Directors Report of Jocil Ltd.

Mar 31, 2024

Your Directors have pleasure in presenting the Forty Sixth Annual Report of the Company together with the Audited Financial Statements for the Financial Year ended 31st March 2024.

		(? in Lakhs)
1. FINANCIAL RESULTS	2023-24	2022-23
Sales	75091.90	91601.49
Processing charges	227.69	326.44
Other income	396.10	238.86
Total income	75,715.69	92166.79
Profit for the year before interest and depreciation	876.77	1965.22
Interest	(1.92)	(69.93)
Depreciation	(610.20)	(621.01)
Profit before tax	264.65	1274.28
Less: Provision for current tax	140.00	355.00
Deferred tax-(credit)/charge	(58.20)	(64.77)
(Excess)/Short provision of income tax in earlier years	10.12	(15.49)
Profit after tax	172.73	999.54

The turnover of the company for the year at ''750.92 crores decreased by 18.02% from ?916.01 crores of the previous year. During the year, the sales volume of Fatty acids increased by 11.09% and Toilet Soap & Soap products decreased by 16.72%. The Profit Before Tax (PBT) decreased to ''2.65 crores as compared to ''12.74 crores in the previous year. The main reasons for the drop are decrease in demand of Soap Noodles and more so due to increase in fuel cost of Biomass Power Plant.

The appropriations from the profit are as detailed below.		('' in Lakhs)
	2023-24	2022-23
Profit after tax (including other comprehensive income)	640.22	452.71
Balance brought forward from previous year	6228.17	5953.08
Profit for appropriations	6868.39	6405.79
APPROPRIATIONS
Dividend (accounted in the year of payment)1	222.03	177.62

Balance carried forward	6646.36	6228.17
TOTAL	6868.39	6405.79
Authorized capital	1000.00	1000.00
Paid-up capital	888.16	888.16
Reserves & surplus	20169.77	19751.58

2. DIVIDEND & RESERVES

The Board of Directors have recommend for the approval of the shareholders of the Company for payment of dividend for the year ended 31-03-2024, at ''1.50 per equity share of '' 10 each, which aggregates to '' 1,33,21,725/- on 88,81,150 equity shares of the Company. In the previous year, the Company paid dividend at '' 2.50 per equity share of '' 10 each on 88,81,150 shares amounting to '' 2,22,02,875. Your Directors do not propose to transfer any amount to reserves for the Financial Year ended on March 31, 2024.

3. OPERATIONS	2023-24	2022-23
	MT	MT
Production
(including processed on jobwork)
a. Fatty acids	74945	72514
b. Toilet soap & Soap products	37087	44892
c. Biomass power-kwh	27239959	24502397
d. Wind power-kwh	9596206	11073930
By-products:
a. Glycerine	2457	1386
b. Fatty acid pitch	2722	2239
Sales
a. Fatty acids	55255	49741
b. Toilet soap & Soap products	31849	38242
c. Biomass power-kwh	4865214	5107757
d. Wind power-kwh	9516050	11053081
By-products:
a. Glycerine	1713	709
b. Fatty acid pitch	2737	2168

4. BUSINESS REVIEW AND OUTLOOK

Your Company has not changed its nature of business during the period under review. Division wise performance and outlook is described as given below.

Fatty Acids and Soap

Except for a slight increase in sales volume of Fatty Acids, the profitability of the year under review is lower when compared to previous year due to the reasons and figures afore stated. GST refund/benefit is continuing for North-eastern states and Jammu & Kashmir and will be available upto June 30, 2027. However, these benefits may not be attractive enough to overcome the increased logistical costs for marketing in the south. As a result, the opportunities have improved for manufacturers in non-exempt areas especially for those catering to the Southern markets. However, due to intense competition, the Company is able to market short of its full capacity and that too with meagre margins.The Company is continuing to explore the market for Soap Noodles from medium to small customers with reasonable success.

Cost of raw materials is a major component in total cost of production and the fluctuation in their prices is a serious cause of concern to the company particularly when the customers demand long term forward contracts while the same is not possible with the raw material suppliers. There is stiff competition from manufacturers particularly from those having backward integration which gives them a cost advantage. The Company is able to source the raw materials largely from local suppliers. However, to meet the urgent requirements of major customers, Company may have to import PFAD and RBD Palm Stearine in case of shortage in local market.

The Company enters into contracts for supply of Fatty Acids, Soap Noodles and Toilet Soap for major customers wherein the price of raw materials is factored into the selling price of the products. The customers themselves supply/cover raw materials required for the total process and the Company receives processing charges for the manufacture of final products. This helps to safeguard against fluctuations in raw material prices. The market for stearic acid is expected to remain same as that of the year under review and for Toilet Soap and Soap Noodles it may slightly increase in the forthcoming period due to anticipated orders from new customers.

Biomass Power Plant

The generation from the Plant during the year improved to 272 lakh units, a 11% increase when compared to the previous year. The main reason for increase is sale of Power to Indian Energy Exchange (IEX) through PTC India Limited by way of Open Access Agreement throughout the year under review as it was only from 24 June 2022 in the previous year. The revenue from Biomass Power Plant is expected to remain the same as that of the year under review as running of Plant at higher capacity may not be viable if the raw materials prices are increasing without a corresponding increase in selling prices as prices prevailing in IEX are very competitive.

Wind Energy Generators (WEG)

Power generation during the year from the four Wind Energy Generators (WEGs) of 6.3 MW capacity has declined as compared to the previous year. During the year, the power generation from all the four WEGs was 95.96 lakh units as compared to 110.74 lakh units in the previous year due to increase of grid failure from 7.77% to 13.12% and also due to failure of transformers in sub-station from 6 May 2022 to 15 April 2024 and breakdown of one machine from 13 February 2024. The backdown of WEGs for want of evacuation facilities amounts to 4.26% of available time during the year 2023-24 as compared to 4.16% in the previous year.

5. SUBSIDIARY / ASSOCIATE COMPANIES

Your Company has no subsidiary/associate / joint venture companies. During the year under review, your company has not added any subsidiaries, joint ventures or associate companies.

6. FINANCE AND STATUTORY COMPLIANCES

The Company availed working capital facilities under consortium arrangement with Union Bank of India and State Bank of India and the accounts are in order. The company complied with all the legal requirements and there are no outstanding statutory dues as on 31st March 2024.

During the year there have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

7. CREDIT RATING

During the year the Credit Rating Agency CARE re-affirmed the credit rating for working capital facilities as detailed hereunder.

Nature of Facilities	Rating Assigned
	2023-24	2022-23
i. Long term facilities	CARE A-; Stable (adequate degree of safety regarding timely servicing of financial obligations)	CARE A -, Stable (adequate degree of safety regarding timely servicing of financial obligations)
ii. Short term facilities	CARE A2 (Strong degree of safety regarding timely payment of financial obligations)	CARE A2 (Strong degree of safety regarding timely payment of financial obligations)

8. DEPOSITS

Your Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 i.e. within the meaning of Section 2(31)of the Companies Act, 2013 read with Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014 and as such there are no such overdue deposits outstanding as on 31 March 2024.

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

There are no material changes and commitments affecting financial position of the Company, which occurred after the end of the financial year i.e. 31 March 2024.

10. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013. All women employees whether permanent, temporary or contractual are covered under the said policy. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year the Company has not received any complaints on sexual harassment of women at the workplace.

11. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established Vigil Mechanism as required under Section 177 of the Companies Act, 2013 for directors and employees to report genuine concerns as prescribed in the policy. The policy provides adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

a. In accordance with the provisions of the Companies Act 2013 and Articles of Association of the Company, Sri P Narendranath Chowdary, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

b. Shareholders at their meeting held on 23 September 2023 appointed Sri. G.S.V Prasad, Dr.VN. Rao as Independent Directors of the Company for a term of 5 consecutive years commencing from 23 September 2023 to 22 September 2028 not liable to retire by rotation. Shareholders at the same meeting also approved the continuation of appointment of Sri VS. Raju as a Non-Executive and Non-Independent Director of the Company w.e.f. April 1, 2024 liable to retire by rotation.

c. Dr. Manjulata Dasari, retired from the position of Independent Director consequent upon completion of her present term of appointment on 12 October 2023. As such shareholders appointed Smt. V Bhargavi as Independent Director of the Company for a term of 5 consecutive years commencing from 13 October 2023 to 12 October 2028 not liable to retire by rotation.

d. In the opinion of the Board, Independent Directors appointed during the year possess the requisite integrity, expertise and experience (including proficiency),

e. During the year under review, none of the Directors resigned from the Board.

f. The Company held Four Board Meetings during the year. Board Meeting dates and attendance particulars are available in the report on Corporate Governance.

g. The Company has received declarations from all Independent Directors confirming that he/she meets the criteria of independence as provided under sub-section 6 of Sec. 149 of the Companies Act, 2013 at the first meeting of the Board in which he/she participated as a Director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances that may affect his/her status as an Independent Director.

h. The Audit Committee as on 31 March 2024 consisted of 4 Non-Executive Directors of which 3 are Independent Directors. Sri VS. Raju, Independent Director is the Chairman of the Audit Committee. The remaining 3 members are Sri MullapudiThimmaraja, Non-Executive Director, Sri PA. Chowdary, Independent Director and Sri P Kesavulu Reddy, Independent Director. The Board accepted all the recommendations of the Audit Committee during the year. Consequent upon continuation of appointment of Sri VS. Raju as Non-Independent and Non-Executive Director w.e.f. 1-4-2024, the Audit Committee was reconstituted comprising of 6 Non-Executive Directors of which 4 or Independent Directors. Sri PA. Chowdary, Independent Director is the Chairman of the Committee. Remaining 4 members are Sri Mullapudi Thimmaraja, Non-Executive Director, Sri VS. Raju, NonExecutive Director, Sri P Kesavulu Reddy, Independent Director, Sri G.S.V Prasad, Independent Director and Dr. VN. Rao, Independent Director.

i. During the year under review, the Company is having the following persons as Key Managerial Personnel under Sec. 203 of the Companies Act, 2013.

Name of the Official	DIN / Membership No.	Designation
Sri J. Murali Mohan	00114341	Managing Director
Sri K. Raghuram	FCS - 6712	Secretary &
		Dy. General Manager (Fin.) (CFO)

13. MEETING OF INDEPENDENT DIRECTORS

A separate meeting of Independent Directors as required under Schedule IV of the Companies Act, 2013 was held on 8 February 2024, without the presence of Non-Independent Directors. This meeting was conducted to review and evaluate (a) the performance of Non-Independent Directors and the Board as a whole, (b) the performance of the Chairperson of the company, taking into account the views of Executive Directors and Non-Executive Directors and (c) assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The Independent Directors expressed their satisfaction with the performance of Non-Independent Directors and the Board as a whole and Lead Independent Director briefed the outcome of the meeting to the Board.

14. AUDITORS

M/s. Chevuturi Associates, Chartered Accountants, Vijayawada were appointed as Auditors for a period of 5 years at the 44th Annual General Meeting held on 24 September 2022 till the year 2026-27. There are no qualifications, reservations or adverse remarks in the audit report issued by them for the financial year ended 31st March 2024.

15. COST RECORDS AND COST AUDITORS

Company is maintaining cost records as specified by the Central Government under sub section (1) of Section 148 of the Companies Act, 2013. M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad are conducting the cost audit for applicable products during the year. They are eligible for re-appointment as Cost Auditors for the year 2024-25. There are no qualifications, reservations or adverse remarks in the audit report issued by them for the financial year ended 31st March 2024.

16. SECRETARIAL AUDIT

M/s. Nekkanti S.R.VVS. Narayana & Co., Company Secretaries, Hyderabad were appointed as Auditors for secretarial audit for the year 2023-24 under Section 204 of the Companies Act, 2013 and they have submitted their report. There are no qualifications, reservations or adverse remarks in the audit report issued by them for the financial year ended 31st March 2024.

17. ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013, Annual Return has been placed in the website of the Company and web link for the same is www.//jocil.in/AnnualReturn2024.pdf

18. DECLARATION AS PER SECTION 134(3)(ca) OF COMPANIES ACT, 2013

During the year, the auditors have not reported any instance of frauds committed by or against the Company by its Directors/Officers/Employees to the Audit Committee or Board under Section 143(12) of the Companies Act, 2013 and rules made thereunder. Therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

19. SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS

There were no significant material orders passed by any Regulators/Courts/Tribunals that would impact the going concern status of the Company and its future operations.

Your company has complied with all the Acts, Rules, Regulations and Guidelines issued/prescribed by the Securities Exchange Board of India, Reserve Bank of India, Ministry of Corporate Affairs and other statutory authorities.

20. No application has been made under the Insolvency and Bankruptcy Code. The requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable.

21. The requirement to disclose the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

22. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY

Your Company has adequate Internal Financial Controls as per Section 134(5)(e) of the Companies Act, 2013 that commensurate with the size of the business and nature of its operations, designed to provide reasonable assurance with regard to the accuracy and completeness of the accounting records and

timely preparation and provision of reliable financial statements.

The Board has inter alia reviewed the adequacy and effectiveness of the Company''s internal financial controls relating to its financial statements, the major financial risk exposures if any and steps taken by the management to monitor and control such exposures, overseen and reviewed the functioning of the Whistle Blower Mechanism.

Your Company has adopted necessary policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to 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 financial information.

During the year no fraud by the Company or with the Company by its officers or employees has been noticed/reported.

23. The information required to be included in the Board of Directors Report under the Companies Act, 2013 and Rules made there under is annexed and forms part of this report, details of which are as follows.

Sl. No.	Particulars	Section	Rule	Annexure No.
1	Company policy on Directors appointment and remuneration etc. provided under sub-sections (3) and (4) of Section 178	134 (3) (e)		1
2	Particulars of loans, guarantees or investments under Section 186	134 (3) (g)		2
3	Particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 in Form AOC -2. Companies (Accounts) Rules, 2014	134 (3) (h)	8(2)	3
4	Conservation of energy, technology absorption and Foreign Exchange earnings and outgo. Companies (Accounts) Rules, 2014	134 (3) (m)	8 (3) (A), (B) & (C)	4
5	Risk management policy for the company including identification therein of elements of risk if any.	134 (3) (n)		5
6	Corporate Social Responsibility Policy and initiatives taken during the year. Companies (Corporate Social Responsibility Policy) Rules, 2014	134 (3) (o)	8 (1)	6
7	Statement indicating the manner in which formal annual evaluation of the performance of the Board, its committees and Individual Directors have been made. Companies (Accounts) Rules, 2014	134 (3) (p)	8 (4)	7

Sl. No.	Particulars	Section	Rule	Annexure No.
8	Financial summary or highlights. Companies (Accounts) Rules, 2014	134 (3) (q)	8 (5) (i)	8
9	Ratio of the remuneration of each Director to the median employee''s remuneration and such other details. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	197 (12)	5 (1)	9
10	Particulars of employees in receipt of remuneration not less than Rs. 8,50,000 per month or Rs. 1,02,00,000 per year etc. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	197 (12)	5 (2)	10
11	Secretarial Audit Report in Form MR-3. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	204 (1)	9 (1)	11

24. INFORMATION UNDER LISTING REGULATIONS

The Company is committed to maintain the standards of Corporate Governance prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations). The information required to be included in the Annual Report under Schedule V of the Listing Regulations are as follows.

Sl.No.	Particulars	Para	Annexure No.
1	Management Discussion and Analysis Report	A	12
2	Report on Corporate Governance	B	13
3.	Related Party Disclosures	C	14
4.	Disclosures with respect to Demat Suspense Account / Unclaimed Suspense Account	D	15
5	Declaration by the Managing Director that all Board Members and Senior Management Personnel affirmed their compliance with the Code of Conduct.	E	16
6	Compliance Certificate from Auditors on Corporate Governance	F	17

The Company is having a policy to deal with Related Party Transactions and the same may be viewed in the Company''s website www.jocil.in. Accounts for disclosures in compliance with the Accounting Standards on "Related Party Disclosures" are given in note no. 34.

25. 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 that -

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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 and loss 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. 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;

Explanation : For the purpose of this clause, the term "internal financial controls" means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business including adherence to 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 information.

f. and, 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.

26. PERSONNEL

The Directors wish to place on record their appreciation to all the employees of the Company for their sustained efforts and valuable contribution to the performance of the Company during the year.

27. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the wholehearted and sincere cooperation the Company received from various departments of Central and State Governments, Bankers, Auditors, Dealers and Suppliers of the Company. The Directors also would like to express their grateful appreciation for the guidance and cooperation received from the Holding Company, M/s. The Andhra Sugars Limited, Tanuku.

1

In accordance with the requirements of Ind AS, dividend is to be accounted in the year of payment. Hence, dividend paid during the year is given instead of dividend declared during the year.

---

Mar 31, 2023

The Directors have pleasure in presenting the Forty fifth Annual Report of the Company together with the Audited Statement of Accounts for the Financial Year ended 31st March 2023.

		(Rs. in Lakhs)
1. FINANCIAL RESULTS	2022-23	2021-22
Sales	91601.49	75114.07
Processing charges	326.44	244.91
Other income	238.86	113.20
Total income	92166.79	75472.18
Profit for the year before interest and depreciation	1965.22	1644.99
Interest	(69.93)	(4.94)
Depreciation	(621.01)	(682.20)
Profit before tax	1274.28	957.85
Less:
Provision for current tax	355.00	327.00
Deferred tax-(credit)/charge	(64.77)	(81.83)
(Excess)/Short provision of income tax in earlier years	(15.49)	0.01
Profit after tax	999.54	712.67

The turnover of the company for the year at '' 916.01 crores increased by 21.95% from '' 751.14 crores of the previous year. This is largely due to increase in the prices of finished goods in line with the increase in the prices of raw materials and also due to increase in the sales volume of Fatty Acids and Soap Noodles. During the year, the sales volume of Fatty acids and Toilet Soap & Soap products increased by 17.36% and 8.53% respectively due to favourable market conditions. The Profit Before Tax (PBT) increased to '' 12.74 crores as compared to '' 9.58 crores in the previous year. The main reasons for increase in profitability are increase in sales volume of Fatty Acids and Soap Noodles due to increase in demand and also due to commencement of sale of surplus power to Indian Energy Exchange (IEX) through PTC India Limited.

The appropriations from the profit are as detailed below.		(? in Lakhs)
	2022-23	2021-22
Profit after tax (including other comprehensive income)	452.71	1020.05
Balance brought forward from previous year	5953.08	5199.46
Profit for appropriations	6405.79	6219.51
APPROPRIATIONS
Dividend (accounted in the year of payment)*	177.62	266.43

* In accordance with the requirements of Ind AS, dividend is to be accounted in the year of payment. Hence, dividend paid during the year is given instead of dividend declared during the year.

Balance carried forward	6228.17	5953.08
TOTAL	6405.79	6219.51
Authorized capital	1000.00	1000.00
Paid-up capital	888.16	888.16
Reserves & surplus	19751.58	19476.49

2. DIVIDEND & RESERVES

The Board of Directors have recommend for the approval of the shareholders of the Company for payment of dividend for the year ended 31-03-2023, at '' 2.50 per equity share of '' 10 each, which aggregates to '' 2,22,02,875/- on 88,81,150 equity shares of the Company. In the previous year, the Company paid dividend at '' 2.00 per equity share of '' 10 each on 88,81,150 shares amounting to '' 1,77,62,300. Your Directors do not propose to transfer any amount to reserves for the Financial Year ended on March 31, 2023.

3. OPERATIONS	2022-23	2021-22
	MT	MT
Production
(including processed on jobwork)
a. Fatty acids	72514	63048
b. Toilet soap & Soap products	44892	41886
c. Biomass power-kwh	24502397	18176102
d. Wind power-kwh	11073930	12441968
By-products:
Glycerine	1386	1019
Fatty acid pitch	2239	2369
Sales
a. Fatty acids	49741	42382
b. Toilet soap & Soap products	38242	35236
c. Biomass power-kwh	5107757	-
d. Wind power-kwh	11053081	12375271
By-products:
Glycerine	709	758
Fatty acid pitch	2168	2330

4. BUSINESS REVIEW AND OUTLOOK

Your Company has not changed its business during the period under review.

Division wise performance and outlook is described as given below.

Fatty Acids and Soap

There is an improvement in sales volume of Fatty Acids and Soap Noodles. Due to increase in volume of the said products and also due to commencement of sale of surplus power, the profitability in the current year is higher when compared to previous year. GST refund/benefit is continuing for Northeastern states and Jammu & Kashmir and will be available upto June 30, 2027. However, these benefits may not be attractive enough to overcome the increased logistical costs for marketing in the south. As a result, the opportunities have improved for manufacturers in non-exempt areas especially for those catering to the Southern markets. The Company is able to maintain reasonable volume of orders for Fatty Acids and Soap Noodles from major customers.

Cost of raw materials is a major component in total cost of production and the fluctuation in their prices is a serious cause of concern to the company particularly when the customers demand long term forward contracts while the same is not possible with the raw material suppliers. There is stiff competition from manufacturers particularly from those having backward integration which gives them a cost advantage. The Company is able to source the raw materials largely from local suppliers. During the year under review the prices of raw materials have stabilized due to declining of COVID-19 impact and lifting of export ban by major vegetable oil producing countries like Indonesia & Malaysia. As a result, the interest burden on working capital decreased as predicted in the previous year. However, Company may have to import PFAD and RBD Palm Stearine at increased costs in case of shortage in local market.

The Company enters into contracts for supply of Fatty Acids, Soap Noodles and Toilet Soap for major customers wherein the price of raw materials is factored into the selling price of the products. The customers themselves supply/cover raw materials required for the total process and the Company receives processing charges for the manufacture of final products. This helps to safeguard against fluctuations in raw material prices. The market for stearic acid is expected to improve and for Toilet Soap, Soap Noodles and Glycerine it may slightly decrease in the forthcoming period due to decline in demand.

Biomass Power Plant

The Company commenced sale of surplus Power with effect from 24 June 2022 to Indian Energy Exchange (IEX) through PTC India Ltd by way of Open Access arrangement. As a result of commencement of sale of power, the generation from the plant during the year improved to 245 lakh units, a 35% increase when compared to the previous year. The revenue from Biomass Power Plant is expected to improve further due to demand for Power. However running of Plant at higher capacity may not be viable if the raw material prices are increasing as prices prevailing in IEX are very competitive.

Wind Energy Generators (WEG)

Power generation during the year from the four Wind Energy Generators (WEGs) of 6.3 MW capacity has declined as compared to the previous year. During the year, the power generation from all the four WEGs was 110.74 lakh units as compared to 124.42 lakh units in the previous year due to increase of low wind from 39.86% to 42.35% and also due to failure of transformer in sub-station from 27 May 2022 and breakdown of one machine from 19 February 2023 to 09 May 2023. The backdown of WEGs for want of evacuation facilities amounts to 7.77% of available time during the year 2022-23 as compared to 8.22% in the previous year.

5. SUBSIDIARY / ASSOCIATE COMPANIES

Your Company has no subsidiary/associate / joint venture companies. During the year under review, your company has not added/removed any subsidiaries, joint ventures or associate companies.

6. FINANCE AND STATUTORY COMPLIANCES

The Company availed working capital facilities under consortium arrangement with Union Bank of India and State Bank of India and the accounts are in order. The company complied with all the legal requirements and there are no outstanding statutory dues as on 31st March 2023.

During the year there have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

7. CREDIT RATING

During the year the Credit Rating Agency CARE re-affirmed the credit rating for working capital facilities as detailed hereunder.

Nature of Facilities	Rating Assigned
	2022-23	2021-22
i. Long term facilities	CARE A-; Stable (adequate degree of safety regarding timely servicing of financial obligations)	CARE A -, Stable (adequate degree of safety regarding timely servicing of financial obligations)
ii. Short term facilities	CARE A2 (Strong degree of safety regarding timely payment of financial obligations)	CARE A2 (Strong degree of safety regarding timely payment of financial obligations)

8. DEPOSITS

Your Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 i.e. within the meaning of Section 2(31)of the Companies Act, 2013 read with Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014 and as such there are no such overdue deposits outstanding as on 31 March 2023.

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

There are no material changes and commitments affecting financial position of the Company, which occurred after the end of the financial year i.e. 31 March 2023.

10. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year the Company has not received any complaints on sexual harassment of women at the workplace.

11. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established Vigil Mechanism as required under Section 177 of the Companies Act, 2013 for directors and employees to report genuine concerns as prescribed in the policy. The policy provides adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

a. In accordance with the provisions of the Companies Act 2013 and Articles of Association of the Company, Sri Mullapudi Mrutyumjaya Prasad, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

b. Shareholders at their meeting held on 24 September 2022 appointed Sri. P Kesavulu Reddy as Independent Director of the Company for a term of 5 consecutive years commencing from 24 September 2022 to 23 September 2027 not liable to retire by rotation.

c. Sri Subbarao V Tipirneni, retired from the position of Independent Director consequent upon completion of his present term of appointment on 30 September 2022.

d. In the opinion of the Board, Independent Directors appointed during the year possess the requisite integrity, expertise and experience (including proficiency),

e. During the year under review, none of the Directors resigned from the Board.

f. The Company held Four Board Meetings during the year. Board Meeting dates and attendance particulars are available in the report on Corporate Governance.

g. The Company has received declarations from all Independent Directors confirming that he/she meets the criteria of independence as provided under sub-section 6 of Sec. 149 of the Companies Act, 2013 at the first meeting of the Board in which he/she participated as a Director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances that may affect his/her status as an Independent Director.

h. The Audit Committee consists of 4 Non-Executive Directors of which 3 are Independent Directors. Sri VS. Raju, Independent Director is the Chairman of the Audit Committee. The remaining 3 members are Sri Mullapudi Thimmaraja, Non-Executive Director, Sri PA. Chowdary, Independent Director and Sri P Kesavulu Reddy, Independent Director. The Board accepted all the recommendations of the Audit Committee during the year.

i. During the year under review, the Company is having the following persons as Key Managerial Personnel under Sec. 203 of the Companies Act, 2013.

Name of the Official	DIN / Membership No.	Designation
Sri J. Murali Mohan	00114341	Managing Director
Sri K. Raghuram	FCS - 6712	Secretary & Dy. General Manager (Fin.) (CFO)

13. MEETING OF INDEPENDENT DIRECTORS

A separate meeting of Independent Directors as required under Schedule IV of the Companies Act, 2013 was held on 8 February 2023, without the presence of Non-Independent Directors. This meeting was conducted to review and evaluate (a) the performance of Non-Independent Directors and the Board as a whole, (b) the performance of the Chairperson of the company, taking into account the views of Executive Directors and Non-Executive Directors and (c) assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The Independent Directors expressed their satisfaction with the performance of Non-Independent Directors and the Board as a whole and Lead Independent Director briefed the outcome of the meeting to the Board.

14. AUDITORS

M/s. Chevuturi Associates, Chartered Accountants, Vijayawada were re-appointed as Auditors for a period of 5 years at the 44th Annual General Meeting held on 24 September 2022 till the year 2026-27. There are no qualifications, reservations or adverse remarks in the audit report issued by them for the financial year ended 31st March 2023.

15. COST RECORDS AND COST AUDITORS

Company is maintaining cost records as specified by the Central Government under sub section (1) of Section 148 of the Companies Act, 2013. M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad are conducting the cost audit for applicable products during the year. They are eligible for re-appointment as Cost Auditors for the year 2023-24. There are no qualifications, reservations or adverse remarks in the audit report issued by them for the financial year ended 31st March 2023.

16. SECRETARIAL AUDIT

M/s. Nekkanti S.R.VVS. Narayana & Co., Company Secretaries, Hyderabad were appointed as Auditors for secretarial audit for the year 2022-23 under Section 204 of the Companies Act, 2013 and they have submitted their report. There are no qualifications, reservations or adverse remarks in the audit report issued by them for the financial year ended 31st March 2023.

17. ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013, Annual Return has been placed in the website of the Company and web link for the same is www.//jocil.in/AnnualReturn2023.pdf

18. DECLARATION AS PER SECTION 134(3)(ca) OF COMPANIES ACT, 2013

During the year, the auditors have not reported any instance of frauds committed by or against the Company by its Directors/Officers/Employees to the Audit Committee or Board under Section 143(12) of the Companies Act, 2013 and rules made thereunder. Therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

19. SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS

There were no significant material orders passed by any Regulators/Courts/Tribunals that would impact the going concern statutes of the Company and its future operations.

Your company has complied with all the Acts, Rules, Regulations and Guidelines issued/prescribed by the Securities Exchange Board of India, Reserve Bank of India, Ministry of Corporate Affairs and other statutory authorities.

20. No application has been made under the Insolvency and Bankruptcy Code. The requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable.

21. The requirement to disclose the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

22. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY

Your Company has adequate Internal Financial Controls as per Section 134(5)(e) of the Companies Act, 2013 that commensurate with the size of the business and nature of its operations, designed to provide reasonable assurance with regard to the accuracy and completeness of the accounting records and timely preparation and provision of reliable financial statements.

The Board has inter alia reviewed the adequacy and effectiveness of the Company’s internal financial controls relating to its financial statements, the major financial risk exposures if any and steps taken by the management to monitor and control such exposures, overseen and reviewed the functioning of the Whistle Blower Mechanism.

Your Company has adopted necessary policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to 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 financial information.

During the year no fraud by the Company or with the Company by its officers or employees has been noticed/reported.

23. The information required to be included in the Board of Directors Report under the Companies Act, 2013 and Rules made there under is annexed and forms part of this report, details of which are as follows.

Sl. No.	Particulars	Section	Rule	Annexure No.
1	Company policy on Directors appointment and remuneration etc. provided under sub-sections (3) and (4) of Section 178	134 (3) (e)		1
2	Particulars of loans, guarantees or investments under Section 186	134 (3) (g)		2
3	Particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 in Form AOC -2. Companies (Accounts) Rules, 2014	134 (3) (h)	8(2)	3
4	Conservation of energy, technology absorption and Foreign Exchange earnings and outgo. Companies (Accounts) Rules, 2014	134 (3) (m)	8 (3) (A), (B) & (C)	4
5	Risk management policy for the company including identification therein of elements of risk if any.	134 (3) (n)		5
6	Corporate Social Responsibility Policy and initiatives taken during the year. Companies (Corporate Social Responsibility Policy) Rules, 2014	134 (3) (o)	8 (1)	6
7	Statement indicating the manner in which formal annual evaluation of the performance of the Board, its committees and Individual Directors have been made. Companies (Accounts) Rules, 2014	134 (3) (p)	8 (4)	7

Sl. No.	Particulars	Section	Rule	Annexure No.
8	Financial summary or highlights. Companies (Accounts) Rules, 2014	134 (3) (q)	8 (5) (i)	8
9	Ratio of the remuneration of each Director to the median employee''s remuneration and such other details. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	197 (12)	5 (1)	9
10	Particulars of employees in receipt of remuneration not less than Rs. 8,50,000 per month or Rs. 1,02,00,000 per year etc. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	197 (12)	5 (2)	10
11	Secretarial Audit Report in Form MR-3. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	204 (1)	9 (1)	11

24. INFORMATION UNDER LISTING REGULATIONS

The Company is committed to maintain the standards of Corporate Governance prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations). The information required to be included in the Annual Report under Schedule V of the Listing Regulations are as follows.

Sl.No.	Particulars	Para	Exhibit No.
1	Management Discussion and Analysis Report	A	12
2	Report on Corporate Governance	B	13
3.	Related Party Disclosures	C	14
4.	Disclosures with respect to Demat Suspense Account / Unclaimed Suspense Account	D	15
5	Declaration by the Managing Director that all Board Members and Senior Management Personnel affirmed their compliance with the Code of Conduct.	E	16
6	Compliance Certificate from Auditors on Corporate Governance	F	17

The Company is having a policy to deal with Related Party Transactions and the same may be viewed in the Company''s website www.jocil.in. Accounts for disclosures in compliance with the Accounting Standards on "Related Party Disclosures" are given in note no. 34.

25. 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 that -

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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 and loss 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. 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;

Explanation : For the purpose of this clause, the term "internal financial controls" means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business including adherence to 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 information.

f. and, 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.

26. PERSONNEL

The Directors wish to place on record their appreciation to all the employees of the Company for their sustained efforts and valuable contribution to the performance of the Company during the year.

27. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the wholehearted and sincere cooperation the Company received from various departments of Central and State Governments, Bankers, Auditors, Dealers and Suppliers of the Company. The Directors also would like to express their grateful appreciation for the guidance and cooperation received from the Holding Company, M/s. The Andhra Sugars Limited, Tanuku.

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Mar 31, 2018

The Directors have pleasure in presenting the Fortieth Annual Report together with the Audited Statement of Accounts for the Financial Year ended 31 March 2018.

(Rs. in Lakhs)

1. FINANCIAL RESULTS	2017-18	2016-17
Gross Sales	34782.37	40745.21
Less : Excise Duty	698.59*	3557.68
Net Sales	34083.89	37187.53
Processing Charges	63.31	391.14
Other Income	214.73	341.76
Total Income	34361.82	37920.43
Profit for the year before Interest and Depreciation	1276.88	1885.43
Interest	(128.64)	(160.01)
Depreciation	(653.38)	(706.81)
Profit Before Tax	494.86	1018.61
Provision for Current Tax	(130.00)	(255.00)
Deferred Tax / (credit)	45.59	57.19
Profit After Tax	410.45	820.80

* w.e.f. 01 July 2017 GST was introduced and it is not to be included in the gross sales. Hence, Excise Duty up to 30 June 2017 only has been deducted from gross sales.

The turnover of the company for the year at Rs. 348.45 crores is down by 15.29% over the figure of Rs. 411.36 crores of the previous year. During the year the sales volume of fatty acids has marginally increased by 1.64% whereas sales volume of soap noodles dropped by about 32% as compared to the previous year. Increase in prices of raw materials and sales at reduced margins resulted in decline in Profit Before Interest and Depreciation to Rs. 1276.88 lakhs from Rs. 1885.43 lakhs in the previous year. The volume of toilet soap and soap products has come down due to intense price competition in the market. The Profit Before Tax (PBT) has come down to Rs. 4.95 crores as compared to Rs. 10.19 crores in the previous year.

The appropriations from the profit are as detailed below.

(Rs. in Lakhs)

	2017-18	2016-17
Profit after Tax (including comprehensive income)	709.68	955.68
Balance brought forward from previous year	2407.87	1652.19
Profit for appropriations	3117.55	2607.87

APPROPRIATIONS
Dividend (accounted in the year of payment)*	266.43	-
Provision for Tax on distributed profits @ 20.35765% on dividend	54.24	-
(accounted in the year of payment)
Transfer to General Reserve	-	200.00
Balance carried forward	2796.88	2407.87
TOTAL	3117.55	2607.87
Authorized Capital	1000.00	1000.00
Paid-up Capital	888.16	888.16
Reserves & Surplus	16320.29	15931.29

* In accordance with the requirements of Ind AS, dividend is to be accounted in the year of payment. Hence, dividend paid during the year is given instead of dividend declared during the year

2. DIVIDEND

The Board of Directors are pleased to recommend for the approval of the shareholders of the Company for payment of dividend for the year ended 31 -03-2018, at Rs. 2.00 per equity share of Rs. 10 each, which aggregates to Rs.1,77,62,300 (excluding Dividend Distribution Tax) on the 88,81,150 equity shares of the Company. In the previous year, the Company paid dividend at Rs.3.00 per equity share of Rs.10 each on 88,81,150 shares amounting to Rs.2,66,43,450 (excluding Dividend Distribution Tax).

3. TRANSFER OF AMOUNT TO RESERVES

The Company does not propose to transfer any amount to reserves.

4. OPERATIONS	2017-18	2016-17
Production (including processed on jobwork)	MT	MT
a) Fatty Acids	45483	52134
b) Toilet Soap & Soap Products	15908	26260
c) Biomass Power-kwh	24914266	29562238
d) Wind Power-kwh	14851184	14022372
Sales
a) Fatty Acids	35392	34822
b) Toilet Soap & Soap Products	14703	21583
c) Biomass Power-kwh	9603400	13959000
d) Wind Power-kwh	14851184	14022372

5. OUTLOOK

Fatty Acids and Soap

The sales of fatty acids have improved marginally during the year whereas soap noodles sales have been declining year after year due to availability of noodles at lower price in tax exempted areas. The margins have narrowed down due to intense price competition in the market. Indigenous market of soap noodles is also affected by cheaper imported soap noodles due to inverted duty structure. This market condition of soap noodles is also affecting sales of fatty acids as majority of fatty acids produced is used for soap noodles production. Even after introduction of GST, tax exemptions are continuing to be available for units located in exempted areas. As a result, manufacturers in non-exempt areas, doing jobwork are still finding it difficult to market their capacities.

Palm stearin and PFAD are the major raw materials for manufacture of fatty acids and soap. These are the by-products derived from the refining of crude palm oil. With the increase in import duties on crude palm oil, local raw material suppliers are not in a position to supply Palm Stearin and PFAD at competitive prices. Accordingly, we are having to import Crude Palm Stearin and PFAD directly. Also, in order to meet the requirements of Roundtable on Sustainable Palm Oil (RSPO) Guidelines regarding processing of Mass Balanced (MB) Palm Stearin, we are having to import MB Palm Stearin from Malaysia and Indonesia as it is not available locally.

Cost of raw materials is a major component in total cost of production and the fluctuation in raw material prices is a serious cause of concern to the company particularly when the customers demand long term forward contracts while the same is not possible with the raw material suppliers.

There is stiff competition from manufacturers particularly from those having backward integration which gives them a cost advantage.

To safeguard against fluctuations in raw material prices, the company tries to enter into contracts for doing job-work both for fatty acids and soap wherein the customers themselves supply/cover raw materials required for the total process and we receive processing charges for the manufacture of final products. Presently, the market situation has improved and the Company is getting export orders for DFA and indigenous orders for Soap Noodles and Toilet Soap from the major customers.

Biomass Power Plant

During the year under review, the performance of the Biomass Power Plant has declined. The generation from the plant during the year is lower by 46.48 lakh units, a 15% decline from the previous year. Export of power to APSPDCL was stopped from 29 August 2017 to 20 October 2017 due to non availability of fuels. Other technical problems resulted in decline in performance. However, after the overhaul, the plant performance has improved.

Wind Energy Generators (WEG)

Power generation during the year from the four Wind Energy Generators (WEGs) of 6.3 MW capacity has marginally increased as compared to the previous year. During the year, the power generation from all the four WEGs is 148.51 lakh units as compared to 140.22 lakh units in the previous year. Due to sustained efforts of the Indian Wind Power Association in seeking “must run” status to WEGs to reduce back down time, the back down of WEGs for want of evacuation facilities has come down during the year from 8.58% of machine available hours to 5%.

6. FINANCE AND STATUTORY COMPLIANCES

The Company availed working capital facilities under consortium arrangement with Andhra Bank and State Bank of India and the accounts are in order. During the year under review, working capital limits increased by Rs. 10 crores to cater to the increased volume of procurements for export orders obtained from major customers. The company complied with all the legal requirements and there are no outstanding statutory dues as on 31 March 2018.

During the year there have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

7. CREDIT RATING

During the year the Credit Rating Agency CARE revised the credit rating for various facilities as detailed hereunder when compared to previous year

Nature of facilities	Rating Assigned
	2017-18	2016-17
1. Working Capital facilities i) Long Term facilities	CARE A -	CARE A
	(adequate degree of safety	(adequate degree of safety
	regarding timely servicing of	regarding timely servicing of
	financial obligations)	financial obligations)
ii) Short Term facilities	CARE A 2	CARE A 1
	(Strong degree of safety	(Very strong degree of safety
	regarding timely payment of	regarding timely payment of
	financial obligations)	financial obligations)
2. Fixed Deposits	CARE A2 (FD)	CARE A1 (FD)
	(Strong degree of safety	(Very strong degree of safety
	regarding timely payment of	regarding timely payment of
	financial obligations)	financial obligations)

8. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year the Company has not received any complaints on sexual harassment of women at the workplace.

9. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established vigil mechanism as required under Sec. 177 of the Companies Act, 2013 for directors and employees to report genuine concerns as prescribed in the policy. The policy provides adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

a) In accordance with the provisions of the Companies Act 2013 and Articles of Association of the Company, at the ensuing Annual General Meeting, Shri P Narendranath Chowdary, Chairman retires by rotation and being eligible offers himself for re-election.

b) The Company held four Board Meetings during the year. Board Meeting dates and attendance particulars are available in the report on Corporate Governance.

c) The Company has received declarations from all the five Independent Directors confirming that he / she meets the criteria of independence as provided under sub-section 6 of Sec. 149 of the Companies Act, 2013 at the first meeting of the Board in which he / she participated as a Director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances which may affect his / her status as an Independent Director

d) The Audit Committee consists of 3 Non-Executive Directors of which 2 are Independent Directors. Shri VS. Raju, Independent Director is the Chairman of the Audit Committee. The remaining 2 members are Shri Mullapudi Thimmaraja, Non-Executive Director and Shri Subbarao V Tipirneni, Independent Director. The Board accepted all the recommendations of the Audit Committee during the year

e) Shri P Kesavulu Reddy, President & Secretary who was appointed as Key Managerial Personnel demitted office on the completion of his term of employment on 30 November 2017. Shri K. Raghuram, Dy. Secretary & AGM (Finance) was appointed as Key Managerial Personnel under Sec. 203 of the Companies Act, 2013 w.e.f. 01 December 2017.

f) During the year under review, the Company is having the following persons as Key Managerial Personnel under Sec. 203 of the Companies Act, 2013.

Name of the Official	DIN / Membership No.	Designation
Shri J. Murali Mohan	00114341	Managing Director
Shri P Kesavulu Reddy (upto 30 November 2017)	FCS - 6052	President & Secretary
Shri K. Raghuram	FCS - 6712	Dy. Secretary & Asst. General
(From 01 December 2017)		Manager (Finance)

11. MEETING OF INDEPENDENT DIRECTORS

A separate meeting of Independent Directors as required under the Schedule IV of the Companies Act, 2013 was held on 24 May 2018, without presence of Executive Directors and Promoter Directors. This meeting was conducted to review and evaluate (a) the performance of Non-Independent Directors and the Board as a whole, (b) the performance of the Chairperson of the company, taking into account the views of Executive Directors and Non-Executive Directors and (c) assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board

to effectively and reasonably perform their duties. The Independent Directors expressed their satisfaction with the performance of Non-Independent Directors and the Board as a whole and Shri V S. Raju one of the Independent Directors briefed the outcome of the meeting to the Board.

12. AUDITORS

M/s. Chevuturi Associates, Chartered Accountants, Vijayawada were appointed as Auditors for a period of 5 years at the 39th Annual General Meeting held on 28 September 2017 till the year 2021-22. There are no qualifications, reservations or adverse remarks in the audit report issued by them for the financial year ended 31 March 2018.

13. COST RECORDS AND COST AUDITORS

Company is maintaining cost records as specified by the Central Government under sub section (1) of Section 148 of the Companies Act, 2013. M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad are conducting the cost audit for applicable products during the year. They are eligible for re-appointment as Cost Auditors for the year 2018-19. There are no qualifications, reservations or adverse remarks in the audit report issued by them for the financial year ended 31 March 2018.

14. SECRETARIAL AUDIT

M/s.Nekkanti S.R.VVS. Narayana & Co., Company Secretaries, Hyderabad were appointed as Auditors for secretarial audit for the year 2017-18 under Sec. 204 of the Companies Act, 2013 and they have submitted their report. There are no qualifications, reservations or adverse remarks in the audit report issued by them for the financial year ended 31 March 2018.

15. The information required to be included in the Board of Directors Report under the Companies Act, 2013 and Rules made thereunder is annexed and forms part of this report detailed as follows.

Sl.No.	Particulars	Section	Rule	Annexure No.
1	Extract of the Annual Return - Form MGT-9. Companies (Management and Administration) Rules, 2014	134 (3) (a) & 92 (3)	12 (1)	1
2	Company policy on Directors appointment and remuneration etc. provided under sub-sections (3) and (4) of Section 178	134 (3) (e)		2
3	Particulars of loans, guarantees or investments under Section 186	134 (3) (g)		3
4	Particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 in Form AOC -2. Companies (Accounts) Rules, 2014	134 (3) (h)	8(2)	4
5	Conservation of energy, technology absorption and Foreign Exchange earnings and outgo. Companies (Accounts) Rules, 2014	1 34 (3) (m)	8 (3) (A), (B) &(C)	5
6	Risk management policy for the company including identification therein of elements of risk if any.	134 (3) (n)		6

7	Corporate Social Responsibility policy and initiatives taken during the year . Companies (Corporate Social Responsibility policy) Rules, 2014	134 (3) (o)	8 (1)	7
8	Statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and Individual Directors. Companies (Accounts) Rules, 2014	134 (3) (p)	8 (4)	8
9	Financial summary or highlights. Companies (Accounts) Rules, 2014	134 (3) (q)	8 (5) (i)	9
10	Details relating to deposits covered under Chapter V of the Act. Companies (Accounts) Rules, 2014	134 (3) (q)	8 (5) (v) & (vi)	10
11	Ratio of the remuneration of each Director to the median employee.s remuneration and such other details. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	197 (12)	5 (1)	11
12	Particulars of employees in receipt of remuneration not less than Rs. 8,50,000 per month or Rs. 1,02,00,000 per year etc. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	197 (12)	5 (2)	12
13	Secretarial Audit Report in Form MR-3. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	204 (1)	9 (1)	13

16. INFORMTION UNDER LISTING REGULATIONS

The Company is committed to maintain the standards of Corporate Governance prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations). The information required to be included in the Annual Report under Schedule V of the Listing Regulations are as follows.

Sl.No.	Particulars	Para	Annexure No.
1	Related Party Disclosures	A	14
2	Management Discussion and Analysis Report	B	15
3	Report on Corporate Governance	C	16
4	Declaration by the Managing Director that all Board Members and Senior Management Personnel affirmed their compliance to the Code of Conduct.	D	17
5	Compliance Certificate from Auditors on Corporate Governance	E	18
6	Disclosures with respect to Demat Suspense Account / Unclaimed Suspense Account	F	19
7	Details of shares transferred to IEPF	G	20

The Company is having a policy to deal with Related Party Transactions and the same may be viewed in the Company’s website www.jocil.in. Please see Note No.34 on Accounts for disclosures in compliance with the Accounting Standards on “Related Party Disclosures”.

17. 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 that

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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 and loss 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) 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 and

Explanation : For the purpose of this clause, the term “internal financial controls” means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business including adherence to 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 information.

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.

18. PERSONNEL

The Directors wish to place on record their appreciation to all the employees of the Company for their sustained efforts and valuable contribution to the performance of the Company during the year.

19. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the wholehearted and sincere cooperation the Company received from various departments of Central and State Governments, Bankers, Auditors, Dealers and Suppliers of the Company. The Directors also would like to express their grateful appreciation for the guidance and cooperation received from the Holding Company, M/s. The Andhra Sugars Limited, Tanuku.

For and on behalf of the Board of Directors

Hyderabad P NARENDRANATH CHOWDARY

03 August 2018 Chairman

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Mar 31, 2016

DIRECTORS'' REPORT

The Directors have pleasure in presenting the Thirty Eighth Annual Report together with the Audited Statement of Accounts for the year ended 31st March 2016.

(Rs. in Lakhs)

FINANCIAL RESULTS	2015-16	2014-15
Gross Sales	42443.14	35854.62
Less : Excise Duty	3776.91	3725.48
Net Sales	38666.23	32129.14
Processing Charges	597.20	923.06
Other Income	502.39	236.31
Total Income	39765.82	33288.51
Profit for the year before Interest and Depreciation	3630.74	2729.24
Interest	(1 12.63)	(94.56)
Depreciation	(804.20)	(666.77)
Profit Before Tax	2713.91	1967.91
Provision for Current Tax	(1025.00)	(700.00)
Deferred Tax / (Credit)	101.82	42.74
Excess/(Short) provision of Income Tax made in earlier years	2.94	--
Profit After Tax	1793.67	1310.65

During the year the total turnover of the company has grown up to Rs. 435.43 crores from Rs. 370.14 crores in the previous year, an increase by 17.64% over the previous year. The sales of fatty acids, glycerine and soap products have increased considerably due to increase in volumes even though the average realization has come down. The turnover of the Company includes export sales of Rs. 67.17 crores which is significant as compared to the exports in the previous year of Rs. 0.61 crores. As a result, the Company has been recognized as ''One Star Export House'' by the Govt. of India. Due to increase in turnover and lower raw material prices the Profit Before Interest and Depreciation (PBID) rose by 33.03% and Profit Before Tax (PBT) by 37.91% over the previous year even though the Company made higher provision for depreciation expenses as per the new regulations under the Companies Act, 2013. The rise in PAT is 36.85% over the previous year.

The appropriations from the profit are as detailed below.

(Rs. in Lakhs)

	2015-16	2014-15
Profit after Tax	1793.67	1310.65
Balance brought forward from previous year	1 1 14.33	1487.13
Profit for appropriations	2908.00	2797.78
APPROPRIATIONS
Interim Dividend paid	621.68	532.87
Provision for Tax on distributed profits @ 20.35765% on dividend	126.56	108.48
Transfer to General Reserve	500.00	1042.10
Balance carried forward	1659.76	1 114.33
TOTAL	2908.00	2797.78
Authorized Capital	1000.00	1000.00
Paid-up Capital	888.16	888.16
Reserves & Surplus	14983.17	13937.75

2. DIVIDEND

Considering the profitability of the Company, the Board of Directors declared interim dividend at Rs. 7 (seven) per equity share of Rs.10 each, which aggregates to Rs. 6,21,68,050 on the 88,81,150 equity shares of the Company and the same was paid to the shareholders in the last week of March 2016. The Board of Directors recommend to the shareholders for their approval of the said Interim Dividend. In the previous year, the Company paid dividend at Rs.6 (six) per equity share of Rs.10 each on 88,81,150 shares amounting to Rs.5,32,86,900.

3. OPERATIONS	2015-16	2014-15
Production (including processed on jobwork)	MT	MT
a) Fatty Acids	61424	49445
b) Soap products	38605	33410
c) Biomass Power-kwh	31797001	26740889
d) Wind Power-kwh	8189633	9754843
Sales
a) Fatty Acids	36954	28832
b) Soap products	30866	19541
c) Biomass Power-kwh	14557300	9804800
d) Wind Power-kwh	8189633	9754843

4. OUTLOOK

Fatty Acids and Soap

The sales of fatty acids, glycerin and soap products have improved during the year due to favorable market conditions. The investment of about Rs. 50 crores by the Company in the last few years under expansion cum modernization of fatty acid plant, glycerin plant and soap plant are now yielding results in securing customer satisfaction and improving volumes. Continuous efforts are being made to increase product range and widen the customer base. As part of this exercise fat based animal feed is produced during the year to meet the requirements of the customers.

The units located in exempted areas continue to enjoy cost advantage over the Company and some of the MNC customers are sourcing part of their requirements of Toilet Soap from them. Since the Company is not having its own brands and depends on brand owners utilize the capacity, the Company is not able to utilize Soap Plant Finishing Lines for manufacture of toilet soap.

Cost of raw-materials is a major component in total cost of production and the fluctuations in raw material prices is a serious cause of concern to the Company particularly when the customers demand for long term forward contracts while the same is not possible with the raw-material suppliers. Local raw material prices were comparatively cheaper than those of imported raw material prices for a large part of the year and hence the country was favorably placed for exports even though severe competition existed among the manufacturers within the country. There is stiff competition from manufacturers particularly from those having backward integration which gives them a cost advantage. Retention of high volume customers withstanding to the competition is considered very important and all efforts are made to quote attractive price. The present market conditions are expected to continue for some more time.

Biomass Power Plant

The performance of the Biomass Power Plant has been steadily improving since last two years. The generation from the plant during the year is higher by 50.56 lakh units, 18.84% over the previous year. The Govt. of A.P has provided tariff support by Rs. 1.50 per unit to the Biomass Power Plant Developers in addition to the applicable tariff fixed by APERC for a period of one year w.e.f. 01-04-2015. This has improved revenue from sale of power to the Company by Rs. 218.36 lakhs.

Wind Energy Generators (WEG)

Power generation during the year from the four Wind Energy Generators (WEGs) of 6.3 Mw capacity has been coming down year by year since 2012-13. During the year the power generation from all the four WEGs is 81.90 lakh units as against previous year 97.55 lakh units. The very same four WEGs have produced 164.18 lakh units in the year 2012-13. As a result the revenue from WEGs has come down. The major reason for fall in generation is the failure on the part of Tamil Nadu Electricity Generation and Distribution Corporation Limited (TANGEDCO) to evacuate power on priority basis. The back down of WEGs for want of evacuation facility amounts to 29% of available time during the year 2015-16, 22% in 2014-15 and 23% in 2013-14. The Indian Wind Power Association is fighting for ''must run'' status to WEGs to avoid back down in future.

j. FINANCE AND STATUTORY COMPLIANCES

The Company availed working capital facilities under consortium arrangement from Andhra Bank and State Bank of India and the accounts are in order. The company complied with all the legal requirements and there are no outstanding statutory dues as on 31 st March 2016. During the year there have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

3. CREDIT RATING

The Credit Rating Agency CARE reaffirmed the credit rating of working capital facilities availed from the banks ''CARE A '' (adequate degree of safety regarding timely servicing of financial obligations) for long term facilities, ''CARE A1'' (strong degree of safety regarding timely payment of financial obligations) for short term facilities and ''CARE A1 (FD)'' (Strong degree of safety regarding timely payment of financial obligations) for Fixed Deposits accepted by the Company.

L DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013. A Committee has been set up to redress the complaints received regarding sexual harassment. During the year the Company has not received any complaints on sexual harassment of women at the workplace.

3. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established vigil mechanism as required under Sec. 177(10) of the Companies Act, 2013 for directors and employees to report genuine concerns as prescribed in the policy. The policy provides adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

h DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

a) In accordance with the provisions of the Companies Act 2013 and Articles of Association of the Company, at the ensuing Annual General Meeting, Shri Mullapudi Thimmaraja, Director and Shri K. Srinivasa Rao, Director retire by rotation and being eligible offer themselves for re-election.

b) The Company held five Board Meetings during the year and dates and attendance particulars are available in the report on Corporate Governance.

c) The Company has received declarations from all the five Independent Directors confirming that he / she meets the criteria of independence as provided under sub-section 6 of Sec. 149 of the Companies Act, 2013 at the first meeting of the Board in which he / she participated as a Director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances which may affect his / her status as an Independent Director.

d) The Audit Committee consists of 3 Non-Executive Directors of which 2 are Independent Directors. Shri VS. Raju, Independent Director is the Chairman of the Audit Committee. The remaining 2 members are Shri Mullapudi Thimmaraja, Non-Executive Director and Shri Subbarao V. Tipirneni, Independent Director. The Board accepted all the recommendations of the Audit Committee during the year.

e) Shri J. Murali Mohan, Managing Director and Shri P Kesavulu Reddy, President & Secretary are the Key Managerial Personnel appointed under Sec. 203 of the Companies Act, 2013.

10. AUDITORS

M/s.Brahmayya & Co., Chartered Accountants, Guntur were appointed as Auditors for a period of 3 years at the 36th Annual General Meeting held on 6th September 2014 subject to ratification by the shareholders at the ensuing Annual General Meeting to continue as Auditors for the year 2016-17.

1 1. COST AUDITORS

M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad carried out the cost audit for the applicable products during the year. They are eligible for re-appointment as Cost Auditors for the year 2016-17.

12. SECRETARIAL AUDIT

M/s.Nekkanti S.R.VVS. Narayana & Co., Company Secretaries, Hyderabad were appointed as Auditors for secretarial audit for the year 2015-16 under Sec. 204 of the Companies Act, 2013 and they have submitted their report.

13. The information required to be included in the Board of Directors Report under the Companies Act, 2013 and Rules made there under is annexed to and forms part of this report as detailed below.

Sl.No.	Particulars	Section	Rule	Annexure No.
1	Extract of the Annual Return - Form MGT-9. Companies (Management and Administration) Rules, 2014	134 (3) (a) & 92 (3)	12 (1)	1
2	Company policy on Directors appointment and remuneration etc. provided under sub-sections (3) and (4) of Section 178	134 (3) (e)		2
3	Particulars of loans, guarantees or investments under Section 186	134 (3) (g)		3
4	Particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 in Form AOC -2. Companies (Accounts) Rules, 2014	134 (3) (h)	8(2)	4
5	Risk management policy for the company including identification therein of elements of risk if any.	134 (3) (n)		5
6	Corporate Social Responsibility policy and initiatives taken during the year . Companies (Corporate Social Responsibility policy) Rules, 2014	134 (3) (o)	8 (1)	6
7	Statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and Individual Directors. Companies (Accounts) Rules, 2014	134 (3) (p)	8 (4)	7
Sl.No.	Particulars	Section	Rule	Annexure No.
8	Financial summary or highlights. Companies (Accounts) Rules, 2014	134 (3) (q)	8 (5) (i)	8
9	Conservation of energy, technology absorption and Foreign Exchange earnings and outgo. Companies (Accounts) Rules, 2014	134 (3) (m)	8 (3) (A), (B) &(C)	9
10	Details relating to deposits covered under chapter V of the Act. Companies (Accounts) Rules, 2014	134 (3) (q)	8 (5) (v) & (vi)	10
11	Ratio of the remuneration of each Director to the median employee''s remuneration and such other details. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	197 (12)	5 (1)	11
12	Variation in the market capitalization of the company, price earnings ratio and percentage increase over decrease in the market quotations of the shares of the company etc. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	197 (12)	5 (1) (vii)	12
13	Particulars of employees in receipt of remuneration not less than Rs. five lakhs per month or Rs. sixty lakhs per year etc. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	197 (12)	5 (2)	13
14	Secretarial Audit Report in Form MR-3. Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014	204 (1)	9 (1)	14

14. INFORMATION UNDER LISTING REGULATIONS.

The Company is committed to maintain the standards of Corporate Governance prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations). The information required to be included in the Annual Report under Schedule V of the Listing Regulations are given below.

Sl.No.	Particulars	Para	Annexure No.
1	Related Party Disclosures	A	15
2	Management Discussion and Analysis Report	B	16
3	Report on Corporate Governance	C	17
4	Declaration by the Managing Director that all Board Members and Senior Management Personnel affirmed their compliance to the Code of Conduct.	D	18
5	Compliance Certificate from Auditors on Corporate Governance	E	19
6	Disclosures with respect to Demat Suspense Account / Unclaimed Suspense Account	F	20

The Company is having a policy to deal with Related Party Transactions and the same may be viewed in the Company''s website wwwjocil.in. Please see Note No.31 on Accounts for disclosures in compliance with the Accounting Standards on ''Related Party Disclosures.''

15. 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 that

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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 and loss 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; and

e) 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 and

Explanation: For the purpose of this clause, the term ''internal financial controls'' means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business including adherence to 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 information.

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.

16. PERSONNEL

The Directors wish to place on record their appreciation to all the employees of the Company for their sustained efforts and valuable contribution to the performance of the Company during the year.

17. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the wholehearted and sincere cooperation the Company received from various departments of Central and State Governments, Bankers, Auditors, Dealers and Suppliers of the Company. The Directors also would like to express their grateful appreciation for the guidance and cooperation received from the Holding Company, M/s. The Andhra Sugars Limited, Tanuku.

For and on behalf of the Board of Directors

Hyderabad P NARENDRANATH CHOWDARY

28th May 2016. Chairman

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Mar 31, 2015

The Directors have pleasure in presenting the Thirty Seventh Annual Report together with the Audited Statement of Accounts for the year ended 31st March 2015.

(Rs. in Lakhs)

2014-15 2013-14

1. FINANCIAL RESULTS

Gross Sales 35854.62 41718.29

Less : Excise Duty 3725.48 4499.40

Net Sales 32129.14 37218.89

Processing Charges 923.06 292.92

Other Income 236.31 190.31

Total Income 33288.51 37702.12

Profit for the year before Interest and Depreciation (PBID) 2729.24 2819.81

Interest (94.56) (163.12)

Depreciation (666.77) (1026.23)

Profit Before Tax (PBT) 1967.91 1630.46

Provision for Current Tax (700.00) (650.00)

Deferred Tax / (credit) 42.74 142.53

(Short)/ Excess provision of Income Tax made in earlier years - 9.54

Profit After Ta x (PAT) 1310.65 1132.53

During the year the total turnover of the company has come down to Rs.370.14 crores from Rs. 422.01 crores in the previous year, a decline of 12% over the previous year. The sales of fatty acids, glycerin, industrial oxygen and biomass power have shown marginal increase over the previous year while the sales of toilet soap, soap noodles and power from wind mills has declined considerably. Shift in customer requirements of soap noodles from outright purchase to jobwork is another reason for decline in sales turnover. However, the Profit Before Interest and Depreciation (PBID) shows only 3% decline due to improved market conditions for fatty acids in the last quarter of the year and marginal increase in interest received from deposits. Profit Before Tax (PBT) improved by 20% due to lower provision for depreciation expenses as per the new regulations under the Companies Act, 2013 and reduction in interest expense.

The appropriations from the profit are as detailed below:

(Rs. in Lakhs)

2014-15 2013-14

Profit after Tax 1310.65 1132.53

Balance brought forward from previous year 1487.13 1374.13

Profit for appropriations 2797.78 2506.66

APPROPRIATIONS

Dividend 532.87 444.06

Provision for Tax on distributed profits @ 20.35765% 108.48 75.47

Transfer to General Reserve 1042.10 500.00

Balance carried forward 1114.33 1487.13

Total 2797.78 2506.66

Authorized Capital 1000.00 1000.00

Paid up Capital 888.16 888.16

Reserves & Surplus 13937.75 13310.55

2. DIVIDEND

Considering the profitability of the Company, the Board of Directors are pleased to recommend for the approval of the shareholders of the Company for payment of dividend for the year ended 31-3-2015, at Rs. 6 per equity share of Rs.10 each, which aggregates to Rs. 5,32,86,900 on the 88,81,150 equity shares of the Company. In the previous year, the Company paid dividend at Rs.5 per equity share of Rs.10 each on 88,81,150 shares amounting to Rs.4,44,05,750.

3. OPERATIONS 2014-15 2013-14 MT MT

Production (including processed on job work)

a) Fatty Acids 49445 48567

b) Toilet Soap & Soap Products 31955 37840

c) Biomass Power-kWh 26740889 25149728

d) Wind Power-kWh 9754843 11056328

Sales

a) Fatty Acids 28832 24759

b) Toilet Soap & Soap Products 19541 35941

c) Biomass Power-kWh 9804800 8491700

d) Wind Power-kWh 9754843 11056328

4. OUTLOOK

Fatty Acids and Soap

The difficult market conditions set in during the year 2013-14 continued in the year 2014-15 also. However, company strategies to face the competition in fatty acid marketing have yielded better volumes, where as in soap and soap products segment similar strategies have not found much acceptance from the customers due to competition from imports and drop in rural market for FMCG products. During the year the Company has also improved product range of fatty acids. Some of the competitors in the fatty acid and soap products have an edge over the Company due to their backward integration to source raw-materials. The units located in exempted areas continue to enjoy cost advantage over the Company and some of the MNC customers are sourcing part of their requirements of soap products from them. However, the overall capacity utilization of main plant has slightly improved over the previous year due to increase in fatty acid sales. The Company could improve sales volume of refined glycerine but the realization has come down due to excessive supply of glycerine in the market from bio-diesel production.

The inverted duty structure – Imported soap noodles are exempted from customs duty whereas Lauric Acid, one of the raw-materials in the manufacture of soap noodles, attracts import customs duty at 7.5% - is seriously affecting the industry. Further, the export duty imposed on crude vegetable oils by Malaysia and Indonesia to encourage processing of crude oils there itself is raising cost of raw materials in India. As a result cost of production of soap noodles within the country is going up and becoming uncompetitive with imports. There is under utilization of installed capacities within the country due to imports.

The market for fatty acids showed signs of improvement towards the end of the year 2014-15. The Company has recommenced export of fatty acids since April 2015 which was discontinued in 2013. Cost of raw- materials is a major component in total cost of production and the fluctuations in raw-material prices is a serious cause of concern to the Company particularly when the customers demand for long term forward contracts while the same is not possible with the raw-material suppliers.

Biomass Power Plant

The performance of the biomass power plant has improved during the year as compared to the previous year. The generation from the plant during the year is higher by 15.91 lakh units over the previous year. The Govt. of A.P. has provided additional tariff amount of Rs. 1.50 per unit to the Biomass Power Plant Developers in addition to the applicable tariff fixed by APERC subject to maximum ceiling of Rs. 6.50 per unit for a period of one year with effect from 1st April 2014. This has improved income from sale of power to the Company by Rs. 77.46 lakhs.

Wind Energy Generators (WEG)

Power generation during the year from the four Wind Energy Generators (WEGs) of the Company aggregating to 6.3 Mw capacity is lower than that of the previous year which itself was considered as very low. During the year the power generation from all the four WEGs together was 97.55 lakh units as against 110.56 lakh units in the previous year and 164.18 lakh units in 2012-13. As a result the revenue from wind power generation is lower by Rs. 39.67 lakh during the year as compared to the previous year and Rs.193.08 lakh as compared to 2012-13. Even though power generation depends upon wind velocity, the major reason for fall in generation is the failure on the part of Tamil Nadu Electricity Generation and Distribution Corporation Limited (TANGEDCO) to evacuate power on priority basis. The back down of WEGs for want of evacuation facility amounts to about 22% of available time during the year 2014-15 and 23% in 2013-14. The Indian Wind Power Association is fighting for 'must run' status to WEGs to avoid back down in future.

5. FINANCE

The Company availed working capital facilities under consortium arrangement from Andhra Bank and State Bank of India and the accounts are in order. The company complied with all the legal requirements and there are no outstanding statutory dues as on 31st March 2015. During the year there have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

6. CREDIT RATING

The Credit Rating Agency CARE reaffirmed the credit rating of the Company 'CARE A ' (adequate degree of safety regarding timely servicing of financial obligations) for long term facilities and 'CARE A1' (strong degree of safety regarding timely payment of financial obligations) for short term facilities from banks. Fixed Deposits of the company have been accorded CARE A1 (FD) rating.

7. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place Internal Complaints Committee in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013 to redress the complaints received on sexual harassment. During the year the Company has not received any complaints on sexual harassment of women at the workplace.

8. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established vigil mechanism as required under Sec. 177(10) of the Companies Act, 2013 for Directors and Employees to report genuine concerns as prescribed in the policy. The policy provides adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

a) During the year, pursuant to Section 149 (1) and 149(4) of the Companies Act, 2013, Dr. Manjulata Dasari was appointed as an Independent Director at the Board Meeting held on 13-09-2014 for a period of five years and shall hold office up to 12-09-2019. The company has received requisite notice in writing from a member proposing her name as Independent Director.

b) Shri Y. Narayanarao Chowdary, Director retired at the last AGM held on 6th September, 2014. He has been on the Board of Directors of the Company since 1st November 1980 for more than three decades continuously. As Promoter Director he had put in immense efforts in the initial stage of incorporation of the Company in the areas of finance, administration and other Company matters which were instrumental for the growth and success of the Company. The Board placed on record its appreciation of his services at the meeting held on 5th November 2014.

c) In accordance with the provisions of the Companies Act 2013 and Articles of Association of the Company, at the ensuing Annual General Meeting, Shri P. Narendranath Chowdary, Chairman and Shri M. Mrutyumjaya Prasad, Director retire by rotation and being eligible offer themselves for re-election.

d) The Company held five Board Meetings during the year. Board meeting dates and attendance particulars are available in 'Corporate Governance' under item 14.

e) The Company has received declarations from all the Independent Directors confirming that he / she meets the criteria of independence as provided under sub-section 6 of Sec. 149 of the Companies Act, 2013 at the first meeting of the Board in which he / she participated as a Director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances which may affect his / her status as an Independent Director.

f) The Audit Committee consists of 3 Non-Executive Directors of which 2 are Independent Directors. Shri V.S. Raju, Independent Director is the Chairman of the Audit Committee. The remaining 2 members are Shri M.Thimmaraja, Non-Executive Director and Shri Subbarao V. Tipirneni, Independent Director. The Board accepted all the recommendations of the Audit Committee during the year.

g) Shri J. Murali Mohan, Managing Director and Shri P. Kesavulu Reddy, President & Secretary are the Key Managerial Personnel appointed under Sec. 203 of the Companies Act, 2013.

10. AUDITORS

M/s.Brahmayya & Co., Chartered Accountants, Guntur were appointed as Auditors for a period of 3 years at the 36th Annual General Meeting held on 6th September 2014 subject to ratification by the shareholders at the ensuing Annual General Meeting to continue as Auditors for the year 2015-16.

11. COST AUDITORS

M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad carried out the cost audit for applicable products during the year. They are eligible for re-appointment as Cost Auditors for the year 2015-16.

12. SECRETARIAL AUDIT

M/s.Nekkanti S.R.V.V.S. Narayana & Co., Company Secretaries, Hyderabad were appointed as Auditors for secretarial audit for the year 2014-15 under Sec. 204 of the Companies Act, 2013 and they have submitted their report.

13. The information required to be included in the Board of Directors Report under the Companies Act, 2013 and Rules made there under is annexed to and forms part of this report as detailed below.

Sl. No. Particulars Section Rule Annexure No.

1 Annual Return – Form MGT-9. 134 (3) (a) 1 & 92 (3) Companies (Management and Administration) Rules, 2014 12 (1)

2 Company's policy on Directors appointment and remuneration 134 (3) (e) 2 etc. provided under sub-sections (3) and (4) of Section 178

3 Particulars of loans, guarantees or investments under Section 186 134 (3) (g) 3

4 Particulars of contracts or arrangements with related parties 134 (3) (h) 4 referred to in sub-section (1) of Section 188 in Form AOC -2. Companies (Accounts) Rules, 2014 8 (2)

5 Conservation of energy, technology absorption and 134 (3) (m) 5 Foreign Exchange earnings and outgo. Companies (Accounts) Rules, 2014 8 (3) (A),(B) &(C)

6 Risk management policy for the company including 134 (3) (n) 6 identification therein of elements of risk if any.

7 Corporate Social Responsi- bility policy and initiatives taken 134 (3) (o) 7 during the year . Companies (Corporate Social Responsibility policy) Rules, 2014 8 (1)

8 Statement indicating the manner in which formal annual 134 (3) (p) 8 evaluation has been made by the Board of its own performance and that of its committees and Individual Directors. Companies (Accounts) Rules, 2014 8 (4)

9 Financial summary or highlights. 134 (3) (q) 9 Companies (Accounts) Rules, 2014 8 (5) (i)

10 Details relating to deposits covered under chapter V of the Act. 134 (3) (q) 10 Companies (Accounts) Rules, 2014 8 (5) (v) & (vi)

11 Ratio of the remuneration of each Director to the median 197 (12) 11 employee's remuneration and such other details. Companies (Appointment and Remuneration of Managerial 5 (1) Personnel) Rules, 2014

12 Variation in the market capitalization of the company, price 197 (12) 12 earnings ratio and percentage increase over decrease in the market quotations of the shares of the company etc. Companies (Appointment and Remuneration of Managerial 5 (1) (vii) Personnel) Rules, 2014

13 Particulars of employees in receipt of remuneration not less 197 (12) 13 than Rs. five lakh per month or Rs. sixty lakh per year etc. Companies (Appointment and Remuneration of Managerial 5 (2) Personnel) Rules, 2014

14 Secretarial Audit Report in Form MR-3. 204 (1) Companies (Appointment and Remuneration of Managerial 9 (1) 14 Personnel) Rules, 2014

14. CORPORATE GOVERNANCE

The Company is committed to maintain the standards of Corporate Governance prescribed by the Securities and Exchange Board of India (SEBI) codified in Clause 49 of the Listing Agreement with Stock Exchanges. The information required to be included in the Annual Report under Clause 49 of the Listing Agreement (L.A.) are given below.

Sl. No. Particulars Clause Annexure No.

1 Report on Corporate Governance 49 (x)(A) 15

2 Management Discussion and Analysis Report 49 (viii)(D) 16

3 Declaration by the Managing Director that all Board Members and Senior 49 (ii)(E)(2) 17 Management Personnel affirmed their compliance to the Code of Conduct on annual basis.

4 Compliance Certificate from Auditors on Corporate Governance 49 (xi) (A) 18

Related Party Transactions – L.A. 49 (viii) (A) (2)

The Company is having a policy to deal with Related Party Transactions and the same may be viewed in the Company's website www.jocil.in

Remuneration to Non Executive Directors - L.A. 49 (viii) (c) (3)

Non Executive Directors are paid sitting fee for attending Board Meetings and Committee Meetings in which they are the Members in addition to reimbursement of traveling, lodging, boarding and incidental expenses.

Performance Evaluation of Independent Directors – L.A. 49(ii)(b)(5)

The Nomination and Remuneration Committee laid down the evaluation criteria for performance evaluation of Independent Directors in the Nomination and Remuneration Policy of the Company. The criteria for evaluation is based on the parameters such as his / her participation in the Board Meetings, adherence to the Code of Conduct, ability to guide the Board, capability to get along with the other Directors in the Board etc., considered as reasonable and appropriate for the purpose.

Familiarization Programme for Independent Directors – L.A. 49 (ii)(b)(7)

The Company conducted familiarization programme for Independent Directors at the factory on 30th January 2015. They were explained about the nature of the industry in which the Company is operating, market conditions and business model of the Company. Then the Managing Director under the guidance of the Heads of Department took all the five Independent Directors to the plants and explained the manufacturing processes, generation of power from biomass, development of green belt, pollution control measures taken, and safety and security procedures etc., followed in the Company.

15. 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 that

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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 and loss 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; and e) 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 and Explanation : For the purpose of this clause, the term 'internal financial controls' means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business including adherence to 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 information.

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.

16. PERSONNEL

The Directors wish to place on record their appreciation to all the employees of the Company for their sustained efforts and valuable contribution to the performance of the Company during the year.

17. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the wholehearted and sincere cooperation the Company received from various departments of Central and State Governments, Bankers, Auditors, Dealers and Suppliers of the Company. The Directors also would like to express their grateful appreciation for the guidance and cooperation received from the Holding Company, M/s. The Andhra Sugars Limited, Tanuku.

For and on behalf of the Board of Directors

Hyderabad P. NARENDRANATH CHOWDARY

25th May 2015. Chairman

---

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Thirty Sixth Annual Report together with the Audited Statement of Accounts for the year ended 31st March 2014.

(Rs. in Lakhs)

2013-14 2012-13

1. FINANCIAL RESULTS

Gross Sales 41718.29 45346.36

Less : Excise Duty 4499.40 5160.22

Net Sales 37218.89 40186.14

Processing Charges 292.92 578.60

Other Income 190.31 162.80

Total Income 3 7702.12 40927.54

Profit before Interest and Depreciation 2819.81 3677.97

Interest (163.12) (382.13)

Depreciation (1026.23) (1001.38)

Profit before Tax 1630.46 2294.46

Provision for Current Tax (650.00) (850.00)

Deferred Tax / Credit 142.53 18.63

Excess/(Short) provision of Income Tax 9.54 (1.03) made in earlier years

Profit after Tax 1132.53 1462.06

During the year the turnover of the company has come down to Rs.417.18 crores from Rs. 453.46 crores in the previous year, a decline of 8% over the previous year. The Profit Before Interest and Depreciation (PBID) of Rs. 28.20 crores and Profit Before Tax (PBT) of Rs.16.30 crores in the current year have accounted for a drop by 23% and 29% respectively over the previous year. Turnover has come down during the year due to sluggish market for Fatty Acids and Toilet Soap. Severe competition and aggressive marketing by the other manufacturers affected the margins. The revenue from Wind Energy Generators (WEGs) has come down by Rs. 153.41 lakhs due to back down of WEGs for lack of evacuation facilities. Depreciation expense marginally increased due to few additions to assets while interest cost has come down because of reduced borrowings. The income for the year includes Rs. 233.07 lakhs (previous year''s Rs. 213.52 lakhs) received from APSPDCL for the power supplied in earlier years from 01-04-2004 to 31-03-2009 towards rate difference.

The appropriations from the profit are as detailed below:

(Rs. in Lakhs)

2013-14 2012-13

Profit after Tax 1132.53 1462.06

Balance brought forward from previous year 1374.13 1035.50

Profit for appropriations 2506.66 2497.56

APPROPRIATIONS

Dividend 444.06 532.87

Provision for Tax on distributed profits 75.47 90.56 @16.995%

Transfer to General Reserve 500.00 500.00

Balance carried forward 1487.13 1374.13

Total 2506.66 2497.56

4. OUTLOOK

Fatty Acids and Soap

The market for fatty acids mostly depends on their consumption for toilet soap production. During the year, the toilet soap market was stagnant and even the established brand owners are at difficulty to maintain their existing sales. Consequently the offtake by some of the major customers is abnormally low. Further, some of the competitors in the market for fatty acids have an edge over the company due to their backward integration to source raw material and few of such competitors are, curiously, vendors of raw materials to the company too. As a result the company could not utilize the full capacity of fatty acid, soap and glycerine plants after the recent expansion with latest technology.

Authorised Capital 1000.00 1000.00

Paid up Capital 888.16 888.16

Reserves & Surplus 13310.55 12697.54

2. DIVIDEND

Considering the profitability of the Company, the Board of Directors are pleased to recommend for the approval of the shareholders of the Company for payment of dividend for the year ended 31-3-2014, at Rs. 5 per equity share of Rs.10 each, which aggregates to Rs. 4,44,05,750 on the 88,81,150 equity shares of the Company. In the previous year, the Company paid dividend at Rs.6 per equity share of Rs.10 each on 88,81,150 shares amounting to Rs.5,32,86,900.

3. OPERATIONS 2013-14 2012-13 MT MT

Production (including processed on jobwork)

a) Fatty Acids 48567 51179

b) Toilet Soap 3495 7346

c) Soap Products 37270 43967

d) Glycerine 2381 3735

e) Industrial Oxygen (cubic meters) 459664 464432

f) Biomass Power-kwh 25149728 25799840

g) Wind Power-kwh 11056328 16418310

Sales

a) Fatty Acids 24759 23095

b) Toilet Soap 1395 2034

c) Soap Products 34546 36699

d) Glycerine 2254 3679

e) Industrial Oxygen (cubic meters) 454191 457681

f) Biomass Power (kWh) 8491700 7831000

g) Wind Power (kWh) 11056328 16418310

Biomass Power Plant

Restrictions on power consumption came into operation again from 06-02-2014 after a brief period of about six months. Yet, the company was able to carry out its operations normally, only because of Biomass Captive Power Plant. The company is not allowed to draw power even at extra cost during the periods of Biomass Power Plant maintenance due to restrictions on power consumption. Ironically, this year the company is not allowed to purchase power even under Open Access inspite of repeated representations, on frivolous grounds. Therefore the company is always at the risk of stoppage of production if there is any problem in power plant. Capacity utilization of Biomass Power Plant is satisfactory taking into consideration the fuel constraints experienced by the company. Since the continuous running of power plant is very essential, biomass fuels are having to be procured even at a higher cost.

Wind Energy Generators (WEGs)

Power generation during the year from the four Wind Energy Generators (WEGs) of the Company aggregating to 6.3 Mw capacity is very low at 110.56 lakh kwh as against the previous year 164.18 lakh units, mainly due to back down of WEGs for want of evacuation by Tamil Nadu Electricity Generation and Distribution Corporation Limited (TANGEDCO). The wind velocity during the year in general was considered good as compared to previous year and at least 10% increase in generation over the previous year was expected. TANGEDCO failed to evacuate power on priority basis as there were other cheaper sources of power at its disposal. The Indian Wind Power Association is fighting for ''must run'' status to WEGs to avoid back down in future. The estimated loss of income from the four WEGs due to back down is about Rs.200 lakhs during the year.

Credit Rating

The Credit Rating Agency CARE reaffirmed the credit rating of the Company ''CARE A '' (adequate degree of safety regarding timely servicing of financial obligations) for long term facilities and ''CARE A1'' (strong degree of safety regarding timely payment of financial obligations) for short term facilities from banks.

5. CONSERVATION OF ENERGY & ENVIRONMENTAL SAFETY

a) Air Handling Unit provided in Electrolyser Control Panel Room for reducing ambient temperature to avoid premature failure & malfunctioning of electronic components such as Programmed Logic Circuit (PLC), Control Cords etc.

b) Solar Photo Voltaic Cells (Plates) arranged at Biomass Collection Point to utilize solar power for Weigh Bridge.

c) Left over Hydrogen gas after reaction in Autoclave, successfully recovered and used in subsequent batches.

d) Heat released in condensation of glycerine, used to evaporate the Sweet Water in Glycerine Distillation Plant.

e) Steam generated from Vapour Liquid Separator in Continuous Neutralisation and Drying Plant, used for melting Lauric Acid.

f) Three thousand Eucalyptus saplings planted in the factory premises during the year to promote green belt.

6. FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, the Company earned foreign exchange equivalent to Rs.12,34,262 (previous year - 1,30,50,778). The exports have come down because of high raw-material prices and competition from countries like Malaysia and Indonesia for supply of similar products. The Company imported raw materials and equipment during the year resulting in foreign exchange outgo equivalent to Rs. 33,77,50,837 (previous year - Rs. 43,58,19,914).

7. FINANCE

The Company availed working capital facilities under consortium arrangement from Andhra Bank and State Bank of India and the accounts are in order. The company complied with all the legal requirements and there are no outstanding statutory dues as on 31st March 2014.

8. FIXED DEPOSITS

The Company has accepted Fixed Deposits from the public and shareholders during the year under review. There are no matured and unclaimed deposit as on 31st March 2014.

9. DIRECTORS

a) Pursuant to Section 149(4) of the Companies Act, 2013, Shri VS. Raju, Shri M. Gopalakrishna, Shri Subbarao V Tipirneni and Shri P Venkateswara Rao were appointed as Independent Directors with effect from 1-4-2014 and shall hold office up to 31-03-2019. The company has received requisite notices for each of the Directors separately in writing from members proposing their names as Independent Directors. The company has received declarations from all the Independent Directors of the company confirming that they meet the criteria of independence as prescribed under Sub Section 5 of Section 149 of Companies Act, 2013.

b) In accordance with the provisions of the Companies Act 2013 and Articles of Association of the Company at the ensuing Annual General Meeting Shri M. Thimmaraja, Director retires by rotation and being eligible offers himself for re-election and Shri Y. Narayanarao Chowdary, Director retires by rotation.

c) The present term of office of Shri Jagarlamudi Murali Mohan, Managing Director expires on 15-02-2015. During his tenure in office in the past twenty five years the company made appreciable progress in all aspects. The Board of Directors has recommended to the Shareholders for his reappointment at the ensuing Annual General Meeting.

d) The Board of Directors constituted Corporate Social Responsibility Committee comprising Shri P Narendranath Chowdary, as the Chairman and Shri J. Murali Mohan, Shri Mullapudi Thimmaraja and Shri Parvathaneni Venkateswara Rao as other members. The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility (CSR) Policy indicating the activities to be undertaken by the company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.

e) The Board of Directors have also constituted Nomination and Remunaeration Committee comprising Shri VS. Raju, as the Chairman and Shri P Narendranath Chowdary, Shri Mullapudi Thimmaraja and Shri Subbarao V. Tipimeni as other members. The said Committee has been entrusted with the responsibility of formulating a policy on nomination and remuneration of Directors, Key Managerial Personnel, Senior Management and other employees.

10. AUDITORS

M/s.Brahmayya & Co., Chartered Accountants, Guntur retire at the ensuing Annual General Meeting and are eligible for re-appointment for a period of 3 years.

11. COST AUDITORS

M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad have been appointed as Cost Auditors for Cost Audit of the Cost Accounting Records maintained by the Company for the year 2013-14. Cost Auditors'' Report in respect of financial year 2012-13 has been filed with the Ministry of Corporate Affairs on 13-09-2913 i.e. within the stipulated due date of 30-09-2013. They are eligible for appointment as Cost Auditors for the year 2014-15.

12. PERSONNEL

The Directors wish to place on record their appreciation to all the employees of the Company for their sustained efforts and valuable contribution to the performance of the Company during the year. The Statement of Particulars of Employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is annexed to and forms part of this report.

13. CORPORATE GOVERNANCE

The Company is committed to maintain the standards of Corporate Governance prescribed by the Securities and Exchange Board of India (SEBI) codified in Clause 49 of the Listing Agreement with Stock Exchanges. Report on Corporate Governance and Management Discussion and Analysis (MD & A) Report along with Compliance Certificate from Auditors on Corporate Governance are set out as separate Annexures to this report.

14. DIRECTORS'' RESPONSIBILITY STATEMENT

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

a) in the preparation of the annual accounts for the year ended March 31, 2014, the applicable Accounting Standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same ;

b) 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 the Company as at March 31, 2014 and of the profit of the Company for the year ended on that date ;

c) 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; and

d) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

15. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the wholehearted and sincere cooperation the Company received from various departments of Central and State Governments, Bankers, Auditors, Dealers and Suppliers of the Company. The Directors also would like to express their grateful appreciation for the guidance and cooperation received from the Holding Company, M/s. The Andhra Sugars Limited, Tanuku.

For and on behalf of the Board of Directors Hyderabad, P NARENDRANATH CHOWDARY 19 July, 2014 Chairman

---

Mar 31, 2013

The Directors have pleasure in presenting the Thirty Fifth Annual Report together with the Audited Statement of Accounts for the year ended 31st March 2013.

(Rs. in Lakhs) 2012-13 2011-12

1. FINANCIAL RESULTS

Gross Sales 45346.36 43014.76

Less: Excise Duty 5160.22 4228.64

Net Sales 40186.14 38786.12

Processing Charges 578.60 360.82

Other Income 162.80 258.42

Total Income 40927.54 39405.36

Profit before Interest and Depreciation (PBID) 3677.97 3090.75

Interest (382.13) (342.11)

Depreciation (1001.38) (888.22)

Profit before Tax (PBT) 2294.46 1860.42

Provision for Current Tax (850.00) (600.00)

Deferred Tax (Provision) / Withdrawal 18.63 (10.05)

Excess/(Short) provision of Income Tax made in earlier years (1-03)

Profit after Tax 1462.06 1250.37

During the year the turnover of the company has increased marginally from Rs. 430.15 crores to Rs. 453.46 crores recording a 5.42% growth over the previous year. The Profit Before Interest and Depreciation (PBID) of Rs. 36.78 crores and Profit Before Tax (PBT) of Rs. 22.94 crores during the year have grown by 19.00% and 23.33% respectively over the previous year. The performance of the company during the first half of the financial year was significantly better than that of the corresponding period in the previous year. However, during the second half of the financial year the Company experienced unfavourable conditions due to decline in prices, slump in market conditions and severe competition. As a result, the production, sales and operations were adversely affected and consequently the overall outcome for the financial year 2012-13 was only marginally better than the previous year.

The income for the year also includes Rs.213.52 lakhs received from AP Transco for the power supplied in earlier years towards rate difference. An increase in revenue by Rs. 77.75 lakhs was achieved from wind mills due to improved wind velocity over the previous year.

The appropriations from the profit are as detailed below :

(Rs. in Lakhs)

2012-13 2011-12

Profit after Tax 1462.06 1250.37

Balance brought forward from previous year 1035.50 1745.28

Profit for appropriations 2497.56 2995.65

APPROPRIATIONS

Dividend 532.87 444.06

Provision for Tax on distributed profits @ 16.995% 90.56 72.03

Transfer to General Reserve 500.00 1444.06

Balance carried forward 1374.13 1035.50

Total 2497.56 2995.65

Authorised Capital 1000.00 1000.00

Paid up Capital 888.16 888.16

Reserves & Surplus 12697.54 11858.91

2. DIVIDEND

Considering the profitability of the Company, the Board of Directors are pleased to recommend for the approval of the shareholders of the Company for payment of dividend for the year ended 31-3-2013, at Rs. 6/- per equity share of Rs.10 each, which aggregates to Rs. 5,32,86,900/- on the 88,81,150 equity shares of the Company. In the previous year, the Company paid dividend at Rs.5/- per equity share of Rs. 10 each on 88,81,150 shares amounting to Rs.4,44,05,750.

3. OPERATIONS 2012-13 2011-12 MT MT

Production

(including processed on jobwork)

a) Fatty Acids 51179 49710

b) Toilet Soap 7346 7472

c) Soap Products 43967 40077

d) Glycerine 3735 2300

e) Industrial Oxygen (cubic meters) 464432 424554

f) Biomass Power (kWh 25799840 20246932

g) Wind Power (kWh) 16418310 13676554

Sales

a) Fatty Acids 23095 23364

b) Toilet Soap 2034 2259

c) Soap Products 36633 35727

d) Glycerine 3679 2322

e) Industrial Oxygen (cubic meters) 457681 408072

f) Biomass Power (kWh) 7831000 3561300

g) Wind Power (kWh) 16418310 13676554

4. OUTLOOK

Fatty Acids and Soap

In the last annual report the members were informed that the company commissioned new equipment under expansion cum modernization programme implementing latest technology and increasing plant capacities. However, the production figures for the year under consideration could not be improved over the previous year due to unfavourable market conditions. Yet, the investment in new upgraded plant and machinery helped the company to sustain the bottom lines through reduced processing costs and improved efficiency.

The recession in European markets in recent times has adversely affected the business prospects of some of our major customers and as a result their offtake has come down. Stearic Acid and Soap Noodles markets were also disturbed by new entrants offering their products at low rates to get an entry into the market but these prices may not prevail for long and are expected to settle at a reasonable level. The overall market conditions are expected to improve soon from the slow down since October, 2012.

Biomass Power Plant

The extremely bleak power scenario at present had never been experienced in the past. Yet, we were able to carry out our operations normally only because of Biomass Cogeneration Captive Power Plant. The industry is not allowed to draw extra power even at additional cost since 7th November 2012 after the introduction of Revised Restriction and Control (R&C) measures by Andhra Pradesh Electricity Regulatory Commission (APERC). The company obtained No Objection Certificate (NOC) for purchase of power under Open Access from third parties as and when required to meet the exigencies. The capacity utilization of Biomass Power Plant has improved considerably during the year to 60% over the previous year at 47%, due to the extra efforts put in to procure biomass fuels. Since the continuous running of power plant is very essential, biomass fuels are being purchased at a higher cost.

During the year the company has received Rs.213.52 lakhs from Andhra Pradesh Power Coordination Committee towards differential tariff amount for the power exported during the period I st April 2004 to 31st March 201 las per the interim orders of the Hon''ble Appellate Tribunal for Electricity (ATE) dt. 1-2-2012. The ATE passed final orders dt.20-12-2012 giving directions to APERC to finalise the tariff which is yet to be complied with.

Wind Energy Generators (WEGs)

Power generation from the four wind energy generators (WEGs) of the Company aggregating to 6.3 Mw capacity has improved during the current year to 164.18 lakh units as against the previous year at 136.77 lakh units because of improved wind velocity. In the last two years power generation from the wind mills was much lower than expected due to prolonged winter season and low wind velocity.

Wind energy is a boon to the power starved Tamil Nadu State Government. Yet, the Tamil Nadu Electricity Generation and Distribution Corporation Limited (TANGEDCO) has been delaying payments for power supplied to it for more than a year. As on 31 st March, 2013, Rs.450.33 lakhs is due for payment by TANGEDCO. Indian Wind Power Association in which the Company is a Member, took up the issue and the Appellate Tribunal for Electricity (ATE) directed TANGEDCO to pay interest at 12% per annum on delayed payments. Inspite of these Orders TANGEDCO pays neither the interest nor the principal in time which is causing problems to the industry.

Credit Rating

The Credit Rating Agency CARE reaffirmed the credit rating of the Company ''CARE A '' (adequate degree of safety regarding timely servicing of financial obligations) for long term facilities and ''CARE Al'' (strong degree of safety regarding timely payment of financial obligations) for short term facilities from banks.

5. CONSERVATION OF ENERGY & ENVIRONMENTAL SAFETY

a) New Electrolyzer with improved technology installed, to save on electricity in producing hydrogen gas.

b) Fatty Acid Distillation Plants 5 & 6 interconnected, to reduce steam consumption for vacuum creation.

c) Water Vapour in Splitting Plant 2 & 3 condensed to water, to recover heat and to reuse the same water.

d) Vapor Liquid Separator system adopted in Batch Neutralisation and Drying Plant, to improve production of Noodles.

e) Power Control Panel Room (Power House-1) air-cooled with Air Handling Unit, to reduce heat emissions of panel and to avoid premature failure of changeover switches & breakers.

6. FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, the Company earned foreign exchange equivalent to Rs. 1,30,50,778 (previous year- Rs.2,18,08,672/-). The exports have come down because of competition from countries like Malaysia and Indonesia for supply of similar products. The Company imported raw materials and equipment during the year resulting in foreign exchange outgo equivalent to Rs. 43,58,19,914 (previous year Rs. 54,25,70,176/-).

7. FINANCE

The Company availed working capital facilities under consortium arrangement from Andhra Bank and State Bank of India and the accounts are in order. The Company complied with all the legal requirements and there are no outstanding statutory dues as on 31st March, 2013.

8. FIXED DEPOSITS

The Company has accepted Fixed Deposits from the public and shareholders during the year under review. There are no matured and unclaimed deposit as on 31st March 2013.

9. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri M. Gopalakrishna, I.A.S. (Retd.), Shri Subbarao V. Tipimeni and Shri K.Srinivasa Rao, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Shri R Venkateswara Rao was appointed as Additional Director of the Company with effect from 29th September 2012 in accordance with Section 260 of the Companies Act, 1956, read with Article 113 of the Articles of Association of the Company. He will be holding office until the date of the forthcoming Annual General Meeting.

10. AUDITORS

M/s.Brahmayya & Co., Chartered Accountants, Guntur retire at the ensuing Annual General Meeting and are eligible for reappointment.

11. COST AUDITORS

Cost Audit of the Cost Accounting Records maintained by the Company in respect of the products Fatty Acids and Electricity is required for the year 2012-13. Accordingly for conducting the cost audit, M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad were appointed as Cost Auditors for both the products.

12. PERSONNEL

The Directors wish to place on record their appreciation to all the employees of the Company for their sustained efforts and valuable contribution to the performance of the Company during the year. The Statement of Particulars of Employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is annexed to and forms part of this report.

13. CORPORATE GOVERNANCE

The Company is committed to maintain the standards of Corporate Governance prescribed by the Securities and Exchange Board of India (SEBI) codified in Clause 49 of the Listing Agreement with Stock Exchanges. Report on Corporate Governance and Management Discussion and Analysis (MD & A) Report along with Compliance Certificate from Auditors on Corporate Governance are set out as separate Annexures to this report.

14. DIRECTORS'' RESPONSIBILITY STATEMENT

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

a) in the preparation of the annual accounts for the year ended March 31, 2013, the applicable Accounting Standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same ;

b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit of the Company for the year ended on that date;

c) 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; and

d) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

15. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the wholehearted and sincere cooperation the Company received from various departments of Central and State Governments, Bankers, Auditors, Dealers and Suppliers of the Company. The Directors also would like to express their grateful appreciation for the guidance and cooperation received from the Holding Company, M/s. The Andhra Sugars Limited, Tanuku.

For and on behalf of the Board of Directors

Hyderabad, P NARENDRANATH CHOWDARY

25th May, 2013 Chairman

---

Mar 31, 2012

The Directors have pleasure in presenting the Thirty Fourth Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2012.

(Rs. in Lakhs)

2011-12 2010-11

1. FINANCIAL RESULTS

Gross Sales 43014.76 41353.74

Less: Excise Duty 4228.64 3565.51

Net Sales 38786.12 37788.23

Processing Charges 360.82 507.95

Other Income 258.42 364.06

Total Income 39405.36 38660.24

Profit for the year before Interest and Depreciation 3090.75 3790.77

Interest (342.11) (262.96)

Depreciation (888.22) (682.48)

Profit before Tax 1860.42 2845.33

Provision for Current Tax (600.00) (830.00) (Rs. in Lakhs)

2011-12 2010-11

Deferred Tax (Provision) / Withdrawal (10.05) (86.53)

Excess/(Short) provision of Income Tax made in earlier years _ 13.95

Profit after Tax 1250.37 1942.75

The Gross Sales during the year marginally increased from Rs.413.54 crores to Rs.430.15 crores recording a 4% growth over the previous year The Profit Before Interest and Depreciation (PBID) of Rs.31.05 crores and Profit Before Tax (PBT) of Rs. 18.60 crores during the current year have come down by 18% and 35% respectively over the previous year. The Financial Years 2009-10 and 2010-11 were rewarding years for the Company in terms of demand for the products and capacity utilization which resulted in PBT of Rs.32.02 crores and Rs.28.45 crores respectively. During the current year the company could not maintain the operations at such high levels due to lower demand for fatty acids and soap products in toilet soap industry Increase in cost of raw materials without corresponding increase in selling prices, lower revenue from wind mills due to low wind velocity, rise in finance expenses due to borrowings for expansion, higher provision for depreciation due to commissioning of new plants etc have all resulted in substantial fall in PBT of the company. As a result the Profit After Tax (PAT) during the current year stood at Rs. 12.50 crores as against Rs. 19.43 crores a year ago registering a 36% fall.

During the year the Company issued Bonus Shares to the shareholders at one fully paid equity share of Rs. 10 each for every one share held by them as on the Record Date of 28-09-2011. Consequently the equity share capital of the Company rose from 44,40,575 equity shares of Rs. 10 each aggregating to Rs.4,44,05,750 to 88,81,150 equity shares of Rs. 10 each aggregating to Rs.8,88,11,500.

The appropriations from the profit are as detailed below :

(Rs. in Lakhs)

2011-12 2010-11

Profit after Tax 1250.37 1942.75

Balance brought forward from previous year 1745.28 1215.41

Profit for appropriations 2995.65 3158.16

APPROPRIATIONS

Dividend 444.06 355.25

(Rs. in Lakhs)

2011-12 2010-11

Provision for Tax on distributed profits @ 16.225% on dividend 72.03 57.63

Transfer to General Reserve 1444.06 1000.00

Balance carried forward 1035.50 1745.28

Total 2995.65 3158.16

Authorised Capital 1000.00 500.00

Paid up Capital 888.16 444.11

Reserves & Surplus 11858.91 11568.69

2. DIVIDEND

Considering the profitability of the Company, the Board of Directors is pleased to recommend for the approval of the shareholders of the Company for payment of dividend for the year ended 31 -3-2012, at Rs. 5 per equity share of Rs. 10 each, which aggregates to Rs.4,44,05,750 on the 88,81,150 equity shares in the share capital of the Company. In the previous year the Company paid dividend at Rs.8 per equity share of Rs. 10 each on 44,40,575 shares (before bonus issue at 1:1) amounting to Rs. 3,55,24,600.

3. OPERATIONS 2011-12 2010-11 MT MT

Production

(including processed on job work)

a) Fatty Acids 49710 57485

b) Toilet Soap 7472 9630

c) Soap Products 40077 48229

d) Glycerine 2300 1704

e) Industrial Oxygen (cubic meters) 424554 426157

f) Biomass Power (kwh) 20246932 19060975

g) Wind Power (kwh) 13676554 15762891



2011-12 2010-11 MT MT

Sales

aj Fatty Acids 23364 25708

b) Toilet Soap 2259 1682

c) Soap Products 35727 42810

d) Glycerine 2322 1463

e) Industrial Oxygen (cubic meters) 408072 414458

f) Biomass Power (kwh) 3561300 4906300

g) Wind Power (kwh) 13676554 15762891

4. OUTLOOK

Fatty Acids and Soap

Production and sales of fatty acids have come down during the current year due to absence of exports of fatty acids and lower captive consumption of fatty acids for production of soap and soap products. The offtake of fatty acids and soap noodles by some of the major customers in the toilet soap industry was low because of sluggishness in the toilet soap market. The market for fatty acids consumed in industries, other than toilet soap, is encouraging and expected to grow further.

During the year, the company commissioned Hydrogenation Plant, Continuous Saponificaton & Soap Drying Plant and Glycerine Refining Plant, all with latest technologies, thereby completing the expansion cum modernization program of fatty acid, soap and glycerine plants. As a result, the company is now able to produce superior quality products, increase product range, reduce consumption of utilities and maintain additional production facilities to meet unexpected demands from the customers. The performance of the company is expected to improve once the market for toilet soap improves.

Biomass Power Plant

The availability of fuels continues to be the critical factor for running the 6 Mw Biomass Cogeneration Captive Power Plant. Collection of field residues like cotton stalk, chili stalk etc., is becoming difficult due to shortage of labour and increase in labour cost. Hence the plant was run at lower capacity to meet the steam and power requirements of process plants through out the year. Fuels are now being purchased at a higher price to procure more quantity and improve PLF

On the directions of the Hon'ble Supreme Court, the three member bench of Andhra Pradesh Electricity Regulatory Commission (APERC), reconsidered the issue of fixation of price for purchase of renewable energy by AP Transco and passed three different and independent orders as a result of which none of the orders could be enforceable. Hence, Biomass Energy Developers Association (BEDA) again filed an appeal before the Appellate Tribunal for Electricity (ATE) which passed interim orders to give effect to the orders of the Chairman of APERC. The appeal filed by AP Transco on these orders before the Hon'ble Supreme Court was dismissed. Therefore it is expected that the interim orders of ATE will be implemented and the company will receive the differential amount of about Rs. 2.3 crores soon.

The Central Electricity Regulatory Commission (CERC) had notified regulations for issue of Renewable Energy Certificates (RECs) to implement the mechanism envisaged in the Electricity Act, 2003 for encouraging generation and cogeneration of power from renewable energy sources like biomass, bagasse, wind, solar, mini hydel, municipal waste etc. The scheme if implemented strictly is expected to generate an additional revenue of about Rs. 2.4 crores per year to the company by sale of RECs obtained from capative consumption of renewable energy.

The Company is able to run processing plants continuously only on account of captive power generation plant without getting affected by the power cuts imposed by the Government due to power shortage.

Wind Energy Generators (WEG)

Power generation from the four wind energy generators (WEGs) of the Company aggregating to 6.3 Mw capacity continues to be much lower than expected for the second year in a row at 136.80 lakh units as compared to 157.63 lack units in the previous year because of low wind velocity and prolonged winter season. The low wind velocity is a temporary phenomenon due to wind cyles and the generation is expected to improve in the coming years.

While wind energy generators are facing the problem of low generation for the past two years, the Tamil Nadu Electricity Generation and Distribution Corporation Limited (TANGECO) has been delaying payments for power supplied to it for more than a year. Indian Wind Power Association in which the Company is a Member took up the issue and the Appellate Tribunal for Electricity (ATE) directed TANGEDCO to pay interest at 12% per annum on delayed payments.

Credit Rating

The Credit Rating Agency CARE reaffirmed the credit rating of the Company 'CARE A ' (adequate degree of safely regarding timely servicing of financial obligations) for long term facilities and CARE A11 (strong degree of safety regarding timely payment of financial obligations) for short term facilities from banks

5. CONSERVATION OF ENERGY & ENVIRONMENTAL SAFETY

During the year, the following actions were taken for conservation of energy and environmental safety.

a. Vacuum Pumps in Drying Plant installed in place of Steam Jet Ejectors to reduce consumption of steam.

b. About 2500 Eucalyptus saplings planted in the factory premises, in addition to over 2000 trees existing of other varieties, for the development of green belt.

c. Compact Fluorescent Lamp (CFL) fittings used in new Glycerine Plant for energy conservation.

d. Environment friendly chilled water based Fan Coil Units (FCUs) used in certain areas for cooling, instead of conventional Air Conditioning Units, to reduce energy consumption.

e. Glycerine Distillation Plant installed with Lurgi technology to reduce waste generation.

f. Existing R.O. Plant modified to increase the production from 400 mVday to 500 mVday and to conserve power.

g. Effluent water generation reduced by collection and reuse of condensate water.

h. Bag filter installed at coal handling to reduce atmospheric emissions.

i. G.l. sheet fencing arranged at Husk yard to reduce air pollution.

6. FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, the Company earned foreign exchange equivalent to Rs.2,18,08,672 (previous year Rs.36,59,13,419). The exports have come down drastically because of higher raw-material prices and severe competition from countries like Malaysia and Indonesia for supply of similar products exported by the Company. The Company imported raw materials and equipment during the year resulting in foreign exchange outgo equivalent to Rs.54,25,70,176 (previous year Rs.91,67,71,890).

7. FINANCE

The Company availed working capital facilities under consortium arrangement from Andhra Bank and State Bank of India and the accounts are in order. The term loans and working capital facilities availed from Axis Bank, HDFC Bank and ICICI Bank were repaid during the year

8. FIXED DEPOSITS

The Company has accepted Fixed Deposits from the public and shareholders during the year under review. There are no matured and unclaimed deposit as on 31st March 2012

9. DIRECTORS

Dr. Mullapudi Harischandra Prasad, who steered the company to the present status for almost a quarter of the century, passed away on 03-09-2011 and Shri P Narendranath Chowdary was elected in his place as Chairman of the Company by the Board of Directors. In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri Y. Narayanarao Chowdary and Shri VS. Raju, Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Shri M. Mrutyumjaya Prasad was appointed as Additional Director of the Company with effect from 5th November 2011 in accordance with Section 260 of the Companies Act, 1956, read with Article 113 of the Articles of Association of the Company. He will be holding office until the date of forthcoming Annual General Meeting.

10. AUDITORS

M/s. Brahmayya & Co., Chartered Accountants, Guntur retire at the ensuing Annual General Meeting and are eligible for re-appointment.

11. COST AUDITORS

Cost Audit of the Cost Accounting Records maintained by the Company in respect of the products Soap, Industrial Oxygen and Electricity is reguired for the year 2011-12. Accordingly, for conducting the cost audit, M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad were appointed as Cost Auditors for all the three products.

12. PERSONNEL

The Directors wish to place on record their appreciation to all the employees of the Company for their sustained efforts and valuable contribution to the performance of the Company during the year. The Statement of Particulars of Employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is annexed to and forms part of this report.

13. CORPORATE GOVERNANCE

The Company is committed to maintain the standards of Corporate Governance prescribed by the Securities and Exchange Board of India (SEBI) codified in Clause 49 of the Listing Agreement with Stock Exchanges. Report on Corporate Governance and Management Discussion and Analysis (MD & A) along with Corporate Governance Compliance Certificate from Auditors are set out as separate Annexures to this report.

14. DIRECTORS' RESPONSIBILITY STATEMENT

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

a. in the preparation of the annual accounts for the year ended March 31, 2012, the applicable Accounting Standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

b. the Directors have selected such accounting policies that are reasonable, prudent and applied them consistently and made judgments and estimates so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit of the Company for the year ended on that date;

c. 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; and

d. the Directors have prepared the annual accounts of the Company on a 'going concern' basis.

15. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the wholehearted and sincere cooperation the Company received from various departments of Central and State Governments, Bankers, Auditors, Dealers and Suppliers of the Company. The Directors also would like to express their grateful appreciation for the guidance and cooperation received from the Holding Company, M/s. The Andhra Sugars Limited, Tanuku.

For and on behalf of the Board of Directors

Dokiparru, P NARENDRANATH CHOWDARY

26th May, 2012 Chairman

---

Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the Thirty Third Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2011.

(Rs. in Lakhs)

2010-11 2009-10

1. FINANCIAL RESULTS

Gross Sales 41353.74 31819.17

Less : Excise Duty 3608.87 2183.96

Net Sales 37744.87 29635.21

Processing Charges 507.95 531.15

Other Income 364.06 343.58

Total Income 38616.88 30509.94

Profit for the year before Interest and Depreciation 3790.77 3773.12

Interest (262.96) (55.25)

Depreciation (682.48) (510.86)

Profit before Tax 2845.33 3207.01

Provision for Current Tax (830.00) (1100.00)

Deferred Ta x (Provision) / Withdrawal (86.53) 24.50

Excess/(Short) provision of Income Tax made in earlier years 13.95 5.19

Profit after Tax 1942.75 2136.70

The Company achieved a sales turnover of Rs.413.54 crores during the year, an increase by 30% over the previous year turnover of Rs.318.19 crores. Marginal growth in quantity of production and sales apart, increase in turnover is mostly due to rise in prices of finished goods necessitated by increase in prices of raw materials. The profit before interest and depreciation remained almost same in spite of rise in turnover largely due to reduced margins. The Company could not pass on the entire burden in price rise in raw materials to its customers due to stiff competition in the market as was the case with the rest of the industry. The decrease in interest income and increase in interest expense is due to utilization of surplus cash in deposits and bank borrowings under modernization cum expansion programme of fatty acid, toilet soap and glycerine plants. Depreciation expense has also gone up because of commissioning of some of the plants under the above programme. Hence, though profit before interest and depreciation is comparable with last year, Profit Before Tax (PBT) has come down considerably.

The appropriations from the profit are as detailed below :

(Rs. in Lakhs)

2010-11 2009-10

Profit after Tax 1942.75 2136.70

Balance brought forward from previous year 1215.41 596.52

Profit for appropriations 3158.16 2733.22

APPROPRIATIONS

Dividend 355.25 444.06

Provision for Tax on distributed profits @ 16.2225% on dividend 57.63 73.75

Transfer to General Reserve 1000.00 1000.00

Balance carried forward 1745.28 1215.41

Total 3158.16 2733.22

Authorised Capital 500.00 500.00

Paid up Capital 444.11 444.11

Reserves & Surplus 11568.69 10038.82

2. DIVIDEND

Considering the profitability of the Company, the Board of Directors are pleased to recommend for the approval of the shareholders of the Company for payment of dividend for the year ended 31-3-2011, at Rs.8/- per equity share of Rs.10/- each, which aggregates to Rs.3,55,24,600/- on the 44,40,575 equity shares in the share capital of the Company. In the previous year the Company paid dividend at Rs.10/- per equity share of Rs.10/- each.

3. OPERATIONS 2010-11 2009-10

MT MT

Production (including processed on jobwork)

a) Fatty Acids 57485 55505

b) Toilet Soap 9630 9883

c) Soap Products 48229 43920

d) Glycerine 1704 1352

e) Industrial Oxygen (cubic meters) 426157 359572

f) Biomass Power (kwh) 19060975 25364665

g) Wind Power (kwh) 15762891 13817819

Sales

a) Fatty Acids 25708 27089

b) Toilet Soap 1682 1665

c) Soap Products 42810 38763

d) Glycerine 1463 1399

e) Industrial Oxygen (cubic meters) 414458 356317

f) Biomass Power (kwh) 4906300 9178600

g) Wind Power (kwh) 15762891 13817819

4. OUTLOOK

Fatty Acids and Soap

Production and sales of fatty acids, soap products and toilet soap during the year should have been much better than the figures posted but for the lower demand since February 2011. It could be due to rise in prices, high inventory with the customers caused by heavy purchases in anticipation of further increase in prices, slow down in industry etc. Under expansion cum modernization programme, installation and commissioning of Bleacher, Distillation Plant, Soap Finishing Line have been completed and Hydrogenation Plant, Continuous Saponification & Soap Drying Plant are under advanced stage and expected to be completed by July 2011. Glycerine Plant for processing crude to Refined Glycerine, a by-product from fatty acid splitting plant, not being a constraint for running other plants was taken up last and is expected to be completed by October 2011. On commissioning of these plants the Company will have on hand additional capacity with improved technology for producing additional range of superior quality products. The delay in implementation of some of the plants is due to prolonged rainy season and shortage of labour in 2010. Although the industry in general and toilet soap industry in particular may go through a rough patch in the initial part of the year it is expected to return to normalcy soon and the demand for fatty acids and soap noodles will pick up.

Biomass Power Plant

The availability of fuels continues to be the constraint in capacity utilization of Biomass Power Plant. Unexpected failure of turbine resulting in stoppage of power generation for a considerable period and running of power plant at lower capacity due to uncertainty of fuel availability, slipped generation to 190.61 lakh kwh from 224.50 lakh kwh in the previous year accounting for capacity utilization of less than 50%. While the fuel costs have gone up power purchase price by AP Transco came down from Rs.3.80 per kwh to Rs.3.54 per kwh, this being the price fixed by APERC for the biomass power plants which have completed 10 years of generation for surplus power exported.

The decision on the appeal filed by the Company before the Supreme Court for payment of fixed costs for supplies over 2.4 Mw is still pending. The legal action initiated by the Biomass Energy Developers Association (BEDA) on behalf of its members for increase in power purchase price by AP Transco before the Supreme Court was undecided as the Court redirected the issue for reconsideration by APERC.

The underlying positive factor of this plant is that it being a captive power generation plant, the Company is able to run the processing plants and meet the production targets effectively without getting affected by power cuts / interruptions during power shortage.

Wind Energy Generators (WEG)

There are 4 wind energy generators (WEGs) of the Company aggregating to 6.3 Mw all set up in the State of Tamil Nadu. The power generation during the year under review is 157.63 lakh units for installed capacity of 6.3 Mw as against 138.18 lakh units in the previous year for installed capacity of 4.8 Mw. The generation per Mw during the year under review was extremely low because of prolonged rainy season in which the wind velocity drops. The low wind velocity is a temporary phenomenon due to wind cycles and the generation is expected to improve in the next year.

Credit Rating

The Company obtained credit rating of CARE A (adequate safety for timely servicing of debt obligation) for long term facilities and PRI (strong capacity for timely repayment and carry lowest credit risk) for short term facilities from Banks through the credit rating agency CARE.

5. CONSERVATION OF ENERGY & ENVIRONMENTAL SAFETY

During the year, the following actions were taken for conservation of energy and environmental safety.

a) Fatty Acid Distillation Plant-6 is modified to reduce consumption of utilities and material changeover time.

b) Steam driven vapour absorption chilling unit of 415 TRU (energy efficient) is procured to replace Electrical Chiller & low efficiency low capacity vapour absorption chilling unit.

c) Energy efficient steam driven condensate pump is installed for chilling unit to recover steam condensate.

d) Bag filters have been installed for Thermic Fluid Heaters and low pressure steam boiler to reduce atmospheric emissions.

e) Soap lines are automated wherever possible to reduce manpower and energy consumption.

6. FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, the Company exported Fatty Acids to Sri Lanka and earned foreign exchange equivalent to Rs.36,59,13,419/- (previous year Rs.44,61,48,528/-). The Company imported raw materials and equipment during the year resulting in foreign exchange outgo equivalent to Rs.91,67,71,890/- (previous year Rs.75,91,05,662/-).

7. FINANCE

The Company availed working capital facilities under consortium arrangement from Andhra Bank, State Bank of India and separately from Axis Bank and the accounts are in order. To meet part of the funds requirement for working capital as well as for expansion cum modernization programme, the Company also availed unsecured short term loans from HDFC Bank and ICICI Bank.

8. FIXED DEPOSITS

The Company has accepted Fixed Deposits from the Public and Shareholders during the year under review. There are no matured and unclaimed deposit as on 31st March, 2011.

9. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri M. Thimmaraja and Shri K. Srinivasa Rao, Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

10. AUDITORS

M/s. Brahmayya & Co., Chartered Accountants, Guntur retire at the ensuing Annual General Meeting and are eligible for re-appointment.

11. COST AUDITORS

The Company was directed by the Central Government for Cost Audit of the Cost Accounting Records maintained by the Company in respect of the products Soap and Industrial Oxygen for the year 2010-11. Accordingly for conducting the cost audit, M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad were appointed as Cost Auditors for both the products.

12. PERSONNEL

The Directors wish to place on record their appreciation to all the employees of the Company for their sustained efforts and valuable contribution to the performance of the Company during the year. The Statement of Particulars of Employees pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is annexed to and forms part of this report.

13. CORPORATE GOVERNANCE

The Company is committed to maintain the standards of Corporate Governance prescribed by the Securities and Exchange Board of India (SEBI) codified in Clause 49 of the Listing Agreement with Stock Exchanges. Report on Corporate Governance and Management Discussions and Analysis (MD & A) along with Corporate Governance Compliance Certificate from Auditors are set out as separate Annexures to this report.

14. DIRECTORS' RESPONSIBILITY STATEMENT

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

a) in the preparation of the annual accounts for the year ended March 31, 2011, the applicable Accounting Standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

b) 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 the Company as at March 31, 2011 and of the profit of the Company for the year ended on that date;

c) 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; and

d) the directors have prepared the annual accounts of the Company on a going concern basis.

15. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the wholehearted and sincere cooperation the Company received from various departments of Central and State Governments, Bankers, Auditors, Dealers and Suppliers to the Company. The Directors also would like to express their grateful appreciation for the guidance and cooperation received from the Holding Company, M/s. The Andhra Sugars Limited, Tanuku.

For and on behalf of the Board of Directors

Dokiparru Dr. MULLAPUDI HARISCHANDRA PRASAD

28th May, 2011 Chairman

---

Mar 31, 2010

The Directors have pleasure in presenting the Thirty Second Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2010.

(Rs. in Lakhs)

2009-10 2008-09

1. FINANCIAL RESULTS

Gross Sales 31819.17 20674.30

Less : Excise Duty 2184.10 2072.11

Net Sales 29635.07 18602.19

Processing Charges 531.15 739.49

Other Income 343.38 246.37

Total Income 30509.60 19588.05

Profit for the year before Interest and Depreciation 3773.12 2078.17

Interest (55.25) (33.83)

Depreciation (510.86) (523.28)

Profit before Tax 3207.01 1521.06

Provision for Current Tax (1100.00) (500.00)

Deferred Tax (Provision) / Withdrawal 24.50 (48.00)

Excess/(Short) provision of Income Tax made in earlier years 5.19 -

Fringe Benefit Tax - (4.00)

Profit after Tax 2136.70 969.06

The year under review is a landmark year for the Company. The turnover of the Company increased to Rs.305.10 Crores from Rs.195.88 Crores recording an increase of over 55% for the second successive year. The Profit Before Tax (PBT) at Rs.32.07 Crores is more than double the previous year figure of Rs.15.21 Crores, indicating a healthy growth in operations. The operating performance was very good due to consistent demand for the products throughout the year inspite of price volatility. Exports were higher by 125% at Rs.45.37 Crores over the previous year.

The appropriations from the profit are as detailed below :

(Rs. in Lakhs)

2009-10 2008-09

Profit after Tax 2136.70 969.06

Balance brought forward from previous year 596.52 543.08

Profit for appropriations 2733.22 1512.14

APPROPRIATIONS

Dividend 444.06 355.25

Provision for Tax on distributed profits

@ 16.60875% (16.995%) on dividend 73.75 60.37

Transfer to General Reserve 1000.00 500.00

Balance carried forward 1215.41 596.52

Total 2733.22 1512.14

Authorised Capital 500.00 500.00

Paid up Capital 444.11 444.11

Reserves & Surplus 10038.82 8419.93



2. DIVIDEND

Considering the profitability of the Company, the Board of Directors is pleased to recommend for the approval of the shareholders of the Company for payment of dividend for the year ended 31-3-2010, at Rs.10/- per equity share of Rs.10/- each, which aggregates to Rs.4,44,05,750/- on the 44,40,575 equity shares in the share capital of the Company. In the previous year the Company paid dividend at Rs.8/- per equity share of Rs.10/- each.

3. OPERATIONS 2009-10 2008-09

MT MT

Production (including processed on jobwork)

a) Fatty Acids 55505 38946

b) Glycerine 1352 880

c) Toilet Soap 9883 6758

d) Soap Products 43920 33212

e) Industrial Oxygen (cubic meters) 359572 311466

f) Biomass Power (kwh) 25364665 22450366

g) Wind Power (kwh) 13817819 12314523

Sales

a) Fatty Acids 27089 17213

b) Glycerine 1399 660

c) Soap Products 38763 23117

d) Toilet Soap 1665 491

e) Industrial Oxygen (cubic meters) 356317 307206

f) Biomass Power (kwh) 9178600 8340300

g) Wind Power (kwh) 13817819 12314523

4. OUTLOOK

Fatty Acids and Soap

The Company achieved the highest production in all the plants during the year under review. The positive growth in the Toilet Soap Industry for the second successive year created a consistent demand for Fatty Acids and Soap products. It helped to maintain high levels of production throughout the year. The increase in excise duty from 8% to 10% being marginal may not affect the growth of Soap Industry significantly. It is also unfavourable to units located outside the exempted areas but its impact on product cost will be minimal.

In the last annual report the Board approved to further improve the quality of the products and expand the product range by installing new equipment and replacing some of the existing equipment. Accordingly expansion cum modernisation program costing about Rs.45 Crores in Fatty Acid and Soap Plant is under implementation and is expected to be complected by January 2011. The program when completed will increase the capacity of Fatty Acid Plant from 200 tpd to 350 tpd and other downstream plants suitably besides enabling for quality improvement and broadening product range.

Biomass Power Plant

The availability of fuels continues to be the constraint in capacity utilization of Biomass Power Plant. While the fuel costs have gone up steeply the power purchase price by AP Transco for surplus power continues to be the same at Rs.3.80 per kwh. However, this being a captive power generation plant, the Company is able to run the plants and meet the production targets effectively without getting affected by power cuts / interruptions being now faced due to power shortage.

The appeal filed by the Company before the Supreme Court on the Orders of Appellate Tribunal for Electricity (ATE) for purchase of entire surplus power and also for payment of fixed costs for supplies over 2.4 Mw is pending for decision.

The appeals filed by AP Transco and APERC before the Supreme Court on the Orders in Appeal of ATE on the petition filed by the Biomass Energy Developers Association (BEDA) on behalf of its members for increase in power purchase price by AP Transco are also pending for decision. During the year the Company received Rs.88.24 lakhs from AP Transco towards amounts retained for power supplies over and above 2.4 Mw on half hourly PLF basis.

Wind Energy Generators (WEG)

Year 2009-10, like the previous year, was reasonably good for wind power generation. The three WEGs totaling 4.80 Mw generated 138.83 lakh kwh as compared to 123.15 lakh kwh in the previous year. Encouraged by this and the accelerated depreciation available on the investment in WEG, the Company set up one more unit of 1.5 Mw at SF 35(P), Location No. KD 92, Velayudhampalayam Village, Dharapuram Taluk, Tirupur District, Tamil Nadu and it was commissioned on March 28, 2010. The Ministry of New and Renewable Energy (MNRE) has announced Generation Based Incentive (GBI) for Grid Interactive Wind Power Projects commissioned after 17-12-2009. The companies are allowed to avail either Accelerated Depreciation or GBI but not both. The Company preferred to avail Accelerated Depreciation rather than GBI as it is found more beneficial.

Export House

The Company was recognized as an ‘Export House by the Govt. of India for its export performance till 31st March, 2009 for a period of 5 years under Foreign Trade Policy 2004-2009.

Credit Rating

The Company obtained credit rating of CARE A+ (adequate safety for timely servicing of debt obligation) for long term facilities from Banks and PRI (strong capacity for timely repayment and carry lowest credit risk) for short term facilities from CARE. ICRA awarded LA (adequate credit quality) for long term and AI (highest credit quality) for short term facilities.

5. CONSERVATION OF ENERGY & ENVIRONMENTAL SAFETY

During the year, the following actions were taken for conservation of energy and environmental safety.

a) Wind powered Exhaust Fans have been installed in Sweet Water Treatment Plant to remove hot vapours from inside the plant.

b) Conventional CRT Monitors have been replaced with LCD Monitors for the desktop computers.

c) Conventional 40w Tubelights are being replaced with energy efficient T 5 Tubelight fittings.

d) Low Efficiency Rectifier type welding machines have been replaced with energy efficient inverter based welding machines.

e) Flash steam from heat exchangers is being used for pan boiling.

f) Fat Splitting Plant IV capacity has been increased with minor modifications resulting in reduction of power consumption per MT of input.

g) ETP outlet water is being treated and used for gardening and wetting roads and ash heaps. h) Reject water from the Reverse Osmosis Plant is being used for toilets flushing.

6. FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, the Company exported Fatty Acids to Sri Lanka and earned foreign exchange equivalent to Rs.44,61,48,528/- (previous year Rs.19,49,06,344/-). The Company imported raw materials and equipment during the year resulting in foreign exchange outgo equivalent to Rs.75,91,05,662/- (previous year Rs.51,20,31,566/-).

7. FINANCE

The Company availed working capital facilities from Andhra Bank and State Bank of India under consortium arrangement and the accounts with them are in order. To meet part of the funds requirement under expansion cum modernization programme costing about Rs.45 Crores and for setting up 1×1.5 Mw WEG costing Rs.8.75 Crores, the Company availed / planned to avail assistance from Andhra Bank, AXIS Bank and HDFC Bank in the form of working capital facility / term loans.

8. FIXED DEPOSITS

The Company has accepted Fixed Deposits from the Public and Shareholders during the year under review. There is one matured but unclaimed deposit of Rs.39,954 as on 31st March, 2010.

9. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri M. Gopalakrishna and Shri Subbarao V. Tipirneni, Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

10. AUDITORS

Brahmayya & Co., Chartered Accountants, Guntur retire at the ensuing Annual General Meeting and are eligible for re-appointment.

11. COST AUDITORS

The Company was directed by the Central Government for Cost Audit of the Cost Accounting Records maintained by the Company in respect of the products Soap and Industrial Oxygen for the year 2009-10. Accordingly for conducting the cost audit, Narasimha Murthy & Co., Cost Accountants, Hyderabad were appointed as Cost Auditors for both the products.

12. PERSONNEL

The Directors wish to place on record their deep sense of appreciation to all the employees of the Company for their sustained efforts and valuable contribution to the performance of the Company during the year. The Statement of Particulars of Employees pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is annexed to and forms part of this report.

13. CORPORATE GOVERNANCE

The Company is committed to maintain the standards of Corporate Governance prescribed by the Securities and Exchange Board of India (SEBI) codified in Clause 49 of the Listing Agreement with Stock Exchanges. Report on Corporate Governance and Management Discussions and Analysis (MD & A) along with Corporate Governance Compliance Certificate from Auditors are set out as separate Annexures to this report.

14. DIRECTORS RESPONSIBILITY STATEMENT

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

a) in the preparation of the annual accounts for the year ended March 31, 2010, the applicable Accounting Standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

b) 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 the Company is at March 31, 2010 and of the profit of the Company for the year ended on that date;

c) 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; and

d) the directors have prepared the annual accounts of the Company on a going concern basis.

15. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the wholehearted and sincere cooperation the Company received from various departments of Central and State Governments, Bankers, Auditors, Dealers and Suppliers to the Company. The Directors also would like to express their grateful appreciation for the guidance and cooperation received from the Holding Company, The Andhra Sugars Limited, Tanuku.

For and on behalf of the Board of Directors

Tanuku Dr. MULLAPUDI HARISCHANDRA PRASAD

18th May, 2010 Chairman