DIRECTORS' REPORT

To

The Members

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

Performance:

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

Dividend:

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

Board Meetings:

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

Reserves:

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

Subsidiaries, Joint Ventues and Associate Companies :

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

Insurance:

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

Fixed Deposits:

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

Listing of Shares:

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

Directors:

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

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

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

Evaluation of board performance

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

Company's policy on Directors' Appointment and Remuneration

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

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

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

Particulars of loans, guarantees or investments under section 186

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

Particulars of contracts or arrangements with related parties

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

Risk management policy

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

Vigil Mechanism / Whistle Blower Policy

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

Extract of Annual Return :

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

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

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

Corporate Governance:

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

Management Discussion and Analysis Report :

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

Corporate Social Responsibility :

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

Cost Auditors:

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

Statutory Auditors:

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

Secretarial Auditors:

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

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

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

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

Directors' Responsibility Statement:

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

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

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

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

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

(v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

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

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

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

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

Particulars of Employees:

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

Particulars of Remuneration:

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

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

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

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

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

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

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

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

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

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

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

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

Research and Development ( R & D)

1. Specific areas in which R&D carried out by the company:

a) By recovering waste heat available in H2SO4 plant, chilled water can be produced through operation of vapour absorption machine, for which placed order for 140 TR VAM and a plate heat exchanger and other necessary equipments. The vapour absorption machine can be commissioned by the end of April, 2015. Process performance of MCA & SBP plants improve with the utilization of chilled water thus produced .

b) The exact size range of Calcium hypo chlorite product granules with lowest dissolution time was arrived through the research carried out in laboratory.

To achieve the optimised size range a new equipment called oscillating granulator may be required. Process of procuring the same is under way. This is required to meet specific customer requirment. Order was placed for higher capacity compact machine also.

c) Applied to Ministry & Science & Technology, Government of India for awaiting recognition for our R&D centre developed in the company premises and waiting reply,

2. Benifits desired as a result of R&D :

With the improvements carried out in Old Calcium Hypo Chlorite plant. Process performance improved in terms of reduced raw materials consumption and consistency in product quality.

3. Future plans in R&D:

a) Calcium Hypo recovery from mother water project (H.R.S – Hypo recovery system) was finalized and responsibility given to M/S.GEIST on DBOOT (Design build, Own, Operate, & transfer) which will be completed by the end of this year.

b) A proposal to manufacture Sodium hypo from mother water of Calcium Hypo was worked out & plant erection is in progress.

4. Expenditure on R & D

Charged under primary heads to the tune of Rs. 258.35 lakhs.

5. Technology Absorption, Adoption and Innovation:

There is no import of technology absorption, adoption and innovation during the year.

C. Foreign Exchange Earnings and Outgo:

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

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

Acknowledgements:

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

For and on behalf of the Board

Sd/-T.G. BHARATH

Chairman & Managing Director

DIN : 00125087

Date : 14th August, 2015  

Place : Kurnool