Bhagyanagar India

The Directors have pleasure in presenting the 23rd Annual Report of
 your Company together with the Audited Balance Sheet as at 31st March
 2008 and Profit and Loss A/c for the year ended 31st March, 2008.
 
 FINANCIAL RESULTS:
 
 The performance of the Company during the year has been as under:
 
                                                        (Rs.  in Lakhs)
                                         Year ended         Year ended
                                    31st March, 2008   31st March, 2007
 
 Sales and other Income                     22072.86         24832.65
 Profit before Depreciation and Interest     5331.80          8757.23
 DEDUCT:
 Depreciation                                 483.26           299.20
 Interest                                     591.03           417.29
 Profit for the year                         4257.51          8040.74
 Prior period Adjustments                        Nil              Nil
 Provision for Taxation : Current Tax         480.00          1075.00
 Fringe Benefit Tax                             8.65             8.50
 Deferred Tax                                  27.55           (61.05)
 Profit after Tax                            3741.30          7017.12
 Income Tax in respect of earlier years            -             1.16
 Surplus brought forward from previous year  6017.07          4689.25
 Balance available for appropriation         9758.37         11706.37
 APPROPRIATION:
 Dividend                                     447.00           447.00
 Excess provision of Dividend for earlier year     -             0.19
 Tax on Dividend                               75.97            75.97
 Transfer to Foreign Exchange fluctuation 
 reserve                                      876.00                -
 Transfer to General Reserves                 500.00          5166.53
 Balance c/f to Balance Sheet                7859.40          6017.07
 TOTAL                                       9758.37         11706.37
 
 OPERATIONS:
 
 The Income from Operations is Rs. 19995.48 Lakhs as against Rs.
 23843.12 Lakhs for the corresponding previous year the Profit before
 tax is 4257,51 Lakhs as against Rs. 8040.74 Lakhs for the previous
 year. The Profit after Tax is 3741.30 Lakhs as against Rs. 7017.12
 Lakhs for the corresponding period. The Company recorded a decline in
 the income due to decrease in the revenues from Copper and
 Infrastructure segments. The Basic Earnings Per Share for the
 year-ended 31.03.2008 is 5.02 as against Rs.9.42 for the corresponding
 previous year ended 31.03.2007
 
 ISSUE OF EQUITY SHARE WARRANTS ON PREFERENTIAL BASIS:
 
 During the year, Company has issued and allotted 1,15,00,000 equity
 share warrants each warrant convertible into one equity share of a face
 value of Rs. 2/- each of the Company, for cash, at a price of Rs.44/-
 on preferential basis in trenches to promoters ( 40,00,000 warrants)
 and Non Promoters ( 75,00,000 warrants) at its Board Meeting held on
 08.11.2007. The said issue and allotment of warrants was approved by
 the members at their EGM held on 13.10.2007
 
 Further, Company has issued and allotted 40,00,000 equity share
 warrants each warrant convertible into one equity share of a face value
 of Rs. 2/- each of the Company, for cash, at a price of Rs.90/- on
 preferential basis to non- promoters at its Board Meeting held on
 17.03.2008. The said issue and allotment of warrants was approved by
 the members at their EGM held on 31.01.2008.
 
 The Company has not received any request for conversion of warrants and
 all the said warrants are pending conversion.
 
 OUTSTANDING FOREIGN CURRENCY CONVERTIBLE BONDS:
 
 In the previous year, the Company has issued and allotted 150 zero
 coupon Unsecured Foreign Currency Convertible Bonds (FCCB) due 2011, of
 US0,000 each For an aggregate value of US$ 15 million with a
 conversion price of Rs.44/- which are listed on the Luxembourg Stock
 Exchange.
 
 During the year, the Company has not received any request for
 conversion from the bond holders and all the Bonds are pending
 conversion as on 28.07.08.
 
 REAL ESTATE/INFRASTRUCTURE
 
 During the year under review, the Company has entered into
 infrastructure business. The brief details of the various projects is
 as mentioned below:
 
 Development of Land at Gachibowli: The commencement of work is still to
 take place in view of pending approvals from Government Authorities.
 Meanwhile, talks are at advanced stage with a leading International
 Real Estate Company for joint development of the property.
 
 SEZ near Chennai: The developers of the SEZ M/s. Sri City have
 finalized the initial layout plan of the multi product SEZ, at TADA,
 Chennai. The Company has approached them for allocation of 50 acres of
 land in plots of different sizes in various industrial zones, in order
 to maximize the utilization by catering to the needs of various
 industries. Company is expecting the finalization of lease deed for the
 same with the developer shortly.
 
 Uppal Project: The land excavation work for the Companys proposed IT
 Park at Uppal, Hyderabad has been completed.  The building plans for
 the same have been finalized and submitted to the concerned authorities
 for approval. The Company shall commence the construction of the IT
 park immediately on receipt of the approval from all the concerned
 authorities.
 
 FUTURE PROJECT INITIATIVES:
 
 Solar Photovoltaic: The Company is planning to make a foray into the
 Solar Photovoltaic Sector and has decided to make a strategic
 investment in solar energy sector by investing in the equity capital of
 M/s. Surana Ventures Limited jointly with M/s. Surana Telecom and Power
 Ltd.  M/s. Surana Ventures Ltd has been allotted 25 acres of
 
 land by APIIC at Fab City, Hyderabad to set up its Solar Photovoltaic
 Cell and Modules manufacturing facility.
 
 Solar Water Heating System: The Company proposes to produce fully
 integrated solar water heating system for which it has applied for
 allotment of land to APIIC. The Company is already into the production
 of Copper Fins which is one of the major component in solar water
 heating system.
 
 Wind Power - In addition to the existing 9.0 MW Wind Power generation
 plant at Kapatguda, Karnataka, the Company proposes to install further
 10 MW capacity in the current financial year.
 
 CONSOLIDATED FINANCIAL STATEMENTS:
 
 The Consolidated financial Statements incorporating the operations of
 the Company and its subsidiaries are attached herewith in this Annual
 Report. The Ministry of Corporate Affairs while exercising it power
 under Section 212 (8) of the Companies Act, 1956 has exempted the
 Company from publishing the Annual Report of all its subsidiaries vide
 letter no. 47/170/2008-CL-III dated 31.03.2008.  However, the accounts
 of the subsidiary companies and the detailed related information will
 be made available to the investors of the Company and its subsidiaries
 on request and are also available for inspection at Registered Office
 of the Company.
 
 DIVIDEND:
 
 Your Directors recommended a Dividend @ 30% amounting to Rs. 447.00
 lakhs for the year ended 31st March 2008. This will entail an outflow
 of Rs. 522.97 lakhs {inclusive of tax thereon). Your Directors also
 inform that applications for conversion of FCCBs and Equity Share
 warrants received upto the date of closure of the Register of Members
 of the Company would be processed and the resulting shares arising out
 of the said conversion of FCCBs and equity share warrants, would also
 be eligible for dividend, as recommended by the Board and approved by
 the members at the ensuing Annual General Meeting of the Company.
 
 RESERVES:
 
 During the year the Company has transferred an amount of Rs.5.00 crores
 to General Reserves.
 
 FIXED DEPOSITS:
 
 The Company had not accepted or invited any Deposits and consequently
 no Deposit has matured / become due for re-payment as on 31st March
 2008
 
 DIRECTORS:
 
 As per Section 256 of the Companies Act 1956 and Articles of
 Association of the Company Shri. O. Swaminatha Reddy and Shri. R.
 Surender Reddy, Directors of the Company will retire by rotation at the
 ensuing Annual General meeting and being eligible, offers themselves
 for re- appointment.
 
 Shri N.Krupakar Reddy, Whole time Director of the Company whose term of
 office ended on 06.06.2008, has been re-appointed as Director
 Operations for a further period of 3 years from 07th June, 2008 to
 06th June 2011 by the Board of Directors. The approval of the members
 for re-appointment is placed at this Annual General Meeting.
 
 The brief particulars of the Directors seeking appointment /
 re-appointment at this Annual General Meeting is being annexed to the
 Annual Report.
 
 AUDITORS:
 
 M/s. Sekhar & Company, Chartered Accountants, Auditors of the Company
 retire at the conclusion of this Annual General Meeting are eligible
 for re-appointment. The Company is in receipt of confirmation from M/s
 Sekhar & Company that in the event of their re-appointment as Statutory
 Auditors of the Company at the ensuing Annual General Meeting, such
 re-appointment will be in accordance with the limits specified in
 Sub-Section (IB) of Section 224 of the Companies Act, 1956.
 
 INSURANCE
 
 All the movable and immovable assets of your Company are adequately
 insured.
 
 ISO 9001-2000 CERTIFICATION:
 
 Your Company continues to hold ISO 9001-2000 Certification by meeting
 all the requirements of Certification from time to time.
 
 DIRECTORS RESPONSIBILITY STATEMENT AS PER SECTION 217(2AA) OF THE
 COMPANIES ACT, 1956:
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956, with respect to Directors responsibility statement, it is
 hereby confirmed:
 
 a) That in the preparation of the accounts for the financial year ended
 31st March, 2008, the applicable accounting standards have been
 followed along with proper explanation relating to material departures;
 
 b) 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 or Loss account of the Company for the year under review,
 
 c) That the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities;
 
 d) That the Directors have prepared the accounts for the Financial Year
 ended 31st March 2008 on a going concern basis.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
 
 Management Discussion and Analysis Report, pursuant to Clause 49 of the
 Listing Agreement, forms part of this Report and is annexed hereto.
 
 CORPORATE GOVERNANCE:
 
 The Company has implemented the procedures and adopted practices in
 conformity with the Code of Corporate Governance enunciated in Clause
 49 of the Listing Agreement with the Stock Exchanges. A separate report
 on Corporate Governance is annexed herewith, as a part of the Annual
 Report along with the Auditors Certificate on its compliance.
 
 CONSERVATION OF ENERGY, FOREIGN EXCHANGE ETC:
 
 Information on Conservation of Energy, Technology Absorption, Foreign
 Exchange Earnings and Outgo required to be disclosed under Section
 217(l)(e) of the Companies Act, 1956, read with Companies (Disclosure
 of Particulars in the Report of the Board of Directors) Rules, 1998,
 are provided in the Annexure forming part of this report.
 
 PARTICULARS OF EMPLOYEES:
 
 Information relating to particulars of Employees who are drawing more
 than Rs.24,00,000/- per annum which is required to be disclosed under
 Section 217(2A) of the Companies Act 1956 read with the Companies
 (Particulars of Employees) Rules 1975 are provided in the Annexure
 forming part of this report.
 
 APPRECIATION:
 
 Your Directors wish to place on record their appreciation to employees
 at all levels for their hard work, dedication and commitment. The
 enthusiasm and unstinting efforts of the employees have enabled the
 Company to remain at the forefront of the industry, despite increased
 competition from several existing and new players.
 
 ACKNOWLEDGEMENTS:
 
 The Board desires to place on record its sincere appreciation for the
 support and co-operation that the Company  received from the
 suppliers, customers, strategic partners, Bankers, Auditors, Registrar
 and Transfer Agents and all others associated with the Company. The
 Company has always looked upon them as partners in its progress and has
 happily shared with them rewards of growth. It will be the Companys
 endeavor to build and nurture strong links with trade based on
 mutuality, respect and co-operation with each other.
 
                             for and on behalf of the Board of Directors
 
 Place : Secunderabad                                 G. MANGILAL SURANA
 Date  : 28th July, 2008                                        CHAIRMAN