Directors Report of Sri KPR Industries Ltd.

Mar 31, 2016

Dear Members.

The Board of Directors hereby submits the report of the business and operations of your Company, along with the audited financial statements, for the financial year ended March 31, 2016. The Consolidated performance of the Company and its subsidiaries has been referred to wherever required.

FINANCIAL HIGHLIGHTS

(Amount in Rs.)

PARTICULARS	STANDALONE		CONSOLIDATED
	2016	2015	2016	2015
Income from operations	13.43.16.684	36.72.97.849	32.60.05.596	70.61.94.153
Other income	5.97.28.621	3.74.65.742	5.63.46.081	3.96.24.453
Cross profit	19,40.45.305	40.47.63.591	38.23.51.677	74,58.18.606
Consumption of Raw materials	3.14.93.420	16.62.36.652	10.89.21.641	20.93.24.180
Changes in inventories	(26.21.342)	(38.11.850)	(2.58.36.521)	(38.67.038)
Employee benefit expenses	1.39.79.669	2,51.36,730	1.91.19.261	3.17.91.548
Finance cost	1.38.57.635	1.45,25.061	3.23.41.675	3.32.02.995
Depreciation	2.42.23.486	1.92.72.912	3.35.07.052	2.83.48.490
Other expenses	4.63.08.831	12.24.18.669	15.09.57.677	34.40.89.839
Total expenses	12.72.41.699	34,37.78,175	31.90.10.785	64.28.90.015
Profit/ (Loss) before tax & exceptional items	6.68.03.606	6.09.85,416	6.33.40.892	10.29.28.592
Exceptional items	52.11.186	28.23.477	67.33.723	28,23.477
Prior period items	-	-	-
Profit/ (Loss) before tax	7.20.14.792	6.38.08.893	7.00.74.615	10.57.52.069
Current tax	(1.14.79.658)	(99.22.250)	1.28.20.613	2.01.79.833
Deferred tax	3.15.867	24.80.278	(24.52.946)	(13.87.448)
Profit/ (Loss) after tax	6,08,51.002	5.63.66.921	5,97.06.948	8,69.59,683

BUSINESS OPERATIONS

Your Company''s strength lies in identification, planning execution and successful implementation of the projects undertaken by it.

Presently. the Company has interest in pipe manufacturing and wind power generation. During the year under review the Company has made a turnover of Rs. 13.43 crores as against previous turnover of Rs. 36.73 crores thereby resulting a decrease in the turnover. However, profit after tax is Rs. 6.08 crores as against Rs. 5.63 crores.

On a consolidated basis, the Company has made a turnover of Rs. 32.60 crores as against the previous year turnover of Rs. 70.62 crores thereby resulting a decrease in turnover by 53.84 %. The net profit for the current year is Rs. 5.97 crores as against the previous year net profit of Rs. 8.70 crores.

As seen from the above, the turnover from pipe manufacturing activity has come down due to preferring of metal pipes over A.C. pipes by the purchasing departments. You are aware that to service the large equity, the Company has entered into new avenue of execution of drinking water supply schemes by forming a 100% subsidiary company "Sri KPR Infra & Projects Ltd.*’ which is yielding reasonable profits and also dividends to the parent company. Further, your company has also expanded wind power generation by setting up 2MW wind power mill at Dewas District in Madhya Pradesh which has also been commissioned during July 2015.

The Company is further trying to explore other avenues in view of decrease in pipe manufacturing activity.

DIVIDEND

The board in its meeting held on September 2. 2016 has recommended a final dividend of Rs. 0.70 per equity share for the financial year ended March 31. 2016. The proposal is subject to approval of shareholders at the ensuing Annual General meeting to be held on September 30. 2016.

RESERVES

The board has not transferred any amount to Reserves for the year 2015-16.

DEPOSITS

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

PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS

During the year under review, the Company has not given any loan, provided guarantee or made any investment falling under the provisions of Section 186 of the Companies Act. 2016.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT

There have been no material changes and commitments, affecting the financial position of the Company which occurred from the end of the financial year up to the date of this report.

STATE OF COMPANY AFFAIRS;

The operations of the Company was not as expected by the Management and the same has been effected due to various reasons.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the Articles of Association of the Company. Mrs. Vinitha Reddy Nalla retire by rotation at the ensuing Annual General Meeting and being eligible offers herself for re appointment.

During the year, the non executive directors of the Company had no pecuniary relationship or transactions with the Company.

During the year, the Company has made the following appointments:

a. Re designation of Mr. Kishan Reddy Nalla from Chairman cum Whole time Director to Managing Director.

b. Appointment of Mr. Jagadeeshwar Reddy Prodduturi. Non executive Independent Director as Chairman of the Company.

c. Appointment of Ms. Meenakshi Deepak Navalakhe as Company Secretary & Compliance Officer of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act. 2013. the Board of Directors, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures:

ii. 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 of the Company for that period:

iii. they 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. they have prepared the annual accounts on a going concern basis:

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declarations from each of the Independent Director as required under Section 149(7) of the Companies Act. 2013. that he/ she meets the criteria of independence laid down in Section 149(6) of the Companies Act. 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations. 2015.

NUMBER OF MEETINGS OF THE BOARD

The board met 6 (Six) times during the financial year, the details of which are given in the Corporate Governance Report.

COMMITTEES OF THE BOARD

Currently the Board has 4 committees:

a. Audit Committee

b. Nomination and Remuneration Committee

c. Corporate Social Responsibility Committee

d. Stakeholder Relationship Committee.

A detailed note on the composition of the board and its committees is provided in the Corporate Governance Report.

DETAILS OF SUBSIDIARIES/ ASSOCIATES/ JOINT VENTURES

During the year, the Board of Directors (''the Board’) reviewed the affairs of its Wholly Owned Subsidiary i.e. Sri KPR Infra & Projects Limited. In accordance with Section 129(3) of the Companies Act. 2013 consolidated financial statements of the Company forms part of the Annual Report. A statement containing the salient features of the financial statements of the Subsidiary Company in the prescribed Form AOC-1 is appended as “Annexure I” to the Board’s report.

In accordance with Section 136 of the Companies Act. 2013 the audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of M/s. Sri KPR Infra &. Projects Limited. Wholly owned subsidiary is available on our website, www.kprindustries.in. These documents will also be available for inspection during business hours at our registered office on all working days except Saturday up to 2.00 P.M. Further during the year the Company has not made any further investment in its subsidiary.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The details with respect to related party transactions in Form AOC-2 are set out in ’Annexure-U’ and forms part of this Report. The Related party transaction policy is available at the Company''s website.

CONSERVATION OF ENERGY. RESEARCH AND DEVELOPMENT. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO

Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules. 2014 is prepared and is enclosed as "Annexure III”.

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

The Board of your Company has laid down internal -financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Act, and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as “Annexure IV” to this Report. There are no employees who are either employed for the whole/ part of the financial year are in receipt of remuneration exceeding Rs. 5 Lakhs per month or Rs. 60 Lakhs per annum as stipulated under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014. However the Govt vide notification dated June 30. 2016 has revised the above limits.

POLICY ON DIRECTOR''S APPOINTMENT AND REMUNERATION

The Company''s policy on Director''s appointment and remuneration and other matters provided under Section 178(3) of the Companies Act. 2013 has been disclosed in the Corporate Governance Report, which forms part of this report.

CHANGE IN THE NATURE OF BUSINESS

During the year, there was no change in the nature of business carried out by the Company.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as "Annexure V” to the Board''s report.

BOARD EVALUATION

The board of directors has carried out an annual evaluation of its own performance, board committees and Individual Directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulations").

The performance of the board and committees constituted was evaluated after seeking inputs from all the Directors such as effectiveness of board processes, information and functioning, etc.

The board and the Nomination and Remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.

AUDITORS Statutory Auditors

M/s. V. Sridhar & Co.. Chartered Accountants. Hyderabad, the Statutory Auditors of the Company retires at the ensuing annual general meeting and being eligible offers themselves for re appointment till the conclusion of 29"’ Annual General Meeting of the Company.

A certificate from the Auditors has been received to the effect that their reappointment, if made, would be within the prescribed limits. The Auditor''s Report for the FY15-16 does not contain any qualification, reservation, adverse remark or disclaimer.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act. 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014. the board has appointed BS & Company Company Secretaries LLP to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31. 2016 is annexed herewith marked as “Annexure VI” to this Report. The Secretarial Audit Report contains the following observations:

/. The Company Secretary was appointed with effect from 16th November. 2015. The Company was in the process of identifying suitable candidate for the post.

2. The Company has delayed in submitting certain disclosures and intimations under respective clauses of Listing Agreement and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations. 2015. Due to non availability of full time secretary there was delay in certain cases.

3. The Annual Return as required under Payment of Bonus Act. 1965 read with Payment of Bonus Rules. 1975 was not filed: The Company is in the process of filing the same.

4. The Annual Return as required under Minimum Wages Act. 1948 read with Minimum Wages (Central) Rules. 1950 was not filed: The Company is in the process of filing the same.

5. The Annual Return as required under Payment of Wages Act. 1936 read with Andhra Pradesh Payment of Wages Rules. 1937 was not filed: The Company is in the process of filing the same.

6. The returns were not filed as required under Employment Exchange Act. 1959: The Company is in the process of filing the same.

RISK MANAGEMENT POLICY

The Risk Management framework of your Company which ensures regular review by management to proactively identify the emerging risks, to do risk evaluation and risk prioritization along with development of risk mitigation plans and action taken. The various risks, including the risks associated with the economy, regulation, competition, foreign exchange, interest rate etc.. are documented, monitored and managed efficiently.

In order to fulfill the objectives and to lay a strong foundation for the development and implementation of a risk management framework, the policy adopted by the Board had been in line with the policy statement as below:

a. To ensure protection of the shareholder through establishing an integrated risk management framework for monitoring, reporting and mitigating risk.

b. To provide strong basis for informed decision making at all levels of the organization.

c. To strive towards the betterment of the system of risk management on a continuous basis.

MANAGEMENTS DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report as required under LODR Regulations, is disclosed separately in the current Annual Report.

LISTING AGREEMENT

The Securities and Exchange Board of India (SEBI). on September 2. 2015 issued SEBI (Listing Obligations & Disclosure Requirements) Regulations. 2015 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective from December 1. 2015. Accordingly all listed entities were required to enter into the new Listing Agreement within six months from the effective date. The

Company entered into new listing agreement with the BSE during the month of February. 2016.

CORPORATE GOVERNANCE

As required by the existing Regulation 34(3) of the Listing Regulation, a detailed report on Corporate Governance is included in the Annual Report. The Auditors have certified the Company''s compliance of the requirements of Corporate Governance in terms of Regulation 34(3) of the Listing Regulation and the same is annexed to the Report on Corporate Governance.

FRAUDS REPORTED BY AUDITORS

During the year, there were no frauds reported by the Auditors falling under Section 143 of the Companies Act. 2013.

INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION & REDRESSAL) ACT. 2014

Your Company is committed in creating and maintaining an atmosphere in which employees can work together without fear of sexual harassment, exploitation or intimidation. As required under the provisions of Sexual Harassment of Women at Workplace (Prevention. Prohibition and Redressed) Act. 2013. your Company has constituted an Internal Complaints Committee. No complaints were received by the committee during the year under review. Since the number of complaints filed during the year was NIL. the Committee prepared a NIL complaints report. This is in compliance with section 22 of the Sexual Harassment of Women at Workplace (Prevention. Prohibition and Redressed) Act. 2013.

CORPORATE SOCIAL RESPONSIBILITY

The terms of reference of CSR Committee forms part of the Corporate Governance Report. Contents of the CSR Policy are also available on the Company''s Website at

http://www.kprindustries.in/investor.html

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

ACKNOWLEDGMENTS

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/ associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company.

FOR AND ON BEHALF OF THE BOARD

Sd/-

JAGADEESHWAR REDDY PRODDUTURI

CHAIRMAN

DIN: 02582809

Place: Secunderabad

Date: September 2, 2016

---

Mar 31, 2015

Dear Members,

The Directors take the pleasure in presenting the Annual report on the affairs of the Company for the financial year 2014-15 together with the Audited Financial Statements and the report of the Auditors thereon.

FINANCIAL RESULTS (STANDALONE) (Amount in Rs.) Particulars For year ending For year 31st March, ending 31st 2015 March, 2014

Income from Operations 36,72,97,849 43,48,56,138

Other Income 3,74,65,742 80,68,831

Total Income 40,47,63,591 44,29,24,969

Consumption of Raw materials 16,62,36,652 18,23,00,446

Changes in Inventory (38,11,850) 1,41,86,534

Employee benefit expenses 2,51,36,730 1,89,97,145

Finance Cost 1,45,25,061 1,70,12,759

Depreciation 1,92,72,912 2,09,62,626

Manufacturing and other expenses 12,24,18,669 13,42,57,787

Total Expenses 34,37,78,175 38,77,17,297

Profit/(Loss) - Before Tax & Exceptional Items 6,09,85,41 65,52,07,672

Exceptional Items 28,23,477 (81,901)

Prior Period Item - -

Profit/(Loss) - Before Tax 6,38,08,893 5,51,25,771

Current Tax (99,22,250) (1,08,98,426)

Deferred Tax 24,80,278 (53,10,548)

Profit/(Loss) - After Tax 5,63,66,921 3,89,16,797

OPERATIONS

Your Company''s strength lies in identification, planning, execution and successful implementation of the projects undertaken by it. To strengthen the long-term prospects and ensuring sustainable growth in assets and revenue, it is important for your Company to evaluate various opportunities in the different business verticals in which your Company operates. Your Company continues to explore new opportunities.

Presently the Company has interest in pipe manufacturing and power generation. The management feels that power generation has enormous scope and potential in the years to come and accordingly new ventures are being contemplated in this area. In addition to the power generation projects, the Company is also exploring new avenues in manufacturing sector. In this regard the Company has commenced the operation of wind mill in Dewas district of Madhya Pradesh in July 2015. The details of the projects as and when finalized will be put forward / informed to the shareholders.

During the year under review the Company has made a turnover of Rs. 36,72,97,849/- against previous year turnover of Rs. 43,48,56,138/- thereby resulting a decrease in the turnover and registered a net profit of Rs. 5,63,66,921/- compared to previous year profit of Rs. 3,89,16,797/-. The Company is expecting good future in the coming years.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of your Company for the Financial Year 2014-15, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and Listing Agreement as prescribed by the Securities and Exchange Board of India (SEBI).

FINANCIAL PERFORMANCE / FINANCIAL POSITION OF SUBSIDIARIES / ASSOCIATE COMPANIES / JOINT VENTURES

The details of Subsidiary Companies are as follows:

1. Sri KPR Infra & Projects Limited (Wholly owned Subsidiary).

2. Sri KPR Renewable Energy Limited (a step down wholly owned subsidiary of Sri KPR Infra & Projects Limited).

There are no associate companies and Joint Ventures associated with the Company.

A separate statement containing the salient features of financial statements of subsidiary of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the subsidiary Company and related information are available for inspection by the members at the Registered Office of your Company during business hours and also at the registered office of the subsidiary Company upto the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013.

The financial performance of the subsidiary included in the consolidated financial statements of your Company is set out in "Annexure A" to this Report.

DIVIDEND

Your Company has a consistent record of declaration of dividend that balances the dual objectives of appropriately rewarding shareholders and retaining adequate funds, in order to maintain a healthy capital adequacy ratio to future growth.

The Company had in the earlier year declared a dividend of 8% on the paid-up share capital of the Company and based on the Company''s performance, the directors in the Board meeting held on 31.08.2015 has recommended a final dividend of 7% per equity share of Rs. 10/- (Rupees Ten) each for the financial year 2014 - 2015 amounting to Rs. 1,41,01,987/- (Rupees One Crore Forty One Lakhs One Thousand Nine Hundred and Eighty Seven only).

The proposal for payment of dividend is subject to the approval of shareholders at the ensuing Annual General Meeting.

The Register of Members and Share Transfer Books will remain closed from 24.09.2015 to 30.09.2015 (both days inclusive) for the purpose of payment of final dividend. Dividend will be paid to those members, whose names appear as shareholders of the Company as on 23.09.2015.

The dividend will be tax-free in the hands of shareholders.

RESERVES

Your Company proposes to transfer Rs. 28,18,346/- to the General Reserve.

MATERIAL CHANGES AND COMMITMENTS

There are no such changes or commitments occurred, affecting the financial position of the Company between the end of the financial year (i.e. 31.03.2015) and the date of this report.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There are no events subsequent to the date of Financial Statements.

CHANGE IN THE NATURE OF BUSINESS

There are no such changes occurred in the nature of business of the Company or its subsidiary Company during the financial year under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not entered into any transaction falling under the provisions of Section 186 of the Companies Act, 2013 and rules made there under as such the relevant information is not applicable.

PARTICULARS OF CONTRACTS / ARRANGEMENTS MADE WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as "Annexure B" to the Board''s Report.

BOARD MEETINGS

The Board of directors met 8 (Eight) times on 12.05.20104; 14.06.2014; 30.07.2014; 12.09.2014; 14.11.2014; 30.01.2015; 10.03.2015 and 11.03.2015 during the financial year.

DIRECTORS / KEY MANAGERIAL PERSONNEL

During the year under review, there was no change in the composition of the Board of Directors of the Company.

During the current year 2015-16, the Company has passed resolution through postal ballot process pursuant to the provisions of Section 110 and applicable provisions, if any of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 and Clause 35B of the Listing Agreement for change of designation of Sri. Kishan Reddy Nalla (DIN: 00038966) from Managing Director to Whole-Time Director of the Company w.e.f 17.04.2015.

Also Mr. N. Siddha Reddy was appointed as Chief Financial Officer of the Company w.e.f 31.08.2015.

INDEPENDENT DIRECTORS

The Board of the Company consists of 9 Directors, out of which three are independent Directors.

DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of Independence as prescribed under Section 149 of the Companies Act, 2013 read with the Schedules and Rules made there under as well as Clause 49 of the Listing Agreement.

RETIRE BY ROTATION

In accordance with Section 152 of the Companies Act, 2013 read with Articles of Association of the Company, Mr. Bhoopal Reddy Aleti and Mr. Vineel Reddy Nalla, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

A brief profile of directors is given in the notice of the Annual General Meeting.

POLICY ON DIRECTOR''S APPOINTMENT AND REMUNERATION

The current policy of the Company is to have a mix of Executive and Independent Directors to maintain the independence of the Board. As on 31st March, 2015 there are 9 Directors, four of whom are Executive and Whole-Time Directors, three are Independent Directors and two are Non-Executive Directors. The Board periodically evaluates the need for change in its composition and size. The policy of the Company on director''s appointment and remuneration is provided as annexure to the Corporate Governance Report.

EVALUATION OF BOARD EFFECTIVENESS

In terms of provisions of the Companies Act, 2013 read with rules made there under and Clause 49 of the Listing Agreement, the Board of Directors, on recommendation of the Nomination and Remuneration Committee, have evaluated the effectiveness of the Board. Accordingly, the performance evaluation of the Board, each Director and the Committees was carried out for the financial year ended 31st March, 2015.

The evaluation was done using individual questionnaires covering vision and strategy of the Board, Board dynamics, contribution towards development of the strategy, risk management, budgetary controls, functioning, performance & structure of Board Committees, ethics, knowledge & expertise of Directors, leadership, the level of participation in the Board Meetings, understanding of their roles and responsibilities, business of the Company and effectiveness of their contribution. The Directors expressed satisfaction with the evaluation process.

COMMITTEES CONSTITUTED BY THE BOARD OF DIRECTORS

As provided in the Report on Corporate Governance.

AUDITORS

STATUTORY AUDITORS

M/s V. Sridhar & Co, Chartered Accountants, Hyderabad, the Statutory Auditors of the Company retires at the conclusion of ensuing Annual General Meeting and, being eligible offer themselves for reappointment from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

A resolution proposing appointment of M/s. V. Sridhar & Co, Chartered Accountants, Hyderabad as the statutory auditors of the Company pursuant to Section 139 of the Companies Act, 2013 forms part of the notice.

There are no qualifications, reservation or adverse remarks made by the statutory auditors in the audit report.

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 with the approval of its Board, appointed M/s. BS & Company, Company Secretaries LLP to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2015.

The Secretarial Audit Report forms part of the Annual Report as "Annexure C".

The qualifications, reservations or adverse remarks or disclaimers made by the auditor in the report:

1. Company Secretary is yet to be appointed as per Section 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of _Managerial Personnel) Rules, 2014._

DIRECTOR REPLIES

The Company is in the process of appointing Whole-Time Company Secretary.

2. The Company is yet to appoint Internal Auditor as required under Section 138 read with rule 13 of Companies (Accounts) Rules, 2014.

The Company is in the process of appointing internal auditor.

3. The Company has not filed the annual return as required under Payment of Bonus Act, 1965 read with Payment of Bonus Rules, 1975.

The Company is in the process of filing the annual return.

4. The annual return as required under Minimum Wages Act, 1948 read with Minimum Wages (Central) Rules, 1950 was not filed.

The Company is in the process of filing the annual return.

5. The annual return as required under Payment of Wages Act, 1936 read with Andhra Pradesh Payment of Wages Rules, 1937 was not filed.

The Company is in the process of filing the annual return.

6. The returns were not filed as required under Contract Labour (Regulation and Abolition) Central Rules, 1971.

The Company is in the process of filing the annual return.

7. The returns were not filed as required under Employment Exchange Act, 1959.

The Company is in the process of filing the annual return._

8. Registers are not maintained under the following Acts.

- Minimum Wages Act, 1948.

- The Contract Labour (Regulation And Abolition) Act, 1970

- Andhra Pradesh Labour Welfare Fund Act, 1987

The Company is in the process of maintaining the registers.

DIRECTORS'' RESPONSIBILITY STATEMENT

As per Section 134(3) of the Companies Act, 2013 the Board of Directors makes the following statement:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures from the same;

(b) 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 at the end of the financial year and of the profit of the Company for that period;

(c) 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;

(d) The directors had prepared the annual accounts on a going concern basis;

(e) Proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) 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.

EXTRACT OF ANNUAL RETURN

As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 is annexed herewith as "Annexure D".

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

The Company has not received any significant/material orders from the statutory regulatory bodies/courts/tribunals which impact the operations and going concern status of the Company.

DEPOSITS

Your Company has not accepted any deposits from public in terms of Section 73 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company is well equipped with adequate internal financial controls. The Company has a continuous monitoring mechanism which enables the organisation to maintain with the same standard of the control systems and helps them in managing any default on timely basis because of strong reporting mechanisms followed by the Company.

The Audit Committee discusses with the Company''s Statutory Auditors their views on the financial statements, including financial reporting system, compliance to accounting policies and procedures, adequacy of internal controls systems followed by the Company.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 3 of the Companies (Accounts) Rules, 2014, is enclosed as "Annexure E" to the Board report.

CORPORATE GOVERNANCE REPORT

The Company continues to strive towards highest standards of Corporate Governance while interacting with all the stakeholders.

In compliance with the provisions of Clause 49 of the Listing Agreement, a separate report on Corporate Governance along with a certificate from the Auditors on its forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management discussion & analysis report for the year under review forms part of the Annual Report. All matters pertaining to industry structure, segment wise performance, outlook, risks and concerns, internal control system and their adequacy, etc are discussed in the said report.

PARTICULARS OF EMPLOYEES

The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as "Annexure F".

HUMAN RESOURCES

Your Company treats its "human resources" as one of its most important assets.

The human resource philosophy and strategy of your Company is to attract and retain the best talent, encourage innovation, and create an engaging and motivating workplace environment.

Your Company continues its focus on building & developing the leadership pipeline and upgradation of workforce skills. Your Company is providing number of programmes for promotion of talent internally through job rotation and job enlargement.

RISK MANAGEMENT POLICY

The Risk Management framework of your Company which ensures regular review by management to proactively identify the emerging risks, to do risk evaluation and risk prioritization along with development of risk mitigation plans and action taken. The various risks, including the risks associated with the economy, regulation, competition, foreign exchange, interest rate etc., are documented, monitored and managed efficiently.

In order to fulfil the objectives and to lay a strong foundation for the development and implementation of a risk management framework, the policy adopted by the Board had be in line with the policy statement as below:

(a) To ensure protection of the shareholder through establishing an integrated risk management framework for monitoring, reporting and mitigating risk.

(b) To provide strong basis for informed decision making at all levels of the organisation.

(c) To strive towards the betterment of the system of risk management on a continuous basis.

Policies approved from time to time by the Board of Directors/Committees of the Board form the governing framework for each type of risk. The business activities are undertaken within this policy framework.

INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

Your Company has always believed in providing a safe and harassment free workplace including providing an environment that is free from discrimination and harassment including sexual harassment for every individual working in the premises through various policies.

The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy.

During the year ended 31 March, 2015, no complaints were received pertaining to sexual harassment.

VIGIL MECHANISM / WHISTLE BLOWER

Your Company is committed to highest standards of ethical, moral and legal business conduct.

Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its Directors, Employees and Stakeholders against unethical behaviour, actual or suspected fraud or violation of Company''s code of conduct or ethics. The policy provides for safeguards against victimization and provides direct access to higher levels of supervisors.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere appreciation and acknowledge with gratitude the support and consideration extended by the Bankers, Shareholders and employees and look forward for their continued support and cooperation.

For and on behalf of the Board of Directors FOR SRI KPR INDUSTRIES LIMITED

Sd/- (KISHAN REDDY NALLA) CHAIRMAN DIN: 00038966

Place: Secunderabad Date: 31.08.2015

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Mar 31, 2014

Dear Members,

The directors, present herewith the Annual Report of the company together with the Audited Financial Statements (Balance Sheet as on March 31, 2014, Statement of Profit & Loss and the Cash Flow Statement for the period ended as on that date) along with the Reports of the Statutory Auditors.

FINANCIAL RESULTS

FOR THE FOR THE YEAR ENDED YEAR ENDED PARTICULARS 31.03.2014 31.03.2013 Rs. In Lacs Rs. In Lacs

Income from Operations 4225.37 3284.77

Other Income 203.88 310.98

Total Income 4429.25 3595.75

Cost of Material Consumed / Purchases and 1964.87 1342.04 changes in inventory

Administrative & Other Expenses 1533.36 1400.39

Financial Expenses 170.13 165.87

Depreciation 209.63 154.54

Total Expenses 3877.99 3062.84

Profit before Tax 551.26 532.91

Tax including deferred tax 162.09 91.60

Profit After Tax 389.17 441.31

OPERATIONS

Your Company''s strength lies in identification, planning, execution and successful implementation of the projects undertaken by it. To strengthen the long-term prospects and ensuring sustainable growth in assets and revenue, it is important for your Company to evaluate various opportunities in the different business verticals in which your Company operates. Your Company continues to explore new opportunities.

Presently the company has interests in pipe manufacturing and power generation. The management feels that power generation has enormous scope and potential in the years to come and accordingly new ventures are being contemplated in this area. In addition to the power generation projects, the company is also exploring new avenues in manufacturing sector. The details of the projects as and when finalized will be put forward / informed to the shareholders.

Your Board of Directors considers the expansions to be in the strategic interest of the Company and believes that this will greatly enhance the long term shareholders'' value. In order to fund these projects in their development, expansion and implementation stages, conservation of funds is of vital importance. Accordingly proposal to empower the Board to borrow monies in accordance with the new provisions of Companies Act, 2013 is moved before the shareholders for approval through appropriate resolutions.

DIVIDEND

The company had in the earlier year declared a dividend of 7% on the paid-up of the company and based on the Company''s performance, the Directors are pleased to recommend a dividend of 8% amounting to Rs.0.80 ps(eighty paiseonly) per equity share of Rs. 10/-each.

The proposal for payment of dividend if approved at the ensuing Annual General Meeting will be paid to those members, whose names appear as shareholders of the Company as on 23-09-2014.

DIRECTORS

RETIRING BY ROTATION

In accordance with Section 152 of the Companies Act, 2013 (Erstwhile Section 256 of the Companies Act, 1956) read with Articles of Association of the Company Mr. Srinath Reddy Nallaand Mr. Raja Reddy Gaddam, directorsretire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

A brief profile of directorsis given in the notice of the Annual General Meeting.

COMMITTEES CONSTITUTED BY THE BOARD OF DIRECTORS

As provided in the Report on Corporate Governance.

AUDITORS

M/s V. Sridhar & Co, Chartered Accountants, Hyderabad, the Statutory Auditors of the Company retire at the conclusion of ensuing Annual General Meeting and are eligible for appointment.

They have confirmed their eligibility and willingness to accept office of the statutory auditors, if appointed.

DIRECTORS'' RESPONSIBILITY STATEMENTS IN ACCORDANCE WITH PROVISIONS OF SECTION 217 (2AA)

In compliance with the provisions of sec. 217(2AA) of the Companies Act, 1956, the directors confirm that:

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgments and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. 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.

d. The annual accounts have been prepared on going concern basis.

CORPORATE GOVERNANCE

The Company continues to strive towards highest standards of Corporate Governance while interacting with all the stakeholders.

The report of Board of Directors of the Company on Corporate Governance is given as a separate section titled as "Report on Corporate Governance 2013 - 14" which forms part of this Annual Report.

The requisite Certificate of the Statutory Auditors of the Company regarding compliance with the Corporate Governance requirements, as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, is annexed to the Corporate Governance Report.

SUBSIDIARY COMPANIES

The details of subsidiary companies are as follows:

1. Sri KPR Infra & Projects Limited (a Wholly owned subsidiary).

2. Sri KPR Renewable Energy Limited (a step down Wholly owned subsidiary of Sri KPR Infra & Projects Ltd);

Pursuant to the provision of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs (MCA), Government of India, New Delhi vide its Circular No.2/2011 dated: 08.02.2011 has granted general exemption from attaching the Balance sheet, Statement of profit and loss and other documents of the subsidiary companies with the Balance sheet of the holding Company.

A statement containing the brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2014 is provided as Annexure and forms part of this report. /Accordingly, this Annual report does not contain the reports and other statements of the subsidiary companies. Any member intends to have a certified copy of the Balance Sheet and other financial statements of these subsidiaries may write to the Company. These documents are available for inspection during business hours at the registered office of the company and also at the registered offices of the respective subsidiary companies.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any deposits within the meaning of Sec. 58A of the Companies Act, 1956 and the rules made there under.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO [Sec. 217(l)fef]

The particulars prescribed under the provision of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 is provided in annexure and the same forms part of the annual report.

PARTICULARS OF EMPLOYEES [Sec. 217(2A)

There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees)Rules. 1975 as amended from time to time.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management discussion & analysis report for the year under review is provided separately and the same forms part of the annual report.

ACKNOWLEDGEMENTS

The Board of Directors wish to place on record their sincere appreciation and acknowledge with gratitude the support extended to the company by the bankers,State Bank of India, Commercial Branch, Hyderabad, the shareholders,the employees and look forward for their continued support and cooperation.

By the Order of the Board FOR SRI KPR INDUSTRIES LIMITED

Sd/- Kishan Reddy Nalla Srinath Reddy Nalla Managing Director Director

Place: Secunderabad Date: 30.07.2014

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Mar 31, 2013

To the Members of Sri KPR Industries Limited,

The directors, with pleasure present herewith the Annual Report of the company together with the Audited Financial Statements (Balance Sheet as on March 31, 2013, Statement of Profit & Loss and the Cash Flow Statement for the period ended as on that date) along with the Reports of the Statutory Auditors.

HISTORY. OPERATIONS AND MANAGEMENT DISCUSSION AND ANALYSIS

Sri KPR Industries Ltd was incorporated on 13-10-1988 originally under the name of Bhagyanagar Engineering Industries Ltd and was promoted by Mr. Kishan Reddy Nalla, Mr. Prathap Reddy Ande and Mr. Raja Reddy Gaddam.

The company is heading for completion of 25 years of its incorporation and this is the 25th Annual Report

After incorporation, the company established a facility for manufacture of PVC Pipes and PVC foam profiles at Nandikandi Village, Sadashivpet Mandal, Medak District and changed the name to Bhagyanagar Wood Plast Ltd.

The said project was part financed by maiden public issue of the company in the year 1994-95 and with term loan from HUDCO. The working capital facilities were provided by State Bank of Hyderabad.

Over a period of time the company gained experience in marketing the pipes and through its Managing Director Mr. Kishan Reddy Nalla possessed the technical knowledge and expertise in manufacture and marketing of Asbestos Cement Pressure Pipes. This expertise in the AC Pressure Pipes field was extended to Sri Venkateswara Pipes Ltd which was incorporated in the year 1996-97 which earned a royalty to the company for a period of five years.

In addition to extending the technical know-how support, the company also invested in Sri Venkateswara Pipes Ltd and has been a shareholder since the beginning of the said company. Post the five year technical support, the company also lent its expertise in presenting the benefits of Asbestos Cement Pressure Pipes to various government departments and thereby enhanced the business of Sri Venkateswara Pipes Ltd. With the active support of the company, Sri Venkateswara Pipes Ltd has established itself as a leader in Asbestos Cement Pressure Pipes field.

As a logical extension of the manufacture of AC Pressure Pipes, Sri Venkateswara Pipes Ltd formed a 100% subsidiary by name Sri KPR Infra & Projects Ltd, to carry on the business of laying Asbestos Cement Pressure pipe lines. Both Sri Venkateswara Pipes Ltd and its subsidiary have been profit making and dividend paying companies.

In the course of time the PVC Project was disposed-off and the company was exploring various options to augment its business prospects and also to have a progressive growth oriented business. The name of the company was at this time changed to Sri KPR Industries Ltd with a view to reflect a broader objective.

The management of the company and Sri Venkateswara Pipes Ltd noted that the expertise and experience in the field of AC Pressure Pipes is the common strength of these two companies and accordingly it was, after due deliberations deemed fit that the expertise possessed by the company in the area of AC Pressure Pipes and the experience gained by Sri Venkateswara Piped Ltd being strengths of the respective companies could appropriately be synergized and combined for the mutual benefit of both the companies. Therefore a merger proposal was moved before the share holders of both the companies and the same was approved.

The Scheme of merger so approved by the shareholders was presented before the Hon''ble High Court of Andhra Pradesh for sanction, and the same was sanctioned in March, 2013.

Accordingly to the Scheme, the assets, liabilities and the reserves of Sri Venkateswara Pipes Ltd as at April 01, 2010 along with the additions, deletions and accretions thereto from that date, would belong to the company.

The merger has been given effect to in the financial statements for the year ended March 31, 2013 and as such the assets, liabilities and the reserves of Sri''Venkateswara Pipes Ltd as at March 31, 2012 have been taken into the books of the company and the current year (Financial Year 2012-13) operations have been incorporated in the books of the company.

Keeping in view the fact that, as per the Scheme the profits of Sri Venkateswara Pipes Ltd belong to the company upon sanction of the merger and also the fact that Sri Venkateswara Pipes Ltd has been consistently a dividend paying company, it is proposed to recommend to the shareholders to declare a dividend of 7% of the post-merger paid up capital of the company. The shareholders would appreciate this positive aspect of the merger.

As stated earlier, Sri Venkateswara Pipes Ltd is a company engaged in the business of manufacture of AC Pressure Pipes. It has a wholly owned subsidiary by name Sri KPR Infra & Projects Ltd which is a company engaged in the business of construction of water supply pipe lines (laying of pipe lines). The subsidiary Sri KPR Infra & Projects Ltd has recently incorporated a wholly owned subsidiary by name Sri KPR Renewable Energy Ltd with the object of generation of non-conventional / renewable energy. Presently this is a start-up company. Even before forming the step-down subsidiary Sri KPR Renewable Energy Ltd, both Sri Venkateswara Pipes Ltd and Sri KPR Infra & Projects Ltd have been generating renewable energy through the wind-electric generators owned by them.

< As a result of the merger, Sri KPR Infra & Projects Ltd has now become a wholly owned subsidiary of Sri KPR Industries Ltd and consequently Sri KPR Renewable Energy Ltd becomes a step-down subsidiary, The results of this corporate structure are presented to the shareholders in the consolidated Balance Sheet of Sri KPR Industries Ltd. As stated earlier, the merger of Sri Venkateswara Pipes Ltd with the company is given effect to in the Financial Year 2012-13 and therefore the figures of the previous year are not comparable to those of the current year.

The company now is engaged in the manufacture of AC Pressure Pipes and through its subsidiary carries out the activity of construction of pipe lines and through the step down subsidiary would be generating electricity, in the days to come in addition to the electricity being generated through the wind electric generators already owned.

Thus, post the merger the business profile of the company Sri KPR Industries Ltd can be summarized as under: Manufacture and sale of Asbestos Cement Pressure Pipes. r Execution of drinking water supply schemes (by wholly owned subsidiary Sri KPR Infra & Projects Ltd)

- Generation of electricity through own wind electric generators (wind ; mills) i

- -¦ Generation of electricity (by wholly owned subsidiary Sri KPR Infra & -

Projects Ltd).

- Proposed renewable energy, wind and solar (step down subsidiary Sri KPR Renewable Energy Ltd)

The management is confident that its efforts in bringing in the above explained infrastructure into piace will yield the expected results in the years to come.

FINANCIAL RESULTS

PARTICULARS FOR THE YEAR

(On the basis of the amalgamated financial statements. ENDED Hence no previous year''s figures are given) 31.03.2013 Rs. In Lacs

Income from Operations 3284.77

Other Income 310.98

Cost of Material Consumed/ Purchases and changes in 1342.04 inventory

Administrative & Other Expenses 1400.39

Financial Expenses 165.87

Depreciation 154.54

Profit before Tax 532.91

Tax including deferred tax 91.60

Profit After Tax 441.31

DIVIDEND

Before the merger of Sri Venkateswara Pipes Ltd with the company, the paid up capital was Rs. 5,65,33,000 divided into 56,53,300 equity shares of Rs.10/- each fully paid up, The paid up capital of Sri Venkateswara Pipes Ltd on the appointed date (April 1, 2010) stood at Rs. 4,44,06,840 divided into 44,40,684 equity shares of Rs.10/- each fully paid up.

Out of the said total capital of Sri Venkateswara Pipes Ltd, the company already held of 3,00,000/- shares of Rs.10/- fully paid up aggregating to Rs.30,00,000/-. Thus the shareholding other than the shares held by the company amount to 41,40,684 shares.

As per the Scheme of Amalgamation, for every 2 shares held ''(by shareholders other than the company) in Sri Venkateswara Pipes Ltd, 7 shares in the company were issued accordingly 1,44,92,395 shares of Rs.10/- each fully paid up aggregating to Rs. 14,49,23,950/- were issued to the shareholders of Sri Venkateswara Pipes Ltd, thus bringing the total paid up share capital of the company post-merger to Rs.20,14,56,950/- divided into 2,01,45,695 shares of Rs.10/- each fully paid up.

From the current profits of the company (accounted on giving effect to the ,

merger) for the Financial Year 2012-13 the Directors recommend a dividend of 7% on the post-merger paid up share capital of the company. This would result in an outflow by way of distribution of profits to the share holders of an amount of Rs. 1.59 crores (including tax on distributed of the company).

The Directors are optimistic that the foundation being laid now will result in a consistent distribution of profits on a year on year basis. The dividend distributed would be tax free in the hands of the Shareholders.

DIRECTORS

RETIRING BY ROTATION

In accordance with Section 256 of the Companies Act, 1956 read with Articles of Association of the Company, Mr. Jagadeeshwar Reddy Podduturi, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

A brief profile of Sri Jagadeeshwar Reddy Podduturi is given in the notice of the Annual General Meeting.

NEW DIRECTORS

With a view to broad base the Board of Directors of the company and also to bring in the experience of the Directors of the erstwhile Sri Venkateswara Pipes Ltd (since merged with the company) the Board of Directors are of the opinion that the inclusion of the following persons in the Board will add value to the management of the company.

a- Mr. Bhoopal Reddy Aleti

Mr. Bhoopal Reddy Aleti has been the Managing Director of Sri Venkateswara Pipes Ltd right from its inception. With the merger it is proposed that he continue as the Whole Time Director of the company, thus carrying with him the experience of Sri Venkateswara Pipes Ltd. Mr. Bhoopal Reddy Aleti is also proposed to be appointed as a Whole Time Director of the company with remuneration as set out in the resolution.

b. Mr. Vineel Reddv IMalla

A software engineer, with a professional degree from US University and work experience in the USA. He is the Managing Director of a IT Services company have presence in India and USA.

c. Mrs. Vinitha IMalla

A management graduate, having knowledge and aptitude in the general administration of the business.

In addition to the above appointments a resolution for approval of the members by postal ballot is proposed for appointment of Mr Kishan Reddy IMalla, as Managing Director of the company and Mr Srinath Reddy Nalla and Mr Raja Reddy Gaddam as Whole Time Directors of the company.

A brief profile of the Directors is given in the Notice of the Annual General Meeting.

COMMITTEES CONSTITUTED BY THE BOARD OF DIRECTORS

As provided in the Report on Corporate Governance.

AUDITORS

M/s V. Sridhar & Co, Chartered Accountants, Hyderabad, the Statutory Auditors of the Company retire at the conclusion of ensuing Annual General Meeting and are eligible for re-appointment.

They have confirmed their eligibility and willingness to accept office of the statutory auditors, if appointed.

DIRECTORS, RESPONSIBILITY STATEMENTS IN ACCORDANCE WITH PROVISIONS OF SECTION 217 (2AA)

In compliance with the provisions of sec. 217(2AA) of the Companies Act, 1956, the directors confirm that:

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgments and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. 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.

d. The annual accounts have been prepared on going concern basis.

e. The amalgamation of Sri Venkateswara Pipes Ltd with the company has been given effect to during the Financial Year 2012-13 and accounted for in accordance with Accounting Standard 14, Accounting for Amalgamations issued by the Institute of Chartered Accountants of India.

CORPORATE GOVERNANCE

The Company continues to strive towards highest standards of Corporate Governance while interacting with all the stakeholders.

The report of Board of Directors of the Company on Corporate Governance is given as a separate section titled as "Report on Corporate Governance 2012 - 13" which forms part of this Annual Report.

The requisite Certificate of the Statutory Auditors of the Company regarding compliance with the Corporate Governance requirements, as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, is annexed with the Corporate Governance Report.

SUBSIDIARY COMPANIES

The details of subsidiary companies are as follows:

1. Sri KPR Infra & Projects Limited (a wholly owned subsidiary). *

2. Sri KPR Renewable Energy Limited (step-down, a wholly owned subsidiary of Sri KPR Infra & Projects Ltd).

Pursuant to the provision of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs (MCA), Government of India, New Delhi vide its Circular No.2/2011 dated: 08.02.2011 has granted general exemption from attaching the balance sheet, statement of profit and loss and other documents of the subsidiary companies with the balance sheet of the Company.

A statement containing the brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2013 is provided as Annexure and forms part of this report. Accordingly, this annual report does not contain the reports and other statements of the subsidiary companies. Any member intends to have a certified copy of the Balance Sheet and other financial statements of these subsidiaries may write to the Board. These documents are available for inspection during business hours at the registered office of the company and also at the registered offices of the respective subsidiary companies.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any deposits with in the meaning of Sec. 58A of the Companies Act, 1956 and the rules made there under.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO TSec. 217(1 Ue^l

the particulars prescribed under the provision of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 is provided in annexure and the same forms part of the annual report.

PARTICULARS OF EMPLOYEES TSec. 217f 2A)

There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management discussion & analysis report for the year under review is provided separately and the same forms part of the annual report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere appreciation and acknowledge with gratitude the support and consideration extended by the bankers, Shareholders and employees and look forward for their continued support and cooperation. By the Order of the Board

FOR SRI KPR INDUSTRIES LIMITED

Place: Secunderabad Sd/-

Date: 19.08.2013 N, Kishan Reddy

Chairman & Managing Director

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Mar 31, 2012

To, The Members of Sri KPR IndustriesLimited, (Formerly known as Bhagyanagar Wood Plast Limited)

Secunderabad.

The Directors present herewith the Twenty Fourth Annual Report on the affairs of the company along with the report of the Auditors on the accounts of the company for the Financial Year 2011 - 12.

FINANCIAL RESULTS AND PERFORMANCE

The performance of the company is summarised as under;

Amount in Rupees Particulars For the financial For the financial year ended year ended 31.03.2012 31.03.2011

Revenue from Operations - -

Other Income 57,19,023 36,57,544

Administrative & other expenses 35,64,453 20,92,476

Financial Costs 28,578 58,202

Depreciation 2,10,640 2,10,640

Profit before tax 19,15,352 13,26,226

Tax including deferred tax 2,77,154 94,441

Profit after tax 16,38,198 12,31,785

BUSINESS OPERATION:

During the year under review company has achieved a Gross receipt of Rs. 57,19,023 against previous year receipt of Rs. 36,87,544/- and registered a profit of Rs. 16,38,198/- (PAT) against previous year profit of Rs. 12,31,785/- (PAT).

The Company expects for a better performance in the coming years pursuant to proposed scheme of amalgamation as approved by the members.

PIVIP5NP:

To strengthen the long-term prospects and ensuring sustainable growth in assets and revenue, it is important for your Company to evaluate various opportunities in the different business verticals in which your Company operates.

Your Board of Directors considers this to be in the strategic interest of the Company and believes that this will greatly enhance the long term shareholders? value. Considering the current scenario '' and future funds requirement your directors have not recommended any dividend for the financial year.

DIRECTORS

RETIRE BY ROTATION

In accordance with the Provisions of Section 256 of the Companies Act, 1956 read with Articles of Association of the Company, Mr. T. Naveen Chandra and Mr. S. Krishna Prasad retires by rotation and being eligible offers themselves for reappointment.

A brief profile of the directors is given in the notice of the Annual General Meeting.

AUDITORS

M/s V. Sridhar & Co., Chartered Accountants, Hyderabad, the Statutory Auditors of the company retire at the conclusion of the ensuing annual general meeting and being eligible offers themselves for reappointment.

DIRECTORS RESPONSIBILITY STATEMENT (SECTION 217 (2AA) OF THE COMPANIES ACT.

isse

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. 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.

d. The annual accounts have been prepared on going concern basis.

CHANGE OF NAME:

The shareholders of the company at previous Annual General meeting has passed resolution for change of name and the same was filed with the Registrar of Companies , Andhra Pradesh, Hyderabad and obtained a fresh certificate of incorporation under the name and style of M/s. Sri KPR Industries Limited.

DEPOSITS:

Your Company has not accepted any deposits from the public in terms of Section 58A of the Companies Act, 1956 during the year under review.

PARTICULARS OF EMPLOYEES:

There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

The Management discussion & analysis report for the year under review is provided separately and the same forms part of the annual report.

CORPORATE GOVERNANCE:

Your Company adopts the corporate best practices and is committed to conduct its business in accordance with applicable laws, rules & regulations. A report on Corporate Governance is provided and forms part of the annual report.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. ADAPTATION AND INNOVATION:

The Company has not carried out any manufacturing activities for the financial year, the particulars prescribed under the provision of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 is provided in annexure and the same forms part of the annual report..

STATUS OF AMALGAMATION APPUCATION:

The members are aware that the proposal of amalgamation of M/s. Sri Venkateswara Pipes Limited with M/s. Sri KPR Industries Limited was approved by members in the Extra Ordinary General Meeting held on 24.09.2011 and now the petition for approval of merger is pending before the Hon''ble Court of A.P.

The Management is confident that the petition will be approved as explained ^earlier and will help the Company for better future prospects.

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their sincere appreciation and acknowledge with gratitude the support and consideration extended by the Bankers, Shareholders and employees and look forward for their continued support and cooperation.

For & on behalf of the Board For Sri KPR Industries Limited

Sd/-

N.KISHAN REDDY

Chairman

Place: Secunderabad

Date: 31.05.2012

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Mar 31, 2011

To The Members of M/s Bhagyanagar Wood Plast Limited (BWPL), Secunderabad

The Directors present herewith the Twenty Third Annual Report on the affairs of the company along with the report of the Auditors on the accounts of the company for the Financial Year 2010-11.

FINANCIAL RESULTS AND PERFORMANCE

The performance of the company is summarised as under;

Rupees in lacs Particulars Current year Previous year

Sales and other Income 36.87 655.29

Profit before interest, depreciation and tax 15.84 (106.02)

Interest 0.48 5.55

Profit before depreciation and tax 15.36 (111.57)

Depreciation 2.10 (2.10)

Profit before tax for the current year 13.26 (113.67)

Profit after tax for the current year 12.42 (71.31)

Reserves as at the end of the year 150.53 138.11

Share Capital 565.33 565.33

Earnings per share 0.22 (12.61)

DIVIDEND

Keeping in view the current economic scenario and the future funds requirements of the Company, the Board of Directors have not recommended any dividend.

MANAGEMENT DISCUSSION. ANALYSIS AND OPERATIONS

OPERATIONS OF 2010-11 AND FUTURE OUTLOOK

The members are aware that the PVC Pipes division was sold after obtaining the required approvals. Even before that, as the business of the company was adversely affected due to unhealthy competition from players in unorganized sector, the division was not yielding the desired results and the company was on a look out for better ventures.

The company had few years ago provided technical know-how for setting up of a Cement Pipe Manufacturing unit to M/s Sri Venkateswara Pipes Limited and also invested in its capital.

M/s Sri Venkateswara Pipes Limited is a company which started its operations with the technical know- how and expertise extended by M/s Bhagyanagar Wood Plast Limited ever since the inception of the said company. Initially M/s Bhagyanagar Wood Plast Limited also invested in the share capital of the company and for the provision of technical consultancy, royalty was also received. Over the period of last few years, the technical and advisory expertise extended by M/s Bhagyanagar Wood Plast Limited to M/s Sri Venkateswara Pipes Limited enabled the said company to become a leader in the field of asbestos cement pressure pipes.

With a view to enter into newer business areas a proposal to amalgamate M/s Sri Venkateswara Pipes Limited with M/s Bhagyanagar Wood Plast Limited was moved and was in consideration for quite some time now.

The Boards of both the companies having approved the amalgamation, a petition has been moved before the Hon''ble Andhra Pradesh High Court for sanction. The management is confident that the petition will be approved and this will take the company and its business activity to greater levels and the management foresees great potential in this area.

MATERIAL CHANGES & COMMITMENTS [Section 217 (1) (d)]

The Company has filed an application vide application No.795 of 2011 for amalgamation with the Hon''ble High Court of Andhra Pradesh for the purpose of merging M/s Sri Venkateswara Pipes Limited with M/s Bhagyanagar Wood Plast Limited u/s 391 and 393 of the Companies Act, 1956. In furtherance to which and as per clause 24(f) the Company has received in. principle approval dated 22nd June, 2011, bearing Reference No.DCS/AMAL/SI/24 (f)/163/2011-12 from the Bombay Stock Exchange Limited. The approval from Hon''ble High Court will be informed to the shareholders by appropriate mode.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

DIRECTOR''S RESPONSIBILITY STATEMENT (SECTION 217 (2AA) OF THE COMPANIES ACT, 1956

As required under Section 217(2AA) of the Companies Act, 1956, and based on the information and Representations received from the operating management, the Board of Directors of the Company confirms that-

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. 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.

d. The annual accounts have been prepared on going concern basis.

DIRECTORS

Sri P.Jagadeeshwar Reddy and Sri G.Raja Reddy, Directors of the company retires by rotation at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

REPORT ON CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on corporate governance is annexed and form part of the Directors Report.

AUDITORS

M/s V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

The Board of Directors place on record their appreciation of the support extended to the company by the employees and customers of the company and to all the shareholders.

By Order of the Board For Bhagyanagar Wood Plast Limited

Sd/- N. Kishan Reddy Managing Director

Place : Secunderabad Date : 17th August''2011

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Mar 31, 2010

The Directors present herewith the Twenty Second Annual Report on the affairs of the company along with the report of the Auditors on the accounts of the company for the Financial Year 2009-10.

FINANCIAL RESULTS AND PERFORMANCE

The performance of the company is summarised as under;

Rupees in lacs

Particulars Current year Previous year

Sales and other Income 655.29 1025.21

Profit before interest, depreciation and tax (106.02) 43.11

Interest 5.55 15.88

Profit before depreciation and tax (111.57) 27.23

Depreciation (2.10) (26.39)

Profit before tax for the current year (113.67) 0.84

Profit after tax for the current year (71.31) 3.45

Reserves as at the end of the year 138.11 209.41

Share Capital 565.33 565.33

Earnings per share (12.61) 0.06



MANAGEMENT DISCUSSION. ANALYSIS AND OPERATIONS



OPERATIONS OF 2009-10 AND FUTURE OUTLOOK

The competition from unorganized sector has been an impediment in the growth of the company for quite some time now. This aspect has adversely effected the operations of the company, severely damaging the profitability and the operational results. In the earlier year the software division of the company was shut down and in the Financial Year 2009-10 with the approval of the members, the PVC Pipe undertaking was sold.

Considering the fact that the PVC pipe division has consistently been weakening, the management for some time now was contemplating a strategic merger with one of its associate concerns viz., Sri Venkateswara Pipes Limited.

Sri Venkateswara Pipes Limited is a company which started its operations with the technical know-how and expertise extended by Bhagyanagar Wood Plast Limited eversince the inception of the said company.

Initially Bhagyanagar Wodplast Limited also invested in the share capital of the company and for the provision of technical consultancy, royalty was also received. Over the period of last few years, the technical and advisory expertise extended by Bhagnagar Woodplast Limited to Sri Venkateswara Pipes Limited enabled the said company to become a leader in the field of asbestos cement pressure pipes.

Considering the long association, both as a investor as well as provider of technical support and considering the present market positioning of Sri Venkateswara Pipes Limited, the management has come to a firm conclusion that the strategic merger of Sri Venkateswara Pipes Limited with Bhagyanagar Wodplast Limited would be in the best interest of the share holders of both the companies. This would also fuel the future growth of the merged entity, particularly in view of the fact that Bhagyanagar Woodplast Limited has the technical expertise and also the cash reserves required for the growth. The management is confident that the operations of the coming year will be on a highly positive path in the post merged entity. The management will approach the share holders in due course of time with the necessary approvals for the merger.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

RESPONSIBILITY STATEMENT (SECTION 217 (2AA) OF THE COMPANIES ACT. 1956

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. 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.

d. The annual accounts have been prepared on going concern basis.

DIRECTORS

Sri. N. Srinath Reddy and Sri. T. Naveen Chandra, Directors of the company retires by rotation at the conclusion of the ensuing Annual General Meeting and being eligible offer therriselves for reappointment.

REPORT ON CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on corporate governance is annexed and form part of the Directors Report.

AUDITORS

M/s V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

The Board of Directors place on record their appreciation of the support extended to the company by State Bank of Hyderabad, the Bankers to the company, the employees and customers of the company and to all the shareholders.

On behalf of the Board



N.KISHAN REDDY

Chairman.

Secunderabad, May 31, 2010.

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Mar 31, 2009

The Directors present herewith the Twenty first Annual Report on the affairs of the company along with the report of the Auditors on the accounts of the company for the Financial Year 2008-09.

FINANCIAL RESULTS AND PERFORMANCE

The performance of the company is summarised as under;

Rupees in lacs Particulars Current year Previous year

Sales and other Income 1025.21 1124.46 Profit before interest, depreciation and tax 43.11 41.56 Interest 15.88 11.91 Profit before depreciation and tax 27.23 29.66 Depreciation (26.39) 27.56 Profit before tax for the current year 0.84 2.10 Profit after tax for the current year 3.45 0.12 Reserves as at the end of the year 209.41 205.97 Share Capital 565.33 565.33 Earnings per share 0.06 0.002

MANAGEMENT DISCUSSION. ANALYSIS AND OPERATIONS OPERATIONS OF 2008-09 AND FUTURE OUTLOOK

The last few years have not been very good for the company. The best efforts of the management to increase the volumes of business of the company and maintain a steady growth in its operations & profits did not yield fruits.

The world over recession hit the operations of the software division of the company adversely and eventually the management had to stop the operations in its software division from the last quarter of the Financial year 2008-09.

The company has been sustaining from the income from other activities and the main line, i.e., pipes division has been incurring losses from the last few years. To save the company from further losses the management is planning to dispose of Land, Buildings, Plant & Machinery of its pipe unit situated at Nandikandi(V), Sadasivpet (M), Medak district. To this effect the negotiations with various parties are in progress.

The management is committed and determined to make the company a profitable one and increase the shareholders wealth and give optimum returns on the investments. In this direction the management is planning to take forward the merger plan with Sri Venkateswara Pipes Limited, and the scheme of merger will be presented to the concerned authorities such as the stock exchanges & before the Honble High Court of Andhra Pradesh for final approval.

The management is confident that the merger will be a turning point to BWPL and this will take the company to a reasonable growth over the years to come.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

RESPONSIBILITY STATEMENT (SECTION 217 (2AA) OF THE COMPANIES ACT. 1956

a. The accounting standards to the extent applicable to the "company have been followed in the preparation of the annual accounts Tnere are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. 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.

d. The annual accounts have been prepared on going concern .basis.

DIRECTORS

During the year Sri. G. Indrasen Reddy, Director of the company resigned from the Board, and in his place Sri P.Jagadeeshwar Reddy appointed as Additional Director by passing authorised resolution at the Board meeting held on 06-01-2009.

Sri. G. Raja Reddy and Sri. S. Krishna Prasad, Directors of the company retires by rotation at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Sri N. Kishan Reddy was appointed as Managing Director at the Annual General Meeting held on 29th September 2004. The appointment was for a period of 5 years commencing April 01, 2004 and ending March 31, 2009. The board of Directors at their meeting held on January 06, 2009 extended his tenure for a further period of 5 years and the extension will be presented for the approval of the members in the ensuing AGM.

Both Sri. N. Srinath Reddy and Sri. N. Kishan Reddy were provided with salary and perquisites at the time of their respective appointments and both of them at the meeting of the Board of Directors heid on 06 January 2009 informed the Board of their decision not to draw remuneration from the company, in view of the downtrend in the companys business and the board accepted the same and accordingly they are not drawing remuneration from February 2009 onwards.

REPORT ON CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing. Agreement, a report on corporate governance is annexed and form part of the Directors Report.

AUDITORS

Messrs V. Sridhar & Co.., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions Of Section 217 (2A) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

The Board of Directors place on record their appreciation of the support extended to the company by State Bank of Hyderabad, the Bankers to the company, the employees and customers of the company •¦ and to all the shareholders.

On behalf of the Board

N.KISHAN REDDY Managing Director. Secunderabad, June 25, 2009.

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Mar 31, 2008

The Directors present herewith the Twentieth Annual Report on the affairs of the company along with the report of the Auditors on the accounts of the company for the Financial Year 2007-08.

FINANCIAL RESULTS AND PERFORMANCE

The performance of the company is summarised as under: Rupees in lacs Particulars Current year Previous year

Sales and other Income 836.04 837.46 Profit before interest, depreciation and tax 41.56 41.97 Interest 11.91 9.08 Profit before depreciation and tax 29.66 32.89 Depreciation 27.56 30.33 Profit before tax for the current year 2.10 2.56 Profit after tax for the current year 0.12 4.71 Reserves as at the end of the year 205.97 205.84 Share Capital 565.33 565.33 Earnings per share 0.02 0.04

MANAGEMENT DISCUSSION, ANALYSIS AND OPERATIONS OPERATIONS OF 2007-08 AND FUTURE OUTLOOK

The Company has in the earlier year stated that some strategic mergers or acquisitions need to be planned and implemented so as to take the operations to a higher league and in this direction negotiation with Sri. Venkateswara Pipes Limited have been made for a proposed merger. The boards of Directors of both the companies approved the proposed merger and an announcement to this effect has been made in the month of June 2008. The company is in the process of evolving an appropriate scheme of merger.

The company has posted a turnover of Rs.8.36 crores more or less same as in the previous year however the increase in the cost of operations at this lever of turnovers has had an adverse effect on the profitability of the company and the company could post a profit of Rs.0.12 lacs in the current year as against Rs.4.71 lacs in the previous year.

The management is confident that in the current year the proposed plans specially the strategic alliances and merger will take the company to better strengths. The management will approach the members for the required permissions and sanctions in due course of time.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

RESPONSIBILITY STATEMENT (SECTION 217 (2AA) OF THE COMPANIES ACT, 1956

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. 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.

d. The annual accounts have been prepared on going concern basis.

DIRECTORS

Sri. N. Srinath Reddy, Sri. G. Indrasena Reddy and Sri. T. Naveena Chandra, Directors of the company retire by rotation at the conclusion of the ensuing Annual General Meeting and being offer themselves for reappointment.

REPORT ON CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on corporate governance is annexed and form part of the Directors Report.

AUDITORS

Messrs V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

The Board of Directors place on record their appreciation of the support extended to the company by State Bank of Hyderabad, the Bankers to the company, the employees and customers of the company and to all the shareholders.

On behalf of the Board N.KISHAN REDDY Chairman Secunderabad, June 23, 2008.

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Mar 31, 2007

The Directors present herewith the Nineteenth Annual Report on the affairs of the company along with the report of the Auditors on the accounts of the company for the Financial Year 2006-07.

FINANCIAL RESULTS AND PERFORMANCE

The performance of the company is summarised as under;

Rupees in lacs Particulars Current Year Previous year

Sales and other Income 837.46 1086.21 Profit before interest, depreciation and tax 41.97 61.12 Interest 9.08 6.75 Profit before depreciation and tax 32.89 54.37 Depreciation 30.33 29.27 Profit before tax for the current year 2.56 25.10 Profit after tax for the current year 4.71 22.12 Reserves as at the end of the year 205.84 201.68 Share Capital 565.33 565.33 Earnings per share 0.04 0.39

MANAGEMENT DISCUSSION. ANALYSIS AND OPERATIONS

OPERATIONS OF 2006-07

The company despite its best efforts could not increase the volumes in the pipes division due to un- healthy competition from unorganised sector. The company has to maintain the quality of its products which is compromised by unorganized sector

The software division posted a loss of Rs.5.32 lacs on a turnover of Rs. 175.40 lacs.

On a overall performance basis the profitability of the company after making adjustments for deferred taxation as per Accounting Standard - 22 (Accounting for Taxes on Income) and providing for current taxation has been Rs. 4.71 lacs as against Rs. 22.12 lacs in the previous year.

FUTURE OUTLOOK

Having put in its best efforts the company is not able to maintain a set growth pattern in the present line of activity. The management, therefore has come to a conclusion that to have a sustained growth and increased profitability and returns on investments the company is looking at strategic mergers and acquisitions which in the opinion of the management will give a tremendous boost to the growth prospects.

The management will approach the members for the required permissions and sanctions in due course of time.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

RESPONSIBILITY STATEMENT (SECTION 217 (2AA) OF THE COMPANIES ACT. 1956)

a. The accounting standards to the extent applicable to the company have, been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. 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.

d. The annual accounts have been prepared on going concern basis.

DIRECTORS

Sri G.Raja Reddy and Sri S.Krishna Prasad, Director of the company retire by rotation at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

REPORT ON CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on corporate governance is annexed and form part of the Directors Report.

AUDITORS

Messrs V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

The company maintained friendly and cordial relations with its employees during the year. There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

The Board of Directors place on record their appreciation of the support extended to the company by State Bank .of Hyderabad, the Bankers to the company, the employees and customers of the company and to all the shareholders.

On behalf of the Board

N.KISHAN REDDY CHAIRMAN

Secunderabad, June 29, 2007.

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Mar 31, 2006

The Directors present herewith the Eighteenth Annual Report on the affairs of the company along with the report of the Auditors on the accounts of the company for the Financial Year 2005-06.

FINANCIAL RESULTS AND PERFORMANCE

The performance of the company is summarised as under;

Rupees in lacs Particulars Current year Previous year

Sales and other Income 1086.21 1159.71

Profit before interest, depreciation and tax 61.12 47.78

Interest 6.75 5.80

Profit before depreciation and tax 54.37 41.98

Depreciation 29.27 29.48

Profit before tax for the current year 25.10 12.50

Profit after tax for the current year 22.12 11.45

Reserves as at the end of the year 201.68 179.39

Share Capital 565.33 565.33

Earnings per share 0.39 0.20

MANAGEMENT DISCUSSION, ANALYSIS AND OPERATIONS

OPERATIONS OF 2005-06

The company despite its best efforts could not increase the volumes in the pipes division due to un-healthy competition from unorganised sector. However, On a overall performance basis the profitability of the company after making adjustments for deferred taxation as per Accounting Standard - 22 (Accounting for Taxes on Income) and providing for current taxation has been Rs. 22.12 lacs as against Rs. 11.45 lacs in the previous year.

FUTURE OUTLOOK

Having put in its best efforts the company is not able to maintain a set growth pattern in the present line of activity.

The management, considering the past experience and perceived future prospects in the PVC Pipes line, has come to a conclusion that to have a sustained growth and increased profitability and returns on investments the company needs to have different products and a better spread/range in products and services.

As a first step in this direction the company had identified GRP pipes as a product having good future and management is studying the feasibility of setting up the unit. The management, given its past experience in the pipe industry, believes that this new product line will augment the resources of the company and increase the profitability. This unit if setup will be operational in the Financial Year 2007-08.

To further the growth of the company on the lines mentioned above, the company is also looking at strategic mergers and acquisitions which in the opinion of the management will give a boost to the growth prospects.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

RESPONSIBILITY STATEMENT (SECTION 217 (2AA) OF THE COMPANIES ACT, 1956)

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. 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.

d. The annual accounts have been prepared on going concern basis.

DIRECTORS

Sri. T.Naveena Chandra and Sri. G. lndrasena Reddy, Director of the company retire by rotation at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

REPORT ON CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on corporate governance is annexed and form part of the Directors Report.

AUDITORS

Messrs V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

The company maintained friendly and cordial relations with its employees during the year. There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956.

ACKNOWLEDGEMENT

The Board of Directors place on record their appreciation of the support extended to the company by State Bank of Hyderabad, the Bankers to the company, the employees and customers of the company and to all the shareholders.

On behalf of the Board N. KISHAN REDDY Chairman Secunderabad, June 29th, 2006.

ANNEXURE TO DIRECTORS REPORT FOR THE FINANCIAL YEAR 2005-06

Current Year Previous Year

A. CONSERVATION OF ENERGY

Electricity

Units Purchased 5,48,862 6,07,966

Total cost (Rupees) gross 24,48,485 27,61,155

Rate per unit (Rupees) 4.46 4.54

Energy Conservation measures taken and impact thereof

No substantial investments have been made in this year in this regard.

B. TECHNOLOGY ABSORPTION : Not applicable

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign Exchange Earnings: US Dollars NIL from Software Exports (Previous year US Dollars 6,137.17) Foreign Exchange Outgo: NIL (Previous Year-NIL) towards traveling.

On behalf of the Board N. KISHAN REDDY Chairman Secunderabad, June 29, 2006.

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Mar 31, 2005

The Directors present herewith the Seventeenth Annual Report on the affairs of the company along with the report of the Auditors on the accounts of the company for the financial year 2004-05

FINANCIAL RESULTS AND PERFORMANCE

The performance of the company is summarised as under:

Rupees in lacs Current year Previous year

Sales and other Income 1159.71 937.42

Profit before interest, depreciation and tax 47.78 52 88

Interest 5.80 7.74

Profit before depreciation and tax 41.98 45.14

Depreciation 29.48 29.49

Profit before tax for the current year 12.50 15.65

Profit after tax for the current year 7.63 2.59

Profit carried to the Balance Sheet 11.45 2.59

Reserves as at the end of the year 179.391 167.94

Share Capital 565.33 565.33

Earnings per share 0.20 0 004

MANAGEMENT DISCUSSION. ANALYSIS AND OPERATIONS

Outlook for the fiscal 2005-06

* The company will continue its efforts to further increase its market share in the products manufactured.

* The cost control measures initiated in the earlier year will be further intensified and the management foresees further reduction in costs and thereby increase in profitability

* The management will look for new avenues to increase the operations and to augment the growth of the company Operations of 2004-05

The company in the current year registered an increase of about 23% in its turnover over the previous year and posted a modest profit of Rs. 11.45 lacs after taxes, thus registering a positive growth and increasing the earnings per share from almost zero to 0 20ps in the current year. The Software Division registered gross receipts of Rs.98.32 lacs against Rs.15 lacs in the previous year

The company through its internal controls and the audit committee has carried out reviews periodically in order to further strengthen the system.

The company with its ongoing cost controls and efficiency improving measures both in production as well as administration in this fast changing business environment looks positive and will create more wealth for its stake holders in coming years

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo These particulars are disclosed in the Annexure to this report.

RESPONSIBILITY STATEMENT (Section 217 (2AA) of the Companies Act. 1956)

a. The accounting standards to the extent applicable to the company nave been followed in the preparation of the annual accounts. There are no material departures there-from

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have been made, for the said purpose so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. 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.

d. The annual accounts have been prepared on going concern basis.

DIRECTORS

Sn G. Raja Reddy and Sri. N. Srinath Reddy, Director of the company retire by rotation at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment

REPORT ON CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on corporate governance is annexed and form part of the Directors Report.

AUDITORS

Messrs V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment

EMPLOYEES

The company maintained friendly and cordial relations with its employees during the year. TrTere are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956.

ACKNOWLEDGEMENT

The Board of Directors place on record their appreciation of the support extended to the company by State Bank of Hyderabad, the Bankers to the company, the employees and customers of the company and to all the shareholders.

On behalf of the Board N.KISHAN REDDY Chairman Secunderabad, June 29th, 2005.

ANNEXURE TO DIRECTORS REPORT FOR THE FINANCIAL YEAR 2004-05.

Current Year Previous Year A. CONSERVATION OF ENERGY

Electricity

Units Purchased 6,07,966 4,47,907

Total cost (Rupees) gross 27,61,155 22,53,236

Rate per unit (Rupees) 4.54 5.03

Energy Conservation measures taken and impact thereof

No substantial investments have been made in this year in this regard.

B. TECHNOLOGY ABSORPTION : Not applicable

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign Exchange Earnings: US Dollars 6,137.17 from Software Exports (Previous year US Dollars 14,482) Foreign Exchange Outgo. NIL (Previous Year-6,030) towards traveling.

On behalf of the Board N.KISHAN REDDY Chairman Secunderabad, June 29th, 2005.

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Mar 31, 2004

To the Members of Bhagyanagar Wood Plast Limited, Secundrabad. The Directors present herewith the Sixteenth Annual Report on the affairs of the company along with the report of the Auditors on the accounts of the company for the financial year 2003-04. FINANCIAL RESULTS AND PERFORMANCE The performance of the company is summarised as under; Rupees in lacs Current Previous year year Sales and other Income 937.42 879.11 Profit, before interest, depreciation and tax 52.88 37.13 Interest 7.74 5.04 Profit before depreciation and tax 45.14 32.09 Depreciation 29.49 29.65 Profit before tax forthe current year 15.65 2.44 Profit after tax forthe current year 2.59 4.53 Profit carried to theBalance Sheet 2.59 4.53 Reserves as at theend of the year 167.94 161.01 Share Capital 565.33 565.33 Earnings per share 0.004 0.008

DIRECTORS N. Kishan Reddy has been appointed as Managing Director of the company for a further period of five years beginning with financial year 2004-2005 by the Board of Directors at the meeting held on March 31, 2004. Necessary resolution seeking approval of the members for his re-appointment has been included in the notice for the ensuing Annual General meeting. Sri. S. Krishna Prasad, Director of the company retires by rotation at the conclusion of the ensuing Annual General Meeting and is eligible for reappointment. CORPORATE GOVERNANCE Pursuant to clause 49 of the Using Agreement, a report on corporate governance is annexed and form part of the Directors Report. AUDITORS Messers V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for-reappointment. EMPLOYEES The company maintained friendly and cordial relations with its employees during the year. There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956. ACKNOWLEDGEMENT The Board of Directors place-on record their appreciation of the support extended to the company-by State Bank of Hyderabad, the Bankers to the company, the employees and customers of the, company and to all the shareholders. On behalf of the Board Place : Secunderabad, N. KISHAN REDDY Date : July 30, 2004 Chairman

TECHNOLOGY ABSORPTION Not applicable. C. FOREIGN EXCHANGE EARNINGS AND OUTGO Foreign Exchange Earnings: US Dollars 4,482 from Software Exports (Previous year 1!S Dollars 25,923) Foreign Exchange Outgo : NIL (Previous Year-6,030) towards travailing. On behalf of the Board Place : Secunderabad, N. KISHAN REDDY Date : July 30; 2004 Chairman

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Mar 31, 2003

The Directors present herewith the Fifteenth Annual Report on the affairs of the company along with the report of the Auditors on the accounts of the company for the financial year 2002-03.

FINANCIAL RESULTS AND PERFORMANCE

The performance of the company is summarised as under;

Rupees in lacs Current Previous year year

Sales and other Income 879.11 1102.08

Profit before interest, depreciation and tax 37.13 97.46

Interest 5.04 12.27

Profit before depreciation and tax 32.09 85.19

Depreciation 29.65 29.96

Profit before tax for the current year 2.44 55.23

Profit after tax for the current year 4.53 50.14

Proposed dividend - 45.23

Profit carried to the Balance Sheet 4.53 4.91

Reserves as at the end of the year 161.01 152.13

Share Capital 565.33 565.33

Earnings per share 0.08 0.89

MANAGEMENT DISCUSSION, ANALYSIS AND OPERATIONS

Outlook for 2004 Financial Year To improve the marketing network for the private markets.

To increase the operations in the software sector such as BPO etc.

The demand for the PVC pipes is mainly from the agricultural sector and from water supply scheme undertaken by the Government. With the improvement in the farming techniques and increased governmental spending in the comming years the market for the products of the Company is expected to be stable.

INTERNAL CONTROL SYSTEMS

The Company has an effective internal control system in place and this is continually reviewed for effectiveness and is augmented by written policies and guidellines, careful selection of qualified personnel and a strong programme on internal audit. The Company believes that the overall system of internal control is adequate given the size and nature of operations and effective implementation of internal control assessment procedures.

The internal control of the Company is also reviewed by the Audit Committee of the Board periodically, and suggestions and recommendations of the Committee are carried out.

OPERATIONS

The company again faced a rough patch in its progress in the year 2002-03. The software division, which was expected to do well, did not pick up as anticipated due to the recession in the industry. The overall performance of the company though can be termed satisfactory, in as much as, the company did not incur any losses, the market forces mainly stoppage of direct procurement of PVC Pipes by Government Departments, and the operational bottlenecks faced by the management during the period adversely affected the performance.

The manufacturing facility was shut down during the year for about a month and a half. The employees had to be compensated as they were leaving the company. The cost of employee compensation to the company was to the extent of Rs.9.64 lacs. The operational restructuring that the management had undertaken during the period though cost the company during the accounting year 2002-03, the impact of the same would be seen in the form of reduced costs in the coming years.

The company has, after careful market study, started during the year 2002-03, HDPE Pipe manufacturing and efforts are on to market the product. The operations on this front are expected to increase and yield good results to the company in the coming years.

Though the company was passing through troubled times, it has been able to with stand the same due to the strong commitment of the key employees. The management is confident of improving its performance in the year to come.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

RESPONSIBILITY STATEMENT (Section 217 (2AA) of the Companies Act, 1956)

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. 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.

d. The annual accounts have been prepared on going concern basis.

DIRECTORS

Sri. T. Naveena Chandra, Director of the company retires by rotation at the conclusion of the ensuing Annual General Meeting and is eligible for reappointment.

Sri. G. Indrasena Reddy was appointed as an Additional Director of the company at the meeting of the Board of Directors held on July 30, 2003. A resolution for his appointment as an independent director on the Board of the company is being proposed for the approval of the members in the annual general meeting.

CORPORATE GOVERNANCE.

As required under clause 49 of the Listing Agreement, a Report on corporate Governance" is annexed and form part of the Directors Report.

AUDITORS

Messrs V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

The company maintained friendly and cordial relations with its employees during the year. There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956.

ACKNOWLEDGEMENT

The Board of Directors place on record their appreciation of the support extended to the company by State Bank of Hyderabad, the Bankers to the company, customers, employees of the company and to all the shareholders.

On behaif of the Board Place: Secunderabad, N.KISHAN REDDY Date: August 18, 2003 Chairman

ANNEXURE TO DIRECTORS REPORT

for the Financial Year 2002-03. Current year Previous year

A. CONSERVATION OF ENERGY

Electricity

Units Purchased 4,47,907 8,69,399

Total cost (Rupees) gross 22,53,236 38,15,127

Rate per unit (Rupees) 5.03 4.38

Own Generation Units Generated - 68,046

Total Cost - 3,48,400

Rate per unit (Rupees) - 5.12

Energy Conservation measures taken and impact thereof;

No substantial investments have been made in this year in this regard.

B. TECHNOLOGY ABSORPTION

Not applicable to our company.

C. FOREIGN EXCHANGE EARNINGS AMD OUTGO

Foreign Exchange Earnings US Dollars 25,923 from Software Exports (Previous year US Dollars 1,29,425)

Foreign Exchange Outgo US Dollars 6,030 (Previous Year - 5,800) towards travelling.

On behalf of the Board Place: Secunderabad, N.KISHAN REDDY Date: August 18, 2003 Chairman

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Mar 31, 2002

The Directors present herewith the Fourteenth Annual Report along with the report of the Auditors on the accounts of the company for the financial year 2001-02.

FINANCIAL RESULTS AND PERFORMANCE

The performance of the company is summarised as under;

Rupees in Lacs Current Previous year year

Sales and other Income 1102.08 931.33

Profit before interest, depreciation and tax. 97.46 (-) 31.17

interest 12.27 13.57

Profit before depreciation and tax 85.19 (-) 44.74

Depreciation 29.96 28.72

Profit before tax for the current year 55.23 (-) 73.46

Profit after tax for the current year 50.14 (-) 73.46

Proposed dividend 45.23 -

Profit carried to the Balance Sheet 4.91 (-) 73.46

Reserves (Excluding Revaluation Reserve) as at the end of the year 152.13 215.37

Share Capital 565.33 565.33

Earnings per share 0.88 -

OPERATIONS

The company is slowly but steadily coming out of the recessional trends observed in the last couple of years.

The turnover of pipes division posted a marginal increase during the year. However the company achieved a quantum jump in the operations of the software division, T he gross receipts from the software activity of the company increased from Rs. 17.81 lacs in the previous year to Rs. 57.36 lacs in the current year.

Though the increase in the manufacturing activity of the company may not be substantial in the year 2002-03 and subsequent years, the management is confident that the software division of the company will post better results in the coming years.

in addition to the Product development and software development activities, the company has entered the areas of IT enable services and The members are aware that the company with the approval 01 the members in general Venkateswara Pipes Limited and also rendered technical assistance. The Royalty earned from Sri Venkateswara Pipes Limited is Rs. 20.21 lacs during the year as against Rs. 4.33 tecs in the previous year.

DIVIDEND

Your directors are happy to propose a dividend of Rs. 0.80 per every share of Rs. 10/- fully paid aggregating to Rs. 45.23 lacs.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

RESPONSIBILITY STATEMENT (Section 217 (2AA) of the Companies Act; 1956)

a. he accounting standards TO me extent applicable So the company have been followed in the preparation of the annual accounts. There are no material departures there from.

b. The accounting policies selected by the Board for the purpose of preparation ana presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have beer, made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. Proper and sufficient care has been taken for the maintenance of adequate accounting of the Companies Act, 1955 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d. the annual accounts have been prepared on going concern basis.

DIRECTORS

Sri. S.Krishna Prasad, ana Sri. G. Raja Reddy, Directors, retire by rotation at the conclusion of The ensuing Annual General Meeting and are eligible for reappointment.

AUDIT COMMITTEE

The Audit Committee comprising of Sri. T. Naveena Chandra, Sri. S. Krishna Prasad and Sri. G. Raja Reddy as its members met at regular intervals during the year.

The Annual Accounts for the Financial Year 2001-02 and the report of the Auditors thereon have been reviewed by the committee and the recommendations of the Committee have been accepted by the Board.

AUDITORS

Messrs V. Sridhar & Co., Chartered Accountants, Hyderabad. the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

The company maintained friendly and cordial relations with its employees during the year. There are no employees on the rolls of the company whose particulars are required to be disclosed in the report of the Directors.

ACKNOWLEDGEMENT

The Board of Directors place on record their appreciation of the support extended to the company by State Bank of Hyderabad, the Bankers to the company, the employees of the company and above all the shareholders.

ANNEXURE TO DIRECTORS REPORT

A. TECHNOLOGY ABSORPTION

Not applicable to our company.

B. FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign Exchange Earnings US Dollars 1,29,425 from Software Exports (Previous year US Dollars 38,931)

Foreign Exchange Outgo US Dollars 5,800 (Previous Year - 6,600) towards travelling.

On behalf of the Board

Place: Secunderabad, N. KISHAN REDDY Date: August 17th 2002 Chairman

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Mar 31, 2001

The Directors present herewith the Thirteenth Annual Report along with the report of the Auditors on the balance sheet as at March 31, 2001 and the profit and loss account for the financial year 2000-2001.

FINANCIAL RESULTS AND PERFORMANCE

Rupees in lacs Current Previous year year

Sales and other Income 931.33 1310.24 Profit before interest, depreciation and tax (-) 31.17 118.04 Interest 13.57 17.62 Profit before depreciation and tax (-) 44.74 100.42 Depreciation 28.72 22.83 Profit before tax (-) 73.46 77.59 Provision for income tax - 8.50 Profit after tax (-) 73.46 69.09 Prior period items - 27.85 Profit carried to the Balance Sheet (-) 73.46 41.24 Reserves (Excluding Revaluation Reserve) as at the end of the year 215.37 288.83

OPERATIONS

As reported earlier, the industry scenario has seen major changes in the year 1999-2000 with the departure by the government from the earlier rate contract system of procurement of pipes. The impact of this change has adversely affected the operations of the company both in terms of turnovers as well as profitability.

The company has faced teething problems in the transition phase from the earlier rate contract system.

However with a view to not only augment the profitability but also explore new markets the company has, in a modest way, started supplies to the private markets in Tamilnadu and Karnataka in addition to Andhra Pradesh with new products like PVC suction pipes etc.

The software division of the company has doubled its gross income from Rs. 8.85 lacs in the previous year to Rs. 17.81 lacs in the current year. However amounts invested towards the development of Products and Tools have affected the profitability of this division.

The management is confident that the products will be well accepted in the markets and once there is a improvement of the software market, the company will definitely improve its performance.

The company is exploring the African and Middle East in addition to the American markets for its software products in addition to onsite consulting. With the experienced and valuable manpower and human resources presently available with the company, the management is confident of achieving fair results in the coming years.

DISCLOSURE

a. The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

b. In respect of the employees, there are no employees on the rolls of the company whose particulars are required to be disclosed in the report of Directors in pursuance of section 217(2A) of the Companies Act, 1956.

RESPONSIBILITY STATEMENT (Section 217 (2AA) of the Companies Act, 1956)

a. The accounting standards to the extent applicable to the company have been followed in the preparation of the annual accounts. There are no material departures there-from.

b. The accounting policies selected by the Board for the purpose of preparation and presentation of the financial statements have been and are being applied consistently and reasonable and prudent the judgements and estimates (wherever applicable) have been made, for the said purpose, so as to give a true and fair view of the affairs of the company as at end of the financial year under review and of the profit for the said year.

c. 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.

d. The annual accounts have been prepared on going concern basis.

DIRECTORS

Pursuant to Article 132 of the Articles of Association of the Company read with Section 255 of the Companies Act, 1956, Sri. N. Srinath Reddy, Director of the Company retires by rotation and being eligible offers himself for re-appointment.

Sri. G. Hemanth Reddy, Director of the company resigned during the year. The resignation was accepted by the Board at the meeting held on December 29, 2000. The Board of Directors wishes to place on record their appreciation for the service rendered to the company by Sri.G.Hemanth Reddy during his office as Director.

Sri S.R.Acharya, a man of wide ranging interests and experience of nearly three decades in Finance and Management was appointed as an additional director at the meeting of the Board of Directors held on December 29, 2000. Unfortunately he expired on January 25, 2001. The Directors wish to place on record their heart felt condolences and pray that his soul rests in peace.

Sri.G.Raja Reddy was appointed as an Additional Director at the meeting of the Board of Directors held on December 29, 2000. Sri T. Naveena Chandra and Sri S. Krishna Prasad have been inducted into the Board on June 15, 2001.

The members are requested to regularize their appointment.

AUDIT COMMITTEE

In terms of section 292A of the Companies Act, 1956 an Audit Committee has been formed with Sri.T.Naveena Chandra, Sri.S.Krishna Prasad and Sri.G.Raja Reddy as its members. The committee functioned under the Chairmanship of Sri.T.Naveena Chandra on the following terms of reference.

a. To discuss and review with Auditors the matters relating to the Internal Control System;

b. To ensure compliance with the Internal Control System;

c. To make recommendations to the Board on matters relating to Internal Control System and Financial Management;

d. To review the financial information, both half yearly and annual, with the Auditors about their observations, before submission to the Board.

e. To make recommendations to the Board on matters relating to Audit, Audit Observations and Audit Report

f. To investigate into all the matters covered under section 292A of the Companies Act, 1956 and such other matters as may be referred to the Committee by the Board from time to time.

The Committee reviewed the Annual Accounts for the Financial Year 2000-01 and the reports of the Auditors thereon. The Board has accepted the recommendations of the Committee.

AUDITORS

Messrs. V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

The company has in the last one year has built up a strong human resource base in its software professionals. The commitment shown by them in the development of the products of the division is commendable.

The employees of the pipes division are being very supportive to the management in difficult times the company is passing through.

ACKNOWLEDGEMENT

The management wishes to thank State Bank of Hyderabad, the Bankers to the company, the employees of the company and above all the shareholders for the support being extended during these difficult times.

On behalf of the Board N.KISHAN REDDY Chairman Place : Secunderabad Date : June 28, 2001

B. TECHNOLOGY ABSORPTION

Not applicable to our company.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign Exchange Earnings US Dollars 38,931 from Software Exports (Previous year US Dollars 20,000)

Foreign Exchange Outgo US Dollars 6,600 (Previous Year - Nil) towards travelling.

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Mar 31, 2000

The Directors present herewith the 12th Annual Report along with the report of the Auditors on the balance sheet as at March 31st, 2000 and the profit and loss account for the financial year 1999-2000.

FINANCIAL RESULTS AND PERFORMANCE

Rupees in lacs

Current Previous year year

Sales and other Income 1310.24 1742.10

Profit before interest, depreciation and tax 118.04 182.75

Interest 17.62 16.27

Profit before depreciation and tax 100.42 166.48

Depreciation 22.83 24.57

Profit before tax for the current year 77.59 141.91

Provision for income tax for the year 1999-2000 8.50 --

Profit after tax for the current year 69.09 141.91

Prior period items 27.85 --

Profit carried to the Balance Sheet 41.24 141.91

Reserves (Excluding Revaluation Reserve) as at the end of the year 288.83 247.59

OPERATIONS

During the year 1999-2000 the areas which the company was operating and the companies operating profile itself have undergone major changes. The major supplies of the company in respect of PVC pipes were made to various Government departments under "Rate Contract" system. As a major policy shift the Government of Andhra Pradesh has dispensed with the system of procurring through "Rate Contracts". In the changed circumstances either the person supplying the pipes should undertake the work of laying the pipeline or the person laying the pipeline should procure the pipes on his own account.

This change in the working environment adversely affected the operations of the company which resulted in reduced turnover with respect to PVC Pipes thereby affecting the profitability.

However the company geared up itself to face the situation and has registered as an eligible contractor with the Government of Andhra Pradesh and made a small beginning in procurring pipe laying contracts. With the infrastructure of the pipe manufacture already in existence, the company has adequate strength to undertake the contracts.

Though there was a temporary setback in the PVC pipes manufacturing activity of the company the operations of the company got a boost with the successful commencement of the software division and the investment activities of the company. These activities of the company have been authorised by the resolutions of the members in the earlier general meetings.

The investment activity of the company yielded Rs. 11.01 lacs as profit during the financial year 1999-2000.

The software division of the company started off as planned and in the very beginning of its operations has earned a foreign exchange of US Dollars 20,000. Though a small beginning the management is confident of substantial growth in the coming years.

The company has also ventured into the interest zone by launching a portal of its own namely bhagyastock.com. The portal facilitates online investment operations between investors and members of the stock exchange while providing value added services such as investment portfolio management and assorted information about various companies to suit individual needs of the investors.

The year 1999-2000 also saw the company venture into manufacture of HDPE pipes. With the exponential growth in the telecommunication sector the demand for HDPE pipes has also grown tremendously. The company has prepared itself to meet the market requirements. With the commencement of manufacture of HDPE pipes the company has bagged an order of Rs. 70.00 lacs from one of the group companies of Reliance Industries.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

In respect of the employees, there are no employees on the rolls of the company whose particulars are required to be disclosed in the report of Directors in pursuance of section 217(1)(e) of the Companies Act, 1956.

Y2K COMPLIANCE

All the systems of the company are Y2K compliant and adequate care has been taken to avoid any complications in this regard. None of the plant and machinery/manufacturing facilities are computerised and hence not affected.

DIRECTORS

Sr. G. Hemanth Reddy, Director of the company retires by rotation and being eligible offers himself for re-appointment.

Sri. G. Hemanth Reddy has been appointed as Director on 27-9-1996 on the following terms and conditions and re-appointed on 29-9-98 on the same terms and conditions.

Salary - Rs. 10,000 per month.

Perquisite : 1. Telephone at house (excluding personal long distance (calls).

2. Provident Fund as per rules of company.

3. Personal Accident Insurance premium not exceeding Rs. 2,000/-.

4. Medical re-imbursement for self and family (consisting of self, spouse, dependent children and dependent parents) subject to a maximum of one month of salary over one year or three months salary over a period of three years.

No change in the above terms of remuneration are proposed.

AUDITORS

Messrs. V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

The company during the year has employed software professionals for its software division. The support extended by these professionals resulted in successful commencement, of software division and also launching of the portal.

The employees of the factory have been very supportive to the management in setting up of HDPE pipe manufacturing facility. The management considers employees its core strength and would like to place on record their appreciation for the supportive role played by the employees.

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Mar 31, 1999

The Directors are pleased to present the Eleventh Annual Report of the Company along with the Audited Balance Sheet as at March 31, 1999 and the Profit and Loss Account for the financial year 1998-99.

FINANCIAL RESULTS AND PERFORMANCE

Rupees in lacs Current Previous Year Year

Sales and other Income 1742.10 1496.77

Profit before interest, depreciation and tax 182.75 101.17

Interest 16.27 23.42

Profit before depreciation and tax 166.48 77.75

Depreciation 24.57 19.86

Profit before tax 141.91 57.89

Provision for income tax -- --

Profit after tax 141.91 57.89

The turnover of the Company increased from Rs. 1496.77 lacs during the financial year 1997-98 to Rs. 1742.10 lacs during the financial year under review, an increase of 16.39% over the previous year. The Net Profit of the Company is Rs. 141.91 as compared to Rs. 57.89 of the previous year. The percentage increase in the Net Profit is 145.12% over the last year.

This is the direct result of the efforts of the management and the employees of the Company towards cost cutting measures that have been initiated during the last two financial years. The production capacities of the plant have also been put to improved usage in the current year as compared to the last year.

The management hopes to maintain the improving trend in the results.

NEW BUSINESS AVENUES

It may be recalled that the members had earlier approved alteration of the Memorandum of Association of the Company by addition thereto the object of software development, etc. The management is exploring this area of the business and all efforts are being made to identify ventures / areas that yield results on the long term basis. Once the activities and areas are identified, the Company would start the same after taking necessary approvals and completing other legal formalities.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

In respect of the employees, there are no employees on the rolls of the Company whose particulars are required to be disclosed in the report of Directors in pursuance of Section 217(1)(e) of the Companies Act, 1956.

Y2K COMPLIANCE

The Company has incurred Rs. 0.15 lacs on upgrading its information systems to make it Y2K compliant. The manufacturing process and none of the machinery / plant of the Company are computerised and hence are not affected by Y2K bug. However, the Company is gearing itself to address any contingencies in this regard.

DIRECTORS

Sri N. Srinath Reddy, Director of the Company retires at the conclusion of the ensuing Annual General Meeting and being eligible offers himself for reappointment.

Sri N.Kishan Reddy has been appointed as the Managing Director of the Company for a further period of Five Years beginning with financial year 1999-2000, by the Board of Directors at the meeting held on May 27, 1999. Necessary resolutions for the approval of the members are being proposed at the ensuing Annual General Meeting.

AUDITORS

Messrs V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

EMPLOYEES

The Directors wish to place on record their appreciation for the cooperation extended by the employees and the role played by them in the operating results of the Company. The relations with the employees have been cordial throughout the year. TECHNOLOGY ABSORPTION

Not applicable to our company.

FOREIGN EXCHANGE EARNINGS AND OUTGO

There are no Foreign Exchange Earnings or Outgo in the year under review (Previous Year - Nil)

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Mar 31, 1998

The Directors present herewith their report on the affairs of the company for the financial year ended March 31, 1998.

FINANCIAL RESULTS Rupees in lacs Current year Previous year Sales and other Income 1496.77 1,078.89 Profit before interest, depreciation and tax 101.17 57.97 Interest 23.42 28.67 Profit before depreciation and tax 77.75 29.30 Depreciation 19.86 17.16 Profit before tax 57.89 12.14 Provision for income tax - - Profit after tax 57.89 12.14

PERFORMANCE AND BUSINESS PROSPECTS

The members will appreciate the fact that the company has performed excellently in the current year. The sales and other income which were Rupees 1078.89 lacs for 1996-97 rised to Rupees 1496.76 lacs during 1997-98 recording an increase of 38.73%.

The cost saving measures, better capacity utilisation coupled with lesser interest burden during the year had a positive impact on the profitability of the company. The profit before tax which stood at Rupees 12.14 lacs in the year 1996-97 increased to Rupees 57.89 lacs for the year 1997-98 recording an increase of 376%.

The Directors are confident of maintaining consistency of improved performance in the current year also.

The management is confident of procuring orders in bulk from various government departments and other contractors. This will improve the performance for 1998-99.

SUBSIDY

Out of the total sanctioned amount of Rupees 15.00 lacs, the company had received Rupees 14.37 lacs by March 31, 1997. The balance of Rupees 0.63 lakhs has been received during the year.

NEW BUSINESS AVENUES

The management has been contemplating, for some time now, to venture into new areas of business, to enhance the earnings of the company. After careful consideration and also keeping in view the future prospects the Directors have identified Information Technology as the area with immense potential, both present and future.

The Objects of the company as they stand at present do not permit the company to pursue the proposed business. Hence the management of the company is moving two special resolutions under section 17 and 149 of the Companies Act 1956, to alter the objects clause of the memorandum and to enable the company to pursue the new object, respectively. The management is confident that the new business avenues will yield good results in the years to come.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

In respect of the employees, there are no employees on the rolls of the company whose particulars are required to be disclosed in the report of Directors in pursuance of section 217(1)(e) of the Companies Act, 1956.

DIRECTORS

Sri G. Hemanth Reddy, Director of the company retires at the conclusion of the ensuing annual general meeting and being eligible offers himself for reappointment.

AUDITORS

Messers V. Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

The company maintained cordial relations with its employees throughout the year. The Directors wish to place on record their appreciation for the cooperation extended by the employees.

Energy Conservation measures taken and impact thereof;

a. Installation of Servo Stabilizers, Digital PID temperature controllers and Air Dryers reduces the consumption of air and power and regulate the consistency of voltage which saves from the frequent break downs and also energy costs and helps in reduced spares consumption.

b. Development of local vendors for specially chemicals, this helps in reducing the dosage of chemicals in formulations and also ensures consistent quality in finished goods.

c. Installation of water softner for chilling plant and cooling tower which reduces maintenance of machinery and improves efficiency of the same.

TECHNOLOGY ABSORPTION

Not applicable to our company.

FOREIGN EXCHANGE EARNINGS AND OUTGO

OUTGO

Current year Previous year

Towards raw materials Nil 3,99,458 Towards Travelling Nil Nil Equivalent to UDS Nil 11,050

EARNINGS Nil Nil

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Mar 31, 1997

The Directors present herewith their report on the affairs of the Company for the financial year ended 31st March, 1997.

FINANCIAL RESULTS Rupees in lacs. Current Previous Year Year Sales and Other Income 1,078.89 637.38 Profit before interest, depreciation and tax 57.97 54.85 Interest 28.67 24.50 Profit before depreciation and tax 29.30 30.35 Depreciation 17.16 15.40 Profit before tax 12.14 14.95 Provision for income tax - - Profit After Tax 12.14 14.95

PROJECTIONS VS. PERFORMANCE

Projections Performance

Sales 2,133.60 1,059.18 Depreciation 44.09 17.16 Income Tax 0.00 0.00 Profit After Tax 243.49 12.14

PERFORMANCE AND BUSINESS PROSPECTS

The Company has achieved a turnover of Rupees 1,078 lacs during the year, in spite of recession and stiff competition from the major players in the field. The profits, however have been very low due to increase in certain elements of cost and also due to break down of a manufacturing line for part of the year. The profit margins for the year have been generally very low.

The Directors are, however, happy to announce that the Company has received very good and large orders for the current year which are expected to increase the turnover of the Company further. With the technical problems in the machinery now sorted out the Company hopes to make the most out of the large orders on hand. The company has added another extruder to the existing production facilities with a view to produce, without any interruption, the fast moving category of pipes, so that the inventory holding costs would be reduced, thereby increasing the profitability and the Company can ensure a continuous supply into the market thereby having a consistent market presence.

One more positive aspect in the operations of the Company for the year under review is that the Company has executed its first bulk order of PVC foam Doors and Windows in Government undertakings which have shown a positive interest in the product. The Directors are hopeful of procuring repeated orders for the product, which will go on to add to the turnover and profit volumes of the Company in future.

SUBSIDY

The Company has been sanctioned a total investment subsidy of Rupees 15.00 lacs by the Government of Andhra Pradesh. Out of the sanctioned amount, the Company has received an amount of Rs.14.37 lacs as at 31st March, 1997. (Previous year Rupees 8.75 lacs). The amounts received during the year 1996-97 have been utilized for procuring the additional Extruder for enhancing the production capacities of the plant.

DISCLOSURE

The Directors are required to disclose certain information in their report with respect to Technology Absorption, Energy Conservation and Foreign Exchange Earnings and Outgo. These particulars are disclosed in the Annexure to this report.

In respect of the Employees. there are no employees on the rolls of the Company whose particulars are required to be disclosed in the report of Directors in pursuance of Section 217(1)(e) of the Companies Act, 1956.

DIRECTORS

The Members at the general meeting held on 18th April, 1994 approved a salary of Rupees 10,000 per month for Sri.N.Kishan Reddy, Managing Director of the Company. Sri N. Kishan Reddy, however did not draw salary from the Company. He expressed that, in view of the initial operational bottle necks faced by the Company it was not appropriate for the Company to be burdened with overheads. Consequently, he did not draw salary for the period 1st April, 1994 till 31st October, 1996. As the Company's operations are completely streamlined, the Managing Director has been drawing salary from 1st November, 1996 onwards at Rupees 10,000 per month. Sri N. Kishan Reddy has written to the Company to the effect that he shall not claim the earlier salary.

Sri. N.Srinath Reddy, Director of the Company retires at the conclusion of the ensuing Annual General Meeting and being eligible offers himself for reappointment.

AUDITORS

Messers V.Sridhar & Co., Chartered Accountants, Hyderabad, the Auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment.

EMPLOYEES

The Company maintained cordial relations with its employees throughout the year. The Directors wish to place on record their appreciation for the cooperation extended by the employees to the management during the difficult times which the Company had to go through.

ANNEXURE TO THE DIRECTORS' REPORT

Energy Conservation measures taken and impact thereof;

A. Installation of Servo Stabilizers, Digital PID temperature controllers and Air Dryers reduce the consumption of air and power and regulate the consistency of voltage which saves from frequent break downs and also energy costs and helps in reduced spares consumption.

B. Development of local vendors for speciality chemicals. This helps in reducing the dosage of chemicals in formulations and also ensures consistent quality in finished goods.

B. TECHNOLOGY ABSORPTION

Not applicable to our Company

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

OUTGO

Towards Raw materials 3,99,458 7,45,669 Towards Travelling Nil 19,747 Equivalent to USD 11,050 24,124 EARNINGS Nil Nil

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Mar 31, 1996

Your Directors are pleased to present the Eighth Annual Report on the affairs of the company for the financial year 1995-96, along with the Balance Sheet as at 31st March, 1996 and the Profit and Loss account for the year ended on that date and the Report of the Auditors thereon.

PERFORMANCE

As a first step in the direction of having a well developed distribution network your company has Increased the number of dealers. In addition to this your company also opened branches in those areas where the demand for the products of the company has been-estimated in high volumes. This gave the company the edge of direct presence in the market place and reduced the dependency on dealers.

During the year your company has successfully completed the supplies to World Bank Aided Project under the Deemed Exports Scheme and has been granted Advance Licence for the duty free import of raw materials. The complete entitlements under the Advance Licence will be utilised in the current financial year.

Your Company successfully launched PVC Foam Profiles in the market during the year and also added another plant to the existing manufacturing capacity. The supplies to the Government Departments in the state of Andhra Pradesh against rate contracts have been successfully made during the year and in addition to this your company has also participated in the tenders called for by other state governments. The directors are hopeful of getting a part of these tenders.

SUBSIDY AND TAX INCENTIVES

During the year your company has been granted State Subsidy to the extent of Rupees 15.00 lakhs Out of which an amount of Rupees 8.75 lakhs has already been received. Further your company has been granted Sales Tax Deferrment to the tune of Rupees 1.17 crores.

FUTURE PROSPECTS

Your company has been successful in entering into rate contracts with various Government Departments in respect of PVC Pipes and the directors are hopeful of entering into rate contracts in respect of PVC Foam Profile's also and planning to add some more plants in pipes and profiles. With this the company can expect a major boost to its turnover and profitability.

FIXED DEPOSITS

Your company did not accept any fixed deposits during the year.

INSTITUTIONS

During the year your company has restricted the loan amount sanctioned by Housing and Urban Development Corporation Limited, to Rupees 113.00 lacs only as against the sanction of Rupees 452.87 lacs. The complete loan amount has been drawn in the financial year 1994-95 and the balance term loan as on 31st March, 1996 is Rupees 92.46 lacs.

The Directors wish to place on record their gratitude towards the support extended to the company by Housing and Urban Development Corporation Limited and the professional contribution on the Board by its nominee Director Dr. G.S.R. Somayaji.

DIRECTORS

The Board of Directors appointed Sri. N. Srinath Reddy as additional director of the company on 20th November 1995 and on 29th March 1996 fixed a remuneration of Rupees 6000/- per month. Sri N. Srinath Reddy is presently looking after the marketing network of the company. He holds office until the conclusion of the ensuing annual general meeting and being eligible offers himself for reappointment.

Sri G Hemanth Reddy Director of the-company retires at the conclusion of the ensuing annual general meeting and being eligible offers himself for reappointment.

During the year Sri. A. Narasimha Reddy resigned as Director of the company and the Board accepted the same. The Board wishes to place on record its appreciation of the services rendered by him during his office as director of the company.

AUDITORS

M/s V. Sridhar & Co., Chartered Accounts, auditors of the company retire at the conclusion of the ensuing annual general meeting and are eligible for reappointment. The members are requested to appoint auditors of the company for the year 1996-97 and fix their remuneration.

EMPLOYEES

Keeping up with the tradition of harmonious and friendly relations with its employees the company maintained, during the year, friendly and cordial relationship with its employees, without whose cooperation and support, your company would not have made progress.

STATUTORY INFORMATION

Employees:

There are no employees whose particulars are required to be disclosed in the Directors' Report in pursuance of section 217(2A) of the Companies Act, 1956.

Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo:

Particulars containing necessary information as required by the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 are disclosed in the annexure to this report.

ACKNOWLEDGEMENTS

The directors wish to place on record their gratitude for the support and cooperation extended to the company by the employees, Housing and Urban Development Corporation Limited, State Bank of Hyderabad, Risk Capital and Technology Development Corporation, Andhra Pradesh Industrial Development Corporation and above all the share holders of the company.

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Mar 31, 1995

The Directors present herewith the 7th Annual Report alongwith the Balance sheet as on 31st March, 1995 and the Profit and Loss account for the period ended on that date and the Report of Auditors there on.

Financial Results.

Your company successfully commenced the commercial production of PVC Pipes on 1st August, 1994 and achieved a turnover of Rs. 1.07 crores for the eight months period ended 31st March, 1995. The Financial figures for the said period are as under.

Rupees in Lakhs Sales and Other income 124.08 Profit before interest, depreciation and tax 24.37 Interest 12.48 Profit before depreciation 11.89 Depreciation 6.18 Profit before tax 5.71 Provision for tax --- Balance carried to Balance sheet 5.71

Statement showing the projections made in the prospectus vis-a-vis Actual Performance for the year 1994-95 is detailed as below. Rs. in lakhs Actuals Projections Sales & other income 107.55 400.10 Depreciation 6.18 12.00 Tax -- -- Net profit after tax 5.73 34.01

Project Implementation & Performance

Your company has made significant progress in implementing the project. The Company has incurred an expenditure of Rs. 325.48 lakhs on the project upto 31st March, 1995. The turnover of the PVC Pipes during the period ended 31st March, 1995 was Rs. 107.55 lakhs. The same is less than the projected turnover since the company could not achieve the rated capacity due to raw material problems and power shortage. Moreover the BIS quality Certification for the company's products was granted only in month of January,1995 which had an adverse impact on sales.

To overcome the problem of erratic power supply and to have ninterrupted power supply, the plant and machinery had to be run with 100% own generated power.

During the current financial year the company has bagged a deemed export order worth Rs. 1.10 Crores of which 16.51 lakhs was executed during the period under review.

The implementation of PVC Foam panels/sheets project has been deferred for the time being as there has been sharp fall in international prices of the sheets and the escalation in cost of raw material.

Given the present scenario the company anticipates a severe competition from the Oriental Companies in Australian and European Markets due to which the entry of your company into this field will not be remunerative. The funds ear-marked for the foam sheets will be utilised for the production of other high value added products which would yield higher profit margins.

Your company is presently chalking out a strategic plan in this regard.

Although there has been a spurt in the prices of raw materials, your company has been able to pass on the incremental costs due to it's competative pricing.

Public Issue

Your company's Maiden public Issue in August, 1994 was over subscribed by 3.85 times. The allotment of shares was completed on 25-10-94. Consequently the share capital increased to Rs.565.33 lakhs.

Future Prospects

Your company has already entered into rate contract with Government departments such as APSIDC and Panchayat raj for supply of PVC pipes confirming to IS 4985 and IS 12818 Indian Standards. The PVC foam profiles are being marketed through well established dealer network all over Andhra Pradesh and in other important metros of the country. Your company has bagged a prestigious order for supply of PVC popes worth of Rs.1.1 crore to World bank aided Project and consequently entitled to import raw materials without paying the duty on the Sales which falls under the category of "Deemed Exports"

Your Company has since completed all the supplies and is eligible to claim the benefits which include the import of raw materials on duty exemption basis.

Fixed Deposits.

Your Company has not accepted any deposits from the public during the year.

Statutory Information

There are no employees whose particulars are required to be disclosed in the Director's Report as per the provisions of Section 217 2(A) of the Companies Act 1956 Read with Companies (Particulars of Employees) Rules 1975.

Conservation of Energy and Technology absorption and Foreign exchange out go.

A Statement containing the necessary information as required under the Companies (Disclosure of Particulars in the Report of directors) Rules 1988, is annexed hereto.

Technology Absorption

Your Company has started manufacturing PVC Blue Casing Pipes, Plumbing Pipes, SWR Pipes and PVC Foam Profiles by indegenously developed formulations and technology adopting Imported Machinery and critical equipments like Dyes etc,.

Your Company is one of the very few to get the IS-12818 of Blue Casing Pipes in India. The PVC Foam Profiles are Manufactured first time in South India by your Company and the same are well accepted in the market.

Foreign Exchange Earnings & out go

Earnings -Nil-

During the year your company has procured imported dyes for manufacture of PVC Foam profiles and other critical equipment and main raw materials for PVC Foam Profiles aggregating to Rs. 17,60,236/- (Raw materials consisting of CIF value US $ 5222.).