DIRECTOR'S REPORT

Dear Members,

Your Directors have pleasure in presenting the Twenty Third Annual Report of your Company together with the audited statement of accounts for the year ended 31st March 2016.

Performance Review :

The Board of Directors are pleased to inform that the company has achieved a turnover of Rs. 14913 Lakhs (Rs. 21783 Lakhs). The net revenue from operations for the current year was Rs. 15027 lakhs (Rs. 21963 lakhs). The loss before tax for the year is Rs. 529 lakhs as against profit of Rs. 304 lakhs during the preceding previous year.

Dividend :

Your Directors did not recommend any dividend for the financial year 2015-16.

During the year dividend amounting to Rs. 205,907/- that had not been claimed by the shareholders for the Financial years 2007-08 and 2008-09 (Interim) was transferred to the credit of Investor Education and Protection Fund as required under section 124 read with section 125 of the Companies Act, 2013.

Board Meetings :

The Board of Directors duly met 4 times during the financial year from 1st April, 2015 to 31st March, 2016. The meetings were held on 15th May 2015, 8th August, 2015, 6th November, 2015 and 08th February, 2016.

Directors :

In accordance with the provisions of the Companies Act, 2013, Sri. K.S Raju (DIN:00008177) retires from office by rotation, and being eligible, offer himself for re-appointment at the ensuing Annual General Meeting of the Company.

The information on the particulars of Director eligible for appointment in terms of Regulation 33 of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 has been provided in the notes to the notice convening the Annual General Meeting.

Independent Directors Declaration :

The Independent Directors have confirmed and declared that they are not disqualified to act as an Independent Director in compliance with the provisions of Section 149 of the Companies Act, 2013 and the Board is also of the opinion that the Independent Directors fulfill all the conditions specified in the Companies Act, 2013 making them eligible to act as Independent Directors.

Evaluation of the Board's Performance :

In compliance with the Companies Act, 2013 and Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the performance evaluation of the Board was carried out during the year under review. More details on the same are given in the Corporate Governance Report.

Directors Responsibility Statement :

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, your Directors confirm as under:

I. In the preparation of the annual accounts, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013 have been followed and there are no material departures from the same.

II. The Directors 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 your Company at the end of the financial year ended 31st March 2016 and the loss of the Company for the year under review.

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

IV. The Directors have prepared the annual accounts on a 'going concern' basis.

V. The Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating effectively.

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

Management Discussion and Analysis :

The Management Discussion and Analysis Report for the year under review, as stipulated under SEBI (LODR) Regulations, 2015 is presented in a separate section forming part of the Annual Report as Annexure-II.

Statutory Auditors :

M/s. R. kankaria & Uttam Singhi, Chartered Accountants, Statutory Auditors of the Company hold office upto the conclusion of 24th Annual General Meeting, who were appointed in the 21st AGM to hold office until the conclusion of 24th AGM. Your company seeks ratification of the appointment of Statutory Auditors at the ensuing Annual General Meeting.

The Statutory Audit Report does not contain any qualification, reservation or adverse remark. Cost Auditors:

The Board of Directors has on the recommendation of Audit Committee, approved the appointment of M/s. Sagar & Associates, Cost Accountants, as the Cost Auditors of the company for the year 2016-2017 at a remuneration of Rs. 75,000. The proposed remuneration of the Cost Auditors would be approved by the members in the ensuing AGM. The Cost Audit Report for the year 2014-15 has been filed under XBRL mode within the due date.

The Cost Audit Report for the F.Y 2014-15 does not contain any qualification, reservation or adverse remark.

Secretarial Auditors :

The Board of Directors has on the recommendation of Audit Committee, approved the appointment of M/s. Naresh Tiwari & Associates, Company Secretaries as the Secretarial Auditor for the year 2016-2017.The secretarial audit report for the F.Y 2015-16 forms part of this Report as Annexure -III.

There are no qualifications or observations or remarks made by the Secretarial Auditor in their Report.

Audit Committee :

The committee comprises of Shri D. Ranga Raju, Shri Sudhakar Kudva and Shri Chandra Sekhar Singavarapu. The Chairman of the Committee is Shri Sudhakar Kudva who is a non-executive Independent Director. The Company Secretary is the Secretary to the committee. During the year under review four (4) meetings of the audit committee were  held.

Vigil mechanism:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.bhagirad.com/reports/vigil

MECHANISM/ VIGIL MECHANISM POLICY LINK.

STAKEHOLDER RELATIONSHIP COMMITTEE :

Stakeholder Relationship Committee comprises of Shri.D. Ranga Raju as Chairman and Shri Sudhakar Kudva and Shri D. Sadasivudu as members. The details of term of reference of the Committee member, dates of meeting held and attendance of the Directors are given separately in the Corporate Governance Report

Internal Financial Controls:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

Conservation of energy, Technology absorption, Foreign Exchange earnings & outgo :

The particulars as required to be disclosed pursuant to Section 134(3)(m) of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014, are given to the extent applicable in the Annexure forming part of this Report is enclosed as Annexure - I.

Corporate Social Responsibility (CSR) :

During the year pursuant to the provisions of section 135 read with Schedule VII of the Companies Act, 2013 the company does not fall under the criteria of CSR Policy. Hence the company has not contributed towards CSR Activity.

Material changes effecting financial positions of the company :

No material changes have occurred and commitments made, affecting the financial position of the company, between the end of the financial year of the company and the date of this report. There is no order passed by any regulator or court or tribunal against the company, impacting the going concern concept or future operations of the company.

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 forms part of this Annual Report as Annexure-IV.

Subsidiaries, Joint ventures and Associate Companies :

During the year under review the company does not have any subsidiaries and joint ventures. The company have one associate company the details are given in MGT-9 is enclosed as Annexure-IV.

Fixed Deposits :

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding, as on the date of the Balance Sheet.

Particulars of Loans, Guarantees or Investments :

The Company has not granted any Loans, Investments, Guarantees and securities. Sexual Harassment of Women at workplace :

The company has a policy on prohibition, prevention and redressal of Sexual Harassment of women at workplace and matters connected there with or incidental there to covering all the aspects as contained under "The Sexual Harassment of women at workplace (Prohibition, Prevention and Redressal) Act, 2013".

During the financial year 2015-16, no complaint was received under the policy.

Particulars of Employees :

During the year NONE of the employees have received remuneration more than the limits specified under the Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 35(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Remuneration ratio of the Directors / Key Managerial Personnel / employees :

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the company and Directors is furnished here under:

Listing with Stock Exchange:

The Board of Directors confirms that, the annual listing fees have been paid for the year 2016-2017 to BSE where the Company's Shares are listed.

Dematerialization of shares :

98.91% of the company's paid up Equity Share Capital is in dematerialized form as on 31st March, 2016 and balance 1.09% is in physical form.

The Company's Registrars are M/s XL Softech Systems Ltd., having their registered office at Plot No.3, Sagar Society, Road No.2, Banjara Hills, Hyderabad - 500 034.

Corporate Governance and Shareholders Information :

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement as well as SEBI (LODR) Regulations, 2015.

A report on Corporate Governance is included as a part of this Annual Report. Certificate from the Statutory Auditors of the company confirming the compliance with the conditions of Corporate Governance as stipulated under SEBI (LODR) Regulations, 2015 is attached to this report as Annexure-VI.

Risk and area of concern :

The company has laid down a well defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitor and non-business risks. The Audit Committee and the Board periodically review the risks and suggest steps to be taken to manage/ mitigate the same through a properly defined framework.

During the year, a risk analysis and assessment was conducted and no major risks were noticed, which may threaten the existence of the company.

Related Party Transactions :

All related party transactions are in the ordinary course of business and at arm's length basis, which are not material in nature. All related party transactions are with the approval of the Audit Committee and periodically placed before the Board for review. The Particulars of transactions during the year as AOC-2 is enclosed in Annexure-V.

Research & Development :

R&D continues to do good job in process development. Over the years, it has adapted to changing and difficult times, and has been contributing with the current needs of the Company by maximum utilization of its existing resources. It has endeavored to generate revenues by way of development of new products and various developments in processes.

Safety, Health, Environment and Quality :

The Company is committed to excellence in safety, health, environment and quality management. It accords the highest priority to the health and safety of its employees, customers and other stakeholders as well as to the protection of the environment. The management of your Company is focused on continuous improvement in these areas which are fundamental to the sustainable growth of the Company.

Acknowledgement

The Directors take this opportunity to thank all the stakeholders for their support and co-operation.

For and on behalf of the Board

D. Ranga Raju

Chairman

Date : 25.05.2016

Place : Hyderabad.