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Directors Report of Swagruha Infrastructure Ltd.

Mar 31, 2015

To

The Members,

The Directors of your Company are pleased to present the 21st Annual Report together with the Audited Financial Statements of the Company for the Financial Year ended 31st March, 2015.

1. Financial Highlights:

The working results of the Company for the year under report are as under:-

2014-2015 2013-2014

Income 2,788,963 2,051,486

Expenditure 1,885,832 1,173,789

Profit before Tax 903,131 877,697

Tax 300,000 300,000

Profit after Tax 603,131 577,697

Balance brought forward from previous year (62,167,660) (62,745,357)

Balance carried to Balance Sheet (61,564,529) (62,167,660)

Basic Earnings Per Share 0.00 0.01 (Face Value of Re. 1 per share)

2. Performance:

Your Directors wish to report that your Company has achieved the turnover of Rs. 2,788,963 for the year ended March 31, 2015 as against Rs. 2,051,486 for financial year 2013-2014. Similarly for the FY 14-15, Profit before Tax (PBT) stood at Rs. 903,131 and Net Profit (Profit After Tax) at Rs. 603,131 as against PBT of Rs.877,697 and PAT of Rs.577,697 for the previous financial year.

3. Dividend:

In order to conserve resources, the Board of Directors of your Company express their inability to recommend any dividend for the Financial Year 2014-15.

4. Management Discussion and Analysis Report:

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

5. Subsidiary, Joint Ventures and Associate Companies:

As on 31st March, 2015, your Company has no subsidiary company. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013. Further the company has not entered into Joint Ventures with any company, details of which are mentioned in "Annexure V" in prescribed Form AOC 1.

6. Director's Responsibility Statement:

In terms of the provisions of Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any ;

- the Directors have selected such accounting policies and applied 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 March 31,2015 and of the profit and loss of the Company for the year ended on that date;

- the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- the Directors have prepared the annual accounts on a "going concern basis";

- the Directors have laid down internal financial controls to be followed by the Company and that such controls are adequate and are operating effectively; and

- the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

7. Corporate Governance:

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements as stipulated by Securities and Exchange Board of India (SEBI).

The report on Corporate Governance as per the requirement of the Listing Agreement forms an integral part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

8. Transfer to Reserves:

During the year under review the company has not transferred any amount to reserves.

9. Share Capital

- Authorized Share Capital:

The Authorized Share Capital of the Company presently is 25, 00, 00, 000 (Twenty Five Crore only) divided into 25, 00, 00, 000 (Twenty Five Crore shares) at the Face Value (F.V.) of Re. 1 /- each. The Company Share price was Rs. 10/- which was later on sub divided into Rs 1/- in the meeting of 12th March, 2014.

- Paid-up Share Capital:

The Issued, Subscribed and Paid up Capital of the Company is Rs. 6, 85, 48,000 (Six Crore Eighty Five Lakhs Forty Eight Thousand only) divide into 6, 85, 48, 000 shares of Re. 1/- each.

10. Capital Raising/ Preferential Allotment Of Warrants Converting To Equivalent Number Of Equity Shares And Utilization Of Proceeds Received From Preferential Allotment:

Preferential Issue of Warrants:

- In order to generate long term resources for implementing future growth plans, to augment the capital base, meet working capital requirements and to make strategic investments and to enable the Company to raise additional borrowing in case of requirement, during the year under review, the Company had issued and allotted warrants convertible into equal number of equity shares of Rs.10/- each on preferential basis to the promoters and non promoters, at the issue price calculated under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, on preferential basis duly approved by Shareholders and the Board of Directors of the Company.

- On May 07, 2014, the Company issued and allotted 25, 00, 000 Warrants convertible into equal number of equity shares of Rs. 10/- each at a premium of Rs. 90/- each, aggregating to Rs. 25,00,00,000/- to the promoters and non-promoters on preferential basis [in accordance with the Regulations for Preferential Issue contained in Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulation, 2009]. The warrants shall be converted into Equity Shares, in one or more trenches, within 18 months from the date of their allotment

11. Related Party Transactions:

During the year, the Company has not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

None of the transactions with related parties falls under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in "Annexure IV" in Form AOC-2 and the same forms part of this report.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.swagruhainfra.com.

12. Risk Management:

The Company has put in place a mechanism to identify, assess, monitor and mitigate various risks associated with the business. Major risks identified are systematically discussed at the meeting of the Audit Committee and Board of Directors of the Company. In line with the new regulatory requirement, the Company has framed the Risk Management policy to identify and assess the key risk areas, monitor and report compliance and effectiveness of the policies and procedures.

13. Internal Control Systems and their Adequacy:

The Company has Internal Control Systems, commensurate with the size, scale and complexity of its operations. Significant observations and corrective actions thereon are presented to the Audit Committee from time to time.

14. Directors:

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Babu Shaik, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered himself for re–appointment.

15. Key Managerial Personnel:

During the year under review, Mrs. Nerogi Lakshmi Kalyani, Managing Director and Mr. Babu Shaik, Chief Financial Officer (appointed w.e.f. 14th November, 2014) were designated as Key Managerial Personnel of the Company pursuant to Section 203 of the Companies Act, 2013.

16. Declaration by the Independent Directors:

The Company has received declarations under Section 149(7) of the Companies Act, 2013 from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

17. Performance Evaluation:

Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the director being evaluated.

The evaluation of all the Directors, the Board as a whole and it various committees was conducted based on the criteria and framework adopted by the Board.

The Nomination and Remuneration Policy is annexed herewith as "Annexure VI".

18. Familiarization of Independent Directors:

The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at www.swagruhainfra.com.

19. Auditors and Auditor's Report:

- Statutory Auditors:

M/s Verma Mehta & Associates, Chartered Accountants were appointed as Statutory Auditors at the 20thAnnual General Meeting of the Company, for a term of five (5) consecutive financial years and they shall hold office till the conclusion of the 25th Annual General Meeting of the Company to be held in the year 2019, subject to ratification by the Shareholders at every Annual General Meeting. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for re-appointment.

- Auditor's Report:

The Auditors Report to the Members on the Accounts of the Company for the financial year ended March 31, 2015 does not contain any qualification, reservation or adverse remark.

- Internal Auditor:

The Company has appointed M/s Tejas Nadkarni & Associates as the Internal Auditor, qualified Chartered Accountants, Mumbai, who are responsible for conducting internal audit of the head office functions and reports directly to the Audit Committee of the Board.

- Secretarial Auditors:

The Board has appointed Mr. Bimlendu Kumar, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2014-2015. The Secretarial Audit Report for the financial year ended 31st March, 2015 is annexed herewith as "Annexure III" to this Report.

20. Particulars of Loans, Guarantees and Investments:

During the year under review the Company has not taken any Loans, provided Guarantees nor made any Investments.

21. Committees of the Board:

The Board of Directors of your Company had already constituted various Committees in compliance with the provisions of the Companies Act, 2013/Listing Agreement viz. Audit Committee, Nomination and Remuneration committee, Stakeholders Relationship Committee.

During the year under review, in compliance with the provisions of Clause 49 of the Listing Agreement, the Board had also constituted the Risk Management Committee.

All decisions pertaining to the constitution of Committees, appointment of members and fixing of terms of reference/role of the Committees are taken on record by the Board of Directors.

Details of the role and composition of Committees, including the number of meetings held during the financial year and attendance at meetings, are provided in the Corporate Governance Section of the Annual Report.

22. Meetings of Board of Directors:

The Board met six (6) times during the Financial Year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between the two Board Meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement.

23. Public deposits:

Your Company has not accepted any deposits from the public, or its employees during the year under review.

24. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under the Companies (Accounts) Rules, 2014, is given in "Annexure I" forming part of this Report.

25. Extract of Annual Return:

Extract of Annual Return of the Company for the Financial Year ended 31st March, 2015 in Form No. MGT-9 is annexed herewith as "Annexure II" to this Report.

26. Particulars of Employees and other Additional Information:

During the year ended March 31, 2015, no employee is drawing remuneration in excess of the amount prescribed under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

27. Transfer of amount to Investor Education & Protection Fund (IEPF):

During the period under review your company has not transferred any amounts to Investor Education & Protection Fund.

28. Industrial relations:

The industrial relations continued to be generally peaceful and cordial during the year.

29. Corporate Social Responsibility (CSR):

The conditions prescribed in the section 135 of the Companies Act, 2013, requiring a Company to constitute a Corporate Social Responsibility Committee are not applicable to the Company. The Board of Directors periodically reviews the applicability of CSR rules to the Company.

30. Significant and material Orders passed by the Regulators/Courts, if any:

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

31. Acknowledgements:

Your Directors would like to acknowledge and express sincere appreciation from all stakeholders which inter alia includes Banks, Financial Institutions, Government Authorities, Customers, Vendors and members.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.

By order of the Board

For Swagruha Infrastructure Limited Sd/-

N.L. Kalyani

Hyderabad CMD & Compliance Officer

September 5, 2015 DIN: 01669808


Mar 31, 2014

To,

The Members of Swagruha Infrastructure Limited,

The Directors have pleasure in presenting the Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS : (Rs. in Lakhs) Particulars 2013-14 2012-13

Income 20.51 17.60

Expenditure 11.73 10.56

Profit before tax 8.77 7.04

Tax 3.00 3.00

Profit after tax 5.77 4.04

OPERATIONAL PERFORMANCE:

Your Directors wish to report that your Company has achieved the turnover of Rs. 20.51 Lakhs for the year ended March 31, 2014 as against Rs. 17.60 for FY 12-13. The rise in income has been due to the income from contract work during the year under review.

Similarly for the FY 13-14, Profit Before Tax (PBT) stood at Rs. 8.77 Lakhs and Net Profit (Profit After Tax) at Rs. 5.77 Lakhs as against PBT of Rs.7.04 Lakhs and PAT of Rs.4.04 Lakhs for the previous financial year.

DIVIDEND:

After taking into consideration the financial Results of the Company for the Financial Year 2013-2014, and with an intention to build up the net worth for future expansion and growth plans, your Directors are of the opinion that no dividend be recommended for the year under review.

PUBLIC DEPOSITS:

The company has not accepted any fixed deposits from the public during the year under the provisions of the sections 58A AND 58AA of the Companies Act, 1956 and the rules framed thereunder.

LISTING OF SHARES AND DEPOSITORIES:

The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited (BSE). There are no arrears on account of payment of listing fees to the Stock Exchanges.

DIRECTORS:

Liable to retire by rotation:

Mr. Jayasimha Reddy (holding DIN 06490738), Director of the Company, is liable to retire by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment. Your Directors recommend his re- appointment as an Executive Director of the Company liable to retire by rotation.

Re- appointment of Independent Directors

Mr. Srinivasalu Konduru (holding DIN 06489376) and Mr. Gopal Gillela (holding DIN 06369221) are Independent Directors of the Company. In terms of Section 149 and any other applicable provisions of the Companies Act, 2013, Mr. Konduru and Mr. Gillela are proposed to be re-appointed as Independent Directors to hold office for period of five years with effect from 1st October, 2014, not liable to retire by rotation. Appropriate resolutions seeking your approval for the same has already been included in the Notice of the Annual General Meeting.

In the opinion of the Board Mr. Konduru and Mr. Gillela fulfil the conditions specified in the Companies Act, 2013 and the rules made thereunder for their appointment as Independent directors of the Company and are independent of the management.

Change in Designation:

Mr. Babu Shaik was appointed as an Additional Director on the Board of the Company on 5th February, 2014. However, as per the applicable provisions of Companies Act, 2013, his term expires as an Additional Director in this Annual General Meeting. However, a notice proposing his candidature for office of director has been received by the Company pursuant to Section 160 of the Companies Act, 2013.

Thus, considering his contribution to the Company since his appointment on the Board, your directors recommend the appointment of Mr. Babu Shaik as an Executive Director of the Company.

Fresh Appointment:

A notice proposing the appointment of Ms. Radhika R on the Board of the Company has been received pursuant to Section 160 of the Companies Act, 2013.

Having experience in the field of Banking & Healthcare, the Board considers that her appointment on the Board of the Company would be beneficial to the Company and thus proposes her appointment as a Director on the Board of the Company.

Appropriate resolutions seeking your approval for the same has already been included in the Notice of the Annual General Meeting.

AUDITORS:

M/s. M.M. Reddy & Co. Chartered Accountants, retire at the ensuing Annual general meeting and have declared their unwillingness to continue to act as Statutory Auditors of our Company for the financial year 2014-15, due to their pre- occupation.

A consent to act as Statutory Auditor of your Company has been obtained from M/s. Verma Mehta & Associates, Chartered Accountants (FRN No. 112118W).

Thus, considering the same, your Board proposes the appointment of M/s. Verma Mehta & Associates as Statutory Auditors of the Company for a period of five years from the conclusion of this Annual General Meeting, subject to ratification by Members every year.

AUDITORS REPORT:

The observations made in the Auditor''s Report are self-explanatory and, therefore, do not call for any further comments under Section 217(3) of the Companies Act, 1956.

CAPITAL EVOLUTION:

The members in the Annual General Meeting of the Company, held on 28th September, 2013 had approved the proposal of the Board to sub-divide the face value of the Equity Shares of the Company from Rs. 10/- (Rupees Ten only) to Rs. 5/- (Rupees Five only). However, the Company could not implement the approved sub-division. Thus, on discussing the same at the meeting of the Board held on 17th February, 2014, and considering the existing market scenario, the Board proposed for sub-dividing the face value to Re. 1/- per share instead of Rs. 5/- per share and placed the same for approval of members in the Extra-Ordinary General meeting (EGM) of the Company held on 12th March, 2014.

The Board also proposed to the members to cancel the earlier resolutions passed by the members for the sub-division and the corresponding amendment in the Capital Clause of the Memorandum of Association. A special resolution to that effect was duly passed by the shareholders.

Furthermore, the notice to the EGM so conducted also proposed for issue of 2,50,00,000 convertible warrants, convertible into Equity Shares of the Company, to persons other than the existing holders, pursuant to the applicable provisions of Companies Act and SEBI (ICDR) regulations, applicable at that time.

Also a resolution proposing increasing in the Authorized Share capital of the Company from Rs. 7,50,00,000/- to Rs. 25,00,00,000/-, in order to accommodate the issue as stated above, was put up for approval of members.

The aforesaid resolutions were approved by the shareholders with requisite majority.

In accordance with regulations applicable to the Company and on receipt of an In-principle approval from BSE Limited dated 23rd April, 2014, the Board of Directors in their meeting held on 7th May, 2014, allotted the aforesaid warrants to the allottees from whom the application money was received.

REPORT ON CORPORATE GOVERANCE:

Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by SEBI.

The Report on Corporate Governance, as stipulated under Clause 49 of the Listing Agreement is presented in a separate section and forming part of the Annual Report. Your Company''s Statutory Auditors'' Certificate confirming compliance with Clause 49 of the Listing Agreement also forms part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, is presented in separate section and forms part of this report.

PUBLIC DEPOSITS:

The Company has not accepted any public deposits during the year under review.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956:

A. CONSERVATION OF ENERGY, RESEARCH AND DEVLOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EARNINGS AND OUTGO

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under Section 217(1) (e) of the Companies Act, 1956 is not given as the Company does not fall under the category as mentioned above.

B. PARTICULARS OF EMPLOYEES

As required under the provisions of Sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975, as amended, as at 31st March, 2014, none of the employees employed throughout the year were in receipt of remuneration of Rs.60 lacs or more per annum.

C. DIRECTORS RESPONSIBILITY STATEMENT

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

- In the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same.

- The Directors 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 2014 and of the profits of the Company for the year ended on that date.

- The Directors 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.

- The Directors prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation of the continued co-operation and assistance of the APIIC, State Government of Andhra Pradesh, the Bankers, Customers and the valuable advice and support received from the shareholders.

The Directors would also like to thank the employees for the continued support given by them to the Company and their confidence reposed in the management.

By Order of the Board For Swagruha Infrastructure Limited

Sd/- Nerogi Lakshmi Kalyani CMD & Compliance Officer Place: Hyderabad DIN: 01669808 Date: 5th September, 2014


Mar 31, 2012

The Directors have great pleasure in presenting this 18th Annual Report together with the audited financial statements of the Company for the financial year ended 31st March, 2012.

FINANCIAL RESULTS

(Rs. In Lakhs)

Particulars 2011-2012 2010-2011

Income 30.24 25.37

Expenditure 558.47 24.98

Profit for the year (528.23) 0.38

Add: Loss brought forward (103.26) (103.51)

Profit / (Loss) carried to Balance Sheet (631.49) (103.26)

OPERATIONAL PERFORMANCE

You will be glad to note that our Company has achieved a turnover of Rs. 30.24 Lakhs. However it could not sustain its profit for the year due to bad debts and Advances written off. Loss for the year amounted to Rs. 528.23 lakhs.

PUBLIC DEPOSITS

The Company has not accepted any fixed deposits from the public during the year under the provisions of the sections 58A and 58AA of the Act and the rules framed there under, where applicable.

AUDITORS

The retiring auditors, M/s. M. M. REDDY & CO., Chartered Accountants, be and are hereby Re-appointed as auditors of this company to hold office from the conclusion of this annual general meeting to the conclusion of the next annual general meeting of the company on such remuneration as may be mutually agreed upon between the Board of Directors or the Audit Committee and the Auditors.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to Section 217 (1) (e) of the Companies Act, 1956 read with the Company (Disclosures of particulars in the report of Board of Directors) Rules, 1988.

Foreign Exchange Earnings & Out Go: Earnings:

FOB Value of Exports : Rs. Nil

Out Go:

CIF Value of Capital Goods : Rs. Nil

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956, the Directors, is hereby confirming that:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

b) that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c) that 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;

d) That the Directors had prepared the annual accounts on a going concern basis.

PERSONNEL

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

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation of the continued co-operation and assistance of the APIIC, State Government of Andhra Pradesh, the Bankers, Customers and the valuable advice and support received from the shareholders.

The Directors thank the shareholders for their continued confidence and trust placed by them with the Company. The Board also records its deep appreciation for the committed services of its employees during the year.

By Order of the Board of Directors

For Swagruha infrastructure Limited

Sd/-

Date: 03.09.2012 Director

Place: Hyderabad


Mar 31, 2010

The Directors have pleasure in presenting the 16th ANNUAL REPORT together with Audited Accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS

(Rs.in Thousands)

Sl.No Particulars 31.03.2010 31.03.2009

1 Income 1124.60 2496.91

2 Expenditure 1121.59 2971.39

3 Net Profit/ (Loss) before Tax 3.01 (474.48)

4 Provision for Tax Nil N

5 Net Profit/ (Loss) after Tax 3.01 (474.48)

6 Profit/(Loss) brought from last (10353.75) (9879.26) year

7 Profit/(Loss) carried to Balance (10350.74) (10353.75) Sheet

OPERATIONS:

During the year under review your Companys turnover has come down due sluggish real estate market in the Hyderabad where your Company main business is focused. We hope the market will pick up in the current financial year.

OUT LOOK & FUTURE PLANS

The outlook and future plans of the company are presented in Management Discussion and Analysis, forming part of this report.

DIVIDEND

Your directors have not recommended any dividend in view of the accumulated losses and need to build up long term and working capital resources.

FIXED DEPOSITS:

Your Company has not invited any deposits falling within the meaning of Sec.58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, during the financial year under review.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 read with the Articles of Association of the company Sri. Vidya Sagar Jalda, Sri.N.V.Satyanarayana and Sri.Mittapally Sudarshan, Directors of the Company would retire by rotation at the ensuring Annual General Meeting, and is eligible for re-appointment and expressed their willingness for their re-appointment.

LISTING OF SHARES:

The securities of the company are listed at BSE Limited, Mumbai. Presently the trading of the shares under suspension.

DIRECTORS RESPONSIBILITY STATEMENT

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

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2010, the applicable accounting standards had been followed.

(ii) 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 and loss of the Company for the year under review.

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

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

CORPORATE GOVERNANCE:

Your Company believes in creating wealth for its Shareholders. In pursuit of this objective, the policies of the Company are designed to strengthen the ability of the Board of the Directors to supervise the management and to enhance long term shareholder value.

Pursuant to Clause 49 of the said Listing Agreement (a) Management Discussion and Analysis, (b) the Report of the Directors on the practices prevalent on Corporate Governance in the Company and (c) the Auditors Certificate on compliance of mandatory requirements of Corporate Governance are given as an annexure to this report.

AUDITORS:

M/s. S.Phani Kumar, Chartered Accountant, Auditor of the company who retires at the conclusion of the Annual General Meeting has given his consent to be reappointed for the current year.

DIRECTORS REPLY TO THE QULIFICATION OF AUDITORS

Reference Auditors Qualification Directors reply

2 (g)(i) of the No information with respect to party-wise Long outstandings in Auditors break-up,nature and origin of Sundry Debtors are on Report transaction, legal enforceability of claims account of erstwhile and the realizable values are available for business of Sundry Debtors amounting to Rs, Pharmaceuticals. Owing to 98,74,630 (Previous Year Rs. changes in the 98,55,124). management and administrative hierarchy over the years and discontinuance of the line of activity, etc have resulted in stagnation of Sundry Debtors. Your Directors are working on a time-bound programme to realize the same at an early date.

2 (g)(ii) of the No information with respect to party-wise Long outstandings in Loans Auditors break-up, nature and origin of & Advances are on account

Report transaction, legal enforceability of claims of various factors - most of and the realizable values are available for them are advances made Loans & Advances amounting to for purchase of capital Rs.4,74,28,481 (Previous Year equipment during 1995-96 Rs.4,74,28,481) and owing to financial crunch and continuous losses, the company could not fulfill the commitments to capital goods suppliers. Your Directors are working on a time-bound programme to realize the same at an early date.

2 (g)(iii) of the In the absence of necessary records, the Repeated changes in Auditors figures as per the previous years Audited registered office of the Report Financial Statements have been relied company, changes in upon. management and unexpected seepage of water, etc, have resulted in several statutory and financial records being lost/ destroyed. Your Directors are working on a time- bound programme to create all the necessary statutory records.

INFORMATION PURSUANT TO SECTION 217 (2A) OF THE COMPANIES ACT, 1956.

No employees are drawing salary as specified in Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 hence no details are required to be given.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO:

The required information as per Sec.217 (1) (e) of the Companies Act 1956 is provided hereunder:

A: Conservation Of Energy:

The management is striving to achieve cost reduction by economical usage of energy and to bring a general awareness about the energy conservation among employees.

B. Technology Absorption:

1. Research and Development (R&D) : NIL

2. Technology absorption, adoption and innovation : NIL

C. Foreign Exchange Earnings and Out Go:

Foreign Exchange Earnings : NIL

Foreign Exchange Outgo : NIL

ACKNOWLEDGEMENTS:

The Directors take this opportunity to thank the share holders, Financial institutions, Banks, Customers and regulatory and Government authorities for their continuous support to the Company. Further the Directors wish to place on record their appreciation of employees at all levels for their hard work, dedication and commitment.

FOR AND ON BEHALF OF THE BOARD

Director Managing Director

Place: Hyderabad Date : 31.07.2010.

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