

Provision for Taxation & Deferred Income Tax 638.69 422.22

Profit after Tax 1937.08 743.58

Add: Balance brought forward from previous year 10051.56 9307.98

Other adjustments 207.56 0.00

Balance carried forward to 12196.20 10051.56 next year

Performance:

During the year the Company achieved turnover of Rs. 41114.96 lakhs against previous year turnover of Rs. 31169.27 lakhs. The profit before tax stood at Rs.1937.08 lakhs as against Rs.743.60 lakhs for the previous year.

Dividend:

Your Directors have recommended a final dividend of Rs.1.50 (i.e.,15%) per equity share of face value Rs.10/- each for the financial year ended 31st March,15 . The dividend payment is subject to approval of members at the ensuing Annual General Meeting. The total cash outflow on account of dividend on equity shares for the financial year 2014-15 would aggregate Rs.22075034/-. The dividend will be paid to members whose names appear in the Register of Members as on 23.09.2015. The dividend payment date is 26.10.2015.

Board Meetings:

During the year 7(seven) Board meeting and 4(four) Audit Committee Meetings were held and the details of which are mentioned in Corporate Governance Report.

Reserves:

During the year the Company had transfered an amount of Rs.96,85,413/- to General Reserves.

Subsidiaries, Joint Ventues and Associate Companies :

As on 31.03.2015 the Company is not having any subsidiary Companies and Joint venture Companies. Sree Rayalaseema Alkalies and Allied Chemicals Limited is the only Associate Company as per Section 2(6) of Companies Act, 2013.

Insurance:

All assets of the Company and other potential risks have been adequately insured.

Fixed Deposits:

The Company has not accepted any public deposit and as such, no amount on account of principle or interest on public deposits was outstanding as on the date of the balance sheet.

Listing of Shares:

The Equity shares of your Company are listed on BSE Ltd. and National Stock Exchange of India Ltd. The Company has paid the Annual Listing fees to each of these Stock Exchanges for the financial year 2015-16.

Directors:

Sri. Krishnamoorthy Chandraiah Naik , Director is retiring by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment . Sri.H.Gurunath Reddy appointed as Director in Casual vacancy with effect from 15.06.2015 and whose term of office will expire on the date of this AGM. The Company has received requisite amount of deposit from a shareholder proposing Sri.H.Gurunath Reddy candidature as Director, whose position is subject to retire by rotation. Necessary resolution along with explanatory statement is placed in the Notice of AGM for your approval.

Sri.P.Ramachandra Gowd will be appointed as Independent Director for a term of 5 years . Necessary resolution is placed in the notice of Annual General Meeting for members approval. Sri.N.Ramachandra Rao ,Independent Director had resigned from the Board with effect from 15.06.2015 .

The brief particulars of the Directors seeking appointment / re-appointment at this Annual General Meeting are being annexed to the Corporate Governance Report.

Evaluation of board performance

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out performance evaluation taking into consideration of various aspects of the Board's functioning, composition of Board, and its Committees, execution, and performance of specific duties, obligations and governance. The Performance of evaluation of Independent Directors was completed. The Performance evaluation of Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with evaluation process.

Company's policy on Directors' Appointment and Remuneration

The Nomination and Remuneration Committee had been constituted by the Board which ensures the selection, appointment of persons having wide exposure in their respective fields and remuneration to Directors, Key Managerial Personnel and Senior Management of the Company. The Board on the recommendation of the Nomination & Remuneration Committee takes necessary steps and decisions.

Statement of declaration given by independent Directors under section 149(6)

The company has received the necessary declarations from each Independent Director in accordance with Section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Particulars of loans, guarantees or investments under section 186

The Company had not given any loans , guarantees or made investments during the year 2014-15.

Particulars of contracts or arrangements with related parties

All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval, where ever required. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. A statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee and the Board of Directors on a quarterly basis. FormAOC-1 and AOC-2 are annexed as (Annexure-F).

Risk management policy

A special team with senior executives had been formed to assist the Board (a) Overseeing and approving the Company's enterprise risk management framework and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit , market, liquidity, security, property, IT, legal and other risks and there is an adequate risk management infrastructure. The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives.

Vigil Mechanism / Whistle Blower Policy

In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour the company has adopted a vigil mechanism policy.

Extract of Annual Return :

The details forming part of the extract of Annual Return (Form-MGT-9) is annexed as (Annexure-A.)

Particulars of Energy conservation, Technology Absorption and Foreign Exchange earnings and outgo:

Information as per Section 134 (3) of the Companies Act, 2013 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are forming part of the Directors' Report for the year ended 31st March, 2015 is annexed to this Report (Annexure B).

Corporate Governance:

A separate report on Corporate Governance (Annexure -C) is being incorporated as a part of the Annual Report along with a Certificate from the Auditors of the Company regarding the compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement .

Management Discussion and Analysis Report :

Further to comply with Clause - 49 of listing agreement 'Management Discussion and Analysis ' has been given as Annexure -D to the Directors' Report .

Corporate Social Responsibility :

The composition of CSR Committee : (1) Smt. D. Sai Leela (2) Dr. A.H. Praveen (3) Sri P. Ramachandra Gowd. During the financial year 2014 - 15, the Company had spent Rs. 3 Lakhs towards providing safe drinking water facility out of total CSR Expenditure to be spent as per section 135 of Companies Act, 2013. The committee is in the process of exploring new projects in this regard. On finalization of the same, the unspent amount will be spent in the current finacial year.

Cost Auditors:

The Cost Audit under Section 148 of Companies Act, 2013 is carried out in respect of the products of the Company by M/s. Kapardhi & Associates, (M 9488) - Cost Auditor of the Company for the financial year 2014-15 and Cost Audit Report (Form-I) in XBRL format had been filed with Central Government .

Statutory Auditors:

The Statutory Auditors M/s. S.T. Mohite & Co., Chartered Accountants, Hyderabad, retire at the ensuing Annual General Meeting of the Company and have confirmed their eligibility and willingness to accept office, if re-appointed. Your Directors propose the reappointment of M/s. S.T. Mohite & Co., as Statutory Auditors to hold office until the conclusion of the next Annual General Meeting of the Company. The Firm is peer reviewed and holds a peer review certificate.

Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Geetha Serwani & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the Financial Year 2014-15. The Report of the Secretarial Audit Report is annexed herewith as "Annexure- E ".

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under.

During the financial year 2014-15, the Company received no complaints on sexual harassment.

Directors' Responsibility Statement:

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the 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) that the Directors have selected such accounting policies and applied them consistently and made judgments 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 of the Company for the year under review;

(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; and

(iv) that the Directors had prepared the accounts for the financial year ended 31st March, 2015 on a 'going concern' basis.

(v) that 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.

(vi) that 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.

Explanations or comments on qualifications, reservations or adverse remarks or disclaimers made by the Auditors and the Practicing Company Secretary in Practice.

There are no qualifications, reservation or adverse remark or disclaimer made by Statutory auditor in his report and Company secretary in practice in the secretarial audit report.

Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

There are no material changes which affects the financial position of the Company according to the date of financial year and the date of its report. The Company had promoted four 100% wholly owned subsidiary Companies in the current financial year.

Particulars of Employees:

No employee of the Company is drawing remuneration as prescribed under Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014.

Particulars of Remuneration:

Disclosures with respect to the remuneration of Directors and employees as required under Section 197(12) of Companies Act,2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.:

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Ratio to Median Name of the Director Remuneration

Sri.T.G.Bharath, CMD 60.39

Dr.A.H.Praveen, Director 0.12

Sri.N.Ramachandra Rao, Director 0.12

Smt.D.Sai Leela, Director 0.09

Sri.N.Ramachandra Gowd, Director 0.06

Sri.Krishnamoorthy Chandraiah Naik, Director 0.06

(ii) The percentage increase in remuneration of each Director, Chief financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Sri.T.G.Bharath, CMD & CEO 150%

Sri.A.Sambasiva Rao, CFO 11%

Smt.V Surekha, Company Secretary 15.39%

(iii) The percentage increase in the median remuneration of employees in the financial year - 5%

(iv) The number of permanent employees on the rolls of Company - 541

(v) The explanation on the relationship between average increase in remuneration and Company performance:

The increase in remuneration is in line with the market trends.

(vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company :

Particulars Rs. / Lacs

Remuneration of key managerial personnel (KMP)during financial year 2014-15 (aggregated) 134.58

Total revenue 41114.96

Remuneration (as a % of total revenue) 0.33%

(vii) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:

As at As at Particulars Unit 31.03.2015 31.03.2014

Closing rate of share at BSE/NSE Rs. Rs.45/- Rs.21.70/-

EPS Rs. 13.16 5.05

Market capitalization Rs./Lacs 662.25 319.35

Price Earning Ratio Ratio 3.42 4.30

(viii) Average percentile increase already made in the salaries of employees other than managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration :

The average increase in salaries of employees other than managerial personnel in 2014-15 was 5%. Percentage increase in the managerial remuneration for the year was 150%.

(ix) Comparison of the each remuneration of the key Managerial Personnel against the performance of the Company:

Remune- Total Remuneration Name of person ration Revenue as % of total (Rs./lacs) (Rs./lacs) revenue

Sri.T.G.Bharath, CMD & CEO 120.00 41114.96 0.29%

Sri.A.Sambasiva Rao (CFO) 9.19 41114.96 0.02%

Smt.V.Surekha 5.39 41114.96 0.01%

(Company Secretary)

(x) The key parameters for any variable component of remuneration availed by the Directors : No

(xi) The ratio of remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year : NIL

(xii) Affirmation that the remuneration is as per the remuneration policy of the Company : YES

C. Foreign Exchange Earnings and Outgo:

a) Activities relating to exports, initiatives taken to increase Exports, development of new export market for products and services and export plans:

The Company is continuously exploring the new markets for export of its products- Hi-strength Hypo Chlorite, Stable Bleaching Powder, Mono- Chloro Acetic Acid and Sulphuric Acid

b) Total Foreign Exchange used/earned (Rs. in lakhs)

i. Foreign Exchanged earned 17757.44

ii. Foreign Exchange used 4317.94

Acknowledgements:

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from Customers, Banks, Suppliers, Shareholders , Government departments and other statutory authorities and others associated with the Company. Your directors also wish to place on record their appreciation for the contributions made by employees at all levels , during the year under review .

For and on behalf of the Board Sd/- T.G. BHARATH Place : Kurnool Chairman & Managing Director Date : 14th August, 2015 DIN : 00125087


Mar 31, 2014

The Members,

The Directors have pleasure in presenting the Ninth Annual Report of the Company for the year ended 31st March, 2014.

Financial Results: (Rs. in lakhs)

Particulars 2013-14 2012-13

Profit Before Interest, Depreciation and Tax 3581.20 3789.86

Less : Interest 924.13 789.44

Depreciation 1491.08 1319.94

Loss on sale / Loss due to floods - 0.81

Prior period adjustments 0.18 398.62

Profit Before Tax 1165.81 1281.05

Provision for Taxation & Deferred Income Tax 422.22 351.99

Profit After Tax 743.58 929.06

Add: Balance brought forward from previous year 9307.98 8378.92

Balance carried forward to next year 10051.56 9307.98

Operations:

During the year the Company achieved turnover of Rs. 29670.11 lakhs against previous year turnover of Rs. 29966.76 lakhs. The project relating to 10MW thermal power plant is commissioned during financial year 2013-14.

Dividend:

In view of the need for augmenting resources for on going capex projects, margin for working capital and stabilization of activities, your Directors have decided not to declare any dividend for the year 2013-14.

Risk Management:

All assets of the Company and other potential risks have been adequately insured.

Fixed Deposits:

The Company has not accepted any public deposit and as such, no amount on account of principle or interest on public deposits was outstanding as on the date of the balance sheet.

Preferential allotment of shares :

During the year there is an increase of Rs.49,25,060 in Paid Up Equity Share capital of the Company. The Company had allotted 4,92,506 Equity shares of Rs. 10/- each on 13.07.2013 pursuant to conversion of warrants under 2nd tranche to one of the promoters of the Company under preferential issue as per approvals given by the members and Stock Exchanges.

Listing of Shares:

The Equity shares of your Company are listed on BSE Ltd. and National Stock Exchange of India Ltd. The Company has paid the Annual Listing fees to each of these Stock Exchanges for the financial year 2014-15.

Particulars of Employees:

Except Mr T.G. Bharath, Chairman & Managing Director, no other employee of the Company is drawing remuneration as specified under Section 217(2A) of the Companies Act, 1956. Particulars of employees as required under this Section is given as Annexure-A to the Directors'' Report.

Particulars of Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo:

Information as per 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 are forming part of the Directors'' Report for the year ended 31st March, 2014 is annexed to this Report (Annexure B).

Directors'' Responsibility Statement:

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

(i) that the preparation of the accounts for the financial year ended 31st March, 2014 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have 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 of the Company for the year under review;

(iii) that the Directors have 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; and

(iv) that the Directors have prepared the accounts for the financial year ended 31st March, 2014 on a ''going concern'' basis.

Corporate Governance:

A separate report on Corporate Governance (Annexure -C) is being incorporated as a part of the Annual Report along with a Certificate from the Auditors of the Company regarding the compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement.

Management Discussion and Analysis Report :

Further to comply with Clause - 49 of listing agreement ''Management Discussion and Analysis '' has been given as Annexure - D to the Directors'' Report.

Directors:

The Company had pursuant to clause 49 of the Listing Agreement entered with Stock Exchanges and Provisions of Companies Act, 2013, Sri N Ramachandra Rao, Dr A.H. Praveen and Smt D. Sai Leela are appointed as Independent Directors. Sri P.T. Reddy had resigned from the Board with effect from 09.04.2014 and Sri D.V. Narendra Babu with effect from 14.08.2014. Sri P Ramachandra Gowd and Sri Krishnamoorthy Chandraiah Naik are appointed as directors who are liable to retire by rotation.

As per section 149(4) of the Companies Act, 2013 which came into effect from April 1, 2014, every listed public company is required to have at least one-third of the total number of directors as Independent Directors. In accordance with these provisions, these directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the meeting.

Cost Audit

The Cost Audit under Section 233B is carried out in respect of the products of the Company by M/s. Kapardhi & Associates, (M 9488) - Cost Auditors of the Company for the financial year 2012-13 and Cost Audit Report ( Form-I )in XBRL format had been filed with Central Government vide SRN No S29420221 on 26.02.2014.

Auditors:

The Statutory Auditors M/s. S.T. Mohite & Co., Chartered Accountants, Hyderabad, retire at the ensuing Annual General Meeting of the Company and have confirmed their eligibility and willingness to accept office, if re-appointed. Your Directors propose the re-appointment of M/s. S.T. Mohite & Co., as Statutory Auditors to hold office until the conclusion of the next Annual General Meeting of the Company. The Firm is peer reviewed and holds a peer review certificate.

Acknowledgements:

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from Customers, Banks, Suppliers, Shareholders, Government departments and other statutory authorities and others associated with the Company. Your Directors also wish to place on record their appreciation

for the contributions made by employees at all levels, during the year under review.

For and on behalf of the Board

Sd/- T.G. BHARATH Place: Kurnool Chairman & Managing Director Date :14th August, 2014 DIN : 00125087


Mar 31, 2013

To The Members,

The Directors have pleasure in presenting the Eighth Annual Report of the Company for the year ended 31st March, 2013.

Financial Results: (Rs. in lakhs)

Particulars 2012-13 2011-12

Profit Before Interest, Depreciation and Tax 3789.86 4760.92

Less : Interest 789.44 747.93

Depreciation 1319.94 1198.00

Loss on sale / Loss due to floods 0.81 50.46

Preliminary Expenses written off 4.18

Prior period adjustments 390.62 8.39

Profit Before Tax 1281.05 2751.96

Provision for Taxation & Deferred Income Tax 351.99 931.52

Profit After Tax 929.06 1820.44

Add: Balance brought forward from previous year 8378.92 6626.54

Profit available for appropriation

Balance carried forward to next year 9307.98 8378.92

Operations:

During the year, the Company achieved turnover of Rs. 29966.76 lakhs against previous year turnover of Rs. 24345.89 lakhs. The project relating to 10MW thermal power plant is under advanced stage of implementation & is ready for commissioning in this financial year.

Dividend:

In view of the need for augmenting resources for on going capex projects, margin for working capital and stabilization of activities, your Directors have decided not to declare any dividend for the year 2012-13.

Risk Management:

All assets of the Company and other potential risks have been adequately insured.

Fixed Deposits:

During the year under review, your Company has neither invited nor accepted any deposits from the public . Hence, provisions of section 58A of Companies Act, 1956 are not applicable to the Company for the year.

Preferential allotment of shares :

During the year there is an increase of Rs. 24,33,240 in paid up Equity Share capital of the Company. The Company had allotted 2,43,324 Equity shares of Rs. 10/- each on 30.03.2013 pursuant to conversion of warrants under 1st tranche to one of the promoters of the Company under preferential issue as per approvals given by the members and Stock Exchanges.

Listing of Shares:

The Equity shares of your Company are listed on Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. The Company has paid the Annual Listing fees to each of these Stock Exchanges for the financial year 2013-14.

Particulars of Employees:

Except Sri T.G. Bharath, Chairman & Managing Director, no other employee of the Company is drawing remuneration as specified under Section 217(2A) of the Companies Act, 1956. Particulars of employees as required under this Section is given as Annexure–A to the Directors'' Report.

Particulars of Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo:

Information as per 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 are forming part of the Directors'' Report for the year ended 31st March, 2013 is annexed to this Report (Annexure - B).

Directors'' Responsibility Statement:

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

(i) that the preparation of the accounts for the financial year ended 31st March, 2013 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have 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 of the Company for the year under review;

(iii) that the Directors have 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; and

(iv) that the Directors have prepared the accounts for the financial year ended 31st March, 2013 on a ''Going Concern'' basis.

Corporate Governance:

A separate report on Corporate Governance (Annexure - C) is being incorporated as a part of the Annual Report along with a Certificate from the Auditors of the Company regarding the compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement .

Management Discussion and Analysis Report :

Further to comply with Clause – 49 of listing agreement ''Management Discussion and Analysis '' has been given as Annexure – D to the Directors'' Report .

Directors:

Dr A H Praveen and Sri D V Narendra Babu , Directors retires by rotation at the ensuing Annual General Meeting and being eligible for re-appointment offer themselves to be re-elected as Directors.

Cost Audit

The Cost Audit under Section 233B is carried out in respect of the product Sulphuric Acid and generation of Power by Sri NVS Kapardhi, (M 9488), Cost Auditor of the Company for financial year 2011-12. As per recent notifications issued by Ministry of Corporate Affairs, Cost Audit Report ( Form-I )in XBRL format had been filed with Central Government vide SRN S20911640 on 25.04.2013 and Compliance Report ( Form-A) vide SRN S20414801 on 28.02.2013.

Auditors:

The Statutory Auditors M/s. S.T. Mohite & Co., Chartered Accountants, Hyderabad, retire at the ensuing Annual General Meeting of the Company and have confirmed their eligibility and willingness to accept office, if re-appointed . Your Directors propose the reappointment of M/s. S.T. Mohite & Co., as Statutory Auditors to hold office until the conclusion of the next Annual General Meeting of the Company. The Firm is peer reviewed and holds a peer review certificate .

Acknowledgements:

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from Customers, Banks, Suppliers, Shareholders, Government departments and other statutory authorities and others associated with the Company. Your Directors also wish to place on record their appreciation for the contributions made by employees at all levels, during the year under review.

For and on behalf of the Board

Sd/-

Place : Kurnool T.G. BHARATH

Date : 30th May, 2013 Chairman & Managing Director


Mar 31, 2010

The Directors have pleasure in presenting the Fifth Annual Report and the Audited Accounts of the Company for the year ended 31st March, 2010.

Financial Results: (Rs. in lakhs)

Parituculars 2009 - 2010 2008 - 2009

Profit before interest, Depreciation and Tax 3876.63 3629.31

Less : Interest 884.87 401.68

Depreciation 943.36 545.97

Loss on sale / impairment of assets 9.83 174.67

Preliminary Expenses written off 2.98 2.98

Prior period adjustments 59.83 -9.24

Profit Before Tax 1975.76 2513.25

Provision for Taxation 1632.51 990.53

Profit after Tax 343.25 1522.72

Add: Balance brought forward from previous year 2794.84 1272.12

Balance carried forward to next year 3138.09 2794.84

Operations:

During the year the Company achieved a turnover of Rs.17432 lakhs against previous year turnover of Rs.20857 lakhs. Your Company is proposing to manufacture HDPE drums which will be used for packing requirements of exports of the Company. Further, it is proposed to expand Hypo Chlorite Plant with 3 streams of approximately 6600 MTs each.

In view of the strengthening and stabilization of activities and augmentation of working capital requirements for increased activities and bank borrowings, your Directors have decided not to declare any dividend for the year 2009-10.

Floods :

In October 2009, due to heavy floods in Kurnool, the flood water have entered into the factory and part of inventory, machinery etc. were damaged. The operations of the factory have come to stand still for about 35 days. Since the risks of assets, stocks and profits are covered by the insurance policies, the Company has preferred claims with insurance Company.

Risk Management:

All assets of the Company and other potential risks have been adequately insured.

Fixed Deposits:

The Company has not accepted any Fixed Deposits during the year as per Section 58A of the Companies Act, 1956 and as such, no amount of principal or interest was outstanding as on the date of the Balance Sheet.

Preferential allotment of shares :

During the year there is an increase of Rs. 26,65,000 in paid up Equity Share capital of the Company. The Company had allotted 2,66,500 Equity shares to one of the promoters of the Company as per approvals by the members and Stock Exchanges. These shares were listed on Bombay Stock Exchange on 22/02/2010 and National Stock Exchange on 09/02/2010.

Listing of Shares:

The Equity shares of your Company are listed at Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. The Company has paid the Annual Listing fees to each of these Stock Exchanges for the financial year 2010-2011.

Particulars of Employees:

Except Sri T.G. Bharath, Chairman & Managing Director, no other employee of the Company is drawing remuneration as specified under Section 217(2A) of the Companies Act, 1956. Particulars of employees as required under this Section is given as (Annexure – A ) to the Directors’ Report.

Particulars of Energy conservation, Technology Absorption and Foreign Exchange earnings and outgo:

Information as per 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 are forming part of the Directors’ Report for the year ended 31st March, 2010 and is annexed to this Report (Annexure - B).

Directors Responsibility Statement:

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

(i) that the preparation of the accounts for the financial year ended 31st March, 2010 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have 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 of the Company for the year under review;

(iii) that the Directors have 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; and

(iv) that the Directors have prepared the accounts for the financial year ended 31st March, 2010 on a ‘going concern’ basis.

Corporate Governance:

A report on the Corporate Governance Code alongwith a Certificate from the Statutory Auditors of the Company regarding the compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement (Annexure - C) and also the Management Discussion and Analysis Report are annexed to this Report (Annexure - D).

Directors:

Sri A.H. Praveen and Sri D.V. Narendra Babu retire by rotation at the ensuing Annual General Meeting and being eligible for re-appointment offer themselves to be re-elected as Directors.

Cost Audit

The Cost Audit under Section 233B of Companies Act, 1956 is carried out in respect of the product Sulphuric Acid by M/s. Kapardhi & Associates, Cost Auditor of the Company. The Company has complied with Company Law Board’s Order No. F.No/52/258/CAB-2000, dated 13.08.2007 and all the applicable provisions of the Companies Act, 1956.

Auditors:

M/s. S.T. Mohite & Co., Chartered Accountants, ( ICAI Regn No. 011410S ) Hyderabad, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting of the Company and are eligible for re-appointment. The firm is peer reviewed and hold a Peer Review Certificate issued by ICAI.

Acknowledgements:

Your Directors wish to express their gratitude to State Bank of Hyderabad, Government Departments, Project and Technical Consultants for their continued support and to all the employees of the Company for their devoted and loyal services.

For and On behalf of the Board



Sd/-

Place : Kurnool T.G. BHARATH

Date : 25.08.2010 Chairman & Managing Director

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