Board of Directors DashoWangchukDorji Chairman & Managing Director DashoTopgyalDorji Director Mr.PremSagar Director Mr.KNMalhotra Director Mr.VinayKilla Director

Audit Committee Mr.PremSagar Chairman Mr.KNMalhotra Mr.VinayKilla

President Mr.RohanGhosh

General Manager-Corporate & Company Secretary Ms.IndiraBiswas

Bankers StateBankofIndia HDFCBankLimited CanaraBank UnitedBankofIndia VijayaBank

Statutory Auditors Ray&Ray,CharteredAccountants,Kolkata

Registered Office 53A,MirzaGhalibStreet

3rdfloor,Kolkata700016

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Contents

Notice 3

Directors’Report 5 ManagementDiscussionandAnalysisReport 9 ReportonCorporateGovernance 10

CEO’s declaration on the Affirmation of Code of Conduct 15

Auditor’s Certificate on Corporate Governance 16

Auditor’sReport 17

BalanceSheet �0

Profit & Loss Account 21

CashFlowStatement ��

Schedules �4

BalanceSheetAbstract 37

AddendumtotheAccounts 38

ProxyForm 39

Annual General Meeting on Monday, ��nd September �008 at Kalakunj,48,ShakespeareSarani,Kolkata-700017at10.00A.M.Asameasureofeconomy,copies of the Annual Report will not be distributed at the General Meeting.ShareholdersarerequestedtokindlybringtheircopiestotheMeeting.

3

NoticeNOTICE is hereby given that the Twenty-fifth Annual General Meeting of Tai Industries Limited will be held at Kalakunj,48ShakespeareSarani,Kolkata–700017,onMonday,the22ndSeptember,2008at10.00a.m.totransactthefollowingbusiness:

Ordinary Business

1. Toreceive,considerandadopttheProfitandLossAccountfortheyearended31stMarch2008,theBalanceSheetasatthatdateandtheReportsoftheDirectorsandtheAuditorsthereon.

2.ToappointaDirectorinplaceofMr.PremSagarretiringbyrotationandeligibleforreappointment.

3. ToappointAuditorsandtofixtheirremuneration.Messrs.Ray&Ray,theretiringAuditorsareeligibleforreappointment.

Special Business

4. ToconsiderandifthoughtfittopassthefollowingresolutionasSpecialResolution.

“RESOLVEDthatpursuanttoSection149(2A)andotherapplicableprovisions,ifany,oftheCompaniesAct,1956consentbeandisherebyaccordedforthecommencementofbusinessofpurchaseandsale,includingimportandexportofmachineryasprovidedinsub-clause6and9oftheOtherObjectsClauseoftheMemorandumofAssociationoftheCompany.”

“RESOLVEDFURTHERthattheBoardofDirectorsoftheCompanybeandisherebyauthorizedtodoallsuchacts,deedsorthingswhichmayberequiredtogiveeffecttothisresolution.”

ByOrderoftheBoard

Indira Biswas

Thimpu,Bhutan GeneralManager-Corporate25thJune,2008 &CompanySecretary

Notes:

1. TherelativeexplanatorystatementpursuanttoSection173oftheCompaniesAct,1956,isannexedhereto.

2. AMEMBERENTITLEDTOATTENDANDVOTEATTHEMEETINGISENTITLEDTOAPPOINTAPROXYTOATTENDANDVOTEINSTEADOFHIMSELF.APROXYNEEDNOTBEAMEMBEROFTHECOMPANY.

A Proxy, in order to be effective, must be received at the Company’s Registered Office at 53A , Mirza Ghalib Street,Kolkata-700016notlessthanforty-eighthoursbeforetheMeeting.

3. TheCompanyisregisteredwithNationalSecuritiesDepositoryLtd.(‘NSDL’),andCentralDepositoryServices(India)Ltd.(‘CDSL’), for dematerialization of its Equity Shares which has been allotted the ISIN INE358D01018. Intime SpectrumRegistryLimitedhavingtheirofficeat59CChowringheeRoad,Kolkata700020aretheRegistrarandShareTransferAgentsoftheCompany.

4. TheRegisterofMembersoftheCompanywillremainclosedfrom15thSeptember,2008to22ndSeptember,2008,bothdaysinclusive.

5. Memberswhoareholdingsharesinphysicalformarerequestedto:

a. notifyanychangeintheiraddresses;

b. communicate on all matters pertaining to their shareholdings with the Company’s Registered Office, quoting theirrespectiveLedgerFolioNumbers,ClientIDandDPID;

c. notethatasperprovisionsoftheCompaniesAct,1956,facilityformakingnominationsisavailableforshareholdersinrespectofEquitySharesheldbythem;

d. bringtheircopiesoftheAnnualReporttotheMeeting;

e. bringtheirrespectiveLedgerFolioNumbers,ClientIDandDPIDforeasyidentificationofattendanceattheAnnualGeneralMeeting.

4

6. i. PursuanttoSection205AoftheCompaniesAct,1956(‘theAct’)alldividendsdeclaredandrelativedividendwarrantsposted upto and including the Dividend for the year 1993-94 and remaining unclaimed by members have beentransferredtotheGeneralRevenueAccountoftheCentralGovernment.ShareholderswhohavenotencashedtheirdividendwarrantsinrespectofthesaidperiodarerequestedtoprefertheirclaimstotheRegistrarofCompanies,WestBengal.Incaseanyassistanceisrequired,shareholdersarerequestedtowritetotheCompany’sRegisteredOffice.

ii. Pursuant to Section 205A of the Companies Act, 1956 dividends declared from the year 1994-95 upto 1999-2000(InterimDividend)andremainingunclaimedbythemembersattheendofthestatutoryperiodofsevenyearshavebeentransferredtotheInvestorEducation&ProtectionFundconstitutedbytheCentralGovernmentunderSection205CoftheActonwhichnoclaimforUnpaidDividendcanbepreferred.TheStatutoryperiodofsevenyearspertainingtodividendfortheyear2000-2001expireson9thSeptember,2008,followingwhichtheunpaid/unclaimeddividendforthesaidyearshallbetransferredtotheInvestorEducationandProtectionFund.

iii. Thosememberswhohavenotsofarencashedtheirwarrantspertainingtothedividendpaidfortheyear2001–2002arerequestedtosendthesametotheCompany’sRegisteredOfficeforrevalidationimmediatelyinviewofthefactthatdividendremainingunpaid/unclaimedoveraperiodofsevenyearsarerequiredtobetransferredtotheaforesaidFundonwhichnoclaimforUnpaidDividendcanbepreferred.

7. Relevantdetails in respectof Itemno.2of theNotice,pursuant toClause49of theListingAgreementwith theStockExchanges,aregivenhereunder.

DETAILSOFDIRECTORRETIRINGBYROTATIONANDSEEKINGRE-APPOINTMENT

(InpursuanceofClause49oftheListingAgreement)

NameofDirector:Mr.PremSagar

BriefResumé:

Mr.PremSagarstartedhiscareerwithTISCOandhasassumedseveralresponsiblepositionsintheTataGroupofCompanies.Hehasanexperienceofoverfourdecadesintheindustryandisawidelytravelledtechnocrat.Mr.Sagarisconnectedwithseveraltrade,socialandsportsassociationsinIndia.

Directorships&CommitteeMembershipsofOtherCompanies:

Mr.PremSagarisalsoaDirectorofFrontierSpringsLimited

Mr.PremSagardoesnotholdanyshareintheCompany.

ByOrderoftheBoard

Indira Biswas

Thimpu,Bhutan GeneralManager-Corporate25thJune,2008 &CompanySecretary

Explanatory Statement pursuant to section 173 (2) of the Companies Act, 1956.

Item No. 4

Asadiversificationprogramme,yourCompanyproposestoenterintothebusinessofpurchaseandsale,includingexportandimportofmachinerywhichhasvastpotentialsofgrowth.

TheCompanyispermittedtoenterintothisactivityvideclauses6and9intheOtherObjectsClauseoftheMemorandumofAssociationoftheCompany.

As per section 149 (2A) of the Companies Act, 1956, approval of members by way of special resolution is necessary forcommencementofnewbusinessprovidedinthe‘OtherObjects’clausesoftheMemorandumofAssociation.Accordinglythisresolutionisplacedbeforetheshareholdersfortheirapproval.

NoDirectorisinterestedorconcernedinthisresolution.

ByOrderoftheBoard

Indira Biswas

Thimpu,Bhutan GeneralManager-Corporate25thJune,2008 &CompanySecretary

5

Directors’ Report

TO THE MEMBERS

YourDirectorshavepleasureinpresentingtheir25thAnnualReportonthebusinessandoperationsofyourCompanyfortheyearended31stMarch,2008.

FINANCIAL PERFORMANCE

(RupeesinLakhs)

Particulars Year ended Year ended

31st March 2008 31st March 2007

Turnover 4463.53 4414.93

ProfitbeforeInterest,Depreciation&Taxation(PBIDT) 113.77 600.54

Interest 5.07 56.54

ProfitbeforeDepreciation&Taxation(PBDT) 108.70 544.00

Depreciation 62.88 79.63

Profit Before Tax and Extraordinary Items (PBTE) 45.82 464.37

ExtraordinaryItems 151.98 -

Profit/(Loss) Before Tax (PBT) (106.16) 464.37

ProvisionforTaxation 13.41 52.07

Profit/(Loss) After Tax (PAT) (119.57) 412.30

Balancebroughtforwardfrompreviousyear 961.27 548.97

Profit available for appropriation 841.71 961.27

ProposedDividend - -

ProfitcarriedtoBalanceSheet 841.71 961.27

AUDITOR’S REPORT

Messrs.RayandRay,StatutoryAuditors,havesubmittedtheirReportunderSection227oftheCompaniesAct,1956andthecommentsmadebytheAuditorsintheirReporthavebeenadequatelydealtwithintherelativeNotesonAccountswhichareselfexplanatory.

Referringto ItemNo.4of theAuditor’sReport,yourDirectorsclarifythatduringtheyearstocksworthRs.1,43,78,087weredamagedbyinundationinthemonthofSeptember.TheamountofdamagehasbeendulysurveyedbytheInsuranceCompanyandaclaimfortheaforesaidamounthasbeenlodged.Thesettlementoftheclaimisawaited.

ACCOUNTING POLICIES AND PROCEDURES

ThemajoraccountingpoliciesinconformitywiththeAccountingStandardsandGuidelinesissuedbyTheInstituteofCharteredAccountantsofIndiafromtimetotimewhichhavebeenspecifiedintheCompaniesAct,1956havebeenfollowedasusualinthecourseofpreparingandpresentingtheseAccounts.SuchaccountingpolicieshavebeensuitablyincorporatedintheNotesonAccounts.

YourCompanycontinuestohaveanadequateinternalauditsystemcarriedoutbyexternalfirmsofCharteredAccountantswhosubmittheirReportsuponcompletionofauditforconsiderationbytheDirectors.

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RESUMÉ OF PERFORMANCE

YourCompany’sfinancialperformancereflects1.10%riseintotalsalesoftheCompanyfromthepreviousyear.ThedetailsofSales/Incomefromoperationsareasfollows:

PRODUCTS Sales in Sales in Increase/ Percentage 2007-2008 2006-2007 (Decrease) increase/

in Sales (decrease) (Rs. in lakhs) (Rs. in lakhs) (Rs. in lakhs) %

FruitProducts 2073.27 1768.36 304.91 17.24

CalciumCarbide 282.85 301.70 (18.85) (6.25)

Charcoal 445.04 431.49 13.55 3.14

Retail 1520.83 1775.86 (255.03) (14.36)

CommissiononSale 141.54 137.52 4.02 2.92

TotalTurnover 4463.53 4414.93 48.60 1.10

TheLossofRs.119.57lakhsisattributabletostocksdamagedduringtheyearduetoinundationowingtoheavyrainfall.

PLANS AND PROSPECTS

Fruit Product Division

The‘DRUK’brandinIndiacontinuestoenjoycustomerconfidenceforovertwodecadesintermsofthequalityofitsproductsandyourCompanycontinuesinitsendeavourforconsolidationandexpansionofthisdivision.

Presentlythefocushasbeenonsquashesand,duringtheyear,yourCompanyhastestlaunchedtheLitchiSquashandhasreceivedaveryfavourableresponse.YourCompanyisthusalsocontemplatingintroducingnewvariantsinthiscategory.

YourCompanyisalsocontemplatingenteringintoagreementswithreputedFMCGcompaniesfordistributorshipoftheirfoodproducts throughout India.Thiswouldnotonlybebeneficial fromtheoperationspointofviewbutwouldalsoaugment theCompany’srevenue.

YourCompanyalsocontinuesinitsfocusonbrandingandmodernizationofpackagingandexpansionofexistingproductmix.

Industrial Division

1.Charcoal

a) TherehasbeenencouragingperformanceontheCharcoalprocurementfrontduringtheyear.

b) YourDirectorsarecontemplatingshiftingofbasefromTrichytoManamaduraiandtheLogisticsandcostsinvolvedinthemovearebeingconsidered.

c) ThereisaverygooddemandforCharcoalfromBhutanandotherparties.Wearelookingatanincreasedprocurementandhaverevisedourtargetsupwardtomeetthedemandinthecomingfinancialyear.

2.ManganeseOre

a) Wehavebeenabletolocategoodresourcesofsupplyandhavegoodbusinessprospectsinthecomingfinancialyear.

3.LowAshMetallurgicalCoke

WearelookingattieupswithCokingCoalcompaniesasthereareregularrequirementsforthesame.Wearealsolookingatopeningofnewopportunities.

4.Silico-Manganese

WearelookingatmarketingoftheaboveproductinIndia.

5.CalciumCarbide

a) OurperformanceontheCalciumCarbidefronthasbeensatisfactory.

b) WehaverevisedoursalestargetfortheQuarterApril–June2008,aswearelookingatverygooddemandsbecauseoftheriseinproductioncapacitiesofendusers.

c) Thetradersarealsosignalingagoodseasonahead.

d) WeareworkingaggressivelyonthedealernetworkacrossEasternIndiaandareabletoseethedemandsgrowing.

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Retail Division

TheRetailsectorhasbeenwitnessingatremendousgrowthwithanexplosionofallformatsofretailstoresbybiggroupsonanationallevel.ThecompetitionforcustomerpatronageisalsoverykeenandtheoverallbaseofcustomersvisitingModernTraderetailoutletshasincreasedexponentially.Equally,yourCompanyhasbeenpursuingastrategyofaggressivegrowthinthissegment.

Thefirststoreunderthebrandname“C3theMarketplace”wasopenedinLeeRoad,waybackinJanuary,2004.ThereafteryourCompanyhassincebeenontheexpansionmode.

DuringtheyearyourCompanyhasenteredintoanarrangementwithoilmammothHPCLforatieupwiththeirsuitableretailoutletsforopeningofExpressstores.Accordingly,thefirststorewasopenedatNarendrapurinFebruary‘08.FurtheroutletsarebeingreadiedintermsofinfrastructurebyHPCLforC3tocommission.

Inaccordancewiththefocusonbuildingandmonitoringacustomer-centriccultureyourCompanyisimplementing:

1.AnongoingandcontinousprogrammeofdeliveringincreasedcustomersatisfactionbywayofarangeofofferswhichwillmakeC3thepreferredshoppingdestination.

2.UpgradationofStoresinfrastructureandrenovation,ofwhichtheexerciseinLeeRoadhasbeencompletedandCityCentreisimpending.

3.Upgradationofproductmixforcompetitiveadvantageandhighermargins.

4. Manpower rationalization and optimal efficiency in logistics and stocking to ensure faster rotation with lower inventorylevels.

5.Afocusedpromotionalprogrammetargetedatnichecustomerssuchasseniorcitizensandothersuchclientele.

TheproposaltospinofftheretailbusinesscontinuestobeundertheBoard’sconsideration.

DIVIDEND

Your Directors express their inability to recommend dividend for the year to plough back profits to conserve funds forexpansion.

APPROVAL UNDER SECTION 211(4) OF THE COMPANIES ACT, 1956

DuringtheyeartheCompanyhasmadeanapplicationtotheCentralGovernment,MinistryofCorporateAffairsforobtaininganexemptionfromdisclosingthequantitativeinformationasrequiredtobestatedintermsofparagraph3(ii) (b)ofPartIIofScheduleVItotheCompaniesAct,1956forthefinancialyearended31stMarch,2008.TheapprovaloftheCentralGovernmentisawaited.

CORPORATE GOVERNANCE

IncompliancewiththedisclosuresrequiredunderthesaidClause49oftheListingAgreement,aManagementDiscussionandAnalysisReportisprovidedinAnnexure‘A’.

TheReportonCorporateGovernanceasrequiredundertheaforesaidClauseisalsoprovidedinAnnexure‘B’tothisReport,together with the Declaration affirming compliance with the Code of Conduct of the Company and Auditor’s Certificate onCompliancewiththeconditionsofCorporateGovernance.

DIRECTORS’ RESPONSIBILITY STATEMENT

PursuanttotheprovisionsSection217(2AA)oftheCompaniesAct,1956theDirectorsherebyconfirmthat:

(i) TheAccountingStandardsasapplicabletoyourCompanyandcorroboratedbytheCompaniesAct,1956havebeenfollowedincourseofpreparationof theAnnualAccounts for the yearended31stMarch,2008and therehasbeenno materialdeparturestowarrantfurtherexplanation.

(ii) TheaccountingpoliciesashavebeenfollowedarebeingcontinuedincourseofpreparationoftheAnnualAccountsfortheyearended31stMarch,2008,soastoexhibitatrueandfairviewofthestateofaffairsoftheCompanyandofthelossforthatperiod.

(iii) AdequatecontrolsandinternalauditsystemsarebeingfollowedbytheCompanyincourseofrunningitsaffairsasalsoformaintenanceandsafeguardingofitsassets.EverycautionhasbeentakentorelatesuchcontrolmeasurestothebenefitoftheCompanyandtopreventanyfraudorirregularitiestocreepin.

(iv)TheAnnualAccountsoftheCompanyfortheyearended31stMarch,2008havebeenpreparedonagoingconcernbasisashitherto.

DEMATERIALISATION OF SECURITIES

ThesharesoftheCompanyarecompulsorilytradedindematerialisedformforallshareholders.Ason31stMarch,2008,58.62%oftotalnumberofsharesstanddematerialised.

8

DIRECTORS

InaccordancewithArticle56oftheArticlesofAssociationoftheCompany,Mr.PremSagarretiresbyrotationattheforthcomingAnnualGeneralMeetingandbeingeligible,offershimselfforreappointment.

PARTICULARS OF EMPLOYEES

TherewerenoemployeesduringtheyearunderreviewinrespectofwhomdetailsasrequiredunderSection217(2A)oftheCompaniesAct,1956,readwiththeCompanies(ParticularsofEmployees)Rules,1975,arerequiredtobedisclosed.

COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

A. Conservation of Energy

(a)Energyconservationmeasurestaken:

YourCompany’sactivitiesbeingtradinginnature,energyconsumedisonlyinthenatureofelectricalconsumptionfor useandmaintenanceofofficeappliances.However,theeffortsofyourCompanyareaimedatkeepingtheconsumption levelstoaslowaspracticable.

(b)Additionalinvestmentsandproposals,ifany,beingimplementedforreductionofconsumptionofenergy:

Asalreadymentionedabove,theelectricalconsumptionrequiredfortheuseandmaintenanceofofficeappliancesis keptaslowasispracticable.

(c) Impactofthemeasuresat(a)and(b)aboveforreductionofconsumptionandconsequentimpactonthecostofproduction ofgoods:

YourCompanyisnotengagedinanymanufacturingactivityandhencedisclosureunderthisheadisnotrequired.

(d) TotalenergyconsumptionandenergyconsumptionperunitofproductionasperFormAoftheAnnexureinrespectof industriesspecifiedintheSchedulethereto:

YourCompanyisnotengagedinanymanufacturingactivityandhencedisclosureunderthisheadisnotrequired

B. Technology Absorption

(e) EffortsmadeintechnologyabsorptionasperFormBoftheAnnexure:

YourCompanyisnotengagedinanymanufacturingactivityandhencedisclosureunderthisheadisnotrequired.

C. Foreign exchange earnings and outgo

(f) Activitiesrelatingtoexports;initiativestakentoincreaseexports;developmentofnewexportmarketsforproductsand services;exportplans;

YourCompanyisnotengagedinanyexportactivityandhencedisclosureunderthisheadisnotrequired.

(g) Totalforeignexchangeusedandearned

Therehasbeennoforeignexchangeearningsoroutgoduringtheyear.

AUDITORS

Messrs.Ray&Ray.,CharteredAccountants,AuditorsoftheCompany,retireattheconclusionoftheforthcomingAnnualGeneralMeetingand,beingeligible,offerthemselvesforre-appointment.

ACKNOWLEDGEMENTS

YourDirectorswish toplaceon record their grateful appreciation for theexcellent support andco-operation received fromthe Shareholders, Banks, Financial Institutions and Investors, Government Authorities, Stock Exchanges, Reserve Bank ofIndia,CentralandStateGovernments.YourDirectorsalsowishtoplaceonrecordtheirdeepappreciationofthededicationandcontributionsmadebyemployeesatalllevelswhothroughtheircompetence,hardworkandsupporthaveenabledyourCompanytoachievebetterperformanceandlookforwardtotheircontinuedsupportinthefutureaswell.

ForandonbehalfoftheBoard

Place:Thimpu,Bhutan Vinay Killa Wangchuk Dorji Date:25thJune,2008 Director Managing Director

9

Annexure ‘A’ to the Directors’ Report

Management Discussion and Analysis ReportClause49oftheListingAgreementstipulatesdisclosureunderspecificheadswhicharegiveninthefollowingparagraphsandwhichcontinuetobefollowedintheusualcourseoftheCompany’sbusinessovertheyearsindiscussionsamongsttheDirectorsandotherSeniorManagementPersonnel.

(a) Industry Structure and Developments Indiancitiesarewitnessingaparadigmshiftfromtraditionalformsofretailingintoamodernorganisedsector.Ofthe12millionretail

outletsinthecountry,nearly5millionsellfoodandrelatedproducts.Organisedretailaccountsforonly4percentofthetotalmarket,andislikelytoincreaseitsshareto22percent,openinghugegrowthpotentialinthissegment.

Theprocessedfruitsindustryisadominantsegmentofthefoodindustry.Fruititemsareprimarilyprocessedinordertoextendtheirshelf lifeandtopreservetheirnutritionalvalue.Thesecondarypurposeistodeliverconvenience,tasteandappealtothetargetconsumers.Thisindustryissettoregisterasignificantgrowthrateagainstthebackdropofincreasedconsumerdemandsandastepupininvestments.

Intheindustrialsector,CalciumCarbideisgenerallyusedasadesulphuriserintheironandsteelindustry.YourCompany’smainfocusinthepastyearhasbeeninthemanufactureofacetylenegas.DuetoitslongchainofimportanceCalciumCarbideisoneofthemostrequiredandmanufacturedchemicals.

Charcoal is a product with many uses in the industry at different scales of activity, specially in furnaces for forging and metalworking.

(b) Opportunities and threats TheIndianretailmarketwhichisthefifthlargestretaildestinationglobally,accordingtoindustryestimatesisestimatedtogrowfrom

USD330billionin2007toUSD427billionby2010andUSD637billionby2015.Whiletherearesignificantopportunitiesforgrowthinthissector,yourCompanyoperatesinahighlycompetitiveenvironmentwiththeentryofseveralbigplayers.

WhileIndiahasanabundantsupplyoffruitsandvegetables,theprocessedfoodindustryisstillinitsnascentstages.InacountrylikeIndiawherelocaltastepreferencesdifferfromregiontoregion,itposesamuchbiggerproblemtomarketfoodproductswhichcanhaveamuchlargeracceptanceandhenceabiggermarketpotential.ApartfromcertainexoticitemssuchaspreservedbambooshootsandKiwifruitjuices,yourCompanyisintomarketingofgenericcategoryoffruitpreserveshavinguniversalacceptancefortheIndianmarket.

TheIndianfoodsindustryisgrowingat9%andhassetthegrowthagendaformoderntradeformats.Thepreservedfoodssectoriswitnessingasignificantfavourablechangedrivenbychanginglifestyle,strongincomegrowthandfavourabledemographicpatterns.Thisisalsooneofthekeygrowthdriversoftheorganisedretailsector.

OurcountryremainsanetimporterofCalciumCarbide,withthedemandgrowingat3-3.5percent,therequirementforthesamebeinginlargequantities.

(c) Segment-wise or Product-wise Performance AsmentionedintheNotesonAccounts,yourCompanyispredominantlyengagedinretail,tradingoffruitproducts,calciumcarbide

andcharcoal. “C3TheMarketplace”,with itsclearcompetitiveadvantageover itscompetitors incertainsegmentssuchas liquor, frozennon

vegetarian,andimporteditemsanditsUSPofpersonalizedservicehascreatedadedicatedcustomerclientele. ‘Druk’isawellrecognisedbrandintheprocessedfruitindustry,havingamajorpresenceinthemarket.Asaleadingdistributorof

jams,crushes,squashes,preservesunderthesaidbrandname,yourCompanyenjoysfullcustomerconfidenceastothequalityofitsproducts.

TheperformanceintheindustrialproductsegmenthasbeenveryencouragingandyourDirectorsarecontemplatingexpansionofthisdivision.

(d) Outlook YourDirectorscontinueintheiremphasisonthe‘Quality’ofproducts.Theoutlookfortheforthcomingyearlooksencouraginginthe

retail,fruitproductandindustrialsector.

(e) Risks & Concerns Despitetheprospectsbeinggood,theseverecompetitioncontinuetogovernresults. AvitalareaofconcernisthedependenceonITsectorforsolutionsthathelpautomateandintegratethetransactionalsystem.

(f) Internal Control Systems & their Adequacy Thestatutory requirementsofAuditCommitteearebeingmet. Inmeetingsof theAuditCommittee, theStatutoryAuditorsand

PartnersofInternalAuditFirmsparticipate.SuchInternalAuditorsalsoperiodicallyvisitvariousdivisionsoftheCompany. Activities of each sector are being programmed on a quarterly basis, which get translated into an Annual Activity Plan. Each

departmentalhead is involved in thepreparationof theactivityplansand identifyingandcategorising theareasof risks,whichare closely monitored. Such documentations thereafter undergo a further layer of scrutiny and implementation under directsuperintendenceofthePresidentoftheCompany.

(g) Financial & Operational Performances ThishasbeenadequatelystatedintheDirectors’Report.

(h) Material Developments in Human Resources / Industrial Relations Front TheCompanyhastakeninhandtostepupactivitiesrelatedtohumanresourcedevelopmentpursuanttowhicheffortsareunder

wayforimprovedtrainingandeducationoftheCompany’semployeesatalllevels.

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Annexure ‘B’ to the Directors’ Report

Report On Corporate Governance

1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE

CorporateGovernanceisthemeanstomaximisethelongtermshareholdervalueinalegalandethicalmannerensuringfairness,courtesyanddignityinalltransactionsoftheCompany.YourCompanyiscommittedtotheconceptandphilosophyofCorporateGovernanceasameansofeffectiveinternalcontrol,highestlevelofaccountability,transparencyandprofessionalisminallareasofitsoperationsforenhancingcustomersatisfactionandshareholdervalue.

2. BOARD OF DIRECTORS

TheBoardofDirectorsatpresentcomprisesaChairman&ManagingDirector(beingExecutiveDirector)andfourNon-executiveDirectors.TheparticularsoftheDirectorsfortheyearendedon31stMarch,2008aregivenhereunder:

Attendance

Directorships in

Committee Positions Name Category

other companies

in other companies

At Board At last As As Meetings AGM Chairman Member

DashoWangchukDorji Chairmanand 5 Yes 12 _ _

ManagingDirector

DashoTopgyalDorji Non-Executive 3 Yes 10 _ _

Director

Mr.PremSagar Non-Executive 5 Yes 1 _ _

Independent

Director

Mr.KanwalNainMalhotra Non-Executive 5 Yes _ _ _

Independent

Director

Mr.VinayKilla Non-Executive 5 Yes 1 _ _

Independent

Director

Note:

CommitteePositionsinothercompaniesrelatetoChairmanship/MembershipofAuditandInvestors’/Shareholders’GrievanceCommitteesonly.

Duringtheyearunderreview,fiveBoardmeetingswereheldon24thApril2007,30thJuly2007,17thAugust2007,29thOctober2007and31stJanuary2008.

3. AUDIT COMMITTEE

TheAuditCommitteeconsistsofthreeNon-executiveIndependentDirectorswhoarepersonsofhighstandingintheindustrypossessingtherequisiteexperienceandexpertise.

ThetermsofreferenceoftheAuditCommitteeinclude:-

a) reviewinternalcontrolsystems;natureandscopeofauditaswellaspostauditdiscussions;

b) review quarterly, half-yearly and annual financial statements with particular reference to matters to be included in theDirectors’ResponsibilityStatementtobeincludedintheBoard’sReport;

c) ensurecompliancewithinternalcontrolsystems;

d) recommendtotheBoardonanymatterrelatingtofinancialmanagement,includingauditreport;

e) overseeCompany’sfinancialreportingprocessanddisclosureoffinancialinformation;

f) reviewperformanceofstatutoryandinternalauditors;

g) anyothermatterwhichmaybereferredtotheCommitteebytheBoard.

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During2007-2008theAuditCommitteemeton24thApril2007,30thJuly2007,17thAugust2007,29thOctober2007and31stJanuary2008.

CompositionoftheAuditCommitteeduringtheyear2007-2008:

Name Position held No. of Meetings

Held Attended

Mr.PremSagar Chairman 5 5

Mr.K.N.Malhotra Member 5 5

Mr.VinayKilla Member 5 5

Invitees:TheSeniorManagerFinance, theManagerAccountsandrepresentativesof theStatutoryandInternalAuditorsareinvitedandgenerallyremainpresentatthemeetingsoftheAuditCommittee.

TheCompanySecretaryactsastheSecretarytotheCommittee.

4. REMUNERATION COMMITTEE

No Remuneration Committee has been formed pursuant to Clause 49 of the Listing Agreement. However, a RemunerationCommitteeisinplaceinaccordancewithScheduleXIIItotheCompaniesAct,1956toconsiderandapprovetheManagerialRemuneration (subject toapprovalof theshareholders)consistingof thesalaryandperquisites tobepaid to theManagingDirectorwithoutcommissioninthesituationofinadequateprofits.TheRemunerationCommitteecomprises-

Mr.PremSagar Chairman

Mr.K.N.Malhotra Member

Mr.VinayKilla Member

NomeetingoftheCommitteewasheldduringtheyear.

DetailsofremunerationpaidtotheManagingDirectorduringtheyearunderreviewaregivenbelow:

(Rupees)

Salary 13,20,000

Commission –

Otherbenefits –

RetiralBenefits 1,58,400

Total 14,78,400

TheServiceAgreementbetweentheCompanyandDashoWangchukDorjiasChairmanandManagingDirectorisforaperiodof5yearseffective20thMay,2005,approvedby theCentralGovernment,vide itsOrderNo.1/232/2005-CL.VIIdated2ndSeptember, 2005. The reappointment was also approved by the shareholders at the Annual General Meeting held on 28thSeptember,2005.AspertheprovisionsofScheduleXIIIoftheCompaniesAct,1956,theretrialbenefitspaidtoDashoWangchukDorjihasnotbeenincludedinthecomputationoftheceilingonremunerationspecifiedinthesaidSchedule.NosittingfeeshavebeenpaidtoDashoWangchukDorji.

OnlysittingfeesforattendingthemeetingsoftheBoardandCommitteesthereofarepaidtotheNon-ExecutiveDirectors.

ParticularsofsittingfeespaidtotheNon-ExecutiveDirectorsduringtheyearunderreviewaregivenbelow:

Name Board Committee Total No. of Shares held

Meetings Meetings in the Company ( Rs. ) ( Rs. ) ( Rs. )

DashoTopgyalDorji 24,000 - 24,000 -

Mr.PremSagar 40,000 40,000 80,000 -

Mr.KanwalNainMalhotra 40,000 40,000 80,000 -

Mr.VinayKilla 40,000 40,000 80,000 200

TheCompanyhasnotissuedanyconvertibleinstruments.

1�

5. SHARE TRANSFER COMMITTEE:

TheShareTransferCommitteecomprisesMr.VinayKilla,astheChairmanandMr.RohanGhoshasMember.TheCompanySecretaryactsastheSecretarytotheCommittee.

ShareTransfer formalitiesarecompliedwithoncea fortnight, thepower toapprove the samebeingdelegatedseverally toMr.RohanGhoshandtheCompanySecretary.

TheCompany’sRegistrarandShareTransferAgent,IntimeSpectrumRegistryLimitedcarryouttheentiresharetransferactivitiesbothunderphysicalanddematsegment.

6. SHAREHOLDERS’ GRIEVANCE COMMITTEE

The Shareholder’s Grievance Committee was reconstituted on 29th October, 2007 and comprises Mr. Prem Sagar, as theChairmanandMr.KanwalNainMalhotraandMr.VinayKillaasMembers.

TheCompanySecretary,istheComplianceOfficer.

E-mailIDpursuanttoClause47(f)oftheListingAgreementwiththeStockExchanges:ibiswas@taiind.com.

StatusofInvestors’Complaintsason31stMarch,2008:

Noofcomplaintsreceivedduringtheyearandentirelydealtwith 2

Noofcomplaintspending Nil

7. GENERAL BODY MEETINGS

LocationandtimewherelastthreeAnnualGeneralMeetingswereheld:-

Date Location Time

28thSeptember,2005 Kalakunj,48,ShakespeareSarani,Kolkata–700017. 10.00AM

21stSeptember,2006 Sameasabove 10.00AM

21stSeptember,2007 Sameasabove 10.00AM

ASpecialResolutionforalterationoftheObjectsClauseoftheMemorandumofAssociationwaspassedattheAnnualGeneralMeeting held on 21st September, 2006. No Special Resolution was passed at the Annual General Meetings held on 28thSeptember,2005and21stSeptember,2007.

ResuméandotherinformationontheDirectorre-appointedasrequiredunderClause49IV(G)(i)oftheListingAgreementisgivenintheNoticeoftheAnnualGeneralMeetingannexedtotheAnnualReportfortheyearunderreview.

8. DISCLOSURES

a) Materiallysignificantrelatedpartytransactions:TheCompanyhasnotenteredintoanytransactionsofmaterialnaturewithitsPromoters,Directors,themanagement,subsidiarycompaniesorrelatives,etc.thatmayhavepotentialconflictwithitsinterestduringtheyearunderreview.However,thelistofrelatedpartyrelationshipsortransactionsasrequiredtobedisclosedinaccordancewithAccountingStandard18issuedbytheInstituteofCharteredAccountantsofIndiahasbeengiveninNotesonAccountsfortheyearended31stMarch,2008.

b) Nopenalties/strictureswereimposedontheCompanybyanyregulatoryauthorityfornon-complianceofanylawsoranymatterrelatingtocapitalmarketsduringthelastthreeyears.

c) TheCompanyhascompliedwithallthemandatoryrequirementsofSub-clausesItoVIIofthisClause.TheCompanycontinues in itseffortson improvement,consolidationanddocumentationofmethodsof internalcontrol forfinancialreportinganditseffectiveness.

9. MEANS OF COMMUNICATION

a) IncompliancewithClause41oftheListingAgreementtheCompanyregularlyintimatesunauditedhalfyearlyandquarterlyresultsaswellastheauditedannualresultstotheStockExchangesaftertheyaretakenonrecordandapprovedbytheBoardofDirectors.Inaddition,thesamearealsofiledontheElectronicDataInformationFilingandRetrieval(EDIFAR)websitemaintainedbytheSEBIinassociationwiththeNationalInformaticsCentre(NIC)pursuanttotherequirementsofClause51oftheListingAgreement.

b) Suchresultsarealsopublishedinnewspapersnamely,FinancialExpressandArthikLipi.

c) TheCompanyhasnoweb-site.

d) Nopresentationshavebeenmadetoinstitutionalinvestorsortotheanalysts.

e) ThedocumentonManagementDiscussionandAnalysisReportformsapartofthisAnnualReport.

13

10. GENERAL SHAREHOLDER INFORMATION

a) AGMdate,timeandvenue:

Monday,the22nddayofSeptember,2008atKalakunj,48,ShakespeareSarani,Kolkata–700017at10.00a.m.

b) FinancialYear:1stAprilto31stMarch.

c)BookclosurePeriod:15thSeptember,2008to22ndSeptember,2008,bothdaysinclusive.

d)Dividendpaymentdate:Nodividendhasbeenrecommendedfortheyearended31stMarch,2008.

e) ListingonStockExchangesandStockCodes:ThesharesoftheCompanyarelistedwiththeStockCodesattheStockExchangesgivenhereinbelow:

Stock Exchange Stock Code

(i) TheCalcuttaStockExchangeAssociationLimited 7,LyonsRange,Calcutta700001 30055

(ii) BombayStockExchangeLimited,PhirozeJeejeebhoyTowers,

DalalStreet,Fort,Mumbai400023. 519483

ListingFeesasprescribedhavebeenpaidtoalltheaforesaidStockExchangesupto31stMarch,2009.

DematCodeNo.allottedbyNSDL&CDSL: INE358D01018

f) StockPriceDataandSharePricePerformanceincomparisontoBSESENSEX:

Year 2007-2008 (Rupees)

Month Bombay Stock Exchange Limited Sensex

High Low High Low

April,2007 34.00 21.00 14383.72 12425.52

May,2007 27.90 22.70 14576.37 13554.34

June,2007 25.30 21.70 14683.36 13946.99

July,2007 32.50 24.00 15868.85 14638.88

August,2007 28.00 21.15 15542.40 13779.88

September,2007 28.00 21.40 17361.47 15323.05

October,2007 24.90 19.60 20238.16 17144.58

November,2007 24.90 18.55 20204.21 18182.83

December,2007 33.00 22.15 20498.11 18886.40

January,2008 42.90 20.50 21206.77 15332.42

February,2008 23.10 16.75 18895.34 16457.74

March,2008 19.10 11.30 17227.56 14677.24

g) ShareTransferSystem:

Sharetransfersareregisteredwithinamaximumperiodof30daysfromthedateofreceipt,provided,thedocumentsarecompleteinallrespects.

h) RegistrarandShareTransferAgent:

IntimeSpectrumRegistryLimitedat59CChowringheeRoad,Kolkata-700020actsastheRegistrarsforPhysicalaswellasDematsegment.

i) Dematerialisationofshares&liquidity:

ThesharesoftheCompanyarecompulsorilytradedindematerialisedformforallshareholders.Ason31stMarch,2008,58.62%oftotalnumberofsharesstanddematerialised.

j) OutstandingGDR/ADR/Warrantsoranyconvertibleinstruments:NotApplicable.

14

k)(A)DistributionofShareholdingason31stMarch,2008:

Break-up of Equity No. of Percentage of No. of Equity Percentage of shares held Shareholders Shares held shares held Equity shares

1-500 8733 94.31 1026726 17.11

501-1000 251 2.71 209313 3.49

1001-2000 117 1.26 179279 2.99

2001-3000 62 0.67 155184 2.59

3001-4000 16 0.17 56740 0.95

4001-5000 26 0.28 123536 2.06

5001-10000 22 0.24 162259 2.70

10000andabove 33 0.36 4086963 68.12

Total 9260 100.00 6000000 100.00

(B) ShareholdingPatternason31stMarch,2008:

Category No.of Percentage of

Shares held Shareholding

A PromotersHolding

1.Promoters

-IndianPromoters

-ForeignPromoters 1216000 20.267

2.Personsactinginconcert _ _

Total(A) 1216000 20.267

B PublicShareholding

1.InstitutionalInvestors

a)MutualFundsandUTI _ _

b)Banks,FinancialInstitutions,

InsuranceCompanies(Central/

StateGovt.Institutions/

Non-GovernmentInstitutions) 300 0.005

c)FIIs 1200000 20.00

Sub-Total 1200300 20.005

2.Others

a)PrivateCorporateBodies 790964 13.183

b)Individuals 2188735 36.478

c)NRIs/OCBs 604001 10.067

Sub-Total 3583700 59.729

Total(B) 4784000 79.733

Grand Total (A+B) 6000000 100.00

15

m) AddressforCorrespondence:

Registrarand ShareTransferAgent IntimeSpectrumRegistryLimited, 59CChowringheeRoad,Kolkata–700020. Phone:22890539/22890540 Fax:22890539 CorporateOffice: Ms.IndiraBiswas, GeneralManager-Corporate&CompanySecretary TaiIndustriesLimited, 53A,MirzaGhalibStreet, Kolkata–700016.

SignaturestoAnnexuresA&B

ForandonbehalfoftheBoard

Place:Thimpu,Bhutan Vinay Killa Wangchuk Dorji Date:25thJune,2008 Director Managing Director

DECLARATION BY THE CEO ON AFFIRMATION OF COMPLIANCE WITH

THE CODE OF CONDUCT OF THE COMPANY

TotheMembersof

TaiIndustriesLimited

Pursuant toClause49(I)(D)(ii) of theListingAgreementwith theStockExchanges, I herebydeclare that allDirectorsof theCompanyandMembersofSeniorManagementhaveaffirmedcompliancewiththeCodeofConductoftheCompany,fortheyearended31stMarch,2008.

Wangchuk Dorji

Date:25thJune,2008 Chief Executive Officer

16

Auditor’s Certificate on Corporate Governance

To

TheMembersof

TaiIndustriesLimited

WehaveexaminedthecomplianceofconditionsofCorporateGovernancebyTaiIndustriesLimitedfortheyearendedas31stMarch,2008,asstipulatedinclause49oftheListingAgreementofthesaidcompanywithstockexchanges.

ThecomplianceofconditionsofCorporateGovernanceistheresponsibilityofthecompany’smanagement.OurexaminationwascarriedoutinaccordancewiththeGuidanceNoteonCertificationofCorporateGovernance(asstipulatedinClause49oftheListingAgreement)issuedbytheInstituteofCharteredAccountantsofIndiaandlimitedtotheproceduresandimplementationthereof,adoptedbythecompanyforensuringthecomplianceoftheconditionsoftheCorporateGovernance.Itisneitheranauditnoranexpressionofopinionofthefinancialstatementsofthecompany.

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventousandrepresentationmadebythemanagement,wecertifythatthecompanyhascompliedwiththeconditionsofCorporateGovernanceasstipulatedintheabovementionedListingAgreement.

Westatethatinrespectofinvestorgrievancesreceivedduringtheyearended31stMarch,2008noinvestorgrievanceswerependingforaperiodexceedingonemonthagainstthecompany,aspertherecordsmaintainedbythecompany.

Wefurtherstatethatsuchcompliance isneitheranassuranceastothefutureviabilityof thecompanynortheefficiencyoreffectivenesswithwhichthemanagementhasconductedtheaffairsofthecompany.

ForRAY & RAY CharteredAccountants

ABHIJIT NEOGIPlace : Thimpu,Bhutan (Partner)Date : 25thJune,2008 (Membership No. 61380)

17

Auditors’ ReportTo The Members of Tai Industries Limited

1. WehaveauditedtheattachedBalanceSheetofTAI INDUSTRIES LIMITED ason31stMarch,2008,therelatedProfit&LossAccountandtheCashFlowStatementfortheyearendedonthatdate(hereinafterreferredtoas“financialstatements”),allofwhichwehavesignedunder the reference to this report. Thesefinancialstatementsare the responsibilityof theCompany’sManagement.Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.

2. WeconductedourauditinaccordancewiththeauditingstandardsgenerallyacceptedinIndia.Thesestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceastowhetherthefinancialstatementsarefreeofanymaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.

3. AsrequiredbytheCompanies(Auditors’Report)Order2003,asamendedbytheCompanies(Auditors’Report)(Amendment)Order2004(“Order”)issuedbytheCentralGovernmentofIndiaintermsofSub-section(4A)ofSection227ofTheCompaniesAct,1956,(the‘Act’)andonthebasisofsuchchecksasweconsideredappropriateandaccordingtotheinformationandexplanationsgiventous,wegiveintheAnnexure,astatementonthemattersspecifiedinparagraphs4and5ofthesaidOrder.

4. Attention is drawn to note no. n and o of Notes to Accounts (Schedule 21). Damaged stock of the Company could not be physically verified by us and we have relied upon the Certification from Management. We further state that we are unable to offer any comment as to the adequacy of the provision in respect of the damaged stock.

5. FurthertoourcommentsintheAnnexurereferredtoinparagraph3above,wereportthat:

5.1 Subject to our comment in paragraph no. 4,wehaveobtainedalltheinformationandexplanations,whichtothebestofourknowledgeandbeliefwerenecessaryforthepurposesofouraudit;

5.2 Inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbytheCompanysofarasappearsfromourexaminationofthosebooks;

5.3 TheBalanceSheet,theProfitandLossAccountandtheCashFlowStatementdealtwithbythisreportareinagreementwiththebooksofaccount;

5.4 Inouropinion, thefinancialstatementsdealtwithbythisreportcomplywiththeapplicableAccountingStandardsreferredtoinSub-section(3C)ofSection211oftheCompaniesAct,1956;

5.5 Onthebasisofwrittenrepresentationsreceivedfromthedirectors,ason31March2008andtakenonrecordbytheBoardofDirectors,wereportthatnoneofthedirectorsisdisqualifiedason31March,2008frombeingappointedasadirectorintermsofclause(g)ofSub-section(1)ofSection274oftheCompaniesAct,1956’;

5.6 Subject to our comment in paragraph 4 above the effect of which is not readily ascertainable,inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,thesaidfinancialstatementstogetherwiththenotesthereonandattachedtheretogiveintheprescribedmannertheinformationrequiredbytheCompaniesAct,1956andalsogiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

a) InthecaseofBalanceSheet,ofthestateofaffairsoftheCompanyasat31March2008;

b) InthecaseoftheProfitandLossAccount,ofthelossfortheyearendedonthatdate;and

c) InthecaseoftheCashFlowStatement,ofthecashflowsfortheyearendedonthatdate.

ForRAY & RAY CharteredAccountants

ABHIJIT NEOGIPlace : Thimpu,Bhutan (Partner)Date : 25thJune,2008 (Membership No. 61380)

18

ANNEXURE TO AUDITORS’ REPORT[Referred to in paragraph 3 of the Auditors’ Report of even date to the Members of TAI INDUSTRIES LIMITED on the financial statements for the year ended 31 March 2008]

1. (a) TheCompanyhasmaintainedproperrecordstoshowfullparticularsincludingquantitativedetailsandsituationofitsfixedassets.

(b) ThefixedassetsoftheCompanyhavebeenphysicallyverifiedbythemanagementaccordingtoaphasedprogrammedesignedtocoveralltheitemsoveraperiodofthreeyears,whichinouropinion,isreasonablehavingregardtothesizeoftheCompanyandthenatureofitsassets.Pursuanttosuchprogramme,aportionofthefixedassetshasbeenphysicallyverifiedbythemanagementduringtheyearandnomaterialdiscrepanciesbetweenthebookrecordsandthephysicalinventoryhavebeennoticed.

(c) Inouropinionandaccordingtotheinformationandexplanationsgiventous,asubstantialpartoffixedassetshasnotbeendisposedoffbytheCompanyduringtheyear.

2. (a) The inventoryoftheCompanyhasbeenphysicallyverifiedbythemanagementduringtheyear. Inouropinion,thefrequencyofverificationisreasonable.

(b) Inouropinion,theproceduresofphysicalverificationofInventoriesfollowedbythemanagementarereasonableandadequateinrelationtothesizeoftheCompanyandthenatureofitsbusiness.

(c) The records of inventory maintained by the Company in respect of its C3 division need to be improved with respect to timeliness of entries and adjustments, quantitative reconciliation of stocks at various locations and unit price. The discrepancies noticed on physical verification of inventory as compared to book records were notmaterial.

3. (a) TheCompanyhasnotgrantedanyloans,securedorunsecured,tocompanies,firmsorotherpartiescoveredintheregistermaintainedunderSection301ofthe‘Act’.Accordingly,theclauses(iii)(b)to(iii)(d)oftheparagraph4oftheOrderarenotapplicable.

(b) TheCompanyhasnottakenanyloans,securedorunsecured,fromcompanies,firmsorotherpartiescoveredintheregistermaintainedunderSection301ofthe‘Act’.Accordingly,theclauses(iii)(e)to(iii)(g)oftheparagraph4oftheOrderarenotapplicable.

4. OnthebasisofourevaluationofInternalControlproceduresandaccordingtotheinformationandexplanationsgiventous,weareoftheopinionthatinternalcontrolproceduresforpurchaseandsaleofinventoryisincommensuratewiththesizeofthecompanyandnatureofitsbusiness.

5. (a) Inouropinionandaccordingtotheinformationandexplanationsgiventous,theparticularsofcontractsofarrangementsreferredtoinSection301ofthe‘Act’havebeenenteredintheRegisterrequiredtobemaintainedunderthatSection.

(b) Inouropinionandaccordingtotheinformationandexplanationsgiventous,thetransactionsmadeinpursuanceofsuchcontractsorarrangementsandexceedingthevalueofrupeesfivelakhsinrespectofapartyduringtheyearhavebeenmadeatpriceswhicharereasonablehavingregardtotheprevailingmarketpricesattherelevanttime.

6. TheCompanyhasnotacceptedanydepositsfromthepublicwithinthemeaningofSections58Aand58AAoranyotherrelevantprovisionsofthe‘Act’andtherulesframedthereunder.

7. TheCompanyhasappointedoutsidefirmofCharteredAccountantsasitsInternalAuditorswhosescopeofworkasInternalAuditorsandcoverageisincommensuratewiththesizeandnatureofCompany’sbusiness.

8. TheCentralGovernmentofIndiahasnotprescribedmaintenanceofcostrecordsundersection209(1)(d)ofthe‘Act’foranyoftheactivitiesoftheCompany.

9. a) Accordingtothe informationandexplanationsgiventousandtherecordsof theCompanyexaminedbyus, inouropinion,theCompanyhasbeenregularindepositing,duringtheyear,theundisputedstatutoryduesincludingprovidentfund,incometax,salestax,agriculturaltax,servicetax,educationcessandothermaterialstatutorydues,asapplicable,withappropriateauthorities.

(b)Accordingtotheinformationandexplanationsgiventous,noundisputedamountspayableinrespectofprovidentfund,investoreducationandprotectionfund,incometax,salestax,wealthtax,servicetax,customsduty,excisedutyandcesswereinarrearsasat31stMarch,2008foraperiodofmorethansixmonthsfromthedatetheybecamepayable.

19

(c) AccordingtotheinformationandexplanationsgiventousandtherecordsoftheCompanyexaminedbyustheparticularsofduesofincometaxasat31stMarch2008whicharenotbeendepositedonaccountofadisputearegivenbelow.Apartfromthesame,therearenoundisputedduesinrespectofincometax,servicetaxandeducationcess.

Name of the Statute Nature Amount Forum where dispute Assessment of dues (Rs.) is pending Year to which the amount relates

IncomeTaxAct IncomeTax 7,28,206 CommissionerofIncomeTax(Appeal) 2005-2006

10. TheCompanyhasnoaccumulatedlossasat31stMarch2008andithasnotincurredanycashlossesinthefinancialyearendedonthatdateorintheimmediatelyprecedingfinancialyear.

11. AccordingtotherecordsoftheCompany,examinedbyusandtheinformationandexplanationsgiventous,thecompanyhasnotdefaultedinrepaymentofduestoabankorfinancialinstitutions.TheCompanyhasnotissuedanydebenture.

12. TheCompanyhasnotgrantedanyloansandadvancesonthebasisofsecuritybywayofpledgeofshares,debentureandothersecurities.

13. Theprovisionsofanyspecialstatuteapplicabletochitfund/nidhi/mutualbenefitfund/societiesarenotapplicabletotheCompany.

14. Inouropinion,theCompanyisnotdealerortraderinshares,securities,debenturesandotherinvestments.

15. Inouropinionandaccordingtotheinformationandexplanationsgiventous,theCompanyhasnotgivenanyguaranteesforloanstakenbyothersfrombanksorfinancialinstitutionsduringtheyear.

16. Inouropinionandaccordingtotheinformationandexplanationsgiventous,onanoverallbasis,thecompanyhasnotobtainedanytermloanduringtheyear.

17. OnthebasisofanoverallexaminationoftheBalanceSheetandCashFlowStatementoftheCompany,inouropinionandaccordingtotheinformationandexplanationsgiventous,therewerenofundsraisedonshort-termbasis,whichhavebeenusedforlong-terminvestments.

18. TheCompanyhasnotmadeanypreferential allotmentof shares toanypartiesandcompaniescovered in the registermaintainedunderSection301ofthe‘Act’duringtheyear.

19. TheCompanyhasnotissuedanydebenture.

20. TheCompanyhasnotraisedanymoneybywayofpublicissueduringtheyear.

21. During the course of our examination of books and records of the Company carried out in accordance with generallyacceptedauditingpracticesinIndiaandaccordingtotheinformationandexplanationsgiventous,wehaveneithercomeacrossanyinstanceoffraudonorbytheCompanynorhavewebeeninformedofsuchcasebythemanagement.

ForRAY & RAY Chartered Accountants

ABHIJIT NEOGIPlace : Thimpu,Bhutan (Partner)Date : 25thJune,2008 (Membership No. 61380)

�0

Balance Sheet as at 31st March, 2008 As at 31st As at 31st March, 2008 March, 2007 Schedules Rs. Rs.

I. SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Capital 1 60,000,000 60,000,000 ReservesandSurplus 2 88,644,562 100,413,137 148,644,562 160,413,137 LOAN FUNDS SecuredLoan 3 4,867,368 - DeferredTaxLiability - 756,240 (Note2(c)onSchedule21) TOTAL 153,511,930 161,169,377II. APPLICATIONS OF FUNDS FIXED ASSETS 4 GrossBlock 74,097,188 74,073,085 Less :AccumulatedDepreciationandAmortisation 47,554,783 41,493,767 NetBlock 26,542,405 32,579,318 INVESTMENTS 5 8,631,173 8,631,173 Deferred Tax Asset 45,983 - (Note2(c)onSchedule21) CURRENT ASSETS, LOANS AND ADVANCES Inventories 6 28,802,614 36,804,533 SundryDebtors 7 230,519,150 168,455,395 CashandBankBalances 8 10,463,945 10,761,491 OtherCurrentAssets 9 59,620 24,736 LoansandAdvances 10 126,529,083 127,082,566 396,374,412 343,128,722 Less : CURRENT LIABILITIES AND PROVISIONS CurrentLiabilities 11 265,651,725 204,883,476 Provisions 12 12,430,318 18,286,360 278,082,043 223,169,836 NET CURRENT ASSETS 118,292,369 119,958,886 TOTAL 153,511,930 161,169,377

Notes on Accounts 21 TheschedulesreferredtoaboveandattachedtheretoformanintegralpartoftheBalanceSheet. ThisistheBalanceSheetreferredtoinourreportofevendate.

ForRAY & RAY Chartered Accountants

ABHIJIT NEOGI Partner Membership No. 61380

Place : Thimpu,Bhutan Date : 25thJune,2008

ForandonbehalfoftheBoard

WANGCHUK DORJIManaging Director

VINAY KILLADirector

INDIRA BISWASCompany Secretary

�1

Profit and Loss Account for the Year ended 31st March, 2008

For the year ended For the year ended Schedule 31st March, 2008 31st March, 2007 Rs. Rs.

INCOME

Turnover 13 446,352,560 441,493,359

ProfitonSaleofInvestments - 82,791,584

OtherIncome 14 12,938,409 15,819,487

Increase/(Decrease)inInventories 15 6,376,168 (24,354,209)

TOTAL 465,667,137 515,750,220

EXPENDITURE

Purchases 16 364,354,504 361,871,255

Employee’sremunerationandwelfareexpenses 17 13,738,686 15,070,334

Interest 18 507,725 5,654,943

Administrative,SellingandOtherExpenses 19 76,195,803 78,753,666

Depreciation/Amortisation 6,287,831 7,963,046

TOTAL 461,084,549 469,313,244

Profit/(Loss) before taxes & extraordinary items 4,582,588 46,436,976

PriorPeriod&Extra-ordinaryitems 20 15,197,714 -

Profit/(Loss) before taxation -10,615,126 46,436,976

Taxation

-CurrentTax - 5,750,610

-FringeBenefitTax 369,321 355,185

-DeferredTax (802,223) (899,109)

IncomeTaxpaidforearlieryears 1,774,351 -

Profit after Taxation -11,956,575 41,230,290

Balancebroughtforwardfrompreviousyear 96,127,249 54,896,959

Balance carried to Balance Sheet 84,170,674 96,127,249

Notes on Accounts 21

EarningPerShare(Rs) -1.99 6.87

(Note2(l)onSchedule21)

TheschedulesreferredtoaboveandattachedtheretoformanintegralpartoftheProfitandLossAccount

ThisistheProfitandLossAccountreferredtoinourreportofevendate.

ForRAY & RAY Chartered Accountants

ABHIJIT NEOGI Partner Membership No. 61380

Place : Thimpu,Bhutan Date : 25thJune,2008

ForandonbehalfoftheBoard

WANGCHUK DORJIManaging Director

VINAY KILLADirector

INDIRA BISWASCompany Secretary

��

Cash Flow Statement for the Year ended 31st March, 2008

Year ended Year ended 31 March, 2008 31 March, 2007 Rs. Rs.

CASH FLOW FROM OPERATING ACTIVITIES

NetProfitbeforeTaxandextraordinaryitems 4,582,588 46,436,976

Adjustmentsfor:

Depreciation 6,287,831 7,963,046

InterestReceived (38,459) (36,648)

DividendReceived (5,275,876) (7,113,423)

ProvisionforGratuity 213,435 617,712

ProvisionForLeaveEncashment 878,316 488,181

(Profit)/LossonSaleofFixedAssets - (14,312)

Interestpaid 507,725 5,654,943

Lossonsaleofinvestments - (82,791,583)

CommissionReceived (14,153,911) (13,751,828)

Investmentwrittenoff - -

Liabilitiesnolongerrequired,writtenback (1,535,410) (1,242,303)

Debts&otherdebitswrittenoff - 4,370,984

DiscountGiven 1,265,054 1,019,022

Operating Profit before Working Capital changes (7,268,707) (38,399,232)

AdjustmentforchangesinWorkingCapital:

(Increase)\DecreaseinTradeandotherReceivables (61,545,155) (42,629,376)

(Increase)\DecreaseinInventories 8,073,502 24,354,209

Increase\(Decrease)inTradepayables 54,923,567 26,092,772

CommissionReceived 13,241,958 13,530,169

Cash Generated from Operations 7,425,164 (17,051,459)

Interestpaid (507,725) (5,654,943)

Taxespaid (2,341,000) (4,617,586)

LeaveEncashmentPaid (409,134) (340,267)

GratuityPaid (26,972) (30,779)

Cash Flow before Extra ordinary items 4,140,333 (27,695,034)

ExtraOrdinaryItems (14,803,153) -

Net Cash from Operating Activities ( A ) (10,662,820) (27,695,034)

CASH FLOW FROM INVESTING ACTIVITIES

PurchaseofFixedAssets (250,918) (852,915)

SaleofInvestments 117,647,271

SaleofFixedAssets 226,814 19,000

InterestReceived 24,538 32,442

DividendReceived 5,275,876 7,113,423

AdvanceforPurchaseofinvestments 47,700 -

Net Cash from Investing Activities ( B ) 5,324,011 123,959,221

�3

Year ended Year ended 31 March, 2008 31 March, 2007 Rs. Rs.

CASH FLOW FROM FINANCING ACTIVITIES

Proceeding from Borrowings :

SecuredLoans 4,867,368 (91,217,605)

DividendPaid(DepositedtoCentralGovernment) (382,585) (400)

DiscountReceived 556,480

Net Cash used in Financing Activities ( C ) 5,041,264 (91,218,005)

Netincrease/(decrease)inCashandCashEquivalents(A+B+C) (297,545) 5,046,183

OpeningBalanceofCashandCashEquivalents 10,761,491 5,715,308

Closing Balance of Cash and Cash Equivalents 10,463,945 10,761,491 Notes :

1. TheaboveCashFlowStatementhasbeencompiledfromandisbasedontheBalanceSheetasat31March,2008andtherelatedProfitandLossAccountfortheyearendedonthatdate.

2. TheaboveCashFlowStatementhasbeenpreparedunder“IndirectMethod”assetoutintheAccountingStandard(AS)on“CashFlowStatement”,AS-3,issuedbyTheInstituteofCharteredAccountantsofIndiaandreallocationsrequiredforthispurposeareasmadebytheCompany.

3. Figuresinparenthesisrepresentoutflows.

4. Previousyear’sfigureshavebeenregrouped,wherevernecessary,toconformcurrentyear’spresentation.

ThisistheCashFlowreferredtoinourreportofevendate.

ForRAY & RAY Chartered Accountants

ABHIJIT NEOGI Partner Membership No. 61380

Place : Thimpu,Bhutan Date : 25thJune,2008

ForandonbehalfoftheBoard

WANGCHUK DORJIManaging Director

VINAY KILLADirector

INDIRA BISWASCompany Secretary

�4

As at 31st As at 31st March 2008 March 2007 Rs. Rs.

Schedules to Balance Sheet

SCHEDULE : 3

SECURED LOANS

OverdraftAccountwithCenturionBank 4,867,368 -

(Securedagainsthypothecationofpresentandfurtherinventories,

bookdebts&equitablemortgageoftheimmovablepropertyofthecompany)

4,867,368 -

SCHEDULE : 1

SHARE CAPITAL

AUTHORISED

7,500,000(2007-7,500,000)EquitySharesofRs.10/-each 75,000,000 75,000,000

ISSUED, SUBSCRIBED, CALLED AND PAID UP

6,000,000(2007-6,000,000)EquitySharesofRs.10/-eachfullypaidup [Outoftheabove20,000(2007-20,000)EquityShareswereallotted asfullypaidbonussharesbycapitalisationofGeneralReserve] 60,000,000 60,000,000

60,000,000 60,000,000

SCHEDULE : 2

RESERVES & SURPLUS

GeneralReserve

BalanceasperlastAccount 3,690,788 3,690,788

Less:AdjustmentrelatingtoOpeningLiabilityinrespectofEmployeeBenefitin

accordancewithtransitionalprovisionofAccountingStandard-15(Revised) 188,000 -

3,878,788 3,690,788

CapitalReserve 595,100 595,100

ProfitandLossAccount 84,170,674 96,127,249

88,644,562 100,413,137

�5

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26

As at 31st As at 31st Particulars No. of Face March, 2008 March, 2007 Shares Value Cost Cost Rs. Rs. Rs.

SCHEDULE 5

INVESTMENTS-LONG TERM

Other Investments:

Equity Shares Fully Paid (Quoted )

UshaIspatLimited 300 10 3,000 3,000

CoreHealthCareLimited 100 10 15,000 15,000

IndustrialFinanaceCorporationofIndia 100 10 3,500 3,500

StateBankofIndia 150 10 15,000 15,000

BataIndiaLimited 4,375 10 152,250 152,250

InfosysTechnologiesLimited 104 5 3,448 3,448

RelianceIndustriesLimited 1,030 10 102,167 102,167

ISIBarsLimited 250 10 2,500 2,500

RelianceCapitalLimited 51 10 2,554 2,554

RelianceCommunicationLimited 1,030 5 76,036 76,036

RelianceEnergyLimited 77 10 14,343 14,343

RelianceNaturalResourcesLimited 1,030 5 1,375 1,375

NirmaLtd. 1 5 - -

TOTAL (A) 391,173 391,173

Equity Shares Fully Paid (Unquoted)

JamshedpurInjectionPowderLimited 800,000 10 8,000,000 8,000,000

TOTAL (B) 8,000,000 8,000,000

Others Fully Paid (Quoted)

UTIMasterGain92(Note-1) 10,000 10 100,000 100,000

SBIMagnumMultiplierPlus1993 10,000 10 100,000 100,000

MorganStanleyMutualFund 4,000 10 40,000 40,000

TOTAL (C) 240,000 240,000

GRAND TOTAL [(A)+(B)+( C)] 8,631,173 8,631,173 Notes:

1. UTIMastergain92isinthenameofTashiAgroIndustriesLTD, Companyistakingstepstochangethename.

As at 31st As at 31st March, 2008 March , 2007 (Rs.) (Rs.)

2. AggregateBookValue

ofquotedInvestments 631,173 631,173

ofunquotedInvestments 8,000,000 8,000,000

TOTAL 8,631,173 8,631,173

�7

As at 31st As at 31st March, 2008 March ,2007 (Rs.) (Rs.)

3. Marketvalue/NetAssetValue(NAV)ofquotedinvestment

a) Shares 5,684,216 2,029,372

b) Others

I) UTIMasterGain92(NAV) 425,700 307,000

II) SBIMagnumMultiplerPlus1993(NAV) 623,100 501,700

III) MorganStanleyMutualFund(NAV) 211,400 190,280

TOTAL 6,944,416 3,028,352

4. ReceivedonallotmentmadebyNirmaLimitedon26.06.07intheratioof1(one)fullypaidupEquityShareofRs.5/-underaCompositeSchemeofCompromiseandArrangementforDemergerofanUndertakingofCoreHealthcareLimited(CHL)andvestingthesameintotheCompany(NirmaLimited),approvedbyHon’bleHighCourtofGujaratondated01.03.07

SCHEDULE : 6

INVENTORIES(As certified by Management)

StockofTradedGoods-Good 28,802,614 36,804,533

(ReferNoteNo2(n)onSchedule21)

StockofTradedGoods-Damaged 14,378,087 -

43,180,701

Less:ProvisionforDamagedStock 14,378,087 -

28,802,614 36,804,533

SCHEDULE : 7

SUNDRY DEBTORS

(Unsecured-ConsideredGood)

Debtsexceedingsixmonths 6,049,995 89,006,044

OtherDebts 224,469,155 79,449,351

230,519,150 168,455,395

SCHEDULE : 8

CASH AND BANK BALANCES

Cashinhand 911,710 856,892

BalanceswithScheduledBankson:

CurrentAccounts 8,327,788 8,211,143

DividendAccounts 655,078 1,037,663

FixedDeposits 569,369 655,793

(pledgedagainstlettersofcreditandBankGuarantee)

10,463,945 10,761,491

�8

As at 31st As at 31st March, 2008 March ,2007 (Rs.) (Rs.)

SCHEDULE : 9

OTHER CURRENT ASSETS

(Unsecured-ConsideredGood)

Interestaccuredonfixeddeposits 59,620 24,736

59,620 24,736

SCHEDULE : 10

LOANS AND ADVANCES

(Unsecured - Considered Good)

Advancesrecoverableincashorkindorforvalueto

bereceived(Note2(b)onSchedule21) 107,258,669 98,960,181

PrepaidExpenses 428,998 550,644

Deposits[includingdepositswithGovernmentAuthorities- 8,805,035 11,049,905

-inNationalSavingsCertificateRs.Nil(2007-Rs.6,000)

-inOtherDepositRs.127,860(2007-Rs.127,860)]

IncomeTax[includingTaxDeductedatSourcesRs.1,000,533]

(2007-Rs.1,393,006)andFringeBenefitTaxRs.12,72,473(2007-Rs.782,473)] 10,036,381 16,521,836

126,529,083 127,082,566

SCHEDULE : 11

CURRENT LIABILITIES

SundryCreditors

MicroandSmallEnterprise 2,034,756 -

(ReferNote2(d)onSchedule21)

OtherthanMicroandSmallEnterprise 250,022,520 192,738,435

252,057,276 192,738,435

AdvancesfromCustomers 5,958,217 4,827,597

UnclaimedDividend 628,660 903,939

OtherLiabilities 7,007,572 6,413,505

265,651,725 204,883,476

SCHEDULE : 12

PROVISIONS

Particulars As at 1st Addition Total Payments / Reversals As at 31st

April 2007 Utilization/ March 2008

Rs. Rs. Rs. Rs. Rs. Rs.

Gratuity 1,555,624 213,435 1,769,059 14,712 367,000 1,387,348

LeaveEncashment 424,334 968,000 1,392,334 353,587 60,000 978,747

IncomeTax 15,488,744 - 15,488,744 - 6,611,500 8,877,244

FringeBenefitTax 817,658 369,321 1,186,979 - - 1,186,979

TOTAL 18,286,360 1,550,756 19,837,116 368,299 7,038,500 12,430,318

�9

Schedules to Profit and Loss Account

For the year ended For the year ended 31 March, 2008 31 March, 2007 Rs. Rs.

SCHEDULE : 13 TURNOVER Sales : FruitProducts 102,474,487 93,066,797CalciumCarbide 28,285,157 30,170,560Charcoal 44,504,467 43,148,980FoodProduct 104,852,000 83,769,500SaleofRetailProducts 152,082,538 177,585,693Commissiononsaleofaboverelatedproducts[TaxesDeducted 14,153,911 13,751,828atSources-Rs.911,953(2007-Rs.251,659)] 446,352,560 441,493,359

SCHEDULE : 14 OTHER INCOME DividendonLongTermInvestments-Others 5,275,876 7,113,423Interest-Gross[TaxesDeductedatSourcesRs.13,921(2007-Rs.4,206)] 38,459 36,648Liabilitiesnolongerrequired,writtenback 1,535,410 1,242,303ProfitonSaleofFixedAssets - 14,312MiscellaneousIncome 6,088,664 7,412,800 12,938,409 15,819,487

SCHEDULE : 15 ACCRETION / ( DECCRETION ) OF INVENTORIES OpeningStock 36,804,533 61,158,742Less:ClosingStock 43,180,701 36,804,533AccretionofInventories 6,376,168 (24,354,209) SCHEDULE : 16 PURCHASE OF TRADED GOODS FruitProducts 81,498,368 76,611,315CalciumCarbide 25,693,303 27,120,326Charcoal 41,713,701 32,986,330FoodProducts 79,220,500 69,355,000RetailProducts 133,861,213 154,286,090CarraigeInward,OctroiExpensesandOtherrelatedexpenses 2,367,419 1,512,194 364,354,504 361,871,255

SCHEDULE : 17 EMPLOYEES REMUNERATION AND WELFARE EXPENSES Salaries,Wages,Bonusetc 11,891,024 11,885,165ContributiontoProvidentandOtherFunds 1,254,147 1,132,115StaffWelfare 593,515 2,053,054 13,738,686 15,070,334

30

For the year ended For the year ended 31 March, 2008 31 March, 2007 Rs. Rs.

SCHEDULE : 18

INTEREST

OnSecuredLoans 368,450 5,273,881

OtherInterest 139,275 381,063

507,725 5,654,943

SCHEDULE : 19

ADMINISTRATIVE, SELLING & OTHER EXPENSES

Rent 6,908,716 5,856,508

RepairstoBuilding 590,188 594,589

RepairstoOthers 19,111,812 17,353,998

Insurance 250,704 240,456

RatesandTaxes 1,600,171 2,001,423

Electricity 6,106,607 7,278,727

TravellingandConveyance 3,530,728 3,566,871

CommunicationExpense 1,809,117 1,951,523

LegalandProfessionalcharges 1,971,700 1,938,664

PrintingandStationery 797,469 999,478

Cuttingandotherprocessingcharges - 1,031,456

CarriageOutward 11,329,487 9,349,842

CommissiononDepotSales 673,733 620,575

BreakageandDamages 2,447,041 3,519,777

Discount 1,265,054 1,019,022

Advertisement,PublicityandSalesPromotion 1,825,968 1,972,761

OtherSellingExpenses 4,678,353 6,326,981

Debtsandotherdebitswrittenoff - 4,370,984

BankCharges 1,723,995 1,793,434

MiscellaneousExpenses(Note2(h)onSchedule21) 5,771,080 3,051,047

SecurityCharges 1,978,378 2,067,781

CommonexpensesStores 1,825,502 1,847,767

76,195,803 78,753,666

SCHEDULE : 20

PRIOR PERIOD AND EXTRA-ORDINARY ITEMS

ProvisionforDamagedStock(Note2(o)onSchedule21) 14,378,087 -

PriorPeriodAdjustment 819,627 -

15,197,714 -

31

SCHEDULE - 21

ACCOUNTING POLICIES AND NOTES ON THE FINANCIAL STATEMENTS

1. Significant Accounting Policies

(a) Basis of preparation of Financial Statements TheFinancialStatementshavebeenpreparedontheaccrualbasisofaccounting,underthehistoricalcostconvention,

inaccordancewiththeaccountingprinciplesgenerallyacceptedinIndiaandcomplywiththeAccountingStandardsissuedbyTheInstituteofCharteredAccountantsofIndiaandtherelevantprovisionsoftheCompaniesAct,1956.

(b) Use of Estimates Thepreparationof thefinancialstatements inconformitywithGenerallyAcceptedAccountingPrinciplesrequires

managementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesandthedisclosureofcontingentliabilitiesasatthedateoftheFinancialStatementandthereportedamountofrevenueandexpensesduringthereportingperiod.Actualresultscoulddifferfromtheseestimates.Anyrevisiontoaccountingestimatesisrecognisedintheperiodinwhichtheresultsareknown/materialised.

(c) Fixed Assets FixedAssetsarestatedatcost.Costincludestaxes,duties,freightandotherincidentalexpensesrelatedtoacquisition,

improvementsandinstallationoftheassets.

(d) Depreciation (i) Depreciationisprovidedon“WrittenDownValueMethod”,attheratesandinthemannerspecifiedinSchedule

XIVoftheCompaniesAct,1956. (ii) AssetscostingRs.5,000orlessaredepreciatedinfullintheyearofpurchase.

(e) Impairment An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment

loss ischargedtoprofitandlossaccount intheyear inwhichanasset is identifiedas impaired.The impairmentlossrecognizedinprioraccountingperiodsisreversediftherehasbeenachangeintheestimateofrecoverableamount.

(f) Investments LongtermInvestmentsarestatedatcostlessprovisionforpermanentdiminution,ifany,invalueofsuchinvestments.

Currentinvestmentsarestatedatlowerofcostandfairvalue.

(g) Inventories Inventoriesarevaluedatlowerofcostornetrealizablevalue.Costiscomputedonthebasisofcostofpurchase

inclusiveoffreightetc,on“First-In-First-Out”basis.

(h) Intangible Assets Software which is not an integral part of related hardware, is treated as intangible asset and are capitalized in

accordancewiththerelevantAccountingStandard.Thecostofsuchassetsisamortizedonstraight–linemethodoveraperiodoffiveyearsbasedontheestimatedeconomiclifeoftheasset.ThecarryingvalueofthecapitalizedsoftwarecostsisreviewedateachBalanceSheetdate.

(i) Revenue Recognition (i) Sales,netoftaxes,areaccountedforwhenpropertyinthegoodsistransferredtothecustomers. (ii) CommissionisaccountedforasandwhentheCompany’srighttoreceivethesameisestablished. (iii) Dividendisrecognised,whentherighttoreceivethedividendarises.

(iv) ItemsofIncome/Expenditurearerecognizedonaccrualbasis,unlessotherwisestated

(j) Employee Benefits (i) DefinedContributionSchemes ProvidentFundsandEmployeesState InsuranceFundareadministeredbyCentralGovernmentof Indiaand

contributiontothesaidfundsarechargedtoProfitandLossAccountonactualbasis. (ii) DefinedBenefitSchemes Provisionforleaveencashmentandgratuityliabilityaremadeonthebasisofactuarialvaluation.

(k) Borrowing Cost Borrowingcostsattributabletotheacquisitionorconstructionofaqualifyingassetarecapitalizedaspartofthecost

ofsuchasset.Aqualifyingassetisonethatnecessarilytakessubstantialperiodoftimetogetreadyforintendeduse.Otherborrowingcostsarerecognizedasexpenseintheperiodinwhichtheseareincurred.

3�

(l) Foreign Currency Transactions Transactions denominated in foreign currencies are recorded at the rates of exchange prevailing on the date of

transactions.Monetaryassetsandliabilitiesdenominatedinforeigncurrencyareconvertedattherateofexchangeprevailingon thedateofBalanceSheet.Anyexchange lossorgain,onsuchconversion isaccounted for in theProfitandLossAccount.Exchangegain/lossrelatingtoacquisitionoffixedassetsisadjustedtothecostofthoseassets.

(m) Treatment of Prior Period and Extra Ordinary Items (i) Anymaterialitems(otherthanthosearisingoutofover/underestimationinearlieryears)arisingasaresultof

errororomissioninpreparationofearlieryearsfinancialstatementsareseparatelydisclosed. (ii) Anymaterialgains/losseswhicharisefromtheeventsortransactionwhicharedistinctfromordinaryactivities

oftheCompanyareseparatelydisclosed.

(n) Income Tax Incometaxexpensecomprisesofcurrenttaxanddeferredtaxchargeorcredit.CurrentTaxisdeterminedasthe

amountoftaxpayableinrespectoftaxableincomefortheyear. DeferredTaxexpensesorbenefitisrecognizedontimingdifferencesbeingthedifferencebetweenthetaxableincome

andaccountingincomethatoriginateinoneperiodandarecapableofreversalinoneormoresubsequentperiods.Deferredtaxassetsandliabilitiesaremeasuredusingthetaxrates lawsthathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.

Intheeventofunabsorbeddepreciationandcarryforwardoflosses,deferredtaxassetsarerecognizedonlytotheextentthatthereisvirtualcertaintythatsufficienttaxableincomewillbeavailableinfuturetorealizesuchassets.Inothersituations,deferredtaxassetsarerecognizedonlytotheextentthatthereisreasonablecertaintythatsufficientfuturetaxableincomewillbeavailabletorealizetheseassets.

(o) Provisions, Contingent Liabilities and Contingent Assets Provisionsarerecognizedwhenthecompanyhasa legalandconstructiveobligationasaresultofapastevent,

forwhichitisprobablethatacashoutflowwillberequiredandreliableestimatecanbemadeoftheamountoftheobligation.

ContingentliabilitiesaredisclosedwhentheCompanyhasapresentobligationanditisprobablethatacashoutflowwillnotberequiredtosettletheobligation.

ContingentassetsareneitherrecognisednordisclosedintheFinancialStatements.

2. Notes on the Balance Sheet and Profit & Loss Account

a. Contingent liabilities

As at 31st March 2008 As at 31st March 2007 (Rs.) (Rs.)

(a) Claimnotacknowledgedasdebts- (i)SalesTaxunderappeal NIL 4,16,983.00 (ii)IncomeTaxunderappeal 7,28,206.00 NIL (b) BankGuarantees 2,25,000.00 2,25,000.00

b. AdvancesrecoverableincashorinkindorforvaluetobereceivedincludeRs.3,36,45,103.29(previousyear-Rs.750,85,467)onaccountofTaiProjectsPrivateLtd,inwhichoneofthedirectorsoftheCompanyisalsoadirectorincorporatedwithanobjectofsettingupofaFamilyEntertainmentComplex(FEC)atNonadangainEasternMetropolitan,KolkatainpursuanceofadecisiontomakeinvestmentinthesaidCompany,whichwasapprovedbytheshareholdersoftheCompanyinitsAnnualGeneralMeetingheldon17September2002.

c. Deferred Taxation Themajorcomponentsofdeferredtaxationarisingoutoftimingdifferencesare-

Liabilities As at 31st March 2008 As at 31st March 2007 (Rs.) (Rs.)

Depreciation 7,58,252 14,22,694 TotalLiabilities–(A) 7,58,252 14,22,694 Assets ProvisionforGratuityandLeaveEncashment 804,235 6,66,454 TotalAssets–(B) 804,235 6,66,454 Net Deferred Tax Liability / (Asset) [(A) - (B)] (45,983) 7,56,240

33

d. TheamountduetoMicroandSmallEnterprisesasdefinedin‘TheMicro,SmallandMediumEnterprisesDevelopmentAct,2006’(asdisclosedinSchedule-CurrentLiabilities)hasbeendeterminedtotheextentsuchpartieshavebeenidentifiedonthebasisofinformationavailablewiththecompany.ThedisclosuresrelatingtoMicroandSmallenterprisesasat31stMarch,2008areasunder:

Sr.no. Description Amount outstanding as at 31st March,2008. (Rs.)

1. Theprincipalamountremainingunpaidtosuppliersasattheendoftheyear 20,34,756

2. Theinterestduethereonremainingunpaidtosupplierasattheendoftheaccountingyear NIL

3. Theamountofinterestpaidintermsofsection16,alongwiththeamountofthepaymentmadetothesupplierbeyondtheappointeddayduringtheyear2007-08 NIL

4. Theamountofinterestdueandpayablefortheperiodofdelayinmakingpayment(whichhavebeenpaidbutbeyondtheappointeddayduringtheyear)butwithoutaddingtheinterestspecifiedundertheact. NIL

5. Theamountofinterestaccruedduringtheyearandremainingunpaidattheendoftheaccountingyear. NIL

6. Theamountoffurtherinterestremainingdueandpayableeveninthesucceedingyears,untilsuchdatewhentheinterestduesasaboveareactuallypaidtothesmallenterprises,forthepurposeofdisallowanceasadeductibleexpenditureundersection23. NIL

Thepreviousyear’sfiguresarenotgivenastherewerenoreportedMicroandSmallenterprisesupto31stMarch,2007.

e. Employee benefit

TheemployeebenefitshavebeendeterminedinaccordancewiththeAccountingStandard-15issuedbytheInstituteofCharteredAccountantsofIndia.

A. Defined Benefit Plans

Gratuity & leave–ThegratuityliabilityisdeterminedonthebasisofactuarialvaluationusingtheProjectedUnitCreditMethod.Thismethodrecognizeseachperiodofserviceasgivingrisetoadditionalunitofemployeebenefitentitlementandmeasureseachunitseparatelytobuildupthefinalobligation.Theleaveencashmentisrecognizedinthefinancialstatementinthesamemannerasgratuity.

Gratuity Leave Encashment

(Rs) (Rs)

a. Reconciliation of opening and closing balances of Defined Benefit Obligations DefinedBenefitObligationatthebeginningoftheyear 11,88,000 6,03,000 CurrentServiceCost 2,22,000 4,42,000 InterestCost NIL 59,000 Actuarial(gain)/loss -9,000 2,28,000 Benefitpaid -25,000 -3,54,000 DefinedBenefitObligationattheyearend 13,76,000 9,78,000 b. Reconciliation of fair value of assets and obligations

Fairvalueofplanassetsasat31stMarch,2008 Notfunded Notfunded Presentvalueofobligationasat31stMarch,2008. 13,76,000 9,78,000 AmountrecognizedinBalanceSheet 13,87,348 9,78.747

34

Gratuity Leave Encashment

(Rs) (Rs) c. Expenses recoginsed during the year

Currentservicecost 2,22,000 4,42,000 Interestcost Nil 59,000 Expectedreturnonplanassets Nil Nil Actuarial(gain)/loss -9,000 2,28,000 Netcost 2,13,000 7,29,000 Actuarial method Projected Unit Creditd. Actuarial assumptions For Gratuity 31.03.2007 31.03.2008 Discountrateperannumcompound 7.50% 7.50% Rateofincreasesalaries 15.00% 15.00% Expectedaverageremainingworkinglivesofemployees(years) 21.09 WithdrawalRates Varyingbetween2%perannumand

1%perannumdependingonduration andageoftheemployees

For Leave Liability

31.03.2007 31.03.2008

Discountrateperannumcompound 7.50% 7.50% Rateofincreasesalaries 15.00% 15.00% Expectedaverageremainingworkinglivesofemployees(years) 13.00 21.09 WithdrawalRates Varyingbetween2%perannumand

1%perannumdependingonduration andageoftheemployees

B. Defined Contribution Plans

ThecontributionstoDefinedContributionPlansrecognizedasexpensesintheProfit&Lossaccountfortheyearended31stmarch,2008areasfollows:

Nature of contributions Rs.

Employers’contributionstoProvidentFund 5,71,839.00

Employers’contributionstoPensionFund 3,95,064.81

f. Certain confirmation of balances from Sundry Debtors, Loans & Advances, Deposits and Sundry Creditors, includingAdvancesreceivedfromCustomersareawaitedandtheaccountreconciliationofsomeparties,whereconfirmationshavebeenreceived,areinprogress.Adjustmentfordifferences,ifany,arisingoutofsuchconfirmation/reconciliationwouldbemadeintheaccountsonreceiptoffinalagreedbalances/reconciliation.Themanagementisoftheopinionthattheimpactofadjustment,ifany,isnotlikelytobesignificant.

Furthermore, in theopinionof themanagement,allcurrentassets, loansandadvances includingadvancesoncapitalaccounts,wouldberealizedatthevaluesatwhichthesearestatedintheaccountsintheordinarycourseofbusiness.

g. Managing Director’s Remuneration :

Particulars 2007-08 2006-07

Rs. Rs.

(i) Salary 13,20,000 13,10,000

(ii) ContributiontoProvidentFund 1,58,400 1,57,200

(iii) Monetaryvalueofperquisites - -

Total 14,78,400 14,67,200

35

h. Miscellaneous expenses include -

Particulars 2007-08 2006-07 Rs. Rs.

(a) Amountpaid/payabletoAuditors

(i) StatutoryAuditFee 90,000 75,000

(ii) TaxAuditFee 20,000 20,000

(iii) OtherCertificates 55,500 55,500

(iv) ReimbursementofExpenses[(IncludingService-Tax

Rs.23,510)2006-07-Rs.21,655] 48,510 46,655

Total 2,14,010 1,97,155

(b) DirectorsFees 2,64,000 2,00,000

i. ThecompanyhasenteredintoaleaseagreementforobtainingapossessionofapremiseatSaltLake,Kolkataforoneofitsretailshop.Thefutureminimumleasepaymentforthesaidleasedpremiseareasfollows:

Sr. no. Duration Amount

1. Notlaterthanoneyear; 17,80,200

2. Laterthanoneyearandnotlaterthanfiveyears 78,74,718

3. laterthanfiveyears 155,49,281

j. TheCompanyispredominantlyengagedintradingoffruitproducts,calciumcarbideandcharcoal. Accordingly revenues fromtheaboveproductscomprise theprimarybasisofsegmental information in thesefinancial

statements. Thecompanyhasnoexportsalesandassuchtherearenoreportablegeographicalsegments. Segmental Revenue, Segmental Results, Segmental Assets and Segmental Liabilities include the respective amounts

identifiabletoeachofthesegmentstotheextentpossible,asalsoamountsallocatedonareasonablebasis. Thenetexpenses,whicharenotdirectlyattributabletotheBusinessSegment,areshownasunallocatedcorporatecost. ItisnotpossibletoallocateAssetsandLiabilitiesoftheCompanybetweentheSegmentsandthereforetheyaretreated

entirelyasunallocatedCorporateAssetsandCorporateLiabilitiesrespectivelyandconsequentlytheyarenotdisclosedseparatelyhere.

Particulars Fruit Products Carbide Charcoal Others C3-Retail Total

(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.)

Revenue 21,34,26,135 3,60,67,099 4,45,04,467 69,79,230 15,83,14,038 45,92,90,969

(PreviousYear) (18,31,99,479) (3,75,59,207) (4,31,48,980) (84,06,487) (18,49,98,693) (45,73,12,846)

Profitonsaleof - - - (8,27,91,584) - (8,27,91,584)

Investment

Operating Expenses 19,19,97,154 3,07,09,000 4,19,62,000 6,33,634 18,26,11,338 44,79,13,126

(PreviousYear) (19,60,28,000) (3,58,68,000) (4,11,96,000) (96,67,465) (19,72,90,000) 48,00,49,465

Operating Income 2,14,28,981 53,58,099 25,42,067 63,45,996 -2,42,97,300 1,13,77,843

(PreviousYear) (-1,28,29,521) (16,91,207) (19,52.980) (8,15,30,606) (-1,22,91,307) (6,00,54,965)

Un-allocable Expenses 67,95,556

(PreviousYear) (1,36,17,989)

Net Profit Before Tax 45,82,287

(PreviousYear) (464,36,976)

Income Tax (including Deferred Taxation and Fringe Benefit Tax) 13,41,448

(PreviousYear) 52,06,686

Prior Period & Extra-ordinary items 1,51,97,714

(PreviousYear) --

Net Profit / (-) Loss After Tax -1,19,56,875

(PreviousYear) (4,12,30,290)

36

k. Related Parties Disclosure AsperAccountingStandard-18‘RelatedPartyDisclosures’issuedbytheInstituteofCharteredAccountantsofIndia,the

namesoftherelatedpartiesaregivenbelow:

Nature of relationship Names of the related parties

Key management Personnel lDashoTopgyalDorji lDashoWangchukDorji

Enterprise in which key Management lBhutanFruitProductsPrivateLimited Personnel have significant influence lBhutanCarbideandChemicalsLimited lBhutanFerroAlloysLimited lTashiInfocomLtd. lTashiCommercialCorporation–SuperMarket lTashiCommercialCorporation lTaiProjectsPrivateLimited lBhutanEcoVenturesPvt.Ltd. lRijalTashiIndustriesPvt.Ltd. lTashiMetalsLimited lBhutanBreweryPvt.Ltd. lTashiBeveragesCompanyLimited. lDrukPlasterandChemicalsLimited.

lDrukSatAirCorporationLimited. lBhutanToursimCorporationLimited.

Thefollowingtableprovidesthetotalamountoftransactions,whichhavebeenenteredintowithrelatedpartiesfortherelevantfinancialyear:-

Enterprise in which Key Management Key Management Personnel Personnel have significant influence Fortheyearended Fortheyearended Fortheyearended Fortheyearended 31.03.2008 31.03.2007 31.03.2008 31.03.2007 Rs. Rs. Rs. Rs. Purchaseofgoods 7,82,70,014 7,45,88,420 SaleofGoods 3,42,12,467 Nil RenderingofServices 5,40,350 5,08,240 CommissionReceived 1,38,81,661 1,37,51,829 RoyaltyPaid 1,91,287 2,35,577 AdvancetorelatedParty 3,36,45,103 7,50,85,467 OutstandingBalanceDuetoCompany 11,47,32,823 14,47,84,592 OutstandingBalancePayablestoCompany 14,04,23,750 12,41,73,944 Remunerations-DashoTopgyalDorjiDashoWangchukDorji 13,20,000 13,10,000Director’sSittingFees-DashoTopgyalDorji 24,000 24,000DashoWangchukDorji Nil Nil

l. Earnings Per Share (EPS)

Particulars 2007-08 2006-07 Rs. Rs.

Profit(Loss)afterTaxattributabletoEquityShareholders (11,956,575) 41,230,290 WeightedAveragenumberofEquityShareOutstanding 60,00,000 60,00,000 EPS–Basic&diluted(Rs.). (1.99) 6.87

37

m.DuringthelastthreepreviousyearsthecompanyhadreceivedtheapprovalfromtheCentralGovernmentexemptingitfromthedisclosuresofquantitativeinformationasrequiredunderparagraph3(ii)bofPart-IIofSchedule-VIoftheCompaniesAct,1956.InthecurrentyearthecompanyhasappliedtotheCentralGovernmenton3rdMarch,2008forthesameexemption,thereplyofwhichisstillawaited.Inviewofthistherequiredquantitativeinformationisnotdisclosedinthefinancialyear2007-2008also.

n. TheValueofclosingstockamountingtoRs.43,180,701/-iscertifiedbythemanagementofthecompanyandisincludedinthestockoftradedgoods.

o.TheextraordinaryitemsrepresentsprovisionforstockamountingtoRs.143,78,087/-,damagedduetofloodinrespectofwhichclaimhasalreadybeenlodgedwiththeinsurancecompany.Theinsurancecompanyhascompletedthenecessaryformalitiesregardingtheexaminationbythesurveyorbutthesettlementofthesameisstillpending.

p. (a) Previousyearsfigureshavebeenregrouped/rearranged,wherevernecessarytoconformcurrentyear’spresentation.

(b) Figuresinparenthesisrepresentpreviousyear’sfigures.

InformationpursuanttoPartIVofScheduleVItotheCompaniesAct,1956.

Balance Sheet Abstract and Company’s General Business Profile:

(I) Registration Details RegistrationNumber 59695 StateCode 21 BalanceSheetDate 31.3.2008

(II) Capital raised during the year (Amount in Rs.thousands) PublicIssue Nil RightsIssue Nil BonusIssue Nil PrivatePlacement Nil

(III) Position of mobilization and deployment of funds (Amount in Rs.thousands) TotalLiabilities 153512 TotalAssets 153512 Sources of Funds Paid-upcapital 60000 ReservesandSurplus 88645 SecuredLoans 4867 UnsecuredLoans Nil

Applications of funds NetFixedAssets 26542 Investments 8631 DeferredTaxAsset 46 NetCurrentAssets 118292 Miscellaneousexpenditure Nil AccumulatedLosses Nil

(IV) Performance of the Company (Amount in Rs.thousands) Turnover(includingotherincome) 459291 Totalexpenditure 469906 Profit(+)/loss(-)beforeTax (-)10615 Profit(+)/loss(-)afterTax (-)11956 Earningpershare(inRs.)annualized (-)1.99 Dividendrate(%) Nil

(V) Generic names of the principal products and/ services of the company as per monetary terms:

Itemcodeno.(ITCCode) NotApplicable Productdescription NotApplicable

SignaturestoSchedules1to21

ForRAY & RAY Chartered Accountants

ABHIJIT NEOGI Partner Membership No. 61380

Place : Thimpu,Bhutan Date : 25thJune,2008

ForandonbehalfoftheBoard

WANGCHUK DORJIManaging Director

VINAY KILLADirector

INDIRA BISWASCompany Secretary

38

Addendum to the Accounts for the year ended 31st March, 2008.

ToTheMembers

YourDirectorswish todrawyourattention toNote2mofSchedule21of theAccounts for theyearended

31stMarch,2008.

Ithasbeenstated inthesaidnotethatduringthe lastthreepreviousyearstheCompanyhadreceivedthe

approvalfromtheCentralGovernmentexemptingitfromthedisclosuresofquantitativeinformationasrequired

underparagraph3 (ii)bofPart– IIofSchedule–VIof theCompaniesAct,1956. Intheyearunderreview

theCompanyhasappliedtotheCentralGovernmenton3rdMarch,2008forthesameexemption,thereply

of which is still awaited. In view of this the required quantitative information is not disclosed for the year

2007–2008.

YourDirectorsnowwishtoinformyouthatpursuanttoanapplicationdated3rdMarch2008,undersection

211(4)of theCompaniesAct,1956,yourCompanyhas received from theCentralGovernment,Ministryof

CorporateAffairs,theirOrderNo.46/116/2008–CL–IIIdated10thJuly,2008exemptingyourCompanyfrom

disclosingthequantitativedetailsenvisagedinpara3(ii)(b)ofPartIIofScheduleVItotheCompaniesAct,1956.

AccordinglytheinformationpublishedintheAccountsfortheyearended31stMarch,2008isinconformity

withtherequirementsofthesaidOrder.

ForandonbehalfoftheBoard

WANGCHUK DORJIManaging Director

VINAY KILLADirector

INDIRA BISWASCompany Secretary

Place : KolkataDate : 24thJuly,2008