Balaji Galvanising Industries Ltd

To,

The Members of Balaji Galvanising Industries Limited, Secunderahad

Your Directors take pleasure in presenting the Twentieth Annual Report on the affairsof the Company for the financial year 2009-2010 together with the Audited FinancialStatements

BUSINESS PERFORMANCE:

Financial Results

The overall performance of the Company for the financial year 2009-10 is summarized asunder:

(Rs.ln Lakhs)

Outing the year 2009-10, with the improvement In the market conditions and the effortsto Improve the productivity and cost reduction the Company has improved Its total turnoverto Rs 926.93 lakhs as against Rs. 737.16 lakhs in the previous year and made a net profitof Rs 35.93 lakhs..

Dividend

As the profit made by the Company not being significant and to conserve the resourcesyour Board could not declare any dividend for the financial year under review

FUTURE OUTLOOK:

The steel industry during the year under review has successfully come out of the globaleconomic slowdown win the required fiscal incentives by the Government of India. There wasa demand growth over the previous year domestically of all steel products In spite oflarge infrastructure projects were on hold. India continues to be the leader in the spongeIron and Pig iron production. After the on set of global recession resulting In pressureon steel prices with diminishing margins all the large units started focusing on expansionof capactlies and modernizing them to become cost effective and environment friendly. TheGovernment has put in place measures for large scale Investments In the sector lor modernand elflcient units to meet the diversified product demands. The Increased domestic steelconsumption to 7.8% showing strengthening of demand In the year under review is expectedto grow further. India Is expected to become the number 2 player from the present fifthposition. The per capita domestic consumption of steel of 47 kgs against the world averageof 190 kgs and the European average of 400 kgs shows the huge polentlal for growth. TheIndustry now operates in open economy where exports And imports respond to increase ordecrease In domestic demand driven primarily by market signals. In the light of The statusof the Industry as such your Company expects to do well in the coming years

DIRECTORS:

Shri Shiv Bagwan Baganaand Shri Navneet Khemani retire by rotation and being eligibleoffer themselves lor reappointment.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act,1956, yourDirectors state:

(i) That the accountings standards to the extent applicable to the Company have beenfollowed in the preparation of the annual accounts. There are no material departures therefrom.

(ii) That the accounting policies selected by the Board for the purpose of preparationand preservation of the financial statements have been and are being applied consistentlyand reasonable and prudent Judgments and estimates (wherever applicable) have been madelor the said purpose, so as to give a true and fair view of the affairs of the Company asat the end of the financial year under review and of the profit/loss for the said year.

(iii) That proper and sufficient care has been taken for the maintenance of adequateaccounting records In accordance with the provisions of the Companies Act, 1956 forsaleguarding the assets of your company end for preventing and detecting fraud and otherirregularities.

(iv) That the annual Accounts have been prepared on a going concern basis.

AUDITORS;

M/s. Dagliya & Company. Chattered Accountants, Secunderebad, the Auditors of thecompany retire at the conclusion of the ensuing Annual General Meeting and are eligiblefor reappointment. The Board recommends their reappolntment.

The observations made by the Auditors in their report read with the Notes on Accountsare self explanatory and do not require any comments from Directors.

LISTING:

The shares of your company are listed on Mumbai and Kolkata stock Exchanges. The sharesremain suspended from trading at BSE despite the fact that the Listing compliances havebeen regularly mode. Company is following up the matter with Stock Exchange at Mumbai.

EMPLOYEES:

There are no employees whose particulars are to be disclosed pursuant to the provisionsof Section 217 (2A) of the Companies Act, 1956.

FIXED DEPOSITS:

During the year under review, the company has not accepted any deposits under Section56A and 58AAof the Companies Act 1956 read with Companies (Acceplance of Deposits) Rules,1975.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT TECHNQLOGOGY ABSORPTION, FOREIGNEXCHANGE EARNINGS AND OUTGO:

Information regarding Energy Conservation, Technology Absorption, Foreign ExchangaEarnings and outgo In accordance with Section 217(1)(e) of the Companies Act, 1956 readwith Companies (Disclosure of particulars In the report of Board of Directors) Rules 1988,forming part of the Directors Report for the year ended 31st March, 2010 is as follows:

1. Conservation of Energy : The company's operations require low energy consumption.Adequate measures are taken to conserve energy wherever possible. The details required areattached herewith.

2. Technology Absorption:

a. Research & Development : There is no specilic Research and development activitycarried out by the Company during the year

b. Technology Absorption :The technology is indigenous and fully absorbed

CORPORATE GOVERNANCE:

The company has Implemented the Code for Corporate Governance as stipulated underamended Clause 49 of the Listing Agreement A separate report on Corporate Governance isannened to this report.

CODE OF CONDUCT

The Company has adopted a uniform Code of Conduct for Directors and Senior Managementand above Officers level to ensure ethical standards and ensure compliance to the laiddown standards.

DEMATEAIA USATION OF SHARES:

MA. NICHE TECHNOLOGIES PRIVATE LIMITED, Kolkata were appointed as Depository Registrarsfor dematerlalizatlon of shares and for physical shares also the transfer work wasentrusted to them.

ACKNOWLEDGEMENTS:

The Board takes this opportunity to express its deep gratitude for the continuedco-operation and support received from is Bankers, State and Central Governments, thecustomers, share holders, business assoclates and employees during the year under review.

ANNEXURE 'A' TO DIRECTORS REPORT

Disclosure of particulars with respect to the Conservation of Energy, Technologyabsorption and Foreign Exchange Earnings & Outgo as required under Companies(Disclosure of Particulars in the Board of Directors Report) Rules, 1988:

I- Conservation of Energy;

A Energy conservation measures taken: Regular maintenance of machinery leads toImproved operational efficiency and lower power consumption.

B. Additional Investments and proposals. II any, being implemented for reduction ofconsumption of energy: NIL

C Impact of measures of (A) and (B) above lor reduction of Energy consumption andconsequent Impact on the cost of production of goods ; Low energy consumption.

D. Total Energy consumption and Energy consumption per unit of production as perForm -A of the Annexure 10 the Rules In respect of the Industries specified In theSchedule thereto :

A POWER AND FUEL CONSUMPTION;

B. CONSUMPTION PER UNIT OF PRODUCTION