26 t h annual report 2009 — 201 026 t h annual report 2009 — 201 0 your company has successfully...

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CONTENTS

Board of Directors 2Founder Chairman 3CMD Message to the Shareowners 4–6Notice 7–8Directors’ Report 9–11Corporate Governance Report 12–19STANDALONE STATEMENTS:-Auditors’ Report 20–21Balance Sheet 22Profit & Loss Account 23Schedules to Accounts 24–38Balance Sheet Abstract andCompany’s General Business Profile 39Cash Flow Statement 40

CONSOLIDATED STATEMENTS:-Auditors’ Report 41Balance Sheet 42Profit & Loss Account 43Schedules to Accounts 44–58Cash Flow Statement 59Statement u/s 212 of Subsidiaries 60

SUBSIDIARIES:-Sukhdham Constructions & Developers Ltd.:Directors’ Report 61–62Compliance Certificate 63–65Auditors’ Report 66–67Annual Accounts 68–73

Arti Web Developers Pvt. Ltd.:Directors’ Report 74Auditors’ Report 75–76Annual Accounts 77–82

M.K. Web-Tech Pvt. Ltd.:Directors’ Report 83Compliance Certificate 84–86Auditors’ Report 87–89Annual Accounts 90–95

Kothari Products Singapore Pvt. Ltd.Directors’ Report 96Auditors’ Report 97Annual Accounts 98–112

KPL Exports Pvt. Ltd.Directors’ Report 113–114Auditors’ Report 115–116Annual Accounts 117–122

IMK Hotels Pvt. Ltd.:Directors’ Report 123Compliance Certificate 124–126Auditors’ Report 127–128Annual Accounts 129–133

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BOARD OF DIRECTORS

Chairman & Managing Director

DEEPAK KOTHARI

Executive Director

MITESH KOTHARI

Directors

DR. AVINASH GUPTA

PRAMOD KUMAR TANDON

VIKAS CHATURVEDI

Company Secretary

RAJ KUMAR GUPTA

AUDITORS

MEHROTRA & MEHROTRA

Chartered Accountants

16/49, Civil Lines,

Kanpur - 208 001

REGISTERED OFFICE &SECRETARIAL DEPARTMENT

“Pan Parag House”, 24/19, The Mall, Kanpur - 208 001.

Visit us on Internet at : http://www.kothariproducts.in

E-mail : [email protected]

Ph. Nos. (0512) 2312171-74, Fax No. (0512) 2312058

INVESTORS’ GRIEVANCE E–MAIL [email protected]

AUDIT COMMITTEE

Chairman

PRAMOD KUMAR TANDON

Members

DEEPAK KOTHARI

DR. AVINASH GUPTA

VIKAS CHATURVEDI

SHAREOWNERS’/INVESTORS’GRIEVANCE COMMITTEE

Chairman

PRAMOD KUMAR TANDON

Members

DEEPAK KOTHARI

MITESH KOTHARI

DR. AVINASH GUPTA

REMUNERATION COMMITTEE

Chairman

PRAMOD KUMAR TANDON

Members

DR. AVINASH GUPTA

VIKAS CHATURVEDI

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M.M. KOTHARIOur Founder Chairman

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From the desk of Chairman & Managing Director

Dear Shareowners,

While I write this message in the year 2010, I am also looking into the retrospect since the inception of yourcompany about 27 years back.

It was a humble beginning of small scale manufacturing of mouth freshener in the FMCG sector by thevisionary Shri M.M. Kothari. As years passed by, your company continued to stride forward facing biggestchallenges, competitions and attained the glory where it is today.

This would not have been possible without the sustained toiling, determination and vision of the promoters,employees and undeterred support of you the co-owners.

The impeccable track record of wealth maximization of the co-owners is the testimony of the dedication & untiring efforts of everystakeholder be it promoter, shareowner and the employee.

REORGANIZATION – Growth perspective

Your company registered a sustained growth and in this journey it grew many folds, to ensure proper governance and efficientmanagement of such a large set up and looking to the synergies and segments, re-organization of its activities was imminent. Consequentlywith your approval the manufacturing & certain divisions were hived off into a separate legal entity in the year 2008 – 09.

THINKING AHEAD

Looking to the global economic scenario and the existing business opportunities in most buoyant and vibrant sectors of the economyyour company has ventured into the international trade, real estate and investment sectors

International Trade

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Your Company has successfully diversified into the Import & Export of various products/ commodities, minerals, metals and petroleumproducts. It is also pursuing the business of International Trade through its Foreign and Domestic Subsidiary Companies vigorouslyand profitably.

Real Estate Ventures

Your Company with its subsidiaries and strategic partners has successfully embarked upon an ambitious business plan to invest in thereal estate sector in the country to reap the rich dividends from the most buoyant sector of the economy.

The Company and its subsidiaries and partners have undertaken projects of development having ample space in retail, commercial,service / hospitality and residential sectors at various places in the country.

Investment in Securities

Kothari Products Ltd., being a profit making company has invested its surplus funds in the stocks and mutual funds besides subscribingto the share capital of subsidiary and associate companies.

Through all what I have said hereinbefore, more than three decades experience has made it possible for us to withstand in the mostadverse conditions and continue on the path of sustained growth.

The greatest contribution in this journey of success has been that of our people who have stayed with us for such a long time withdedication and extreme hard work that enabled us to withstand in difficulties and adversities.

HR INITIATIVES

Your company is quite aware and sensitive about the importance of Human Resource under its umbrella and treats it as the mostintelligent raw material in the business cycle.

It draws inspiration from the age old concepts of home building, territory possessiveness, courtship rituals and herd mentality foundwith the varied severity among animals and humans.

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Theory of Geese

Your company relies upon various behavioral patterns / models of modern day behavioral science and compares its human resourcewith that of “V” Shape Geese formation. It believes in inculcating the theory of sharing a common goal, travelling on a thrust of oneanother, staying in the formation showing solidarity, adaptability, sharing of leadership, encouragement to each other and sense ofbelongingness.

We at Kothari strongly believe that wisdom and lessons in life sometimes can be learnt and acquired by observations, be it man,animal, bird or for that matter nature itself.

Work Environment

Our Motto : “A few motivated are far better than thousands humiliated”

The company lays great emphasis on creating a conducive, well defined work environment along with the unambiguous hierarchypatterns in all its business activities.

We practice most modern behavioral techniques / principles for motivation, development, growth and equal opportunities to ouremployees. We believe in embedding the traits of co-existence, tolerance, team-spirit, support and belongingness.

The company takes into its fold the families of the employees for their welfare, informal interaction among the families which isencouraged through various excursions and get-togethers periodically to maintain the cordial and warm relations among its employeesto make the Group as “Kothari Family”.

Conclusion

I would like to thank all our stakeholders especially the shareowners for their continued confidence reposed in the Management team,business partners and employees for their dedication and hard work evident from the financial results and record breaking dividenddeclaration.

“I assure you that ……………… The Best is yet to come !!

With Warm Regards,

Deepak KothariChairman & Managing Director 29th May, 2010

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NOTICE :

Notice is hereby given that the Twenty Sixth Annual General Meeting of the Members of Kothari Products Limited, will be held onTuesday, the 21st September, 2010 at "Little Chef", Civil Lines, Kanpur at 11.30 A.M., to transact the following business:–

ORDINARY BUSINESS :

1) To consider and adopt the Audited Balance Sheet of the Company as at 31st March, 2010 and the Profit & Loss Account for thefinancial year ended on that date and the Reports of the Directors’ and Auditors’ thereon.

2) To declare a dividend for the aforesaid financial year.

3) To appoint a Director in place of Sri Vikas Chaturvedi, who retires by rotation and being eligible, offers himself for re-appointment.

4) To re-appoint M/s.Mehrotra & Mehrotra, Chartered Accountants, retiring Auditors, as Auditors of the Company and toauthorise the Board of Directors of the Company to fix their remuneration.

SPECIAL BUSINESS :

5) To consider and if thought fit, to pass with or without modification(s), the following as an Ordinary Resolution :-

“RESOLVED THAT in supersession of the Ordinary Resolution passed in 25th AGM of the Company held on 24th September,2009 the consent of the Company be and is hereby accorded Under Section 293(1)(a) and all other applicable provisions of theCompanies Act, 1956 (including any statutory modification or re-enactment thereof for the time being in force), to the Board ofDirectors (hereinafter referred to as “the Board”) to mortgage and/or charge, in addition to the mortgage(s)/charge(s) created/tobe created by the Company, in such form and manner and with such ranking and at such time and on such terms and conditionsas the Board may determine, subject to maximum amount of Rs.750 Crores of charges outstanding at any time, on all or any ofthe movable and/or immovable property(ies) of the company, both present and future of every nature & kind whatsoevertogether with the powers to take over the management of the business and concern of the Company, in certain events of defaults,in favour of lenders for securing the borrowing availed/to be availed by the Company by way of loans and securities issued by theCompany together with interest at the respective agreed rates, additional interest, all other costs, charges and expenses and allother monies payable by the Company in respect of said loans/borrowings/debentures/other securities and containing suchspecific terms and conditions and covenants in respect of enforcement of security as may be stipulated in that behalf and agreedto between Board of Directors and the Lender(s)/Agent(s) and Trustee(s).

RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors be and is herebyauthorized to finalise, settle and execute such documents/deeds/writings/papers/ agreements as may be required and to do allsuch acts, deeds, matters and things, as it may in its absolute discretion deem necessary, proper or desirable and to settle anyquestion, difficulty or doubt that may arise in regard to creating mortgages/charges as aforesaid.”

By Order of the BoardRegd. Off : for KOTHARI PRODUCTS LIMITED‘PAN PARAG HOUSE’24/19, THE MALL, KANPUR - 208 001

Sd/–(RAJ KUMAR GUPTA)

DATE : 29th May, 2010 Company Secretary

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NOTES :1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND

VOTE INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.2. Proxies, in order to be effective should be completed, stamped and signed and must be deposited at the Registered Office of the Company not

less than 48 hours before the commencement of the meeting.3. The Register of Members of the Company shall remain closed from Tuesday, the 14th September, 2010 to Tuesday, 21st September, 2010 (both

days inclusive).4. The Dividend for the year ended 31st March, 2010 as recommended by the Board, if approved by the members, will be paid to the physical

members whose names appear in the Company’s Register of Members on 13th September, 2010. In respect of shares held in electronic form,the dividend will be payable on the basis of their beneficial ownership as at the end of aforesaid date as per details furnished by NationalSecurities Depository Ltd. and Central Depository Services (India) Ltd. for this purpose.

5. THE MEMBERS HOLDING PHYSICAL SHARES ARE, IN THEIR OWN INTEREST, ADVISED TO SEND IMMEDIATELY REQUESTSFOR CHANGE OF ADDRESS AND BANK PARTICULARS, IF ANY, TO OUR REGISTRAR i.e. ALANKIT ASSIGNMENTS LTD.,CORPORATE OFFICE, “ALANKIT HOUSE”, 2E/21, JHANDEWALAN EXTENSION, NEW DELHI – 110 055, PHONE NOS. (011)23541234 / 42541234 & FAX NOS. (011) 42541967 / 23552001. HOWEVER, THE MEMBERS HOLDING DEMAT SHARES AREADVISED TO IMMEDIATELY INTIMATE THE CHANGE OF ADDRESS AND BANK DETAILS TO THEIR CONCERNEDDEPOSITORY PARTICIPANTS.

6. Those Members who have not encashed/received their Dividend warrants for the financial years 2002-03 onwards may approach the SecretarialDepartment at the Registered Office of the Company for revalidation of Dividend Warrants or for obtaining duplicate Dividend Warrants inlieu of the lost warrants.

7. Members are hereby also informed that Dividends which remain unclaimed/unencashed for a period of 7 years, from the date of transfer to theunpaid Dividend Accounts, have to be transferred by the Company u/s 205A to the Investors Education & Protection Fund (IEPF) constitutedby the Central Government u/s 205C of the Companies Act, 1956. Further, under the amended provisions of Sec.205B of the Companies Act,1956, no claim shall lie for the unclaimed Dividend from IEPF by the Shareowners.The unpaid Dividend amount relating to the Financial Years 1994-95, 1995-96, 1996-97, 1997-98, 1998-2000 (Interim),1998-2000 (Final), 2000-01 & 2001-02 have been transferred to the aforesaid Investor Education & Protection Fund.MEMBERS ARE AGAIN ADVISED TO NOTE THAT THE UNPAID DIVIDEND AMOUNT RELATING TO FINANCIAL YEAR 2002-03 WILL BE TRANSFERRED TO THE INVESTOR EDUCATION & PROTECTION FUND, AS PER THE PROVISIONS OF SEC.205A(5) OF THE COMPANIES ACT, 1956 IN DECEMBER, 2010. FURTHER, NO CLAIM SHALL LIE, IN RESPECT OF THE AFORESAIDDIVIDEND TRANSFERRED TO THE FUND, EITHER AGAINST THE COMPANY/ITS OFFICERS OR AGAINST THEGOVERNMENT.

8. Members desirous of getting any information at the meeting about the accounts and operations of the company are requested to send their queryat the Registered office well in advance so that the same may reach the office atleast seven days before the date of the meeting to enable themanagement to keep the information required readily available at the meeting.

9. Section 109A of the Companies Act, 1956 has extended nomination facility to individuals holding shares in Companies. Shareowners, inparticular, those holding shares as sole holder are advised to avail of the above facility in their own interest, by furnishing to the Company theparticulars of their nominations. The prescribed application form may be obtained by the Shareowners from the Company’s SecretarialDepartment at its Registered Office.

10. Members are requested to bring their copies of Annual Report at the meeting. Please note that no gifts will be distributed at the meeting.

EXPLANATORY STATEMENT PURSUANT TO SEC 173(2) OF THE COMPANIES ACT, 1956 :-ITEM NO. 5In the 25th AGM held on 24th September, 2009 the Company had authorized Board of Directors to create charge/mortgage in respect of theborrowings excercised subject to Rs.500 Crores.In order to meet the enhanced capital requirements for the diversified business operations the Company needs to borrow frequently from Banks byway of various credit facilities. The borrowing by the Company, in general, is required to be secured by mortgage or charge on all or any of themovable and/or immovable property(ies) of the Company in such form, manner and ranking as may be determined by the concerned Banks. TheBoard of Directors of the Company has decided to increase the aforesaid limit of Rs.500 Crores to Rs.750 Crores.The mortgage and/or charge on any of the movable and/or immovable property(ies) and/or the whole or any part of the undertaking(s) of theCompany, to secure borrowings of the Company with a power to the charge holders to take over the management of the business and concern of theCompany in certain events of default, may be regarded as disposal of the Company’s undertaking(s) within the meaning of Section 293(1) (a) of theCompanies Act, 1956. Hence, it is necessary for the members to pass an ordinary resolution under the said section for the aforesaid increase of limit.The Board of Directors accordingly recommend the resolution set out in item no.5 of the accompanying notice for the approval of the members.None of the Directors is in any way concerned or interested in the passing of the said Resolution.

By Order of the BoardRegd. Off : for KOTHARI PRODUCTS LIMITED‘PAN PARAG HOUSE’24/19, THE MALL, KANPUR - 208 001

Sd/-(RAJ KUMAR GUPTA)

DATE : 29th May, 2010 Company Secretary

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DIRECTORS’ REPORT

TO THE MEMBERS:

The Board of Directors of your Company presents herewith its 26th Annual Report and Audited Accounts for the financial year ended31st March, 2010. The report also includes the Management discussion and Analysis Report in accordance with the guidelines ofCorporate Governance.

FINANCIAL PERFORMANCE :(RS. IN LACS)

FINANCIAL FINANCIALYEAR ENDED YEAR ENDED

31.03.2010 31.03.2009

Net Sales : 34872 9654Other Income 8307 1561Profit before Depreciation & Taxation 8280 1271Less : Depreciation 121 160Provision for Taxation :-Current Tax 1450 165-Deferred Tax 24 10-Tax Adjustments for earlier years 1 (-) 238Profit after Tax 6684 1174Add : Balance of Profit brought forwardfrom previous year 16333 16065

Profit available for appropriation 23018 17239

APPROPRIATIONSTransfer to General Reserve 668 130Proposed Dividend 1327 663Additional Tax on Proposed Dividend 220 113Balance of Profit carried forward 20803 16333

23018 17239

2010 IN RETROSPECT :

Your Directors are to report that the Company’s sales turnover during the year under review has been Rs.34872 Lacs as againstRs.9654 Lacs during the previous financial year. The Profit before tax during the year has zoomed to Rs.8280 Lacs as against Rs.1271Lacs in the previous year. The Profit after Tax has also similarly zoomed to Rs.6684 Lacs as against Rs.1174 Lacs in the previous year.

INTERNATIONAL BUSINESS :

The Company’s exports during the year under review has increased to Rs.23262 Lacs as compared to Rs.5367 Lacs during theprevious year.

DIVIDEND RECOMMENDED :

Your Directors recommend a dividend of 200% (Rs.20/- per Equity share of Rs.10/- each) for the financial year ended 31st March,2010 subject to approval of Shareowners in ensuing Annual General Meeting, absorbing Rs.1547 Lacs (Approx) including additionaltax on dividend. The aforesaid Dividend is tax free in the hands of the Shareowners.

SUBSIDIARIES :

The Company has six subsidiaries namely Sukhdham Constructions & Developers Ltd., Arti Web-Developers Pvt. Ltd., MK Web-Tech Pvt. Ltd., KPL Exports Pvt. Ltd. & IMK Hotels Pvt. Ltd. as its wholly owned subsidiary Companies and Kothari ProductsSingapore Pvt. Ltd. as its subsidiary Company. In accordance with section 212 of the Companies Act, 1956, the detailed accounts andthe Directors’ Reports of the aforesaid subsidiary companies form part of this annual report.

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DIRECTORS :

Sri Vikas Chaturvedi, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible offershimself for re-appointment. Further, Sri M.M. Kothari, Chairman has resigned w.e.f. 30th January, 2010 owing to his poor healthand Sri Deepak Kothari, Managing Director of the Company has been re-designated as Chairman & Managing Director from theaforesaid date.

STOCK EXCHANGE LISTING & COMPLIANCE:

The Shares of the Company are presently listed at Bombay Stock Exchange Ltd., Mumbai, National Stock Exchange of India Ltd.,Mumbai & U.P. Stock Exchange Association Ltd., Kanpur.

CORPORATE GOVERNANCE CODE:

The report on the Corporate Governance Code as required under clause 49 of the Listing Agreement is included in this AnnualReport under a separate section.

DIRECTORS’ RESPONSIBILITY STATEMENT :

As required under Sec.217 (2AA) introduced by the Companies (Amendment) Act, 2000, your Directors confirm:

(i) that in the preparation of the annual accounts, the applicable accounting standards have been followed ;

(ii) that the Directors have selected such accounting policies and applied them consistently and made judgements and estimates thatare 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 yearand of the profit of the company for the year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance withthe provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

(iv) that the Directors have prepared the annual accounts on a going concern basis.

MANAGEMENT DISCUSSION & ANALYSIS REPORT :

The information, as required under clause 49 of the Listing Agreement, is as under :-

a) INDUSTRY STRUCTURE AND DEVELOPMENTS :

The Company has focused on seizing the business opportunities in the most buoyant and vibrant sectors of the economy such asInternational Trade and Real Estate. The Company has emerged as a strong market player in the aforesaid sectors & also therevenue in the said sectors has increased substantially this year. Both the above sectors have proved very profitable for theCompany.

b) OPPORTUNITIES & THREATS/RISKS & CONCERNS :

The opportunities for the International Trade & Real Estate Industries are immense. Thus the future of the Company appears tobe bright. However, the Industry may face the risk of facing a ban on the import/export of any item by the Central/StateGovernments.

c) FINANCIAL PERFORMANCE :

The Company’s sales have increased to Rs.34872 Lacs during the period under review as against Rs.9654 Lacs during theprevious financial year. The profit before tax during the year has similarly risen to Rs.8280 Lacs as against Rs.1271 Lacs in theprevious year. The profit after tax has similarly increased to Rs.6684 Lacs as against Rs.1174 Lacs during the previous financialyear. Profitability of the Company has zoomed mainly due to International Trade & Real Estate activities. The segmentwisefinancial performance of the Company has been mentioned in the Notes on Accounts being part of this Annual Report.

d) OUTLOOK :

In view of the aforesaid business ventures, the outlook of the company seems to be very bright.

e) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY :

The Company has Internal Control procedures commensurate with the size of the Company and the nature of its business for theimport & export of commodities, minerals etc. purchase of Assets and with regard to the sale of goods.

f) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT :

These aspects have been covered in detail in the CMD Message to the shareowners in the beginning of this Annual Report. Ason 31st March, 2010 the Company had 48 employees.

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AUDITORS AND AUDITORS’ REPORT :

M/s Mehrotra & Mehrotra, Auditors retiring at the ensuing Annual General Meeting having furnished the requisite certificate undersection 224(1B) of The Companies Act, 1956, are eligible for re-appointment.

There are no qualifications or adverse remarks in the Auditors’ Report which need explanation in the Directors Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required under the companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is asunder :-

[A] CONSERVATION OF ENERGY :

a) Energy Conservation Measures taken :

The Company has taken all measures for conservation of energy most economically.

b) Additional Investments & Proposals, if any, being implemented for reduction of consumption of energy. No such investmentis proposed.

c) Impact of measures at (a) & (b) above for reduction of energy consumption.

These measures have led to consumption of energy more economically.

d) Form ‘A’ is not applicable to the company.

[B] TECHNOLOGY ABSORPTION :

Since there is no manufacturing activity in the Company hence the Company has not imported any technology. Accordingly, noR & D department exists in the company.

[C] FOREIGN EXCHANGE EARNINGS AND OUTGO :

(a) Activities relating to exports; } The Company’s trading items are beinginitiatives taken to increase } exported directly as well as through Merchantexports; Development of new export } Exporters to Singapore & China. The Company ismarkets for Trading Items and Export Plans } making continuous & vigorous efforts to increase

} its exports to the existing and new export markets.

(RS. IN LACS)

CURRENT YEAR PREVIOUS YEAR

(b) Earnings in Foreign Exchange 23262 5367(c) Expenditure in Foreign Currency 6 5(d) Imports of goods for Trading 21593 2570(e) Purchase of Fixed Assets 0 78

INDUSTRIAL RELATIONS :

Cordial and harmonious industrial relations prevailed throughout the year.

PARTICULARS OF EMPLOYEES :

The particulars of employees who were in receipt of remuneration as specified in Sec.217(2A) of the Companies Act, 1956 read withThe Companies (Particulars of Employees) Rules, 1975 as amended, is Nil.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the continued co-operation and support extended by various GovernmentDepartments, Bankers, Dealers & suppliers and also acknowledge and appreciate the contribution made by the employees.

The Board also wishes to place on record its gratitude to the valued customers, members and investors for their continued support andconfidence in the Company.

For and on behalf of the Board

Sd/- Sd/-PLACE : KANPUR (DEEPAK KOTHARI) (MITESH KOTHARI)DATE : 29th May, 2010 Chairman & Managing Director Executive Director

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REPORT ON CORPORATE GOVERNANCE

COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE

The Company’s philosophy on Corporate Governance comprises of the objective of attainment of highest level of transparency,accountability and equity, in all facets of its operations. The Company firmly believes in and continues to practice good CorporateGovernance. During the year the Company has further fine-tuned its corporate practices so as to bring them in line with the revisedclause 49 of the Listing Agreements.

BOARD OF DIRECTORS

COMPOSITION

The Board of Directors of the Company comprises of two Executive & Non-Independent Directors and three Non-Executive &Independent Directors as on 31st March 2010, in line with the stipulations laid by the Listing Agreement. The Non-executiveDirectors are drawn from amongst persons with varied experience in Business & Industry. The Board presently has an ExecutiveChairman & Managing Director, an Executive Director and three Non-Executive Directors. Its composition as on 31st March, 2010was as under :-

Name of the No. of Outside No. of Membership, Executive/Non- DesignationDirectors Directorships Chairmanship in Executive/

Other Board Independent/Committees : Promoter

Sri Deepak Kothari 51 2 Executive & Chairman & Managing DirectorNon-independent(Promoter)

Sri Mitesh Kothari 44 1 ———Do——- Executive Director

Dr. Avinash Gupta 4 3 Independent & DirectorNon-executiveDirector

Sri Pramod Kumar Tandon 8 3 ———Do——- Director

Sri Vikas Chaturvedi 1 2 ———Do——- Director

Attendance of Each Director at the Board Meetings and Last Annual General Meeting

Name No. of Board No. of Board AttendanceMeetings Held Meetings Attended At Last A.G.M.

Sri M.M. Kothari 8 1 Absent

Sri Deepak Kothari 8 7 Present

Sri Mitesh Kothari 8 8 Present

Dr. Avinash Gupta 8 Nil Absent

Sri Pramod Kumar Tandon 8 8 Present

Sri Vikas Chaturvedi 8 8 Present

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NO. OF MEETINGS HELD DURING THE YEAR & DATESDuring the financial year 2009-10 eight Board Meetings were held. The dates on which the said Meetings were held are given below :

25th April, 2009, 27th June, 2009, 30th July, 2009, 22nd August, 2009, 27th October, 2009, 30th January, 2010, 16th February, 2010& 11th March, 2010.

AUDIT COMMITTEE

The composition of the Audit Committee of the Company as on 31st March, 2010 was as under :-

Sl. Name of Directors Designation Executive/ No. of Meetings AttendanceNo. Non-Executive/ Held during of each

Independent the year Director

1. Sri Pramod Kumar Tandon Chairman Independent & Non-Executive 4 42. Dr. Avinash Gupta Vice Chairman Independent & Non-Executive 4 Nil3. Sri Deepak Kothari Member Executive & Non-Independent 4 44. Sri Vikas Chaturvedi Member Independent & Non-Executive 4 4

Shri Anurag Tandon, Auditor & Shri Rajeev Porwal, G.M. (Finance) are the permanent invitees and the Company Secretary Mr. RajKumar Gupta is the Secretary of the Committee.

The role and terms of reference of the Audit Committee covers the areas mentioned under revised clause 49 of the Listing Agreementand Section 292-A of the Companies Act, 1956, besides other terms as may be referred by the Board of Directors, which broadlyinclude :

The Audit Committee is to oversee the Company’s financial reporting process and disclosure of its financial information, to recommendthe appointment of Statutory Auditors and fixation of their fees, to review and discuss with the Auditors about internal controlsystems, the scope of Audit including the observations of the Auditors, adequacy of the internal audit system, major accountingpolicies, practices and entries, compliances with accounting standards and Listing Agreement entered into with the Stock Exchangeand other legal requirements concerning financial statements and related party transactions, if any, to review the Company’s financialand risk management policies and discuss with the Internal Auditors any significant findings for follow-up thereon, to review theQuarterly, Half Yearly and Annual financial statements before they are submitted to the Board of Directors.

The Committee also meets the operating management personnel and reviews the operations, new initiatives and performance of thebusiness units. Minutes of the Audit Committee Meetings are circulated to the Members of the Board, discussed and taken note of.

REMUNERATION POLICY

The Company has two whole time Directors on its Board whose appointment, terms thereof as well as remuneration have beenapproved by the Members in the General Meetings and also by the remuneration committee of Directors, pursuant to the provisionsof Schedule XIII to the Companies Act, 1956. Further the Company has three Non-Executive Directors whose remuneration isdecided by the Board of Directors and Member’s approval for the same has been obtained in the 19th Annual General Meeting,pursuant to amended clause 49 of the Listing Agreement. The details of Directors’ Remuneration paid during the year to all theDirectors is as under :-

Name of Mr. M.M. Mr. Deepak Mr. Mitesh Dr. Avinash Mr. Pramod Kumar Mr. VikasDirector Kothari Kothari Kothari Gupta Tandon Chaturvedi

Salary 1000000 1080000 900000 — — —Perquisites 349333 999322 913888 — — —Commission — — — — — —Sitting Fees — — — Nil 8000 8000

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SHAREOWNERS'/INVESTORS' GRIEVANCE COMMITTEE

The Shareowners’/Investors’ Grievance Committee has been constituted to take care of matters relating to redressal of Shareowners’/investors’ complaints, to recommend measures to improve the level of investors’ services and simultaneously to expedite the process ofShare Transfers. The Committee also approves requests for Share Transfers/Issue of Duplicate Share Certificates/Issue of newcertificates on split, consolidation, renewal etc; as also requests for transmission of shares etc.. Members of the Committee as on31st March, 2010 were Sri Pramod Kumar Tandon (Chairman), Sri Deepak Kothari, Sri Mitesh Kothari & Dr.Avinash Gupta.

The Company addresses all complaints, suggestions and grievances expeditiously and replies have been sent/issues resolved usuallywithin 15 days except in case of dispute over facts or other legal constraints.

� Name of the Non-executive Director heading : Sri Pramod Kumar Tandonthe Committee

� Name & Designation of Compliance Officer : Sri Raj Kumar Gupta,Company Secretary

� No. of Shareowners Letters/complaints received : 2During the financial year

� No. of Letters/Complaints not replied/solved to the : All the Letters/Complaints receivedSatisfaction of the Shareowners by the Company have been

replied/solved to the satisfactionof the complainants.

� No.of pending transfers : All valid requests for share transfer received during the financialyear have been acted upon.

SHAREHOLDING OF NON-EXECUTIVE DIRECTORS

Only Dr.Avinash Gupta, holds 500 shares in the Company. No other Non Executive Director holds any shares in the Company.

REMUNERATION COMMITTEE

The Company has set-up remuneration committee, pursuant to the provisions of Schedule XIII to the Companies Act, 1956 & clause49 of the Listing Agreement, which consists of three Non-Executive Directors as on 31st March, 2010 viz. Sri Pramod Kumar Tandonas its Chairman, Sri Vikas Chaturvedi & Dr.Avinash Gupta as its Members. The committee has been constituted to approve theremuneration of the Executive Directors of the company. The present remuneration of the Executive Directors of the company hasbeen approved by the remuneration committee.

GENERAL BODY MEETINGS

Venue, Date & Time where last 3 AGMs were held

Meeting Date Time Venue

25TH AGM 24.09.2009 11.30 A.M. LITTLE CHEF, CIVIL LINES, KANPUR

24TH AGM 18.09.2008 11.30 A.M. LITTLE CHEF, CIVIL LINES, KANPUR

23RD AGM 21.09.2007 11.30 A.M. LITTLE CHEF, CIVIL LINES, KANPUR

Details of Special Resolution(s) passed in the previous 3 Annual General Meetings :-

Annual General Meeting No. of Special Resolutions

25TH 124TH 123RD 1

At the 25th Annual General Meeting held on September 24th, 2009, one Special Resolution was passed pertaining to the re-appointmentof the Chairman of the Company. The resolution was put to vote by show of hands and was passed unanimously.At the 24th Annual General Meeting held on September 18th, 2008, one Special Resolution was passed pertaining to the re-appointmentof the Chairman of the Company. The resolution was put to vote by show of hands and was passed unanimously.At the 23rd Annual General Meeting held on September 21st, 2007, one Special Resolution was passed pertaining to the re-appointmentof the Chairman of the Company. The resolution was put to vote by show of hands and was passed unanimously.

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DETAILS OF RESOLUTIONS PASSED THROUGH POSTAL BALLOT

During the year under review no Special Resolution was passed through Postal Ballot.

EXTRA ORDINARY GENERAL MEETING

During the year under review no Extra Ordinary General Meeting of the Company was held.

DISCLOSURES

� During the financial year 2009-10, the company had no materially significant related party transactions which may have potentialconflict with the interests of the company at large.

� Whistle Blower Policy :- Every employee of the Company has been given the right to approach the audit committee if he observesan unethical or improper practice (not necessarily a violation of law), without necessarily informing his supervisor. Further, nopersonnel of the Company has been denied access to the audit committee.

� There has neither been any non-compliances nor penalties, strictures imposed on the Company by the Stock Exchanges, SEBI orany other statutory authority, on any matter relating to the capital markets, during the last three years.

� No accounting treatment has been done which is different from the prescribed Accounting Standards.

MEANS OF COMMUNICATION

i. Quarterly, Half yearly & Annual results are normally : Business Standard (All Editions),Published in following newspapers. Dainik Jagran & Hindustan, Kanpur Editions

ii. Any website, where displayed : Annual Financial Results are displayed on Company’swebsite, i.e. http://www//kothariproducts.in

iii. Whether it also displays official News : Yes, In addition to Audited Financial Results, DetailsReleases and presentations made to regarding Board of Director(s), businesses etc. of theInstitutional investors/analysts. Company and any changes therein are displayed.

iv. Whether Management Discussion and : YesAnalysis Report is a part of Annual Report

16

• REGISTRAR AND TRANSFER AGENTS AND SHARE TRANSFER SYSTEM

The Company has appointed following Registrar & Transfer Agent for physical & demat work both, from 1st May, 2007; AllShareowners may contact the Registrar and Transfer Agents at the following address :-

Alankit Assignments Ltd.Corporate Office “Alankit House” 2E/21 Jhandewalan Extension, New Delhi – 110 055Telephone Nos. (011)23541234 & 42541234Fax Nos. (011) 42541967 & 23552001, E-mail : [email protected]

NAME OF DIRECTOR Sri Vikas Chaturvedi

DATE OF BIRTH 05.07.1963

DATE OF APPOINTMENT 15.09.2006

QUALIFICATIONS Bsc.

EXPERTISE IN SPECIFIC He has rich business experience

FUNCTIONAL AREAS

DIRECTORSHIP HELD IN Shree Dataware Pvt. Ltd.OTHER COMPANIES

COMMITTEE POSITION NilHELD IN OTHER COMPANIES

GENERAL SHAREHOLDER INFORMATION

DETAILS OF DIRECTORS SEEKING RE-APPOINTMENT IN THE FORTHCOMING ANNUAL GENERALMEETING(in pursuance of clause 49(VI) (A) of the Listing Agreement)

ANNUAL GENERAL MEETING

• Date : Tuesday, 21st September, 2010• Time : 11.30 A.M.• Venue : Little Chef, Civil Lines, Kanpur• Financial Calendar : 1st April to 31st March• Dates of Book Closure : 14th September, 2010 to 21st September, 2010 (Both days inclusive)• Dividend Payment Date : On or before 20th October, 2010.• Stock Exchanges where the shares are listed : U.P. Stock Exchange Association Ltd., Kanpur, Bombay Stock

Exchange Ltd., Mumbai & National Stock Exchange of India Ltd.,Mumbai. Stock Code : 530299 on Bombay Stock Exchange, KothariPro-Series-EQ. : National Stock Exchange of India Ltd.

MARKET PRICE DATA : HIGH & LOW DURING THE LAST FINANCIAL YEAR (NSE)

MONTH HIGH (Amount in Rs.) LOW (Amount in Rs.)

APRIL 2009 215 150MAY 2009 295 184JUNE 2009 354 242JULY 2009 311 205AUGUST 2009 345 276SEPTEMBER 2009 347 305OCTOBER 2009 334 295NOVEMBER 2009 325 282DECEMBER 2009 389 309JANUARY 2010 496 336FEBRUARY 2010 460 366MARCH 2010 430 386

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No. of Equity shares held No. of Shareowners No. of Shares held in % of Equity Capital held in

No. of % of Physical Demat Physical DematShareowners Shareowners form form form form

1 - 500 5311 96.406 50434 287588 0.760 4.336501 - 1000 93 1.688 6600 61514 0.100 0.9271001 - 5000 68 1.234 7100 134688 0.107 2.0315001 - 10000 9 0.163 0 51013 0 0.76910001- 20000 10 0.182 12143 139746 0.183 2.10720001- 30000 4 0.073 28700 84342 0.433 1.27230001 - 40000 1 0.018 0 32853 0 0.49540001 - 50000 0 0 0 0 0 050001 - 100000 3 0.054 0 265900 0 4.009100001- 500000 7 0.127 1439577 646084 21.707 9.742500001 - Above 3 0.055 2094413 1289275 31.582 19.440

Total 5509 100.000 3638967 2993003 54.872 45.128

• DISTRIBUTION OF SHAREHOLDING

The Shareholding distribution of equity shares as on 31st March, 2010 is given below :

• DEMATERIALISATION OF SHARES AND LIQUIDITY

Nearly 45.13% of total Equity Share Capital is held in dematerialised form with NSDL and CDSL as on 31st March, 2010. ISINNo. is INE823A01017 of NSDL & CDSL. The Company’s shares are regularly traded at Bombay Stock Exchange Ltd. &National Stock Exchange of India Ltd., Mumbai.

• PLANT LOCATIONS

Since the Company is engaged in the business of International Trade and Real Estate Activities hence it has no plants.

CATEGORY NO. OF SHARES HELD % OF HOLDING

PROMOTERS & PROMOTER GROUP 4973978 75.000

INDIAN PUBLIC - INDIVIDUALS 947037 14.280

INDIAN PUBLIC - CORPORATE BODIES 706901 10.659

FIIs 4054 0.061

TOTAL 6631970 100.00

Shareholding Pattern of the Company as on 31st March, 2010 :

• ADDRESS FOR CORRESPONDENCE

1. Shareowners having any queries regarding Dividend Warrants & Annual Reports should send their correspondence to :The Share DepartmentKOTHARI PRODUCTS LTD.“PAN PARAG HOUSE”24/19, The Mall, KANPUR - 208 001 (U.P.)

PHONE NOS. 0512-2312171-74 FAX NO. 0512-2312058 E-mail- [email protected]

2. Physical Shareowners should send their requests for Share Transfers, Change of Address/Bank Details etc., if any, to ourfollowing Registrar & Share Transfer Agent :-

Alankit Assignments Ltd.Corporate Office“Alankit House”2E/21 Jhandewalan Extension, New Delhi- 110 055

PHONE NOS. (011)23541234 & 42541234 FAX NO. (011)42541967 & 23552001E-mail- [email protected]

3. Shareowners holding shares in electronic mode should address all their correspondence relating to change of address, changeof Bank details etc. to their respective Depository Participants.

18

DECLARATION BY CHIEF EXECUTIVE OFFICER

I, Deepak Kothari, Chairman & Managing Director of Kothari Products Ltd. hereby declare that all the Board Members and Seniormanagerial personnel have affirmed, for the year ended 31st March, 2010, compliance with the code of conduct of the Company laiddown for them.

Place : KANPUR (Deepak Kothari)Date : 29th May, 2010 Chairman &

Managing Director

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of Kothari Products Limited

We have examined the compliance of conditions of Corporate Governance by Kothari Products Limited, for the year ended on31st March, 2010 as stipulated in clause 49 of the Listing Agreement of the said Company with stock exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination has been limitedto a review of the procedures and implementation thereof adopted by the Company for ensuring the compliance with the conditionsof Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representations made by theDirectors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulatedin the aforesaid clause of the Listing Agreement.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India we state that no investor grievances arepending for a period exceeding one month against the Company as per the records maintained by the Shareowners’/Investors’Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectivenesswith which the management has conducted the affairs of the Company.

For MEHROTRA & MEHROTRACHARTERED ACCOUNTANTS

Sd/-PLACE : KANPUR (ANURAG TANDON)DATE : 29th May, 2010 PARTNER

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CERTIFICATE BY C.E.O. AND C.F.O.

We, Deepak Kothari, Chairman & Managing Director and Rajeev Porwal, G.M. (Finance) of Kothari Products Ltd., certify :-

1. That we have reviewed the financial statements and the cash flow statement for the year ended 31st March, 2010 and that to thebest of our knowledge and belief;

• these statements do not contain any materially untrue statement nor omit any material fact nor contain statements thatmight be misleading and

• these statements present a true and fair view of the Company’s affairs and are in compliance with the existing accountingstandards, applicable laws and regulations.

2. That there are, to the best of our knowledge and belief, no transactions entered into by the Company during the year, which arefraudulent, illegal or violative of the Company’s code of conduct;

3. That we accept responsibility for establishing and maintaining internal controls, we have evaluated the effectiveness of theinternal control systems of the Company and we have disclosed to the auditors and the audit committee, deficiencies in the designor operation of internal controls, if any, of which we are aware and the steps that we have taken or propose to take to rectify theidentified deficiencies and

4. That we have informed the auditors and the audit committee of :

i. significant changes in internal control during the year; if any.

ii. significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financialstatements, if any and

iii. instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or anemployee having a significant role in the Company’s internal control system.

(Deepak Kothari) (Rajeev Porwal)Chairman & Managing Director G.M. (Finance)

Place : KanpurDate : 29th May, 2010

20

REPORT OF THE AUDITORS TO THE MEMBERS

1. We have audited the attached Balance Sheet of Kothari Products Limited as at 31st March, 2010, Profit & Loss Account for the year ended onthat date and the Cash Flow Statement for the year ended on that date annexed hereto, which are in agreement with the books of accounts.These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financialstatements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors’ Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) ofSection 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we consideredappropriate and the information and explanations given to us during the course of our audit, we report that, in our opinion:-

(i) (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, these fixed assets have been physically verified by the managementduring the year and no material discrepancies were noticed on such verification.

(c) The disposal of fixed assets has been done in the normal course of business and it has not affected the going concern.

(ii) (a) The stock of finished goods, semi-finished goods, raw material, stores & perfumes and traded items have been physically verified bythe management at the end of the year. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of stocks followed by the management is reasonable and adequate in relation to the size ofthe company and the nature of its business.

(c) The company is maintaining proper records of inventory and the discrepancies noticed on physical verification, which were notmaterial, have been properly dealt with in the books of account.

(iii) (a) The Company has given loans to its five wholly owned subsidiary companies. In respect of these loans the maximum amountoutstanding during the year ware Rs.6997.45 lac and year end balances were 5118.95 lac.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms & conditions ofthe loan given by the company , are not prima facie prejudicial to the interest of the company.

(c) The principal amounts are repayable on demand and there is no repayment schedule. The interest is payable on demand.

(d) In respect of the said loans. The same are repayable on demand and therefore the question of overdue amounts does not arise. Inrespect of interest, wherever applicable, there are no overdue amounts.

(e) The Company has not taken any loans, secured or unsecured from companies, firm or other parties covered in the registermaintained under section 301 of the Companies Act, 1956.

(f) Not Applicable to the Company.

(g) Not Applicable to the Company.

(iv) There is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchaseof stocks and fixed assets, for the sale of goods and services. During the course of our audit, we have not observed any continuing failureto correct major weaknesses in internal control system.

(v) (a) To the best of our knowledge and according to the information and explanations given to us, the contracts or arrangements thatneed to be entered into a register in pursuance of section 301 of the Companies Act, 1956 have been so entered;

(b) Each of these transactions has been made at prices which are reasonable having regard to the prevailing market prices at the relevanttime;

(vi) The company has not accepted any deposits from the public. Therefore, reporting under clause 4(vi) of the Companies (Auditors’ Report)Order, 2003 is not applicable to the company.

(vii) The company has integrated Internal Control cum audit system which involves reasonable internal audit which is considered by us to becommensurate with size and nature of its business.

(viii) The maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209of the Companies Act, 1956 for the products manufactured by the Company.

(ix) (a) The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and ProtectionFund, Employees’ State Insurance, Income-tax, Sales tax / Value Added Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty,Cess and any other statutory dues with the appropriate authorities.

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(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income-tax,Wealth-tax, Service-tax, Sales-tax / Value Added Tax, Custom duty, Excise Duty and Cess as at 31st March, 2010 which wereoutstanding for a period of more than six months from the date they became payable.

(c) According to the information & explanations given to us, details of dues of Income-tax which have not been deposited on accountof any dispute are given below :

STATUTE FINANCIAL YEAR TO WHICH FORUM WHERE MATTER AMT. INTHE MATTER PERTAINS IS PENDING

Rs. ‘000

Income Tax 1989-90, 1990-91, 1991-92,1992-93, 1993-94, 1994-95, High Court 103117

1996-97, 2000-01, 2004-05

Block Period ended 18.11.1999

(x) The Company does not have any accumulated losses and it has not incurred cash losses during the financial year during the year andimmediately preceding financial year.

(xi) The Company does not have any dues payable to a financial institution or bank.

(xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the reporting under Clause 4(xiii) of theCompanies (Auditors’ Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly thereporting under clause 4(xiv) of the Companies (Auditors’ Report) Order, 2003 are not applicable to the company.

(xv) The company has given guarantees for loans taken by other from banks and financial institutions or otherwise. According to theinformation and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial tothe interest of the company

(xvi) The Company has not taken any term loans during the year.

(xvii) As per information and explanations given to us, neither short-term funds nor long-term funds have been raised during the year.

(xviii) The Company has not made any preferential allotment of shares during the year.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the companyhas been noticed or reported during the year.

4. Further to above, we report that :-

i. we have obtained all information and explanations which to the best of our knowledge and belief were necessary for the purpose of ouraudit.

ii. in our opinion, proper books of accounts have been kept by the Company as required by the law, so far as appears from our examinationof those books.

iii. in our opinion, Balance Sheet; the Profit & Loss Account and Cash Flow Statement dealt with by this report comply with theAccounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

iv. based on the written representations received from the directors as on 31st March, 2010 and taken on records by the Board of Directors,we report that none of the directors is disqualified from being appointed as a director in terms of clause (g) of sub-section (1) of Section274 of the Companies Act, 1956.

v. in our opinion and to the best of our information and explanations given to us, the said accounts read with Significant AccountingPolicies and Notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true andfair view :-(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010.(b) in the case of Profit & Loss Account, of the Profit of the Company for the year ended on that date. and(c) in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.


PLACE : KANPUR (ANURAG TANDON)DATE : 29th May, 2010 PARTNER

Membership No. 078862

22

Schedule As at 31.03.2010 As at 31.03.2009

Nos. (Rupees ’000) (Rupees ’000)

SOURCES OF FUNDS

Shareowners’ Fund

(a) Share Capital 1 66320 66320

(b) Reserves & Surplus 2 5455738 4942005

Loan Fund

(a) Unsecured Loans 3 78685 0

(b) Deferred Tax Liability 7608 5200

TOTAL 5608351 5013525

APPLICATION OF FUNDS

Fixed Assets 4

(a) Gross Block 162252 144009

(b) Less: Depreciation & Impairment Losses 60897 50589

(c) Net Block 101355 93420

Investments 5 2207431 3756648

Current Assets, Loans & Advances

(a) Inventories 6 12836 4119

(b) Sundry Debtors 7 929560 19760

(c) Cash & Bank Balances 8 992915 420136

(d) Other Current Assets 9 0 722

(e) Loans & Advances 10 2729163 1159507

4664474 1604244

Less: Current Liabilities & Provisions

(a) Current Liabilities 11 917191 214028

(b) Provisions 12 447718 226759

1364909 440787

Net Current Assets 3299565 1163457

TOTAL 5608351 5013525

Significant Accounting Policies &Notes to the Accounts 18

BALANCE SHEET AS AT 31ST MARCH, 2010

As per our report of even date attached hereto. For and on behalf of the Board

For MEHROTRA & MEHROTRAChartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI) (RAJ KUMAR GUPTA)Dated : 29th May, 2010 Partner Chairman & Managing Director Executive Director Company Secretary

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Schedule For the Year For the Year

Nos. Ended 31.03.2010 Ended 31.03.2009

(Rupees ’000) (Rupees ’000)

INCOME

Sales 13 3487165 965430

Increase/Decrease in Stock (+/–) 14 0 -13990

Other Income 15 830732 156076

TOTAL 4317897 1107516

EXPENDITURE

Materials Consumed 16 3105594 466437

Excise Duty 0 178001

Manufacturing, Selling, Distribution

and Administrative Expenses 17 384324 336020

Depreciation 12144 15986

TOTAL 3502062 996444

PROFIT BEFORE TAXATION 815835 111072

PROVISION FOR TAXES :Current Tax 145000 16500

Deferred Tax 2408 1000

Tax Adjustments for Earlier years 25 147433 -23835 -6335

PROFIT AFTER TAXATION 668402 117407

Balance Brought Forward 1633363 1606503

AMOUNT AVAILABLE FOR APPROPRIATION 2301765 1723910

APPROPRIATIONS :

Transfer to General Reserve 66840 12956

Proposed Dividend on Equity Shares 132639 66320

Provision for Tax on Proposed Dividend 22030 221509 11271 90547

Balance Carried Forward to Balance Sheet 2080256 1633363

Significant Accounting Policies &

Notes to the Accounts 18

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH, 2010




24

As at As at31.03.2010 31.03.2009


SCHEDULE : 1

Share Capital

Authorised :11000000 Equity Shares of Rs. 10/- each 110000 110000

Issued, Subscribed and Paid up :6631970 Equity Shares of Rs. 10/- each fully paid up 66320 66320(Including 4800000 shares of Rs. 10/- eachallotted as fully paid up Bonus Shares byCapitalisation of General Reserve.)

Total 66320 66320

SCHEDULE : 2

Reserves & Surplus :(a) Preference Shares Redemption Reserve 316 316

(b) General Reserve :As at Commencement of the year 3308326 3958567Add : Transferred from Profit & Loss Account 66840 12956Less : Transferred on demerger pursuant to the Scheme of Arrangement 0 3375166 663197 3308326

(c) Profit & Loss Account - As per account annexed 2080256 1633363

Total 5455738 4942005

SCHEDULE : 3Unsecured Loans :Bills Discounted from Banks 78685 0

Total 78685 0

SCHEDULE : 4 Fixed Assets :

(Rupees ’000)

GROSS BLOCK DEPRECIATION NET BLOCK

PARTICULARS As at Additions Transfer As at Upto For the Adjust- As at As at As at

31.03.09 31.03.2010 31.03.2009 Year ments 31.03.2010 31.03.2010 31.03.2009

Freehold Land 26652 0 0 26652 25040 0 0 25040 1612 1612

Building (Office) 27320 0 0 27320 4737 445 0 5182 22138 22583

Building (Factory) 15620 0 0 15620 3131 0 0 3131 12489 12489

Flats 1418 0 0 1418 139 0 0 139 1279 1279

Motor Cars/Scooters 62034 13758 6338 69454 14332 6598 1822 19108 50346 47702

Computers 1338 469 0 1807 498 292 0 790 1017 840

Office Equipment 8352 4112 26 12438 2420 591 14 2997 9441 5932

Temporary Structure 0 4030 0 4030 0 4030 0 4030 0 0

Furniture & Fixture 1275 2238 0 3513 292 188 0 480 3033 983

TOTAL 144009 24607 6364 162252 50589 12144 1836 60897 101355 93420

PREVIOUS YEAR 421995 30018 308004 144009 184628 15986 150025 50589 93420

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SCHEDULES CONTINUEDQuantity (Nos.) Amount (Rupees ’000)

As at As at As at As at31.03.2010 31.03.2009 31.03.2010 31.03.2009

SCHEDULE : 5

Investments — Long Term (At cost) :

(1) Held as on 31.03.2010

A. QUOTED – NON TRADE

I. MUTUAL FUNDS :

(Units of Rs. 10/- each, fully paid up)

S.B.I.MAGNUM EQUITY FUND - DIVIDEND 0.000 4500.000 0 488HDFC CASH MANAGEMENT SAVINGS PLUS - WEEKLY DIVIDEND 15017.922 235715.102 151 2361RELIANCE DIVERSIFIED POWER SECTOR FUND - DIVIDEND 0.000 395849.400 0 21265LOTUS INDIA AGILE FUND - DIVIDEND 0.000 4889975.550 0 50000KOTAK INDO WORLD INFRASTRUCTURE FUND - DIVIDEND 0.000 11000000.000 0 110000HDFC MID-CAP OPPORTUNITIES FUND - DIVIDEND 0.000 1500000.000 0 15000BIRLA INFRASTRUCTURE FUND - DIVIDEND 0.000 2689638.728 0 52488DSP MERRILL LYNCH INDIA T.I.G.E.R. FUND - DIVIDEND 0.000 4500222.699 0 138359RELIANCE MONEY MANAGER FUND - INSTITUTIONAL OPTION GROWTH 0.000 48306.988 0 57500RELIGARE ULTRA SHORT TERM FUND - INSTITUTIONAL GROWTH 0.000 2006839.980 0 24000HDFC CASH MANAGEMENT FUND-TREASURY ADVANTAGEPLAN WHOLESALE-WEEKLY DIVIDEND 9861995.451 0.000 98887 0HDFC CASH MANAGEMENT FUND-TREASURY ADVANTAGEPLAN-RETAIL-WEEKLY DIVIDEND 76930.669 0.000 771 0KOTAK SELECT FOCUS FUND- DIVIDEND 3370464.547 0.000 34463 0

II. EQUITY SHARES, EACH FULLY PAID UP

AIA ENGINEERING LTD. of Rs. 2/- 0 39965 0 12137APOLLO TYRES LTD. of Re. 1/- 0 58272 0 1145APTECH LTD. of Rs.10/- 120000 0 22278 0AXIS BANK LTD. of Rs. 10/- 0 5708 0 3563BANK OF BARODA of Rs. 10/- 0 20270 0 5128BHARAT HEAVY ELECTRICALS LTD. of Rs. 10/- 43800 0 110279 0BHARAT PETROLIUM CORPORATION LTD. of Rs. 10/- 0 12601 0 4387BHARTI AIRTEL LTD. of Rs. 10/- 0 32381 0 19806BIOCON LTD. of Rs. 5/- 0 35014 0 8058BLUE STAR LTD. of Rs. 2/- 0 50000 0 2527CROMPTON GREAVES LTD. of Rs.2/- 0 53336 0 12438DISHMAN PHARMA & CHEMICAL LTD. of Rs.2/- 0 22306 0 6920EVEREST KANTO CYLENDAR LTD. of Rs. 2/- 0 32010 0 8384HCL TECHNOLOGIES LTD. of Rs. 2/- 0 66159 0 7107GMR INFRASTRUCTURE LTD. of Rs. 2/- 12000 0 878 0HIMATSINGKA SEIDE LTD. of Rs. 5/- 0 125000 0 15945ICICI BANK LTD. of Rs. 10/- 0 46668 0 47904IDFC LTD. of Rs. 10/- 0 33453 0 2380INFOSYS TECHNOLOGIES LTD. of Rs. 5/- 5000 4902 13946 8967IPCA LABORATORIES LTD. of Rs. 10/- 0 12576 0 6806ITC LTD. of Re. 1/- 0 20299 0 0JAMMU & KASHMIR BANK of Rs. 10/- 0 10597 0 3611JAIPRAKASH ASSOCIATES LTD. of Rs. 2/- 138000 0 22123 0KEC INTERNATIONAL LTD. of Rs. 10/- 0 15201 0 8840LARSEN & TOUBRO LTD. of Rs. 2/- 54200 23711 91978 19203MAHINDRA & MAHINDRA of Rs.5/- 10000 0 5265 0MPHASIS LTD. oF Rs.10/- 17000 0 11141 0NHPC LTD. of Rs. 10/- 167396 0 6026 0PANTALOON RETAIL (I) LTD. of Rs. 2/- 0 36542 0 5811PATNI COMPUTER SYSTEM LTD. of Rs. 2/- 0 30673 0 3136PRAJ INDUSTRIES LTD. of Rs. 10/- 0 72040 0 4882

26


As at As at As at As at31.03.2010 31.03.2009 31.03.2010 31.03.2009

SCHEDULE : 5

RELIANCE CAPITAL LTD. of Rs. 10/- 3000 20495 2745 15864RELIANCE COMMUNICATION LTD. of Rs. 5/- 74519 204487 47068 87429RELIANCE INDUSTRIES LTD. of Rs. 10/- 700000 619000 504309 649772RELIANCE INFRASTRUCTURE LTD. of Rs. 10/- 15000 0 17018 0RELIANCE PETROLEUM LTD. of Rs. 10/- 0 400000 0 35421RELIANCE POWER LTD. of Rs. 10/- 0 16000 0 3758SHOPPERS STOP LTD. of Rs. 10/- 13779 13779 3279 3279SIEMENS LTD. of Rs. 2/- 0 21293 0 0STATE BANK OF INDIA of Rs. 10/- 10156 32591 20781 36954STERLITE INDUSTRIES (INDIA) LTD. of Rs. 2/- 0 92931 0 86179SUN PHARMACEUTICALS INDUSTRIES LTD. of Rs. 5/- 0 7698 0 6711SUZLON ENERGY LTD. of Rs. 2/- 108835 105222 11656 8784TATA STEEL LTD. of Rs. 10/- 0 18623 0 2835TATA MOTORS LTD. of Rs. 10/- 10000 0 7433 0TCS LTD. of Re. 1/- 12000 16500 9477 13336THERMAX LTD. of Rs. 2/- 0 0 0 0UFLEX INDUSTRIES LTD. of Rs. 10/- 508726 508726 53160 53160UNITECH LTD. of Rs. 10/- 75000 0 8187 0UNITED BEWERIES LTD. of Re. 1/- 0 151258 0 7699UNITED PHOSPHOROUS LTD. of Rs. 2/- 0 85490 0 13559ZEE ENTERTAINMENT LTD. of Re. 1/- 0 58641 0 12458ZEE NEWS LTD. of Re. 1/- 0 160449 0 6884

III. DEBENTURES & BONDS :6.6 % TAX FREE UTI ARS BONDS of Rs. 100/- each. 0 218834 0 218830 % Redeemable, Non-convertible Debentures of DSP Merrill Lynchof Rs. 100000/- each. 980 980 98000 98000

Aggregate Cost TOTAL (A) 1201299 1854511Aggregate Market Value 1389278 1686196

B. UNQUOTEDI. NON TRADE

(a) Capital Contribution in India Growth Fund 48088 46588(b) Application Money for Shares & Units of Mutual Fund 663842 1615342

II. TRADE(a) Investments in Equity Shares of wholly owned subsidiary Companies, each Fully paid up

ARTI WEB DEVELOPERS PRIVATE LTD. of Rs.10/- 10000 10000 100 100IMK HOTELS PRIVATE LTD. of Rs. 10/- 250000 250000 30100 30100M.K. WEB TECH PRIVATE LTD. of Rs. 10/- 250000 250000 19000 19000KPL EXPORTS PRIVATE LTD. of Rs. 10/- 50000 50000 500 500SUKHDHAM CONSTRUCTIONS & DEVELOPERS LIMITED of Rs.10/- 100000 100000 1000 1000

(b) Investments in Equity Shares of other subsidiary Companies, each Fully paid upKOTHARI PRODUCTS SINGAPORE PTE. LTD. Of SGD 1/- 1000000 1000000 31450 31450

(c) Investments in Equity Shares of other Companies, each Fully paid upBHOJESWAR REALTORS PRIVATE LTD. of Rs.10/- 10000 10000 100 100HARA PARVATI REALTORS PVT. LTD. of Rs. 10/- 12750 0 128 0REAL GRIHA NIRMAN PRIVATE LTD. of Rs.10/- 10000 10000 100 100SHUBHADRA REALTORS PRIVATE LTD. of Rs.10/- 10000 10000 100 100SANKHYA REALTORS PRIVATE LTD. of Rs.10/- 10000 10000 100 100SPPL HOTELS PRIVATE LTD. of Rs.10/- 127500 229500 1275 2295TAURUS AGILE TECHNOLOGY CORPORATION PRIVATE LTD. of Rs.10/- 1650000 1650000 100007 100007

(d) Investment in Preference Shares of other companies.001% Optionally Convertible Redeemable Preference Sharesof SPPL Hotels Pvt Ltd. of Rs.10/- 802486 1106701 76670 55355.001% Optionally Convertible Redeemable Preference Sharesof HARA PARVATI REALTORS Pvt Ltd. of Rs.10/- 707880 0 33572 0

TOTAL (B) 1006132 1902137TOTAL (A+B) 2207431 3756648

272 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

I. Equity Shares, each fully paid upADANI ENTERPRISES LTD. of Re.1/- 90000 37942 42638APTECH LTD. of Rs.10/- 42500 7010 7510BANK OF INDIA of Rs. 10/- 15000 4894 5271BHARAT HEAVY ELECTRICALS LTD. of Rs. 10/- 4650 9975 10542BHARTI AIRTEL LTD. of Rs.5/- 46180 18501 14629CASTROL (INDIA) LTD. of Rs.10/- 14000 7892 8737CENTURY TEXTILE & INDUSTRIES LTD. oF Rs. 10/- 142000 65942 73223CUMMINS INDIA LTD. of Rs.2/- 15000 5045 6051DEEPAK FERTILISER & PETRO. CORPORATION of Rs.10/- 49000 5095 5325DEWAN HOUSING FINANCE CORPORATION LTD. of Rs.10/- 35652 4655 7218DISHMAN PHARMA & CHEMICALS LTD. of Rs.2/- 36131 3784 9630DIVI’S LABORATORIES LTD. of Rs.2/- 18823 9040 12607FINANCIAL TECHNOLOGIES LTD. of Rs.2/- 3400 5008 4951GAMMON INDIA LTD. of Rs.2/- 37301 4748 6204GEODESIC INFORMATION SYSTEMS LTD. of Rs.2/- 83011 9125 11148HINDALCO INDUSTRIES LTD. of Re.1/- 200000 24704 27692HINDUSTAN CONSTRUCTION COMPANY LTD. of Re.1/- 113881 12153 17254HINDUSTAN DORR OLIVER LTD. of Rs.2/- 19000 1859 2020HT MEDIA LTD. of Rs.2/- 89747 8689 13253INDIABULLS FINANCIAL SERVICES LTD. of Rs.2/- 81116 12884 11088INDIABULLS REAL ESTATE LTD. of Rs.2/- 50521 8686 13418INDIA INFOLINE LTD. of Rs.2/- 48813 6223 6508INFOSYS TECHNOLOGIES LTD. of Rs.5/- 3177 4860 6619IRB INFRASTRUCTURE & DEVELOPERS LTD. of Rs.10/- 58271 6037 8355ITC LTD. of Re.1/- 45165 8988 11157J & K BANK LTD. of Rs.10/- 12339 5318 7126JINDAL STEEL & POWER LTD. of Re.1/- 20500 13040 13864MAHINDRA & MAHINDRA LTD. of Rs.5/- 20000 20683 20935MIND TREE LTD. of Rs.10/- 11261 5925 7730MUNDRA PORT & SEZ LTD. of Rs.10/- 18000 11158 12669NAGARJUN CONSTRUCTIONS LTD. of Rs.2/- 32814 4483 5609PARSVNATH DEVELOPERS LTD. of Rs.10/- 66866 8440 8384PETRONET LNG LTD. of Rs.10/- 140183 9837 10703PUNJAB NATIONAL BANK of Rs. 10/- 31000 24748 26619PANTALOON RETAIL DVR ORDINARY of Rs. 2/- 31998 6216 7568RAIN COMMODITIES LTD. of Rs.10/- 60000 9462 10364RELIANCE CAPITAL LTD. of Rs.10/- 10638 9646 9458RELIANCE COMMUNICATION LTD. of Rs.5/- 42975 10037 7472RELIANCE INFRASTRUCTURE LTD. of Rs.10/- 12097 12482 13716SHREE RENUKA SUGAR LTD. of Re.1/- 80000 11268 11614SIEMENS LTD. of Rs.2/- 25000 15060 16260SINTEX INDUSTRIES LTD. of Rs.2/- 46500 10437 11633STERLITE INDUSTRIES LTD. of Re.1/- 39646 26959 32638SUN PHARMACEUTCALS INDUSTRIES LTD. of Rs.5/- 5032 5745 6886SUZLON ENERGY LTD. of Rs.2/- 69043 6827 6244TATA MOTORS LTD. of Rs.10/- 15100 8496 9340TATA MOTORS LTD. (DVR) of Rs. 10/- 20651 10432 10085TATA STEEL LTD. of Rs.10/- 37500 17969 19577TCS LTD. of Re.1/- 16500 0 9248ULTRATECH CEMENT LTD. of Rs.10/- 40402 34760 36240UNITED BREWERIES LTD. of Re.1/- 49817 10086 13834

SCHEDULES CONTINUEDFor the year ended 31.03.2010

Quantity Purchase SaleSCHEDULE : 5 Nos. (Rupees ’000) (Rupees ’000)

(2) Purchased & Sold during the Financial Year :

28

WYETH LTD. of Rs.10/- 17550 11257 12608ZEE ENTERTAINMENT LTD. of Re.1/- 17407 1989 3709ZEE NEWS LTD. of Re. 1/- 53598 2419 3375

II. Units of Rs. 10/- each, fully paid upRELIGARE BUSINESS LEADER FUND-DIVIDEND 2542987.141 26002 26444RELIANCE REGULAR SAVINGS FUND-EQUITY--DIVIDEND 898505.927 16411 16880BIRLA SUNLIFE FRONTLINE EQUITY FUND -PLAN-A-DIVIDEND 1603810.718 34963 33036ICICI PRUDENTIAL DISCOVERY FUND-DIVIDEND 1261829.653 20000 21309SBNPP SMILE- DIVIDEND 938288.423 13500 12332SBNPP CAPEX OPPURTUNITIES- DIVIDEND 989819.005 14000 14190HDFC TOP 200 FUND - DIVIDEND 241487.563 10000 10239HDFC EQUITY FUND - DIVIDEND 259625.620 10000 10113DSP BLACKROCK INDIA T.I.G.E.R FUND - REGULAR PLAN-DIVIDEND 595425.072 9000 9491RELIANCE DIVERSIFIED POWER SECTOR FUND - RETAIL-DIVIDEND 28910.154 734 1198BIRLA SUNLIFE INFRASTRUCTURE FUND - PLAN -A -DIVIDEND-REINVESTMENT244735.099 2690 2915PRINCIPAL LARGE CAP FUND - GROWTH PLAN 620471.015 13700 13814RELIGARE ULTRA SHORT TERM FUND-INSTITUTIONAL- GROWTH 7086889.906 86311 86594RELIGARE ULTRA SHORT TERM FUND - REGULAR - GROWTH 2132690.869 26132 26164RELIANCE MONEY MANAGER FUND - INSTITUTIONAL -GROWTH 677970.861 835782 838413RELIANCE MONEY MANAGER FUND - RETAIL -GROWTH 19335.277 23502 23543HDFC CASH MANAGEMENT FUND-TREASURY ADVANTAGE -RETAILS -WEEKLY DIVIDEND 4172927.119 41830 41845HDFC CASH MANAGEMENT FUND-TREASURY ADVANTAGE -WHOLESALE -WEEKLY DIVIDEND 6248700.721 62624 62650HDFC CASH MANAGEMENT FUND-TREASURY ADVANTAGE -RETAILS- GROWTH 289795.567 5741 5790IDFC MONEY MANAGER FUND-TREASURY PLAN -WEEKLY DIVIDEND 12147718.419 121854 121823IDFC MONEY MANAGER FUND-INSTITUTIONAL PLAN B -WEEKLY DIVIDEND 2398344.010 24036 24025IDFC MONEY MANAGER FUND-INSTITUTIONAL PLAN A -WEEKLY DIVIDEND 365718.307 3665 3663BIRLA SUNLIFE SAVINGS FUND-INSTITUTIONAL-GROWTH 2063935.871 34949 34963BIRLA SUNLIFE SAVINGS FUND-RETAIL-GROWTH 1975500.176 33036 33217KOTAK FLOATER LONG TERM -GROWTH 9316848.448 131775 132337ICICI PRUDENTIAL FLEXIBLE INCOME PLAN PREMIUM GROWTH 1277555.428 21309 21453SBNPP ULTRA ST FUND RETAIL - GROWTH 2221486.163 26522 26678HDFC CASH MANAGEMENT FUND- TREASURY -ADVANTAGE PLAN -RETAIL -GROWTH 163997.975 32151 32278PRINCIPAL ULTRA SHORT TERM FUND -GROWTH 1196052.870 13814 13891LICMF- SAVINGS PLUS FUND-GROWTH 11868276.098 170000 170095


Quantity Purchase SaleSCHEDULE : 5 Nos. (Rupees ’000) (Rupees ’000)

As at As at31.03.2010 31.03.2009


SCHEDULE : 6Inventories — (At cost or Net realisable Value whichever is lower)Trading Items 12836 4119

Total 12836 4119

292 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

SCHEDULE : 8Cash & Bank Balances :(a) Cash in hand 8869 8099(b) Balances with Scheduled Banks

(i) In Current Accounts & EEFC Account 273178 51306(ii) In Unclaimed Dividend Accounts 2142 2159(iii) In Fixed Deposits 708726 984046 358572 412037

(Including interest accrued but not due)

Total 992915 420136

SCHEDULE : 9Other Current Assets :Interest Accrued on InvestmentsAceured and due 0 722

Total 0 722

SCHEDULE : 10Loans and Advances - (Unsecured, Considered Good)(a) Security Deposits 893 1092(b) Advances recoverable in cash or in kind or for value to be received or pending adjustments 1927634 397838(c) Due from wholly owned subsidiary Companies :

(i) Arti Web Developers Pvt. Ltd. 102187 101985(Maximum amount due during the year Rs. 1021.87 Lacs (P. Y. Rs. 1019.85 Lacs))

(ii) Sukhdham Construction & Developers Ltd. 228940 229507(Maximum amount due during the year Rs. 2424.38 Lacs (P. Y. Rs. 2295.07 Lacs))

(iii) M.K. Web-Tech Pvt. Ltd. 125762 137509(Maximum amount due during the year Rs. 1375.09 Lacs (P. Y. Rs.1595.51 Lacs))

(iv) KPL Exports Pvt. Ltd. 0 119404(Maximum amount due during the year Rs. 1626.05 Lacs (P. Y. Rs. 4400.02 Lacs))

(v) IMK Hotels Pvt. Ltd. 55006 1(Maximum amount due during the year Rs.550.06 Lacs (P. Y. Rs. 0.02 Lac))

(d) Pan Parag India Ltd. 0 22151(Maximum amount due during the year Rs. 221.52 Lacs (P. Y. Rs. 1415.47 Lacs))

(e) Deposit with Income Tax Department 288741 150020

Total 2729163 1159507

SCHEDULE : 11Current Liabilities:(a) Sundry Creditors 913285 57421(b) Due to Directors and their Relatives (in Current Account) 650 149799(c) Investor Education & Protection Fund 2142 2159

(which shall be credited by the amount of Unclaimed Dividend, wherever applicable)(d) Outstanding Liabilities 1114 4649

Total 917191 214028

SCHEDULE : 12Provisions:(a) Proposed Final Dividend including Dividend Tax Rs. 220.30 Lacs (P.Y. Rs. 112.71 Lacs) 154669 77591(b) Provision for Tax 293049 149168

Total 447718 226759

As at As at31.03.2010 31.03.2009


SCHEDULE : 7Sundry Debtors (Unsecured, Considered Good)(a) Debts outstanding for over six months 0 0(b) Other debts 929560 929560 19760 19760

Total 929560 19760

SCHEDULES CONTINUED

30

SCHEDULES CONTINUED

For the Year For the YearEnded 31.03.2010 Ended 31.03.2009

(Rupees ’000) (Rupees ’000)SCHEDULE : 13Sales :(a) Pan Masala & its Preparations 0 708724(b) Zarda 0 4205(c) Packaged Drinking Water 0 6868(d) Trading Items 3487165 245633

Total 3487165 965430

SCHEDULE : 14Increase (+) / Decrease (–) in stock :Opening Stock:

Finished Goods 0 40481Semi-Finished Goods (Work in process) 0 0 56 40537

Stock transferred on demerger pursuant to the schemeof arrangement 0 26547

Total 0 -13990

SCHEDULE : 15Other Income :(a) Interest Earned on Bank Deposits & Others [Gross, T.D.S. Rs.7256542/-

(P. Y. Rs. 4300742/-)] 43772 20417(b) Income From Investments - Long Term, Non Trade

[Gross, T.D.S. Rs.Nil (P. Y. Rs. Nil)] 29185 21139(c) Franchise Receipts [Gross, T.D.S. Rs.Nil (P. Y. Rs.532966/-)] 0 7593(d) Profit on Relinguishment of Rights [Gross, Tds Rs.41079312/- ( P.Y. Nil)] 410793 0(e) Profit on Sale of Long Term, Non Trade Investments-Net of expenses 333511 69763(f) Miscellaneous Receipts 13471 37164

Total 830732 156076

SCHEDULE : 16Materials Consumed :(A) Raw & Packing Materials Consumed :

(i) Opening Stock (a) Raw Material 0 13417(b) Packing Material 0 0 15974 29391

(ii) Add: Purchases (a) Raw Material 0 141887(b) Packing Material 0 0 60489 202376

0 231767(iii) Less : Stock transferred on demerger pursuant to the 0 25493

scheme of arrangementRaw & Packing Materials Consumed 0 206274

(B) Consumption of Trading Items 3105594 260163Materials Consumed Total 3105594 466437

312 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

SCHEDULES CONTINUEDFor the Year For the Year

Ended 31.03.2010 Ended 31.03.2009(Rupees ’000) (Rupees ’000)

SCHEDULE : 17Manufacturing, Selling, Distribution and Administrative Expenses :Power & Fuel 3129 10136Payments to & Provisions for Employees :

Salaries, Wages and Bonus 6891 18980Contribution to Provident and other Funds 449 2395Gratuity 72 3444Staff welfare and Other Expenses 1892 9304 3254 28073

General Insurance 1110 1236Transit Insurance 301 244Demurage Charges 57763 0Consumption of Stores & Perfumes 0 179138Freight & Cartage Inward 10862 6443Rent 5421 2363Rates & Taxes 232 5653 280 2643Repairs :

Building 101 300Machinery 0 1947Others 5857 5958 2290 4537

Freight, Cartage and Octroi Outward 186467 9755Advertisement & Publicity 267 61396Selling & Distribution Expenses 30931 13806Custom Duty Charges 40371 0Travelling & Conveyance 8749 19060Interest & Bank Charges 18935 5166Miscellaneous Expenses -129 -22829Commercial Taxes 0 5324Loss on Sale of Fixed Assets 1501 6311Payment to Auditors :

Statutory Audit Fee 143 144Tax Audit Fee 13 156 13 157

Payment to Directors :Remuneration 2980 3180Sitting Fee 16 8Commission 0 2236

Total 384324 336020

32

SCHEDULES CONTINUED

SCHEDULE : 18

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS :

(A) SIGNIFICANT ACCOUNTING POLICIES :

(1) System of Accounting :

The Financial statements are prepared under the historical cost convention on accrual basis of accounting, in accordance with GenerallyAccepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India andrelevant provisions of the Companies Act,1956.

(2) Fixed Assets and Depreciation :

All ixed assets are stated at cost, comprising of purchase price, duty, levies and any direct attributable cost of bringing the assets to theirworking condition for the intended use.

Depreciation is provided according to straight line method at the rates prescribed by the Schedule XIV to the Companies Act, 1956 andProvision for impairment loss is recognised to the extent by which the carrying amount of an asset exceeds its recoverable amount.

(3) Investments :

Investments are stated at cost less fall in their market value,considered permanent.

(4) Inventories :

Inventories are valued at cost or net realisable value whichever is lower. Cost of Raw Material, Packing Material, Stores & Perfumes andTrading Items is arrived at FIFO basis.

Cost of Finished Goods & Work in Process is arrived on the basis of weighted average cost of raw material, packing material and the costof conversion thereof for bringing the inventories to their intended use.

(5) Sales :

Sales are recognised on despatch of goods to the customers and are recorded including excise duty but excluding commercial taxes i.e.central sales tax / value added tax / entry tax.

(6) Foreign Currency Transactions :

Foreign currency transactions are accounted at the exchange rates prevailing at the date of the transaction. Gains / Losses resulting fromthe settlement of such transactions and from conversion of monetary assets and liabilities denominated in foreign currencies are recognisedin the profit and loss account.

(7) Employee Retirement Benefits :a. Company’s contribution to Employees’ Provident Fund is charged to Profit and Loss Account.

b. Company has taken a Group Gratuity Cash Accumulation Policy from LIC for its employees including directors and the premiumfor the policy is charged to Profit and Loss Account.

(B) NOTES TO THE ACCOUNTS :

(1) Contingent Liabilities: 31.03.2010 31.03.2009

(Rs. ’000) (Rs. ’000)(A) Claims not acknowledged as debt -

Income Tax 103117 100014(B) Guarantee given backed by FDRs against Demerged Company 0 42141(C) Guarantee given by Banks on behalf of the Company 976488 0

(D) Guarantee given to Bank of India, Singapore for one of subsidiaries- Kothari Products Singapore Pte. Ltd. against credit facility ofUSD ($) 50,00,000 or as on 31.03.2010 Rs.22,48,75,000/- (Previous Year Rs. Nil)

(E) Guarantee given to UCO Bank, Kolkata for SPPL Hotels Pvt. Ltd. of Rs. 151,00,00,000/- (Previous year Rs. Nil).

(F) Bank Guarantee given on behalf of Pan Parag India Limited in favour of the Registrar National Consumer Disputes RedressalCommission, New Delhi, for Rs. 4158596/-

(Previous Year Rs. 4158596/-) which is secured by FDRs of Pan Parag India Limited.

332 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

SCHEDULES CONTINUED

(2) Additional Information Pursuant to the Provisions of Paragraphs 3, 4C and4D of Part II of Schedule VI of the Companies Act, 1956.

(A) Class of Goods and Capacity:31.03.2010 31.03.2009

Class of Goods manufactured :- Capacity CapacityLicensed Installed Licensed Installed

Pan Masala and its Preparations N.A. N.A. N.A. N.A.Zarda N.A. N.A. N.A. N.A.Packaged Drinking Water N.A. N.A. N.A. N.A.Ice Cube N.A. N.A. N.A. N.A.

(B) Raw Materials Consumed : (Rs.’ 000) Tons (Rs.’ 000) Tons(a) Betelnuts 0 0.000 98578 1161.000(b) Katha Mix 0 0.000 29370 168.420(c) Tobacco 0 0.000 6694 108.000(d) Packaged Drinking Water 0 — 2991 –(e) Other Materials 0 — 2055 –

(C) Finished Goods : (Rs.’000) Tons/Cases/Nos. (Rs.’000) Tons/Cases/Nos.

Opening Stock :(a) Pan masala and its preparations 0 0.000 40439 52.269(b) Zarda 0 0.000 0 0.000(c) Packaged Drinking Water (in cases) 0 0 41 750(d) Papad 0 0.000 10 0.187(e) Jewellery - Gold 0 0.000 3034 0.003(f) Bubble Top (in nos) 0 0 48 735(g) Washing Powder & Cake 0 0.000 22 1.193(h) Flavoured Supari 0 0.000 170 1.338(i) Water Coolers (in nos.) 0 0 120 27(j) Iron Ore Fines 4119 2999.750 0 0.000

Production :(a) Pan masala and its preparations — — — 1277.269(b) Zarda — — — 17.618(c) Packaged Drinking Water (in cases) — — — 108560(d) Ice Cube — — — 12.038

Purchases :(a) Bubble Top (in nos) 0 0 53 847(b) Papad 0 0.000 62 1.130(c) Washing Powder & Cake 0 0.000 6837 333.682(d) Iron Ore Fines 886707 335698.846 53857 29836.850(e) Flavoured Supari 0 0.000 12121 14.549(f) Water Coolers (in nos) 0 0 48 10(g) Convertor Shell (in nos) 0 0 117819 1(h) Cotton Overall (in nos) 107416 8000 0 0(i) DELL XPS Series Note Book (in nos) 123613 2800 0 0(j) Convertor Equipment (in nos) 193268 1 0 0(k) Working Wheel for Ventilator (in nos) 215394 2 0 0(l) Water Cleaning & Processing Plant (in nos) 218196 1 0 0(m) Bearing Sheel for Convertor (in nos) 57474 2 0 0(n) Diesel Generator Cast Mine (in nos) 205331 3 0 0(o) Di Octyle Phthalate (DOP) 0 0.000 18906 224.000(p) Hidrocarbon Solvent (W.S.) 0 0.000 14443 251.440(q) PVC Rasin Grade LS 100 0 0.000 30445 540.000(r) PVC WS 1000S 14061 363.000 21483 396.000(s) PP F1611 2766 48.000 0 0.000(t) PVC-S-65-D 35779 831.000 0 0.000(u) PVC RESIN-P225-2P15 12675 300.000 0 0.000

34

SCHEDULES CONTINUED31.03.2010 31.03.2009

(Rs.’000) Tons/Cases/Nos. (Rs.’000) Tons/Cases/Nos.

(v) PVC LACOVYL S 6703 9180 153.000 0 0.000(w) VINILEN-140-PVC-RESIN 43717 1122.000 0 0.000(x) Polypropelene Granuels Film 4744 82.500 0 0.000(y) Crude Palm Oil 381169 11262.664 0 0.000(z) Mixed Hydro Carbon Oil 3723 193.240 0 0.000(aa) Heavy Metal Scrap 280450 17673.706 0 0.000(ab) Aluminium Scrap 414 7.070 0 0.000(ac) Brass Honey Scrap 89837 530.130 0 0.000(ad) Zinc Diecast Scrap 1255 18.150 0 0.000(ae) Citric Acid Monohydrate 9206 250.000 0 0.000(af) Mozambique Toor 4601 100.000 0 0.000(ag) Yellow Peas 145000 10000.000 0 0.000(ah) Ispat Super DRI 2599 137.000 0 0.000(ai) Pig Iron (BG) 65736 2988.120 0 0.000

Sales :(a) Pan masala and its preparations 0 0.000 708723 1282.063(b) Zarda 0 0.000 4205 14.624(c) Packaged Drinking Water (in cases) 0 0 6761 109270(d) Ice Cube 0 0.000 107 12.038(e) Bubble Top (in nos) 0 0 23 154(f) Papad 0 0.000 100 1.282(g) Washing Powder & Cake 0 0.000 8974 333.274(h) Iron Ore Fines 1172542 338698.596 53671 26837.100(j) Flavoured Supari 0 0.000 12318 15.887(j) Water Coolers (in nos) 0 0 34 7(k) Convertor Shell (in nos) 0 0 121030 1(l) Cotton Overall (in nos) 110803 8000 0 0(m) DELL XPS Series Note Book (in nos) 126998 2800 0 0(n) Convertor Equipment-Golovina (in nos) 199161 1 0 0(o) Working Wheel for Ventilator (in nos) 224100 2 0 0(p) Water Cleaning & Processing Plant (in nos) 225829 1 0 0(q) Bearing Shell for Convertor (in nos) 59658 2 0 0(r) Diesel Generator Cast Mine (in nos) 211491 3 0 0(s) Di Octyle Phthalate (DOP) 0 0.000 16088 224.000(t) Hidrocarbon Solvent (W.S.) 0 0.000 6701 251.440(u) PVC Rasin Grade LS 100 0 0.000 26695 540.000(v) PVC WS 1000S 16788 363.000 0 0.000(w) PP F1611 2875 48.000 0 0.000(x) PVC-S-65-D 38267 831.000 0 0.000(y) PVC RESIN-P225-2P15 13020 300.000 0 0.000(z) VINILEN-140-PVC-RESIN 44362 1068.000 0 0.000(aa) Polypropelene Granuels Film 5255 82.500 0 0.000(ab) Crude Palm Oil 398018 11262.664 0 0.000(ac) Mixed Hydro Carbon Oil 3913 193.240 0 0.000(ad) Heavy Metal Scrap 307470 17673.706 0 0.000(ae) Aluminium Scrap 465 7.070 0 0.000(af) Brass Honey Scrap 93437 530.130 0 0.000(ag) Zinc Diecast Scrap 1292 18.150 0 0.000(ah) Citric Acid Monohydrate 8386 228.000 0 0.000(ai) Mozambique Toor 4633 100.000 0 0.000(aj) Yellow peas 149650 10000.000 0 0.000(ak) Ispat Super DRI 2717 137.000 0 0.000(al) Pig Iron (BG) 66035 2988.120 0 0.000(inclusive of shortage, wastages & net of returns)

352 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

(D) Value & Percentage of Imported Materials Consumed :

(Rs.’000) Percentage (%) (Rs.’000) Percentage (%)Raw materials consumedImported 0 0.00 0 0.00Indigenous 0 0.00 139688 100.00

0 0.00 139688 100.00

Stores & Perfumes ConsumedImported 0 0.00 6838 3.82Indigenous 0 0.00 172300 96.18

0 0.00 179138 100.00

(E) Value of Imports (C.I.F. Basis) :

Trading Items 2159269 212844

(F) Expenditure in Foreign Currency :

Travelling Expenses 622 496Fixed Assets 0 7779Import of Goods- Trading Items 2159269 212844

Stock Transfer (Pursuant to the Scheme of Arrangement):(a) Pan masala and its preparations — — 25280 47.475(b) Zarda — — 948 2.994(c) Packaged Drinking Water (in cases) — — 2 40(d) Papad — — 2 0.035(e) Jewellery - Gold — — 3034 0.003(f) Bubble Top (in nos) — — 91 1428(g) Washing Powder & Cake — — 31 1.601(h) Water Coolers (in nos) — — 134 30(i) PVC WS 1000S — — 11902 396.000Closing Stock :(a) Iron Ore Fines 0 0.000 4119 2999.750(b) VINILEN-140-PVC-RESIN 2730 54.000 0 0.000(c) Citric Acid Monohydrate 906 22.000 0 0.000(d) PVC LACOVYL S 6703 9201 153.000 0 0.000


(Rs.’000) Tons/Cases/Nos. (Rs.’000) Tons/Cases/Nos.

(G) Earning in Foreign Currency :

Export of goods on F.O.B. Basis 2326232 536727

(H) Amount remitted during the year in ForeignCurrency on account of Dividend : Nil Nil

(3) Payments to Auditors :

(a) As Auditors 143 144(b) For Tax Audit 13 13(c) For Certification work 0 0(d) For Consultancy Charges to the Partners of the Firm 1737 1750

(4) Payment to Directors :(a) Managerial Remuneration 2980 3180(b) Gratuity 95 95(c) Perquisites 1612 1612(d) Commission 0 2236(e) Sitting Fees 16 8

4703 7131

36

(6) Segment information (Information about Business Segments) :

For the year ended For the year ended31.03.2010 31.03.2009

PARTICULARS (Rupees ’000) (Rupees ’000)

(A) Segment Revenue (Net Sales/ Income)(a) Pan Masala & Gutkha etc. 0 712929(b) Packaged Drinking Water 0 6868(c) Trading Items 3487165 245633(d) Real Estate etc. 0 0

3487165 965430(B) Segment Results (Profit (+) / Loss (-) Before Tax)

(a) Pan Masala & Gutkha 0 68389(b) Packaged Drinking Water 0 -8109(c) Trading Items 61818 -14530(d) Real Estate etc. 757715 67039Net Profit Before Interest 819533 112789(e) Interest Expenses 3698 1717(f) Unallocated Expenses 0 0Net Profit Before tax 815835 111072

As at As at31.03.2010 31.03.2009

(C) Capital Employed (Segment Assets – Segment Liabilities)(a) Pan Masala & Gutkha 0 0(b) Packaged Drinking Water 0 0(c) Trading Items 2300743 201720(d) Real Estate etc. 3221315 4806605

(Capital employed is net of inter-segmental transfer)5522058 5008325

Note: Pursuant to the Scheme of Arrangement, sanctioned by Hon’ble High Court of Allahabad, Pan Masala, Packaged Drinking Water andTrading Divisions of the Company have been transferred to Pan Parag India Limited w.e.f. 18th November, 2008. However the Company hasrestarted its Trading Division after 18th November, 2008.

31.03.2010 31.03.2009

(Rs.’000) (Rs.’000)

(5) Computation of Directors Commission asPer Section 309(5) read with Section 198of the Companies Act, 1956.

Net Profit as per Profit & Loss Account 111072Add : Loss on Sale of Fixed Assets 6311

117383Less : Profit on Sale of Investments 69763.00

Interest received from Subsidiary Company 10350.00 80113

Net Profit for the computation of Directors’ Commission 37270

Directors’ Commission @ 6% of the Net Profit as above 2236

372 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

(ii) Summary of Transactions:- (Rs. ’000)

Particulars Key Management Personnel Associate Companies / Firms Subsidiary& Relatives Companies

For the year ended /As on For the year ended /As on For the year ended /As on31.03.2010 31.03.2009 31.03.2010 31.03.2009 31.03.2010 31.03.2009

Directors’ Remuneration etc. 2980 5416 — — — —On Account of Expenses 0 72 540 1964 — —On Account of Income - Rent 0 0 1212 462 108 99Interest Income on Loan Given 0 0 — — 12004 10350Dividend Paid 42392 42391 7333 7333 — —Outstanding (Payable) 649 149799 — — — —Outstanding (Receivable) — — 0 22151 511895 588406Note:- Since no amount is considered as bad & doubtful, neither provision is made for the same nor amount written off.

(8) Earning Per Share :2009-2010 2008-2009

(a) Profit after tax (Profit attributable to Equity Shareowners) 668402 117407(b) Weighted average nos. of Equity shares for Basic / Diluted EPS 6631970 6631970(c) Nominal Value of Equity Share (in Rs.) 10.00 10.00(d) Basic / Diluted Earning per Equity Share (in Rs.) 100.78 17.70

(9) The deferred tax liability amounting to Rs. 7607955/- (Previous year Rs.5200000/-) is on account of time difference of Depreciationwhich is capable of being reversed in one or more subsequent years. The deferred tax liability amounting to Rs.2407955/- (Previous yearRs. 1000000/-) has been provided.

(7) Related Party Disclosures in accordance with the Accounting Standards (AS-18) ‘Related Party Disclosure’, issued by the Institute of CharteredAccountants of India are as under :(i) Names of Related parties and description of relationship :

(A) Key Management Personnel & their Relatives :

(a) Shri M.M. Kothari - Chairman (upto 30th January, 2010)(b) Shri Deepak Kothari - Chairman & Managing Director(c) Shri Mitesh Kothari - Executive Director(d) Smt. Sharda M. Kothari(e) Smt. Arti Kothari(f) Smt. Reeta Shah(g) Mitesh Kothari HUF(h) Smt. Urvi Kothari

(B) Associate Companies :(a) Kothari Detergents Limited(b) Ekta Flavours Pvt. Limited(c) Dham Securities Pvt. Limited(d) Lohewala Construction Pvt. Limited(e) DMK Holdings Pvt. Limited(f) MSR Properties Pvt. Limited(g) Pan Parag India Limited

(C) Subsidiary Companies :(a) Sukhdham Constructions & Developers Limited(b) Arti Web-Developers Private Limited(c) MK Web-Tech Pvt. Limited(d) KPL Exports Pvt. Limited(e) Kothari Products Singapore Pte. Limited(f) IMK Hotels Pvt. Limited

SCHEDULES CONTINUED

38




(10) In terms of Accounting Standard 28 “Impairment of Assets” Issued by the Institute of Chartered Accountants of India, provision for impairmentloss on assets for the year is not required.

(11) In terms of Accounting Standard 29 “ Provisions, Contingent Liabilities and Contingent Assets” Issued by the Institute of Chartered Accountantsof India, there has been no Provision on beginning and at the end of the year, therefore no disclosure requirements.

(12) Fixed Deposits includes Rs.701241684/- (Previous year Rs.42547209/-) given as earnest money etc. and pledged with the banks againstguarantees issued by them on our behalf to Government departments as security deposit.

(13) There is no amount due to be transferred to ‘Investor Education & Protection Fund’ maintained by the Government of India as at the year end.

(14) Sundry creditors include Rs. Nil (Previous Year Rs. Nil) due to SSI Units, based on the records and the information received from suppliers.

(15) The business of Pan Masala, Packaged Dringking Water and Trading Divison have been transferred to Pan Parag India Limited w.e.f 18thNovember, 2008. However the Company has restarted its Trading Division after 18th November, 2008. The figures of previous year are notcomparable to the figures of current year to the extent of aforesaid arrangement.

(16) The figures of previous year have been regrouped, recast whereever considered necessary to make them comparable with those of the currentyear.

392 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILS

Registration No. 6254 State Code 20

Balance Sheet Date 31.03.2010

II. CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. THOUSANDS)

Public Issue Nil Right Issue Nil

Bonus Issue Nil Private Placement Nil

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN RS. THOUSANDS)

Total Liabilities 6973260 Total Assets 6973260

Sources of Funds :

Paid-Up Capital 66320 Reserves & Surplus 5455738

Secured Loans Nil Unsecured Loans 78685

Deferred Tax Liabilities 7608

Application of Funds :

Net Fixed Assets 101355 Investments 2207431

Net Current Assets 3299565 Misc. Expenditure 0

IV. PERFORMANCE OF COMPANY (AMOUNT IN RS. THOUSANDS)

Turnover 3487165 Total Expenditure 3502062

Other Income 830732

Profit Before Tax 815835 Profit After Tax 668402

Earnings per share (in Rs.) 100.78 Dividend Rate % 200.00

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS OF COMPANY

Item Code No. (ITC Code) 210690 02 Item Code No. (ITC Code) 240399 01

Product Description Pan Masala Product Description Zarda

Item Code No. (ITC Code) 220110 10

Product Description Packaged Drinking & Aerated Water Bottling




40

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010As per the Listing Agreement (Rs. in Lacs)Particulars 2009-2010 2008-2009(A) CASH FLOW FROM OPERATING ACTIVITIES :

Net Profit before Tax 8158.35 1110.71Adjustments for– Depreciation 121.44 159.85– Profit (-) / Loss on Sale of Assets 15.01 63.11– Profit (-)/Loss on Sale of Investments -3335.11 -697.63– Interest expenses 36.98 17.17– Interest Income -437.72 -218.62– Dividend Income -291.85 -3891.25 -196.95 -873.07

Operating Profit before working capital changes 4267.10 237.64

Adjustment for– Trade & Other Receivables -14871.75 4569.92– Inventories -87.17 -293.55– Trade Payables 7031.80 -7927.12 2532.91 6809.28Cash Generated from Operations -3660.02 7046.92Direct Taxes Paid -1398.65 -299.86

Net Cash flow from Operating Activities -5058.67 6747.06

(B) CASH FLOW FROM INVESTING ACTIVITIES :– Purchase of Fixed Assets -246.07 -300.18– Sale of Fixed Assets 30.27 21.30– Purchase of Investments -5907.59 -4158.15– Investments in Subsidiary Companies 0.00 -620.50– Sale of Investments 15219.87 3534.35– Loans to Subsidiary Companies (Net) 765.11 -991.69– Loans to Demerged Company 221.51 -221.51– Interest Received 437.72 218.62– Dividend Received 291.85 10812.67 196.95 -2320.81

Net Cash used in Investing Activities 10812.67 -2320.81

(C) CASH FLOW FROM FINANCING ACTIVITIES :– Bills discounted from bank 786.85 0.00– Dividend Paid -663.37 -664.37– Tax on Dividend Paid -112.71 -112.71– Interest Paid -36.98 -26.21 -17.17 -794.25

Net Cash used in Financing Activities -26.21 -794.25

NET CHANGES IN CASH & CASH EQUIVALENTS (A+B+C) 5727.79 3632.00Cash & Cash Equivalents - Opening Balance 4201.36 585.08Cash & Cash Equivalents - on Scheme of Arrangement 0.00 -15.72Cash & Cash Equivalents - Closing Balance 9929.15 4201.36

Note : The figures of previous year have been regrouped/recast wherever considered necessary to make them comparable with those of the current year.

For and on behalf of the BoardFor MEHROTRA & MEHROTRA

Chartered Accountants


412 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

AUDITORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

To,The Board of Directors,Kothari Products Limited

1. We have audited the attached Consolidated Balance Sheet of Kothari Products Limited and its subsidiaries as at 31st March, 2010 and also theConsolidated Profit & Loss Account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. Theseconsolidated financial statements are the responsibility of the Kothari Products Limited's management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe thatour audit provides a reasonable basis for our opinion.

3. We report that the consolidated financial statements have been prepared by the Kothari Products Limited's management in accordance with therequirements of Accounting Standard (AS–21) – Consolidated Financial Statements, issued by the Institute of Chartered Accountants of Indiaand on the basis of the separate financial statements of Kothari Products Limited and its subsidiaries included in the consolidated financialstatement.

4. In our opinion and to the best of our information and explanations given to us, the said accounts read with Significant Accounting Policies andNotes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view :–(a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Kothari Products Limited and its subsidiaries as at 31st March,

2010;(b) in the case of Consolidated Profit & Loss Account, of the Profit of the Kothari Products Limited and its subsidiaries for the year ended on

that date; and(c) in the case of Consolidated Cash Flow Statement, of the Cash Flows of Kothari Products Limited and its subsidiaries for the year ended

on that date.

For MEHROTRA & MEHROTRA,Chartered Accountants,

(ANURAG TANDON)PLACE : KANPUR PartnerDATE : 29th May, 2010 Membership No. 078862

42

Schedule As at 31.03.2010 As at 31.03.2009 Nos. (Rupees ’000) (Rupees ’000)

SOURCES OF FUNDS(A) Shareowners’ Fund

(a) Share Capital 1 66320 66320(b) Reserves & Surplus 2 5598505 5044574

(B) Minority Interest 1 1(C) Loan Fund

(a) Secured Loans 3 0 32615(b) Unsecured Loans 4 83492 0

(D) Deferred Tax Liability 6816 4400

TOTAL 5755134 5147910APPLICATION OF FUNDS(A) Fixed Assets 5

(a) Gross Block 717336 698827(b) Less: Depreciation & Impairment Losses 75453 61796(c) Net Block 641883 637031(d) Capital Work in Progress 2899 644782 0 637031

(B) Investments 6 2210281 3711809(C) Current Assets, Loans & Advances

(a) Inventories 7 17678 4119(b) Sundry Debtors 8 1095197 1246095(c) Cash & Bank Balances 9 1111779 2033257(d) Other Current Assets 10 0 722(e) Loans & Advances 11 2332923 608266

4557577 3892459Less: Current Liabilities & Provisions

(a) Current Liabilities 12 1154663 2823329(b) Provisions 13 502950 270211

1657613 3093540Net Current Assets 2899964 798919

Miscellaneous Expenses to the extent not written off(a) Preliminary Expenses 104 147(b) Preoperative Expenses 3 107 4 151

TOTAL 5755134 5147910Significant Accounting Policies & Notes to the Accounts 19

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2010




432 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

Schedule For the Year For the Year

Nos. Ended 31.03.2010 Ended 31.03.2009


INCOME

Sales 14 5722025 2465142

Increase/Decrease in stock (+/–) 15 0 –13990

Other Income 16 958562 254762

TOTAL 6680587 2705914

EXPENDITUREMaterials Consumed 17 5288449 1949426

Excise Duty 0 178001

Manufacturing, Selling, Distribution 18 499204 340926

and Administrative Expenses

Preliminary & Preoperative Expenses Written off 44 79

Depreciation 15493 19292

TOTAL 5803190 2487724

PROFIT BEFORE TAXATION 877397 218190

PROVISION FOR TAXES :Current Tax 162387 54363

Deferred Tax 2416 200

Tax Adjustments for Earlier Years 43 164846 –23994 30569

PROFIT AFTER TAXATION 712551 187621

LESS : Minority Interest 0 0

PROFIT AFTER TAXATION & MINORITY INTEREST 712551 187621

Balance Brought Forward 1732185 1635111

AMOUNT AVAILABLE FOR APPROPRIATION 2444736 1822732

APPROPRIATIONS :Transfer to General Reserve 66840 12956

Proposed Dividend on Equity Shares 132639 66320

Provision for Tax on Proposed Dividend 22030 221509 11271 90547

Balance Carried Forward to Balance Sheet 2223227 1732185

Significant Accounting Policies & Notes to the Accounts 19

CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010




44

As at As at31.03.2010 31.03.2009


SCHEDULE : 1

Share Capital

Authorised :11000000 Equity Shares of Rs. 10/– each 110000 110000

Issued, Subscribed and Paid up :6631970 Equity Shares of Rs. 10/– each fully paid–up 66320 66320(Including 4800000 shares of Rs. 10/– eachallotted as fully paid up Bonus Shares byCapitalisation of General Reserve.)

TOTAL 66320 66320

SCHEDULE : 2

Reserves & Surplus :

(a) Preference Shares Redemption Reserve 316 316

(b) Foreign Currency Translation Reserve –204 3747

(c) General Reserve :As at Commencement of the year 3308326 3958567Add : Transferred from Profit & Loss Account 66840 12956Less : Transferred on demerger pursuant to the scheme of arrangement 0 3375166 663197 3308326

(d) Profit & Loss Account – As per account annexed 2223227 1732185

TOTAL 5598505 5044574

SCHEDULE : 3

Secured Loans :

Overdraft from Bank of India, Singapore against Fixed Deposit 0 32615

0 32615

SCHEDULE : 4

Unsecured Loans

Bills discounted from Bank of India 83492 0

83492 0

(CONSOLIDATED)

452 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

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46

SCHEDULES CONTINUEDQuantity (Nos.) Amount (Rupees ’000)As at As at As at As at

31.03.2010 31.03.2009 31.03.2010 31.03.2009SCHEDULE : 6

Investments — Long Term (At cost) :

(1) Held as on 31.03.2010

A. QUOTED – NON TRADE

I. MUTUAL FUNDS:

Units of Rs. 10/– each, fully paid upS.B.I.MAGNUM EQUITY FUND – DIVIDEND 0.000 4500.000 0 488HDFC CASH MANAGEMENT SAVINGS PLUS – WEEKLY DIVIDEND 15017.922 235715.102 151 2361RELIANCE DIVERSIFIED POWER SECTOR FUND – DIVIDEND 0.000 395849.400 0 21265LOTUS INDIA AGILE FUND – DIVIDEND 0.000 4889975.550 0 50000KOTAK INDO WORLD INFRASTRUCTURE FUND – DIVIDEND 0.000 11000000.000 0 110000HDFC MID–CAP OPPORTUNITIES FUND – DIVIDEND 0.000 1500000.000 0 15000BIRLA INFRASTRUCTURE FUND – DIVIDEND 0.000 2689638.728 0 52488DSP MERRILL LYNCH INDIA T.I.G.E.R. FUND – DIVIDEND 0.000 4500222.699 0 138359RELIANCE MONEY MANAGER FUND – INSTITUTIONAL OPTION GROWTH 0.000 48306.988 0 57500RELIGARE ULTRA SHORT TERM FUND – INSTITUTIONAL GROWTH 0.000 2006839.980 0 24000HDFC CASH MANAGEMENT FUND–TREASURY ADVANTAGE PLAN 9861995.451 0.000 98887 0WHOLESALE–WEEKLY DIVIDENDHDFC CASH MANAGEMENT FUND–TREASURY ADVANTAGE 76930.669 0.000 771 0PLAN–RETAIL–WEEKLY DIVIDENDKOTAK SELECT FOCUS FUND– DIVIDEND 3370464.547 0.000 34463 0

II. EQUITY SHARES, EACH FULLY PAID UPAIA ENGINEERING LTD. of Rs. 2/– 0 39965 0 12137APOLLO TYRES LTD. of Re. 1/– 0 58272 0 1145APTECH LTD. of Rs.10/– 120000 0 22278 0AXIS BANK LTD. of Rs. 10/– 0 5708 0 3563BANK OF BARODA of Rs. 10/– 0 20270 0 5128BHARAT HEAVY ELECTRICALS LTD. of Rs. 10/– 43800 0 110279 0BHARAT PETROLEUM CORPORATION LTD. of Rs. 10/– 0 12601 0 4387BHARTI AIRTEL LTD. of Rs. 10/– 0 32381 0 19806BHARTI SHIPYARD LTD. of Rs. 10/– 0 19505 0 1287BIOCON LTD. of Rs. 5/– 0 35014 0 8058BLUE STAR LTD. of Rs. 2/– 0 50000 0 2527CROMPTON GREAVES LTD. of Rs.2/– 0 53336 0 12438DISHMAN PHARMA & CHEMICAL LTD. of Rs.2/– 0 22306 0 6920EVEREST KANTO CYLENDAR LTD. of Rs. 2/– 0 32010 0 8383HCL TECHNOLOGIES LTD. of Rs. 2/– 0 66159 0 7107GMR INFRASTRUCTURE LTD. of Rs. 2/– 12000 0 878 0HIMATSINGKA SEIDE LTD. of Rs. 5/– 0 125000 0 15945ICICI BANK LTD. of Rs. 10/– 0 46668 0 47904IDFC LTD. of Rs. 10/– 0 33453 0 2380INDOCO REMEDIES LTD. of Rs. 10/– 0 7926 0 1942INFOSYS TECHNOLOGIES LTD. of Rs. 5/– 5000 4902 13946 8967IPCA LABORATORIES LTD. of Rs. 10/– 0 12576 0 6807ITC LTD. of Re. 1/– 0 20299 0 0JAMMU & KASHMIR BANK of Rs. 10/– 0 10597 0 3611JAIPRAKASH ASSOCIATES LTD. of Rs. 2/– 138000 0 22123 0KEC INTERNATIONAL LTD. of Rs. 10/– 0 15201 0 8840LARSEN & TOUBRO LTD. of Rs. 2/– 54200 23711 91978 19203MAHINDRA & MAHINDRA of Rs.5/– 10000 0 5265 0MPHASIS LTD. of Rs.10/– 17000 0 11141 0NHPC LTD. of Rs. 10/– 167396 0 6026 0

(CONSOLIDATED)

472 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0


31.03.2010 31.03.2009 31.03.2010 31.03.2009SCHEDULE : 6

PANTALOON RETAIL (I) LTD. of Rs. 2/– 0 36542 0 5811PATNI COMPUTER SYSTEM LTD. of Rs. 2/– 0 30673 0 3136PRAJ INDUSTRIES LTD. of Rs. 10/– 0 72040 0 4882RELIANCE CAPITAL LTD. of Rs. 10/– 3000 20495 2745 15864RELIANCE COMMUNICATION LTD. of Rs. 5/– 74519 204487 47068 87429RELIANCE INDUSTRIES LTD. of Rs. 10/– 700000 619000 504309 649772RELIANCE INFRASTRUCTURE LTD. of Rs. 10/– 15000 0 17018 0RELIANCE PETROLEUM LTD. of Rs. 10/– 0 400000 0 35421RELIANCE POWER LTD. of Rs. 10/– 0 16000 0 3758SHOPPERS STOP LTD. of Rs. 10/– 13779 13779 3279 3279SIEMENS LTD. of Rs. 2/– 0 21293 0 0STATE BANK OF INDIA of Rs. 10/– 10156 32591 20781 36954STERLITE INDUSTRIES (INDIA) LTD. of Rs. 2/– 0 92931 0 86179SUN PHARMACEUTICALS INDUSTRIES LTD. of Rs. 5/– 0 7698 0 6711SUZLON ENERGY LTD. of Rs. 2/– 108835 105222 11656 8784TATA STEEL LTD. of Rs. 10/– 0 18623 0 2835TATA MOTORS LTD. of Rs. 10/– 10000 0 7433 0TCS LTD. of Re. 1/– 12000 26104 9477 17418THERMAX LTD. of Rs. 2/– 0 0 0 0UFLEX INDUSTRIES LTD. of Rs. 10/– 508726 508726 53160 53160UNITECH LTD. of Rs. 10/– 75000 0 8187 0UNITED BEWERIES LTD. of Re. 1/– 0 151258 0 7699UNITED PHOSPHOROUS LTD. of Re. 2/– 0 85490 0 13559ZEE ENTERTAINMENT LTD. of Re. 1/– 0 58641 0 12458ZEE NEWS LTD. of Re. 1/– 0 160449 0 6884

III. DEBENTURES & BONDS :6.6 % TAX FREE UTI ARS BONDS of Rs. 100/– each. 0 218834 0 218830 % Redeemable, Non–convertible Debentures of DSP Merrill Lynch of Rs. 100000/– each. 980 980 98000 98000Aggregate Cost TOTAL (A) 1201299 1861822Aggregate Market Value 1389278 1693621

B. UNQUOTEDI. NON TRADE

(a) Capital Contribution in India Growth Fund 48088 46588(b) Application Money for Shares & Units of Mutual Fund 748842 1645342

II. TRADE(a) Investments in Equity Shares of other Companies, each Fully paid up

BHOJESHWAR REALTORS PRIVATE LTD. of Rs.10/– 10000 10000 100 100HARA PARVATI REALTORS PVT. LTD. Of Rs. 10/– 12750 0 128 0REAL GRIHA NIRMAN PRIVATE LTD. of Rs.10/– 10000 10000 100 100SHUBHADRA REALTORS PRIVATE LTD. of Rs.10/– 10000 10000 100 100SANKHYA REALTORS PRIVATE LTD. of Rs.10/– 10000 10000 100 100SPPL HOTELS PRIVATE LTD. of Rs.10/– 127500 229500 1275 2295TAURUS AGILE TECHNOLOGY CORPORATION 1650000 1650000 100007 100007PRIVATE LTD. of Rs.10/–

(b) Investment in Preference Shares of other companies.001% Optionally Convertible Redeemable Preference Shares of 802486 1106701 76670 55355SPPL Hotels Pvt Ltd. of Rs.10/–.001% Optionally Convertible Redeemable Preference Shares of 707880 0 33572 0HARA PARVATI REALTORS Pvt Ltd. of Rs.10/–

TOTAL (B) 1008982 1849987TOTAL (A+B) 2210281 3711809

(CONSOLIDATED)

48

(CONSOLIDATED)SCHEDULES CONTINUED

For the year ended 31.03.2010Quantity Purchase Sale

SCHEDULE : 6 (Nos.) (Rupees ’000)

(2) Purchased & Sold During the Financial Year :

I. Equity Shares, each fully paid up

ADANI ENTERPRISES LTD. of Re.1/– 90000 37942 42638

APTECH LTD. of Rs.10/– 42500 7010 7510

BANK OF INDIA of Rs. 10/– 15000 4894 5271

BHARAT HEAVY ELECTRICALS LTD. of Rs. 10/– 4650 9975 10542

BHARTI AIRTEL LTD. of Rs.5/– 46180 18501 14629

CASTROL (INDIA) LTD. of Rs.10/– 14000 7892 8737

CENTURY TEXTILE & INDUSTRIES LTD. of Rs. 10/– 142000 65942 73223

CUMMINS INDIA LTD. of Rs.2/– 15000 5045 6051

DEEPAK FERTILISER & PETRO. CORPORATION of Rs.10/– 49000 5095 5325

DEWAN HOUSING FINANCE CORPORATION LTD. of Rs.10/– 35652 4655 7218

DISHMAN PHARMA & CHEMICALS LTD. of Rs.2/– 36131 3784 9630

DIVI’S LABORATORIES LTD. of Rs.2/– 18823 9040 12607

FINANCIAL TECHNOLOGIES LTD. of Rs.2/– 3400 5008 4951

GAMMON INDIA LTD. of Rs.2/– 37301 4748 6204

GEODESIC INFORMATION SYSTEMS LTD. of Rs.2/– 83011 9125 11148

HINDALCO INDUSTRIES LTD. of Re.1/– 200000 24704 27692

HINDUSTAN CONSTRUCTION COMPANY LTD. of Re.1/– 113881 12153 17254

HINDUSTAN DORR OLIVER LTD. of Rs.2/– 19000 1859 2020

HT MEDIA LTD. of Rs.2/– 89747 8689 13253

INDIABULLS FINANCIAL SERVICES LTD. of Rs.2/– 81116 12884 11088

INDIABULLS REAL ESTATE LTD. of Rs.2/– 50521 8686 13418

INDIA INFOLINE LTD. of Rs.2/– 48813 6223 6508

INFOSYS TECHNOLOGIES LTD. of Rs.5/– 3177 4860 6619

IRB INFRASTRUCTURE & DEVELOPERS LTD. of Rs.10/– 58271 6037 8355

ITC LTD. of Re.1/– 45165 8988 11157

J & K BANK LTD. of Rs.10/– 12339 5318 7126

JINDAL STEEL & POWER LTD. of Re.1/– 20500 13040 13864

MAHINDRA & MAHINDRA LTD. of Rs.5/– 20000 20683 20935

MIND TREE LTD. of Rs.10/– 11261 5925 7730

MUNDRA PORT & SEZ LTD. of Rs.10/– 18000 11158 12669

NAGARJUN CONSTRUCTIONS LTD. of Rs.2/– 32814 4483 5609

PARSVNATH DEVELOPERS LTD. of Rs.10/– 66866 8440 8384

PETRONET LNG LTD. of Rs.10/– 140183 9837 10703

PUNJAB NATIONAL BANK of Rs. 10/– 31000 24748 26619

PANTALOON RETAIL DVR ORDINARY of Rs.2/– 31998 6216 7568

RAIN COMMODITIES LTD. of Rs.10/– 60000 9462 10364

RELIANCE CAPITAL LTD. of Rs.10/– 10638 9646 9458

RELIANCE COMMUNICATION LTD. of Rs.5/– 42975 10037 7472

RELIANCE INFRASTRUCTURE LTD. of Rs.10/– 12097 12482 13716

SHREE RENUKA SUGAR LTD. of Re.1/– 80000 11268 11614

SIEMENS LTD. of Rs.2/– 25000 15060 16260

SINTEX INDUSTRIES LTD. of Rs.2/– 46500 10437 11633

STERLITE INDUSTRIES LTD. of Re.1/– 39646 26959 32638

SUN PHARMACEUTICALS INDUSTRIES LTD. of Rs.5/– 5032 5745 6886

SUZLON ENERGY LTD. of Rs.2/– 69043 6827 6244

TATA MOTORS LTD. of Rs.10/– 15100 8496 9340

TATA MOTORS LTD. (DVR) of Rs.10/– 20651 10432 10085

492 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0


Quantity Purchase SaleSCHEDULE : 6 (Nos.) (Rupees ’000)

TATA STEEL LTD. of Rs.10/– 37500 17969 19577

TCS LTD. of Re.1/– 16500 0 9248

ULTRATECH CEMENT LTD. of Rs.10/– 40402 34760 36240

UNITED BREWERIES LTD. of Re.1/– 49817 10086 13834

WYETH LTD. of Rs.10/– 17550 11257 12608

ZEE ENTERTAINMENT LTD. of Re.1/– 17407 1989 3709

ZEE NEWS LTD. of Re. 1/– 53598 2419 3375

II. Units of Rs. 10/– each, fully paid up

RELIGARE BUSINESS LEADER FUND–DIVIDEND 2542987.141 26002 26444

RELIANCE REGULAR SAVINGS FUND–EQUITY–DIVIDEND 898505.927 16411 16880

BIRLA SUNLIFE FRONTLINE EQUITY FUND –PLAN –A–DIVIDEND 1603810.718 34963 33036

ICICI PRUDENTIAL DISCOVERY FUND–DIVIDEND 1261829.653 20000 21309

SBNPP SMILE– DIVIDEND 938288.423 13500 12332

SBNPP CAPEX OPPURTUNITIES– DIVIDEND 989819.005 14000 14190

HDFC TOP 200 FUND – DIVIDEND 241487.563 10000 10239

HDFC EQUITY FUND – DIVIDEND 259625.620 10000 10113

DSP BLACKROCK INDIA T.I.G.E.R FUND –REGULAR PLAN–DIVIDEND 595425.072 9000 9491

RELIANCE DIVERSIFIED POWER SECTOR FUND–RETAIL –DIVIDEND 28910.154 734 1198

BIRLA SUNLIFE INFRASTRUCTURE FUND–PLAN –A –DIVIDEND –REINVESTMENT 244735.099 2690 2915

PRINCIPAL LARGE CAP FUND –GROWTH PLAN 620471.015 13700 13814

RELIGARE ULTRA SHORT TERM FUND– INSTITUTIONAL– GROWTH 7086889.906 86311 86594

RELIGARE ULTRA SHORT TERM FUND– REGULAR – GROWTH 2132690.869 26132 26164

RELIANCE MONEY MANAGER FUND – INSTITUTIONAL –GROWTH 677970.861 835782 838413

RELIANCE MONEY MANAGER FUND – RETAIL –GROWTH 19335.277 23502 23543

HDFC CASH MANAGEMENT FUND–TREASURY ADVANTAGE 4172927.119 41830 41845–RETAILS –WEEKLY DIVIDEND

HDFC CASH MANAGEMENT FUND–TREASURY ADVANTAGE 6248700.721 62624 62650–WHOLESALE –WEEKLY DIVIDEND

HDFC CASH MANAGEMENT FUND–TREASURY ADVANTAGE –RETAILS– GROWTH 289795.567 5741 5790

IDFC MONEY MANAGER FUND–TREASURY PLAN –WEEKLY DIVIDEND 12147718.419 121854 121823

IDFC MONEY MANAGER FUND–INSTITUTIONAL PLAN B –WEEKLY DIVIDEND 2398344.010 24036 24025

IDFC MONEY MANAGER FUND–INSTITUTIONAL PLAN A –WEEKLY DIVIDEND 365718.307 3665 3663

BIRLA SUNLIFE SAVINGS FUND–INSTITUTIONAL–GROWTH 2063935.871 34949 34963

BIRLA SUNLIFE SAVINGS FUND–RETAIL–GROWTH 1975500.176 33036 33217

KOTAK FLOATER LONG TERM –GROWTH 9316848.448 131775 132337

ICICI PRUDENTIAL FLEXIBLE INCOME PLAN PREMIUM GROWTH 1277555.428 21309 21453

SBNPP ULTRA ST FUND RETAIL – GROWTH 2221486.163 26522 26678

HDFC CASH MANAGEMENT FUND– TREASURY –ADVANTAGE 163997.975 32151 32278PLAN –RETAIL –GROWTH

PRINCIPAL ULTRA SHORT TERM FUND –GROWTH 1196052.870 13814 13891LICMF– SAVINGS PLUS FUND–GROWTH 11868276.098 170000 170095

(CONSOLIDATED)

50

(CONSOLIDATED)As at As at

31.03.2010 31.03.2009(Rupees ’000) (Rupees ’000)

SCHEDULE : 7Inventories — (At cost or net realisable value whichever is lower) :

Trading Items 17678 4119

Total 17678 4119

SCHEDULE : 8Sundry Debtors (Unsecured, Considered Good) :(a) Debts outstanding for over six months 0 0(b) Other debts 1095197 1095197 1246095 1246095

Total 1095197 1246095

SCHEDULE : 9Cash & Bank Balances :(a) Cash in hand 8871 8103(b) Balances with Scheduled Banks

(i) In Current Accounts & EEFC Account 292067 69562(ii) In Unclaimed Dividend Accounts 2142 2159(iii) In Fixed Deposits (Including interest accrued but not due) 808699 1102908 1953433 2025154

Total 1111779 2033257

SCHEDULE : 10Other Current Assets :Interest Accrued on InvestmentsAccrued and due 0 722

Total 0 722

SCHEDULE : 11Loans and Advances – (Unsecured, Considered Good) :(a) Security Deposits 1994 1093(b) Advances recoverable in cash or in kind or for value to be 1963682 409108

received or pending adjustments(c) Due from Pan Parag India Ltd. 0 22151

(Maximum amount due during the year Rs. 221.52 Lacs (P. Y. Rs. 1415.47 Lacs))(d) Deposit with Income Tax Department 367247 175914

Total 2332923 608266

SCHEDULE : 12Current Liabilities:(a) Sundry Creditors 1116154 1255812(b) Advance against Orders 304 1379836(c) Due to Directors and their Relatives 650 149799(d) Investor Education & Protection Fund (which shall be credited by the 2142 2159

amount of Unclaimed Dividend, wherever applicable)(e) Outstanding Liabilities 35413 35723

Total 1154663 2823329

512 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

(CONSOLIDATED)SCHEDULES CONTINUED

As at As at31.03.2010 31.03.2009


SCHEDULE : 13Provisions:(a) Proposed Final Dividend including Dividend Tax Rs. 220.30 Lacs (P. Y. Rs. 112.71 Lacs) 154669 77591(b) Provision for Tax 348281 192620

Total 502950 270211

For the Year For the YearEnded 31.03.2010 Ended 31.03.2009

SCHEDULE : 14 (Rupees ’000) (Rupees ’000)Sales :(a) Pan Masala & its Preparations 0 708723(b) Zarda 0 4205(c) Packaged Drinking Water 0 6868(d) Trading Items 5722025 1745346

Total 5722025 2465142

SCHEDULE : 15Increase (+) / Decrease (–) in stock :Opening Stock:

Finished Goods 0 40481Semi–Finished Goods (Work in process) 0 0 56 40537

Less : Stock transferred on demerger pursuant to the scheme of arrangement 0 26547

0 –13990

SCHEDULE : 16Other Income :(a) Interest Earned on Bank Deposits & Others (Gross, T.D.S. 148364 92535

Rs.33895557/– (P. Y. Rs 14114389/–))(b) Income From Investments – Long Term, Non Trade 29360 10942

(Gross, T.D.S. Rs. 985479/– (P. Y. Rs Nil /–))(c) Franchise Receipts (Gross, T.D.S. Rs.Nil (P. Y. Rs. 532966/–)) 0 7593(d) Profit on relinquishment of Rights (Gross, TDS Rs.41079312/–) 410793 0(e) Profit on Sale of Long Term, Non Trade Investments–Net of expenses 344696 69763(f) Miscellaneous Receipts 25349 73929

Total 958562 254762

SCHEDULE : 17Materials Consumed :(A) Raw & Packing Materials Consumed :(i) Opening Stock (a) Raw Material 0 13417

(b) Packing Material 0 0 15974 29391(ii) Add: Purchases (a) Raw Material 0 141887

(b) Packing Material 0 0 60489 202376

0 231767(iii) Less: Stock transferred on demerger pursuant to the scheme of arrangement 0 25493

Raw & Packing Materials Consumed 0 206274(B) Consumption of Trading Items 5288449 1743152

Material Consumed Total 5288449 1949426

52

SCHEDULES CONTINUEDFor the Year For the Year

Ended 31.03.2010 Ended 31.03.2009(Rupees ’000) (Rupees ’000)

(CONSOLIDATED)

SCHEDULE : 18Manufacturing, Selling, Distribution and Administrative Expenses :Power & Fuel 3261 10264Payments to & Provisions for Employees :

Salaries, Wages and Bonus 12160 19273Contribution to Provident and other Funds 477 2395Gratuity 72 3444Staff welfare and Other Expenses 1911 14620 3259 28371

General Insurance 1159 1236Transit Insurance 301 244Demurrage Charges 57762 0Consumption of Stores & Perfumes 0 179138Freight & Cartage Inward 25691 6765Rent 6993 2485Rates & Taxes 4388 11381 3683 6069Repairs :

Building 1330 391Machinery 0 1947Others 5868 7198 2290 4628

Freight, Cartage and Octroi Outward 186467 9755Advertisement & Publicity 267 61396Selling & Distribution Expenses 36509 16687Custom Duty Charges 40370 0Travelling & Conveyance 9519 20011Interest & Bank Charges 36045 8937Miscellaneous Expenses 63519 –29931Commercial Taxes 0 5324Loss on Sale of Fixed Assets 1501 6311Payment to Auditors :

Statutory Audit Fee 625 285Tax Audit Fee 13 638 12 297

Payment to Directors :Remuneration 2980 3180Sitting Fee 16 8Commission 0 2236

Total 499204 340926

532 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

SCHEDULES CONTINUED

SCHEDULE : 19

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS :


(1) Basis of Preparation :

The consolidated financial statements are prepared in accordance with Accounting Standard–(AS) 21 on Consolidated Financial Statementsissued by the Institute of Chartered Accountants of India. The Consolidated Financial Statement comprise the financial statement ofKothari Products Limited and its subsidiaries, which have been consolidated on a line–by–line basis by adding together the book valueof like items of assets, liabilities, income and expenses, after eliminating intra–group balances.


The Financial statements are prepared under the historical cost convention on accrual basis of accounting, in accordance with GenerallyAccepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India andrelevant provisions of the Companies Act,1956.


All fixed assets are stated at cost, comprising of purchase price, duty, levies and any direct attributable cost of bringing the assets to theirworking condition for the intended use.

Depreciation is provided according to straight line method at the rates prescribed by the Schedule XIV to the Companies Act, 1956 andProvision for impairment loss is recognised to the extent by which the carrying amount of an asset exceeds its recoverable amount.

The excess of cost of investment in the Subsidiary Company over the Company’s portion of equity of the subsidiary at the date of investmentmade is recognised as Goodwill which is not considered for amortisation.

(4) Investments :


(5) Inventories :

Inventories are valued at cost or net realisable value whichever is lower. Cost of Raw Material, Packing Material, Stores & Perfumes andTrading Items is arrived at FIFO basis.

Cost of Finished Goods & Work in Process is arrived on the basis of weighted average cost of raw material, packing material and the costof conversion thereof for bringing the inventories to their intended use.

(6) Sales :

Sales are recognised on despatch of goods to the customers and are recorded including excise duty but excluding sales tax / value added tax.

(7) Foreign Currency Transactions :Foreign currency transactions are accounted at the exchange rates prevailing at the date of the transaction. Gains / Losses resulting fromthe settlement of such transactions and from conversion of monetary assets and liabilities denominated in foreign currencies are recognisedin the profit and loss account.

(8) Employee Retirement Benefits :

a. Company’s contribution to Employees’ Provident Fund is charged to Profit and Loss Account.b. Company has taken a Group Gratuity Cash Accumulation Policy from LIC for its employees including directors and the premium

for the policy is charged to Profit and Loss Account.


(1) Contingent Liabilities : 31.03.2010 31.03.2009(Rs. ’000) (Rs. ’000)

(A) Claims not acknowledged as debt –Income Tax 103117 100014

(B) Guarantee given for Demerged Company backed by FDRs 0 42141(C) Guarantee given by banks on behalf of company 976488 0(D) Guarantee given to UCO Bank, Kolkata for SPPL Hotels Pvt. Ltd. of Rs. 151,00,00,000/– (Previous year Rs. Nil).(E) Bank Guarantee Given on behalf of Pan Parag India Limited in favour of the Registrar National Disputes Redressal Commission,

New Delhi, for Rs.4158596/– (Previous Year – 4158596), which is secured by FDRs of Pan Parag India Limited.

(CONSOLIDATED)

54

SCHEDULES CONTINUED

(2) Additional Information Pursuant to the Provisions of Paragraphs 3, 4C and4D of Part II of Schedule VI of the Companies Act, 1956.

(A) Class of Goods and Capacity:31.03.2010 31.03.2009

Class of Goods manufactured :– Capacity CapacityLicensed Installed Licensed Installed

Pan Masala and its Preparations N.A. N.A. N.A. N.A.Zarda N.A. N.A. N.A. N.A.Packaged Drinking Water N.A. N.A. N.A. N.A.Ice Cube N.A. N.A. N.A. N.A.

(B) Raw Materials Consumed : (Rs.’000) Tons (Rs.’000) Tons(a) Betelnuts 0 0.000 98578 1161.000(b) Katha Mix 0 0.000 29370 168.420(c) Tobacco 0 0.000 6694 108.000(d) Packaged Drinking Water 0 — 2991 —(e) Other Materials 0 — 2055 —

(C) Finished Goods : (Rs. ’000) Tons/Cases/Nos. (Rs. ’000) Tons/Cases/Nos.Opening Stock :(a) Pan masala and its preparations 0 0.000 40439 52.269(b) Zarda 0 0.000 0 0.000(c) Packaged Drinking Water (in cases) 0 0 41 750(d) Papad 0 0.000 10 0.187(e) Jewellery – Gold 0 0.000 3034 0.003(f) Bubble Top (in nos) 0 0 48 735(g) Washing Powder & Cake 0 0.000 22 1.193(h) Flavoured Supari 0 0.000 170 1.338(i) Water Coolers (in nos.) 0 0 120 27(j) Iron Ore Fines 4119 2999.750 0 0.000

Production :(a) Pan masala and its preparations — — — 1277.269(b) Zarda — — — 17.618(c) Packaged Drinking Water (in cases) — — — 108560(d) Ice Cube — — — 12.038

Purchases :(a) Bubble Top (in nos) 0 0 53 847(b) Papad 0 0.000 62 1.130(c) Washing Powder & Cake 0 0.000 6837 333.682(d) Iron Ore Fines 886707 335698.846 53857 29836.850(e) Flavoured Supari 0 0.000 12121 14.549(f) Water Coolers (in nos) 0 0 48 10(g) Convertor Shell (in nos) 0 0 117819 1(h) Cotton Overall (in nos) 107416 8000 0 0(i) DELL XPS Series Note Book (in nos) 123613 2800 0 0(j) Convertor Equipment (in nos) 193268 1 0 0(k) Working Wheel for Ventilator (in nos) 215394 2 0 0(l) Water Cleaning & Processing Plant (in nos) 218196 1 0 0(m) Bearing Sheel for Convertor (in nos) 57474 2 0 0(n) Diesel Generator Cast Mine (in nos) 205331 3 0 0(o) Di Octyle Phthalate (DOP) 0 0.000 18906 224.000(p) Hidrocarbon Solvent (W.S.) 0 0.000 14443 251.440(q) PVC Rasin Grade LS 100 0 0.000 30445 540.000(r) PVC WS 1000S 14061 363.000 21483 396.000(s) PP F1611 2766 48.000 0 0.000(t) PVC–S–65–D 35779 831.000 0 0.000(u) PVC RESIN–P225–2P15 12675 300.000 0 0.000(v) PVC LACOVYL S 6703 9180 153.000 0 0.000(w) VINILEN–140–PVC–RESIN 43717 1122.000 0 0.000(x) Polypropelene Granuels Film 4744 82.500 0 0.000

(CONSOLIDATED)

552 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

(y) Crude Palm Oil 381169 11262.664 0 0.000(z) Mixed Hydro Carbon Oil 3723 193.240 0 0.000(aa) Heavy Metal Scrap 280450 17673.706 0 0.000(ab) Aluminium Scrap 414 7.070 0 0.000(ac) Brass Honey Scrap 89837 530.130 0 0.000(ad) Zinc Diecast Scrap 1255 18.150 0 0.000(ae) Citric Acid Monohydrate 9206 250.000 0 0.000(af) Mozambique Toor 4601 100.000 0 0.000(ag) Yellow Peas 145000 10000.000 0 0.000(ah) Ispat Super DRI 2599 137.000 0 0.000(ai) Pig Iron (BG) 65736 2988.120 0 0.000(aj) Maize 0 0.000 676373 36700.000(ak) Soyabeens 775092 37159.855 499726 19233.000(al) Soyabeen Oil 776287 18371.000 0 0.000(am) Sunflower Seed Oil 0 0.000 250097 5500.000(an) Machinery (in sets) 314867 3 0 0(ao) Scrap 136699 10016.000 0 0.000(ap) Rice 91559 5248.000 0 0.000(aq) Pulses 71070 2217.000 0 0.000(aq) Bitumen 15774 880.000 0 0.000(ar) Palm Oil 6349 145.000 0 0.000(as) Others 0 0 57114 –

Sales :(a) Pan masala and its preparations 0 0.000 708723 1282.063(b) Zarda 0 0.000 4205 14.624(c) Packaged Drinking Water (in cases) 0 0 6761 109270(d) Ice Cube 0 0.000 107 12.038(e) Bubble Top (in nos) 0 0 23 154(f) Papad 0 0.000 100 1.282(g) Washing Powder & Cake 0 0.000 8974 333.274(h) Iron Ore Fines 1172542 338698.596 53671 26837.100(i) Flavoured Supari 0 0.000 12318 15.887(j) Water Coolers (in nos) 0 0 34 7(k) Convertor Shell (in nos) 0 0 121030 1(l) Cotton Overall (in nos) 110803 8000 0 0(m) DELL XPS Series Note Book (in nos) 126998 2800 0 0(n) Convertor Equipment (in nos) 199161 1 0 0(o) Working Wheel for Ventilator (in nos) 224100 2 0 0(p) Water Cleaning & Processing Plant (in nos) 225829 1 0 0(q) Bearing Shell for Convertor (in nos) 59658 2 0 0(r) Diesel Generator Cast Mine (in nos) 211491 3 0 0(s) Di Octyle Phthalate (DOP) 0 0.000 16088 224.000(t) Hidrocarbon Solvent (W.S.) 0 0.000 6701 251.440(u) PVC Rasin Grade LS 100 0 0.000 26695 540.000(v) PVC WS 1000S 16788 363.000 0 0.000(w) PP F1611 2875 48.000 0 0.000(x) PVC–S–65–D 38267 831.000 0 0.000(y) PVC RESIN–P225–2P15 13020 300.000 0 0.000(z) VINILEN–140–PVC–RESIN 44362 1068.000 0 0.000(aa) Polypropelene Granuels Film 5255 82.500 0 0.000(ab) Crude Palm Oil 398018 11262.664 0 0.000(ac) Mixed Hydro Carbon Oil 3913 193.240 0 0.000(ad) Heavy Metal Scrap 307470 17673.706 0 0.000(ae) Aluminium Scrap 465 7.070 0 0.000(af) Brass Honey Scrap 93437 530.130 0 0.000(ag) Zinc Diecast Scrap 1292 18.150 0 0.000(ah) Citric Acid Monohydrate 8386 228.000 0 0.000(ai) Mozambique Toor 4633 100.000 0 0.000(aj) Yellow peas 149650 10000.000 0 0.000

SCHEDULES CONTINUED(CONSOLIDATED)

31.03.2010 31.03.2009

(Rs. ’000) Tons/Cases/Nos. (Rs. ’000) Tons/Cases/Nos.

56

(CONSOLIDATED)

(ak) Ispat Super DRI 2717 137.000 0 0.000(al) Pig Iron (BG) 66035 2988.120 0 0.000(am) Maize 0 0.000 683129 36700.000(an) Soyabeens 782840 37159.855 504727 19233.000(ao) Soyabeen Oil 784052 18371.000 0 0.000(ap) Sunflower Seed Oil 0 0.000 252598 5500.000(aq) Machinery (in sets) 318294 3 0 0(ar) Scrap 159574 10016.000 0 0.000(as) Rice 98157 5248.000 0 0.000(at) Pulses 69356 2142.000 0 0.000(au) Bituman 16084 880.000 0 0.000(av) Palm Oil 6503 145.000 0 0.000(aw) Others 59258 –(inclusive of shortage, wastages & net of returns)

Stock Transfer (Pursuant to the Scheme of Arrangement):(a) Pan masala and its preparations — — 25279 47.475(b) Zarda — — 948 2.994(c) Packaged Drinking Water (in cases) — — 2 40(d) Papad — — 2 0.035(e) Jewellery – Gold — — 3034 0.003(f) Bubble Top (in nos) — — 91 1428(g) Washing Powder & Cake — — 31 1.601(h) Water Coolers (in nos) — — 134 30(i) PVC WS 1000S — — 11902 396.000

Closing Stock :(a) Iron Ore Fines 0 0.000 4119 2999.750(b) VINILEN–140–PVC–RESIN 2730 54.000 0 0.000(c) Citric Acid Monohydrate 906 22.000 0 0.000(d) PVC LACOVYL S 6703 9201 153.000 0 0.000(e) Pulses 4841 75.000 0 0.000

(D) Value & Percentage of Imported Materials Consumed :Rs.’000 (%) Rs.’000 (%)

Raw Materials Consumed :Imported 0 0.00 0 0.00Indigenous 0 0.00 139688 100.00

0 0.00 139688 100.00Stores & Perfumes Consumed :Imported 0 0.00 6838 3.82Indigenous 0 0.00 172300 96.18

0 0.00 179138 100.00

(E) Value of Imports (C.i.f.basis) :Trading Items 1764223 1639040

(F) Expenditure in Foreign Currency :(a) Travelling 496 496(b) Fixed Assets 0 7779(c) Trading Items 1764223 1639040

(G) Earning in Foreign Currency :Export of goods on F.O.B. Basis 3893124 1977181

(H) Amount Remitted During The Year in ForeignCurrency on Account of Dividend : Nil Nil

3) Payments to Auditors :(a) As Auditors 625 285(b) For Tax Audit 13 12(c) For Consultancy Charges to the Partners of the Firm 1750 1750


(Rs. ’000) Tons/Cases/Nos. (Rs. ’000) Tons/Cases/Nos.

572 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

4) Payments to Directors :(a) Managerial Remuneration 2980 3180(b) Gratuity 95 95(c) Perquisites 1612 1612(d) Commission 0 15752(e) Sitting Fees 8 13

16 20652

5) Segment Information ( Information about Business Segments) :For the year ended For the year ended

31.03.2010 31.03.2009Particulars (Rupees ’000) (Rupees ’000)

(A) SEGMENT REVENUE (NET SALES/ INCOME)(a) Pan Masala & Gutkha 0 712928(b) Packaged Drinking Water 0 6868(c) Trading Items 5722025 1745346(d) Real Estate etc. 0 0

5722025 2465142

(B) SEGMENT RESULTS (PROFIT(+) / LOSS(–) BEFORE TAX)(a) Pan Masala & Gutkha 0 68388(b) Packaged Drinking Water 0 –8109(c) Trading Items 94485 85677(d) Real Estate etc. 796702 84863

Net Profit Before Exceptional Item 891187 230819(e) Interest Expense 13786 12629(f) Exceptional Items – Income 0 0

Net Profit After Exceptional Item 877401 218190

(C) CAPITAL EMPLOYED (SEGMENT ASSETS – SEGMENT LIABILITIES) As at As at31.03.2010 31.03.2009

(a) Pan Masala & Gutkha 0 0(b) Packaged Drinking Water 0 0(c) Trading Items 2414345 262901(d) Real Estate etc. 3250480 4847994(Capital employed is net of inter–segmental transfer)

5664825 5110895

Note : Pursuant to the Scheme of Arrangement, sanctioned by Hon’ble High Court of Allahabad, Pan Masala, Packaged Drinking Water andTrading Divisions of the Company have been transferred to Pan Parag India Limited w.e.f. 18th November, 2008. However the Company hasrestarted its Trading Division after 18th Novemebr, 2008.

(6) Related Party Disclosures in accordance with the Accounting Standards (AS–18) ‘Related Party Disclosure’, issued by the Institute ofChartered Accountants of India are as under :

(i) Names of related parties and description of relationship :

(A) Key Management Personnel & their Relatives :(a) Shri M.M. Kothari – Chairman (upto 30th January, 2010)(b) Shri Deepak Kothari – Chairman & Managing Director (w.e.f. 30th January, 2010), earlier Managing Director(c) Shri Mitesh Kothari – Executive Director(d) Smt. Sharda M. Kothari(e) Smt. Arti Kothari(f) Smt. Reeta Shah(g) Mitesh Kothari HUF(h) Smt. Urvi Kothari

(B) Associate Companies / Firms :(a) Kothari Detergents Limited(b) Ekta Flavours Pvt. Limited(c) Dham Securities Pvt. Limited(d) Lohewala Construction Pvt. Limited(e) DMK Holdings Pvt. Limited(f) MSR Properties Pvt. Limited(g) SPPL Hotels Pvt. Limited(h) Pan Parag India Limited

31.03.2010 31.03.2009(Rs. ’000) (Rs. ’000)

58

(ii) Summary of Transactions : (Rs.’000)

Particulars Key Management Personnel Associate Companies / Firms& Relatives

For the year ended /As on For the year ended /As on31.03.2010 31.03.2009 31.03.2010 31.03.2009

Directors’ Remuneration etc. 2980 5416 — —On Account of Expenses 0 72 540 1964On Account of Income – Rent 0 0 1212 462Sale of Equity Shares 0 0 0 0Dividend Paid 42391 42391 7333 7333Outstanding (Payable) 649 149799 0 22151

Note : Since no amount is considered as bad & doubtful, neither provision is made for the same nor amount written off.

(7) Earning Per Share :

2009–2010 2008–2009

(a) Profit after tax (Profit attributable to Equity Shareowners) 712551 187621(b) Weighted average nos. of equity shares for Basic / Diluted EPS 6631970 6631970(c) Nominal Value of Equity Share (in Rs.) 10.00 10.00(d) Basic / Diluted Earning per Equity Share (in Rs.) 107.43 28.29

(8) The deferred tax liability (net) amounting to Rs.6815826/– (Previous year Rs. 4400000/–) is on account of time difference of Depreciation ofRs. 7607955/– (Previous Year 5200000/–) and Deferred Tax assets for Property Tax Provision amounting to Rs. 800000/– (Previous Year –800000/–) is on account of provision of Property Tax, which are capable of being reversed in one or more subsequent years. Further, thedeferred tax liability amounting to Nil (Previous Year Rs. 12080820/– has been transferred to Pan Parag India Limited, pursuant to ‘Scheme ofArrangement’.

(9) In terms of Accounting Standard 28 “Impairment of Assets” Issued by the Institute of Chartered Accountants of India, provision for impairmentloss on assets for the year is not required.


(11) Fixed Deposits includes Rs. 701241684/– (Previous year Rs. 1575335742/–) given as earnest money etc. and pledged with the banks againstguarantees issued by them on our behalf to Government departments as security deposit.

(12) There is no amount due to be transferred to ‘Investor Education & Protection Fund’ maintained by the Government of India as at the year end.

(13) Sundry creditors do not include any due to SSI Units, based on the records and the information received from suppliers.

(14) The figures of previous year are not comparable to the figures of current year to the extent and because of the business of Pan Masala, PackagedDrinking Water and Trading Divison have been transferred to Pan Parag India Limited w.e.f 18th November, 2008. However the Company hasrestarted its Trading Division after 18th November, 2008

(15) The aforsaid consolidated financial statements comprise the financial statements of Kothari Products Limited and its wholly owned subsidiarycompanies – Sukhdham Constructions & Developers Limited, Arti Web–Developers Private Limited, MK Web–tech Private Limited, KPLExports Pvt. Limited, Kothari Products Singapore Pte. Limited and IMK Hotels Pvt. Limited.

(16) The figures of previous year have been regrouped / recast wherever considered necessary and those are not comparable with the current year’sfigures to the extent of figures of newly acquired subsidiary company.




592 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010As per the Listing Agreement (Rs. in Lacs)Particulars 2009–2010 2008–2009(A) CASH FLOW FROM OPERATING ACTIVITIES :

Net Profit before Tax & Extraordinary items 8773.97 2181.90adjustments for— Depreciation 154.93 192.92— Preliminary & Preoperative Expenses Written Off 0.44 0.80— Interest Expenses 137.86 126.29— Profit (–) / Loss on Sale of Assets 15.01 63.11— Exchange Translation Reserve on Consolidation –39.51 36.26— Profit (–)/Loss on Sale of Investments –3446.96 –697.63— Interest Income –1483.64 –939.79— Dividend Income –293.60 –4955.47 –198.48 –1416.52

Operating Profit before working capital changes 3818.50 765.38adjustments for— Trade & Other Receivables –18326.09 5992.36— Inventories –135.59 –293.55— Trade Payables –2891.17 –21352.85 14601.22 20300.03

Cash Generated from Operations –17534.35 21065.41Direct Taxes Paid –1981.02 –440.17

Net Cash flow from Operating Activities –19515.37 20625.24(B) CASH FLOW FROM INVESTING ACTIVITIES :

— Purchase of Fixed Assets –278.35 –320.23— Sale of Fixed Assets 30.90 21.30— Purchase of Investments –6457.59 –4458.15— Sale of Investments 15404.83 3534.35— Loan to Demerged Company 221.51 –221.51— Interest Received 1490.86 939.79— Dividend Received 293.60 10705.76 198.48 –305.97

Net Cash flow from Investing Activities 10705.76 –305.97(C) CASH FLOW FROM FINANCING ACTIVITIES :

— Minority Interest 0.00 0.00— Interest Paid –137.86 –126.29— Dividend Paid –663.37 –664.37— Tax on Dividend Paid –112.71 –112.71— Bills Discounted from Banks 834.92 0.00— Secured Loans –326.15 –405.17 326.15 –577.22

Net Cash used in Financing Activities –405.17 –577.22

NET CHANGES IN CASH & CASH EQUIVALENTS (A+B+C) –9214.78 19742.05Cash & Cash Equivalents – Opening Balance 20332.57 606.24Transferred on demerger as per Scheme of Arrangement 0.00 –15.72Cash & Cash Equivalents – Closing Balance 11117.79 20332.57

Note: The figures of previous year have been regrouped / recast wherever considered necessary to make them comparable with those of thecurrent year.




Membership No. 078862

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62

SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.

612 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

DIRECTORS’ REPORT

TO THE MEMBERS :

The Board of Directors of your Company feel delighted in presenting its Eighth Annual Report and Audited Accounts of the companyfor the financial year ended 31st March, 2010.

FINANCIAL PERFORMANCE

(RS. IN THOUSANDS)

FINANCIAL FINANCIALYEAR ENDED YEAR ENDED

31.03.2010 31.03.2009

Other Income 11290 153Profit(+)/Loss (–) before Taxation 9368 85Provision for Taxation 1795 NilProfit(+)/Loss (–) after Tax 7573 84Add : Balance brought forward 10255 10171

Amount available for appropriation 17828 10255

APPROPRIATIONSTransfer to General Reserve NIL NILProposed Dividend NIL NILAdditional Tax on Proposed Dividend NIL NILBalance of amount carried forward 17828 10255

17828 10255

YEARLY OVERVIEW :

The company has earned other income of Rs. 112.90 lacs by way of dividend on shares and profit on sale of long term investmentsduring the period under review against Rs. 1.53 lacs earned during the previous year. Efforts are being made to start the operations ofreal estate constructions after identifying suitable project.

DIVIDEND :

Your Directors do not recommend any Dividend for the financial year under review to conserve resources for future purposes.

DIRECTORS :

Sri M. M. Kothari & Sri Deepak Kothari, Directors of the Company, retire by rotation in the ensuing Annual General Meeting andbeing eligible offer themselves for reappointment. The Board recommends their reappointment.

SHARE CAPITAL :

The entire share capital of the Company is held by Kothari Products Ltd. and accordingly the Company is wholly owned subsidiary ofKothari Products Ltd.

DIRECTORS RESPONSIBILITY STATEMENT :

Your Directors confirm:

1. That in preparation of the Annual Accounts, the applicable accounting standards have been followed;

2. That the Directors have selected such accounting policies and made judgements and estimates that are reasonable and prudent soas to give a true and fair view of the state of affairs of the Company as at the end of the financial year ended 31.03.2010;

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with


62

the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities ;

4. That the Directors have prepared the Annual Accounts on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information under these headings is Nil.


M/s Mehrotra & Mehrotra, Chartered Accountants, Auditors of the Company, retire at the ensuing Annual General Meeting and areeligible for reappointment. There are no qualification or adverse remarks in the Auditor's Report which call for explanation by theDirectors.


There are no employees who were in receipt of remuneration as specified in Sec.217 (2A) of the Companies Act, 1956 read with TheCompanies (Particulars of Employees) Rules 1975 as amended.

ACKNOWLEDGEMENT :

Your Directors wish to place on record their appreciation for the co–operation and support extended by various Government Departments,Bankers etc..

By order of the BoardFor SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.

Sd/– Sd/–PLACE : KANPUR (DEEPAK KOTHARI) (MITESH KOTHARI)DATE : 29th May, 2010 Director Director


632 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0

COMPLIANCE CERTIFICATE

Registration No. of the Company : MH 2003–138914Nominal Capital : Rs. 10000000To,The Members,M/s SUKHDHAM CONSTRUCTIONS & DEVELOPERS LIMITED373, Konark House, Veer Savarkar RoadGround Floor, Near Sidhivinayak TemplePrabhadevi, Dadar (West), Mumbai–400028Maharashtra.

We have examined the registers, records, books and papers of M/S SUKHDHAM CONSTRUCTIONS & DEVELOPERS LIMITED(the Company) as required to be maintained under the Companies Act (the Act), and the rules made there under and also theprovisions contained in Memorandum and Articles of Association of the Company for the financial year ended on 31st March, 2010(financial year). In our opinion and to the best of our information and according to the examinations carried out by us and explanationsfurnished to us by the company, its officers and agents, we certify that in respect of the aforesaid financial year.

1) The Company has kept and maintained all registers as stated in Annexure ‘A’ to this certificate as per the provisions of theCompanies Act, 1956 and the rules made there under and all entries therein have been duly recorded.

2) The Company has filed the Forms and Returns as stated in Annexure ‘B’ to this certificate, with the Registrar of Companies,Regional Director, Central Government, Company Law Board or other authorities, where applicable, within the time prescribedand/or further time allowed with additional fee, whenever applicable, under the Act and the rules made there under.

3) The Company being an unlisted public limited company has the minimum prescribed paid up capital.

4) The Board of Directors duly met 4 times respectively on 27th June, 2009, 24th September, 2009, 19th December, 2009 and5th March, 2010 during the year under review, in respect of which meetings proper notices were given and the proceedings wereproperly recorded and signed.

5) The Company has not closed its Register of Member during the financial year being not required and question of closure ofregister of Debenture holders did not arise, as Company has no Debentures.

6) The Annual General Meeting of the company for the financial year ended on 31st March, 2009 was held on 30th September,2009 after giving due notice to the members of the company and the resolutions passed thereat were duly recorded in MinutesBook maintained for the purpose.

7) No Extra Ordinary General Meeting was held during the financial year under review.

8) The Company has not advanced any loan to its Directors and/or persons or firms or Companies referred in the Section 295 ofthe Act, as per information provided by the management of the company.

9) The Company has not entered into any contracts falling with in the purview of Section 297 of the Act as per informationprovided by the management of the company.

10) The Company has made necessary entries in the register maintained under Section 301 of the Act.

11) As there were no instances falling with in the purview of Section 314 of the Act, hence the Company has not obtained anyapprovals from the Board of Directors, Members and previous approval of Central Government, as the case may be.

12) The Company has not issued any duplicate share certificate during the financial year under review.

13) The Company has:

i) Not made any allotment / transfer/ transmission of shares or securities during the financial year under review.

ii) Not deposited any amount in a separate Bank Account as no dividend was declared during the financial year.

iii) The Company was not required to post warrants to any members of the company as no dividend was declared during thefinancial year.

iv) No amount is lying in respect of unpaid dividend application money due for refund, matured deposits, matured debenturesand interest accrued thereon.

v) Duly complied with the requirements of section 217 of the Act.


64

14) The Board of Directors of Company is duly constituted and there was no appointment of additional directors, alternate directorsand directors to fill the casual vacancies during the financial year under review.

15) The Company has not appointed any managing director/ whole time director/manager during the financial year under review.

16) The Company has not appointed any sole selling agents during the financial year under review.

17) The Company was not required to obtain the approval of Central Government, Company Law Board, Regional Director,Registrar of Companies and/or such other authorities as prescribed under the various Provisions of the Act.

18) The Directors have disclosed their interest in other firms/companies to the Board of Directors pursuant to the provisions of theAct and the rules made there under.

19) The Company has not issued any equity shares, debentures or other securities during the financial year under review.

20) The Company has not bought back any shares during the financial year under review.

21) There was no redemption of Preference shares or Debentures during the financial year under review, as the Company has noredeemable preference shares/ debentures.

22) There were no transactions necessitating the Company to keep in abeyance the right to dividend, right shares and bonus sharespending registration of transfer of share.

23) The Company has not invited/accepted any deposits from the public and accordingly provisions of section 58A/ 58AA of theCompanies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975 and directives/directions issued by the ReserveBank of India with respect of deposits are not applicable.

24) The amount borrowed by the company during the financial year ending 31st March, 2010 is within the borrowing limits of theCompany.

25) The Company has not made loans, given guarantees or provided securities to other bodies corporate during the year underreview.

26) The Company has not altered the provisions of Memorandum with respect to situation of the Company’s registered office fromone state to another during the financial year under review.

27) The Company has not altered the provisions of the Memorandum with respect to the objects of the company during the financialyear under review.

28) The Company has not altered the provisions of Memorandum with respect to name of the company during the financial yearunder review.

29) The Company has not altered the provisions of Memorandum with respect to Share Capital of the company during the financialyear under review.

30) The Company has not altered its Articles of Association during the financial year under review.

31) No prosecution was initiated against the company and the company received no show cause notice during the year under review,for offences under the Act.

32) The Company has not received any money as security from its employees during the financial year.

33) As per information furnished to us, the company had no employee, hence reporting under this clause is not applicable.

for Adesh Tandon & Associates(Company Secretaries)

Sd/–Place : KANPUR (Adesh Tandon)Dated: 29th May, 2010 Prop.

C. P. No.: 1121


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ANNEXURE–A

Registers as maintained by the Company

1) Register of members u/s 150

2) Registers of Certificates under Rule 7 of Companies (Issue of Share Certificates Rules 1960)

3) Minutes Books of Meetings u/s 193

4) Register of Directors Attendance under Regulation 71 of Table A.

5) Books of Accounts u/s 209

6) Registers u/s 301

7) Register of Director, Managing Director, Manager & Secretary u/s 303

8) Register of Directors’ share holding u/s 307

9) Register of Investment u/s 372A(5)

ANNEXURE–B

1) Forms and Returns as filed by the Company with Registrar of Companies during the financial year ended on 31st March,2010.

Sl. Forms/ Filed For Date of Whether filed If delay in filingNo. Returns under filing within Prescribed whether requisite

section time, yes/no additional feepaid, yes/no

1 Form 23AC& 220 Balance Sheet as at and Profit 28.11.2009 NO YES23ACA and Loss Account for the

year ended 31st March, 2009

2 Form 20B 159 Annual Return Made upto 24.11.2009 YES NO30th September, 2009

3 Form 66 383A Compliance Certificate 12.11.2009 NO YESfor the year ended31st March, 2009.

2) Other Authorities–Nil


Sd/–Place : KANPUR (Adesh Tandon)Dated: 29th May, 2010 Prop.

C. P. No.: 1121


66


1. We have audited the attached Balance Sheet of Sukhdham Constructions & Developers Limited as at 31st March, 2010 andProfit & Loss Account for the year ended on that date, annexed hereto, which are in agreement with the books of accounts. Thesefinancial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluatingthe overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of sub–section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Companyas we considered appropriate and the information and explanations given to us during the course of our audit, we report that, inour opinion :–

(i) The Company does not own any fixed assets. Therefore reporting under clause 4(i) of the Companies (Auditors' Report)Order, 2003 is not applicable to the Company.

(ii) The Company has not started any manufacturing activity during the year. Therefore, reporting under clause 4(ii) of theCompanies (Auditors' Report) Order, 2003 is not applicable to the Company.

(iii) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in theregister maintained under Section 301 of the Companies Act, 1956.

(b) Not applicable to the Company.(c) Not applicable to the Company.(d) Not applicable to the Company.(e) The Company has taken loans from its holding company. In respect of this loan the maximum amount outstanding

during the year was Rs.2424.38 lac and year end balance was Rs.2289.40 lac. There are no stipulations for therepayment of the loans. The terms and other conditions of the said loans are not prima facie prejudicial to the interestof the company.

(f) There is no repayment schedule and therefore no overdue payment outstanding as at the end of the year.

(iv) There is an adequate internal control system commensurate with the size of the company and the nature of its business, forthe purchase of stocks and fixed assets, for the sale of goods and services. During the course of our audit, we have notobserved any continuing failure to correct major weaknesses in internal control.

(v) (a) To the best of our knowledge and according to the information & explanations given to us there has been no contractsor arrangements that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956.

(b) Not applicable to the Company

(vi) The Company has not accepted any deposits from the public. Therefore, reporting under clause 4(vi) of the Companies(Auditors' Report) Order, 2003 is not applicable to the company.

(vii) The Company has integrated Internal Control cum audit system which involves reasonable internal audit which is consideredby us to be commensurate with size and nature of its business.

(viii) The maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub–section (1) ofsection 209 of the Companies Act, 1956 for the products manufactured by the Company.

(ix) (a) According to the information & explanations given by the management, the company has not incurred any liability ofstatutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income–tax, Sales tax / Value Added Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, Cess and any other statutory dues.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect ofIncome–tax, Wealth–tax, Service–tax, Sales–tax, Custom duty, Excise Duty and Cess as at 31st March, 2010 whichwere outstanding for a period of more than six months from the date they became payable.


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(x) The Company does not have any accumulated losses and it has not incurred cash losses during the financial year during theyear and immediately preceding financial year.

(xi) The Company does not have any dues payable to any financial institution or bank.

(xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and othersecurities.

(xiii) The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the reporting under Clause 4(xiii)of the Companies (Auditors' Report) Order, 2003 is not applicable to the Company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordinglythe reporting under clause 4(xiv) of the Companies (Auditors' Report) Order, 2003 is not applicable to the company.

(xv) To the best of our knowledge and according to the information and explanations given to us, the company has not givenany guarantee for loans taken by others from bank or financial institutions.


(xvii) As per information and explanations given to us, neither short–term funds nor long–term funds have been raised duringthe year.




(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or bythe company has been noticed or reported during the year.

4. Further to above, we report that :–

i. we have obtained all information and explanations which to the best of our knowledge and belief were necessary for thepurpose of our audit.

ii. in our opinion, proper books of accounts have been kept by the Company as required by the law, so far as appears from ourexamination of those books.

iii. in our opinion, Balance Sheet; and the Profit & Loss Account dealt with by this report comply with the AccountingStandards referred to in sub–section (3C) of Section 211 of the Companies Act, 1956.

iv. based on the written representations received from the directors as on 31st March, 2010 and taken on records by the Boardof Directors, we report that none of the directors is disqualified from being appointed as a director in terms of clause (g) ofsub–section (1) of Section 274 of the Companies Act, 1956.

v. in our opinion and to the best of our information and explanations given to us, the said accounts read with SignificantAccounting Policies and Notes thereon, give the information required by the Companies Act, 1956 in the manner sorequired and give a true and fair view :–

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010.

(b) in the case of Profit & Loss Account, of the Profit of the Company for the year ended on that date.


PLACE : KANPURDATE : 29th May, 2010

(ANURAG TANDON)PARTNER

MEMBERSHIP NO. 078862


68

Schedule As at 31.03.2010 As at 31.03.2009Nos. (Rupees) (Rupees)

I. SOURCES OF FUNDSShareowners’ Fund:(a) Share Capital 1 1000000.00 1000000.00(b) Reserves & Surplus 2 17828296.08 10255400.34

Loan FundUnsecured Loans 3 228940243.00 229507072.00

TOTAL 247768539.08 240762472.34II. APPLICATION OF FUNDS

Fixed Assets 4(a) Gross Block 233363050.00 233363050.00(b) Less: Depreciation 0.00 0.00

(c) Net Block 233363050.00 233363050.00(d) Capital work in progress 2898946.00 236261996.00 0.00 233363050.00

Investments 5 0.00 7310900.00Current Assets,Loans & Advances(a) Cash & Bank Balances 6 151434.19 118717.34(b) Loans & Advances 7 14697903.89 4638.00

14849338.08 123355.34Less: Current Liabilities & Provisions(a) Current Liabilities 8 1542795.00 24833.00(b) Provisions 9 1800000.00 10000.00

3342795.00 34833.00

Net Current Assets 11506543.08 88522.34

TOTAL 247768539.08 240762472.34





Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)Dated : 29th May, 2010 Partner Director Director


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Schedule For the Year Ended For the Year Ended

Nos. 31.03.2010 31.03.2009

(Rupees) (Rupees)

INCOME

Other Income 10 11289630.74 152716.50

Total 11289630.74 152716.50

EXPENDITUREAdministrative Expenses 11 1922097.00 23721.00Preliminary & Preoperative Expenses Written off 0.00 44376.00

Total 1922097.00 68097.00

PROFIT (+) / LOSS (–) BEFORE TAXATION 9367533.74 84619.50

PROVISION FOR TAXATIONProvision for Tax 1800000.00 0.00Provision for Tax for Earliar year(s) –5362.00 1794638.00 0.00 0.00

PROFIT (+) / LOSS (–) AFTER TAXATION 7572895.74 84619.50Balance Brought Forward 10255400.34 10170780.84

AMOUNT AVAILABLE FOR APPROPRIATION 17828296.08 10255400.34

APPROPRIATIONSTransfer to General Reserve 0.00 0.00

Balance Carried Forward to Balance Sheet 17828296.08 10255400.34


PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010





70

SCHEDULE : 4 Fixed Assets(Rupees)

Particulars GROSS BLOCK DEPRECIATION NET BLOCK

As at Additions Transfer As at As at For the year Adjustment Upto As at As at31.03.09 31.03.10 31.03.09 31.03.10 31.03.10 31.03.09

Flat 233363050.00 0.00 0.00 233363050.00 0.00 0.00 0.00 0.00 233363050.00 233363050.00

Total 233363050.00 0.00 0.00 233363050.00 0.00 0.00 0.00 0.00 233363050.00 233363050.00

Previous Year 231357500.00 2005550.00 0.00 233363050.00 0.00 0.00 0.00 0.00 233363050.00

SCHEDULES TO ACCOUNTSAs at As at

31.03.2010 31.03.2009(Rupees) (Rupees)

SCHEDULE : 1

Share Capital

Authorised :1000000 Equity Shares of Rs. 10/– each 10000000.00 10000000.00

Issued, Subscribed and Paid up100000 Equity Shares of Rs. 10/– each fully paid up 1000000.00 1000000.00

Total 1000000.00 1000000.00

SCHEDULE : 2

Reserves & Surplus

Profit & Loss Account – As per account annexed 17828296.08 10255400.34

Total 17828296.08 10255400.34

SCHEDULE : 3

Unsecured LoansKothari Products Limited, the holding company 228940243.00 229507072.00

Total 228940243.00 229507072.00

As at 31.03.2010 As at 31.03.2009Units/Nos. (Rupees) Units/Nos. (Rupees)SCHEDULE : 5

Investments –Long Term (At Cost)(1) Held as at 31.03.2010

QUOTED – NON TRADE :IN EQUITY SHARES, each fully paid up

BHARTI SHIPYARD LTD. OF RS. 10/– 0 0.00 19505 1287330.00INDOCO REMEDIES LTD. OF RS. 10/– 0 0.00 7926 1941870.00TATA CONSULTANCY SERVICES LTD. OF RE. 1/– 0 0.00 9604 4081700.00

AGGREGATE COST Total 0.00 7310900.00

AGGREGATE MARKET VALUE 0.00 7424784.25

(2) Purchased & Sold During the Financial Year: NIL NIL

SCHEDULE : 6

Cash & Bank BalancesBalance with Scheduled BankIn Current Account 151434.19 118717.34

Total 151434.19 118717.34

SCHEDULE : 7Loan & Advances – (Unsecured, Considered Good)Deposit with Income Tax 1900000.00 4638.00Amount Recoverable 12797903.89 0.00

Total 14697903.89 4638.00


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SCHEDULE : 12

SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS :



The Financial statements are prepared under the historical cost convention on accrual basis of accounting, in accordance with GenerallyAccepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and relevantprovisions of the Companies Act,1956.



No Depreciation is provided due to Company has not yet started commercial activities.

(3) Investments :



31.03.2010 31.03.2009(Rupees) (Rupees)

SCHEDULE : 8Current LiabilitiesSundry Creditors 1443203.00 0.00Outstanding Liabilities 99592.00 24833.00

Total 1542795.00 24833.00

SCHEDULE : 9ProvisionsProvision for Taxation 1800000.00 10000.00

Total 1800000.00 10000.00

For the year ended For the year ended

31.03.2010 31.03.2009(Rupees) (Rupees)

SCHEDULE : 10Other Income(i) Dividend Income (Gross) 199219.00 152716.50(ii) Profit on Sale of Long Term, Non Trade Investments 11090411.74 0.00

Total 11289630.74 152716.50

SCHEDULE : 11Administrative ExpensesInterest & Bank Charges 0.00 5843.00Repairs & Maintenance Expenses 1098266.00 0.00Property Tax 753192.00 0.00Miscellaneous Expenses :

Rent Account 0.00 11000.00Electricity exp. 12527.00 0.00Miscellaneous Expenses 20.00 1.00Licence & Legal Expenses 22550.00 3004.00Printing & Stationery Exp. 693.00 0.00Security Expenses 27617.00 0.00Demat Charges 3923.00 67330.00 564.00 14569.00

Payment to AuditorsStatutory Audit Fee 3309.00 3309.00

Total 1922097.00 23721.00


72


(1) Contingent Liabilities : 31.03.2010 31.03.2009(Rs.) (Rs.)

Claims not acknowledged as debt – Nil Nil

(2) Additional Information Pursuant to the Provisions of Paragraphs 3,4c and 4d of Part II of Schedule VI of The Companies Act, 1956. Nil Nil

(3) Payments to Auditors :(a) As Auditors 3309.00 3309.00

(4) Payments to Directors : Nil Nil(5) Related Party Disclosures in accordance with the Accounting Standards (AS–18) ‘Related Party Disclosure’, issued by the Institute of

Chartered Accountants of India are as under :(i) Names of Related parties and description of relationship :

(A) Key Management Personnel & their Relatives :(a) Shri M.M. Kothari(b) Shri Deepak Kothari – Director(c) Shri Mitesh Kothari – Director(d) Smt. Sharda M. Kothari(e) Smt. Arti Kothari(f) Smt. Reeta Shah(g) Mitesh Kothari HUF(h) Smt. Urvi Kothari

(B) Associate Companies / Firms :(a) Kothari Detergents Limited(b) Ekta Flavours Pvt. Limited(c) Dham Securities Pvt. Limited(d) Lohewala Construction Pvt. Limited(e) Arti Web–Developers Pvt. Limited(f) MK. Web Tech Pvt. Limited(g) IMK. Hotels Pvt. Limited(h) KPL Exports Pvt. Ltd.

(C) Holding Company :Kothari Products Limited

(ii) Summary of Transactions : For the year ended / as on Particulars 31.03.2010 31.03.2009

(Rs.) (Rs.) Outstanding Payable to Holding Company 228940243.00 229507072.00

Since no amount is considered as bad & doubtful, neither provision is made for the same nor amount written off.

(6) There is no deferred tax liability or Assets, hence no requirement for any provision.

(7) In terms of Accounting Standard 28 “Impairment of Assets” Issued by the Institute of Chartered Accountants of India, there is noimpairment loss on assets for the year.

(8) In terms of Accounting Standard 29 “Provisions, Contingent Liabilities and Contingent Assets” Issued by the Institute of CharteredAccountants of India, there has been no Provision on beginning and at the end of the year, therefore no disclosure requirements.

(9) The figures of previous year have been regrouped, recast whereever considered necessary to make them comparable with those of currentyear.





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Sources of Funds :

Paid–Up Capital 1000 Reserves & Surplus 17828






Turnover Nil Total Expenditure 1922

Other Income 11290


Earnings per share (in Rs.) 75.73 Dividend Rate % Nil

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS OF COMPANY –N.A.–




ARTI WEB – DEVELOPERS PRIVATE LIMITED

74

DIRECTORS’ REPORT

TO THE MEMBERS :

The Board of Directors of your company feel delighted in presenting its Sixth Annual Report and Audited Accounts of the Company for thefinancial year ended 31st March, 2010.

YEARLY OVERVIEW :

The Company is in the pursuit of identifying profitable venture in the field of web-designing solutions, software development includingtelevision and cimema software etc. In view of global slow down in the IT sector, the company is yet to start its operations.

DIVIDEND :

Your Directors do not recommend any dividend for the financial year under review due to loss incurred by the Company.

DIRECTORS :

Sri Deepak Kothari, Director of the Company, retires by rotation in the ensuing Annual General Meeting and being eligible, offers himselffor reappointment.

SHARE CAPITAL :

The entire share capital of the Company is held by Kothari Products Ltd. and accordingly the Company is wholly owned subsidiary of KothariProducts Ltd.


Your Directors confirm :

1. That in preparation of the Annual Accounts, the applicable Accounting Standards have been followed;

2. That the Directors have selected such Accounting policies and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company as at the end of the financial year ended 31.03.2010.

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;


CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO :



M/s Mehrotra & Mehrotra, Chartered Accountants, Auditors of the Company, retire at the ensuing Annual General Meeting and areeligible for reappointment. There are no qualification or adverse remarks in the Auditors’ Report which call for explanation by the Directors.



ACKNOWLEDGEMENT :

Your Directors wish to place on record their appreciation for the co–operation and support extended by various Government Departments,Bankers etc.

By order of the BoardFor ARTI WEB – DEVELOPERS PVT. LTD.



752 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0


1. We have audited the attached Balance Sheet of Arti Web–Developers Private Limited as at 31st March, 2010 and Profit & LossAccount for the year ended on that date, annexed hereto, which are in agreement with the books of accounts. These financialstatements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financialstatements based on our audit.


3. As required by the Companies (Auditors’ Report) Order, 2003 issued by the Central Government of India in terms of sub–section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Companyas we considered appropriate and the information and explanations given to us during the course of our audit, we report that, inour opinion :–

(i) (a) The company is maintaining proper records showing full particulars, including quantitative details and situation offixed assets.

(b) According to the information and explanations given to us, these fixed assets have been physically verified by themanagement during the year and no material discrepancies were noticed on such verification.

(c) The disposal of fixed assets has been done in the normal course of business and it has not affected the going concernassumption.

(ii) The Company has not started any manufacturing activity during the year. Therefore, reporting under clause 4(ii) of theCompanies (Auditors’ Report) Order, 2003 is not applicable to the Company.

(iii) (a) The Company has not granted any loans, secured or unsecured to / from companies, firms or other parties covered inthe register maintained under Section 301 of the Companies Act, 1956.

(b) Not applicable to the Company.

(c) Not applicable to the Company.

(d) Not applicable to the Company.

(e) The Company has taken loans from its holding company. In respect of this loan the maximum amount outstandingduring the year was Rs.1021.87 lac and year end balance was Rs.1021.87. There are no stipulations for the repaymentof the loans. The terms and other conditions of the said loans are not prima facie prejudicial to the interest of thecompany.



(v) To the best of our knowledge and according to the information & explanations given to us there has been no contracts orarrangements that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956.

(vi) The company has not accepted any deposits from the public. Therefore, reporting under clause 4(vi) of the Companies(Auditors’ Report) Order, 2003 is not applicable to the company.

(vii) The company has integrated Internal Control cum audit system which involves reasonable internal audit which is consideredby us to be commensurate with size and nature of its business.

(viii) The maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub–section (1) ofsection 209 of the Companies Act, 1956 for the products manufactured by the Company.

(ix) (a) According to the information & explanations given by the management, the company has not incurred any liability ofstatutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income–tax, Sales tax / value Added tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, Cess and any other statutorydues.


76

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect ofIncome–tax, Wealth–tax, Sales–tax / Value Added Tax, Custom duty, Excise Duty, Service–tax and Cess as at 31stMarch, 2010 which were outstanding for a period of more than six months from the date they became payable.

(x) The company does not have any accumulated losses but it has incurred cash loss in this financial year and in the financialyear immediately preceding this financial year also.



(xiii) The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the reporting under Clause 4(xiii)of the Companies (Auditors’ Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordinglythe reporting under clause 4(xiv) of the Companies (Auditors’ Report) Order, 2003 are not applicable to the company.



(xvii) As per information and explanations given to us, neither short–term funds nor long–term funds have been raised duringthe year.








iii. in our opinion, Balance Sheet; and the Profit & Loss Account dealt with by this report comply with the AccountingStandards referred to in sub–section (3C) of Section 211 of the Companies Act, 1956.

iv. based on the written representations received from the directors as on 31st March, 2010 and taken on records by the Boardof Directors, we report that none of the directors is disqualified from being appointed as a director in terms of clause (g) ofsub–section (1) of Section 274 of the Companies Act, 1956.


(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; and

(b) in the case of Profit & Loss Account, of the Loss of the Company for the year ended on that date.






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I. SOURCES OF FUNDSShareowners’ Funds(a) Share Capital 1 100000.00 100000.00(b) Reserves & Surplus 2 6356468.66 6579466.66

Loan Fund:Unsecured Loans 3 102186632.00 101985021.00

Total 108643100.66 108664487.66

II. APPLICATION OF FUNDSFixed Assets 4(a) Gross Block 108846761.00 108846761.00(b) Less: Depreciation 0.00 0.00(c) Net Block 108846761.00 108846761.00

Current Assets, Loans & Advances(a) Cash & Bank Balances 5 6337.66 37358.66(b) Loans & Advances 6 12150.00 12150.00

18487.66 49508.66

Less: Current Liabilities & ProvisionsCurrent Liabilities 7 222148.00 231782.00

222148.00 231782.00Net Current Assets –203660.34 –182273.34

Total 108643100.66 108664487.66







78


Nos. 31.03.2010 31.03.2009

(Rupees) (Rupees)

I INCOME

Other Income 0.00 0.00

Total 0.00 0.00

II EXPENDITURE

Administrative Expenses 8 222998.00 216323.00

Preliminary Expenses Written off 0.00 7296.00

Total 222998.00 223619.00

III PROFIT BEFORE TAXATION –222998.00 –223619.00

IV PROVISION FOR TAXATION

Provision for Tax for earlier year written back 0.00 –159826.00

V PROFIT AFTER TAXATION –222998.00 –63793.00

Balance Brought Forward 6579466.66 6643259.66

VI AMOUNT AVAILABLE FOR APPROPRIATION 6356468.66 6579466.66

APPROPRIATIONS

Transfer to General Reserve 0.00 0.00


Significant Accounting Policies

& Notes to the Accounts 9






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31.03.2010 31.03.2009(Rupees) (Rupees)

SCHEDULE : 1

Share Capital :

Authorised100000 Equity Shares of Rs. 10/– each 1000000.00 1000000.00

Issued, Subscribed and Paid–up Capital10000 Equity Shares of Rs. 10/– each fully paid up 100000.00 100000.00

Total 100000.00 100000.00

SCHEDULE : 2

Reserves & Surplus

Profit & Loss Account – As per account annexed 6356468.66 6579466.66

Total 6356468.66 6579466.66

SCHEDULE : 3

Unsecured LoansKothari Products Limited, the holding Company 102186632.00 101985021.00

Total 102186632.00 101985021.00

SCHEDULE : 4 Fixed Assets(Rupees)

Particulars GROSS BLOCK DEPRECIATION NET BLOCK

As on Addition Transfer As on As on For the year Adjustment Upto As on As on31.03.09 31.03.10 31.03.09 31.03.10 31.03.10 31.03.09

Flat 108061761.00 0.00 0.00 108061761.00 0.00 0.00 0.00 0.00 108061761.00 108061761.00

Office Equipments 785000.00 0.00 0.00 785000.00 0.00 0.00 0.00 0.00 785000.00 785000.00

TOTAL 108846761.00 0.00 0.00 108846761.00 0.00 0.00 0.00 0.00 108846761.00 108846761.00

PREVIOUS YEAR 108061761.00 785000.00 0.00 108846761.00 0.00 0.00 0.00 0.00 108846761.00

SCHEDULE : 5

Cash & Bank Balances(a) Cash in Hand 1727.00 1787.00(b) Balance with Scheduled Bank in Current Account 4610.66 35571.66

Total 6337.66 37358.66

SCHEDULE : 6

Loans & Advances – (Unsecured, Considered Good)Advances recoverable in cash or in kind or for value to be received 12150.00 12150.00or pending adjustments

Total 12150.00 12150.00

SCHEDULE : 7

Current Liabilities(a) Sundry Creditors – CIDCO 201200.00 201200.00(b) Outstanding Liabilities 20948.00 30582.00

Total 222148.00 231782.00


80

Administrative ExpensesElectricity Expenses 82606.00 105742.00Repairs & Maintenance – Building 129928.00 90565.00Rent 0.00 6000.00Interest & Bank Charges 0.00 225.00Miscellaneous Expenses

Miscellaneous Expenses 556.00 410.00Printing & Stationery 0.00 913.00Licence & Legal Expenses 918.00 6530.00Professional tax 2500.00 0.00Demat Charges 975.00 4949.00 423.00 8276.00

Payment to Auditors :Statutory Audit Fee 5515.00 5515.00

Total 222998.00 216323.00

SCHEDULE : 8For the year ended For the year ended

31.03.2010 31.03.2009(Rupees) (Rupees)

SCHEDULE : 9

SIGNIFICANT ACCOUNTING POLICIES & NOTES TO THE ACCOUNTS :






No Depreciation is provided due to Company has not yet started commercial activities.

(3) Investments :


(B) NOTES TO THE ACCOUNTS :(1) Contingent Liabilities : 31.03.2010 31.03.2009

(Rupees) (Rupees)

Claims not acknowledged as debt – Nil Nil

(2) ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPHS 3,4C AND 4D OF PART II OF SCHEDULE VI OF THE COMPANIES ACT, 1956. Nil Nil

(3) Payments to Auditors :As Auditors 5515.00 5515.00

(4) Payments to Directors : Nil Nil


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(5) Related Party Disclosures in accordance with the Accounting Standards (AS–18) 'Related Party Disclosure', issued by the Institute ofChartered Accountants of India are as under :

(i) Names of Related parties and description of relationship :

(A) Key Management Personnel & their Relatives :(a) Shri M.M. Kothari

(b) Shri Deepak Kothari – Director

(c) Shri Mitesh Kothari – Director

(d) Smt. Sharda M. Kothari

(e) Smt. Arti Kothari

(f) Smt. Reeta Shah

(g) Mitesh Kothari HUF

(h) Smt. Urvi Kothari

(B) Associate Companies / Firms :

(a) Kothari Detergents Limited

(b) Ekta Flavours Pvt. Limited

(c) Dham Securities Pvt. Limited

(d) Lohewala Constructions Pvt. Limited

(e) Sukhdham Constructions & Developers Limited

(f) MK Web–Tech Private Limited

(C) Holding Company :Kothari Products Limited

(ii) Summary of Transactions : For the year ended / as on

Particulars 31.03.2010 31.03.2009(Rs.) (Rs.)

Outstanding Payable to Holding Company 102186632.00 101985021.00Since no amount is considered as bad & doubtful, neither provision is made for the same nor amount written off.


(7) In terms of Accounting Standard 28 “Impairment of Assets” Issued by the Institute of Chartered Accountants of India, there is no impairmentloss on assets for the year.


(9) The figures of previous year have been regrouped / recast wherever considered necessary to make them comparable with those of current year.

As per our report of even date attached hereto. For and on behalf of the Board,

For MEHROTRA & MEHROTRA,Chartered Accountants



82










Sources of Funds :




Net Fixed Assets 108847 Investments Nil

Net Current Assets –204 Misc. Expenditure Nil

Accumulated Losses Nil


Turnover Nil Total Expenditure 223

Other Income 0.00

Profit Before Tax –223 Profit After Tax –223

Earnings per share (in Rs.) –22.30 Dividend Rate % Nil


For and on behalf of the Board,

For MEHROTRA & MEHROTRA,Chartered Accountants


MK WEB-TECH PRIVATE LIMITED

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DIRECTORS’ REPORT

TO THE MEMBERS :

The Board of Directors of your Company feel delighted in presenting its Sixth Annual Report and Audited Accounts of theCompany for the financial year ended 31st March, 2010.

FINANCIAL PERFORMANCE :

During the financial year under review the Company has earned a Net Profit of Rs.128.35 Lacs against Rs.127.61 Lacs earned duringthe previous year.

YEARLY OVERVIEW :

The company has earned rental income from the property owned by it and received interest income on Income Tax refund. It isexploring the possibilities of starting the operations in the area of High-Tech web development.

DIVIDEND :


DIRECTORS :

Sri Kamlesh Mehta & Sri Mitesh Kothari, Directors of the Company, retire by rotation in the ensuing Annual General Meeting andbeing eligible offer themselves for reappointment. The Board recommends their reappointment.

SHARE CAPITAL :

The entire share capital of the Company is held by Kothari Products Ltd. and accordingly the Company is wholly owned subsidiaryof Kothari Products Ltd.




2. That the Directors have selected such accounting policies and made judgements and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company as at the end of the financial year ended 31.03.2010;

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance withthe provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraudand other irregularities ;




AUDITORS & AUDITORS’ REPORT:

M/s Vipul Thakkar & Co., Chartered Accountants, Auditors of the Company, retire at the ensuing annual general meeting and areeligible for reappointment. There are no qualification or adverse remarks in the Auditors Report which call for explanation by theDirectors.



ACKNOWLEDGEMENT :

Your Directors wish to place on record their appreciation for the co-operation and support extended by various GovernmentDepartments, Bankers etc..

By order of the BoardFor MK WEB-TECH PVT. LTD.

Sd/- Sd/-PLACE : MUMBAI (DEEPAK KOTHARI) (MITESH KOTHARI)DATE : 19th May, 2010 Director Director


84


Registration No. Of the Company : 11–152153Nominal Capital : Rs. 25,00,000

To,The Members,MK WEB-TECH PRIVATE LTD.373, Konark House, Veer Savarkar RoadGround Floor, Near Sidhivinayak TemplePrabhadevi, Dadar (West), Mumbai–400 028Maharashtra.

We have examined the registers, records, books and papers of M/S MK WEB-TECH PRIVATE LTD. as required to be maintainedunder the Companies Act, (the Act) and the rules made there under and also the provisions contained in Memorandum and Articlesof Association of the Company for the financial year ended on 31st MARCH 2010. In our opinion and to the best of our informationand according to the examinations carried out by us and explanations furnished to us by the company, its offices and agents, we certifythat in respect of the aforesaid financial year :–

1) The Company has kept and maintained all registers as stated in Annexure ‘A’ to this certificate as per the provisions and therules made there under and all entries therein have been duly recorded.

2) The Company has duly filed the forms and returns as stated in Annexure ‘B’ to this certificate, with the Registrar of Companies,Regional Director, Central Government, Company Law Board and other authorities with in the time prescribed under the Actand the rules made there under.

3) The Company being a subsidiary of a Public Limited Company is a Public Limited Company, has the minimum prescribed paidup capital.

4) The Board of Directors duly met 4 times respectively on 16th June 2009, 3rd September 2009, 8th December 2009 and 26th

February 2010 in respect of which meetings proper notices were given and the proceedings were properly recorded and signed inMinutes Book maintained for the purpose.

5) The Company has not closed its Register of Members during the financial year and question of closure of Register of Debentureholders did not arise, as Company has no Debentures.

6) The ANNUAL GENERAL MEETING for the financial year ended 31st March 2009 was held on 30th September 2009 aftergiving due notice to the members of the company and the resolutions passed thereat were duly recorded in Minutes Bookmaintained for the purpose.

7) No Extra ordinary general meeting was held during the financial year.

8) The Company has not advanced any loan to its Directors and/or persons or firms or Companies referred in the Section 295 ofthe Act, as per information provided by the management of the Company.

9) The Company has not entered into any contracts falling with in the purview of Section 297 of the Act as per informationprovided by the management of the Company.

10) The Company has made necessary entries in the register maintained under Section 301 of the Act.

11) As there were no instances falling with in the purview of Section 314 of the act, hence the company has not obtained anyapprovals from the Board of Directors, members or Central Government, as the case may be.

12) The Company has not issued any duplicate share certificate during the financial year.

13) The Company has:

i) Not made any allotment / transfer/ transmission of shares or securities during the financial year under review.

ii) Not deposited any amount in a separate Bank Account as no dividend was declared during the financial year.

iii) The Company was not required to post warrants to any members of the company as no dividend was declared during thefinancial year.


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iv) Neither unpaid dividend, nor any application money due for refund is lying, and it has not deposited any interest accruedthereon, hence same is not applicable.

v) Duly complied with the requirements of section 217 of the Act.

14) The Board of Directors of Company is duly constituted. There was no appointment of additional directors or alternate directorsor directors to fill the casual vacancy during the financial year.

15) The Company has not appointed any managing director/ whole time director/manager during the financial year under review.

16) The Company has not appointed any sole selling agents during the financial year.

17) The Company was not required to obtain the approval of the Central Government, Company Law Board, and Registrar ofCompanies, Regional Director and/or such authorities prescribed under the various provisions of the Act during the financialyear.

18) The Directors have disclosed their interest in the firms/companies to the Board of Directors pursuant to the provisions of the Actthe rules made there under.

19) The Company has not issued any equity shares, debentures or other securities during the financial year under review.

20) The Company has not bought back any shares during the financial year.

21) There was no redemption of preference shares or debentures during the financial year.

22) There were no transactions necessitating the Company to keep in abeyance the right to dividend, right shares and bonus sharespending registration of transfer of share.

23) The Company has not invited/accepted any deposits including any unsecured loans falling within the purview of Section 58 Aof the Companies Act, 1956 during the financial year.

24) The amount borrowed by the Company during the financial year ending 31st March 2010 is within the borrowing limits of theCompany and that necessary resolution as per Section 293(1)(d) of the Act have been passed by the Shareowners.

25) The Company has not made loans, given guarantees or provided securities to other bodies corporate during the year underreview.

26) The Company has not altered the provisions of Memorandum with respect to situation of the Company’s registered office fromone state to another during the year under scrutiny.

27) The Company has not altered the provisions of Memorandum with respect to the objects of the company during the year underscrutiny.

28) The Company has not altered the provisions of Memorandum with respect to name of the company during the year underscrutiny.

29) The Company has not altered the provisions of Memorandum with respect to Share Capital of the company during the yearunder scrutiny.

30) The Company has not altered its Articles of Association during the year under scrutiny.

31) There was no prosecution initiated against or show cause notices received by the Company and no fines or penalties or any otherpunishment was imposed on the company during the financial year for offences under the Act.

32) The Company has not received any money as security from its employees during the financial year.

33) As the company has not constituted any Provident Fund with recognition from the prescribed authorities, the provisions ofSection 418 of The Companies Act, do not apply.


Sd/-Place: MUMBAI (Adesh Tandon)Date : 19th May, 2010 Prop.

C. P. No.: 1121


86

ANNEXURE–A

Registers as maintained by the CompanyStatutory Registers1) Register of members u/s 1502) Registers and returns u/s 1633) Minutes Books of Meetings u/s 1934) Books of Accounts u/s 2095) Registers u/s 3016) Register of Director, Managing Director, Manager & Secretary u/s 3037) Register of Director share holding u/s 3078) Register of Mortgage & Charges u/s 143Other Registers1) Register of Transfer2) Register of Directors Attendance3) Register of Share Holder Attendance4) Register of Share Application and Allotment5) Register of Share Scrip

Note: The other Statutory Register are not required to be maintained as same are not applicable, as there exist no transactions to berecorded therein.

ANNEXURE–B

1) Forms and Returns as filed by the Company with Registrar of Companies during the financial year ended on 31st March, 2010.

Sl. Forms Filed For Date of Whether filed If delay in filingNo. under filing within Prescribed whether requisite

section time yes/no additional feepaid yes/no

1. Form 23AC 220 Balance Sheet as at and Profit 28.11.2009 NO YESAnd and Loss Account for the yearForm 23ACA ended 31st March, 2009

2. Form 20B 159 Annual Return Made upto 25.11.2009 YES NO

30th September, 2009

3. Form 66 383A(1) Compliance Certificate for the 12.11.2009 NO YESyear ended 31st March, 2009

2) Other Authorities – Nil


Sd/-(Adesh Tandon)

Place: MUMBAI Prop.Date : 19th May, 2010 C. P. No.: 1121


872 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0


We have audited the attached Balance Sheet of MK Web-Tech Private Limited as at 31st March, 2010 annexed thereto. Thesefinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

1) We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluatingthe overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2) As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of Section227 (4A) of the Companies Act, 1956 , we enclose in the Annexure hereto a statement of the matters specified in the paragraphs4 and 5 of the said Order.

3) Further to our comments in the paragraph (2) above, we report that:

1. We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary forthe purpose of our audit;

2. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from ourexamination of the books of accounts;

3. The Balance Sheet and the Profit & Loss account referred to in this Report are in agreement with the books of account;

4. In our opinion, the Balance Sheet dealt with by this Report have been prepared in compliance with the accountingstandards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable;

5 On the basis of the written representations received from the Directors and taken on record by the Board of Directors, wereport that none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director in terms ofclause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

6 In our opinion and to the best of our information and according to the explanations given to us, the said accounts subjectto and read together with the Notes thereon gives the information required by the Companies Act, 1956 in the mannerso required and give a true and fair view :

(i) In case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010

(ii) In case of the Profit and Loss Account, of the profit for the year ended on that date.

For VIPUL THAKKAR & CO.CHARTERED ACCOUNTANTS

(VIPUL THAKKAR)PLACE : MUMBAI PROPRIETORDATE : 19th May, 2010 MEMBERSHIP NO. 107991


88

ANNEXURE TO AUDITORS’ REPORT(REFERRED TO IN PARAGRAPH 2 OF OUR REPORT ON EVEN DATE.)

F.Y.2009-10

1) In respect of Fixed Assets

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixedassets.

b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals, which in ouropinion is reasonable, having regard to the size of the Company and nature of its assets. We are informed that no materialdiscrepancies were noticed by the management on such verification.

c) The Company has not disposed of any part of fixed assets during the year.

2) In respect of its Inventory

As explained to us, since there is no inventory, related clauses are not applicable to the company.

3) In respect of Loans Given / Taken

a) The Company has not granted Unsecured loans to any parties covered in the Register maintained u/s 301 of the Act.Hence related clauses are not applicable to the Company.

b) The Company has not taken unsecured loans from parties covered in the register maintained u/s 301 of the CompaniesAct, 1956.

c) In our opinion, the rate of interest and other terms and conditions are not, prima facie, prejudicial to the interest of thecompany.

d) There is no stipulation for repayment of principal amount of the loans taken.

4) In respect of Internal Control System

In our opinion and according to the information and explanation given to us, there is adequate internal control systemcommensurate with the size of the Company and the nature of its business. It has not purchased any stores, raw materials, plantand machinery or equipments or sold any goods during the year under report. During the course of our audit, we have notobserved any major weakness in internal controls.

5) In respect of transactions covered u/s 301 of the Companies Act, 1956.

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance ofcontracts or arrangements that needed to be entered into the register needed to be maintained u/s 301 of the CompaniesAct have been so entered.

b) In our opinion and according to the information and explanations given to us, there are no transactions in pursuance ofcontracts or arrangements entered in the register maintained u/s 301 of the Companies Act aggregating during the year toRs. 5,00,000/- [Rs. Five lakhs only] or more in respect of any party.

6) In our opinion and according to the information and explanations given to us, the company has not accepted any deposit fromthe public and have complied with the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies(Acceptance of Deposits) Rules, 1975.

7) The Company has no formal internal audit system commensurate with the size and nature of business. However, it has beeninformed to us that its control procedures ensure reasonable internal checking of its financial and other records.

8) The Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 ofthe Companies Act, 1956 in respect of the Company.

9) In respect of Statutory Dues:

a) According to the records of the Company, the Company has been regular in depositing undisputed statutory dues includingProvident Fund, Investor Education and Protection Fund, Income tax, Service Tax and any other statutory dues with theappropriate authorities/. According to the information and explanations given to us, no undisputed amounts payable inrespect of the aforesaid dues were outstanding as at 31-3-2010 for a period of more than six months from the date theybecame payable.


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b) The Company does not have any disputed statutory dues that have not been deposited on account of matters pendingbefore appropriate authorities.

10) The Company does not have accumulated losses. Therefore, the question of reporting under clause 4(x) of the Order regardingcomparison of accumulated losses with the net worth of the Company does not arise.

11) Monitoring of Loans taken from Banks/Financial Institutions etc.

a) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that,the Company has not taken any loans from Bank / Financial Institutions.

b) During the year, the Company has not taken any new loan from Banks / Financial Institutions.

c) The funds raised on short-term basis have not been used for long-term investment and vice versa.

d) The Company has not issued any debentures.

12) According to the information and explanation given to us, the Company has not given any guarantee for loans taken by othersfrom banks or other financial institutions.

13) The Company is not dealing or trading in shares, securities, debentures or similar instruments. In respect of investments, theCompany has maintained proper records of the transactions and contracts and has made timely entries therein; the shares,securities, debentures and other investment have been held by the Company in its own name except to the extent of theexemption, if any, granted under section 49 of the Companies Act, 1956.

14) In our opinion and according to the information and explanations given to us, no loans and advances have been granted by theCompany on the basis of security by way of pledge of shares, debentures and other securities.

15) In our opinion, the Company is not a chit fund or a Nidhi/or mutual benefit fund/society. Therefore, clause 4(xiii) of theCompanies (auditors report) Order 2003 is not applicable to the Company.

16) The Company has not made any preferential allotment shares during the year.

17) The Company has not raised any money by way of Public Issue during the year.

18) In our opinion and according to the information and explanations given to us no fraud on or by the Company has been noticedor reported during the year, that causes the financial statements to be materially misstated.

For VIPUL THAKKAR & CO.CHARTERED ACCOUNTANTS

(VIPUL THAKKAR)PLACE : MUMBAI PROPRIETORDATE : 19th May, 2010 MEMBERSHIP NO. 107991


90


SOURCES OF FUNDS

Shareowners’ FundShare Capital A 2,500,000.00 2,500,000.00Reserves & Surplus B 44,159,778.03 31,324,545.84

Loan Funds :Unsecured Loans C 125,762,361.00 137,509,118.00

Total 172,422,139.03 171,333,663.84

APPLICATION OF FUNDSFixed Assets D 188,363,690.19 191,670,599.46

CURRENT ASSETS, LOANS & ADVANCES

Cash & Bank Balances E 5,787,123.20 114,392.50Loans & Advances F 16,652,510.64 16,906,009.88

22,439,633.84 17,020,402.38LESS: CURRENT LIABILITIES & PROVISIONS

Current Liabilities G 38,381,185.00 37,371,826.00

NET CURRENT ASSETS (15,941,551.16) (20,351,423.62)

MISCELLANEOUS EXPENDITURE

(To extent not written off)Preliminary Expenses – 14,488.00

Total 172,422,139.03 171,333,663.84Notes to the Accounts J


As per our report of even date attached

For MK Web-Tech Private Limited

For VIPUL THAKKAR & CO.Chartered Accountants

(VIPUL THAKKAR)Place : Mumbai Proprietor (DEEPAK KOTHARI) (MITESH KOTHARI)Dated : 19th May, 2010 M.No. 107991 Director Director


912 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0


Nos. 31.03.2010 31.03.2009

(Rupees) (Rupees)

INCOME

Rent & Compensation Received 24,605,136.00 24,507,101.00Interest On Income Tax Refund 93,072.00 207,817.00

Total : 24,698,208.00 24,714,918.00

EXPENDITURE :

Finance Expenses H – –Administrative & Other Expenses I 3,417,597.00 3,431,059.99Depreciation 3,306,909.27 3,306,909.27Preliminary Expenses Written Off 14,488.00 14,488.00

Total : 6,738,994.27 6,752,457.26

Profit / (Loss) Before Taxation 17,959,213.73 17,962,460.74Provision For Taxation 5,100,000.00 6,000,000.00Deferred Tax Assets – (800,000.00)Income Tax Of Earlier Year (Written Off) / Back 23,981.54 5,123,981.54 1,149.76 5,201,149.76Profit / (Loss) After Taxation 12,835,232.19 12,761,310.98Balance Brought Forward From Earlier Year 31,324,545.84 18,563,234.86

Profit / (Loss) Carried ForwardTo Balance Sheet Total : 44,159,778.03 31,324,545.84

Notes To Accounts J



For MK Web-Tech Private Limited




92


31.03.2010 31.03.2009(Rupees) (Rupees)

SCHEDULE ‘A’

Share Capital :Authorised :250,000 Equity Shares of Rs. 10/- each 2,500,000.00 2,500,000.00

Total 2,500,000.00 2,500,000.00

Issued, Subscribed and Paid up :250000 Equity Shares of Rs. 10/- each fully paid up 2,500,000.00 2,500,000.00(Previous year 250000 Equity Shares)

Total 2,500,000.00 2,500,000.00

SCHEDULE ‘B’Reserves & Surplus :Opening Balance 31,324,545.84 18,563,234.86Profit / (Loss) During the year 12,835,232.19 12,761,310.98

Total 44,159,778.03 31,324,545.84

SCHEDULE ‘C’Unsecured Loans :From Director / Shareholder :Kothari Products Ltd. (Holding Company) 125,762,361.00 137,509,118.00

Total 125,762,361.00 137,509,118.00

SCHEDULE ‘D’ : Fixed Assets

Gross Block Depreciation (SLM) Net Block

Particulars Opening Additions As At Opening Rate of For The Closing As At As AtBalance Balance Dep. % Year Balance

01.04.2009 31.03.2010 01.04.2009 31.03.2010 31.03.2010 31.03.2009

Premises at Bangalore 202,877,850.00 – 202,877,850.00 11,207,250.54 1.63% 3,306,909.27 14,514,159.81 188,363,690.19 191,670,599.46

Total : 202,877,850.00 – 202,877,850.00 11,207,250.54 3,306,909.27 14,514,159.81 188,363,690.19 191,670,599.46

Previous Year 202,877,850.00 – 202,877,850.00 7,900,341.27 3,306,909.27 11,207,250.54 191,670,599.46 194,977,508.73

SCHEDULE ‘E’

Cash and Bank Balance:Cash on hand 1,170.00 1,230.00Balance in Current Account with Scheduled Banks – –

Axis Bank Ltd. 53,976.10 61,342.10Kotak Mahindra Bank 5,731,977.10 51,820.40

Total 5,787,123.20 114,392.50

SCHEDULE ‘F’

Current Assets, Loans & AdvancesT D S Receivable 06-07 - 4,955,268.48T D S Receivable 07-08 - 5,512,947.06T D S Receivable 08-09 5,607,787.34 5,607,787.34T D S Receivable 09-10 4,123,624.30 -Advance Tax (A.Y. 09-10) 309,780.00 -Advance Tax (A.Y. 10-11) 1,050,000.00 -Income Tax Refund Receivable (A.Y.2007-08) 3,886,536.00 -Sapient Corporation Pvt. Ltd. 844,776.00 -Deferred Tax Asset 800,000.00 800,000.00Services Tax Refund Receivable 30,007.00 30,007.00

Total 16,652,510.64 16,906,009.88


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SCHEDULE ‘G’

Current Liabilities:Creditors for Expense 58,000.00 58,000.00Auditors Remuneration Payable 18,000.00 9,000.00Property Tax Payable 3,402,795.00 3,402,794.00Services Tax Payable 1,478,358.00 –Provision for Taxation (F.Y.2006-07) – 1,100,000.00Provision for Taxation (F.Y.2007-08) – 4,478,000.00Provision for Taxation (F.Y.2008-09) 6,000,000.00 6,000,000.00Provision for Taxation (F.Y.2009-10) 5,100,000.00 –Security Deposit 22,324,032.00 22,324,032.00

Total 38,381,185.00 37,371,826.00

SCHEDULE ‘H’

Finance Expenses:Interest on loans to Directors / Shareowners – –

Total – –

SCHEDULE ‘I’

Administrative & Other Expenses:Bank Charges – 252.99Printing & Stationery – 913.00Audit Fees 9,000.00 9,000.00Profession Tax 2,500.00 5,000.00Property Tax 3,402,794.00 3,402,794.00Rent for Office – 6,000.00ROC Fees 2,550.00 7,100.00Sundry Expense 753.00 –

Total 3,417,597.00 3,431,059.99

As at As at31.03.2010 31.03.2009

(Rupees) (Rupees)

SCHEDULE ANNEXED TO AND FORMING PART OF ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010.

SCHEDULE ‘J’

1. Significant Accounting Policies:

a. System of Accounting

The financial statements are prepared on the basis of historical cost convention and in accordance with the GenerallyAccepted Accounting Principles. The Company follows accrual system of accounting.

b. Recognition of Income & Expenditure:

The Company adopts the accrual system of accounting. Revenue is being recognized as and when there is reasonablecertainty of its ultimate realization. Income earned by way of leasing or renting out of commercial premises is recognized asincome in accordance with Accounting Standard 19 on Leases.

c. Fixed Assets:

Fixed Assets are stated at cost of acquisition less depreciation and impairment.

d. Depreciation:

Depreciation on Fixed Assets is provided in accordance with the provisions and at the rates prescribed under ScheduleXIV to the Companies Act, 1956 on Straight Line Method.

e. Borrowing Cost:

All borrowing costs are recognized as an expense in the period in which they are incurred.

f. Miscellaneous Expenditure:

Preliminary Expenses are amortized over a period of five years.


94

As per our report of even date attached For MK Web Tech Private Limited



g. Provisions, Contingent Liabilities & Contingent Assets:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that anoutflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisionsare not discounted to its present value and are determined based on management estimate required to settle the obligationat the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current managementestimates. Contingent Liabilities are disclosed when the Company has a possible or a present obligation and it is probablethat a cash outflow will not be required to settle the obligation.

h. Impairment:

The carrying amount of assets is reviewed at each balance sheet date to determine whether there is indication. If anyindication exist, the assets recoverable amount is estimated. An impairment loss is recognized wherever the carryingamount of an asset exceeds its recoverable amount.

i. Taxation:

(i) Provision for Taxation is made on the basis of the taxable profits computed for the current accounting period(reported period) in accordance with the Income Tax Act, 1961.

(ii) Deferred Tax Asset and Liabilities are recognized for the future tax consequences of timing differences between theaccounting income and taxable income for the year and measured using enacted tax rates expected to apply to taxableincome in the year in which the timing differences are expected to be reversed or settled. Deferred Tax Assets arisingon account of unabsorbed depreciation or carried forward losses are recognized and carried forward to the extent thatthere is a virtual certainty that sufficient future taxable income will be available against which such Deferred Tax Assetcan be realized. In other cases, Deferred Tax Assets are recognized and carried forward based on reasonable certaintyof future taxable income.

2. Notes to Accounts:

(a) Previous year’s figures are regrouped and rearranged wherever necessary.

(b) In the opinion of the management, Loans & Advances and Other Current Assets have a realizable value in theordinary course of business not less than the amount at which they are stated in the Balance Sheet and provision forall known liabilities and doubtful assets have been made.

(c) Additional information under part II of Schedule VI to the Companies Act, 1956 have been given to the extentapplicable to the Company.

Sr. No. 2009–10 2008–09

a) CIF Value of Import Nil Nil

b) Expenditure in Foreign Currency Nil Nil

c) Earning in Foreign Exchange Nil Nil

d) Outstanding dues to Small Scale Industrial Undertaking Nil Nil

(d) As the Company’s business activity falls within a single primary business segment and one geographical segment, thesegment information is not provided.

(e) The Company has not received intimation from any ‘enterprise’ regarding its status under Micro Small and MediumEnterprise Development Act, 2006 and therefore no disclosure under the said Act is considered necessary.

(f) Related Party Disclosures:The Company is a subsidiary company of M/s Kothari Products Limited and an amount of Rs.40,53,243/- wasreceived as unsecured loan, an amount of Rs.1,58,00,000/- was repaid and balance outstanding at the end of the yearwas Rs.12,57,62,361/-.


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II. CAPITAL RAISED DURING THE YEAR (RS. IN THOUSANDS)



III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (RS. IN THOUSANDS)

Total Liabilities 210,803.32 Total Assets 210,803.32

Sources of Funds :

Paid–Up Capital 2,500.00 Reserves & Surplus 44,159.78

Secured Loans 0.00 Unsecured Loans 125,762.36


Net Fixed Assets 188,363.69 Investments 0.00

Net Current Assets -15,941.55 Misc. Expenditure 0.00

IV. PERFORMANCE OF COMPANY (RS. IN THOUSANDS)

Total Income 24,698.21 Total Expenditure 6,738.99

Profit / (Loss) Before Tax 17,959.21 Provision for Taxation 5,123.98

Profit / (Loss) After Tax 12,835.23 Earnings per share (in Rs.) 51.34

Dividend Rate (Equity) 0.00

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS OF THE COMPANY (AS PER MONETARY TERMS) :NOT APPLICABLE





KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED(Incorporated in the Republic of Singapore with its Registration Number 200809977K)

96

Directors’ ReportFor the Financial period 1st April, 2009 to 31st March, 2010

The directors present their report to the Shareowners together with the audited financial statements of the Company for the financial periodended 31st March, 2010.

DIRECTORS

The directors of the Company at the date of this report are:

Bharat Mekani

Deepak Kothari

Kirtida Mekani

ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES OR DEBENTURES

Neither at the end of nor at any time during the financial year ended to 31st March, 2010 was the Company a party to any arrangement whoseobject was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Companyor any other body corporate.

DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES

According to the register kept under Section 164 of the Companies Act, Chapter 50, the following directors of the Company who held officeat the end of the financial year had an interest in the shares of the company as stated below :–

Shares registered in the Names of directors of company

As at As at

01.04.2009 31.03.2010

Bharat Mekani 10 10

Kirtida Mekani 10 10

Kothari Products Limited 1,000,000 1,000,000

DIRECTORS’ CONTRACTUAL BENEFITS

Since the beginning of the financial year, no director has received or has become entitled to receive a benefit which is required to be disclosedunder Section 201(8) of the Companies Act, Chapter 50 by reason of a contract made by the company or a related corporation with thedirector or with a firm of which he is a member, or with a company in which he has a substantial financial interest except related partytransactions as disclosed in the financial statements.

OPTIONS GRANTEDDuring the financial year ended to 31st March, 2010, no option was granted to take up unissued shares of the company.

OPTIONS EXERCISED

During the financial year ended to 31st March, 2010, there was no share issued by virtue of the exercise of an option granted to take upunissued shares of the company.

OPTIONS OUTSTANDING

At the end of the financial year ended to 31st March, 2010, there was no unissued share of the company under option.

AUDITORS

The auditors, T. Ravi & Co., Certified Public Accountants, have expressed their willingness to accept re-appointment.

On behalf of the Directors,

PLACE : SINGAPORE BHARAT MEKANI KIRTIDA MEKANIDATE : 22nd May, 2010 Director Director


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INDEPENDENT AUDITOR’S REPORT TO THE SHAREOWNERS OF KOTHARIPRODUCTS SINGAPORE PRIVATE LIMITEDREPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED, which comprise the Statementof financial position as at 31st MARCH,2010, and Statement of comprehensive Income, statement of changes in equity and statement ofcash flows for the financial period 1 April, 2009 to 31 March,2010, and notes to financial statements together with summary of significantaccounting policies and other explanatory notes set out on this attached pages

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the provisions of theSingapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards. This responsibility includes:

(a) devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguardedagainst loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary topermit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets;

(b) selecting and applying appropriate accounting policies; and

(c) making accounting estimates that are reasonable in the circumstances.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance withSingapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. Theprocedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the entity’s internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

In our opinion,

(a) The financial statements are properly drawn up in accordance with the provisions of the Act and Singapore Financial ReportingStandards so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010, and the results, changes inequity and cash flows of the Company for the financial period 1st April, 2009 to 31 March, 2010; and

(b) The accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with theprovisions of the Act.

T Ravi & Co.,PLACE : SINGAPORE Public Accountants andDATE : 22nd May, 2010 Certified Public Accountants

We, the directors of KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED do hereby state that, in the opinion of the directors:

(a) the accompanying statement financial position, Statement of comprehensive Income, statement of changes in equity and statement of cash flowstogether with the notes thereto are drawn up to give a true and fair view of the state of affairs of the company as at 31st MARCH, 2010 and theresults, changes in equity and cash flows of the company for the financial period 1st April, 2009 to 31st March, 2010; and

(b) At the date of this statement there are reasonable grounds to believe that the company will be able to pay its debts as and when they fall due.The board of directors authorised these financial statements on the date of this statement.

On behalf of the Directors,

PLACE : SINGAPORE BHARAT MEKANI KIRTIDA MEKANIDATE : 22nd May, 2010 Director Director


98

STATEMENT OF FINANCIAL POSITIONFor the financial year 1st April, 2009 to 31st March, 2010 2010 2009

Note US$ US$

ASSETS AND LIABILITIES

Non-current assetsPlant and equipment 3 5,002 –

5,002 –Current AssetsTrading stock 107,646 –Trade receivables 4 3,664,076 704,298Deposit, prepayments and other receivables 5 519,421 –Cash and bank balances 6 1,231,936 693,365

5,523,079 1,397,663Less: Current LiabilitiesTrade payables 7 4,472,864 30,000Accruals 8 95,870 6,550Bank borrowings, secured 9 106,875 641,261Provision for income tax - current 10 14,032 3,207

- deferred tax 10 175

4,689,816 681,018

Net Current Assets 833,263 716,645

Net Assets 838,265 716,645

EQUITYShare capital 11 689,664 689,664

Retained profit 148,601 26,981

838,265 716,645

STATEMENT OF COMPREHENSIVE INCOME For the financial year 1st April, 2009 to 31st March, 2010

01/04/2009 21/05/2008to to

31/03/2010 31/03/2009Notes US$ US$

Revenue 12 14,618,767 1,265,934Changes in the inventories 107,646 –Direct costs – purchases and incidentals 13 (14,433,782) (1,220,117)Other operating income – interest income 6,271 6,199Staff costs inclusive of directors’ remuneration 14 (107,533) –Depreciation expenses 3 (931) –Operating lease payments - rental (16,812) –Operating expenses (41,006) (21,828)Finance costs – –Net profit for the financial period 15 132,620 30,188Income tax 10 (11,000) (3,207)Net profit for the financial period 121,620 26,981Other comprehensive income – –Income tax relating to components of other comprehensive income – –Total other Comprehensive income 121,620 26,981

On behalf of the Directors

Place : Singapore BHARAT MEKANI KIRTIDA MEKANI T. RAVI & CO.,Dated : 22nd May, 2010 Director Director Public Accountants and

Certified Public Accountants

On behalf of the Directors

Place : Singapore BHARAT MEKANI KIRTIDA MEKANI T. RAVI & CO.,Dated : 22nd May, 2010 Director Director Public Accountants and

Certified Public Accountants


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STATEMENT OF CHANGES IN EQUITY For the financial year 1st April, 2009 to 31st March, 2010

Issued Retained TotalShare Profit

CapitalUS$ US$ US$

At 21st May, 2008 (date of incorporation) 689,650 – 689,650Issue of Shares 14 – 14Total recognised gains for the financial period -net profit for the year – 26,981 26,981

At 31st March, 2009 689,664 26,981 716,645

Total recognised gains for the financial period -net profit for the year – 121,620 121,620

At 31st March, 2010 689,664 148,601 838,265

STATEMENT OF CASH FLOW For the financial year 1st April, 2009 to 31st March, 2010

2010 2009US$ US$

OPERATING ACTIVITIESProfit from ordinary activities before taxation 132,620 30,188Depreciation 931 –Interest income (5,966) (6,149)Interest expenses 6,654 11,799Operating profit before working capitalChanges 134,239 35,838

Changes in working capital:Inventories –trading stock (107,646)Trade and other Receivables (3,479,199) (704,298)Trade Payables and other payables 4,532,184 36,550Payment of income tax – –Interest income 5,966 6,149Interest expenses (6,654) (11,799)

Cash flows from operations 944,651 (673,398)

Net cash generated from operating activities (1,078,890) (637,560)

Cash flows from investing activitiesPurchase of plant and equipment (5,966) –Fixed deposits placed (302,031) (692,400)

(307,997) (692,400)Cash flow from financial activitiesIssue of shares – 689,664(Repayment)/proceeds from Bank (534,386) 641,261

Net Cash flow from financial activities (534,386) 1,330,925

Net (decrease)/increase in cash and bank balance 236,507Cash and cash equivalents at the beginning 965 –Cash and cash equivalents at end of year 237,472 965

NOTES TO CASH FLOW STATEMENTa) Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts:

01-04-2009 to 21-05-2008 to31-03-2010 31-03-2009

US$ US$Cash – 14Cash at banks 237,472 951Fixed deposits –

237,472 965

Fixed deposits amounting to US$994,431/-(2009: 692,400/-) is not taken into as cash and cash equivalent bank for the purpose of cash flow statement.


100

NOTES TO THE FINANCIAL STATEMENTS For the financial year 1st April, 2009 to 31st March, 2010

These notes form part of and should be read in conjunction with the accompanying financial statements.

1. CORPORATE INFORMATION

The company is a limited liability company which is incorporated in the Republic of Singapore with its registered office atNo: 1, Amber Road, # 17 - 03 Amber Point, Singapore 439 845 having its place of business at 10 Anson Road, #15-13 InternationalPlaza, Singapore 079903.

The principal activities of the company are those of business in general wholesale trade (including importers and exporters), businessmanagement and consultancy services and other general trade.The company had two employees at the end of the financial year except the directors.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 BASIS OF PREPARATION

The financial statements, which are expressed in United States dollars, are prepared in accordance with the historical costconvention and in accordance with Singapore Financial Reporting Standards (“FRS”) including related Interpretations promulgatedby the Council on Corporate Disclosure and Governance (“CCDG”) and the disclosure requirements of the Singapore CompaniesAct. Chapter 50.

The preparation of financial statements in conformity with FRS requires management to exercise its judgment in the process ofapplying the company’s accounting policies. It also requires the use of accounting estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statementsand the reported amounts of revenues and expenses during the financial year. Although these estimates are based on management’sbest knowledge of current events and actions, actual results may ultimately differ from those estimates. Critical accountingestimates and assumptions used that are significant to the financial statements, and areas involving a higher degree of judgmentand complexity, are disclosed elsewhere in this financial statements.

a) Adoption of new and revised FRS

With effect from 1st January 2009, the company has adopted all the new and revised FRS that are mandatory for thefinancial years beginning on or after 1st January 2009.

The following are the FRS that are relevant to the Group:

FRS 1 – Presentation of Financial Statements – Revised Presentation

Amendments to FRS 107 – Financial Instruments: Disclosures

The adoption of the above FRS did not have any significant impact on the Group, except as discussed below:-

(i) FRS 1 Presentation of Financial Statements – Revised Presentation

The revised FRS 1 separates owner and non-owner changes in equity. The statement of changes in equity includesonly details of transactions with owners, with all non-owners changes in equity presented in the statement of othercomprehensive income. In addition, the Standards introduce the statement of comprehensive income which presentsincome and expenses recognised in the period. This statement may be presented in one single statement or twolinked statements. The company has elected to present this statement as one single statement.

(ii) Amendments to FRS 107 Financial Instruments : Disclosures

The amendments to FRS 107 require additional disclosure about fair value measurement and liquidity risk. Fairvalue measurements are to be disclosed by sources of inputs using a three level hierarchy for each class of financialinstruments. In addition, reconciliation between the beginning and ending balance for Level 3 fair value measurementis now required, as well as significant transfers between Level 1 and Level 2 fair value measurements’. The amendmentsalso clarify the requirements for liquidity risk disclosures. The fair value measurement disclosures and liquidity riskdisclosures are presented in the notes to the financial statements separately.

(b) FRS and INT FRS not yet effective

The company has not adopted the following FRS and INT FRS that have been issued but not yet effective.

FRS 24 : Related party Disclosures – Revised.FRS 27 : Consolidated and Separate Financial Statements – revisedFRS 32 : Amendment to Financial Instruments: presentation – Amendments relating to classification of Right

Issues.


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FRS 101 : First-time adoption of Financial Reporting StandardsFRS 101 : Additional Exemptions for First-time Adopters (Amendments to FRS 101)FRS 102 : Share –based payments – Group cash –settled Share-based Payment Transactions.FRS 103 : Business Combination – Revised.INT FRS 114 : Amendments relating to Prepayments of a Minimum Funding requirements.INT FRS 117 : Distribution of Non-cash Assets to OwnersINT FRS 118 : Transfer of Assets from customers.INT FRS 119 : Extinguishing Financial Liabilities with Equity Instruments

Improvements to FRS issued in 2009

The company expect that the adoption of the above standards and interpretations will have no material impact on the financialstatements in the period of initial application.

2.2 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of the company’s financial statements requires management to make judgements, estimates and assumptionsthat affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at thereporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require amaterial adjustment to the carrying amount of the asset or liability affected in the future.

(a) Key sources of estimation uncertainty

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognisedin the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and futureperiods, if the revision affects both current and future period.

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that havea significant risk of causing a material adjustment to the carrying amounts of asset and liabilities within the next financial year arediscussed below:-

Depreciation of plant and equipment

The cost of plant and equipment is depreciated on a straight-line basis over their estimated economic useful lives. Managementestimates the useful lives of these property, plant and equipment to be within 3 to 5 years. The carrying amount of the company’splant and equipment at 31st March, 2010 was $5,002/- (2009: NIL). Changes in the expected level of usage and technologicaldevelopments could impact the economic useful lives and the residual values of these assets, therefore future depreciation chargescould be revised.

Income taxes

The company has exposure to income taxes on its income and certain expenses. Significant judgement is involved in determiningthe company’s provision for income taxes. There are certain transactions and computations for which the ultimate tax determinationis uncertain during the ordinary courses of business. The company recognises liabilities for expected tax issues based on estimatesof whether additional taxes will be due.

The carrying amount of company’s tax liabilities at 31st March 2010 was $11,000/-(2009: $3,207/-).

(b) Critical judgements made in applying accounting policies

The following are the judgements made by management in the process of applying the company’s accounting policies that havethe significant effect on the amounts recognised in the financial statements.

Impairment of financial assets

The company follows the guidance of FRS 39 on determining when a financial asset is other-than temporarily impaired. Thisdetermination requires significant judgment. The company evaluates, among other factors, the duration and extent to which thefair value of a financial asset is less than its costs; and the financial health of and near-term business outlook for the financialasset, including factors such as industry and company performance, changes in technology and operational and financing cashflow.

Impairment of other receivables

Management believes that with the deposits and other receivables are guaranteed and are recoverable at their carrying values asat the balance sheet, and hence no allowance for doubtful is deemed necessary.


102

2.3 PLANT AND EQUIPMENT

(a) Measurement

Items of plant and equipment are stated at cost less accumulated depreciation and impairment losses. The cost of an assetcomprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intendeduse.

(b) Depreciation

Depreciation is calculated on a straight line basis to write off the cost of plant and equipment over their expected usefullives. The estimated useful lives are as follows:

Office equipment 03 yearsFurniture and fittings 03 yearsComputers 03 years

The residual values and useful lives of plant and equipment are reviewed, and adjusted as appropriate, at each balancesheet date. A full year’s depreciation is provided for assets acquired in the year and no depreciation is provided for the yearin which the asset is disposed off.

Fully depreciated plant and equipment are retained in the financial statements at nominal value until such time when theyare no longer in use and no further charge for depreciation is made in respect of these assets.

(c) Subsequent expenditure

Subsequent expenditure relating to plant and equipment that has already been recognised is added to the carrying amountof the asset when it is probable that future economic benefits, in excess of the standard of performance of the assets beforethe expenditure was made, will flow to the company and the cost can be reliably measured. Other subsequent expenditureis recognised as an expense during the financial year in which it is incurred.

(d) Disposal

An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from itsuse or disposal. On disposal of an item of plant and equipment, the difference between the net disposal proceeds and itscarrying amount is taken to the income statement.

(e) Impairment of assets

Plant and equipment are reviewed for impairment whenever there is any indication that these assets may be impaired. Ifany such indication exists, the recoverable amount (i.e.) the higher of the fair value less cost to sell and value in use of theasset is estimated to determine the amount of impairment loss.

For the purpose of impairment testing, recoverable amount is determined on an individual asset basis unless the asset doesnot generate cash flows that are largely independent of those from other assets. If there is the case, recoverable amount isdetermined for the cash generating unit (CGU) to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of theasset (or CGU) is reduced to its recoverable amount. The impairment loss is recognised in the income statement.

An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to determine theassets’ recoverable amount since the last impairment loss was recognised. The carrying amount of an asset is increased toits revised recoverable amount, provided that this amount does not exceed the carrying amount that would have beendetermined (net of depreciation) had no impairment loss been recognised for the asset in prior years. A reversal ofimpairment loss for an asset is recognised in the income statement.

2.4 IMPAIRMENT

The carrying amounts of the company’s assets are reviewed at each balance sheet date to determine whether there is anyindication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. An impairment loss isrecognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. The impairmentloss is charged to the profit and loss statement unless it reverses a previous revaluation, credited to equity, in which case it ischarged to equity.

(a) CALCULATION OF RECOVERABLE AMOUNT

The recoverable amount of the company’s receivables carried is calculated as the present value of estimated future cashflows, discounted at the original effective interest rate (i.e. The effective interest rate computed at initial recognition of thesefinancial assets). Receivables with a short duration are not discounted.


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The recoverable amount of other assets is the greater of their fair values less costs to sell and value in use. In assessing valuein use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflectscurrent market assessments of the time value of money and the risks specific to the asset. For an asset that does generatelargely independent cash flows, the recoverable amount is determined for the cash-generating unit to which the assetbelongs.

(b) REVERSALS OF IMPAIRMENT

An impairment loss in respect of receivables carried at amortized cost is reversed if the subsequent increase in recoverableamount can be related objectively to an event occurring after the impairment loss was recognized.

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount orwhen there is an indication that the impairment losses for the asset no longer exist or have decreased.

However, an impairment loss in respect of goodwill is not reversed. The increased carrying amount of an asset due to areversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have beendetermined (net of amortization or depreciation) had no impairment loss been recognized for that asset in prior years.

2.5 INVENTORIES

Inventories comprising commodities (trading stocks) are stated at the lower of cost and net realizable value. Cost is determinedon a first-in, first-out basis.

Net realizable value represents the estimated selling price less anticipated costs of disposal and after making allowance fordamaged, obsolete and slow-moving items.

2.6 FINANCIAL ASSETS

Financial assets within the scope of FRS 39 are reclassified as either financial assets at fair value through profit or loss, loans andreceivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. Financial assets are recognised onthe balance sheet when, and only when, the Company becomes a party to the contractual provisions of the financial instruments.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair valuethrough profit or loss, directly attributable transaction costs. The company determines the Classifications of its financial assetsafter initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year end.

2.7 TRADE RECEIVABLES

Trade receivables are accounted for as receivables under FRS 39. They are recognised and carried at original invoiced amount,which represents their fair value on initial recognition, less allowance for any uncollectible amounts. Allowance for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off when identified. The accountingpolicy for this category of financial assets is stated in Note 2.5.

2.8 LOANS AND RECEIVABLES

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loansand receivables. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised inthe profit and loss statement when the loans and receivables are derecognised or impaired, as well as through the amortisationprocess.

2.9 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash balances and bank deposits and highly liquid investments, which are readily convertibleto cash and which are subject to an insignificant risk of change in value. For the purpose of the statement of cash flows, cash andcash equivalents are presented net of bank overdraft, if any, which are repayable on demand and which form an integral part ofthe company’s cash management. Restricted deposits are excluded from cash and cash equivalents.

2.10 TRADE CREDITORS AND OTHER PAYABLES

Trade creditors and other payables are carried at cost, which is the fair value of the consideration to be paid in the future forgoods and services received, whether or not billed to the company and subsequently measured at amortised cost, using theeffective interest method.

2.11 PROVISIONS

Provisions are recognised when the Company has a legal or constructive obligation as a result of past events, that it is probablethat an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of the obligation canbe made.


104

Where the effect of the time value of money is material, the amount recognised is the present value of the expenditures expectedto be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money andthe risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

2.12 FINANCIAL LIABILITIES

Financial liabilities at fair value through profit or loss when recognized initially are measured at fair value. Financial liabilities notat fair value through profit or loss are measured at fair value plus transaction costs that are directly attributable to the acquisitionor issue of the financial liability. After initial recognition financial liabilities at fair value through profit or loss, includingderivatives that are financial liabilities, are measured at fair value. Other financial liabilities not at fair value through profit or lossare measured at amortized cost and any difference between the proceeds (net of transaction costs) and the redemption value isrecognized in the profit and loss statement over the period of the borrowings are classified as current liabilities unless there is anunconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Items classified withintrade and other payables are not usually re-measured, as the obligation is usually known with a high degree of certainly andsettlement is short-term.

2.13 TAXATION

The income taxes are accounted using the asset and liability method that requires the recognition of taxes payable or refundablefor the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized inthe financial statements or tax returns. The measurement of current and deferred tax liabilities and assets are based on provisionsof the enacted or substantially enacted tax laws; the effect of future changes in the tax laws or rates are not anticipated. Income taxexpense represents the sum of the tax currently payable and deferred tax.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases ofassets and liabilities and their carrying amounts in the financial statements. Temporary differences are not recognized forgoodwill not deductible for tax purposes and the initial recognition of assets or liabilities that affect neither accounting nortaxable profit. The amount of deferred tax provided is based on the expected manner of realization or settlement of the Carryingamount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

Deferred taxation benefits are recognised in the accounts only to the extent of any deferred tax liability or when benefits areexpected to be realisable in the near future.

2.14 LEASED ASSETS

Leases on terms of which the company assumes substantially all risks and rewards of ownership of the leased items are classifiedas finance lease. Property, plant and equipment acquired by way of finance lease is capitalised at the lower of its fair value and thepresent value minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Leasepayments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate ofinterest on the remaining balance of the liability. Finance charges are charged directly to the profit and loss statement.

Leases where the lessor effectively retains substantially all the risks and rewards of ownership of the leased items are classified asoperating leases. Operating lease payments are recognised as an expense in the profit and loss statement on a straight-line basisover the lease term.

2.15 SHARE CAPITAL

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown inequity as a deduction from the proceeds. Where the company reacquires its own equity instruments as treasury shares, theconsideration paid, including any directly attributable incremental cost is deducted from equity attributable to the company’sequity holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, anyconsideration received, net of any directly attributable incremental transaction costs and related income tax effects, is included inequity attributable to the company’s equity holders a no gain or loss is recognised in the profit and loss statement.

2.16 REVENUE RECOGNITION

Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer. The revenueamount is the fair value of the consideration received or receivable from the gross inflow of economic benefits during the yeararising from the course of the ordinary activities of the entity and it is shown net of related tax, estimated returns, discounts andvolume rebates. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due,associated costs or the possible return of goods.

(a) Sale of goods

Revenue from sales of goods is recognised when the entity has delivered the products to the customers; the customer hasaccepted the products and the collectibility of the related receivables are reasonably assured.


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(b) Other Sales/Service income

Revenue from services is recognised when the company has delivered the sales/service to the customer, the customer hasaccepted the sales/services and collectibility of the related receivables is reasonably assured.

(c) Interest income

Interest income on financial instruments is recognised on a time-proportion basis using the effective interest method.When a receivable is impaired, the entity reduces the carrying amount to its recoverable amount, being the estimated futurecash flow discounted at the original effective interest rate of the instrument, and continue amortising the discount asinterest income on the recoverable amount.

2.17 EMPLOYEE BENEFITS

The company had no employees at the end of the financial period except the directors. So, the company could not make anycontributions to the Central Provident Fund, a defined contribution pension scheme.

2.18 FINANCE COSTS

All borrowing costs that are interest and other costs incurred in connection with the borrowing of funds are recognised as anexpense in the period in which they are incurred except for borrowing costs that are directly attributable to the acquisition,construction or production of a qualifying assets that necessarily take a substantial period of time to get ready for their intendeduse or sale are capitalised as part of the cost of that asset until substantially all the activities necessary to prepare the qualifyingasset for its intended use or sale are compete. The interest expense is calculated using the effective interest rate method.

2.19 FAIR VALUE FINANCIAL INSTRUMENTS

The carrying amounts of current receivables and payables are assumed to approximate their fair values. The carrying values ofcurrent financial assets and financial liabilities including cash, accounts receivable, short-term borrowings, account payableapproximate their values due to the short-term maturity of these instruments. The fair values of non-current financial instrumentsare not disclosed unless there are significant items at the end of the year and in the event the fair values are disclosed in therelevant notes. Disclosures of fair value are not made when the carrying amount is a reasonable approximation of fair value. Themaximum exposure to credit risk is the fair value of the financial instruments at the balance sheet date.

2.20 FOREIGN CURRENCY TRANSLATION

(1) Measurement currency

Items included in the financial statements of the Company are measured using the currency that best reflects the economicsubstance of the underlying events and circumstances relevant to the Company (“the measurement currency”). The financialstatements of the Company are presented in United States dollars which is the measurement currency of the Company.

(2) Transactions and balances

Foreign currency transactions are translated into the measurement currency using the exchange rates prevailing at the dateof transactions. Foreign currency monetary assets and liabilities are translated into the measurement currency at the ratesof exchange prevailing at the balance sheet date. Foreign exchange gains and losses resulting from the settlement of foreigncurrency transactions and from the translation at financial year-end exchange rates of monetary assets and liabilitiesdenominated in foreign currencies are taken to the income statement.

2.21 RELATED PARTIES

A related party is an entity or person that directly or indirectly through one or more intermediaries controls, is controlled by, oris under common or joint control with, the entity in governing the financial and operating policies, or that has an interest in theentity that gives it significant influence over the entity in financial and operating decisions. It also includes members of the keymanagement personnel or close members of the family of any individual referred to herein and others, who have the ability tocontrol, jointly control or significantly influence by or for which significant voting power in such entity resides with, directly orindirectly, any such individual. This includes parents, subsidiaries, fellow subsidiaries, associates, joint ventures and post-employmentbenefits plans, if any.


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3. PLANT AND EQUIPMENTBalance at Balance at

01/04/2009 Additions Disposals 31/03/2010$ $ $ $

CostOffice equipment – 531 – 531Computers – 6,820 (1,418) 5,402

– 7,351 (1,418) 5,933Accumulated depreciationOffice equipment – 141 – 141Computers – 790 – 790

– 931 – 931

Depreciation Net Book ValueCharge for

2009 2009 2010$ $ $

Office equipment – – 390Computers – – 4,612

– – 5,002

4. TRADE RECEIVABLES

2010 2009$ $

Trade receivables - related party – 704,298Trade receivables - others 3,664,076 –

3,664,076 704,298

Related party refers to a corporation in which there are common directors bearing no interest and within the normal credit terms withothers.

Credit terms of the trade receivables are at sight to 180 days on bank LC terms and/or against documents. Trade receivables aredenominated in United States Dollars.

The current receivables with a short duration are not discounted for present value and the carrying values are assumed to approximatethe fair value.

5. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS2010 2009

$ $Trade advances 514,651 –Prepayments 1,377 –Other receivables – others 3,393 –

519,421 –Deposits and other receivables are denominated in the following currencies:

2010 2009$ $

Singapore dollars 5,828 –United States dollars 513,593 –

519,421 –


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6. CASH AND BANK BALANCES

The cash and bank balances as at the balance sheet date are2010 2009

$ $Cash – 14Cash at banks 237,505 951Fixed deposits – –Fixed deposits – under lien 994,431 692,400

1,231,936 693,365

The effective interest rates on fixed deposits are about 0.085 % to 0.18 % p.a.(2009: 0.12% p.a). The fixed deposits amounting toUS$994,431/- (2009: US$692,400/-) pledged as security against property and for facility provided by the banks.

The cash and bank balances as at the balance sheet date are denominated in the following currencies:2010 2009

$ $Singapore dollars 698,829 693,365United States dollars 533,072 –

1,231,936 693,365

7. TRADE PAYABLES

2010 2009$ $

Trade payable – related party – 30,000Trade payable – others 4,472,864 –

4,472,864 30,000

Related party refers to a corporation in which there are common directors. Credit terms of the trade payables are at sight to 180 dayson bank LC terms. The carrying amounts are assumed to be a reasonable approximation of fair values.

Trade payables as at the balance sheet are denominated in United States dollars.

8. OTHER CREDITORS AND ACCRUALS2010 2009

$ $Provision for interest on discounted bills 290 –Provision for freight charges 78,730 –GST payable 81 –Other payables 6,769Other accruals 10,000 6,550

95,870 6,550

Other creditors and Accruals as at the balance sheet are denominated in the following currencies:2010 2009

$ $Singapore dollars 3,037 –United States dollars 92,833 6,550

95,870 6,550


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9. BANK BORROWINGS, secured

The bank facilities are secured by way of charges on receivables financed by the bankers, both present and future of the company.

The facilities are secured by way of:-

Lien on fixed deposits, margins and personal guarantees of the Shareowners of the company

The interest for revolving credit facility is charged at bank’s prevailing LIBOR/SIBOR rate calculated on daily balance with monthlyrests. The bank’s current prime lending rate is about 3.11% per annum.

10. TAX

(a) Tax expense / (credit)2010 2009

$ $Current taxation – current year 10,825 3,207

– under provision in prior years – –

10,825 3,207

Deferred taxation 175 –11,000 3,207

The income tax on profit before tax differs from the amount that would arise using the Singapore standard rate of income tax dueexplained in the numerical reconciliation between the accounting profit and tax expense.

The numerical reconciliation between the accounting profit and tax expense is as follows:-

2010 2009$ $

Accounting profit 132,620 30,188Tax calculated at corporate tax rate of 17%(2009: 18%) (22,545) (5,434)Tax effect on expenses that are not deductible for tax purposes (234) (378)Tax effect on temporary timing difference 175 –Tax exemption 11,604 2,618Other (13)

(11,000) (3,207)(b) Movement in current income tax liability

2010 2009$ $

Balance at beginning of financial year 3,207 –Tax expense on profit for current financial year 10,825 3,207Tax –net paid during the financial year (–) (–)

Balance at end of financial year 14,032 3,207

(c) Deferred tax

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current income tax assetsagainst current income tax liabilities and when the deferred income taxes relate to the same fiscal authority. The amounts,determined after appropriate offsetting, are shown on the balance sheet as follows:

2010 2009$ $

Deferred income tax asset – –Deferred income tax liability – –Net deferred income tax liability – –


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The movement in the deferred income tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction)during the financial year is as follows:

Deferred income tax assets2010 2009

$ $Tax losses – –Capital allowances – –Provisions – –Other temporary differences – –Deferred income tax assets

Deferred income tax liability2010 2009

$ $Excess of net book value over tax written down values of plant and equipment 175 –Unrealised exchange gains – –Other temporary differences – –Deferred income tax liability 175 –

The movement in the Company’s deferred tax liability is as follows:2010 2009

$ $Balance at 1st January – –Transfer to profit and los statement – –Other temporary differences 175 –Deferred income tax liability 175 –

11. SHARE CAPITAL

Issued and paid-up ordinary share capital2010 2009

$ $1,000,020 (2009: 1,000,020) ordinary shares 689,664 689,664Balance at end of financial year 689,664 689,664

The company was incorporated with 1,000,000 ordinary shares of S$1/- each as subscribers’ shares. For presentation purposes,Singapore dollar has been converted into United States dollar and reported accordingly. Subsequently the company issued 20 ordinaryshares of $1/- each at par for cash.

The holders of ordinary shares are entitled to receive dividends as a when declared by the company. All ordinary shares carry one voteper share without restriction. The ordinary shares carry no right to fixed income. The company is not subject to any externally imposedcapital requirements.

Capital Management

The objective when managing capital are to safeguard the entity’s ability to continue as a going concern, so that it can continue toprovide returns for owners and benefits for other stakeholders, and to provide an adequate return to owners by pricing products andservices commensurately with the level of risk taken. There were no changes in the approach to capital management during the year.The management manages the capital structure and makes adjustments to it where necessary or possible in the light of changes inconditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the managementmay adjust the amount of dividends paid to owners, return capital to owners, issue new shares, or sell assets to reduce debts.

12. REVENUE

Revenue represents sales made net of trade discount and goods and service tax.


110

13. DIRECT COSTS – COST OF SALES2010 2009

$ $Outsiders

– Purchases from outsiders 13,926,082 1,220,117– Bank charges 31,746 –– Freight, Demurrage, Despatch 464,199 –– Inspection expenses 4,020 –– Insurance 1,082 –– TR and discounting interest 6,653 –

14,433,782 1,220,117

14. STAFF COSTS2010 2009

$ $Directors’ remuneration – –Salary, bonus and CPF etc. 107,254 –Medical expense 279 –

107,533 –

15. PROFIT BEFORE TAXATION2010 2009

$ $This is determined after charging :–Bank charges 31,746 12,887Directors’ remuneration – –Depreciation 931 –Interest paid –– Discounting interest 2,199 –– TR interest 4,454 11,799Incorporation expense 1,690Loss on disposal of plant and equipment – 865Net foreign exchange difference 2,330 –Rental expense – Operating lease 16,812 –Staff costs 107,533 –Interest income (6,271) (6,149)

16. BANK FACILITIES, secured

The bank facilities are secured by way of deed of debenture and floating charges on receivables financed by the bankers, both presentand future of the company

2010 2009US$ US$

Bank overdrafts 5,000,000 –LC facilities 600,000 –

5,600,000 –

The facilities are secured by way of:–

(i) Lien on trade receivables financed by the respective banks and fixed deposits; and(ii) a deed of debenture by way of fixed and floating charge of on the assets financed by the bank.The interest for revolving credit facility is charged at LIBOR plus certain agreed percentage mutually agreed which varied from 2.5% to4% calculated on daily balance with monthly rests.


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17. COMMITMENTS

Operating Commitment

The company also leases one of the office equipment under cancellable operating lease agreement. The company is required to givethree months notice to renewal of the contract. The lease expenditure $16,812/- (2009: $NIL /-) charged to profit and loss statementduring the financial year.

The future aggregate minimum lease payable under non-cancellable operating leases contracted at the balance sheet date but notrecognized as liabilities, are as follows:–

2010 2009$ $

Not later than one year 13,700 –Between two to five years – –

13,700 –

18. CONTINGENT LIABILITY, unsecured

As at 31st March, 2010, Out of the facilities utilised with the banks,US$198,267/- (2009: NIL) related to discounted foreign usanceBills under bills for collection and the company’s liability on Letter of guarantee opened by the bank on behalf of the companyamounting to $1,721,385 (2009: NIL).

Also the banker given a guarantee on behalf of the company to IRAS towards GST registration against fixed deposit placed with thebanker for this purpose.

19. FINANCIAL INSTRUMENTS

The main risks arising from the company’s financial instruments are credit risk and price risk, primarily interest rate risk and marketrisk. The management has not established any written risk management policies and guidelines. However, as a minimum requirement,the management monitors and controls its main risks in the following manner:–

Credit Risk

Financial instruments contain an element of risk in that the counterparties may be unable to meet their obligations. Credit risk is therisk of loss that may arise on outstanding financial instruments should a counterparty default on its obligation. The company exposureto credit risk arises primarily from trade and other receivables. For other financial (including cash and cash equivalents), the companyminimises credit risk by dealing exclusively with high credit rating counterparties.

The company’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure.

Exposure to credit risk

At the balance sheet date, the company’s maximum exposure to credit risk is represented by the carrying amount of each class offinancial assets recognised in the balance sheet.

Credit risk concentration profile

The credit risk concentration profile of the company’s trade receivables as the company has large number of customers to deal with andthere is no concentration of geological presence.

Interest Rate Risk

Interest rate risk relates primarily to the risk that the value of financial instruments will fluctuate as a result of changes to market interestrates. The company obtains financing from banks at the prevailing interest rates and additional financing through bank credit facilitiesat the most favourable interest rates and terms and conditions available to the company.

Market Risk

The company is exposed to changes in commodity prices of items, especially international coal prices. The company does not usederivative financial instruments to hedge underlying commodity price risk. However, this risk is mitigated as the company signed thecounter party agreement with their customers for such commodity price risk.

Financial Credit Risk

The company has placed its surplus funds in a reputed financial institution to mitigate potential concentrations of credit risk in relationto its bank balances


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Foreign Currency Risk

The company is exposure on foreign currency risk is minimum as the company’s sales and purchases are denominated in the sameforeign currencies.

Liquidity Risk

Liquidity risk is the risk that the company will encounter difficulty in meeting financial obligations due to shortage of funds.

The company manages liquidity risk by maintaining sufficient cash to meet normal operating commitments and/or will able to getfinancial support from its holding company.

All trade and other payable are due within one year.

20. CAPITAL MANAGEMENT

The primary objective of the company’s capital management is to ensure that it maintains a strong credit rating and healthy capitalratios in order to support its business and maximize shareholder value.

The company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain oradjust the capital structure, the company adjusts the dividend payment to Shareowners, if any, return capital to Shareowners orissue new shares. No changes were made in the objectives, policies or processes during the years ended 31stMarch, 2010 and31st March 2009.

The company will continue to be guided by prudent financial policies of which gearing is an important aspect.

2010 2009$ $

Total Loans and borrowings 4,161,884 681,018Equity attributable to the equity holders of the company 739,531 716,645Capital and net debt 4,901,415 1,397,663Gearing ratio 0.849 0.48725

21. NET FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

The financial assets and financial liabilities of the Company consist of its current assets, current liabilities and non-current receivable.The fair values of the Company’s financial assets and financial liabilities at the balance sheet date approximate their book values asshown in the balance sheet.

22. NEW ACCOUNTING STANDARDS AND FRS INTERPRETATIONS

Certain new accounting standards and interpretations have been published that are mandatory for accounting periods beginning on orafter 1st November 2009. The company does not expect that adoption of these accounting standards or interpretations will have amaterial impact on the company’s financial statements.

23. COMPARATIVE FIGURES

The current financial period is a period of twelve months from 1st April 2009 to 31st March 2010, while the comparative figures arefrom the date of incorporation which is on 21st May, 2008 to 31st March, 2009.

24. AUTHORISATION OF FINANCIAL STATEMENTS

These financial statements were authorised for issue in accordance with a resolution of the Board of Directors of KOTHARI PRODUCTSSINGAPORE PRIVATE LIMITED on 22nd May 2010.

KPL EXPORTS PRIVATE LIMITED

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DIRECTORS’ REPORT

TO THE MEMBERS :

The Board of Directors of your Company present herewith the Second Annual Report and Audited Accounts of the Company for thefinancial year ended 31st March, 2010.

(Rs. in Thousands)

FINANCIAL PERFORMANCE

Financial Year Financial YearEnded 31.03.2010 Ended 31.03.2009

Sales 1566892 1440454Other Income 116287 71907Profit(+)/Loss (-) before Taxation 28502 88167Provision for Taxation 10000 31700Profit(+)/Loss (-) after Tax 18502 56467Add : Balance brought forward 56467 Nil

Amount available for appropriation 74969 56467

APPROPRIATIONSTransfer to General Reserve NIL NILProposed Dividend NIL NILAdditional Tax on Proposed Dividend NIL NILBalance of amount carried forward 74969 56467

74969 56467

2010 IN RETROSPECT – AT A GLANCE :

The Directors report that the Company’s sales turn over during the year under review has increased to Rs.15668.92 Lacs as against Rs.14404.54Lacs during the previous financial year. However the profit before tax during the year under review has reduced considerably to Rs.285.02Lacs as against Rs. 881.67 Lacs in the previous year. Similarly, the profit after tax has also decreased to Rs.185.02 Lacs as against Rs.564.67Lacs in 2009. The profitability of the Company has reduced due to increase in selling & administrative expenses etc.. The Directors aremaking all endeavours to give better performance in future.

DIVIDEND :


DIRECTORS :

Sri Deepak Kothari & Smt.Arti Kothari, Directors of the Company, retire by rotation in the ensuing Annual General Meeting and beingeligible offer themselves for reappointment. The Board recommends their reappointments. Further, Sri Pramod Kumar Tandon was appointedas a Director of the Company w.e.f. 19th December, 2009 in the Extra Ordinary General Meeting of the Company held on the aforesaid date& is liable to retire by rotation.

SHARE CAPITAL :





2. That the Directors have selected such accounting policies and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at the end of the financial year ended 31.03.2010;


114

By order of the BoardFor KPL EXPORTS PVT. LTD.


3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and otherirregularities ;





M/s Mehrotra & Mehrotra, Chartered Accountants, Auditors of the Company, retire at the ensuing annual general meeting and are eligiblefor reappointment. There are no qualification or adverse remarks in the Auditors Report which call for explanation by the Directors.



ACKNOWLEDGEMENT :

Your Directors wish to place on record their appreciation for the co-operation and support extended by various Government Departments,Bankers etc..


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1. We have audited the attached Balance Sheet of KPL EXPORTS PRIVATE LIMITED as at 31st March, 2010 and Profit & LossAccount for the period ended on that date, annexed hereto, which are in agreement with the books of accounts. These financialstatements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financialstatements based on our audit.


3. As required by the Companies (Auditors’ Report) Order, 2003 issued by the Central Government of India in terms of sub-section(4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as weconsidered appropriate and the information and explanations given to us during the course of our audit, we report that, in ouropinion :–

(i) The Company does not own any fixed assets. Therefore reporting under clause 4(i) of the Companies (Auditors’ Report)Order, 2003 is not applicable to the Company.

(ii) The Company has not started any manufacturing activity during the year. Therefore, reporting under clause 4(ii) of theCompanies (Auditors’ Report) Order, 2003 is not applicable to the Company.





(e) The Company had taken loans from its holding company. In respect of this loan the maximum amount outstandingduring the year was Rs.1626.05 lac and the same was repaid during the year and there was no amount outstanding asat the end of the year. The terms and other conditions of the said loans were not prima facie prejudicial to the interestof the company.






(viii) The maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) ofsection 209 of the Companies Act, 1956 for the products manufactured by the Company.

(ix) (a) According to the information & explanations given by the management, the company has not incurred any liability ofstatutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales tax / Value Added Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, Cess and any other statutorydues.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect ofIncome-tax, Wealth-tax, Service-tax, Sales-tax, Custom duty, Excise Duty and Cess as at 31st March, 2010 which wereoutstanding for a period of more than six months from the date they became payable.


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(x) The Company has been registered for less than five years. Therefore, the reporting under clause 4(x) of the Companies(Auditors’ Report) Order 2003 is not applicable to the company.



(xiii) The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the reporting under Clause 4(xiii)of the Companies (Auditors’ Report) Order, 2003 is not applicable to the Company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordinglythe reporting under clause 4(xiv) of the Companies (Auditors’ Report) Order, 2003 is not applicable to the company.

(xv) The company has given guarantees to Allahabad Bank, Kanpur for its holding company-Kothari Products Limited ofRs. 105 Crore. The terms & conditions of the guarantees are not prejudicial to the interest of the company.


(xvii) As per information and explanations given to us, neither short-term funds nor long-term funds have been raised during theyear.








iii. in our opinion, Balance Sheet; and the Profit & Loss Account dealt with by this report comply with the AccountingStandards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

iv. based on the written representations received from the directors as on 31st March, 2010 and taken on records by the Boardof Directors, we report that none of the directors is disqualified from being appointed as a director in terms of clause (g) ofsub-section (1) of Section 274 of the Companies Act, 1956.



(b) in the case of Profit & Loss Account, of the Profit of the Company for the period ended on that date.


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I. SOURCES OF FUNDSShareowners’ FundShare Capital 1 500000.00 500000.00Reserve & Surplus 2 74968893.55 56466981.28Loan FundUnsecured Loans 3 0.00 119404398.96

TOTAL 75468893.55 176371380.24

II APPLICATION OF FUNDSCurrent Assets, Loans & AdvancesLoans & Advances 4 61627869.41 21042049.00Sundry Debtors 5 0.00 1190513756.50Cash & Bank Balances 6 58447003.52 1577852060.94

120074872.93 2789407866.44

Less: Current Liabilities & ProvisionsSundry Creditors 7 2646194.98 2581390107.00Provision for taxation 41700000.00 31700000.00

44646194.98 2613090107.00


Miscellaneous Expenses to the extent not written offPreliminary Expenses 40215.60 53620.80

Total 75468893.55 176371380.24

Significant Accounting Policies & 11Notes to the Accounts






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Schedule For the Period Ended For the Period Ended

Nos. 31.03.2010 31.03.2009

(Rupees) (Rupees)INCOMESales 1566892002.00 1440454302.00Other Income 8 116287252.81 71907197.73

Total 1683179254.81 1512361499.73

EXPENDITUREMaterials Consumed 9 1551378939.00 1426196716.00Selling & Administrative Expenses 10 103298403.54 -2002197.55

Total 1654677342.54 1424194518.45

PROFIT BEFORE TAXATION 28501912.27 88166981.28

PROVISION FOR TAXATIONProvision for Tax 10000000.00 31700000.00

PROFIT AFTER TAXATION 18501912.27 56466981.28

Balance Brought Forward 56466981.28 0.00

AMOUNT AVAILABLE FOR APPROPRIATION 74968893.55 56466981.28

APPROPRIATIONS

Transfer to General Reserve 0.00 0.00



PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 31ST MARCH, 2010





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31.03.2010 31.03.2009(Rupees) (Rupees)

SCHEDULE : 1Share CapitalAuthorised250000 Equity Shares of Rs. 10/– each 2500000.00 2500000.00

Issued, Subscribed and Paid–up Capital50000 Equity Shares of Rs. 10/– each, fully paid up 500000.00 500000.00

Total 500000.00 500000.00

SCHEDULE : 2Reserves & SurplusProfit & Loss Account 74968893.55 56466981.28

Total 74968893.55 56466981.28

SCHEDULE : 3Unsecured LoansKothari Products Limited, Holding Company 0.00 119404398.96

Total 0.00 119404398.96

SCHEDULE : 4Loans & AdvancesAmount receivable in cash or in kind for value tobe received or pending adjustments 0.00 11228402.00Deposit with Income–tax 61627869.41 9813647.00

Total 61627869.41 21042049.00

SCHEDULE : 5Sundry DebtorsSundry Debtors (Outstanding for a period less than 6 months) 0.00 1190513756.50

Total 0.00 1190513756.50

SCHEDULE : 6Cash & Bank BalancesIn fixed Deposits Accounts with Nationalised Banks 56197164.00 1559931012.09(including interest accrued on it)In Current Accounts with–

Axis Bank Ltd., Kanpur 1040493.71 11237.47Bank of India, Kanpur 1001203.72 417629.64UCO Bank, Delhi 17505.35 17301545.00UCO Bank, Delhi –EEFC Account 190636.74 190636.74

Total 58447003.52 1577852060.94

SCHEDULE : 7Sundry CreditorsSundry Creditors 0.00 1196272519.00Advance against Orders 0.00 1379835848.00Outstanding Liabilities 2946194.98 5281740.00

Total 2946194.98 2581390107.00


120

SCHEDULE : 11





(2) Investments :

Investments are stated at cost less fall in their market value, considered permanent.

SCHEDULE : 8Other IncomeInterest Income from Banks (Gross, TDS Rs. 30020581/-, 116192000.36 71907197.73Previous Year Rs. 9813647/-)Profit on Sale of Long term non trade Investments 95252.45 0.00

Total 116287252.81 71907197.73

SCHEDULE : 9Materials Consumed :Opening Stock 0.00 0.00Add: Purchases 1551378939.00 1426196716.00Less: Closing Stock 0.00 0.00

Total 1551378939.00 1426196716.00

SCHEDULE : 10Selling & Administrative ExpensesBank Charges 5570590.65 3151476.06Commission on Sales 0.00 2880909.00Difference in Conversion of Foreign Currency 62677907.48 -7507319.77Loss on Forward Contract (FC) 12619529.00 -12356728.00Travelling & Conveyance Expenses 0.00 950915.00Electricity Expenses 24000.00 22000.00Interest Expense to bank 9784545.96 9290.00Interest to Holding Company 12003889.00 10350025.00Licence & Legal 6583.00 2491.00Printing & Stationary Expenses 27992.25 23370.00Preliminary Expenses Written Off 13405.20 13405.20Professional Fee 50000.00 50000.00Rent Expenses to KPL 108000.00 99000.00Salary 397240.00 292458.96Statutory Audit Fees 5515.00 5515.00Staff Welfare Expenses 6000.00 5500.00Telephone Expenses 3206.00 5495.00

Total 103298403.54 -2002197.55

SCHEDULES TO ACCOUNTSFor the Period Ended For the Period Ended

31.03.2010 31.03.2009(Rupees) (Rupees)


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(1) CONTINGENT LIABILITIES:

Guarantee given to Allahabad Bank, Kanpur for Kothari Products Limited, holding company, of Rs. 105,00,00,000/- (PreviousYear Rs. Nil)

(2) ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPHS 3, 4C AND 4D OF PART II OFSCHEDULE VI OF THE COMPANIES ACT, 1956.

a) Quantitative Details of Traded Goods: (in M.T.)

2009-10 2008-09Opening Stock

Maize 0.000 0.000Soyabeens 0.000 0.000Soyabeen Oil 0.000 0.000Sunflower Seed Oil 0.000 0.000PurchasesMaize 0.000 36700.000Soyabeens 37159.855 19233.000Soyabeen Oil 18371.000 0.000Sunflower Seed Oil 0.000 5500.000SalesMaize 0.000 36700.000Soyabeens 37159.855 19233.000Soyabeen Oil 18371.000 0.000Sunflower Seed Oil 0.000 5500.000Closing StockMaize 0.000 0.000Soyabeens 0.000 0.000Soyabeen Oil 0.000 0.000Sunflower Seed Oil 0.000 0.000

b) Value of Import (C.I.F. basis) (in Rs.) 1551378939.00 1426196716.00

c) Expenditure in Foreign Currency Nil Nil

d) Earning in Foreign Currency (in Rs.) 1566892002.00 1440454302.00

e) Amount remitted during the year in foreign currency on account of Dividend– Nil Nil

(3) PAYMENTS TO AUDITORS :

As Auditors 5515.00 5515.00


(5) Their exists neither deferred tax asset nor liability as required by Accounting Standard (AS - 22) - ‘Accounting for Taxes on Income’ issuedby the institute of Chartered Accountants of India.

(6) The details of the only related partly transction as required by Accounting Standard (AS - 18) ‘Related Party Disclosures’ are given below :Kothari Products Limited, Holding Company -

Unsecured loans taken and balance outstanding 0.00 119404398.96Interest paid on loan taken 12003889.00 10350025.00Rent paid 108000.00 99000.00

(7) In terms of Accounting Standard 28 “Impairment of Assets” Issued by the Institute of Chartered Accountants of India, there is noimpairment loss on assets for the year.

(8) In terms of Accounting Standard 29 “Provisions, Contingent Liabilities and Contingent Assets” Issued by the Institute of CharteredAccountants of India there has been no Provision on beginning and at the end of the year, therefore no disclosure requirements.

(9) The figures of the previous year have been re-grouped and recast to make them comparable with the current year’s figures.





122










Sources of Funds :







Turnover 1566892 Total Expenditure 1654677

Other Income 116287


Earnings per share (in Rs.) 370.04 Dividend Rate % Nil





IMK HOTELS PRIVATE LIMITED

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DIRECTORS’ REPORT

TO THE MEMBERS :

The Board of Directors of your Company feel pleasure in presenting the Second Annual Report and Audited Accounts of the Company forthe financial year ended 31st March, 2010.

YEARLY OVERVIEW :

In line with the objects of the company for carrying on the business of establishing/running hotels/motels/service apartments/resorts/boarding & lodging centres etc., the company has entered into a joint venture of establishing a hotel and service apartments at Lavasa and hasmade an investment of Rs. 8.5 crores under the project which is under contruction.

DIVIDEND :

Since there has been no profits during the year under review, hence your Directors are unable to recommend any Dividend for the financialyear.

DIRECTOR :

Sri Deepak Kothari, Director of the Company, retire by rotation in the ensuing Annual General Meeting and being eligible offers himself forreappointment.

SHARE CAPITAL :





2. That the Directors have selected such accounting policies and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at the end of the financial year ended 31.03.2010;

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and otherirregularities ;




AUDITORS & AUDITORS’ REPORT:

M/s Mehrotra & Mehrotra, Chartered Accountants, Auditors of the Company, retire at the ensuing annual general meeting and are eligiblefor reappointment. There are no qualification or adverse remarks in the Auditors Report which call for explanation by the Directors.



ACKNOWLEDGEMENT :

Your Directors wish to place on record their appreciation for the co-operation and support extended by various Government Departments,Bankers etc..

By order of the BoardFor IMK HOTELS PVT. LTD.



124


Registration No. Of the Company : 11–185511Nominal Capital : Rs. 25,00,000/-

To,The Members,IMK HOTELS PRIVATE LTD.373, Konark House, Veer Savarkar Road,Ground Floor, Near Sidhivinayak TemplePrabhadevi, Dadar (West), Mumbai–400028Maharashtra.

We have examined the register, records, books and papers of IMK Hotels Private Limited, (the Company) as required to bemaintained under the Companies Act, 1956, (the Act) and the rules made there under and also the provisions contained in theMemorandum and Articles of Association of the Company for the financial year ended on 31.03.2010. In our opinion and to thebest of our information and according to the examinations carried out by us and explanations furnished to us by the Company, itsofficers and agents, we certify that in respect of the aforesaid financial year:

1. The Company has kept and maintained all registers as stated in Annexure ‘A’ to this certificate, as per the provisions of the Actand the rules made there under and all entries therein have been duly recorded.

2. The Company has duly filed return as stated in Annexure ‘B’ to this certificate, with the Registrar of Companies within the timeprescribed under the Act, and rules made there under, e form No. 23 AC, 23 ACA & 66 were filed late along with additionalfee. As informed no forms were required to be filed with Regional Director, Central Government, Company Law Board or otherauthorities.

3. The Company is a Private Limited Company (wholly owned subsidiary of a public limited Company) has the minimum prescribedpaid up Capital and its maximum number of members during the said financial year were seven excluding its present and pastemployees, if any, and the Company during the year under scrutiny :

(i) has not invited public to subscribe for its shares or debentures ; and

(ii) has not invited or accepted any deposits from persons other than its members, directors or their relatives.

4. The Board of Directors duly met four times on 27.06.2009, 25.09.2009, 28.12.2009 and 23.03.2010 in respect of whichmeetings proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintainedfor the purpose.

5. The Company has not closed its Register of Members.

6. The Annual General Meeting for the financial year ended on 31.03.2009 was held on 30.09.2009 after giving due notice to themembers of the Company and the resolutions passed thereat were duly recorded in Minutes Book maintained for the purpose.

7. No extra ordinary general meeting was held during the financial year.

8. The Company has not advanced any loans to its directors or persons or firms or companies referred to under section 295 of theAct.

9. The Company has not entered into contracts falling within the purview of Section 297 of the Act.

10. The Company has made necessary entries in the Register maintained under Section 301 of the Act.

11. As there were no instances falling within the purview of section 314 of the Act, the Company has not obtained any approvalsfrom the Board of Directors, members or Central Government.

12. The Company has not issued any duplicate shares certificates during the financial year.

13. The Company:

(i) there was no allotment, transfer / transmission of securities during the financial year;

(ii) has not deposited any amount in a separate Bank Account as no dividend was declared during the financial year;

(iii) has not paid/posted warrants to any members of the Company as no dividend was declared during the financial year;


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(iv) was not required to transfer any amounts to Investors Education and Protection Fund ;

(v) was not required to comply with the provisions of Section 217 of the Act.

14. The Board of Directors of the Company is duly constituted and there was no appointment of Directors, Additional Directors,Alternate Directors and Directors to fill casual vacancy during the financial year.

15. The Company has not appointed any Managing Director / Whole time Director / Manager during the financial year.

16. The Company has not appointed any sole-selling agents during the financial year.

17. As informed Company was not required to obtain any approvals of the Central Government, Company Law Board, RegionalDirector, Registrar of Companies during the financial year.

18. The Directors have disclosed their interest in other firms/companies to the Board of Directors pursuant to the provisions of theAct and rules made there under.

19. The Company has not issued any shares, debentures or other securities during the financial year.20. The Company has not bought back any shares during the financial year.21. There was no redemption of preference shares or debentures during the financial year.22. There were no transactions necessitating the Company to keep in abeyance the rights to dividend, rights shares and bonus shares

pending registration of transfer of shares.23. The Company has not invited / accepted any deposits including any unsecured loans falling within in the purview of section 58

A during the financial year. Unsecured loans were accepted from body corporate.24. The amount borrowed by the Company from the body corporate during the financial year ended 31st March 2010 were within

the borrowing limits of the Company and that necessary resolutions as per section 293 (1) (d) of the Act have been passed in dulyconvened extraordinary general meeting.

25. The Company has not made any loans or advances or given guarantees or provided securities to other bodies corporate andconsequently no entries have been made in the register kept for the purpose. The Company has made investment (shareapplication) to other body corporate in compliance with the provisions of the Act.

26. The Company has not altered the provisions of the Memorandum with respect to situation of the Company’s Registered Officefrom one State to another during the year under scrutiny.

27. The Company has not altered the provisions of the Memorandum with respect to the objects of the Company during the yearunder scrutiny.

28. The Company has not altered the provisions of the Memorandum with respect to name of the Company during the year underscrutiny.

29. The Company has not altered the provisions of the Memorandum with respect to Share Capital of the Company during the yearunder scrutiny.

30. The Company has not altered its Articles of association during the year under scrutiny.31. There was no prosecution initiated against or show cause notices received by the Company and no fines or penalties or any other

punishment was imposed on the Company during the financial year, for the offences under the Act.32. The Company has not received any money as security from its employees during the financial year.33. As the company has not constituted any provident fund with recognition from prescribed authority provisions of Section 418 of

the Act do not apply.

for Gupta Saurabh & Associates(Company Secretaries)

Sd/–(Saurabh Gupta)

Place : KANPUR Prop.Date : 29th May, 2010 C. P. No.: 4910


126

ANNEXURE A

Registers as maintained by the Company

Register of Members u/s 150 of the Act.

Minute Books of meetings of Directors held during the year.

Minute Books of proceedings of General Meetings held during the year.

Register of particulars of contracts which Directors are Interested.

Register of Directors u/s 303.

Register of Directors’ Shareholdings u/s 307 of the Act.

Register of Share Transfer.

Register of investments u/s 372 A

Books of Accounts u/s 209.

Register of Share application and allotment

ANNEXURE B

1. Forms and Returns as filed by the Company with the Registrar of Companies during the financial year ending 31st March, 2010.

Sl. Form No. Under Date of Whether filed If delay in filing,No. Return Section filing within Prescribed whether requisite

for time additional feepaid

1. Form No. 66 U/S 383A 14.11.09 No YesCompliance F.Y. 31.03.09Certificate

2. Form No. 20B U/S 159 26.11.09 Yes NoAnnual Return F.Y. 31.03.09

3. Form No. 23 AC U/S 220 28.11.09 No YesForm No. 23 ACA F.Y. 31.03.09Balance Sheet & P/L

Central Government NIL

Regional Director NIL

for Gupta Saurabh & Associates(Company Secretaries)

Sd/–(Saurabh Gupta)

Place : KANPUR Prop.Date : 29th May, 2010 C. P. No.: 4910


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1. We have audited the attached Balance Sheet of IMK HOTELS PRIVATE LIMITED as at 31st March, 2010 and Profit & Loss

Account for the year ended on that date, annexed hereto, which are in agreement with the books of accounts. These financialstatements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financialstatements based on our audit.


3. As required by the Companies (Auditors’ Report) Order, 2003 issued by the Central Government of India in terms of sub-section(4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as weconsidered appropriate and the information and explanations given to us during the course of our audit, we report that, in ouropinion :–

(i) The Company does not own any fixed assets. Therefore reporting under clause 4(i) of the Companies (Auditors’ Report)Order, 2003 is not applicable to the Company.

(ii) The Company has not started any business activity during the year. Therefore, reporting under clause 4(ii) of the Companies(Auditors’ Report) Order, 2003 is not applicable to the Company.





(e) The Company has taken loans from its holding company. In respect of this loan the maximum amount outstandingduring the year was Rs.550.06 lac and year end balance was also Rs.550.06 lac. There are no stipulations for therepayment of the loans. The terms and other conditions of the said loans are not prima facie prejudicial to the interestof the company.







(viii) The Company has not started any manufacturing activity during the year. Therefore, reporting under clause 4(viii) of theCompanies (Auditors’ Report) Order, 2003 is not applicable to the Company.

(ix) (a) According to the information & explanations given by the management, the company has not incurred any liability ofstatutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales tax / Value Added Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, Cess and any other statutorydues.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect ofIncome-tax, Wealth-tax, Service-tax, Sales-tax, Custom duty, Excise Duty and Cess as at 31st March, 2010 which wereoutstanding for a period of more than six months from the date they became payable.


128





(x) The Company has been registered for less than five years. Therefore, the reporting under clause 4(x) of the Companies(Auditors’ Report) Order 2003 is not applicable to the company.



(xiii) The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the reporting under Clause 4(xiii)of the Companies (Auditors’ Report) Order, 2003 is not applicable to the Company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordinglythe reporting under clause 4(xiv) of the Companies (Auditors’ Report) Order, 2003 is not applicable to the company.



(xvii) As per information and explanations given to us, neither short-term funds nor long-term funds have been raised during theyear.








iii. in our opinion, Balance Sheet; and the Statement of Preoperative Expenses dealt with by this report comply with theAccounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

iv. based on the written representations received from the directors as on 31st March, 2010 and taken on records by the Boardof Directors, we report that none of the directors is disqualified from being appointed as a director in terms of clause (g) ofsub-section (1) of Section 274 of the Companies Act, 1956.



(b) in the case of Profit & Loss Account, of the Loss of the Company for the period ended on that date.


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I. SOURCES OF FUNDSShareowners’ FundShare Capital 1 2500000.00 2500000.00Reserves & Surplus 2 27600000.00 27600000.00

Unsecured Loans 3 55006253.00 0.00

Total 85106253.00 30100000.00

II APPLICATION OF FUNDSInvestments 4 85000000.00 30000000.00

Current Assets,Loans & AdvancesCash & Bank Balances 5 14931.00 18745.00

14931.00 18745.00

Less: Current Liabilities & ProvisionsOutstanding Liabilities 1214.00 1853.00

1214.00 1853.00


Miscellaneous Expenses to the extent not written offProfit & Loss Account 26049.60 0.00Pre–operative Expenses 3206.40 4008.00Preliminary Expenses 63280.00 92536.00 79100.00 83108.00

Total 85106253.00 30100000.00

Significant Accounting Policies & 6Notes to the Accounts






130


Nos. 31.03.2010 31.03.2009

(Rupees) (Rupees)

INCOMESales 0.00 0.00

Total 0.00 0.00

EXPENDITURELicence & Legal Expenses 7550.00 0.00Miscellaneous Expenses 664.00 0.00Statutory Audit Fee 1214.00 0.00Preliminary Expesnes Written Off 15820.00 0.00Pre-operative Expesnes Written Off 801.60 0.00

Total 26049.60 0.00

PROFIT BEFORE TAXATION -26049.60 0.00PROVISION FOR TAXES :Current Tax 0.00 0.00PROFIT AFTER TAXATION -26049.60 0.00Balance Brought Forward 0.00 0.00

Amount Carried Forward to Balance Sheet -26049.60 0.00







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SCHEDULE : 6





(2) Investments :Investments are stated at cost less fall in their market value, considered permanent.


(1) Additional Information Pursuant to The Provisions of Paragraphs Nil Nil3, 4C and 4D of Part II of Schedule VI of The Companies Act, 1956 31.03.2010 31.03.2009

(Rs.) (Rs.)(2) Payments to Auditors :

As Auditors 1214.00 1243.00



31.03.2010 31.03.2009(Rupees) (Rupees)

SCHEDULE : 1

Share Capital

Authorised(250000 Equity Shares of Rs. 10/– each) 2500000.00 2500000.00

Issued, Subscribed and Paid up Capital250000 Equity Shares of Rs. 10/– each 2500000.00 2500000.00

Total 2500000.00 2500000.00

SCHEDULE : 2

Reserves & Surplus

Share Premium Account 27600000.00 27600000.00

Total 27600000.00 27600000.00

SCHEDULE : 3

Unsecured LoansKothari Products Limited, Holding Company 55006253.00 0.00

Total 55006253.00 0.00

SCHEDULE : 4

InvestmentsShare Application Money 85000000.00 30000000.00

Total 85000000.00 30000000.00

SCHEDULE : 5

Cash & Bank BalancesIn Current Account with Scheduled Bank 14931.00 18745.00

Total 14931.00 18745.00


132

SCHEDULES TO ACCOUNTS





(5) In terms of Accounting Standard 28 “Impairment of Assets” Issued by the Institute of Chartered Accountants of India,there is no impairment loss on assets for the year.

(6) In terms of Accounting Standard 29 “ Provisions, Contingent Liabilities and Contingent Assets” Issued by the Institute ofChartered Accountants of India, there has been no Provision on beginning and at the end of the year, therefore nodisclosure requirements.

(7) The figures of previous year have been regrouped and recast whereever considered necessary to make them comparable.


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Sources of Funds :







Turnover N.A. Total Expenditure N.A.

Other Income N.A.

Profit Before Tax N.A. Profit After Tax N.A.

Earnings per share (in Rs.) N.A. Dividend Rate % N.A.





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PROXY FORM26TH ANNUAL GENERAL MEETING ON 21ST SEPTEMBER, 2010

I/We .......................................................................................... of ......................................................................................................being a Member/Members of above named Company, hereby appoint ........................................................................................

....................................................... of ................................................................... or failing him ......................................................

............................................................. of ................................................................................................................. as my/our Proxyto attend and vote for me/us and on my/our behalf at the Twenty Sixth Annual General Meeting of the Company, to be heldat “LITTLE CHEF”, Civil Lines, Kanpur on Tuesday, the 21st day of September, 2010 at 11.30 A.M. and at any adjournmentthereof.

Signed at ............................................................ this ......................................................... day of ......................................................

Ledger Folio No. .....................................D.P. Id* ....................................................Client Id* ......................................................

Number of Equity

Shares held .................................................................................. Signature .............

NOTES :1. The Proxy need not be a member.2. This Proxy duly signed across 1 Rupee Revenue Stamp should reach the Registered Office of the Company not less than

48 hours before the time fixed for the Meeting.* Applicable for members holding shares in electronic form.

— — — — — — — — — — — — — — — — — — — — — — — — TEAR HERE — — — — — — — — — — — — — — — — — — — — — — — —

Regd. Office : “PAN PARAG HOUSE”, 24/19, THE MALL, KANPUR - 208 001

ATTENDANCE SLIP

I, hereby record my presence at the Twenty Sixth Annual General Meeting being held on Tuesday, the 21st day of September,2010 at 11.30 A.M. at “LITTLE CHEF”, Civil Lines, Kanpur.

1. Full Name of the Shareowner/Proxy ..........................................................................................................................................(in Block Letters)

2. Ledger Folio No. .................................................. D.P. Id.* ......................................... Client Id.* .........................................

3. No. of Equity Shares held ................................................................. 4. Signature of the Shareowner/Proxy

............................................................................................................. attending .............................................................

To be used only when First named Shareowner is not attending

Please give full name of the Joint Holders.

1. Mr./Mrs./Miss ............................................................................................... Signature .............................................................

2. Mr./Mrs./Miss ............................................................................................... Signature .............................................................(in Block Letters)

NOTES :i. Please fill in this attendance slip and hand it over at the entrance of the hall.ii. Shareowners who come to attend the meeting are requested to bring their copies of the Annual Report with them.iii. Applicable for members holding shares in electronic form.iv. No gift will be distributed in the aforesaid meeting as per SEBI guidelines.

AffixRe. 1/-

RevenueStamp

Regd. Office : “PAN PARAG HOUSE”, 24/19, THE MALL, KANPUR - 208 001

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