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CONTENTS

Board of Directors 2
Founder Chairman 3
CMD Message to the Shareowners 4–6
Notice 7–8
Directors’ Report 9–11
Corporate Governance Report 12–19
STANDALONE STATEMENTS:-
Auditors’ Report 20–21
Balance Sheet 22
Profit & Loss Account 23
Schedules to Accounts 24–38
Balance Sheet Abstract and
Company’s General Business Profile 39
Cash Flow Statement 40
CONSOLIDATED STATEMENTS:-
Auditors’ Report 41
Balance Sheet 42
Profit & Loss Account 43
Schedules to Accounts 44–58
Cash Flow Statement 59
Statement u/s 212 of Subsidiaries 60
SUBSIDIARIES:-
Sukhdham Constructions & Developers Ltd.:
Directors’ Report 61–62
Compliance Certificate 63–65
Auditors’ Report 66–67
Annual Accounts 68–73
Arti Web Developers Pvt. Ltd.:
Directors’ Report 74
Auditors’ Report 75–76
Annual Accounts 77–82
M.K. Web-Tech Pvt. Ltd.:
Directors’ Report 83
Compliance Certificate 84–86
Auditors’ Report 87–89
Annual Accounts 90–95
Kothari Products Singapore Pvt. Ltd.
Directors’ Report 96
Auditors’ Report 97
Annual Accounts 98–112
KPL Exports Pvt. Ltd.
Directors’ Report 113–114
Auditors’ Report 115–116
Annual Accounts 117–122
IMK Hotels Pvt. Ltd.:
Directors’ Report 123
Compliance Certificate 124–126
Auditors’ Report 127–128
Annual Accounts 129–133

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BOARD OF DIRECTORS AUDIT COMMITTEE

Chairman & Managing Director Chairman


DEEPAK KOTHARI PRAMOD KUMAR TANDON

Executive Director Members


MITESH KOTHARI DEEPAK KOTHARI
DR. AVINASH GUPTA
Directors VIKAS CHATURVEDI
DR. AVINASH GUPTA
PRAMOD KUMAR TANDON
VIKAS CHATURVEDI SHAREOWNERS’/INVESTORS’
GRIEVANCE COMMITTEE
Company Secretary
RAJ KUMAR GUPTA Chairman
PRAMOD KUMAR TANDON

AUDITORS Members
DEEPAK KOTHARI
MEHROTRA & MEHROTRA MITESH KOTHARI
Chartered Accountants DR. AVINASH GUPTA
16/49, Civil Lines,
Kanpur - 208 001 REMUNERATION COMMITTEE

REGISTERED OFFICE & Chairman


SECRETARIAL DEPARTMENT PRAMOD KUMAR TANDON
“Pan Parag House”, 24/19, The Mall, Kanpur - 208 001.
Visit us on Internet at : http://www.kothariproducts.in Members
E-mail : kothari@panparag.com DR. AVINASH GUPTA
Ph. Nos. (0512) 2312171-74, Fax No. (0512) 2312058 VIKAS CHATURVEDI

INVESTORS’ GRIEVANCE E–MAIL ID


rkgupta@kothariproducts.in

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M.M. KOTHARI
Our 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 your
company about 27 years back.
It was a humble beginning of small scale manufacturing of mouth freshener in the FMCG sector by the
visionary Shri M.M. Kothari. As years passed by, your company continued to stride forward facing biggest
challenges, 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 every
stakeholder 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 efficient
management of such a large set up and looking to the synergies and segments, re-organization of its activities was imminent. Consequently
with 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 economy
your 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 petroleum
products. It is also pursuing the business of International Trade through its Foreign and Domestic Subsidiary Companies vigorously
and profitably.
Real Estate Ventures

Your Company with its subsidiaries and strategic partners has successfully embarked upon an ambitious business plan to invest in the
real 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 subscribing
to 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 most
adverse 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 with
dedication 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 most
intelligent raw material in the business cycle.
It draws inspiration from the age old concepts of home building, territory possessiveness, courtship rituals and herd mentality found
with 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 resource
with that of “V” Shape Geese formation. It believes in inculcating the theory of sharing a common goal, travelling on a thrust of one
another, staying in the formation showing solidarity, adaptability, sharing of leadership, encouragement to each other and sense of
belongingness.
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 hierarchy
patterns in all its business activities.
We practice most modern behavioral techniques / principles for motivation, development, growth and equal opportunities to our
employees. 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 is
encouraged through various excursions and get-togethers periodically to maintain the cordial and warm relations among its employees
to 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 dividend
declaration.
“I assure you that ……………… The Best is yet to come !!
With Warm Regards,

Deepak Kothari
Chairman & 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 on
Tuesday, 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 the
financial 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 to
authorise 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 the
Companies Act, 1956 (including any statutory modification or re-enactment thereof for the time being in force), to the Board of
Directors (hereinafter referred to as “the Board”) to mortgage and/or charge, in addition to the mortgage(s)/charge(s) created/to
be created by the Company, in such form and manner and with such ranking and at such time and on such terms and conditions
as the Board may determine, subject to maximum amount of Rs.750 Crores of charges outstanding at any time, on all or any of
the movable and/or immovable property(ies) of the company, both present and future of every nature & kind whatsoever
together 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 the
Company together with interest at the respective agreed rates, additional interest, all other costs, charges and expenses and all
other monies payable by the Company in respect of said loans/borrowings/debentures/other securities and containing such
specific terms and conditions and covenants in respect of enforcement of security as may be stipulated in that behalf and agreed
to 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 hereby
authorized to finalise, settle and execute such documents/deeds/writings/papers/ agreements as may be required and to do all
such acts, deeds, matters and things, as it may in its absolute discretion deem necessary, proper or desirable and to settle any
question, difficulty or doubt that may arise in regard to creating mortgages/charges as aforesaid.”

By Order of the Board


Regd. 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 National
Securities 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 REQUESTS
FOR 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 ARE
ADVISED TO IMMEDIATELY INTIMATE THE CHANGE OF ADDRESS AND BANK DETAILS TO THEIR CONCERNED
DEPOSITORY PARTICIPANTS.
6. Those Members who have not encashed/received their Dividend warrants for the financial years 2002-03 onwards may approach the Secretarial
Department at the Registered Office of the Company for revalidation of Dividend Warrants or for obtaining duplicate Dividend Warrants in
lieu 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 the
unpaid Dividend Accounts, have to be transferred by the Company u/s 205A to the Investors Education & Protection Fund (IEPF) constituted
by 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 AFORESAID
DIVIDEND TRANSFERRED TO THE FUND, EITHER AGAINST THE COMPANY/ITS OFFICERS OR AGAINST THE
GOVERNMENT.
8. Members desirous of getting any information at the meeting about the accounts and operations of the company are requested to send their query
at 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 the
management 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, in
particular, those holding shares as sole holder are advised to avail of the above facility in their own interest, by furnishing to the Company the
particulars of their nominations. The prescribed application form may be obtained by the Shareowners from the Company’s Secretarial
Department 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. 5
In the 25th AGM held on 24th September, 2009 the Company had authorized Board of Directors to create charge/mortgage in respect of the
borrowings 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 by
way 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 the
movable and/or immovable property(ies) of the Company in such form, manner and ranking as may be determined by the concerned Banks. The
Board 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 the
Company, to secure borrowings of the Company with a power to the charge holders to take over the management of the business and concern of the
Company 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 the
Companies 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 Board


Regd. 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 ended
31st March, 2010. The report also includes the Management discussion and Analysis Report in accordance with the guidelines of
Corporate Governance.

FINANCIAL PERFORMANCE :
(RS. IN LACS)
FINANCIAL FINANCIAL
YEAR ENDED YEAR ENDED
31.03.2010 31.03.2009

Net Sales : 34872 9654


Other Income 8307 1561
Profit before Depreciation & Taxation 8280 1271
Less : Depreciation 121 160
Provision for Taxation :
-Current Tax 1450 165
-Deferred Tax 24 10
-Tax Adjustments for earlier years 1 (-) 238
Profit after Tax 6684 1174
Add : Balance of Profit brought forward
from previous year 16333 16065
Profit available for appropriation 23018 17239

APPROPRIATIONS
Transfer to General Reserve 668 130
Proposed Dividend 1327 663
Additional Tax on Proposed Dividend 220 113
Balance 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 against
Rs.9654 Lacs during the previous financial year. The Profit before tax during the year has zoomed to Rs.8280 Lacs as against Rs.1271
Lacs 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 the
previous 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 additional
tax 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 Products
Singapore Pvt. Ltd. as its subsidiary Company. In accordance with section 212 of the Companies Act, 1956, the detailed accounts and
the 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 offers
himself for re-appointment. Further, Sri M.M. Kothari, Chairman has resigned w.e.f. 30th January, 2010 owing to his poor health
and Sri Deepak Kothari, Managing Director of the Company has been re-designated as Chairman & Managing Director from the
aforesaid 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 Annual
Report 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 that
are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year
and of the profit 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 with
the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and
other 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 as
International Trade and Real Estate. The Company has emerged as a strong market player in the aforesaid sectors & also the
revenue in the said sectors has increased substantially this year. Both the above sectors have proved very profitable for the
Company.
b) OPPORTUNITIES & THREATS/RISKS & CONCERNS :
The opportunities for the International Trade & Real Estate Industries are immense. Thus the future of the Company appears to
be bright. However, the Industry may face the risk of facing a ban on the import/export of any item by the Central/State
Governments.
c) FINANCIAL PERFORMANCE :
The Company’s sales have increased to Rs.34872 Lacs during the period under review as against Rs.9654 Lacs during the
previous financial year. The profit before tax during the year has similarly risen to Rs.8280 Lacs as against Rs.1271 Lacs in the
previous year. The profit after tax has similarly increased to Rs.6684 Lacs as against Rs.1174 Lacs during the previous financial
year. Profitability of the Company has zoomed mainly due to International Trade & Real Estate activities. The segmentwise
financial 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 the
import & 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. As
on 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 under
section 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 as
under :-
[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 investment
is 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, no
R & D department exists in the company.
[C] FOREIGN EXCHANGE EARNINGS AND OUTGO :
(a) Activities relating to exports; } The Company’s trading items are being
initiatives taken to increase } exported directly as well as through Merchant
exports; Development of new export } Exporters to Singapore & China. The Company is
markets 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 with
The 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 Government
Departments, 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 and
confidence 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 Corporate
Governance. During the year the Company has further fine-tuned its corporate practices so as to bring them in line with the revised
clause 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-executive
Directors are drawn from amongst persons with varied experience in Business & Industry. The Board presently has an Executive
Chairman & Managing Director, an Executive Director and three Non-Executive Directors. Its composition as on 31st March, 2010
was as under :-

Name of the No. of Outside No. of Membership, Executive/Non- Designation


Directors Directorships Chairmanship in Executive/
Other Board Independent/
Committees : Promoter
Sri Deepak Kothari 51 2 Executive & Chairman & Managing Director
Non-independent
(Promoter)

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

Dr. Avinash Gupta 4 3 Independent & Director


Non-executive
Director

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 Attendance
Meetings 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 & DATES
During 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 Attendance
No. Non-Executive/ Held during of each
Independent the year Director
1. Sri Pramod Kumar Tandon Chairman Independent & Non-Executive 4 4
2. Dr. Avinash Gupta Vice Chairman Independent & Non-Executive 4 Nil
3. Sri Deepak Kothari Member Executive & Non-Independent 4 4
4. 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. Raj
Kumar 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 Agreement
and Section 292-A of the Companies Act, 1956, besides other terms as may be referred by the Board of Directors, which broadly
include :
The Audit Committee is to oversee the Company’s financial reporting process and disclosure of its financial information, to recommend
the appointment of Statutory Auditors and fixation of their fees, to review and discuss with the Auditors about internal control
systems, the scope of Audit including the observations of the Auditors, adequacy of the internal audit system, major accounting
policies, practices and entries, compliances with accounting standards and Listing Agreement entered into with the Stock Exchange
and other legal requirements concerning financial statements and related party transactions, if any, to review the Company’s financial
and risk management policies and discuss with the Internal Auditors any significant findings for follow-up thereon, to review the
Quarterly, 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 the
business 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 been
approved by the Members in the General Meetings and also by the remuneration committee of Directors, pursuant to the provisions
of Schedule XIII to the Companies Act, 1956. Further the Company has three Non-Executive Directors whose remuneration is
decided 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 the
Directors is as under :-
Name of Mr. M.M. Mr. Deepak Mr. Mitesh Dr. Avinash Mr. Pramod Kumar Mr. Vikas
Director Kothari Kothari Kothari Gupta Tandon Chaturvedi
Salary 1000000 1080000 900000 — — —
Perquisites 349333 999322 913888 — — —
Commission — — — — — —
Sitting Fees — — — Nil 8000 8000

13
2 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0
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 of
Share Transfers. The Committee also approves requests for Share Transfers/Issue of Duplicate Share Certificates/Issue of new
certificates on split, consolidation, renewal etc; as also requests for transmission of shares etc.. Members of the Committee as on
31st 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 usually
within 15 days except in case of dispute over facts or other legal constraints.
 Name of the Non-executive Director heading : Sri Pramod Kumar Tandon
the Committee
 Name & Designation of Compliance Officer : Sri Raj Kumar Gupta,
Company Secretary
 No. of Shareowners Letters/complaints received : 2
During the financial year
 No. of Letters/Complaints not replied/solved to the : All the Letters/Complaints received
Satisfaction of the Shareowners by the Company have been
replied/solved to the satisfaction
of the complainants.
 No.of pending transfers : All valid requests for share transfer received during the financial
year 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 & clause
49 of the Listing Agreement, which consists of three Non-Executive Directors as on 31st March, 2010 viz. Sri Pramod Kumar Tandon
as its Chairman, Sri Vikas Chaturvedi & Dr.Avinash Gupta as its Members. The committee has been constituted to approve the
remuneration of the Executive Directors of the company. The present remuneration of the Executive Directors of the company has
been 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 1
24TH 1
23RD 1
At the 25th Annual General Meeting held on September 24th, 2009, one Special Resolution was passed pertaining to the re-appointment
of 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-appointment
of 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-appointment
of the Chairman of the Company. The resolution was put to vote by show of hands and was passed unanimously.
14
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 potential
conflict 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 observes
an unethical or improper practice (not necessarily a violation of law), without necessarily informing his supervisor. Further, no
personnel 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 or
any 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’s
website, i.e. http://www//kothariproducts.in
iii. Whether it also displays official News : Yes, In addition to Audited Financial Results, Details
Releases and presentations made to regarding Board of Director(s), businesses etc. of the
Institutional investors/analysts. Company and any changes therein are displayed.
iv. Whether Management Discussion and : Yes
Analysis Report is a part of Annual Report

15
2 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0
GENERAL SHAREHOLDER INFORMATION
DETAILS OF DIRECTORS SEEKING RE-APPOINTMENT IN THE FORTHCOMING ANNUAL GENERAL
MEETING
(in pursuance of clause 49(VI) (A) of the Listing Agreement)
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 Nil
HELD IN OTHER COMPANIES

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

• 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; All
Shareowners may contact the Registrar and Transfer Agents at the following address :-
Alankit Assignments Ltd.
Corporate Office “Alankit House” 2E/21 Jhandewalan Extension, New Delhi – 110 055
Telephone Nos. (011)23541234 & 42541234
Fax Nos. (011) 42541967 & 23552001, E-mail : rta@alankit.com

16
• DISTRIBUTION OF SHAREHOLDING
The Shareholding distribution of equity shares as on 31st March, 2010 is given below :

No. of Equity shares held No. of Shareowners No. of Shares held in % of Equity Capital held in
No. of % of Physical Demat Physical Demat
Shareowners Shareowners form form form form
1 - 500 5311 96.406 50434 287588 0.760 4.336
501 - 1000 93 1.688 6600 61514 0.100 0.927
1001 - 5000 68 1.234 7100 134688 0.107 2.031
5001 - 10000 9 0.163 0 51013 0 0.769
10001- 20000 10 0.182 12143 139746 0.183 2.107
20001- 30000 4 0.073 28700 84342 0.433 1.272
30001 - 40000 1 0.018 0 32853 0 0.495
40001 - 50000 0 0 0 0 0 0
50001 - 100000 3 0.054 0 265900 0 4.009
100001- 500000 7 0.127 1439577 646084 21.707 9.742
500001 - Above 3 0.055 2094413 1289275 31.582 19.440
Total 5509 100.000 3638967 2993003 54.872 45.128

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


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
• 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. ISIN
No. 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.

• ADDRESS FOR CORRESPONDENCE


1. Shareowners having any queries regarding Dividend Warrants & Annual Reports should send their correspondence to :
The Share Department
KOTHARI 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- rkgupta@kothariproducts.in
2. Physical Shareowners should send their requests for Share Transfers, Change of Address/Bank Details etc., if any, to our
following 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- rta@alankit.com
3. Shareowners holding shares in electronic mode should address all their correspondence relating to change of address, change
of Bank details etc. to their respective Depository Participants.

17
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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 on
31st 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 limited
to a review of the procedures and implementation thereof adopted by the Company for ensuring the compliance with the conditions
of 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 the
Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated
in 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 are
pending 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 effectiveness
with which the management has conducted the affairs of the Company.

For MEHROTRA & MEHROTRA


CHARTERED ACCOUNTANTS

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

DECLARATION BY CHIEF EXECUTIVE OFFICER


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

Place : KANPUR (Deepak Kothari)


Date : 29th May, 2010 Chairman &
Managing Director

18
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 the
best of our knowledge and belief;

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

• these statements present a true and fair view of the Company’s affairs and are in compliance with the existing accounting
standards, 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 are
fraudulent, 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 the
internal control systems of the Company and we have disclosed to the auditors and the audit committee, deficiencies in the design
or operation of internal controls, if any, of which we are aware and the steps that we have taken or propose to take to rectify the
identified 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 financial
statements, if any and
iii. instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an
employee having a significant role in the Company’s internal control system.

(Deepak Kothari) (Rajeev Porwal)


Chairman & Managing Director G.M. (Finance)

Place : Kanpur
Date : 29th May, 2010

19
2 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0
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 on
that 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 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
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. An audit also includes assessing the
accounting 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) of
Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered
appropriate 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 management
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 concern.
(ii) (a) The stock of finished goods, semi-finished goods, raw material, stores & perfumes and traded items have been physically verified by
the 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 of
the 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 not
material, 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 amount
outstanding 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 of
the 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. In
respect 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 register
maintained 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 purchase
of stocks and fixed assets, for the sale of goods and services. During the course of our audit, we have not observed any continuing failure
to 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 that
need 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 relevant
time;
(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 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) of section 209
of 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 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 with the appropriate authorities.

20
(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 were
outstanding 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 account
of any dispute are given below :

STATUTE FINANCIAL YEAR TO WHICH FORUM WHERE MATTER AMT. IN


THE 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 and
immediately 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 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. Accordingly the
reporting 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 the
information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to
the 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 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 the purpose 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 our examination
of those books.
iii. in our opinion, Balance Sheet; the Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the
Accounting 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 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 Significant Accounting
Policies and Notes 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 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.

For MEHROTRA & MEHROTRA


CHARTERED ACCOUNTANTS
PLACE : KANPUR (ANURAG TANDON)
DATE : 29th May, 2010 PARTNER
Membership No. 078862

21
2 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 AS AT 31ST MARCH, 2010

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

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

For MEHROTRA & MEHROTRA


Chartered Accountants

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

22
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH, 2010
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

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

For MEHROTRA & MEHROTRA


Chartered Accountants

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

23
2 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0
As at As at
31.03.2010 31.03.2009
(Rupees ’000) (Rupees ’000)

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/- each
allotted as fully paid up Bonus Shares by
Capitalisation 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 3958567
Add : Transferred from Profit & Loss Account 66840 12956
Less : 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 : 3
Unsecured 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

24
SCHEDULES CONTINUED
Quantity (Nos.) Amount (Rupees ’000)
As at As at As at As at
31.03.2010 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 0 488
HDFC CASH MANAGEMENT SAVINGS PLUS - WEEKLY DIVIDEND 15017.922 235715.102 151 2361
RELIANCE DIVERSIFIED POWER SECTOR FUND - DIVIDEND 0.000 395849.400 0 21265
LOTUS INDIA AGILE FUND - DIVIDEND 0.000 4889975.550 0 50000
KOTAK INDO WORLD INFRASTRUCTURE FUND - DIVIDEND 0.000 11000000.000 0 110000
HDFC MID-CAP OPPORTUNITIES FUND - DIVIDEND 0.000 1500000.000 0 15000
BIRLA INFRASTRUCTURE FUND - DIVIDEND 0.000 2689638.728 0 52488
DSP MERRILL LYNCH INDIA T.I.G.E.R. FUND - DIVIDEND 0.000 4500222.699 0 138359
RELIANCE MONEY MANAGER FUND - INSTITUTIONAL OPTION GROWTH 0.000 48306.988 0 57500
RELIGARE ULTRA SHORT TERM FUND - INSTITUTIONAL GROWTH 0.000 2006839.980 0 24000
HDFC CASH MANAGEMENT FUND-TREASURY ADVANTAGE
PLAN WHOLESALE-WEEKLY DIVIDEND 9861995.451 0.000 98887 0
HDFC CASH MANAGEMENT FUND-TREASURY ADVANTAGE
PLAN-RETAIL-WEEKLY DIVIDEND 76930.669 0.000 771 0
KOTAK 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 12137
APOLLO TYRES LTD. of Re. 1/- 0 58272 0 1145
APTECH LTD. of Rs.10/- 120000 0 22278 0
AXIS BANK LTD. of Rs. 10/- 0 5708 0 3563
BANK OF BARODA of Rs. 10/- 0 20270 0 5128
BHARAT HEAVY ELECTRICALS LTD. of Rs. 10/- 43800 0 110279 0
BHARAT PETROLIUM CORPORATION LTD. of Rs. 10/- 0 12601 0 4387
BHARTI AIRTEL LTD. of Rs. 10/- 0 32381 0 19806
BIOCON LTD. of Rs. 5/- 0 35014 0 8058
BLUE STAR LTD. of Rs. 2/- 0 50000 0 2527
CROMPTON GREAVES LTD. of Rs.2/- 0 53336 0 12438
DISHMAN PHARMA & CHEMICAL LTD. of Rs.2/- 0 22306 0 6920
EVEREST KANTO CYLENDAR LTD. of Rs. 2/- 0 32010 0 8384
HCL TECHNOLOGIES LTD. of Rs. 2/- 0 66159 0 7107
GMR INFRASTRUCTURE LTD. of Rs. 2/- 12000 0 878 0
HIMATSINGKA SEIDE LTD. of Rs. 5/- 0 125000 0 15945
ICICI BANK LTD. of Rs. 10/- 0 46668 0 47904
IDFC LTD. of Rs. 10/- 0 33453 0 2380
INFOSYS TECHNOLOGIES LTD. of Rs. 5/- 5000 4902 13946 8967
IPCA LABORATORIES LTD. of Rs. 10/- 0 12576 0 6806
ITC LTD. of Re. 1/- 0 20299 0 0
JAMMU & KASHMIR BANK of Rs. 10/- 0 10597 0 3611
JAIPRAKASH ASSOCIATES LTD. of Rs. 2/- 138000 0 22123 0
KEC INTERNATIONAL LTD. of Rs. 10/- 0 15201 0 8840
LARSEN & TOUBRO LTD. of Rs. 2/- 54200 23711 91978 19203
MAHINDRA & MAHINDRA of Rs.5/- 10000 0 5265 0
MPHASIS LTD. oF Rs.10/- 17000 0 11141 0
NHPC LTD. of Rs. 10/- 167396 0 6026 0
PANTALOON RETAIL (I) LTD. of Rs. 2/- 0 36542 0 5811
PATNI COMPUTER SYSTEM LTD. of Rs. 2/- 0 30673 0 3136
PRAJ INDUSTRIES LTD. of Rs. 10/- 0 72040 0 4882

25
2 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
Quantity (Nos.) Amount (Rupees ’000)
As at As at As at As at
31.03.2010 31.03.2009 31.03.2010 31.03.2009
SCHEDULE : 5
RELIANCE CAPITAL LTD. of Rs. 10/- 3000 20495 2745 15864
RELIANCE COMMUNICATION LTD. of Rs. 5/- 74519 204487 47068 87429
RELIANCE INDUSTRIES LTD. of Rs. 10/- 700000 619000 504309 649772
RELIANCE INFRASTRUCTURE LTD. of Rs. 10/- 15000 0 17018 0
RELIANCE PETROLEUM LTD. of Rs. 10/- 0 400000 0 35421
RELIANCE POWER LTD. of Rs. 10/- 0 16000 0 3758
SHOPPERS STOP LTD. of Rs. 10/- 13779 13779 3279 3279
SIEMENS LTD. of Rs. 2/- 0 21293 0 0
STATE BANK OF INDIA of Rs. 10/- 10156 32591 20781 36954
STERLITE INDUSTRIES (INDIA) LTD. of Rs. 2/- 0 92931 0 86179
SUN PHARMACEUTICALS INDUSTRIES LTD. of Rs. 5/- 0 7698 0 6711
SUZLON ENERGY LTD. of Rs. 2/- 108835 105222 11656 8784
TATA STEEL LTD. of Rs. 10/- 0 18623 0 2835
TATA MOTORS LTD. of Rs. 10/- 10000 0 7433 0
TCS LTD. of Re. 1/- 12000 16500 9477 13336
THERMAX LTD. of Rs. 2/- 0 0 0 0
UFLEX INDUSTRIES LTD. of Rs. 10/- 508726 508726 53160 53160
UNITECH LTD. of Rs. 10/- 75000 0 8187 0
UNITED BEWERIES LTD. of Re. 1/- 0 151258 0 7699
UNITED PHOSPHOROUS LTD. of Rs. 2/- 0 85490 0 13559
ZEE ENTERTAINMENT LTD. of Re. 1/- 0 58641 0 12458
ZEE 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 21883
0 % Redeemable, Non-convertible Debentures of DSP Merrill Lynch
of Rs. 100000/- each. 980 980 98000 98000
Aggregate Cost TOTAL (A) 1201299 1854511
Aggregate Market Value 1389278 1686196
B. UNQUOTED
I. 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 100 100
IMK HOTELS PRIVATE LTD. of Rs. 10/- 250000 250000 30100 30100
M.K. WEB TECH PRIVATE LTD. of Rs. 10/- 250000 250000 19000 19000
KPL EXPORTS PRIVATE LTD. of Rs. 10/- 50000 50000 500 500
SUKHDHAM CONSTRUCTIONS & DEVELOPERS LIMITED of Rs.10/- 100000 100000 1000 1000
(b) Investments in Equity Shares of other subsidiary Companies, each Fully paid up
KOTHARI PRODUCTS SINGAPORE PTE. LTD. Of SGD 1/- 1000000 1000000 31450 31450
(c) Investments in Equity Shares of other Companies, each Fully paid up
BHOJESWAR REALTORS PRIVATE LTD. of Rs.10/- 10000 10000 100 100
HARA PARVATI REALTORS PVT. LTD. of Rs. 10/- 12750 0 128 0
REAL GRIHA NIRMAN PRIVATE LTD. of Rs.10/- 10000 10000 100 100
SHUBHADRA REALTORS PRIVATE LTD. of Rs.10/- 10000 10000 100 100
SANKHYA REALTORS PRIVATE LTD. of Rs.10/- 10000 10000 100 100
SPPL HOTELS PRIVATE LTD. of Rs.10/- 127500 229500 1275 2295
TAURUS 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 Shares
of SPPL Hotels Pvt Ltd. of Rs.10/- 802486 1106701 76670 55355
.001% Optionally Convertible Redeemable Preference Shares
of HARA PARVATI REALTORS Pvt Ltd. of Rs.10/- 707880 0 33572 0
TOTAL (B) 1006132 1902137
TOTAL (A+B) 2207431 3756648

26
SCHEDULES CONTINUED
For the year ended 31.03.2010
Quantity Purchase Sale
SCHEDULE : 5 Nos. (Rupees ’000) (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 PHARMACEUTCALS 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
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

27
2 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
For the year ended 31.03.2010
Quantity Purchase Sale
SCHEDULE : 5 Nos. (Rupees ’000) (Rupees ’000)

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-REINVESTMENT244735.099 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 -
RETAILS -WEEKLY DIVIDEND 4172927.119 41830 41845
HDFC CASH MANAGEMENT FUND-TREASURY ADVANTAGE -
WHOLESALE -WEEKLY DIVIDEND 6248700.721 62624 62650
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 PLAN -
RETAIL -GROWTH 163997.975 32151 32278
PRINCIPAL ULTRA SHORT TERM FUND -GROWTH 1196052.870 13814 13891
LICMF- SAVINGS PLUS FUND-GROWTH 11868276.098 170000 170095

As at As at
31.03.2010 31.03.2009
(Rupees ’000) (Rupees ’000)
SCHEDULE : 6
Inventories — (At cost or Net realisable Value whichever is lower)
Trading Items 12836 4119
Total 12836 4119

28
SCHEDULES CONTINUED
As at As at
31.03.2010 31.03.2009
(Rupees ’000) (Rupees ’000)

SCHEDULE : 7
Sundry Debtors (Unsecured, Considered Good)
(a) Debts outstanding for over six months 0 0
(b) Other debts 929560 929560 19760 19760
Total 929560 19760
SCHEDULE : 8
Cash & 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 : 9
Other Current Assets :
Interest Accrued on Investments
Aceured and due 0 722
Total 0 722

SCHEDULE : 10
Loans 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 : 11
Current 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 : 12
Provisions:
(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
29
2 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

For the Year For the Year


Ended 31.03.2010 Ended 31.03.2009
(Rupees ’000) (Rupees ’000)
SCHEDULE : 13
Sales :
(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 : 14
Increase (+) / Decrease (–) in stock :
Opening Stock:
Finished Goods 0 40481
Semi-Finished Goods (Work in process) 0 0 56 40537

Stock transferred on demerger pursuant to the scheme


of arrangement 0 26547
Total 0 -13990

SCHEDULE : 15
Other 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 : 16
Materials 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 arrangement
Raw & Packing Materials Consumed 0 206274
(B) Consumption of Trading Items 3105594 260163
Materials Consumed Total 3105594 466437

30
SCHEDULES CONTINUED
For the Year For the Year
Ended 31.03.2010 Ended 31.03.2009
(Rupees ’000) (Rupees ’000)
SCHEDULE : 17
Manufacturing, Selling, Distribution and Administrative Expenses :
Power & Fuel 3129 10136
Payments to & Provisions for Employees :
Salaries, Wages and Bonus 6891 18980
Contribution to Provident and other Funds 449 2395
Gratuity 72 3444
Staff welfare and Other Expenses 1892 9304 3254 28073
General Insurance 1110 1236
Transit Insurance 301 244
Demurage Charges 57763 0
Consumption of Stores & Perfumes 0 179138
Freight & Cartage Inward 10862 6443
Rent 5421 2363
Rates & Taxes 232 5653 280 2643
Repairs :
Building 101 300
Machinery 0 1947
Others 5857 5958 2290 4537

Freight, Cartage and Octroi Outward 186467 9755


Advertisement & Publicity 267 61396
Selling & Distribution Expenses 30931 13806
Custom Duty Charges 40371 0
Travelling & Conveyance 8749 19060
Interest & Bank Charges 18935 5166
Miscellaneous Expenses -129 -22829
Commercial Taxes 0 5324
Loss on Sale of Fixed Assets 1501 6311
Payment to Auditors :
Statutory Audit Fee 143 144
Tax Audit Fee 13 156 13 157
Payment to Directors :
Remuneration 2980 3180
Sitting Fee 16 8
Commission 0 2236
Total 384324 336020

31
2 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 : 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 Generally
Accepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and
relevant 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 their
working 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 and
Provision 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 and
Trading 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 cost
of 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 from
the settlement of such transactions and from conversion of monetary assets and liabilities denominated in foreign currencies are recognised
in 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 premium
for 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 of
USD ($) 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 Redressal
Commission, New Delhi, for Rs. 4158596/-
(Previous Year Rs. 4158596/-) which is secured by FDRs of Pan Parag India Limited.

32
SCHEDULES CONTINUED
(2) Additional Information Pursuant to the Provisions of Paragraphs 3, 4C and
4D 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 Capacity
Licensed 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
33
2 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
31.03.2010 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)

34
SCHEDULES CONTINUED
31.03.2010 31.03.2009

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

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 396.000
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
(D) Value & Percentage of Imported Materials Consumed :
(Rs.’000) Percentage (%) (Rs.’000) Percentage (%)
Raw materials consumed
Imported 0 0.00 0 0.00
Indigenous 0 0.00 139688 100.00
0 0.00 139688 100.00
Stores & Perfumes Consumed
Imported 0 0.00 6838 3.82
Indigenous 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 622 496
Fixed Assets 0 7779
Import of Goods- Trading Items 2159269 212844
(G) Earning in Foreign Currency :
Export of goods on F.O.B. Basis 2326232 536727
(H) Amount remitted during the year in Foreign
Currency 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

35
2 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
(Rs.’000) (Rs.’000)
(5) Computation of Directors Commission as
Per Section 309(5) read with Section 198
of the Companies Act, 1956.

Net Profit as per Profit & Loss Account 111072


Add : Loss on Sale of Fixed Assets 6311
117383
Less : 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

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


For the year ended For the year ended
31.03.2010 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 67039
Net Profit Before Interest 819533 112789
(e) Interest Expenses 3698 1717
(f) Unallocated Expenses 0 0
Net Profit Before tax 815835 111072

As at As at
31.03.2010 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 and
Trading Divisions of the Company have been transferred to Pan Parag India Limited w.e.f. 18th November, 2008. However the Company has
restarted its Trading Division after 18th November, 2008.

36
SCHEDULES CONTINUED

(7) 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 - 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

(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 on
31.03.2010 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 99
Interest Income on Loan Given 0 0 — — 12004 10350
Dividend Paid 42392 42391 7333 7333 — —
Outstanding (Payable) 649 149799 — — — —
Outstanding (Receivable) — — 0 22151 511895 588406
Note:- 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 Depreciation
which is capable of being reversed in one or more subsequent years. The deferred tax liability amounting to Rs.2407955/- (Previous year
Rs. 1000000/-) has been provided.

37
2 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0
(10) In terms of Accounting Standard 28 “Impairment of Assets” Issued by the Institute of Chartered Accountants of India, provision for impairment
loss 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 Accountants
of 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 against
guarantees 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 18th
November, 2008. However the Company has restarted its Trading Division after 18th November, 2008. The figures of previous year are not
comparable 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 current
year.

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

For MEHROTRA & MEHROTRA


Chartered Accountants

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

38
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

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

For MEHROTRA & MEHROTRA


Chartered Accountants

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

39
2 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
As per the Listing Agreement (Rs. in Lacs)
Particulars 2009-2010 2008-2009
(A) CASH FLOW FROM OPERATING ACTIVITIES :
Net Profit before Tax 8158.35 1110.71
Adjustments 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 6809.28
Cash Generated from Operations -3660.02 7046.92
Direct 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 3632.00
Cash & Cash Equivalents - Opening Balance 4201.36 585.08
Cash & Cash Equivalents - on Scheme of Arrangement 0.00 -15.72
Cash & 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 Board


For MEHROTRA & MEHROTRA
Chartered Accountants

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

40
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 the
Consolidated Profit & Loss Account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These
consolidated financial statements are the responsibility of the Kothari Products Limited's management. Our responsibility is to express an
opinion 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 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. An audit also includes assessing the accounting
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. We report that the consolidated financial statements have been prepared by the Kothari Products Limited's management in accordance with the
requirements of Accounting Standard (AS–21) – Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India
and on the basis of the separate financial statements of Kothari Products Limited and its subsidiaries included in the consolidated financial
statement.

4. In our opinion and to the best of our information and explanations given to us, the said accounts read with Significant Accounting Policies and
Notes 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 Partner
DATE : 29th May, 2010 Membership No. 078862

41
2 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0
CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2010

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 5147910
APPLICATION 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 3892459
Less: Current Liabilities & Provisions
(a) Current Liabilities 12 1154663 2823329
(b) Provisions 13 502950 270211
1657613 3093540
Net 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 5147910
Significant Accounting Policies & Notes to the Accounts 19

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

For MEHROTRA & MEHROTRA


Chartered Accountants

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

42
CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010
Schedule For the Year For the Year
Nos. Ended 31.03.2010 Ended 31.03.2009
(Rupees ’000) (Rupees ’000)

INCOME
Sales 14 5722025 2465142
Increase/Decrease in stock (+/–) 15 0 –13990
Other Income 16 958562 254762

TOTAL 6680587 2705914


EXPENDITURE
Materials 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

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

For MEHROTRA & MEHROTRA


Chartered Accountants

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

43
2 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0
(CONSOLIDATED)
As at As at
31.03.2010 31.03.2009
(Rupees ’000) (Rupees ’000)

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/– each
allotted as fully paid up Bonus Shares by
Capitalisation 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 3958567
Add : Transferred from Profit & Loss Account 66840 12956
Less : 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

44
SCHEDULES CONTINUED (CONSOLIDATED)
SCHEDULE : 5 Fixed Assets :

(Rupees ’000)

GROSS BLOCK DEPRECIATION NET BLOCK

2 6 T H
PARTICULARS As at Additions Transfer As at Upto For the Adjust– Upto 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) 230198 0 0 230198 15943 3752 0 19695 210503 214255

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

Flats 342843 0 0 342843 139 0 0 139 342704 342704

A N N U A L
Motor Cars/Scooters 62034 13758 6338 69454 14333 6598 1822 19109 50345 47701

Computers 1338 776 63 2051 498 328 0 826 1225 840

Office Equipment 9137 4135 26 13246 2420 597 14 3003 10243 6717

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

Furniture & Fixture 1275 2237 0 3512 292 188 0 480 3032 983

Goodwill 9730 0 0 9730 0 0 0 0 9730 9730

R E P O R T
TOTAL 698827 24936 6427 717336 61796 15493 1836 75453 641883 637031

PREVIOUS YEAR 974808 32024 308005 698827 192528 19292 150024 61796 637031

2 0 0 9

2 0 1 0
45
(CONSOLIDATED)
SCHEDULES CONTINUED
Quantity (Nos.) Amount (Rupees ’000)
As at As at As at As at
31.03.2010 31.03.2009 31.03.2010 31.03.2009
SCHEDULE : 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 up
S.B.I.MAGNUM EQUITY FUND – DIVIDEND 0.000 4500.000 0 488
HDFC CASH MANAGEMENT SAVINGS PLUS – WEEKLY DIVIDEND 15017.922 235715.102 151 2361
RELIANCE DIVERSIFIED POWER SECTOR FUND – DIVIDEND 0.000 395849.400 0 21265
LOTUS INDIA AGILE FUND – DIVIDEND 0.000 4889975.550 0 50000
KOTAK INDO WORLD INFRASTRUCTURE FUND – DIVIDEND 0.000 11000000.000 0 110000
HDFC MID–CAP OPPORTUNITIES FUND – DIVIDEND 0.000 1500000.000 0 15000
BIRLA INFRASTRUCTURE FUND – DIVIDEND 0.000 2689638.728 0 52488
DSP MERRILL LYNCH INDIA T.I.G.E.R. FUND – DIVIDEND 0.000 4500222.699 0 138359
RELIANCE MONEY MANAGER FUND – INSTITUTIONAL OPTION GROWTH 0.000 48306.988 0 57500
RELIGARE ULTRA SHORT TERM FUND – INSTITUTIONAL GROWTH 0.000 2006839.980 0 24000
HDFC CASH MANAGEMENT FUND–TREASURY ADVANTAGE PLAN 9861995.451 0.000 98887 0
WHOLESALE–WEEKLY DIVIDEND
HDFC CASH MANAGEMENT FUND–TREASURY ADVANTAGE 76930.669 0.000 771 0
PLAN–RETAIL–WEEKLY DIVIDEND
KOTAK 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 12137
APOLLO TYRES LTD. of Re. 1/– 0 58272 0 1145
APTECH LTD. of Rs.10/– 120000 0 22278 0
AXIS BANK LTD. of Rs. 10/– 0 5708 0 3563
BANK OF BARODA of Rs. 10/– 0 20270 0 5128
BHARAT HEAVY ELECTRICALS LTD. of Rs. 10/– 43800 0 110279 0
BHARAT PETROLEUM CORPORATION LTD. of Rs. 10/– 0 12601 0 4387
BHARTI AIRTEL LTD. of Rs. 10/– 0 32381 0 19806
BHARTI SHIPYARD LTD. of Rs. 10/– 0 19505 0 1287
BIOCON LTD. of Rs. 5/– 0 35014 0 8058
BLUE STAR LTD. of Rs. 2/– 0 50000 0 2527
CROMPTON GREAVES LTD. of Rs.2/– 0 53336 0 12438
DISHMAN PHARMA & CHEMICAL LTD. of Rs.2/– 0 22306 0 6920
EVEREST KANTO CYLENDAR LTD. of Rs. 2/– 0 32010 0 8383
HCL TECHNOLOGIES LTD. of Rs. 2/– 0 66159 0 7107
GMR INFRASTRUCTURE LTD. of Rs. 2/– 12000 0 878 0
HIMATSINGKA SEIDE LTD. of Rs. 5/– 0 125000 0 15945
ICICI BANK LTD. of Rs. 10/– 0 46668 0 47904
IDFC LTD. of Rs. 10/– 0 33453 0 2380
INDOCO REMEDIES LTD. of Rs. 10/– 0 7926 0 1942
INFOSYS TECHNOLOGIES LTD. of Rs. 5/– 5000 4902 13946 8967
IPCA LABORATORIES LTD. of Rs. 10/– 0 12576 0 6807
ITC LTD. of Re. 1/– 0 20299 0 0
JAMMU & KASHMIR BANK of Rs. 10/– 0 10597 0 3611
JAIPRAKASH ASSOCIATES LTD. of Rs. 2/– 138000 0 22123 0
KEC INTERNATIONAL LTD. of Rs. 10/– 0 15201 0 8840
LARSEN & TOUBRO LTD. of Rs. 2/– 54200 23711 91978 19203
MAHINDRA & MAHINDRA of Rs.5/– 10000 0 5265 0
MPHASIS LTD. of Rs.10/– 17000 0 11141 0
NHPC LTD. of Rs. 10/– 167396 0 6026 0

46
(CONSOLIDATED)
SCHEDULES CONTINUED
Quantity (Nos.) Amount (Rupees ’000)
31.03.2010 31.03.2009 31.03.2010 31.03.2009
SCHEDULE : 6

PANTALOON RETAIL (I) LTD. of Rs. 2/– 0 36542 0 5811


PATNI COMPUTER SYSTEM LTD. of Rs. 2/– 0 30673 0 3136
PRAJ INDUSTRIES LTD. of Rs. 10/– 0 72040 0 4882
RELIANCE CAPITAL LTD. of Rs. 10/– 3000 20495 2745 15864
RELIANCE COMMUNICATION LTD. of Rs. 5/– 74519 204487 47068 87429
RELIANCE INDUSTRIES LTD. of Rs. 10/– 700000 619000 504309 649772
RELIANCE INFRASTRUCTURE LTD. of Rs. 10/– 15000 0 17018 0
RELIANCE PETROLEUM LTD. of Rs. 10/– 0 400000 0 35421
RELIANCE POWER LTD. of Rs. 10/– 0 16000 0 3758
SHOPPERS STOP LTD. of Rs. 10/– 13779 13779 3279 3279
SIEMENS LTD. of Rs. 2/– 0 21293 0 0
STATE BANK OF INDIA of Rs. 10/– 10156 32591 20781 36954
STERLITE INDUSTRIES (INDIA) LTD. of Rs. 2/– 0 92931 0 86179
SUN PHARMACEUTICALS INDUSTRIES LTD. of Rs. 5/– 0 7698 0 6711
SUZLON ENERGY LTD. of Rs. 2/– 108835 105222 11656 8784
TATA STEEL LTD. of Rs. 10/– 0 18623 0 2835
TATA MOTORS LTD. of Rs. 10/– 10000 0 7433 0
TCS LTD. of Re. 1/– 12000 26104 9477 17418
THERMAX LTD. of Rs. 2/– 0 0 0 0
UFLEX INDUSTRIES LTD. of Rs. 10/– 508726 508726 53160 53160
UNITECH LTD. of Rs. 10/– 75000 0 8187 0
UNITED BEWERIES LTD. of Re. 1/– 0 151258 0 7699
UNITED PHOSPHOROUS LTD. of Re. 2/– 0 85490 0 13559
ZEE ENTERTAINMENT LTD. of Re. 1/– 0 58641 0 12458
ZEE 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 21883
0 % Redeemable, Non–convertible Debentures of DSP Merrill Lynch of Rs. 100000/– each. 980 980 98000 98000
Aggregate Cost TOTAL (A) 1201299 1861822
Aggregate Market Value 1389278 1693621

B. UNQUOTED
I. 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 100 100
HARA PARVATI REALTORS PVT. LTD. Of Rs. 10/– 12750 0 128 0
REAL GRIHA NIRMAN PRIVATE LTD. of Rs.10/– 10000 10000 100 100
SHUBHADRA REALTORS PRIVATE LTD. of Rs.10/– 10000 10000 100 100
SANKHYA REALTORS PRIVATE LTD. of Rs.10/– 10000 10000 100 100
SPPL HOTELS PRIVATE LTD. of Rs.10/– 127500 229500 1275 2295
TAURUS AGILE TECHNOLOGY CORPORATION 1650000 1650000 100007 100007
PRIVATE LTD. of Rs.10/–
(b) Investment in Preference Shares of other companies
.001% Optionally Convertible Redeemable Preference Shares of 802486 1106701 76670 55355
SPPL Hotels Pvt Ltd. of Rs.10/–
.001% Optionally Convertible Redeemable Preference Shares of 707880 0 33572 0
HARA PARVATI REALTORS Pvt Ltd. of Rs.10/–
TOTAL (B) 1008982 1849987
TOTAL (A+B) 2210281 3711809

47
2 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
For the year ended 31.03.2010
Quantity 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

48
(CONSOLIDATED)
SCHEDULES CONTINUED
For the year ended 31.03.2010
Quantity Purchase Sale
SCHEDULE : 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 32278
PLAN –RETAIL –GROWTH
PRINCIPAL ULTRA SHORT TERM FUND –GROWTH 1196052.870 13814 13891
LICMF– SAVINGS PLUS FUND–GROWTH 11868276.098 170000 170095

49
2 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0
(CONSOLIDATED)
As at As at
31.03.2010 31.03.2009
(Rupees ’000) (Rupees ’000)
SCHEDULE : 7
Inventories — (At cost or net realisable value whichever is lower) :
Trading Items 17678 4119
Total 17678 4119

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

SCHEDULE : 9
Cash & 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 : 10
Other Current Assets :
Interest Accrued on Investments
Accrued and due 0 722
Total 0 722

SCHEDULE : 11
Loans 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 : 12
Current 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

50
(CONSOLIDATED)
SCHEDULES CONTINUED
As at As at
31.03.2010 31.03.2009
(Rupees ’000) (Rupees ’000)
SCHEDULE : 13
Provisions:
(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 Year


Ended 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 : 15
Increase (+) / Decrease (–) in stock :
Opening Stock:
Finished Goods 0 40481
Semi–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 : 16
Other 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 : 17
Materials 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

51
2 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
For the Year For the Year
Ended 31.03.2010 Ended 31.03.2009
(Rupees ’000) (Rupees ’000)
SCHEDULE : 18
Manufacturing, Selling, Distribution and Administrative Expenses :
Power & Fuel 3261 10264
Payments to & Provisions for Employees :
Salaries, Wages and Bonus 12160 19273
Contribution to Provident and other Funds 477 2395
Gratuity 72 3444
Staff welfare and Other Expenses 1911 14620 3259 28371
General Insurance 1159 1236
Transit Insurance 301 244
Demurrage Charges 57762 0
Consumption of Stores & Perfumes 0 179138
Freight & Cartage Inward 25691 6765
Rent 6993 2485
Rates & Taxes 4388 11381 3683 6069
Repairs :
Building 1330 391
Machinery 0 1947
Others 5868 7198 2290 4628
Freight, Cartage and Octroi Outward 186467 9755
Advertisement & Publicity 267 61396
Selling & Distribution Expenses 36509 16687
Custom Duty Charges 40370 0
Travelling & Conveyance 9519 20011
Interest & Bank Charges 36045 8937
Miscellaneous Expenses 63519 –29931
Commercial Taxes 0 5324
Loss on Sale of Fixed Assets 1501 6311
Payment to Auditors :
Statutory Audit Fee 625 285
Tax Audit Fee 13 638 12 297
Payment to Directors :
Remuneration 2980 3180
Sitting Fee 16 8
Commission 0 2236
Total 499204 340926

52
(CONSOLIDATED)
SCHEDULES CONTINUED
SCHEDULE : 19
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS :
(A) SIGNIFICANT ACCOUNTING POLICIES :
(1) Basis of Preparation :
The consolidated financial statements are prepared in accordance with Accounting Standard–(AS) 21 on Consolidated Financial Statements
issued by the Institute of Chartered Accountants of India. The Consolidated Financial Statement comprise the financial statement of
Kothari Products Limited and its subsidiaries, which have been consolidated on a line–by–line basis by adding together the book value
of like items of assets, liabilities, income and expenses, after eliminating intra–group balances.
(2) System of Accounting :
The Financial statements are prepared under the historical cost convention on accrual basis of accounting, in accordance with Generally
Accepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and
relevant provisions of the Companies Act,1956.
(3) Fixed Assets and Depreciation :
All fixed assets are stated at cost, comprising of purchase price, duty, levies and any direct attributable cost of bringing the assets to their
working 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 and
Provision 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 investment
made is recognised as Goodwill which is not considered for amortisation.
(4) Investments :
Investments are stated at cost less fall in their market value,considered permanent.
(5) Inventories :
Inventories are valued at cost or net realisable value whichever is lower. Cost of Raw Material, Packing Material, Stores & Perfumes and
Trading 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 cost
of 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 from
the settlement of such transactions and from conversion of monetary assets and liabilities denominated in foreign currencies are recognised
in 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.

(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 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.

53
2 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
(2) Additional Information Pursuant to the Provisions of Paragraphs 3, 4C and
4D 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 Capacity
Licensed 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

54
(CONSOLIDATED)
SCHEDULES CONTINUED
31.03.2010 31.03.2009

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


(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

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(CONSOLIDATED)
SCHEDULES CONTINUED
31.03.2010 31.03.2009

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


(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 0.00
Indigenous 0 0.00 139688 100.00
0 0.00 139688 100.00
Stores & Perfumes Consumed :
Imported 0 0.00 6838 3.82
Indigenous 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 Foreign
Currency 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

56
31.03.2010 31.03.2009
(Rs. ’000) (Rs. ’000)
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 31.03.2009
Particulars (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 at
31.03.2010 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 and
Trading Divisions of the Company have been transferred to Pan Parag India Limited w.e.f. 18th November, 2008. However the Company has
restarted 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 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 – 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
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(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 on
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
Sale of Equity Shares 0 0 0 0
Dividend Paid 42391 42391 7333 7333
Outstanding (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 of
Rs. 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, the
deferred tax liability amounting to Nil (Previous Year Rs. 12080820/– has been transferred to Pan Parag India Limited, pursuant to ‘Scheme of
Arrangement’.
(9) In terms of Accounting Standard 28 “Impairment of Assets” Issued by the Institute of Chartered Accountants of India, provision for impairment
loss on assets for the year is not required.
(10) In terms of Accounting Standard 29 “ Provisions, Contingent Liabilities and Contingent Assets” Issued by the Institute of Chartered Accountants
of India, there has been no Provision on beginning and at the end of the year, therefore no disclosure requirements.
(11) Fixed Deposits includes Rs. 701241684/– (Previous year Rs. 1575335742/–) given as earnest money etc. and pledged with the banks against
guarantees 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, Packaged
Drinking Water and Trading Divison have been transferred to Pan Parag India Limited w.e.f 18th November, 2008. However the Company has
restarted 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 subsidiary
companies – Sukhdham Constructions & Developers Limited, Arti Web–Developers Private Limited, MK Web–tech Private Limited, KPL
Exports 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’s
figures to the extent of figures of newly acquired subsidiary company.

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

For MEHROTRA & MEHROTRA


Chartered Accountants

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

58
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
As 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 2181.90
adjustments 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 3818.50 765.38
adjustments 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 21065.41
Direct 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 19742.05
Cash & Cash Equivalents – Opening Balance 20332.57 606.24
Transferred on demerger as per Scheme of Arrangement 0.00 –15.72
Cash & 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 the
current year.
For and on behalf of the Board

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI) (RAJ KUMAR GUPTA)
Dated : 29th May, 2010 Partner Chairman & Managing Director Executive Director Company Secretary
Membership No. 078862

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60
STATEMENT REGARDING SUBSIDIARY COMPANIES PURSUANT TO SECTION 212 OF THE
COMPANIES ACT, 1956
Names of the Financial No. of Extent The net aggregate amount of the The net aggregate amount of the
Subsidiary Year ending shares held of Subsidiary Companies’s Profit/ Subsidiary Companys’ Profit/
Companies of the by Kothari holding (Loss) so far as it concerns (Loss) so far as it concerns
Subsidiary Products the members of the Holding the members of the Holding
Companies Ltd. as on Company and not dealt with in Company and dealt with in the
31.03.2010 the accounts of the Holding accounts of the Holding Company
Company (except to the extent
dealt with in col. 7 & 8)
1 2 3 4 5 6 7 8
For the financial For the previous For the financial For the previous
year ended on financial year since year ended on financial year since it
31.03.2010 it became a subsidiary 31.03.2010 became a subsidiary
(Rs.’000) (Rs.’000) (Rs.’000) (Rs.’000)

Sukhdham 31.03.2010 100000 Equity 100% 7573 1255 Nil Nil


Constructions & Shares of Rs. 10/– each
Developers Ltd.

Arti Web 31.03.2010 10000 Equity 100% –223 6579 Nil Nil
Developers Shares of Rs. 10/– each
Private Ltd.

MK Web–Tech 31.03.2010 250000 Equity 100% 12835 31325 Nil Nil


Pvt. Limited Shares of Rs. 10/– each

KPL Exports 31.03.2010 50000 Equity 100% 18502 56467 Nil Nil
Pvt. Ltd. Shares of Rs. 10/– each

Kothari Products 31.03.2010 1000000 Equity 99.998 5488 965 Nil Nil
Singapore Shares of SGD 1 each
Pvt. Limited

IMK Hotels 31.03.2010 250000 Equity 100% –26 0 Nil Nil


Pvt. Limited Shares of Rs. 10/– each

*KPL Exports Pvt. Ltd., Kothari Products Singapore Pvt. Limited and IMK Hotels Pvt. Limited became the subsidiary of the Company during the year. IMK Hotels Pvt. Limited has not started its
business activities so far.

For Mehrotra & Mehrotra For and on behalf of the Board


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI) (RAJ KUMAR GUPTA)
Dated : 29th May, 2010 Partner Chairman & Managing Director Executive Director Company Secretary
Membership No. 78862
SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.
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 company
for the financial year ended 31st March, 2010.

FINANCIAL PERFORMANCE

(RS. IN THOUSANDS)
FINANCIAL FINANCIAL
YEAR ENDED YEAR ENDED
31.03.2010 31.03.2009

Other Income 11290 153


Profit(+)/Loss (–) before Taxation 9368 85
Provision for Taxation 1795 Nil
Profit(+)/Loss (–) after Tax 7573 84
Add : Balance brought forward 10255 10171
Amount available for appropriation 17828 10255

APPROPRIATIONS
Transfer to General Reserve NIL NIL
Proposed Dividend NIL NIL
Additional Tax on Proposed Dividend NIL NIL
Balance 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 investments
during the period under review against Rs. 1.53 lacs earned during the previous year. Efforts are being made to start the operations of
real 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 and
being 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 of
Kothari 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 so
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 with

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the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and
other 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.
AUDITORS AND AUDITORS’ REPORT :
M/s Mehrotra & Mehrotra, Chartered Accountants, Auditors of the Company, retire at the ensuing Annual General Meeting and are
eligible for reappointment. There are no qualification or adverse remarks in the Auditor's Report which call for explanation by the
Directors.
PARTICULARS OF EMPLOYEES :
There are no employees who were in receipt of remuneration as specified in Sec.217 (2A) of the Companies Act, 1956 read with The
Companies (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 Board


For SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.

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

62
SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.
COMPLIANCE CERTIFICATE

Registration No. of the Company : MH 2003–138914


Nominal Capital : Rs. 10000000
To,
The Members,
M/s SUKHDHAM CONSTRUCTIONS & DEVELOPERS LIMITED
373, Konark House, Veer Savarkar Road
Ground Floor, Near Sidhivinayak Temple
Prabhadevi, Dadar (West), Mumbai–400028
Maharashtra.
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 the
provisions 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 explanations
furnished 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 the
Companies 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 prescribed
and/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 and
5th March, 2010 during the year under review, in respect of which meetings proper notices were given and the proceedings were
properly recorded and signed.
5) The Company has not closed its Register of Member during the financial year being not required and question of closure of
register 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 Minutes
Book 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 of
the 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 information
provided 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 any
approvals 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 the
financial year.
iv) No amount is lying in respect of unpaid dividend application money due for refund, matured deposits, matured debentures
and interest accrued thereon.
v) Duly complied with the requirements of section 217 of the Act.

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14) The Board of Directors of Company is duly constituted and there was no appointment of additional directors, alternate directors
and 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 the
Act 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 no
redeemable preference shares/ debentures.
22) There were no transactions necessitating the Company to keep in abeyance the right to dividend, right shares and bonus shares
pending 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 the
Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975 and directives/directions issued by the Reserve
Bank 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 the
Company.
25) The Company has not made loans, given guarantees or provided securities to other bodies corporate during the year under
review.
26) The Company has not altered the provisions of Memorandum with respect to situation of the Company’s registered office from
one 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 financial
year under review.
28) The Company has not altered the provisions of Memorandum with respect to name of the company during the financial year
under review.
29) The Company has not altered the provisions of Memorandum with respect to Share Capital of the company during the financial
year 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

64
SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.
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 filing


No. Returns under filing within Prescribed whether requisite
section time, yes/no additional fee
paid, yes/no
1 Form 23AC& 220 Balance Sheet as at and Profit 28.11.2009 NO YES
23ACA and Loss Account for the
year ended 31st March, 2009
2 Form 20B 159 Annual Return Made upto 24.11.2009 YES NO
30th September, 2009
3 Form 66 383A Compliance Certificate 12.11.2009 NO YES
for the year ended
31st March, 2009.
2) Other Authorities–Nil
for Adesh Tandon & Associates
(Company Secretaries)

Sd/–
Place : KANPUR (Adesh Tandon)
Dated: 29th May, 2010 Prop.
C. P. No.: 1121

65
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SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.
REPORT OF THE AUDITORS TO THE MEMBERS

1. We have audited the attached Balance Sheet of Sukhdham Constructions & Developers 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
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion 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 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. An
audit also includes assessing the accounting 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) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company
as we considered appropriate and the information and explanations given to us during the course of our audit, we report that, in
our 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 the
Companies (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 the
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 outstanding
during the year was Rs.2424.38 lac and year end balance was Rs.2289.40 lac. There are no stipulations for the
repayment of the loans. The terms and other conditions of the said loans are not prima facie prejudicial to the interest
of 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, for
the purchase of stocks and fixed assets, for the sale of goods and services. During the course of our audit, we have not
observed 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 contracts
or 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 considered
by 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) of
section 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 of
statutory 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 of
Income–tax, Wealth–tax, Service–tax, Sales–tax, Custom duty, Excise Duty and Cess as at 31st March, 2010 which
were outstanding for a period of more than six months from the date they became payable.

66
SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.
(x) The Company does not have any accumulated losses and it has not incurred cash losses during the financial year during the
year 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 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 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. Accordingly
the 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 given
any guarantee for loans taken by others from bank or financial institutions.
(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 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 the
purpose 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 our
examination of those books.
iii. in our opinion, Balance Sheet; and the Profit & Loss Account dealt with by this report comply with the Accounting
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 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 Significant
Accounting Policies and Notes 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 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.

For MEHROTRA & MEHROTRA


CHARTERED ACCOUNTANTS
PLACE : KANPUR
DATE : 29th May, 2010
(ANURAG TANDON)
PARTNER
MEMBERSHIP NO. 078862

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SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.
BALANCE SHEET AS AT 31ST MARCH, 2010

Schedule As at 31.03.2010 As at 31.03.2009


Nos. (Rupees) (Rupees)

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

Loan Fund
Unsecured Loans 3 228940243.00 229507072.00
TOTAL 247768539.08 240762472.34
II. 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 7310900.00


Current Assets,Loans & Advances
(a) Cash & Bank Balances 6 151434.19 118717.34
(b) Loans & Advances 7 14697903.89 4638.00
14849338.08 123355.34
Less: 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

Significant Accounting Policies &


Notes to the Accounts 12

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

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

68
SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010

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

EXPENDITURE
Administrative Expenses 11 1922097.00 23721.00
Preliminary & Preoperative Expenses Written off 0.00 44376.00
Total 1922097.00 68097.00

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

PROVISION FOR TAXATION


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

PROFIT (+) / LOSS (–) AFTER TAXATION 7572895.74 84619.50


Balance Brought Forward 10255400.34 10170780.84

AMOUNT AVAILABLE FOR APPROPRIATION 17828296.08 10255400.34

APPROPRIATIONS
Transfer to General Reserve 0.00 0.00
Balance Carried Forward to Balance Sheet 17828296.08 10255400.34

Significant Accounting Policies &


Notes to the Accounts 12

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

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

69
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SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.
SCHEDULES TO ACCOUNTS
As 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 up
100000 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 Loans
Kothari Products Limited, the holding company 228940243.00 229507072.00
Total 228940243.00 229507072.00
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 at


31.03.09 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

As at 31.03.2010 As at 31.03.2009
SCHEDULE : 5 Units/Nos. (Rupees) Units/Nos. (Rupees)
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 1287330.00
INDOCO REMEDIES LTD. OF RS. 10/– 0 0.00 7926 1941870.00
TATA 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 Balances
Balance with Scheduled Bank
In Current Account 151434.19 118717.34
Total 151434.19 118717.34
SCHEDULE : 7
Loan & Advances – (Unsecured, Considered Good)
Deposit with Income Tax 1900000.00 4638.00
Amount Recoverable 12797903.89 0.00
Total 14697903.89 4638.00

70
SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.
SCHEDULES TO ACCOUNTS
As at As at
31.03.2010 31.03.2009
(Rupees) (Rupees)
SCHEDULE : 8
Current Liabilities
Sundry Creditors 1443203.00 0.00
Outstanding Liabilities 99592.00 24833.00
Total 1542795.00 24833.00
SCHEDULE : 9
Provisions
Provision 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 : 10
Other 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 : 11
Administrative Expenses
Interest & Bank Charges 0.00 5843.00
Repairs & Maintenance Expenses 1098266.00 0.00
Property Tax 753192.00 0.00
Miscellaneous Expenses :
Rent Account 0.00 11000.00
Electricity exp. 12527.00 0.00
Miscellaneous Expenses 20.00 1.00
Licence & Legal Expenses 22550.00 3004.00
Printing & Stationery Exp. 693.00 0.00
Security Expenses 27617.00 0.00
Demat Charges 3923.00 67330.00 564.00 14569.00
Payment to Auditors
Statutory Audit Fee 3309.00 3309.00
Total 1922097.00 23721.00

SCHEDULE : 12
SIGNIFICANT ACCOUNTING POLICIES & NOTES TO 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 Generally
Accepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and relevant
provisions of the Companies Act,1956.
(2) Fixed Assets and Depreciation :
All fixed assets are stated at cost, comprising of purchase price, duty, levies and any direct attributable cost of bringing the assets to their
working condition for the intended use.
No Depreciation is provided due to Company has not yet started commercial activities.
(3) Investments :
Investments are stated at cost less fall in their market value,considered permanent.

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SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.
(B) NOTES TO THE ACCOUNTS :
(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 no
impairment loss on assets for the year.
(8) In terms of Accounting Standard 29 “Provisions, Contingent Liabilities and Contingent Assets” Issued by the Institute of Chartered
Accountants 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 current
year.

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

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

72
SUKHDHAM CONSTRUCTIONS & DEVELOPERS LTD.
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILS
Registration No. 138914 State Code 11
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 251111 Total Assets 251111
Sources of Funds :
Paid–Up Capital 1000 Reserves & Surplus 17828
Secured Loans Nil Unsecured Loans 228940
Application of Funds :
Net Fixed Assets 236262 Investments 0
Net Current Assets 11506 Misc. Expenditure 0

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


Turnover Nil Total Expenditure 1922
Other Income 11290
Profit Before Tax 9368 Profit After Tax 7573
Earnings per share (in Rs.) 75.73 Dividend Rate % Nil

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

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

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

73
2 6 T H A N N U A L R E P O R T 2 0 0 9 — 2 0 1 0
ARTI WEB – DEVELOPERS PRIVATE LIMITED
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 the
financial 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 including
television 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 himself
for 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 Kothari
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 so 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 with the
provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other
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.
AUDITORS AND AUDITORS’ REPORT :
M/s Mehrotra & Mehrotra, Chartered Accountants, Auditors of the Company, retire at the ensuing Annual General Meeting and are
eligible for reappointment. There are no qualification or adverse remarks in the Auditors’ Report which call for explanation by the Directors.
PARTICULARS OF EMPLOYEES :
There are no employees who were in receipt of remuneration as specified in Sec.217 (2A) of the Companies Act, 1956 read with The
Companies (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 Board


For ARTI WEB – DEVELOPERS PVT. LTD.

Sd/– Sd/–
PLACE : KANPUR (DEEPAK KOTHARI) (MITESH KOTHARI)
DATE : 29th May, 2010 Director Director
74
ARTI WEB – DEVELOPERS PRIVATE LIMITED
REPORT OF THE AUDITORS TO THE MEMBERS

1. We have audited the attached Balance Sheet of Arti Web–Developers 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 financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion 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 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. An
audit also includes assessing the accounting 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) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company
as we considered appropriate 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
management 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 concern
assumption.
(ii) The Company has not started any manufacturing activity during the year. Therefore, reporting under clause 4(ii) of the
Companies (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 in
the 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 outstanding
during the year was Rs.1021.87 lac and year end balance was Rs.1021.87. There are no stipulations for the repayment
of the loans. The terms and other conditions of the said loans are not prima facie prejudicial to the interest of 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, for
the purchase of stocks and fixed assets, for the sale of goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal control.
(v) To the best of our knowledge and according to the information & explanations given to us there has been no contracts or
arrangements 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 considered
by 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) of
section 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 of
statutory 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.
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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, Sales–tax / Value Added Tax, Custom duty, Excise Duty, Service–tax and Cess as at 31st
March, 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 financial
year immediately preceding this financial year also.
(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 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 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. Accordingly
the reporting under clause 4(xiv) of the Companies (Auditors’ Report) Order, 2003 are 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 given
any guarantee for loans taken by others from bank or financial institutions.
(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 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 the
purpose 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 our
examination of those books.
iii. in our opinion, Balance Sheet; and the Profit & Loss Account dealt with by this report comply with the Accounting
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 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 Significant
Accounting Policies and Notes 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 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.

For MEHROTRA & MEHROTRA


CHARTERED ACCOUNTANTS
PLACE : KANPUR
DATE : 29th May, 2010
(ANURAG TANDON)
PARTNER
MEMBERSHIP NO. 78862

76
ARTI WEB – DEVELOPERS PRIVATE LIMITED
BALANCE SHEET AS AT 31ST MARCH, 2010

Schedule As at 31.03.2010 As at 31.03.2009


Nos. (Rupees) (Rupees)

I. SOURCES OF FUNDS
Shareowners’ 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 FUNDS


Fixed 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 & Provisions


Current Liabilities 7 222148.00 231782.00
222148.00 231782.00
Net Current Assets –203660.34 –182273.34

Total 108643100.66 108664487.66

Significant Accounting Policies &


Notes to the Accounts 9

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

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

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

Schedule For the Year Ended For the Year Ended


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
Balance Carried Forward to Balance Sheet 6356468.66 6579466.66

Significant Accounting Policies


& Notes to the Accounts 9

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

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

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ARTI WEB – DEVELOPERS PRIVATE LIMITED
SCHEDULES TO ACCOUNTS
As at As at
31.03.2010 31.03.2009
(Rupees) (Rupees)
SCHEDULE : 1
Share Capital :
Authorised
100000 Equity Shares of Rs. 10/– each 1000000.00 1000000.00
Issued, Subscribed and Paid–up Capital
10000 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 Loans
Kothari 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 on


31.03.09 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 12150.00
or 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

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SCHEDULE : 8
For the year ended For the year ended
31.03.2010 31.03.2009
(Rupees) (Rupees)
Administrative Expenses
Electricity Expenses 82606.00 105742.00
Repairs & Maintenance – Building 129928.00 90565.00
Rent 0.00 6000.00
Interest & Bank Charges 0.00 225.00
Miscellaneous Expenses
Miscellaneous Expenses 556.00 410.00
Printing & Stationery 0.00 913.00
Licence & Legal Expenses 918.00 6530.00
Professional tax 2500.00 0.00
Demat 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 : 9
SIGNIFICANT ACCOUNTING POLICIES & 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 Generally
Accepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and relevant
provisions of the Companies Act,1956.
(2) Fixed Assets and Depreciation :
All fixed assets are stated at cost, comprising of purchase price, duty, levies and any direct attributable cost of bringing the assets to their
working condition for the intended use.
No Depreciation is provided due to Company has not yet started commercial activities.
(3) Investments :
Investments are stated at cost less fall in their market value,considered permanent.
(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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ARTI WEB – DEVELOPERS PRIVATE LIMITED
(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 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 101985021.00
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 no impairment
loss on assets for the year.
(8) In terms of Accounting Standard 29 “ Provisions, Contingent Liabilities and Contingent Assets” Issued by the Institute of Chartered Accountants
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 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

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

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BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILS
Registration No. 149451 State Code 11

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 108865 Total Assets 108865
Sources of Funds :
Paid–Up Capital 100 Reserves & Surplus 6356
Secured Loans Nil Unsecured Loans 102187
Application of Funds :
Net Fixed Assets 108847 Investments Nil
Net Current Assets –204 Misc. Expenditure Nil
Accumulated Losses Nil

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


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

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

For and on behalf of the Board,

For MEHROTRA & MEHROTRA,


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

82
MK WEB-TECH PRIVATE LIMITED
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 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 during
the 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 is
exploring the possibilities of starting the operations in the area of High-Tech web development.
DIVIDEND :
Your Directors do not recommend any Dividend for the financial year under review to conserve resources for future purposes.
DIRECTORS :
Sri Kamlesh Mehta & Sri Mitesh Kothari, Directors of the Company, retire by rotation in the ensuing Annual General Meeting and
being 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
of Kothari 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
so 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 with
the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud
and other 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.
AUDITORS & AUDITORS’ REPORT:
M/s Vipul Thakkar & Co., Chartered Accountants, Auditors of the Company, retire at the ensuing annual general meeting and are
eligible for reappointment. There are no qualification or adverse remarks in the Auditors Report which call for explanation by the
Directors.
PARTICULARS OF EMPLOYEES :
There are no employees who were in receipt of remuneration as specified in Sec.217 (2A) of the Companies Act, 1956 read with The
Companies (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 Board


For MK WEB-TECH PVT. LTD.

Sd/- Sd/-
PLACE : MUMBAI (DEEPAK KOTHARI) (MITESH KOTHARI)
DATE : 19th May, 2010 Director Director
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MK WEB-TECH PRIVATE LIMITED
COMPLIANCE CERTIFICATE

Registration No. Of the Company : 11–152153


Nominal Capital : Rs. 25,00,000
To,
The Members,
MK WEB-TECH PRIVATE LTD.
373, Konark House, Veer Savarkar Road
Ground Floor, Near Sidhivinayak Temple
Prabhadevi, Dadar (West), Mumbai–400 028
Maharashtra.
We have examined the registers, records, books and papers of M/S MK WEB-TECH PRIVATE LTD. as required to be maintained
under the Companies Act, (the Act) and the rules made there under and also the provisions contained in Memorandum and Articles
of Association of the Company for the financial year ended on 31st MARCH 2010. In our opinion and to the best of our information
and according to the examinations carried out by us and explanations furnished to us by the company, its offices 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 and the
rules 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 Act
and 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 paid
up 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 in
Minutes 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 Debenture
holders 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 after
giving due notice to the members 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 loan to its Directors and/or persons or firms or Companies referred in the Section 295 of
the 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 information
provided 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 any
approvals 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 the
financial year.

84
MK WEB-TECH PRIVATE LIMITED
iv) Neither unpaid dividend, nor any application money due for refund is lying, and it has not deposited any interest accrued
thereon, 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 directors
or 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 of
Companies, Regional Director and/or such authorities prescribed under the various provisions of the Act during the financial
year.
18) The Directors have disclosed their interest in the firms/companies to the Board of Directors pursuant to the provisions of the Act
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.
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 shares
pending 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 A
of 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 the
Company 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 under
review.
26) The Company has not altered the provisions of Memorandum with respect to situation of the Company’s registered office from
one 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 under
scrutiny.
28) The Company has not altered the provisions of Memorandum with respect to name of the company during the year under
scrutiny.
29) The Company has not altered the provisions of Memorandum with respect to Share Capital of the company during the year
under 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 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 of
Section 418 of The Companies Act, do not apply.

for Adesh Tandon & Associates


(Company Secretaries)

Sd/-
Place: MUMBAI (Adesh Tandon)
Date : 19th May, 2010 Prop.
C. P. No.: 1121

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MK WEB-TECH PRIVATE LIMITED
ANNEXURE–A

Registers as maintained by the Company


Statutory Registers
1) Register of members u/s 150
2) Registers and returns u/s 163
3) Minutes Books of Meetings u/s 193
4) Books of Accounts u/s 209
5) Registers u/s 301
6) Register of Director, Managing Director, Manager & Secretary u/s 303
7) Register of Director share holding u/s 307
8) Register of Mortgage & Charges u/s 143
Other Registers
1) Register of Transfer
2) Register of Directors Attendance
3) Register of Share Holder Attendance
4) Register of Share Application and Allotment
5) 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 be
recorded 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 filing


No. under filing within Prescribed whether requisite
section time yes/no additional fee
paid yes/no
1. Form 23AC 220 Balance Sheet as at and Profit 28.11.2009 NO YES
And and Loss Account for the year
Form 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 YES
year ended 31st March, 2009

2) Other Authorities – Nil


for Adesh Tandon & Associates
(Company Secretaries)

Sd/-
(Adesh Tandon)
Place: MUMBAI Prop.
Date : 19th May, 2010 C. P. No.: 1121

86
MK WEB-TECH PRIVATE LIMITED
REPORT OF THE AUDITORS TO THE MEMBERS

We have audited the attached Balance Sheet of MK Web-Tech Private Limited as at 31st March, 2010 annexed thereto. These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
1) We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we
plan 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. An
audit also includes assessing the accounting 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.
2) As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of Section
227 (4A) of the Companies Act, 1956 , we enclose in the Annexure hereto a statement of the matters specified in the paragraphs
4 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 for
the 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 our
examination 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 accounting
standards 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, we
report that none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director in terms of
clause (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 subject
to and read together with the Notes thereon gives the information required by the Companies Act, 1956 in the manner
so 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 PROPRIETOR
DATE : 19th May, 2010 MEMBERSHIP NO. 107991

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MK WEB-TECH PRIVATE LIMITED
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 fixed
assets.
b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals, which in our
opinion is reasonable, having regard to the size of the Company and nature of its assets. We are informed that no material
discrepancies 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 Companies
Act, 1956.
c) In our opinion, the rate of interest and other terms and conditions are not, prima facie, prejudicial to the interest of the
company.
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 system
commensurate with the size of the Company and the nature of its business. It has not purchased any stores, raw materials, plant
and machinery or equipments or sold any goods during the year under report. During the course of our audit, we have not
observed 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 of
contracts or arrangements that needed to be entered into the register needed to be maintained u/s 301 of the Companies
Act have been so entered.
b) In our opinion and according to the information and explanations given to us, there are no transactions in pursuance of
contracts or arrangements entered in the register maintained u/s 301 of the Companies Act aggregating during the year to
Rs. 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 from
the 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 been
informed 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 of
the 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 including
Provident Fund, Investor Education and Protection Fund, Income tax, Service Tax and any other statutory dues with the
appropriate authorities/. According to the information and explanations given to us, no undisputed amounts payable in
respect of the aforesaid dues were outstanding as at 31-3-2010 for a period of more than six months from the date they
became payable.
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MK WEB-TECH PRIVATE LIMITED

b) The Company does not have any disputed statutory dues that have not been deposited on account of matters pending
before appropriate authorities.
10) The Company does not have accumulated losses. Therefore, the question of reporting under clause 4(x) of the Order regarding
comparison 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 others
from banks or other financial institutions.
13) The Company is not dealing or trading in shares, securities, debentures or similar instruments. In respect of investments, the
Company 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 the
exemption, 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 the
Company 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 the
Companies (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 noticed
or reported during the year, that causes the financial statements to be materially misstated.

For VIPUL THAKKAR & CO.


CHARTERED ACCOUNTANTS

(VIPUL THAKKAR)
PLACE : MUMBAI PROPRIETOR
DATE : 19th May, 2010 MEMBERSHIP NO. 107991

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BALANCE SHEET AS AT 31ST MARCH, 2010

Schedule As at 31.03.2010 As at 31.03.2009


Nos. (Rupees) (Rupees)

SOURCES OF FUNDS

Shareowners’ Fund
Share Capital A 2,500,000.00 2,500,000.00
Reserves & 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 FUNDS
Fixed Assets D 188,363,690.19 191,670,599.46

CURRENT ASSETS, LOANS & ADVANCES

Cash & Bank Balances E 5,787,123.20 114,392.50


Loans & Advances F 16,652,510.64 16,906,009.88
22,439,633.84 17,020,402.38
LESS: 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 172,422,139.03 171,333,663.84
Notes 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

90
MK WEB-TECH PRIVATE LIMITED
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010

Schedule For the Year Ended For the Year Ended


Nos. 31.03.2010 31.03.2009
(Rupees) (Rupees)

INCOME
Rent & Compensation Received 24,605,136.00 24,507,101.00
Interest 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 3,431,059.99
Depreciation 3,306,909.27 3,306,909.27
Preliminary 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 17,962,460.74
Provision For Taxation 5,100,000.00 6,000,000.00
Deferred Tax Assets – (800,000.00)
Income Tax Of Earlier Year (Written Off) / Back 23,981.54 5,123,981.54 1,149.76 5,201,149.76
Profit / (Loss) After Taxation 12,835,232.19 12,761,310.98
Balance Brought Forward From Earlier Year 31,324,545.84 18,563,234.86
Profit / (Loss) Carried Forward
To Balance Sheet Total : 44,159,778.03 31,324,545.84
Notes To 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

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SCHEDULES TO ACCOUNTS
As at As at
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 18,563,234.86
Profit / (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 At
Balance 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 1,230.00
Balance in Current Account with Scheduled Banks – –
Axis Bank Ltd. 53,976.10 61,342.10
Kotak Mahindra Bank 5,731,977.10 51,820.40
Total 5,787,123.20 114,392.50

SCHEDULE ‘F’
Current Assets, Loans & Advances
T D S Receivable 06-07 - 4,955,268.48
T D S Receivable 07-08 - 5,512,947.06
T D S Receivable 08-09 5,607,787.34 5,607,787.34
T 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 800,000.00 800,000.00
Services Tax Refund Receivable 30,007.00 30,007.00
Total 16,652,510.64 16,906,009.88

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MK WEB-TECH PRIVATE LIMITED
As at As at
31.03.2010 31.03.2009
(Rupees) (Rupees)
SCHEDULE ‘G’
Current Liabilities:
Creditors for Expense 58,000.00 58,000.00
Auditors Remuneration Payable 18,000.00 9,000.00
Property Tax Payable 3,402,795.00 3,402,794.00
Services Tax Payable 1,478,358.00 –
Provision for Taxation (F.Y.2006-07) – 1,100,000.00
Provision for Taxation (F.Y.2007-08) – 4,478,000.00
Provision for Taxation (F.Y.2008-09) 6,000,000.00 6,000,000.00
Provision 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 – 252.99
Printing & Stationery – 913.00
Audit Fees 9,000.00 9,000.00
Profession Tax 2,500.00 5,000.00
Property Tax 3,402,794.00 3,402,794.00
Rent for Office – 6,000.00
ROC Fees 2,550.00 7,100.00
Sundry Expense 753.00 –
Total 3,417,597.00 3,431,059.99

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 Generally
Accepted 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 reasonable
certainty of its ultimate realization. Income earned by way of leasing or renting out of commercial premises is recognized as
income 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 Schedule
XIV 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.

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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 an
outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions
are not discounted to its present value and are determined based on management estimate required to settle the obligation
at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management
estimates. Contingent Liabilities are disclosed when the Company has a possible or a present obligation and it is probable
that 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 any
indication exist, the assets recoverable amount is estimated. An impairment loss is recognized wherever the carrying
amount 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 the
accounting income and taxable income for the year and measured using enacted tax rates expected to apply to taxable
income in the year in which the timing differences are expected to be reversed or settled. Deferred Tax Assets arising
on account of unabsorbed depreciation or carried forward losses are recognized and carried forward to the extent that
there is a virtual certainty that sufficient future taxable income will be available against which such Deferred Tax Asset
can be realized. In other cases, Deferred Tax Assets are recognized and carried forward based on reasonable certainty
of 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 the
ordinary course of business not less than the amount at which they are stated in the Balance Sheet and provision for
all 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 extent
applicable 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, the
segment information is not provided.
(e) The Company has not received intimation from any ‘enterprise’ regarding its status under Micro Small and Medium
Enterprise 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/- was
received as unsecured loan, an amount of Rs.1,58,00,000/- was repaid and balance outstanding at the end of the year
was Rs.12,57,62,361/-.

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

94
MK WEB-TECH PRIVATE LIMITED
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILS
Registration No. 152153 State Code 11

Balance Sheet Date 31.03.2010

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


Public Issue Nil Right Issue Nil
Bonus Issue Nil Private Placement Nil

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
Application of Funds :
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

As per our report of even date attached


For and on behalf of the Board
For VIPUL THAKKAR & CO.
Chartered Accountants

(VIPUL THAKKAR)
Place : Mumbai Proprietor (DEEPAK KOTHARI) (MITESH KOTHARI)
Dated : 19th May, 2010 M.No. 107991 Director Director

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KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)

Directors’ Report
For 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 period
ended 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 whose
object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company
or 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 office
at 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 disclosed
under Section 201(8) of the Companies Act, Chapter 50 by reason of a contract made by the company or a related corporation with the
director or with a firm of which he is a member, or with a company in which he has a substantial financial interest except related party
transactions as disclosed in the financial statements.
OPTIONS GRANTED
During 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 up
unissued 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 MEKANI
DATE : 22nd May, 2010 Director Director

96
KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
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 flows
together 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 the
results, 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 MEKANI
DATE : 22nd May, 2010 Director Director

INDEPENDENT AUDITOR’S REPORT TO THE SHAREOWNERS OF KOTHARI


PRODUCTS SINGAPORE PRIVATE LIMITED
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED, which comprise the Statement
of financial position as at 31st MARCH,2010, and Statement of comprehensive Income, statement of changes in equity and statement of
cash flows for the financial period 1 April, 2009 to 31 March,2010, and notes to financial statements together with summary of significant
accounting 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 the
Singapore 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 safeguarded
against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to
permit 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 with
Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to
obtain 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. The
procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial
statements, 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 the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion 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 by
management, 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 Reporting
Standards 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 in
equity 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 the
provisions of the Act.
T Ravi & Co.,
PLACE : SINGAPORE Public Accountants and
DATE : 22nd May, 2010 Certified Public Accountants

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KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
STATEMENT OF FINANCIAL POSITION
For the financial year 1st April, 2009 to 31st March, 2010 2010 2009
Note US$ US$
ASSETS AND LIABILITIES
Non-current assets
Plant and equipment 3 5,002 –
5,002 –
Current Assets
Trading stock 107,646 –
Trade receivables 4 3,664,076 704,298
Deposit, prepayments and other receivables 5 519,421 –
Cash and bank balances 6 1,231,936 693,365
5,523,079 1,397,663
Less: Current Liabilities
Trade payables 7 4,472,864 30,000
Accruals 8 95,870 6,550
Bank borrowings, secured 9 106,875 641,261
Provision 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
EQUITY
Share capital 11 689,664 689,664
Retained profit 148,601 26,981
838,265 716,645
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

STATEMENT OF COMPREHENSIVE INCOME For the financial year 1st April, 2009 to 31st March, 2010
01/04/2009 21/05/2008
to to
31/03/2010 31/03/2009
Notes US$ US$
Revenue 12 14,618,767 1,265,934
Changes in the inventories 107,646 –
Direct costs – purchases and incidentals 13 (14,433,782) (1,220,117)
Other operating income – interest income 6,271 6,199
Staff 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 30,188
Income tax 10 (11,000) (3,207)
Net profit for the financial period 121,620 26,981
Other 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

98
KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
STATEMENT OF CHANGES IN EQUITY For the financial year 1st April, 2009 to 31st March, 2010
Issued Retained Total
Share Profit
Capital
US$ US$ US$
At 21st May, 2008 (date of incorporation) 689,650 – 689,650
Issue of Shares 14 – 14
Total 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 2009
US$ US$
OPERATING ACTIVITIES
Profit from ordinary activities before taxation 132,620 30,188
Depreciation 931 –
Interest income (5,966) (6,149)
Interest expenses 6,654 11,799
Operating profit before working capital
Changes 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 36,550
Payment of income tax – –
Interest income 5,966 6,149
Interest 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 activities
Purchase of plant and equipment (5,966) –
Fixed deposits placed (302,031) (692,400)
(307,997) (692,400)
Cash flow from financial activities
Issue 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 236,507
Cash and cash equivalents at the beginning 965 –
Cash and cash equivalents at end of year 237,472 965

NOTES TO CASH FLOW STATEMENT


a) Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts:
01-04-2009 to 21-05-2008 to
31-03-2010 31-03-2009
US$ US$
Cash – 14
Cash at banks 237,472 951
Fixed 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.

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KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
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 at
No: 1, Amber Road, # 17 - 03 Amber Point, Singapore 439 845 having its place of business at 10 Anson Road, #15-13 International
Plaza, Singapore 079903.
The principal activities of the company are those of business in general wholesale trade (including importers and exporters), business
management 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 cost
convention and in accordance with Singapore Financial Reporting Standards (“FRS”) including related Interpretations promulgated
by the Council on Corporate Disclosure and Governance (“CCDG”) and the disclosure requirements of the Singapore Companies
Act. Chapter 50.
The preparation of financial statements in conformity with FRS requires management to exercise its judgment in the process of
applying the company’s accounting policies. It also requires the use of accounting estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the financial year. Although these estimates are based on management’s
best knowledge of current events and actions, actual results may ultimately differ from those estimates. Critical accounting
estimates and assumptions used that are significant to the financial statements, and areas involving a higher degree of judgment
and 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 the
financial 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 includes
only details of transactions with owners, with all non-owners changes in equity presented in the statement of other
comprehensive income. In addition, the Standards introduce the statement of comprehensive income which presents
income and expenses recognised in the period. This statement may be presented in one single statement or two
linked 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. Fair
value measurements are to be disclosed by sources of inputs using a three level hierarchy for each class of financial
instruments. In addition, reconciliation between the beginning and ending balance for Level 3 fair value measurement
is now required, as well as significant transfers between Level 1 and Level 2 fair value measurements’. The amendments
also clarify the requirements for liquidity risk disclosures. The fair value measurement disclosures and liquidity risk
disclosures 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 – revised
FRS 32 : Amendment to Financial Instruments: presentation – Amendments relating to classification of Right
Issues.

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KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
FRS 101 : First-time adoption of Financial Reporting Standards
FRS 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 Owners
INT 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 financial
statements 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 assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the
reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a
material 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 recognised
in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future
periods, 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 have
a significant risk of causing a material adjustment to the carrying amounts of asset and liabilities within the next financial year are
discussed 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. Management
estimates the useful lives of these property, plant and equipment to be within 3 to 5 years. The carrying amount of the company’s
plant and equipment at 31st March, 2010 was $5,002/- (2009: NIL). Changes in the expected level of usage and technological
developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges
could be revised.
Income taxes
The company has exposure to income taxes on its income and certain expenses. Significant judgement is involved in determining
the company’s provision for income taxes. There are certain transactions and computations for which the ultimate tax determination
is uncertain during the ordinary courses of business. The company recognises liabilities for expected tax issues based on estimates
of 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 have
the 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. This
determination requires significant judgment. The company evaluates, among other factors, the duration and extent to which the
fair value of a financial asset is less than its costs; and the financial health of and near-term business outlook for the financial
asset, including factors such as industry and company performance, changes in technology and operational and financing cash
flow.
Impairment of other receivables
Management believes that with the deposits and other receivables are guaranteed and are recoverable at their carrying values as
at the balance sheet, and hence no allowance for doubtful is deemed necessary.

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KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
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 asset
comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended
use.
(b) Depreciation
Depreciation is calculated on a straight line basis to write off the cost of plant and equipment over their expected useful
lives. The estimated useful lives are as follows:
Office equipment 03 years
Furniture and fittings 03 years
Computers 03 years
The residual values and useful lives of plant and equipment are reviewed, and adjusted as appropriate, at each balance
sheet date. A full year’s depreciation is provided for assets acquired in the year and no depreciation is provided for the year
in which the asset is disposed off.
Fully depreciated plant and equipment are retained in the financial statements at nominal value until such time when they
are 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 amount
of the asset when it is probable that future economic benefits, in excess of the standard of performance of the assets before
the expenditure was made, will flow to the company and the cost can be reliably measured. Other subsequent expenditure
is 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 its
use or disposal. On disposal of an item of plant and equipment, the difference between the net disposal proceeds and its
carrying 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. If
any such indication exists, the recoverable amount (i.e.) the higher of the fair value less cost to sell and value in use of the
asset 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 does
not generate cash flows that are largely independent of those from other assets. If there is the case, recoverable amount is
determined 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 the
asset (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 the
assets’ recoverable amount since the last impairment loss was recognised. The carrying amount of an asset is increased to
its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been
determined (net of depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of
impairment 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 any
indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. An impairment loss is
recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. The impairment
loss is charged to the profit and loss statement unless it reverses a previous revaluation, credited to equity, in which case it is
charged 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 cash
flows, discounted at the original effective interest rate (i.e. The effective interest rate computed at initial recognition of these
financial assets). Receivables with a short duration are not discounted.

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KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
The recoverable amount of other assets is the greater of their fair values less costs to sell and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. For an asset that does generate
largely independent cash flows, the recoverable amount is determined for the cash-generating unit to which the asset
belongs.
(b) REVERSALS OF IMPAIRMENT
An impairment loss in respect of receivables carried at amortized cost is reversed if the subsequent increase in recoverable
amount 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 or
when 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 a
reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been
determined (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 determined
on a first-in, first-out basis.
Net realizable value represents the estimated selling price less anticipated costs of disposal and after making allowance for
damaged, 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 and
receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. Financial assets are recognised on
the 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 value
through profit or loss, directly attributable transaction costs. The company determines the Classifications of its financial assets
after 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 doubtful
debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified. The accounting
policy 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 loans
and receivables. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in
the profit and loss statement when the loans and receivables are derecognised or impaired, as well as through the amortisation
process.
2.9 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and bank deposits and highly liquid investments, which are readily convertible
to cash and which are subject to an insignificant risk of change in value. For the purpose of the statement of cash flows, cash and
cash equivalents are presented net of bank overdraft, if any, which are repayable on demand and which form an integral part of
the 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 for
goods and services received, whether or not billed to the company and subsequently measured at amortised cost, using the
effective 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 probable
that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of the obligation can
be made.

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KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
Where the effect of the time value of money is material, the amount recognised is the present value of the expenditures expected
to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and
the 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 not
at fair value through profit or loss are measured at fair value plus transaction costs that are directly attributable to the acquisition
or issue of the financial liability. After initial recognition financial liabilities at fair value through profit or loss, including
derivatives that are financial liabilities, are measured at fair value. Other financial liabilities not at fair value through profit or loss
are measured at amortized cost and any difference between the proceeds (net of transaction costs) and the redemption value is
recognized in the profit and loss statement over the period of the borrowings are classified as current liabilities unless there is an
unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Items classified within
trade and other payables are not usually re-measured, as the obligation is usually known with a high degree of certainly and
settlement 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 refundable
for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in
the financial statements or tax returns. The measurement of current and deferred tax liabilities and assets are based on provisions
of the enacted or substantially enacted tax laws; the effect of future changes in the tax laws or rates are not anticipated. Income tax
expense 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 of
assets and liabilities and their carrying amounts in the financial statements. Temporary differences are not recognized for
goodwill not deductible for tax purposes and the initial recognition of assets or liabilities that affect neither accounting nor
taxable profit. The amount of deferred tax provided is based on the expected manner of realization or settlement of the Carrying
amount 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 are
expected 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 classified
as finance lease. Property, plant and equipment acquired by way of finance lease is capitalised at the lower of its fair value and the
present value minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Lease
payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of
interest 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 as
operating leases. Operating lease payments are recognised as an expense in the profit and loss statement on a straight-line basis
over 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 in
equity as a deduction from the proceeds. Where the company reacquires its own equity instruments as treasury shares, the
consideration paid, including any directly attributable incremental cost is deducted from equity attributable to the company’s
equity holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any
consideration received, net of any directly attributable incremental transaction costs and related income tax effects, is included in
equity 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 revenue
amount is the fair value of the consideration received or receivable from the gross inflow of economic benefits during the year
arising from the course of the ordinary activities of the entity and it is shown net of related tax, estimated returns, discounts and
volume 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 has
accepted the products and the collectibility of the related receivables are reasonably assured.
104
KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
(b) Other Sales/Service income
Revenue from services is recognised when the company has delivered the sales/service to the customer, the customer has
accepted 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 future
cash flow discounted at the original effective interest rate of the instrument, and continue amortising the discount as
interest 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 any
contributions 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 an
expense 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 intended
use or sale are capitalised as part of the cost of that asset until substantially all the activities necessary to prepare the qualifying
asset 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 of
current financial assets and financial liabilities including cash, accounts receivable, short-term borrowings, account payable
approximate their values due to the short-term maturity of these instruments. The fair values of non-current financial instruments
are not disclosed unless there are significant items at the end of the year and in the event the fair values are disclosed in the
relevant notes. Disclosures of fair value are not made when the carrying amount is a reasonable approximation of fair value. The
maximum 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 economic
substance of the underlying events and circumstances relevant to the Company (“the measurement currency”). The financial
statements 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 date
of transactions. Foreign currency monetary assets and liabilities are translated into the measurement currency at the rates
of exchange prevailing at the balance sheet date. Foreign exchange gains and losses resulting from the settlement of foreign
currency transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities
denominated 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, or
is under common or joint control with, the entity in governing the financial and operating policies, or that has an interest in the
entity that gives it significant influence over the entity in financial and operating decisions. It also includes members of the key
management personnel or close members of the family of any individual referred to herein and others, who have the ability to
control, jointly control or significantly influence by or for which significant voting power in such entity resides with, directly or
indirectly, any such individual. This includes parents, subsidiaries, fellow subsidiaries, associates, joint ventures and post-employment
benefits plans, if any.

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KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
3. PLANT AND EQUIPMENT
Balance at Balance at
01/04/2009 Additions Disposals 31/03/2010
$ $ $ $
Cost
Office equipment – 531 – 531
Computers – 6,820 (1,418) 5,402
– 7,351 (1,418) 5,933
Accumulated depreciation
Office equipment – 141 – 141
Computers – 790 – 790
– 931 – 931

Depreciation Net Book Value


Charge for
2009 2009 2010
$ $ $
Office equipment – – 390
Computers – – 4,612
– – 5,002
4. TRADE RECEIVABLES
2010 2009
$ $
Trade receivables - related party – 704,298
Trade 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 with
others.
Credit terms of the trade receivables are at sight to 180 days on bank LC terms and/or against documents. Trade receivables are
denominated in United States Dollars.
The current receivables with a short duration are not discounted for present value and the carrying values are assumed to approximate
the fair value.

5. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS


2010 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 –

106
KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
6. CASH AND BANK BALANCES
The cash and bank balances as at the balance sheet date are
2010 2009
$ $
Cash – 14
Cash at banks 237,505 951
Fixed 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 to
US$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 698,829 693,365
United States dollars 533,072 –
1,231,936 693,365
7. TRADE PAYABLES

2010 2009
$ $
Trade payable – related party – 30,000
Trade 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 days
on 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 ACCRUALS


2010 2009
$ $
Provision for interest on discounted bills 290 –
Provision for freight charges 78,730 –
GST payable 81 –
Other payables 6,769
Other 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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KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
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 monthly
rests. 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 due
explained 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 30,188
Tax 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 2,618
Other (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 3,207
Tax –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 assets
against 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 – –

108
KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)

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 assets
2010 2009
$ $
Tax losses – –
Capital allowances – –
Provisions – –
Other temporary differences – –
Deferred income tax assets
Deferred income tax liability
2010 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 capital
2010 2009
$ $
1,000,020 (2009: 1,000,020) ordinary shares 689,664 689,664
Balance 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 ordinary
shares 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 vote
per share without restriction. The ordinary shares carry no right to fixed income. The company is not subject to any externally imposed
capital 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 to
provide returns for owners and benefits for other stakeholders, and to provide an adequate return to owners by pricing products and
services 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 in
conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the management
may 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.

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13. DIRECT COSTS – COST OF SALES
2010 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 COSTS


2010 2009
$ $
Directors’ remuneration – –
Salary, bonus and CPF etc. 107,254 –
Medical expense 279 –
107,533 –

15. PROFIT BEFORE TAXATION


2010 2009
$ $
This is determined after charging :–
Bank charges 31,746 12,887
Directors’ remuneration – –
Depreciation 931 –
Interest paid –
– Discounting interest 2,199 –
– TR interest 4,454 11,799
Incorporation expense 1,690
Loss on disposal of plant and equipment – 865
Net 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 present
and future of the company
2010 2009
US$ 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% to
4% calculated on daily balance with monthly rests.

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KOTHARI PRODUCTS SINGAPORE PRIVATE LIMITED
(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
17. COMMITMENTS
Operating Commitment
The company also leases one of the office equipment under cancellable operating lease agreement. The company is required to give
three months notice to renewal of the contract. The lease expenditure $16,812/- (2009: $NIL /-) charged to profit and loss statement
during the financial year.
The future aggregate minimum lease payable under non-cancellable operating leases contracted at the balance sheet date but not
recognized 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 usance
Bills under bills for collection and the company’s liability on Letter of guarantee opened by the bank on behalf of the company
amounting 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 the
banker 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 market
risk. 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 the
risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligation. The company exposure
to credit risk arises primarily from trade and other receivables. For other financial (including cash and cash equivalents), the company
minimises 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 of
financial 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 and
there 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 interest
rates. The company obtains financing from banks at the prevailing interest rates and additional financing through bank credit facilities
at 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 use
derivative financial instruments to hedge underlying commodity price risk. However, this risk is mitigated as the company signed the
counter 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 relation
to its bank balances

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(Incorporated in the Republic of Singapore with its Registration Number 200809977K)
Foreign Currency Risk
The company is exposure on foreign currency risk is minimum as the company’s sales and purchases are denominated in the same
foreign 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 get
financial 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 capital
ratios 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 or
adjust the capital structure, the company adjusts the dividend payment to Shareowners, if any, return capital to Shareowners or
issue new shares. No changes were made in the objectives, policies or processes during the years ended 31stMarch, 2010 and
31st 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 4,161,884 681,018
Equity attributable to the equity holders of the company 739,531 716,645
Capital and net debt 4,901,415 1,397,663
Gearing 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 as
shown 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 or
after 1st November 2009. The company does not expect that adoption of these accounting standards or interpretations will have a
material 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 are
from 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 PRODUCTS
SINGAPORE PRIVATE LIMITED on 22nd May 2010.

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KPL EXPORTS PRIVATE LIMITED
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 the
financial year ended 31st March, 2010.

(Rs. in Thousands)
FINANCIAL PERFORMANCE
Financial Year Financial Year
Ended 31.03.2010 Ended 31.03.2009
Sales 1566892 1440454
Other Income 116287 71907
Profit(+)/Loss (-) before Taxation 28502 88167
Provision for Taxation 10000 31700
Profit(+)/Loss (-) after Tax 18502 56467
Add : Balance brought forward 56467 Nil
Amount available for appropriation 74969 56467

APPROPRIATIONS
Transfer to General Reserve NIL NIL
Proposed Dividend NIL NIL
Additional Tax on Proposed Dividend NIL NIL
Balance 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.14404.54
Lacs during the previous financial year. However the profit before tax during the year under review has reduced considerably to Rs.285.02
Lacs 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.564.67
Lacs in 2009. The profitability of the Company has reduced due to increase in selling & administrative expenses etc.. The Directors are
making all endeavours to give better performance in future.
DIVIDEND :
Your Directors do not recommend any Dividend for the financial year under review to conserve resources for future purposes.
DIRECTORS :
Sri Deepak Kothari & Smt.Arti Kothari, Directors of the Company, retire by rotation in the ensuing Annual General Meeting and being
eligible offer themselves for reappointment. The Board recommends their reappointments. Further, Sri Pramod Kumar Tandon was appointed
as 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 :
The entire share capital of the Company is held by Kothari Products Ltd. and accordingly the Company is wholly owned subsidiary of Kothari
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 so 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;

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3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other
irregularities ;
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.
AUDITORS AND AUDITORS’ REPORT :
M/s Mehrotra & Mehrotra, Chartered Accountants, Auditors of the Company, retire at the ensuing annual general meeting and are eligible
for reappointment. There are no qualification or adverse remarks in the Auditors Report which call for explanation by the Directors.
PARTICULARS OF EMPLOYEES :
There are no employees who were in receipt of remuneration as specified in Sec.217 (2A) of the Companies Act, 1956 read with The
Companies (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 Board


For KPL EXPORTS PVT. LTD.

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

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KPL EXPORTS PRIVATE LIMITED
REPORT OF THE AUDITORS TO THE MEMBERS

1. We have audited the attached Balance Sheet of KPL EXPORTS PRIVATE LIMITED as at 31st March, 2010 and Profit & Loss
Account for the period 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 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 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. An
audit also includes assessing the accounting 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) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we
considered appropriate and the information and explanations given to us during the course of our audit, we report that, in our
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 the
Companies (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 the
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 had taken loans from its holding company. In respect of this loan the maximum amount outstanding
during the year was Rs.1626.05 lac and the same was repaid during the year and there was no amount outstanding as
at the end of the year. The terms and other conditions of the said loans were not prima facie prejudicial to the interest
of 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 purchase of stocks and fixed assets, for the sale of goods and services. During the course of our audit, we have not
observed 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 contracts
or 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 considered
by 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) of
section 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 of
statutory 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 of
Income-tax, Wealth-tax, Service-tax, Sales-tax, Custom duty, Excise Duty and Cess as at 31st March, 2010 which were
outstanding 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.
(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 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 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. Accordingly
the 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 of
Rs. 105 Crore. The terms & conditions of the guarantees are not prejudicial to the 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 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 the
purpose 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 our
examination of those books.
iii. in our opinion, Balance Sheet; and the Profit & Loss Account dealt with by this report comply with the Accounting
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 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 Significant
Accounting Policies and Notes 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 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 period ended on that date.

For MEHROTRA & MEHROTRA


CHARTERED ACCOUNTANTS
PLACE : KANPUR
DATE : 29th May, 2010
(ANURAG TANDON)
PARTNER
MEMBERSHIP NO. 78862

116
KPL EXPORTS PRIVATE LIMITED
BALANCE SHEET AS AT 31ST MARCH, 2010

Schedule As at 31.03.2010 As at 31.03.2009


Nos. (Rupees) (Rupees)

I. SOURCES OF FUNDS
Shareowners’ Fund
Share Capital 1 500000.00 500000.00
Reserve & Surplus 2 74968893.55 56466981.28
Loan Fund
Unsecured Loans 3 0.00 119404398.96
TOTAL 75468893.55 176371380.24

II APPLICATION OF FUNDS
Current Assets, Loans & Advances
Loans & Advances 4 61627869.41 21042049.00
Sundry Debtors 5 0.00 1190513756.50
Cash & Bank Balances 6 58447003.52 1577852060.94
120074872.93 2789407866.44
Less: Current Liabilities & Provisions
Sundry Creditors 7 2646194.98 2581390107.00
Provision for taxation 41700000.00 31700000.00
44646194.98 2613090107.00
Net Current Assets 75428677.95 176317759.44
Miscellaneous Expenses to the extent not written off
Preliminary Expenses 40215.60 53620.80
Total 75468893.55 176371380.24
Significant Accounting Policies & 11
Notes to the Accounts

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

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

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

Schedule For the Period Ended For the Period Ended


Nos. 31.03.2010 31.03.2009
(Rupees) (Rupees)
INCOME
Sales 1566892002.00 1440454302.00
Other Income 8 116287252.81 71907197.73
Total 1683179254.81 1512361499.73
EXPENDITURE
Materials Consumed 9 1551378939.00 1426196716.00
Selling & Administrative Expenses 10 103298403.54 -2002197.55
Total 1654677342.54 1424194518.45
PROFIT BEFORE TAXATION 28501912.27 88166981.28
PROVISION FOR TAXATION
Provision 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
Balance Carried Forward to Balance Sheet 74968893.55 56466981.28
Significant Accounting Policies &
Notes to the Accounts 11

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

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

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KPL EXPORTS PRIVATE LIMITED
SCHEDULES TO ACCOUNTS
As at As at
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 Capital
50000 Equity Shares of Rs. 10/– each, fully paid up 500000.00 500000.00
Total 500000.00 500000.00

SCHEDULE : 2
Reserves & Surplus
Profit & Loss Account 74968893.55 56466981.28
Total 74968893.55 56466981.28
SCHEDULE : 3
Unsecured Loans
Kothari Products Limited, Holding Company 0.00 119404398.96
Total 0.00 119404398.96
SCHEDULE : 4
Loans & Advances
Amount receivable in cash or in kind for value to
be received or pending adjustments 0.00 11228402.00
Deposit with Income–tax 61627869.41 9813647.00
Total 61627869.41 21042049.00
SCHEDULE : 5
Sundry Debtors
Sundry Debtors (Outstanding for a period less than 6 months) 0.00 1190513756.50
Total 0.00 1190513756.50
SCHEDULE : 6
Cash & Bank Balances
In 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 11237.47
Bank of India, Kanpur 1001203.72 417629.64
UCO Bank, Delhi 17505.35 17301545.00
UCO Bank, Delhi –EEFC Account 190636.74 190636.74
Total 58447003.52 1577852060.94
SCHEDULE : 7
Sundry Creditors
Sundry Creditors 0.00 1196272519.00
Advance against Orders 0.00 1379835848.00
Outstanding Liabilities 2946194.98 5281740.00
Total 2946194.98 2581390107.00

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SCHEDULES TO ACCOUNTS
For the Period Ended For the Period Ended
31.03.2010 31.03.2009
(Rupees) (Rupees)
SCHEDULE : 8
Other Income
Interest Income from Banks (Gross, TDS Rs. 30020581/-, 116192000.36 71907197.73
Previous Year Rs. 9813647/-)
Profit on Sale of Long term non trade Investments 95252.45 0.00
Total 116287252.81 71907197.73
SCHEDULE : 9
Materials Consumed :
Opening Stock 0.00 0.00
Add: Purchases 1551378939.00 1426196716.00
Less: Closing Stock 0.00 0.00
Total 1551378939.00 1426196716.00
SCHEDULE : 10
Selling & Administrative Expenses
Bank Charges 5570590.65 3151476.06
Commission on Sales 0.00 2880909.00
Difference in Conversion of Foreign Currency 62677907.48 -7507319.77
Loss on Forward Contract (FC) 12619529.00 -12356728.00
Travelling & Conveyance Expenses 0.00 950915.00
Electricity Expenses 24000.00 22000.00
Interest Expense to bank 9784545.96 9290.00
Interest to Holding Company 12003889.00 10350025.00
Licence & Legal 6583.00 2491.00
Printing & Stationary Expenses 27992.25 23370.00
Preliminary Expenses Written Off 13405.20 13405.20
Professional Fee 50000.00 50000.00
Rent Expenses to KPL 108000.00 99000.00
Salary 397240.00 292458.96
Statutory Audit Fees 5515.00 5515.00
Staff Welfare Expenses 6000.00 5500.00
Telephone Expenses 3206.00 5495.00
Total 103298403.54 -2002197.55

SCHEDULE : 11
SIGNIFICANT ACCOUNTING POLICIES & 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 Generally
Accepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and relevant
provisions of the Companies Act,1956.
(2) Investments :
Investments are stated at cost less fall in their market value, considered permanent.

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KPL EXPORTS PRIVATE LIMITED
(B) NOTES TO THE ACCOUNTS :
(1) CONTINGENT LIABILITIES:
Guarantee given to Allahabad Bank, Kanpur for Kothari Products Limited, holding company, of Rs. 105,00,00,000/- (Previous
Year Rs. 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.
a) Quantitative Details of Traded Goods: (in M.T.)
2009-10 2008-09
Opening Stock
Maize 0.000 0.000
Soyabeens 0.000 0.000
Soyabeen Oil 0.000 0.000
Sunflower Seed Oil 0.000 0.000
Purchases
Maize 0.000 36700.000
Soyabeens 37159.855 19233.000
Soyabeen Oil 18371.000 0.000
Sunflower Seed Oil 0.000 5500.000
Sales
Maize 0.000 36700.000
Soyabeens 37159.855 19233.000
Soyabeen Oil 18371.000 0.000
Sunflower Seed Oil 0.000 5500.000
Closing Stock
Maize 0.000 0.000
Soyabeens 0.000 0.000
Soyabeen Oil 0.000 0.000
Sunflower 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
(4) Payments to Directors : Nil Nil
(5) Their exists neither deferred tax asset nor liability as required by Accounting Standard (AS - 22) - ‘Accounting for Taxes on Income’ issued
by 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 119404398.96
Interest paid on loan taken 12003889.00 10350025.00
Rent 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 no
impairment loss on assets for the year.
(8) In terms of Accounting Standard 29 “Provisions, Contingent Liabilities and Contingent Assets” Issued by the Institute of Chartered
Accountants 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.

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

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

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KPL EXPORTS PRIVATE LIMITED
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILS
Registration No. 035118 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 120115 Total Assets 120115
Sources of Funds :
Paid–Up Capital 500 Reserves & Surplus 74969
Secured Loans Nil Unsecured Loans 0
Application of Funds :
Net Fixed Assets 0 Investments 0
Net Current Assets 75429 Misc. Expenditure 40

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


Turnover 1566892 Total Expenditure 1654677
Other Income 116287
Profit Before Tax 28502 Profit After Tax 18502
Earnings per share (in Rs.) 370.04 Dividend Rate % Nil

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

For and on behalf of the Board

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

122
IMK HOTELS PRIVATE LIMITED
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 for
the 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 has
made 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 financial
year.
DIRECTOR :
Sri Deepak Kothari, Director of the Company, retire by rotation in the ensuing Annual General Meeting and being eligible offers himself for
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 Kothari
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 so 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 with the
provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other
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.
AUDITORS & AUDITORS’ REPORT:
M/s Mehrotra & Mehrotra, Chartered Accountants, Auditors of the Company, retire at the ensuing annual general meeting and are eligible
for reappointment. There are no qualification or adverse remarks in the Auditors Report which call for explanation by the Directors.
PARTICULARS OF EMPLOYEES :
There are no employees who were in receipt of remuneration as specified in Sec.217 (2A) of the Companies Act, 1956 read with The
Companies (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 Board


For IMK HOTELS PVT. LTD.

Sd/– Sd/–
PLACE : KANPUR (DEEPAK KOTHARI) (MITESH KOTHARI)
DATE : 29th May, 2010 Director Director
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IMK HOTELS PRIVATE LIMITED
COMPLIANCE CERTIFICATE

Registration No. Of the Company : 11–185511


Nominal Capital : Rs. 25,00,000/-
To,
The Members,
IMK HOTELS PRIVATE LTD.
373, Konark House, Veer Savarkar Road,
Ground Floor, Near Sidhivinayak Temple
Prabhadevi, Dadar (West), Mumbai–400028
Maharashtra.
We have examined the register, records, books and papers of IMK Hotels Private Limited, (the Company) as required to be
maintained under the Companies Act, 1956, (the Act) and the rules made there under and also the provisions contained in the
Memorandum and Articles of Association of the Company for the financial year ended on 31.03.2010. In our opinion and to the
best of our information and according to the examinations carried out by us and explanations furnished 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 the Act
and 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 time
prescribed under the Act, and rules made there under, e form No. 23 AC, 23 ACA & 66 were filed late along with additional
fee. As informed no forms were required to be filed with Regional Director, Central Government, Company Law Board or other
authorities.
3. The Company is a Private Limited Company (wholly owned subsidiary of a public limited Company) has the minimum prescribed
paid up Capital and its maximum number of members during the said financial year were seven excluding its present and past
employees, 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 which
meetings proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained
for 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 the
members 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 the
Act.
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 approvals
from 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;

124
IMK HOTELS PRIVATE LIMITED
(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, Regional
Director, 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 the
Act 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 duly
convened extraordinary general meeting.
25. The Company has not made any loans or advances or given guarantees or provided securities to other bodies corporate and
consequently no entries have been made in the register kept for the purpose. The Company has made investment (share
application) 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 Office
from 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 year
under scrutiny.
28. The Company has not altered the provisions of the Memorandum with respect to name of the Company during the year under
scrutiny.
29. The Company has not altered the provisions of the Memorandum with respect to Share Capital of the Company during the year
under 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

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IMK HOTELS PRIVATE LIMITED
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 fee
paid
1. Form No. 66 U/S 383A 14.11.09 No Yes
Compliance F.Y. 31.03.09
Certificate
2. Form No. 20B U/S 159 26.11.09 Yes No
Annual Return F.Y. 31.03.09
3. Form No. 23 AC U/S 220 28.11.09 No Yes
Form No. 23 ACA F.Y. 31.03.09
Balance 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

126
IMK HOTELS PRIVATE LIMITED
REPORT OF THE AUDITORS TO THE MEMBERS
st
1. We have audited the attached Balance Sheet of IMK HOTELS PRIVATE LIMITED as at 31 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 financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion 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 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. An
audit also includes assessing the accounting 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) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we
considered appropriate and the information and explanations given to us during the course of our audit, we report that, in our
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 business activity during the year. Therefore, reporting under clause 4(ii) of the Companies
(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 the
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 outstanding
during the year was Rs.550.06 lac and year end balance was also Rs.550.06 lac. There are no stipulations for the
repayment of the loans. The terms and other conditions of the said loans are not prima facie prejudicial to the interest
of 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, for
the purchase of stocks and fixed assets, for the sale of goods and services. During the course of our audit, we have not
observed 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 contracts
or 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 considered
by us to be commensurate with size and nature of its business.
(viii) The Company has not started any manufacturing activity during the year. Therefore, reporting under clause 4(viii) of the
Companies (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 of
statutory 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 of
Income-tax, Wealth-tax, Service-tax, Sales-tax, Custom duty, Excise Duty and Cess as at 31st March, 2010 which were
outstanding for a period of more than six months from the date they became payable.
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IMK HOTELS PRIVATE LIMITED
(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.
(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 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 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. Accordingly
the 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 given
any guarantee for loans taken by others from bank or financial institutions.
(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 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 the
purpose 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 our
examination of those books.
iii. in our opinion, Balance Sheet; and the Statement of Preoperative Expenses dealt with by this report comply with the
Accounting 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 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 Significant
Accounting Policies and Notes thereon, give the information required by the Companies Act, 1956 in the manner so
required and give a true and fair view :–
st
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2010.
(b) in the case of Profit & Loss Account, of the Loss of the Company for the period ended on that date.

For MEHROTRA & MEHROTRA


CHARTERED ACCOUNTANTS
PLACE : KANPUR
DATE : 29th May, 2010
(ANURAG TANDON)
PARTNER
MEMBERSHIP NO. 78862

128
IMK HOTELS PRIVATE LIMITED
BALANCE SHEET AS AT 31ST MARCH, 2010
Schedule As at 31.03.2010 As at 31.03.2009
Nos. (Rupees) (Rupees)
I. SOURCES OF FUNDS
Shareowners’ Fund
Share Capital 1 2500000.00 2500000.00
Reserves & Surplus 2 27600000.00 27600000.00
Unsecured Loans 3 55006253.00 0.00
Total 85106253.00 30100000.00
II APPLICATION OF FUNDS
Investments 4 85000000.00 30000000.00
Current Assets,Loans & Advances
Cash & Bank Balances 5 14931.00 18745.00
14931.00 18745.00
Less: Current Liabilities & Provisions
Outstanding Liabilities 1214.00 1853.00
1214.00 1853.00
Net Current Assets 13717.00 16892.00
Miscellaneous Expenses to the extent not written off
Profit & Loss Account 26049.60 0.00
Pre–operative Expenses 3206.40 4008.00
Preliminary Expenses 63280.00 92536.00 79100.00 83108.00
Total 85106253.00 30100000.00
Significant Accounting Policies & 6
Notes to the Accounts

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

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

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IMK HOTELS PRIVATE LIMITED
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010

Schedule For the Year Ended For the Year Ended


Nos. 31.03.2010 31.03.2009
(Rupees) (Rupees)

INCOME
Sales 0.00 0.00
Total 0.00 0.00

EXPENDITURE
Licence & Legal Expenses 7550.00 0.00
Miscellaneous Expenses 664.00 0.00
Statutory Audit Fee 1214.00 0.00
Preliminary Expesnes Written Off 15820.00 0.00
Pre-operative Expesnes Written Off 801.60 0.00
Total 26049.60 0.00
PROFIT BEFORE TAXATION -26049.60 0.00
PROVISION FOR TAXES :
Current Tax 0.00 0.00
PROFIT AFTER TAXATION -26049.60 0.00
Balance Brought Forward 0.00 0.00
Amount Carried Forward to Balance Sheet -26049.60 0.00

Significant Accounting Policies &


Notes to the Accounts 6

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

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

130
IMK HOTELS PRIVATE LIMITED
SCHEDULES TO ACCOUNTS
As at As at
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 Capital
250000 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 Loans
Kothari Products Limited, Holding Company 55006253.00 0.00
Total 55006253.00 0.00

SCHEDULE : 4
Investments
Share Application Money 85000000.00 30000000.00
Total 85000000.00 30000000.00

SCHEDULE : 5
Cash & Bank Balances
In Current Account with Scheduled Bank 14931.00 18745.00
Total 14931.00 18745.00

SCHEDULE : 6
SIGNIFICANT ACCOUNTING POLICIES & 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 Generally
Accepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and relevant
provisions of the Companies Act,1956.
(2) Investments :
Investments are stated at cost less fall in their market value, considered permanent.
(B) NOTES TO THE ACCOUNTS :
(1) Additional Information Pursuant to The Provisions of Paragraphs Nil Nil
3, 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
(3) Payments to Directors : Nil Nil

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IMK HOTELS PRIVATE LIMITED
SCHEDULES TO ACCOUNTS

(4) There is no deferred tax liability or Assets, hence no requirement for any provision.
(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 of
Chartered Accountants of India, there has been no Provision on beginning and at the end of the year, therefore no
disclosure requirements.
(7) The figures of previous year have been regrouped and recast whereever considered necessary to make them comparable.

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

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

132
IMK HOTELS PRIVATE LIMITED
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILS
Registration No. 034868 State Code 11

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 85107 Total Assets 85107
Sources of Funds :
Paid–Up Capital 2500 Reserves & Surplus 27600
Secured Loans Nil Unsecured Loans 55006
Application of Funds :
Net Fixed Assets 0 Investments 85000
Net Current Assets 14 Misc. Expenditure 93

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


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.

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

For and on behalf of the Board

For MEHROTRA & MEHROTRA


Chartered Accountants

Place : Kanpur (ANURAG TANDON) (DEEPAK KOTHARI) (MITESH KOTHARI)


Dated : 29th May, 2010 Partner Director Director

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g e
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Th een nal
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Regd. Office : “PAN PARAG HOUSE”, 24/19, THE MALL, KANPUR - 208 001
PROXY FORM
26TH 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 Proxy
to attend and vote for me/us and on my/our behalf at the Twenty Sixth Annual General Meeting of the Company, to be held
at “LITTLE CHEF”, Civil Lines, Kanpur on Tuesday, the 21st day of September, 2010 at 11.30 A.M. and at any adjournment
thereof.
Signed at ............................................................ this ......................................................... day of ......................................................
Ledger Folio No. ..................................... D.P. Id* .................................................... Client Id* ......................................................
Number of Equity
Affix
Shares held .................................................................................. Signature ............. Re. 1/-
Revenue
NOTES : Stamp
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.