The Directors have pleasure in presenting their Twenty Fifth Annual Report together with the Audited Accounts of the Company for the Financial Year ended March 31,2014.

Management Discussion and Analysis Report

1. Summary of Financial Results (In Rs. )

S.   Particulars                             2013-2014        2012-2013
No.

1    Profit/(Loss) before Exceptional 
     &  Extraordinary items                 (5,87,049)         1,07,262

2    Exceptional items                               -                -
   
3    Profit/(Loss) before tax               (5,87,049)         1,07,262

4    Income Tax expense for earlier 
     years                                    2,72,066                -

5    Profit/(Loss) for the year             (8,59,115)         1,07,262

6    Deficit brought Forward from 
     Previous Years                    (3,000,008,860)  (3,000,116,122)

2. Operations/Future Outlook

There were no operations during the year.

The company is exploring the possibility of tying up with strategic partners for infusion of funds into the company to take up any business operations subject to obtaining shareholders and necessary government approvals if any. The Company is also looking at possibilities of merger and restructuring which may result in synergies.

3. Dividend

There are no business operations during the year and therefore your directors are not recommending any dividend for the financial year under review.

4. Directors

1. Shri M Dharmaraj retire by rotation and being eligible offers himself for reappointment.

2. Shri D Bala Koteswara Rao retire by rotation and being eligible offers himself for reappointment Your Board recommends their re-appointment.

5. Corporate Governance

A detailed Report on the Corporate Governance is separately annexed.

6. Directors' Responsibility Statement

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956 (section 134 of the Companies Act 2013) with respect to Directors' Responsibility Statement, it is hereby confirmed:

i) that in the preparation of annual accounts for the year ended March 31, 2014, the applicable accounting standards had been followed along with proper explanations relating to material departures.

ii) that 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 at the end of financial year and of the loss of the company for the year under review.

iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the companies Act, 1956 & 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

iv) that the accounts for the financial year have been prepared on a "going concern" basis.

Four Board Meetings were held during the last financial year. The dates on which the meetings were held are 27.05.2013; 20.08.2013; 12.11.2013; and 07.01.2014.

The independent directors have given declaration as per the requirement of section 149 (6) of the companies Act 2013.

In pursuance of section 178 of the Companies Act 2013 the nomenclature of the existing Remuneration Committee has been changed to Nomination and Remuneration Committee and the Committee is the process of formulating the criteria for determining qualifications and others of independence of director and for recommendation to the Board of policy.

The company has complied with the provisions of section 188 of the Companies Act 2013 in respect of related party transactions. There is no related party transaction which is material as per clause 49 of the Listing Agreement.

7. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

Pursuant to section 217(1 )(e) of the Companies Act, 1956 (section 134 of the companies Act 2013) and companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 the information is furnished below:

i) Foreign Exchange Earnings: Nil

ii) Foreign Exchange Outgo : Nil

8. Particulars of Employees

There are no employees falling within the purview of section 217(2A) of the Companies Act, 1956(section 134 of the companies Act 2013).

9. Listing of Shares with the Stock Exchanges

The Equity Shares of the Company are listed with the following stock exchanges:

* The Madras Stock Exchange Limited (Regional Stock Exchange)

* BSE Limited

The trading of company's equity shares was suspended by the BSE Limited. The Company is taking steps for Revocation of suspension.

10. Auditors

M/s P A Reddy & Co., Chartered Accountants and M/s CNGSN & Associates, Chartered Accountants, Joint Statutory Auditors of the company hold office until the conclusion of the ensuing Annual General Meeting. M/s P A Reddy & Co., and CNGSN & Associates, Chartered Accountants, are recommended for re-appointment.

As regards the observations of the auditors vide para 4 of the report, the Board of Directors wish to express the following views:

a. The Board is of the considered view that the investment in preference shares of Balaji Industrial Corporation Limited is long term in nature and hence the valuation is not done. (Refer si.no.lV( i) of Auditors' Report)

b. The interest of Rs.1.81 Crores is not provided as your company is negotiating with the lender for waiver of interest and arrive at one time Settlement. (Refer sl.no.IV (ii) of Auditors' Report)

11. Acknowledgement

Your Board wishes to express their sincere thanks to one and all for their valuable services and help especially Government of Tamil Nadu, Indian Bank and other company's bankers. Your Board also wishes to express their sincere thanks to all the shareholders for reposing confidence in them. By Order of the Board For BALAJI HOTELS AND ENTERPRISES LIMITED

Place : Chennai               M. DHARMARAJ        M. SREENIVASULU REDDY
Dated: May 26,2014            Director(00316960)   Director (00035021)