KILLICK NIXON LIMITED · Companies (Special Provisions) Act, 1985 (SICA) vide the order of BIFR dated 29-8-2006. BIFR BIFR has appointed IDBI as the Operating Agency to prepare a

KILLICK NIXON LIMITED SIXTY SECOND ANNUAL REPORT AND ACCOUNTS 2009-10

KILLICK NIXON LIMITED

SIXTY SECOND ANNUAL REPORT 2009-10

CONTENTS Board of Directors … … … 2

Notice … … … 3

Directors’ Report … … … 4-6

Corporate Governance … … … 7-12

Auditors’ Certificate on Corporate Governance … … … 13

Auditors’ Report … … … 14-19

Balance Sheet … … … 20

Profit & Loss Account … … … 21

Schedules … … … 22-29

Principal Accounting Policies and Notes to Accounts … … … 30-36

Statement Pursuant to Section 212 … … … 37

Balance Sheet Abstract … … … 38

Cash Flow Statement … … … 39-40

SUBSIDIARY COMPANIES

Killick Exports Limited … … … 42-55

Killick Infotech Limited … … … 56-69

Killick Challangers and Technologies Ltd. … … … 70-85

Killick Impex Limited … … … 86-95

Killick Power Limited … … … 96-105

Killick Agencies and Marketing Limited (formerly known as Killick Ports Limited)

… … … 106-119

Killick Financial Services Limited … … … 120-131

Killick Prestressing Private Limited … … … 132-140

Killick Air Couriers and Forwarders Limited … … … 141-153

Killick Engineering Limited … … … 154-169

Lodestar Slotted Angles Limited … … … 170-186

Filtrona India Limited … … … 187-198


BOARD OF DIRECTORS

T. B. Ruia Chairman V. K. Agarwalla Director R. P. Agarwalla Director J. B. Shah Director

ASST. COMPANY SECRETARY

Vaibhav Singhai

BANKERS

Axis Bank Ltd.

Allahabad Bank

ADVOCATES & SOLICITORS

M/s. SHEL DON LAW FIRM New Delhi

REGISTERED OFFICE :

Basement, Commercial Union House, No.9, Wallace Street, Fort,

Mumbai - 400 001. Tel.: 22072311 / 22075201, Fax : 22075204

Email : [email protected]

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NOTICE NOTICE is hereby given that the Sixty second Annual General Meeting of KILLICK NIXON LIMITED will be held on Thursday, the 30th September, 2010 at 5.00 p.m. at Conference Hall, KEL House, Plot No.7, Opp.: Oberoi Garden Estates, Chandivali Farm Road, Chandivali, Andheri (E), Mumbai - 400 072 to transact the following business :

ORDINARY BUSINESS : 1. To receive, consider and adopt the Audited Profit & Loss Account for the year ended 31st March, 2010

and Balance Sheet as at that date together with the Reports of Board of Directors and Auditors thereon. 2. To appoint a Director in place of Mr. T. B. Ruia who retires by rotation and being eligible offers himself

for reappointment. 3. To appoint Auditors and fix their remuneration.

By Order of the Board of Directors Place : Mumbai Dated : 1st September, 2010

Vaibhav Singhai Registered Office : Asst. Company Secretary Basement, Commercial Union House, No.9, Wallace Street, Fort, MUMBAI - 400 001. 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 ON A POLL ONLY AND A PROXY NEED NOT BE A MEMBER.

2. The instrument appointing a proxy affixed with proper Stamp Duty must be submitted at the Registered Office of the Company not later than 48 HOURS before the commencement of the Meeting.

3. The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, the 25th September, 2010 to Thursday, 30th September, 2010, (both days inclusive).

4. Dematerialisation : Equity Shares of the Company are available for dematerialisation through depository participant. The said Shares bear the International Securities Identification Number INE 982A01011 allotted by National Securities Depository Ltd.

5. Nomination : The Companies (Amendment) Act 1999 has introduced through Section 109 A, the facility of nomination to shareholders. Such facility is mainly useful for the investors holding the shares in single name. They are advised to avail this facility to avoid process of transmission by law. Investors holding shares in physical form may send the nomination form duly filled in and signed to the Company Secretary at the Registered Office of the Company (Prescribed form 2B). However, if shares are held in dematerialised form, the nomination has to be submitted to the depository participant of the National Securities Depository Ltd. as per format prescribed by them.

6. Members are requested to notify immediately any change in their address to the Company’s Registrar and Transfer Agents viz., Bigshare Services Pvt. Ltd., E2 &3, Ansa Industrial Estate, Saki-vihar Road, Saki Naka, Andheri (E), Mumbai - 400 072. Tele.:91-22-2847 0652 / 40430200 / 28470653. Fax : 91-22-2847 5207. E-mail : [email protected]. Our RTA, Bigshare Services Private Limited recently launched Gen-Next Investor Interface Module ‘’i’Boss’’ the most advanced tool to interact with investors. Please login into I’Boss (www.bigshareonline.com) and help them to serve you better.

7. The shareholders who have so far not obtained new share certificate of face value of Rs.10/- on subdivision, are requested to surrender their old share certificates of the face value of Rs.100/- so that they may be issued new share certificates in exchange of old ones.

8. Members desirous of having any information regarding accounts are requested to address their queries to the Company Secretary at the registered office of the Company at least 7 days before the date of the meeting in order to facilitate clarification during the meeting.

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DIRECTORS’ REPORT

Your Directors have pleasure in presenting their Annual Report together with the audited Statements of Account for the year ended 31st March, 2010 : PERFORMANCE OF THE COMPANY FINANCIAL RESULTS:

Previous Year Rupees Rupees Rupees Rupees Total Income ... ... ... ... ... 42,404,969 45,173,043 (Loss)/Profit for the year ended 31st March, 2010 before providing for Interest, Depreciation and Doubtful Debts and Writing off Bad Debts and Advances amounts to ... ...

(11,911,689)

(24,962,562) Deducting therefrom : Bad debts and advances written off ... ---- ----

Interest ... ... ... ... ... 1,002,280 182,252

Depreciation (net) ... ... ... ... 597,258 539,045

Loss on sale of Investments ----- (1,599,538) 4,500,707 (5,222,004)

Total Expenses (13,511,227) (30184566) Less : Provision for Taxation for prior years ... ---- 247,476 Deferred Tax for the year ---- ---- Operating Profit/ (Loss) for the year amounts to (13,511,227) (30,432,042)

Dividend: In view of huge losses during the current year, there is no recommendation for any Dividend.

OPERATIONAL VIEW Depsite the downtrends, the Company is confident that the Company’s Engineering Division can be reviewed and revive the Engineering Unit which would attract good response from the customers and in view of the present infrastructure projects coming up in India, the Company hopes to derive benefits once the litigation pending in the Supreme Court of the Custodian matters are resolved. The Management is trying its best to resolve matter in the circumstances and is burdened with heavy legal expenses. The litigation with the labour are going on, and pending in various Labour Courts. The Company is examining with its Auditors a proposal to merge aggregate/sell certain subsidiaries of the Company to remove the burden of the Company and realize some funds. The Company has written-off the non-recoverables over the years which has resulted in a increase in the loss of the business. The Notes to the Accounts are fully self-explanatory, and the Director’s feel that no further clarification is required on the said Notes. The Management is confident of turning around the Company in the ext 5 to 7 years. LEGAL 1) We have already admitted under BIFR now Rehabilitation Scheme is pending due to various

litigations with the Custodian. 2) Our appeal in Supreme Court against the appropriation of dues under decree was ruled

against us and the refund expected by the Company as reported earlier is now lost. The decrees are still not marked satisfied. Pending the appeal of GTB (Oriental Bank of Commerce) against sale of buildings by the Special Court, the Company has made expeditious applications in Supreme Court and we expect a hearing soon.

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SUBSIDIARIES: Pursuant to Section 212 of the Companies Act, 1956, the Balance Sheet and Profit and Loss Account of the Subsidiary Companies together with the Directors and Auditors’ Report thereon are attached with the Annual Report of your Company. Deposits: During the year the Company did not invite any deposits from public. Statutory information/disclosures: There were no employees drawing a remuneration exceeding Rs.24 Lakhs per annum when employed for the whole year or Rs.2 Lakhs per month when employed for part of the year and hence, no disclosure under Section 217(2A) of the Companies Act, 1956 is made. Information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given below: (A) Conservation of Energy: The Company's manufacturing operations require low Energy

consumption and there are no specific areas, where energy conservation measures could be significantly undertaken. As an ongoing process efforts are made to conserve and optimize the use of the energy through improved operations and other means.

Disclosure of total energy consumption and energy consumption per unit of production as per Form A is not applicable to the Company.

(B) Technology absorption, adaptation & innovations: The Company did not have any Technical Collaboration arrangement in force during the year under review and therefore disclosure under Form B is not applicable.

(C) Foreign Exchange earnings and outgo: (i) Activities relating to exports etc: Exports during the year were not significant but the Company hopes to improve the same. (ii) Foreign exchange used and earned:

2009-10 2008-09 (Rupees) (a) Used Expenditure in Foreign Currency for Traveling --- --- (b) Earned Export of goods on F.O.B. basis --- --- Commission & other earnings --- ---

REFERENCE TO B.I.F.R. The Company has been declared a “Sick Company” under Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) vide the order of BIFR dated 29-8-2006. BIFR has appointed IDBI as the Operating Agency to prepare a viability study report and revival scheme for the Company which is in progress and awaiting the final Supreme Court orders in the Custodian matters. Directors’ Responsibility Statement pursuant to Section 217(2AA) of the Companies Act, 1956. The Directors confirm :

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1. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

3. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that they have prepared the annual accounts on a going concern basis. Corporate Governance: The information/details as required under the Corporate Governance Code is given in the Annexure and forms part of this Report. Auditors M/s. NBS & Co., Chartered Accountants, Statutory Auditors of the Company holds office until the conclusion of the ensuing Annual General Meeting, and is eligible for re-appointment. The Company has received their consent under section 224 (1B) of the Companies Act, 1956 for such re-appointment. Auditors' Report: The Directors have taken a note of the observations made by the Auditors in their report. In this connection attention is drawn to the relevant Notes to Accounts, which are self-explanatory. Acknowledgements: The Board records its appreciation for the support received from its Bankers, Customers, Suppliers, Government Authorities etc. For and on behalf of the

Board of Directors Place : Mumbai Dated : 1st September, 2010

T. B. RUIA Chairman

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ANNEXURE to Directors’ Report

CORPORATE GOVERNANCE Company’s Philosophy on code of governance: The Company’s philosophy on Code of Governance envisages attainment of highest level of transparency, accountability and equity in all its interactions with its stakeholders including shareholders, employees, government authorities and lenders. Board of Directors: Composition: The Company’s Board consists of 4 Directors of which two are Non-Executive Independent Directors. The Chairman is a Non-Executive, Promoter Director. Number of Board Meetings : The Company’s Board met six times during the year on 30-04-2009, 31-07-2009, 31-08-2009, 30-10-2009, 29-01-2010 and 31-03-2010 respectively. Details about Board of Directors :

Name of Director

Position No.of Board

Meetings attended

Whether Attended

last AGM

Directorships in other

Companies

Memberships in Board

Committes of other

Companies Mr.T.B.Ruia Non-Executive

Chairman/Promoter

6

No

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4 Mr.V.K. Agarwalla

Non Executive Independent

2

No

Nil

Nil

Mr.R.P. Agarwalla


2

No

Nil

Nil

Mr. J. B. Shah


6 Yes 2 Nil

Details of Directors seeking appointment/ reappointment in the Sixty Second Annual General Meeting (in pursuance of Clause 49 of the Listing Agreement) NAME OF THE DIRECTOR

Mr. T. B. Ruia

Date of Birth 01/06/1947 Qualifications Date of Appointment

01/11/1996

Experience/ Expertise

More than 4 decades of experience in the industry and other fields.

Committees of the Board Audit Committee: Brief description of terms of reference: To oversee the periodical financial reporting process, recommending the appointment/removal of external auditors and fixation of audit fee, review of accounting policies, adequacy of internal control systems, scope of internal audit and the major findings of the internal/statutory audits.

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Composition, names of members and Chairman: The Audit Committee consists of 2 Non-Executive Independent Directors Viz. Mr.V.K.Agarwalla (Chairman), and Mr.J. B. Shah. Meetings and attendance during the year The Committee met 4 (Four) times during the financial year. Two Members attended all the four meetings. Remuneration Committee: Brief description of terms of reference: To determine the remuneration of the Managing/Whole-time/Executive Directors from time to time and recommend the same to the Board for approval. Composition, names of members and Chairman: The committee consists of the following Non-executive Independent Directors: Mr. V. K. Agarwalla – Non Executive Mr. J. B. Shah – Non Executive Attendance during the year: Since there were no issues concerning the remuneration of the Managing/Wholetime Executive Directors during the year, the committee did not have any meetings during the financial year. A. : There is no Executive Director after 01.09.2005. B. Non Whole-time Directors: No Sitting fees paid during the financial year. Shareholders’ Grievances Committee: The Shareholders’ Grievances Committee is headed by Mr. V. K. Agarwalla, a Non-executive Independent Director. Mr. Vaibhav Singhai has been appointed as Asst. Company Secretary and the Compliance Officer with effect from 16th June, 2010. Mr. K. S. Venkatewaran is ceased to be the Company Secretary and Compliance Officer with effect from 15th June, 2010 Analysis of Shareholders’ letters/complaints : Sr. No

Nature of letter/complaint No. of Compl. Received

No. of Compl. Resolved

N I L N I L N I L General Body Meetings: Location, time and venue of last three Annual General Meetings: May 5, 2010 at Conference Hall, KEL House, Plot No.7, Op. Oberoi Garden Estates, Chandivali Farm Road, Chandivali, Andheri (E), Mumbai-400 072 at 3.00 p.m. ( 61st Annual General Meeting)

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May 5, 2010 at Conference Hall, KEL House, Plot No.7, Op. Oberoi Garden Estates, Chandivali Farm Road, Chandivali, Andheri (E), Mumbai-400 072 at 2.00 p.m. (Continuation of Adjourned 60th Annual General Meeting) May 5, 2010 at Conference Hall, KEL House, Plot No.7, Op. Oberoi Garden Estates, Chandivali Farm Road, Chandivali, Andheri (E), Mumbai-400 072 at 12.00 noon. (Continuation of Adjourned 59th Annual General Meeting) Special Resolutions passed in the previous three Annual General Meetings :

Brief description of the items considered Date of the Meeting NIL N.A.

Disclosures on materially significant related party transactions: None of the transactions with any of the related parties were in conflict with the interests of the Company. Means of Communication: The Company normally used to publish its quarterly/half yearly results in `The Free Press Journal’ and `Navshakti’. As a cost cutting measure, the company does not send these results to each household of shareholders since they are already being published every quarter in the aforesaid newspapers. The results for the quarter ended 31.3.2010 were not published because of cost restraints. The Management Discussion and Analysis report forms part of this Annual Report. GENERAL SHAREHOLDERS’ INFORMATION Proposed Annual General Meeting Date: 30th September, 2010 Time:5.00 p. m Venue: KEL House, Plot No.7, Chandivali Farm Road, Chandivali, Andheri (E), Mumbai – 400 072 Financial Calendar Board Meeting for consideration of Accounts for the year ended 31st March 2010: 1st September, 2010 Book Closure Dates: 25th September, 2010 to 30th September, 2010 ( both days inclusive) Last date for receipt of Proxy Forms: 28h September, 2010 Dividend Payment (if any) date: Not Applicable Listing on Stock Exchanges: The Company’s Shares were earlier listed in The Mumbai Stock Exchange. The Equity Shares of the company has been suspended from trading w. e. f. 11.09.2006 for non compliance of certain clauses of Listing Agreement. Every effort is made by the Company to resume trading in the Stock Exchage. Stock Code : 501316 International Securities Identification Number (ISIN) : INE 982A01011

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Market Price Data:

Month High Rs.

Low Rs.

April, 2009 - - May,2009 - - June,2009 - - July,2009 - - August,2009 - - September,2009 - - October,2009 - - November, 2009 - - December, 2009 - - January, 2010 - - February, 2010 - - March, 2010 - - Registrar and Transfer Agents Big Share Services Pvt. Ltd. E-2,Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri(East) Mumbai-400 072 Maharashtra, India Telephone:91-022-285723474/28470652 Fax: 91-022-28525207 E-mail : [email protected]. Our RTA, Bigshare Services Private Limited recently launched Gen-Next Investor Interface Module ‘’i’Boss’’ the most advanced tool to interact with investors. Please login into I’Boss (www.bigshareonline.com) and help them to serve you better. Share Transfer System Share Transfer applications are processed by the Company’s Transfer Agents. The Company’s Secretarial Department works in close co-ordination with the Transfer Agents to ensure that the shares lodged for transfer are duly transferred and despatched within 30 days of its lodgement. In compliance with the Listing Agreement, a Practising Company Secretary audits the system every six months and a certificate to that effect is obtained. Distribution of Shareholding Promoters: 33.08% Financial Institutions/ Banks: 15.63% NRI’s/OCB’s 0.19% Other Bodies Corporate 17.90% Indian Public 33.20% Dematerialisation of Shares and liquidity To facilitate the investors to have an easy access to the demat system, the Company has joined with both the Depositories viz. National Securities Depository Limited (NSDL) and Central depository Services (India) Limited (CSDL).The Company has established connectivity to both the Depositories through the Registrars, Big Share Services Pvt. Ltd., Mumbai. On an average, the demat process is completed within 10 days of receipt of a valid demat request along with the documents. Shareholders who are holding the shares in demat form are advised to contact their

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respective Depository Participants where they maintain their demat accounts and intimate any change of address, change of mandate and for demat enquiries. Plant Locations Nil Address for Correspondence Corporate Office: KILLICK NIXON LIMITED KEL House, Plot No.7, Chandivali Farm Road, Chandivali, Andheri (E), Mumbai – 400 072. Telephone: 911-022-40937340/28470704 Fax: 911-022-28573551 E-mail: [email protected] Website: www.killicknixon.com Compliance Officer: Vaibhav Singhai Asst. Company Secretary KILLICK NIXON LIMITED KEL House, Plot No.7, Chandivali Farm Road, Chandivali, Andheri (E), Mumbai – 400 072. Telephone: 911-022-40937340/28470704 Fax: 911-022-28573551 E-mail: [email protected] MANAGEMENT DISCUSSION AND ANALYSIS Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement is as under : i. Industrial Structure and Developments

Presently the Company does not have any manufacturing activity ii. Opportunities and Threats

With the increased activities in major infrastructure work and opening up the Industry to private parties, the opportunities are encouraging. However, the growth of the industry depends on Government spending and availability of finance. To meet stiffer competition switch over to advanced technology is imminent.

iii. Segment-wise or Product-wise performance Segmentwise Turnover

Segment 2009-2010 (Rs.in Lakhs) Trading --- Service 320.41 Others 103.64 Total 424.05

iv. Outlook, risks and concerns The outlook for the Construction and related Industries is quite encouraging with enormous growth potential. However, this is entirely dependant on Government spending and timely availability of funds. There is no significant recovery in the Shipping Industry.

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v. Internal Control Systems and their adequacy : As an ongoing process the Company is streamlining the internal control systems commensurate with the size of its business.

vi. Discussion on financial performance with respect to operational performance The year 2009-10 continued to be difficult for the Company. There was a loss of Rs.135.11 lakhs compared to a loss of Rs.304.32 lakhs in the previous year.

vii. Material developments in Human resources/Industrial relation front : There were only 2 employees on the rolls of the Company. The Company had transferred most of its staff to other group companies so as to cut the employee cost burden The Company has been declared a sick unit by BIFR and there is no activity in the Company except for some rental income and realizations of old outstandings from its group companies.

viii. Cautionary Statement :

Any statement made in this Report relating to the Company’s objectives, projections, outlook, expectations, estimates etc., may constitute `forward looking statements’ within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections etc, whether express or implied. Important factors that could make a difference to the Company’s operations include availability of finances, government policies, demand/supply, taxation and other incidental factors over which the Company may not have any direct control.

For and on behalf of the Board of Directors

Place : Mumbai Dated :1st September, 2010

T. B. RUIA Chairman

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AUDITORS’ CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENT TO THE MEMBERS, KILLICK NIXON LIMITED 1. We have examined the compliance of conditions of Corporate governance by Killick Nixon

Ltd., for the year ended on 31st March, 2010 as stipulated in Clause 49 of the listing agreement of the said Company with Mumbai Stock Exchange (hereinafter referred to as ‘the agreement’).

2. The Compliance of conditions of Corporate Governance is the responsibility of the

management. Our examination was limited to the procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

3. In our opinion and based on our review and to the best of our information and explanations

given to us and subject to Para 4 below, we certify that the conditions of Corporate Governance as stipulated in the Clause 49 of the agreement have been complied with in all material aspects by the Company.

4. Attention is invited to the following:

(i) The following stipulations of para II of the Clause 49 of the agreement were not complied with : (a) No remuneration committee meeting was needed to be held during the year. (b) Four Audit Committee meetings were held during the year but the external auditor

or his representative was not invited. (c) There are only two members in the Audit Committee instead of three as required

by law. 5. 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 NBS & Co. Chartered Accountants

Devdas Bhat

Place: Mumbai Partner Dated: 1st September, 2010 M. No. 48094

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AUDITOR’S REPORT TO THE MEMBERS, KILLICK NIXON LIMITED We have audited the attached Balance Sheet of Killick Nixon Limited, as at 31st March 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date 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. A. We conducted our audit in accordance with auditing standards generally accepted in India.

These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

B. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central

Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

C. Further to our comments in the Annexure referred to above, we report that:

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. i) In our opinion, proper books of account as required by law have been kept by the

Company so far as appears from our examination of the books of the Company;

ii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account of the company;

iii) In our opinion, the Balance Sheet, Profit and 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, except for the following; (a) Adequate Provision for permanent diminution in the value of Investments has

not been made as required under Accounting Standard No. 13 - 'Accounting for Investments' issued by The Institute of Chartered Accountants of India (see para C(v)(ii)(b) below);

(b) Provision for deferred Tax asset/liability has not been made according to the requirement of Accounting Standard No. 22 - ‘Accounting for Taxes on Income’ issued by The Institute of Chartered Accountants of India. (See para C(v)(ii)(f) below);

(iv) On the basis of written representations received from the directors as on March 31, 2010 and taken on record by the Board of Directors and as per information and explanations given to us, we report that none of the Directors is, as at 31st March 2010, 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) We invite attention to the followings;

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i) The company has given inter-corporate loans and advances and guarantees and made investments in other corporate bodies in excess of limits laid down under section 372A of the Companies Act, 1956 without proper compliance of the provisions of the Section.

ii) No provision has been made in the accounts for: a. Disputed sales tax and income tax matters aggregating to Rs.

854,137,008/- (refer to Note No. 1 (g) and 1 (h) of the Notes to Accounts).

b. The diminution in the value of investments aggregating to Rs. 35,741,849/- (previous year Rs. 35,741,849/-) made in six subsidiary companies whose latest available Balance Sheets show huge negative net worth due to accumulated losses (refer to Note No. 4 a). In our opinion there is a permanent diminution in the value of these investments for which provision should have been made in accordance with the Accounting Policy of the Company and also Accounting Standard No. 13 issued by The Institute of Chartered Accountants of India.

c. During the Year 06-07 the Custodian had submitted Final Accounts detailing the funds raised through disposal of properties and direct remittance through bank in accordance with the decree passed by the court. The account also showed the payment made to notified parties. The payment includes principal and interest thereon at the rate prescribed by the court. In the final analysis the custodian made a claim of Rs. 1,73,50,963/- on the company. The company has not admitted the claim. The company had made independent calculation amounts payable to the notified parties. As per the calculations certified by Chartered Accountant the company has made excess payment and has filled a counter claim to the custodian for Rs. 4,172,390/-. The matter is still not resolved.

d. The interest including Penal interest in respect of debts of Global Trust Bank, Ratnakar Bank, Public Deposits and Inter Corporate Deposits aggregating to Rs. 128,305,584/- (previous year Rs. 128,305,584/-).

e. Deferred Tax Liability/Asset has been provided only on Depreciation based on timing differences.

f. The Company has not provided for Fringe Benefit Tax (FBT) payable for the year 2008-09 amounting to Rs. 152,455/- . The interest thereon amounting to Rs. 97,620/- till the date of signing the Balance Sheet has also not been provided.

g. The Company has not made provision in the accounts in respect of interest amounting to Rs.53,145,864 (Previous year Rs.53,145,864) on loans taken from Companies and others.

(vi) We are unable to express our opinion on the realisability or otherwise of Rs. 39,55,62,723/- (previous year Rs 40,76,21,015/-) included in advance and loans to others and advances and loans to subsidiary companies.

(vii) The Company had acquired during the year 2007-08 certain shares of its 13 associate companies (all unlisted) against their dues to the Company arising out of payments made to the Custodian on the account of the associate companies’ debts through the sale of assets of the Company. The value agreed by the Company to acquire the shares is much higher than the book value of the shares of the associate companies. We have been informed by the Company that the associate companies

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hold real estate assets which are not taken at their current value in their balance sheets and hence the value paid by the Company to acquire those shares appear higher. We have also been informed that the associates are also planning restructuring and strategic alliances which will bring the actual value of their shares on record. However no substantive evidence has been brought to our notice and in its absence, we are unable to comment on the fair market value of the shares acquired. ??/

(viii) (i) Without considering the items in Para C(iii)(a), C(v)(ii)(b),C(v)(ii)(e) and

C(vi), above, the effect of which could not be determined, had our observations in para C(v)(ii)(a), C(v)(ii)(c), C(v)(ii)(d), C(v)(ii)(f) and C(v)(ii)(g) above been considered, the loss for the year would have been Rs.1,066,700,721/- (as against the reported Loss of Rs. 13,511,227/- ). Further the debit balance in Profit and Loss Account at the end of the year would have been Rs.1,447,821,022/- (as against the reported debit balance figure of Rs. 380,064,189/-), current liabilities and provisions would have been Rs. 1,198,747,180/- (previous year Rs. 1,757,800,363//-) as against the reported figure of Rs. 138,005,327/- (previous year Rs. 15,302,545 (ii) Despite the loss for the year under review and in the previous years, and diminution in value of assets, investments, Loans & Advances, various litigations before the Hon’ble Special Court and Debt Recovery Tribunal, overdue liabilities and taking into consideration the discontinuation of distribution agreement w.e.f. 1/5/ 2002 in respect of its paint products, the agreement for reimbursement of expenses having expired w.e.f. 31.10.2002, the accounts of the company have been prepared on a going concern basis. Further the company’s ability to continue as a going concern would depend upon the appropriate steps taken by the management.

(ix) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the Notes and Significant Accounting Policies thereon, give the information required by the Companies Act, 1956, in the manner so required and subject to our reservations expressed in para C (iii)(a)(b), C(v), C(vi) and C(vii) above give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b. In the case of the Profit and Loss Account, of the Loss for the year ended on that date.

c. In the case of the Cash Flow Statement, of the cash flow for the year ended on that date.

For NBS & Co. Chartered Accountants

Devdas Bhat

Partner M. No. 48094

Place : Mumbai Dated: 1st September 2010

15

ANNEXURE TO THE AUDITOR’S REPORT

(Referred to in paragraph “B” of Auditors’ Report of even date)

As required by the Companies (Auditor’s Report) Order, 2003 on the basis of such checks as we considered appropriate, we state that:

i. a) The company has maintained proper records showing full particulars including

quantitative details and situation of its fixed assets upto the financial year 1993-94. From the financial year 1994-95, movements in these assets and additions thereto have not been entered in these records and we are informed that the same will be updated.

b. We have been informed that the management, during the year, physically verified most of the fixed assets. We have also been informed that no material discrepancies were noticed on such verification. However, in our opinion, and in view of the comments in para (a) above, we are unable to comment as to whether the physical verification was reasonable.

c. We are informed that during the year, the company has disposed of some of the fixed assets. According to the information and explanations given to us, we are of the opinion that the sale of the said fixed assets has not affected the going concern status of the company.

ii. a) The inventory has been physically verified during the year by the management. In our opinion the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has not carried any inventory during the year.

iii. a) According to the information and explanations given to us the company has neither granted not taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. In view of the above, the requirements of clause 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the Companies (Auditor’s Report) Order, 2003 is not applicable for the year under audit.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and job work receipts. During the course of our audit we have not come across any continuing failure to correct major weaknesses in internal controls.

v. a) According to the information, explanations and representations given to us by the management we are of the opinion that there are no transactions that need to be entered into the Register maintained under Section 301 of the Companies Act, 1956.

b) According to the information, explanations and representations given to us by the management no transactions were made in pursuance of contracts or arrangements that need to be entered in the Register maintained under Section 301 of the Companies Act, 1956, exceeding the value of Rupees Five Lakhs in respect of any party during the year.

16

vi. The Company has not complied with the provisions of section 58A of the Companies

Act, 1956 in respect of payment of interest, maintenance of statutory liquid assets, application forms, deposit receipts and fixed deposit registers. The relevant details as to whether fixed deposits are cumulative or not were not made available for our verification, hence unable to comment. Further despite the ‘Net Owned Funds’ of the company being less than Rupees one crore it had accepted deposits however the company has not accepted any deposits during the year. Since the company has not accepted deposit from small depositors as defined under section 58 AA, defaults in repayment of deposits, compliance of section 58 AA or obtaining any order from the National Company Law Tribunal does not arise.

vii. The Company does not have an Internal Audit System. viii. The Central Government has not prescribed maintenance of cost records under Section

209(1)(d) of the Companies Act, 1956, for any of the products manufactured by the Company.

ix. According to the information and explanations given to us, dues relating to sales tax/customs duty/wealth tax excise duty/cess that have not been deposited on account of disputes with the related authorities have been shown in the table hereunder.

i. SALES TAX:

Sr.No. Year Amount(Rs.) Forum where dispute is pending (a) 1989-90 578,716/- Mah. Sales Tax Tribunal (b) 1991-92 375,689/- Dy. Comm. Sales Tax (Appeals) (c) 1992-93 795,805/- Honorable High Court, Mumbai (d) 1995-96 452,778/- Dy. Comm. Sales Tax (Appeals) (e) 1997-98 327,428/- Dy. Comm. Sales Tax (Appeals)

Total 2,530,470/- ii. INCOME TAX:

Sr.No. Year Amount(Rs.) Forum where dispute is pending (a) 2001-02 193,966,684 Income Tax Appellate Tribunal (b) 2001-02 291,097,043 Income Tax Appellate Tribunal (c) 2002-03 365,027,587 Income Tax Appellate Tribunal (d) 2003-04 1,415,224 Income Tax Appellate Tribunal (e) 2005-06 100,000 Income Tax Appellate Tribunal

Total 851,606,538 x. The Company has incurred cash losses during the current year and also in the

immediately preceding financial year. The accumulated losses exceed the net worth of the company.

xi. In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to Banks, Financial Institutions and the amounts overdue are as shown in the table hereunder.

Sr. No. Name of the Institution Amount (Rs.) (a) Global Trust Bank 9,86,21,000/- (b) Ratnakar Bank 35,65,185/- (c) M.P. State Industrial Development

Corporation 15,00,00,000/-

(d) Integrated 1,33,794/-

TOTAL 25,23,19,979/-

17

Note: The amounts mentioned are inclusive of interest wherever it has been duly accounted and excludes accrued interest not provided in the accounts and the said amounts are overdue for period of more than one year. The Company has not obtained any borrowings by way of debentures.

xii. According to the information and explanation given to us and based on our examination of documents and records, 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 nidhi / mutual benefit fund / society. Therefore the provisions of clause 4(xiii) of the order are not applicable to the company.

xiv. According to the information and explanations given to us the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable to the company.

xv. According to the information and explanations given to us and the representations made by the Management, the Company has given guarantees to Banks or financial Institutions for loans taken by another company in earlier years amounting to Rs 31,24,74,956 /-. In our opinion, the terms and conditions of these continuing guarantees are, at present, prima facie, prejudicial to the interest of the company.

xvi. According to information and explanation given to us the term loans have been applied for the purpose for which they were obtained.

xvii. Based on the information and explanations given to us and on an overall examination of the balance sheet of the company in our opinion, there are no funds raised on short term basis which have been used for long term investment.

xviii. According to the information and explanations given to us, no preferential allotment of shares has been made during the year by the Company to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, no debentures have been issued by the Company during the year.

xx. Based on our examination of books and records of the Company, no public issue was made by the Company during the year.

xxi. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have not come across any instance of fraud on or by the Company nor have we been informed by the management of any such instance being noticed or reported during the year.

For NBS & Co.

Chartered Accountants

Devdas Bhat Partner

M. No. 48094 Place: Mumbai Dated: 1st September, 2010

18

KILLICK NIXON LIMITED :

Balance Sheet as at 31st March, 2010

As at 31.3.2009

Schedule Rupees Rupees Rupees Rupees I. SOURCES OF FUNDS :

1. SHAREHOLDERS' FUNDS : (a) Share Capital A 32,500,000 32,500,000 (b) Reserves and Surplus B 197,011,980 197,011,980

229,511,980 229,511,980 2. LOAN FUNDS : (a) Secured Loans C 439,541,031 442,388,125 (b) Unsecured Loans D 395,806,416 379,816,104

835,347,447 822,204,229 TOTAL 1,064,859,427 1,051,716,209

APPLICATION OF FUNDS :

1. FIXED ASSETS : Gross Block E 27,176,393 26,813,225 Less : Depreciation to date 19,800,757 19,203,499

7,375,636 7,609,726 2. INVESTMENTS F 405,310,878 405,214,878 3. CURRENT ASSETS, LOANS AND ADVANCES : (i) Current Assets: G (a) Cash and Bank Balances 6,191,056 11,151,181

6,191,056 11,151,180 (ii) Loans and Advances : H 403,922,995 414,208,007

410,114,051 425,359,189 4. Less: CURRENT LIABILITIES AND PROVISIONS : (a) Current Liabilities I 89,104,124 104,119,342 (b) Provisions 41,886,223 41,886,223 (c) Defered Tax 7,014,980 7,014,980

138,005,327 153,020,545 Net Current Assets 272,108,724 272,338,643

5. Debit Balance in Profit and Loss Account 380,064,189 366,552,962

TOTAL 1,064,859,427 1,051,716,209

- See Principal Accounting Policies and Notes to Accounts attached.

Per our report attached For and on behalf of the Board

For N B S & CO.Chartered Accountants T.B. RUIA - CHAIRMAN

DEVDAS V BHAT PARTNER VAIBHAV SINGHAIM. NO. 48094 ASST CO. SECRETARY J.B.SHAH - DIRECTOR

MUMBAI MUMBAI DATED : 1st September, 2010 DATED : 1st September, 2010

19


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

Previous YearSchedule Rupees Rupees Rupees Rupees

INCOME : 1. Sale of Products and Other Income 1 42,404,969 45,173,043

EXPENDITURE :

2. Expenditure on and Provisions for Employees 2 1,174,528 1,165,838

3. Operating and Other Expenses 3 53,142,130 54,532,415

4. Interest and other Finance Charges 1,002,280 182,252

5. Loss on sale of Investments 4,500,707

6. Depreciation 597,258 539,045 Less: Transfer from Fixed Assets Revaluation Reserve - -

597,258 539,045 TOTAL EXPENDITURE 55,916,196 60,920,257

(13,511,227) (15,747,214)

(13,511,227) (15,747,214)

7. Add: Credit Bal. W/back - 3,190,168

8. Provision for Taxation for Prior Years - 247,476

9. Prior year Debit ( Bed Debts W/off) - 17,627,520

Loss for the year (13,511,227) (30,432,042)

10. Balance brought forward from Previous year (366,552,962) (336,120,920)

BALANCE CARRIED TO BALANCE SHEET - (DEBIT) (380,064,189) (366,552,962)

See Principal Accounting Policies and Notes to Accounts attached.

Per our report attached

For N B S & CO. T.B. RUIA - CHAIRMANChartered Accountants

J.B.SHAH - DIRECTORDEVDAS V BHAT PARTNER VAIBHAV SINGHAIM. NO. 48094 ASST. CO. SECRETARY

MUMBAI, MUMBAI, DATED : 1st September, 2010 DATED : 1st September, 2010

20


Schedules annexed to and forming part of the Balance Sheet as at 31st March,2010

As at 31.03.2009

Rupees Rupees Rupees Rupees

SCHEDULE "A" - SHARE CAPITAL

1. AUTHORISED : 20,000,000 Shares of Rs.10 each 200,000,000 200,000,000

2. ISSUED AND SUBSCRIBED : 3,250,000 Equity shares of Rs.10 each fully paid up 32,500,000 32,500,000 Of the above, 799,930 Shares are allotted as fully paid up persuant to a contract without payments being received in cash.

TOTAL 32,500,000 32,500,000

SCHEDULE "B" - RESERVES AND SURPLUS

1. SHARE PREMIUM ACCOUNT 85,000,000 85,000,000

2. CAPITAL RESERVES : (a) Amount arising on Amalgamation 365,692 365,692

(b) Sale of Property by Custodian 111,646,088 111,646,088

(c) Share Forfeiture Account 200 200 112,011,980 112,011,980

TOTAL 197,011,980 197,011,980

21


Schedules annexed to and forming part of the Balance Sheet as at 31st March, 2010As at

31.03.2009Rupees Rupees Rupees

SCHEDULE "C" - SECURED LOANS

1 CASH CREDIT :

From Bank 92,000,000 92,000,000 ( Secured against hypothecation by way of first charge on entire Stocks/Book Debts/Receivables (present & future) of the Company and collateraly secured by mortgage of partof the company's land at Andheri and personal guarantee ofChairman and corporate guarantee of a company)Refer Note No.9

From a Company 347,541,031 350,388,125 (Secured by way of hypothecation of Book-debts and Stocks of the Company)

TOTAL 439,541,031 442,388,125

SCHEDULE "D" - UNSECURED LOANS

(i) FIXED DEPOSITS 2,875,001 2,925,001

(ii) TERM LOANS AND ADVANCES :

From a State Govt Corporation against third party guarantee (Due for repayment overdue -150,000,000 previous year Rs.150,000,000) 150,000,000 150,000,000

From Companies (Due for repayment overdue Rs.8,229,338 Previous year Rs.8,229,338) 37,214,001 29,561,359

Interest Accrued and due 191,342,022 191,342,022378,556,023 370,903,381

(iii) OTHERS : 14,375,392 5,955,000

(iv) FROM BANK :

Temporary Overdrawn Balance from Bank - 32,722

TOTAL 395,806,416 379,816,104

22


Schedules annexed to and forming part of the Balance Sheet as at 31st March, 2010

SCHDULE "E"- FIXED ASSETSGross Block at cost Additions during Deductions Gross Block at cost Total Depreciation Net Depreciated

or revaluation as the year during the or revaluation as as at 31.03.2010 Block as atat 01.04.2009 year at 31.03.2010 31.03.2010

Rupees Rupees Rupees Rupees Rupees Rupees 1. Patents, Trade Marks etc. 8,200 - - 8,200 2,344 5,856

(8,200) (-) (-) (8,200) (2,344) (5,856)

2. Buildings 13,538,491 - - 13,538,491 7,362,206 6,176,285(13,538,491) (-) 0 (13,538,491) (7,037,138) (6,501,353)

3. Furniture and Fittings 13,266,534 - 0 13,266,534 12,363,573 902,961(13,266,534) - 0 (13,266,534) (12,164,017) (1,102,517)

4. Office Machinery and 0 363,168 - 363,168 72,634 290,534 Electrical Equipments 0 - - - - 0

TOTAL .. 26,813,225 363,168 - 27,176,393 19,800,757 7,375,636 Previous Year .. (26,813,225) 0 0 (26,813,225) (19,203,499) (7,609,726)

* Buildings acquired upto 31.03.1993 at revaluation as on that date and acquired thereafter at cost

Conveyances/assignment in respect of certain office premises, residential buildings and lease hold land of an aggregate cost of Rs.6,792,345(Previous year Rs 6,792,345) remains to be executed.

Figures in brackets pertain to previous year.

23


Schedules annexed to and forming part of the Balance Sheet as at 31st March,2010As at 31.03.2009

Rupees RupeesSCHEDULE "F" - INVESTMENTS (Long Term) 1. SHARES IN SUBSIDIARY COMPANIES: (At cost)

KILLICK EXPORTS LIMITED : 150,000 Equity Shares of Rs.10 each fully paid 1,459,090 1,459,090

KILLICK INFOTECH LIMITED : 2,00,000 Equity Shares ( Previous year 200,000 Equity Shares) of Rs.10 each fully paid 15,500,000 15,500,000

KILLICK AGENCIES AND MARKETING LIMITED : (formerly KILLICK PORTS LIMITED ) 50000 Equity Shares of Rs.10 each fully paid 500,000 500,000

KILLICK AIR COURIERS AND FORWARDERS LIMITED : 999,000 Equity Shares of Rs.10 each fully paid 24,960,000 24,960,000

KILLICK IMPEX LIMITED : 800,020 Equity Shares of Rs.10 each fully paid 15,500,200 15,500,200

KILLICK POWER LIMITED : 50000 Equity Shares of Rs.10 each fully paid 500,000 500,000

KILLICK FINANCIAL SERVICES LIMITED : 50000 Equity Shares of Rs.10 each fully paid 500,000 500,000

KILLICK SHIPPING SERVICES LIMITED : 50000 Equity Shares of Rs.10 each fully paid 500,000 500,000

KILLICK ENGINEERING LIMITED : 1,000,000 Equity Shares of Rs.10 each fully paid 16,200,000 16,200,000

KILLICK PRESTRESSING PRIVATE LIMITED: 10000 Equity Shares of Rs.10 each fully paid 100,000 100,000

LODESTAR SLOTTED ANGLES LIMITED 1044900 Equity Shares of Rs.10/- each 10,149,250 10,149,250

FILTRONA INDIA LIMITED 834900 Equity Shares of Rs.10/- each 6,771,500 6,771,500

2. OTHER INVESTMENTS : (At cost)

(a) FULLY PAID EQUITY SHARES

7,50,000 Equity Shares ( Previous year 7,50,000 Equity Shares) of Rs.10 each fully paid of Air Survey Co. of (I) Ltd. 12,500,000 12,500,000

749,900 Equity Shares of Rs.10 each of Millenium Caribonum Limited 7,242,960 7,242,960

18,895 Equity Shares of Rs.10 each of The Shivrajpur Syndicate Limited (In Members Voluntary Liquidation) 278,847 278,847

32,270 Equity Shares of Rs.10 each of The Hingir Rampur Coal Company Limited 326,432 326,432

KILLICK MARINE SERVICES LIMITED 23,000 Equity Shares of Rs.10 each 230,000 230,000

Carried forward 113,218,279 113,218,279

24


Rupees Rupees

SCHEDULE "F" - INVESTMENTS (Contd) Brought forward 113,218,279 113,218,279

10 Equity Shares of Rs.50 each of Venkatesh Bhavan Co-operative Housing Society Ltd. 500 500

10 Equity Shares of Rs.50 each of the Ship Agents Premises Co-operative Society Limited 500 500

10 Equity Shares of Rs.100 each of Janata Sahakari Bank Ltd. 1,000 1,000

KILLICK AGENCIES LIMITED: ( 240 Shares X Rs. 400/-) 240 Equity Shares of Rs.2,500 each partly paid(Rs.650 per share paid) 860,505 764,505 (Previous year Rs.250 per share paid)

PRIME CITY CAPITAL TRUST PVT. LIMITED 2,50,000 Equity Shares ( Previous year 2,50,000 Equity Shares) 16,000,000 16,000,000 of Rs.10 each fully paid

PRIME CITY TRADING & INVESTMENTS PVT. LIMITED 2,65,000 Equity Shares ( Previous year 2,65,000 Equity Shares) 13,780,000 13,780,000 of Rs.10 each fully paid

TRIBUNE INVESTMENTS & TRADING CO. PVT. LIMITED 1,90,000 Equity Shares ( Previous year 1,90,000 Equity Shares) 1,900,000 1,900,000 of Rs.10 each fully paid

SUCHINDRAM INVESTMENTS PVT. LIMITED 13,120 Equity Shares ( Previous year 13,120 Equity Shares) 3,800,000 3,800,000 of Rs.100 each fully paid

KOSHA INVESMENTS LIMITED 12,20,000 Equity Shares ( Previous year 12,20,000 Equity Shares) 12,200,000 12,200,000 of Rs.10 each fully paid

TIRATH HOTELS PVT. LIMITED 1,49,000 Equity Shares ( Previous year 1,49,000 Equity Shares) 49,000,000 49,000,000 of Rs.10 each fully paid

CAMBRIDGE BRIGHT WIRE AND COMPUTER PERIPHERALS PVT. LTD. 1,49,000 Equity Shares ( Previous year 1,49,000 Equity Shares) 55,700,000 55,700,000 of Rs.10 each fully paid

TEJCO FINANCIERS PVT. LIMITED 66,000 Equity Shares ( Previous year 66,000 Equity Shares) 32,000,000 32,000,000 of Rs.10 each fully paid

GREY STEEL CASTING AND FINISHING CO. PVT. LIMITED 66,000 Equity Shares ( Previous year 66,000 Equity Shares) 36,000,000 36,000,000 of Rs.10 each fully paid

RAMGOPAL BALKISON AND SONS PVT. LIMITED 8,000 Equity Shares ( Previous year 8,000 Equity Shares) 34,700,000 34,700,000 of Rs.100 each fully paid

RAMGOPAL GANPATRAI AND SONS PVT. LIMITED 8,000 Equity Shares ( Previous year 8,000 Equity Shares) 35,800,000 35,800,000 of Rs.100 each fully paid

40 Equity Shares of Rs.25 each of The Greater 1,000 1,000 Bombay Co-operative Bank Ltd

Carried forward 404,961,784 404,865,784

25


Rupees Rupees

SCHEDULE "F" - INVESTMENTS (Contd) Brought forward 404,961,784 404,865,784

500 Equity shares of Rs.100 each of Parivartan Co-op. Bank Ltd. 50,000 50,000

of Rs.10 each of The Shivrajpur Syndicate Limited (In Members Voluntary Liquidation) 189,950 189,950

(c) GOVERNMENT SECURITIES (Deposited with Customs and Others)

4 1/2 % Loan 1986 - Face Value Rs.3,000 (Matured but not realised) 3,000 3,000 7-Year National Plan Savings Certificates - Face Value Rs.96,900 (Matured but not realised) 96,900 96,900

6-Year National Savings Certificates - Face value Rs.8,500 8,500 8,500 (Matured but not realised)

1 15% Convertible Bond of Rs.90 of The Ahmedabad Manufacturing and Calico Printing Company Limited 13 13

7 15% Redeemable Bonds of Rs.104.40 each of The Ahmedabad Manufacturing and Calico Printing Company Limited 731 731

TOTAL 405,310,878 405,214,878

As at 31-03-2010 As at 31-03-2009

Book Market Book MarketValue Value Value Value


Quoted Investments 0 0 0 0

Unquoted Investments 405,310,878 405,214,878405,310,878 405,214,878

SCHEDULE "G" - CURRENT ASSETS As at 31.03.2009Rupees Rupees Rupees Rupees

(a) CASH AND BANK BALANCES : In Hand (As certified) 1,715,678 7,825,520

With Scheduled Banks : On Current Accounts 4,150,513 3,000,796 On Fixed Deposits 324,865 324,865

4,475,378 3,325,6616,191,056 11,151,181

TOTAL 6,191,056 11,151,181

26



Rupees Rupees Rupees

SCHEDULE "H"- LOANS AND ADVANCES (Unsecured and considered good unless otherwise specified) (i) Advances and Loans to Subsidiary Companies 160,226,515 168,771,776 (includes items considered doubtful Rs. , previous year Rs.54,888,259)

(ii) Advances and Loans to Others 235,336,208 238,849,239

(iii) Advances recoverable in cash or in kind or for value to be received 629,006 603,329

(iv) Balances with Customs and Port Trusts 116,769 116,769

(v) Trade and Other Deposits 808,089 783,089

(vi) Advance Tax 6,806,408 5,083,805403,922,995 414,208,007

TOTAL 403,922,995 414,208,007

SCHEDULE "I" - CURRENT LIABILITIES AND PROVISIONS

(a) CURRENT LIABILITIES : (i) Acceptances 10,319,979 10,319,979

(ii) Other Sundry Creditors 64,533,653 74,585,819 (iii) Customers Credit Balances 11,270,492 17,233,544

(iv) Trade Deposits 2,980,000 1,980,00089,104,124 104,119,342

(b) PROVISIONS :

(i) Bonus 243,850 243,850 (ii) FBT 1,509,888 1,509,888 (iii) Diminution on value of Investments 35,741,849 35,741,849 (iv) Leave encashment 4,390,636 4,390,636

41,886,223 41,886,223 (c ) Deferred Tax 7,014,980 7,014,980

TOTAL 138,005,327 153,020,545

27


Schedules annexed to and forming part of the Profit and Loss Account for the year ended 31st March, 2010

Previous YearRupees Rupees

SCHEDULE `1' :SALE OF PRODUCTS AND OTHER INCOME

1. Commission and Service Income 32,041,276 40,950,860

2. Dividends and Interest (Gross)

(a) Dividends - -

3. Compensation/Licence fees for use of premises 2,514,600 2,280,000

4. Miscellaneous Income (including Sales of scrap, after Sales service, erection charges, Rent, Hire charges etc) 2,301,115 1,942,183

5. Profit on sale of Fixed Assets - -

6. Royalti received 5,547,978 -

42,404,969 45,173,043

SCHEDULE `2' :EXPENDITURE ON AND PROVISIONS FOR EMPLOYEES

a) Salaries, Wages, Bonus and Commission 906,184 858,667

b) Contributions to Provident and State Insurance Funds 76,650 62,885

c) Employees' Welfare 191,694 244,286

TOTAL 1,174,528 1,165,838

SCHEDULE `3' - OPERATING AND OTHER EXPENSES

a) Other Repairs 1,970,409 1,727,496

b) Rent 527,624 1,109,140

c) Rates and Taxes 2,500 52,880

d) Travelling and Conveyance 1,268,076 1,158,022

e) Auditor's Remuneration and expenses 50,000 315,000

f) Bed Debts & advances written off - -

g) Clearing & Forwarding Expenses 22,904,727 25,834,733

h) Miscellaneous Expenses comprising Postage, Telephones,Telex, Printing & Stationery, Bank Charges,Publicity and advertisement, Legal expenses and Professional Charges,Service Charges, Fabrication and Erection Charges etc. 26,418,794 24,335,142

TOTAL 53,142,130 54,532,413

28

PRINCIPAL ACCOUNTING POLICIES AND NOTES TO ACCOUNTS A . PRINCIPAL ACCOUNTING POLICIES :

(a) SALES AND OTHER INCOME : Sale value of Products is inclusive of excise duty excluding VAT/CST and is net of

discounts other than cash discount.

(b) INVENTORIES : Freehold land is valued at the value appraised on its conversion from fixed assets into stock in trade. All inventories are valued at cost, cost determined on first-in first-out basis or specific identification of cost basis where applicable, or net realizable value whichever is less. The cost of Company manufactured products and work in progress consists of cost of direct materials and direct labour cost and addition of an appropriate proportion of works overheads.

(c) FIXED ASSETS : Fixed Assets are recorded at cost except for subsequent revaluation as stated hereinafter

in respect of Buildings. The Company capitalises all cost relating to Fixed Assets acquisition and installation. Engineering Factory, and K.I.S.P buildings at Chandivli and the building at Ahmedabad are revalued periodically on the basis of valuation of external approved valuer.

(d) DEPRECIATION : Depreciation on Fixed Assets other than Freehold, Leasehold Land and Tenancy Rights

is provided on written down value method in accordance with the provisions of the Companies Act,1956 as applicable from time to time. The amount of annual depreciation on that portion of the value of the buildings which is written up on revaluation is transferred from Revaluation Reserve to Profit and Loss Account. Leasehold Land is amortized over the period of the lease. No depreciation is provided on the Freehold Land and Tenancy Rights. Patent and Trademarks are amortised equally over 14 years.

(e) INVESTMENTS : Investments (which are long term) are stated at cost and permanent diminution in their value wherever considered necessary is provided.

(f) DEFERRED EXPENDITURE :

Revenue expenditure, benefit of which is likely to accrue over a period of time, is treated as deferred revenue expenditure and is written off proportionately over such period or five years whichever is less.

(g) RESEARCH AND DEVELOPMENT : Revenue expenditure on Research and Development is charged to Profit and Loss

Account in the year in which it is incurred. Capital expenditure is treated as addition to Fixed Assets.

(h) FOREIGN CURRENCIES : All exchange differences arising from foreign currency transactions are dealt with in

Profit and Loss Account(except those relating to acquisition of Fixed Assets which are adjusted in the cost of the assets). All foreign currency assets and liabilities as at the balance sheet date are restated at the applicable exchange rates prevailing on that date and any material differences arising on such restatement are dealt with in the Profit and Loss Account except those relating to acquisition of Fixed Assets.

29

(i) PROVISION FOR RETIREMENT BENEFITS : (j)

Liability in respect of retirement gratuity and leave encashment to employees is accounted for, on the basis of actuarial valuation. Retirement benefits in the form of Provident Fund and Superannuation/Pension Scheme, whether in pursuance of any law or otherwise, is accounted on actual basis and charged to the Profit & Loss Account. ACCOUNTING FOR TAXES ON INCOME : Current tax is determined as an amount of tax payable in respect of taxable income for the year. Deferred tax is recognized, subject to the consideration of prudence in respect of the deferred tax assets arising due to timing differences, being the difference between taxable income and accounting income which originate in one year and are capable of reversal entry one or more subsequent years. Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is virtual certainty of its realization, supported by convincing evidence at each Balance Sheet date the carrying amount of deferred tax assets are reviewed, to reassure realization.

B. NOTES TO ACCOUNTS: 1. Contingent Liabilities not provided for:

(a) Claims against the Company not acknowledged as debts Rs.4,714,703 (Previous Year Rs.4,714,703).

(b) In respect of suits filed against the Company in their capacity as Shipping Agents for damages aggregating to Rs.1,509,778 (Previous Year Rs.1,509,778). In the event of any claim materialising, the Company would be compensated by the Principals.

(c) Global Trust Bank Ltd. (now Oriental Bank of Commerce Ltd.) have filed an original Application No.265 of 2005 on 2-7-2002 before the Mumbai Debt Recovery Tribunal claiming a sum of Rs.13,57,62,042 as due from the Company as on 30.06.2002 together with further interest thereon at the rate of 16.5% per annum from 01.07.2002 till 31.3.2006.

On an application taken out by the Company for stay of the proceedings on the ground that a reference made by the Company has been registered by the Board for Industrial Finance and Reconstruction (BIFR), the Debt Recovery Tribunal, II Mumbai has stayed the proceedings until the decision of BIFR on the reference. Refer Note No.9.

(d) The Ratnakar Bank Ltd. have filed an original Application No.13 of 2004 on 14-11-2003 before the Mumbai Debt Recovery Tribunal claiming a sum of Rs.40,83,962/- as due from the Company as on 13-11-2003 together with further interest thereon at the rate of 18.5% per annum till 31.03.2006.

On an application taken out by the Company for stay of the proceedings on the ground that a reference made by the Company has been registered by the Board for Industrial Finance and Reconstruction (BIFR), the Debt Recovery Tribunal, III Mumbai has stayed the proceedings until the decision of BIFR on the reference.

(e) Guarantees given :

(i) By Banks on behalf of the Company to third parties Rs.1,397,014 (previous year Rs. 1,397,014).

By the Company : (ii) a) To third Parties - Rs. 100,000 ( Previous year Rs.100,000) b) To subsidiary companies Rs.2,950,000 (previous year Rs.2,950,000). c) To other companies Rs.25,000,000 (Previous year Rs.25,000,000).

30

(f) Bills discounting facilities for an amount of Rs.175,000,000 (Previous Year Rs.175,000,000) was availed from a bank/financial institution for facilitating payments against supplies is secured by a charge in favour of the bank by hypothecation of book debts and stock & is also covered by securities given by third parties. Please also refer to Note No.1(a) ((c)) & 18.

(g) Sales tax matters pending in appeal etc. Rs. 2,530,470 (previous year Rs.

2,530,470).

(h)

Income-tax demands including interest and penalty in respect of completed assessments disputed before higher authorities Rs.851,606,538(previous year Rs.851,606,538).

2. Uncalled amount on Partly Paid Shares Rs.444,000 (Previous Year

Rs.540,000).

3.

The loan taken from a State Government Corporation of Rs.150,000,000 (previous year Rs.150,000,000) shown under Unsecured Loans is covered by an undertaking by the Company to allow the lender to create a charge against the assets of the Company. The Company had requested the corporation to sell the shares in 2002 when the whole account would have been cleared with interest to till that date.

4. In view of the fact that the Company’s investments in the Subsidiary Companies – Killick Impex Ltd. & Killick Air Couriers & Forwarders Ltd., Killick Shipping Services Ltd., Killick Financial Services Ltd., Lodestar Slotted Angles Ltd., and Air Survey Company of India Limited and also investments in Killick Agencies Ltd., Millenium Caribonum Ltd., and The Hingir Rampur Coal Co. Ltd. are of long term nature and further as steps have been taken to reorganize the working of these Associates, the Directors are of the opinion that no provision is necessary for diminution in the value of the investments although the latest available balance sheets as of 31st March, 2010 of these associate companies show that their net worth has been completely eroded due to accumulated losses. However, Diminution is provided for investments in Killick Air Couriers & Forwarders Ltd. and Lodestar Slotted Angles Ltd.

5. In view of the difficulty of identification of accounts relating to small scale industrial

undertaking, information for determining the particulars relating to current indebtedness to such undertaking as required under Schedule VI Part I of the Companies Act,1956, is not readily available and hence not given.

6. The balance of debtors, other current assets, loans and advances and creditors are

subject to confirmation by the parties. Differences, if any shall be accounted on such reconciliation.

7. The Company has adopted the principles as advised by the Counsels and in the event the claim is rejected in the courts, the Company may have to pay to the Custodian, a sum of Rs.1,88,44,433/-(Previous year Rs.1,88,44,433/-) (Principal Rs.1,73,50,963/- and interest Rs.14,93,470/-) as on 31.3.2007 and the appeals of the Company are pending in Supreme Court.

8.

The Company has not made provision in the accounts in respect of interest amounting to Rs.53,145,864 (Previous year Rs.53,145,864) on loans taken from Companies and others.

9. At the request of the Company, Killick Financial Services Ltd. (KFSL) one of the wholly

owned subsidiaries of the Company, had agreed to grant to Global Trust Bank Ltd.(GTB) {now known as Oriental Bank of Commerce(OBC)} a sub-lease of plot of land admeasuring 23,246 sq. mtrs. approx. for a period of 98 years on nominal annual lease

31

of Rs.1,00,000 and interest free Security Deposit of Rs.74,00,00,000/- with an understanding that after 3 years from execution of lease and payment of Rs. 5 lacs, freehold rights of the property would be given to the Company. By a separate Memorandum of Understanding dated 20th December, 2000 executed by and between the KFSL and the Company, GTB(now known as OBC) and other companies it was agreed that the aforesaid Deposit of Rs.74,00,00,000/- would be utilized for the repayment of the amounts due and payable by the Company and of other companies to GTB and Custodian and would be done within a week of receipt of 37(I) permission as required then under the Income Tax Act 1962, which was jointly applied and received on 21st December 2001. KFSL through their Advocates had sent letter dated 02.01.2002 requesting GTB (now known as OBC) to disburse the said amount as per the agreement and execute a Lease Deed as approved and forwarded to KFSL by GTB (now known as OBC). KFSL vide their Advocates letter dated 04.01.2002 instructed GTB (now known as OBC) also confirmed to pay the balance amount on behalf of the Company to Custodian appointed under the Special Court (Trial of offences Relating to Transactions in Securities) Act, 1992 in repayment of liability of the Company as Judgement Debtor and Guarantor for the debts due to a notified party. But GTB (Now OBC) did not honour the MOU and agreement and refused to complete the agreement. The Company could not satisfy the guaranty given by the Company to the Custodian because of non-disbursement of the said dues by GTB(now known as OBC). KFSL and the Company were ready to execute the Agreement for mandating the payment of deposit and Lease Deed as approved and sent by GTB, which was also approved by the solicitors of KFSL. But GTB(now OBC) did not honour the said MOU and the Agreement for which KFSL has filed a suit in the High Court of Mumbai for specific performance of the Contract and made a claim of Rs. 120 cr. which amount includes the interest upto July 30, 2004. The suit is pending. The aforesaid lease land now belonging to KFSL was originally held by the Company. It was sold to Vysya Bank under a Sale Deed and under a broad understanding which was arrived at between the Company and GTB now (OBC). Vysya Bank Ltd. had leased it to KFSL under instructions of the Company. KFSL was acting under the instructions of the Company. Moreover, GTB(now known as OBC has in one of its Offer Letter for Issue of Shares to the Public has accepted the aforesaid liability and has admitted it in the said Offer Letter as Contingent Liability. In view of the above circumstances, the Management is of the opinion that the amount of Rs.9.20 cr. is not payable to GTB(now OBC), as it was agreed to be adjusted from the deposit payable by GTB (Now OBC) as explained above.

2009-10 (Rs.) 2008-09 (Rs.) 10. Expenditure in foreign currency : Traveling NIL NIL

11. Auditors Remuneration consists of :

1) Audit fees/Tax Audit/Review Audit (excluding Service Tax)

50,000 300,000

2) Reimbursement of Out of Pocket Exps. ---- 15,000 TOTAL 50,000 315,000

12. Earnings in Foreign Exchange :

Export of goods on F.O.B. basis NIL NIL Commission & Service Income NIL NIL

13. By an Order dated 29.8.2006, the Board for Industrial Finance and Reconstruction (BIFR) has

declared the Company as a `Sick Company’ in terms of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). In terms of the powers available Under Section 17(3) of SICA, BIFR has appointed IDBI Bank as the operating Agency (OA) with directions to prepare a viability study report.

14. Figures have been regrouped/rearranged wherever found necessary. 15. Opening and Closing Stock, Purchase and Turnover : NIL (Previous Year : NIL) 16. Capacities and Productions : NIL (Previous Year : NIL)

32


17 SEGMENT WISE REVENUE AND CAPITAL EMPLOYED FOR THE YEAR ENDED 31ST MARCH, 2010

Particulars Year Ended Year Ended31st March, 2010 31st March,2009

1 Segment Revenuea) Trading - - b) Service 32,041,276 40,950,860 c) Others 10,363,693 4,222,183

Total : 42,404,969 45,173,043 Less : Intersegment Revenue - -

42,404,969 45,173,043

2 Segment Resultsa) Tradingb) Service 1,174,528 1,165,838 c) Others 53,739,388 59,572,167

Total : 54,913,916 60,738,005 Less : I) Interest 1,002,280 182,252 ii) Unallocable - -

Total Profit/(Loss) before Tax (13,511,227) (15,747,214)

3 Capital Employed (Refer Note 3)

1) Segmentwise Company business has currently been divided into Trading activities, Servicebusiness.

2) Unallocable Expenditure includes expenses incurred which are not directly identifiableto the individual segments as well as expenses incurred at a corporate level which relateto the Company as a whole. Similarly, interest relates to the Company as a whole.

3) Assets used in the Company's operations or liabilities contracted have not been identifiedto any of the reportable segments. The Company believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities sincea meaningful segreation of the data is onerous.

33

18 Related Party Disclosures

a) List of related Parties and relationships

A. Subsidiaries RelationKillick Exports Ltd. SubsidiaryKillick Infotech Ltd. SubsidiaryKillick Impex Ltd. SubsidiaryKillick Shipping Services Ltd. SubsidiaryKillick Power Ltd. SubsidiaryKillick Engineering Ltd. SubsidiaryKillick Agencies and Marketing Ltd. Subsidiary(formerly known as Killick Ports Ltd.)Killick Prestressing Pvt. Ltd. SubsidiaryKillick Air Couriers & Fowarders Ltd. SubsidiaryKillick Financial Services Ltd. SubsidiaryLoadstar Slotted Angles Ltd. SubsidiaryFiltrona India Ltd. SubsidiaryKillick Challangers & Technologies Ltd. Subsidiary

B. AssociatesKillick Halco Ltd. AssociateThe Central Provinces Railways Company Ltd. AssociateSIL Business Enterprises Ltd. AssociatePelican Paints Ltd. AssociateThe Hingir Rampur Coal Company Ltd. AssociateSuchindram Investments Pvt. Ltd. AssociatePrime City Trading & Investments Co. Pvt. Ltd. AssociateMarathon Trading & Investment (P) Ltd. AssociateRatni Investments Co. Ltd. AssociateKillick Agencies Ltd. AssociateAir Survey Company of India Ltd. Associate

C. Key Management PersonnelMr. T.B. Ruia ChairmanMr. J. B. Shah Director

34

19 Disclosures required for related parties transactions

Transactions Subsidiaries Sub Associates Key TotalSubsidiaries Management

Personnel

I Transaction during the year

Purchase of goods lessreturns - - - - - Sale of Goods - - - - - Purchase of Fixed Assets - - - - - Sale of Fixed Assets - - - - - Rendering of Services 2,175,110 - 126,000 - 2,301,110 Receiving of Services - - - - - Interest paid - - - - - Interest received - - - - - Loans given 36,000 23,946 - 59,946 Loans Paid 58,200 - 1,917,100 - 1,975,300 Loans Recovered 10,672,329 - 165,278 - 10,837,607 Loasns TakenRent Recovered - - - - - Rent Paid - - - - - Remuneration - - - - Equity contributions - during the year - - - - - Dividends received - - - - - Others recovereis - - - - Bad Debts & Advances Written off - - - - Other Payments - - - - -

II Amounts Outstanding atBalance Sheet date

Loans taken Outstanding 1,053,000 - - 1,053,000 Loans given Outstanding - - - - Amounts Receivable - - - - - Amounts Payable - - - - Deposits outstanding - - - - - (Rent) - - - - - Guarantees and - - - - - Collaterals Outstanding - - - - -

Notes: 1) Related Party relaqtionship is as identified by the Company on the basis of information available with them and accepted by the Auditors as correct. 2) No amount has been written off or written back during the year in reaspect of debts due from or to related parties.

For NBS & CO.Chartered Accountants

T.B.Ruia J. B. Shah Chairman Director

DEVDAS V BHATPartnerM.No. 48094

Place: Mumbai Vaibhav SinghaiDated: 1st September, 2010 Asst. Company Secretary

35

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES

Name of the Subsidiary Financial Year Extent of InterestCompanies of the Subsidiary of the Holding

ended on Company inthe Subsidiary

Company'sEquity Share

Capitalfor the for the Previous for the for the Previous

subsidary's years since it subsidary's years since itfinancial year became holding financial year became holding

ended 31.3.2010 company's ended 31.3.2010 company's subsidiary subsidiary

Killick Exports Ltd. 31st March, 2010 100% of Rs.15,00,000 - - (40,873) (802,906) Killick Infotech Ltd. 31st March, 2010 100% of Rs.20,00,000 - - 27,486 (6,856,535) Killick Challanger Technologies Ltd. 31st March, 2010 78% of Rs.25,00,000 - - 505,754 (6,339,213) Killick Impex Ltd. 31st March, 2010 100% of Rs.80,00,200 - - (17,179) (40,713,890) Killick Shipping Services Ltd. 31st March, 2010 100% of Rs.5,00,000 - - - -Killick Power Ltd. 31st March, 2010 100% of Rs.5,00,000 - - - -Killick Engineering Ltd. 31st March, 2010 100% of Rs.1,00,00,000 - - 1,697,187 894,557 Killick Agencies and Marketing Ltd. 31st March, 2010 100% of Rs.5,00,000 - - 3,518,948 4,284,651 Killick Prestressing P. Ltd. 31st March, 2010 100% of Rs.1,00,000 - - - - Killick Financial Services Ltd. 31st March, 2010 100% of Rs.5,00,000 - - (11,525) (940,347) Killick Air Couriers andForwarders Ltd. 31st March, 2010 100% of Rs.99,90,000 - - (23,030) (40,177,165) Lodestar Slotted Angles Ltd. 31st March, 2010 51.10% of Rs.2,04,50,000 - - (7,102) (54,038,008) Filtrona India Ltd. 31st March, 2010 51.06% of Rs.1,63,50,000 - - (346,563) 5,779,283

T.B. RUIA J. B. SHAHChairman Director

Place: Mumbai Vaibhav SinghaiDated: 1st September, 2010 Asst. Company Secretary

accounts of HoldingCompany for the year

For and on behalf of the Board

ended 31.3.2010

of Holding Companyfor the year ended 31.3.2010

Net aggregate of Profit/(Loss) of the SubsidiaryCompanies so far as they concern the members

of Holding CompanyDealt with in the accounts Not dealt with in the

36

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

Statement showing particulars as prescribed in the amendment to Schedule VI to the CompaniesAct, 1956 vide Notification No. G.S.R.388(E) DATED 15TH May, 1995.

I REGISTRATION DETAILSRegistration No. 6068State Code 11Balance Sheet Date 31st March, 2010

II CAPITAL RAISED URING THE YEAR ENDED Amount in Rs.31ST MARCH, 2010 ThousandsPublic Issue -Rights Issue -Bonus Issue -Private placement -

III POSITION OF MOBILISATION AND DEPLOYMENT Amount in Rs.OF FUNDS AS AT 31ST MARCH, 2010 ThousandsTotal liabilities 1,064,859 Total Assets 1,064,859

Sources of Funds:Paid-up capital 32,500 Reserves and Surplus 197,012 Secured loans 439,541 Unsecured loans 395,806

Application of Funds:Net fixed assets 7,376 Investments 405,311 Net current assets 272,108 Accumulated Losses 380,064

IV PERFORMANCE OF THE COMPANY FOR THE Amount in Rs.YEAR ENDED 31ST MARCH, 2010 Thousands

I) Turnover 42,405 ii) Total expenditure 55,916 iii) Profit/(Loss) before tax (13,511) iv) Profit/(Loss) after tax (13,511) v) Earning per share (Face value of Rs.10) (4.16) vi) Dividend rate(%) NIL

V Generic Names of Principal Products/Services of the Company:Item Code No. (ITC CODE) -

Product Description: Construction Equipments ShippingServices other Agencies & Trading

For and on behalf of the Board

T.B. RUIA - Chairman J. B. SHAH - Director

VAIBHAV SINGHAI - Asst. Co. Secretary

Place: Mumbai Dated: 1st September, 201037

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010

Year Ended Year Ended31.03.2010 31.03.2009

Rs. Rs.A Cash Flow from Operating Activities

Net Profit/(Loss) before tax (13,511,227) (30,432,042)

Adjustments forLease payments - Depreciation 597,258 539,045 Provision for Doubtful Advance no more required - Interest and finance charges 1,002,280 182,252 Provision for Leave Encashment - - Interest income - - Dividend income - - (Profit)/Loss on sale of fixed assets (net) - - (Profit)/Loss on sale of Investment - 4,500,707 Bad Debts - - Credit balance written back - (3,190,168) Prior period items & Balance written off - 17,874,996 Diminution in Investment -

(11,911,689) (10,525,210) Adjustments forTrade and other receivables includingInterest free loans 17,350,950 14,570,665 Trade payables 12,905,256 12,905,256

18,344,517 16,950,711 1 Interest received from operating activities - 2 Interest and finance charges paid (1,002,280) (182,252) 3 Income-tax paid - (1,134,615)

NET CASH FROM OPERATING ACTIVITIES 17,342,237 15,633,844

B Cash flow from Investing ActivitiesPurchase of fixed assets - - Sale of fixed assets (The sale proceeds have been - - appropriated against the dues of the Custodian) - - Sale of investmentsDividend received - - NET CASH USED IN INVESTING ACTIVITIES - -

38

C Cash flow from Financing ActivitiesRepayment /proceeds from Borrowings - - NET CASH USED IN FINANCING ACTIVITIES - -

Net Changes in Cash and Cash Equivalents(A+B+C) 17,342,237 15,633,844

Cash and Credit Equivalents-Opening Balance 11,151,181 4,482,663

Cash and Credit Equivalents-Closing Balance 6,191,056 11,151,181

Note: Proceeds from borrowing shown under 'Cash Flow from Financing Activities' includes the movements (net) of Cash Credit Accounts with Bank

Per our report attached For and on behalf of the Board

For NBS & CO.Chartered Accountants T.B. RUIA - CHAIRMAN

DEVDAS V BHAT VAIBHAV SINGHAIPartner Asst. Company Secretary J. B. SHAH - DIRECTORM.No. 48094

Place : MUMBAI MUMBAI Date : 1st September, 2010 Date : 1st September, 2010

We have examined the attached Cash Flow statement of Killick Nixon Limited, derived from the auditedfinancial statements for the year ended 31st March, 2010, covered by our Report dated to the Members of the Company and found the same to be drawn in accordance therewith and also with the requirements of the listing agreement with the Stock Exchange.

Place : MumbaiDate : 1st September, 2010 PARTNER

M.No. 48094

AUDITORS' CERTIFICATE

For NBS & CO. CHARTERED ACCOUNTANTS

39

SUBSIDIARY COMPANIES

DIRECTORS KILLICK EXPORTS LIMITED T. B. Patel S. R. Hemmady

KILLICK AGENCIES AND MARKETING LIMITED (formerly known as Killick Ports Limited)

Sanat C. Parikh Prakash F. Nagori Vibha A. Khandelwal Mr. T. B. Ruia T. B. Patel

KILLICK INFOTECH LIMITED KILLICK FINANCIAL SERVICES PVT. LTD. T. B. Ruia Chetananand Padmashali Sanat C. Parikh Vibha Khandelwal-Whole-time Director

T. B. Ruia S. R. Hemmady P. S. Manjrekar

KILLICK CHALLENGER TECHNOLOGIES LIMITED

KILLICK PRESTRESSING PVT. LIMITED D. S. Bhatiya

Chetananand Padmashali Vibha A. Khandelwal, Jt. Managing Director Mehul Patel, Jt. Managing Director

Sanat C. Parikh

KILLICK IMPEX LIMITED T. B. Patel

KILLICK AIR COURIERS AND FORWARDERS LIMITED

Sanat C. Parikh P. S. Manjrekar

T. B. Patel Sanat C. Parikh P. D. Rasam

KILLICK SHIPPING SERVICES LIMITED FILTRONA INDIA LIMITED T. B. Patel T. B. Ruia P. S. Manjrekar

S. R. Hemmady Sanat C. Parikh P. S. Manjrekar

KILLICK POWER LIMITED LODESTAR SLOTTED ANGLES LTD. P. S. Manjrekar S. R. Hemmady Sanat C. Parikh

S. R. Hemmady Sanat C. Parikh P. S. Manjrekar

KILLICK ENGINEERING LIMITED D. S. Bhatiya Kush Kamal Gupta – Executive Director P. S. Manjrekar T. B. Ruia S. K. Pachapurkar A. K. Gupta

40

KILLICK EXPORTS LIMITED DIRECTORS’ REPORT

The Directors submit their report and audited statement of accounts for the year-ended 31.3.2010 WORKING FOR THE YEAR During the year under review there was no turnover (last year Rs.NIL) 31.3.2009 31.3.2009 Rupees Rupees Loss for the year (40,873) (34,201) Surplus brought forward (8,02,906) (7,68,705) Surplus/(Loss) carried forward to Balance Sheet (8,43,779) (8,02,906) DIRECTORATE: Mr. Sanat C. Parikh retires by rotation and being eligible offers himself for reappointment. EMPLOYEES: There is no employee covered under Section 217 (2A) of the Companies Act, 1956. STATEMENT UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956. 1. The Company has no activities relating to conservation of energy. 2. (a) The Company has made no provision for Research and Development expenditure.

(b) The Company has no activity relating to technology absorption, adoption and innovation. 3. (a) The Company has earned Foreign Exchange of Rs.NIL

(b) The Company’s Foreign Exchange outgo is Rs.NIL DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that: • In the preparation of the annual accounts, the applicable accounting standards have been

followed along with proper explanation relating to material departures; • They have selected such accounting policies and applied them consistently and made

judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as on 31st March, 2010 and of the profit or loss of the Company for that period.

• Proper and sufficient care has been taken 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.

• The Annual accounts are prepared on a going concern basis. AUDITORS: M/s. Jagtiani & Naik, Chartered Accountants, Mumbai retire at the ensuing Annual General Meeting and are eligible for reappointment. For and on behalf of the Board

KILLICK EXPORTS LIMITED Registered Office: Basement, Commercial Union House, No.9, Wallace Street, Fort, Mumbai- 400 001

Director Director

Place: Mumbai Dated 1st September, 2010

41

AUDITOR’S REPORT TO THE MEMBERS OF

KILLICK EXPORTS LIMITED 1. We have audited the attached Balance Sheet of KILLICK EXPORTS

LIMITED, as at 31st March, 2010 and also the Profit and Loss Account for the year ended on that date 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.

2. We have 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 as to 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.

3. As required by the Companies (Auditor’s Report) Order, 2003 as

amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (together the ‘Order’) issued by the Central Government of India in terms of sub-section (4A) of section 227 of “The Companies Act, 1956’ of India (the ‘Act’) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Attention is invited to :

a) Note No : 3 of Schedule F to the accounts regarding non provision of Income Tax Demands of Rs. 31,02,698/- for various years up to Assessment Year 1999-2000 for which the Company has preferred appeals and

b) Note No : 8 of Schedule F to the accounts regarding non receipt

of confirmations and account statement from banks due to its being not in operation.

5. We further report that had the observations made by us in Paragraph

4(a) above been considered.

a) the balance in net current assets would have been Rs. 1,79,979/- as against reported figure of Rs32,82,677 /-.

b) a debit balance in profit and loss account of Rs. 39,46,477/- as

against Rs. 8,43,779/-

42

6. Further to our comments in the Annexure referred to above, we report

that: (i) We have obtained all the information and explanations, which to

the best of our knowledge and belief were necessary for the purposes of our audit.

(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

(iii) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet and Profit and 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 except for Accounting Standard relating to Accounting for Investments (AS-13), which requires provisions to be made in respect of investments for diminution in its value, The company has not made any provisions for diminution in respect of Unquoted Equity Shares as referred to in Note : 4 of Schedule “F”.

(v) On the basis of written representations received from the directors, taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(vi) Subject to the matters referred to in Paragraph 4,5 and 6(iv) above .In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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 the Profit and Loss Account, of the Loss for the year ended on that date.

For JAGTIANI & NAIK Chartered Accountants (ICAI Reg. No. 103854W) J. G. NAIK PARTNER Membership No. 30614 PLACE : MUMBAI DATED : 3RD SEPTEMBER, 2010

43

ANNEXURE TO THE AUDITORS’ REPORT

RE : KILLICK EXPORTS LIMITED

(REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE) 1. The Company has no fixed assets at any time during the year, the clauses

relating to maintenance of records, physical verification and disposal of substantial assets does not arise.

2. Since the Company has not carried on any activity involving inventory, the

clauses relating to its physical verification, procedures, maintenance of records and discrepancies does not arise.

3. The Company has neither granted nor taken any loans, secured or

unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Act. As the Company has not granted/taken any loans, secured or unsecured, to/from the parties covered in the register maintained under Section 301 of the Act, clauses (iii)(b) to (iii)(g) of paragraph 4 of the Companies (Auditor’s Report) (Amendment) Order, 2004 are not applicable to the Company for the current year.

4. In our opinion, and according to the information and explanations given to

us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for purchases fixed assets. The activities of the Company do not involve purchase of inventory and sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

5. In our opinion and according to the information and explanations given to

us, there are no contracts or arrangements during the year that need to be entered into the register maintained under section 301 of the Companies Act, 1956.

6. The Company has not accepted any deposits from the public and

consequently, the directives issued by the Reserve Bank of India, the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable.

7. The Company is not listed and neither does have paid up capital and

reserves exceeding Rs. 50 Lakhs nor average annual turnover of 5 Crores, consecutively for past three financial years, hence comments on Internal Audit System are not made.

8. According to the information and explanations given to us, the Central

Government has not prescribed the maintenance of cost records under clause(d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of services rendered by the Company.

44

9. a) (i) According to the information and explanations given to us, and

on the basis of our examination of the books of account, the Company has been regular in depositing with appropriate authorities undisputed statutory dues including Income Tax and other material statutory dues applicable to it.

(ii) According to information and explanations given to us, the

Company was not liable for contribution towards Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty and Excise Duty during the year.

Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

(iii) According to records of the Company there are no undisputed

arrears of Statutory dues, which were outstanding as on 31st March, 2010 for a period of more than six months from the date they become payable.

b) According to records of the Company examined by us, there are no

dues of Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute. The particulars of dues of Income Tax as at 31st March, 2010, which have not been deposited on account of any dispute are as follows :

Name of the statute

Nature of dues

Amount (Rs.) Period to a which

amount relates

Forum where dispute is pending

The Income Tax Act,

1961

Income Tax Dues

32,224 A. Y. 1996-1997

Income Tax Appellate Tribunal

The Income Tax Act,

1961

Income Tax Dues

88,224 A. Y. 1997-1998


The Income Tax Act,

1961

Income Tax Dues

8,10,693 A. Y. 1999-2000


45

10. The accumulated losses of the Company at the end of the financial year are less than Fifty percent of it net worth. The Company has incurred cash loss of Rs. 40,873/- and Rs. 34,201 /- during the financial years ended 31st March, 2010 and 31st March, 2009 respectively.

11. The Company has neither taken any loans from a financial institution or a

bank nor issued any debentures. 12. The Company has not granted loans and advances on the basis of

security by way of pledge of shares, debentures and other securities. 13. In our opinion and according to information and explanations given to us,

the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi /mutual benefit fund / societies

14. According to the information and explanations given to us, the Company is

not dealing or trading in shares, securities debentures and other investments.

15. According to the information and explanations given to us, the Company

has not given any guarantee for loans taken by others from banks or financial institutions.

16. The Company has not obtained any term loans. 17. According to the information and explanations given to us, the Company

has not raised any funds on short-term basis. All assets have been funded by shareholders’ funds.

18. The Company has not made any preferential allotment of shares to parties

and companies covered in the register maintained under section 301 of the Act.

19. The Company has not issued any debentures. 20. The Company has not raised any money by public issues during the year. 21. According to the information and explanations given to us, no fraud on or

by the Company has been noticed or reported during the year. For JAGTIANI & NAIK Chartered Accountants (ICAI Reg. No. 103854W) J. G. NAIK PARTNER Membership No. 30614 PLACE : MUMBAI DATED : 3RD SEPTEMBER, 2010

46

SCHEDULE 2010 2009ANNEXED RUPEES RUPEES

I. SOURCES OF FUNDS :

1) Shareholders' Funds :

a) Capital A 1,500,000 1,500,000

b) Reserves and Surplus B 2,936,456 2,936,456 ------------------ ------------------

TOTAL 4,436,456 4,436,456 ========= =========

II. APPLICATION OF FUNDS :

1) Investments C 310,000 310,000

2) Current Assets, Loans and Advances : D

a) Sundry Debtors D-1 7,000 7,000

b) Cash and Bank Balances D-2 180,540 180,540

c) Loans and Advances D-3 3,162,534 3,199,134 ------------------ ------------------

3,350,074 3,386,674

Less : Current Liabilities and Provisions : E

Liabilities E-1 67,397 63,124 ------------------ ------------------

Net Current Assets 3,282,677 3,323,550

3) Profit and Loss AccountDeficit as per Profit and Loss Account Annexed 843,779 802,906

------------------ ------------------TOTAL 4,436,456 4,436,456

========= =========

This is the Balance Sheet referred For notes forming part of the Accounts,to in our Report of even date attached refer Schedule "F" Annexed.

For JAGTIANI & NAIK )Chartered Accountants )

)) DIRECTORS)

J. G. NAIK )PARTNER )

PLACE : MUMBAI PLACE : MUMBAIDATED : 3RD SEPTEMBER, 2010 DATED : 3RD SEPTEMBER, 2010

KILLICK EXPORTS LIMITED

BALANCE SHEET AS AT 31ST MARCH, 2010AS AT

31ST MARCH

47

2009-2010 2008-2009RUPEES RUPEES

INCOME :

Miscellaneous Income - - ======== =========

EXPENDITURE :

Business Centre Service Charges 21,600 21,600

Auditors' Remuneration :

Audit Fees 7,500 7,500

Expenses Reimbursed (including Service Tax) 773 1,773

Filing Fees 11,000 -

Bank Charges - 3,047

Legal & Professional Fees - 281 ----------------- -----------------

TOTAL EXPENDITURE : 40,873 34,201 ======== ========

PROFIT / (LOSS) FOR THE YEAR (40,873) (34,201)

Less : Provision for Taxation - - ----------------- -----------------

PROFIT (LOSS) AFTER TAXATION (40,873) (34,201)

Add : Surplus Brought Forward (802,906) (768,705) ----------------- -----------------

Surplus Carreid to Balance Sheet (843,779) (802,906) ========= =========

EARNING PER SHARE BASIC AND DILUTED (0.27) (0.23) ========= =========

This is the Profit and Loss Account refered For Notes forming part of Account,referto in our Report of even date attached Schedule "F" Annexed


))) DIRECTORS)




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

48

2010 2009RUPEES RUPEES

A. SHARE CAPITAL :

Authorised :

10,00,000 Equity Shares of Rs. 10/- each 10,000,000 10,000,000 ========== ==========

Issued Subscribed and Paid up :

1,50,000 Equity Shares of Rs. 10/- each full paid-up 1,500,000 1,500,000 (The entire Share Capital is held by the Holding Company ========== ==========Killick Nixon Limited and its nominees)

B. RESERVES AND SURPLUS :

Capital Reserve :

As Per Last Balance Sheet :

i) Compensation Received for termination of lease agreement 1,718,228 1,718,228

ii) Cessation of deposit from Licensee 1218228 1218228 ------------------- -------------------

2,936,456 2,936,456 ========== ==========

C. INVESTMENTS :

At Cost - LONG TERM - Non TradeIn Shares, Unquoted400 Equity Shares of Vohra Builders Pvt. Ltd. (fully paid up)Face Value Rs. 40,000/-Aggregate Value of Unquoted Investment Rs. 3,10,000/- 310,000 310,000

========== ==========

D. CURRENT ASSETS, LOANS AND ADVANCES :

D-1 Sundry Debtors(Unsecured, Considered doubtful) Due for period exceeding six months 7,000 7,000

========== ==========D-2 Cash and Bank Balances :

a) Cash on Hand 5,000 5,000

b) Bank Balances Balance with Schedules Bank in Current 175,540 175,540 ------------------- -------------------

180,540 180,540 ========== ==========

D-3 Loans and Advances :(Unsecured, Considered Good)

a) Loan to Company 990,977 1,027,577

b) Advance Tax and Tax Deducted at Source 2,171,557 2,171,557 ------------------- -------------------

3,162,534 3,199,134 ========== ==========

E. CURRENT LIABILITIES AND PROVISIONS :

E-1 Liabilities :

Sundry Creditors 67,397 63,124 ------------------- -------------------

67,397 63,124 ========== ==========

AS AT31ST MARCH


SCHEDULES TO BALANCE SHEET AS AT 31ST MARCH, 2010

49


SCHEDULE TO THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 “F”NOTES :

1. Significant Accounting Policies :

a) Applicability of Accounting Standards :

The Company is a Small and Medium Company as defined in the Companies (Accounting Standards) Rules, 2006 in respect of Accounting Standards notified under the Companies Act, 1956. Accordingly, the Company has complied with the Accounting Standards as applicable to a Small and Medium Sized Company.

b) Basis of Accounting :

The financial statements have been prepared on accrual basis under the historical cost convention, in conformity in all material aspects with the generally accepted accounting principles in India, and the requirements of the Companies Act, 1956.

c) Investments :

Investments are stated at cost and are classified into two categories viz Current or Long Term. Provision for diminution in the value of quoted investments is made in the accounts (only if in the opinion of the management such decline is other than temporary) in the line with the Mandatory Accounting Standard for Accounting of Investments (AS-13) issued by the Institute of Chartered Accountants of India and is recognised through the provision for diminution in value of quoted investment account. Dividend is accounted when it is received.

d) Employees Benefits :

The company had no employees during the year hence the Measurement and Disclosure requirements as per AS-15 are not applicable to the Company.

e) Taxation :

i) Provision for tax is made on the basis of the estimated taxable income as per the provisions of the Income Tax Act, 1961 and the relevant Finance Act, after taking into

50

consideration judicial pronouncements and opinions of the Company's tax advisors.

ii) Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

f) Provision Contingent Liabilities and Contingent Assets :

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is possible that there will be an outflow of resources.

A disclosure for a contingent liability is made when there is a possible or present obligation that may, but probably will not, require an outflow of resources, when there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent Assets are neither recognized nor disclosed in the financial statements.

2. Contingent Liability not provided for in respect of :

Income tax demand disputed in appeal Rs. 31,02,698/- (Rs. 31,02,698/-)

3. No provision has been made for Income Tax demands of

Rs. 31,02,698/- upto assessment year 1999-2000 shown under Contingent Liabilities in Note No. 2 above, arising mainly from the Assessing Officer’s Order. The Commissioner of Income Tax (Appeals) has confirmed the order of the Assessing Officer and the Company is now in appeal with the higher authorities. An amount of Rs. 21,71,557/- has been paid as Advance Tax / Tax deducted at source against the said demand which has been included in tax deducted at source in Schedule D-3 to the Balance Sheet.

4. The latest available accounts of the Vohra Builders Private Limited for

the year ended 31st March, 2003 shows the Book value of the Company of Rs. 120/- per share as against acquisition cost of Rs. 775/- by the Company. In view of the long term nature of the Company’s investment in the said Company no provision is presently considered necessary against Company’s investment.

5. In the opinion of the Board, the Current Assets, Loans and Advances

are not less than the values stated if realised in the ordinary course of

51

business. Provisions for all known liabilities are adequate and not in excess of amount reasonably necessary.

6. Related business disclosures : (AS – 18)

The Company is controlled by Killick Nixon Ltd., which is a beneficial owner of 100% Equity Shares. The following related party transactions were carried out during the year : Amount

Name of the related Company

Nature of Relationship

Nature of Transaction

31.03.2010 31.03.2009

Killick Nixon Ltd.

Holding Company

a) Share Capital b) Loan

Received during the year

c) Loan Repaid during the year

d) Outstanding Recoverable

15,00,000 0

36,600

9,90,977

15,00,000 0

24,371

10,27,577

7. Earnings Per Share : (AS-20)

March 31, 2010 March 31, 2009

Particulars Rupees Rupees

Numerator used for calculating basic and diluted earnings per share - profit after taxation

(40,873) (34,201)

Weighted average number of shares used as denominator for calculating basic and diluted earnings per share

1,50,000 1,50,000

Nominal value of shares 10 10 Basic and diluted earnings per share

(0.27) (0.23)

8. The Company has not received confirmation in respect of balances

with two banks as accounts are not in operation, amounting to Rs. 1,75,403/- Company is making efforts to get the confirmations.

52

9. As a matter of prudence, the Company has not created a Deferred Tax Asset on the carried forward tax losses due to uncertainty of its utilisation.

10. The Company does not have any fixed assets hence Accounting Standard AS-28 relating to Impairment of Assets is not applicable.

11. The company has not received any intimation from suppliers/creditors

regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure if any relating to amounts unpaid as at the year end together with the interest paid / payable as required under the said Act has not been made.

12. BALANCE SHEET ABSTRACT AND COMPANYS GENERAL

BUSINESS PROFILE I. Registration Details Registration No. 13354 State Code 11 Balance Sheet Date 31-03-2010 II. Capital Raised during the year (Amount in Rs. Thousands) Public Issue Rights Issue NIL NIL Bonus Issue Private Placement NIL NIL III. Position of Mobilisation and

Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities Total Assets 4504 4504 Sources of Funds

Paid-Up Capital Reserves & Surplus 1500 2936 Secured Loans Unsecured Loans NIL NIL

Application of Funds Net Fixed Assets Investments NIL 310

53

Net Current Assets Misc Expenditure 3,282 NIL Accumulated Losses 844 IV. Performance of Company (Amount in Rs. Thousands) Turnover (Gross Revenue) Total Expenditure NIL 41 Profit / Loss Before Tax Profit / Loss After Tax (41) (41) Earnings Per Share in Rs. Dividend Rate % (0.27) NIL V. Generic Name of The Services of

Company

(as per monetary terms) Item Code No. (ITC Code) NOT APPLICABLE Description Note :

The above particulars should be read along with the balance sheet as at 31st March, 2010, the Profit and Loss Account for the year ended on that date and the schedules forming part there.

13. Previous years figures have been rearranged and regrouped wherever

necessary. These are the Schedules referred For and on behalf of the Board to in our report of even date attached For JAGTIANI & NAIK ) Chartered Accountants ) ) DIRECTORS J. G. NAIK ) PARTNER ) Membership No. 30614 PLACE : MUMBAI PLACE : MUMBAI DATED : 3RD SEPTEMBER, 2010 DATED : 3RD SEPTEMBER, 2010

54

KILLICK INFOTECH LIMITED

DIRECTORS’ REPORT The Directors submit their Annual Report and audited statement of accounts for the year ended 31.3.2010. FINANCIAL RESULTS 31.3.2010 31.3.2009 Rupees Rupees Gross Profit/(Loss) before depreciation & Taxation 50,105 (408,728) Depreciation 7,119 181,476 Provision for Taxation (15,500) 16,801 Credit Balance written back 9,807 --- Debit Balance W/off (340,000) --- Net Profit / (Loss) for the year (302,707) (607,005) Prior period Income Tax --- --- Add / Less : Balance brought forward from earlier Years

(6,856,535) (6,249,530)

Balance carried forward to Balance Sheet (7,159,242) (6,856,535) DIRECTORATE: Ms. Vibha Khandelwal retires by rotation and being eligible offers herself for reappointment. EMPLOYEES: There is no employee covered under Section 217 (2A) of the Companies Act, 1956. STATEMENT UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956. 1. The Company has no activities relating to conservation of energy. 2. (a) The Company has made no provision for Research and Development expenditure.

(b) The Company has no activity relating to technology absorption, adoption and innovation.

3. (a) The Company has earned Foreign Exchange of Rs.NIL (b) The Company’s Foreign Exchange outgo is Rs.NIL

DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that: • In the preparation of the annual accounts, the applicable accounting standards have

been followed along with proper explanation relating to material departures; • They 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 as on 31st March, 2010 and of the profit or loss of the Company for that period.

55

• Proper and sufficient care has been taken 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.

• The Annual accounts are prepared on a going concern basis. AUDITORS: M/s. Manesh Paymaster & Co., Chartered Accountants, Mumbai retire at the ensuing Annual General Meeting and are eligible for reappointment.

For and on behalf of the Board KILLICK INFOTECH LIMITED

Registered Office: Basement, Commercial Union House, No.9, Wallace Street, Fort, Mumbai – 400 001

Director

Director Place : Mumbai Dated 25th August, 2010

56

MANESH PAYMASTER & CO. CHARTERED ACCOUNTANTS EXAMINER PRESS BUILDING, 35 DALAL STREET, BOMBAY 400 023 PHONES : (O) 2267 3688, 2267 7504 (TELE-FAX) (R) 2364 5422, 2361 4146 M. R. PAYMASTER B. COM., F.C.A ----------------------------------------------------------------------------- AUDITORS' REPORT TO THE SHAREHOLDERS ------------------------------------ We have audited the attached Balance Sheet of KILLICK INFOTECH LIMITED as at 31st March 2010 and also the Profit & Loss Account for the year ended on that date 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. We conducted our audit in accordance with auditing standards generally accepted in India. These 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 the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company, as we considered appropriate, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said order to the extent applicable to the Company. Further to our comments in the Annexure referred to 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 account as required by law have been kept by the Company, so far as it appears from our examination of these books;

3) The Balance Sheet and Profit & Loss Account referred to in this report are in agreement with the books of account;

4) In our opinion, the Balance Sheet and Profit & Loss Account referred to in this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable to the Company;

5) On the basis of the written representations received from directors of the Company, and taken on record by the Board of Directors, we report that no director is disqualified as on March 31, 2010 from being appointed as a director under Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

6) The Company has made investment of Rs 1,03,50,000/- in the shares of

its subsidiary. In the absence of relevant information we are unable to comment upon whether there has been permanent diminution in the value of the said investment.

57

MANESH PAYMASTER & CO. CHARTERED ACCOUNTANTS

Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said balance sheet & profit & loss account read together with the notes forming part thereof, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2010

AND b) In so far as it relates to the Profit & Loss Account, of the

profit of the Company for the year ended on that date.

For MANESH PAYMASTER & CO Chartered Accountants

(M R PAYMASTER) Proprietor

Mem No.: 38362 Mumbai: 25th August 2010

58


ANNEXURE TO THE AUDITORS' REPORT REFERRED TO IN OUR REPORT OF EVEN DATE

1) The Company has maintained proper records showing full particulars, in respect of fixed asset. Fixed asset were physically verified by the management at the end of the year, which in our opinion is reasonable having regard to the size of the Company and nature of its asset. No material discrepancies were noticed on such verification as compared with the book records. No fixed assets were disposed off during the year.

2) The Company did not have inventory at any point of time during the year. Hence Clause 4(ii) of the said Order pertaining to the inventory is not applicable.

3) The Company has granted interest free unsecured loan to its subsidiary. The maximum amount involved during the year was Rs 10,45,910/- & year-end balance thereof was Rs 10,45,910/-. There is no stipulation as to repayment. Apart from this, the Company has not taken/granted any loan from/to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

4) In our opinion, and according to the information & explanations given to us, there were adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of fixed assets. In our opinion, and according to the information & explanations given to us, there was no continuing failure to correct major weakness in internal control.

5) According to the information and explanations given to us, in our opinion, there were no contracts or arrangements needing entry in the register to be maintained under section 301 of the Companies Act, 1956. Hence Clause 4(v) of the said Order is not applicable.

6) In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of the provisions of sections 58A, 58AA or any other relevant provisions of the Act and the Rules framed there under.

7) The Company did not have formal internal audit system during the year.

8) According to the information and explanations given to us, the Company was not required to maintain cost records under section 209(1)(d) of the Companies Act, 1956.

9) According to the records of the Company, except for the delay in depositing profession tax, the Company was generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, wealth tax, sales tax, custom duty, excise duty, service tax & cess applicable to it and there were no arrears thereof as at 31st March 2010 for a period of more than six months from the date they became payable. According to the records of the Company, there were no disputed dues in respect of sales tax, income tax, custom duty, wealth tax, excise duty, service tax or cess.

10) In our opinion, the accumulated losses of the Company were not more than fifty percent of its net worth as at 31st March 2010. The Company did not incur cash losses during the year ended 31st March 2010. However it incurred cash losses during the year ended 31st March 2009.

59


11) The Company did not have outstanding debentures or outstanding

loans from financial institution or bank during the year. Hence Clause 4(xi) of the said Order is not applicable.

12) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) The Company is not a chit fund/nidhi/mutual benefit fund/society. Hence Clause 4(xiii) of the said Order is not applicable.

14) In our opinion, and according to the information and explanations given to us, the Company did not deal or trade in shares, securities, debentures & other investments. Hence Clause 4(xiv) of the said Order is not applicable.

15) According to the information and explanations given to us, the Company has not given guarantee for loans taken by others from bank or financial institutions.

16) The Company had no term loans outstanding at any point of time during the year.

17) According to the information & explanations given to us and on an overall examination of the balance sheet of the Company, we report that during the year the Company has not utilized short term funds for long term investments.

18) During the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Hence Clause 4(xviii) of the said Order is not applicable.

19) The Company did not have outstanding debentures at any point of time during the year. Accordingly no securities or charge have been created.

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

21) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.


(M R PAYMASTER) Proprietor Mem No.: 38362 Mumbai: 25th August 2010

60


I. SOURCES OF FUNDS :1) Shareholders' Funds :

a) Share Capital A 2,000,000 2,000,000

b) Reserve & Surplus B 13,500,000 13,500,000 2) Loan Funds : C - -

TOTAL 15,500,000 15,500,000 II. APPLICATION OF FUNDS :

1) Fixed Assets :a) Gross block D 1,119,534 1,119,534

b) Less : depreciation 1,119,534 1,112,415 - 7,119

2) INVESTMENTS AT COST E 10,350,000 10,350,000

3) Current Assets, Loans and Advances :

I Current Assetsa) Inventories F - - b) Cash and Bank Balances 413,542 25,258

413,542 25,258 II Loans and Advances G 5,300,682 3,389,131

5,714,224 3,414,389

4) Less : Current Liabilities and Provisions : H 7,723,466 5,128,043 Net Current Assets (2,009,242) (1,713,654)

5) Profit and Loss Account: 7,159,242 6,856,535 TOTAL 15,500,000 15,500,000

- This is the Balance Sheet referred For Notes forming Part of Accountto in our Report of even date refer Schedule 'H' annexed

FOR MANESH PAYMASTER & CO. FOR AND ON BEHALF OF THE BOARDChartered Accountants KILLICK INFOTECH LIMITED

M.R. PAYMASTER & CO. DIRECTORSProprietorMembership No. 38362

PLACE : MUMBAI PLACE : MUMBAIDATED : 25th August , 2010 DATED : 25th August , 2010


BALANCE SHEET AS AT 31ST MARCH 2010AS AT

61


INCOME :Compensation for Premises given on Leave and Licence 1 2,206,178 1,457,350 and other Income

Interest on Income Tax Refund 60,702 -

TOTAL 2,266,880 1,457,350

EXPENDITURE :

Expenditure and provision for Employees 2 1,247,210 1,201,393

Operating and other Expenses 3 969,565 664,685

Amount Written off (Net) - -

Depreciation 7,119 181,476 2,223,894 2,047,554

Profit/(Loss) for the year Before Tax 42,986 (590,204)

Provision for Income Tax (15,500) -

Provision for Fringe benefit Tax - 16,801

Credit Balance W/back 9,807 -

Debit Balance W/off (340,000) -

Profit/(Loss) for the year after Tax (302,707) (607,005)

Prior Period Income Tax - -

Add: Loss Brought forward from previous year (6,856,535) (6,249,530)

Balance Carried to Balance Sheet (7,159,242) (6,856,535)

This is the Balance Sheet referredto in our Report of even date For Notes forming Part of Account

refer Schedule 'H' annexedFOR MANESH PAYMASTER & CO.Chartered Accountants FOR AND ON BEHALF OF THE BOARD


M.R. PAYMASTER & CO. DIRECTORSProprietorMembership No. 38362

PLACE : MUMBAI PLACE : MUMBAI

DATED : 25th August , 2010 DATED : 25th August , 2010


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2010

62

AS AT 2009 2008

SCHEDULE "A" SHARE CAPITAL : RUPEES RUPEES

Authorised :250,000 Equity Shares of 10/- each 2,500,000 2,500,000

========= ========Issued Subscribed and Paid Up :200,000 Equity Shares Fully Paid Up of Rs. 10/- each 2,000,000 2,000,000 (Previous year 200,000 Equity Share of Rs. 10/- each)

========= ========

SCHEDULE "B" RESERVE & SURPLUS :

Share Premium Account 13,500,000 13,500,000 ========= ========

SCHEDULE "C" UNSECURED LOAN :

FROM HOLDING COMPANY - - ------------------ -----------------

- - ========= =========

SCHEDULE "D" FIXED ASSETS

ComputersGross Block 1,119,534 1,119,534 Balance as on 31.3.2009Add: Addition during the year 0 0

------------------ -----------------Balance as on 31.3.2010 1,119,534 1,119,534

------------------ -----------------DepreciationBalance as on 31.3.2009 1,112,415 930,939 for the year 7,119 181,476

------------------ -----------------Balance as on 31.3.2010 1,119,534 1,112,415

------------------ -----------------

Net Block - 7,119

SCHEDULE "E" INVESTMENTS (Unquoted)IN SUBSIDIARY

1,95,000 (Previous year 195,000) Equity Shares of Rs. 10 eachfully paid up of Killick Challnger Technologies Ltd. 10,350,000 10,350,000

========= =========SCHEDULE "F" CURRENT ASSETS

Cash and Bank Balance I Cash on Hand - - II Balance with Schedule Banks 413,542 25,258 in current accounts

------------------ -----------------413,542 25,258

========= =========


SCHEDULES ANNEXED TO AND FORMING PART OF THE

BALANCE SHEET AS AT 31ST MARCH 2010

63

SCHEDULE "G" LOANS AND ADVANCES:

Advance recoverable-Considered doubtful - 340,000 Prepaid Expenses - Unsecured Loan to Subsidiary 1,045,910 525,910 ( Maximum Bal. due during the year Rs. 10,45,910/- PreviousYear Rs. 525,910 )Unsecured Loan to others 1,852,961 700,000 Accrued Income 559,634 148,729 Prepayment of Tax ( Net of Provision) 1,842,177 1,674,492

5,300,682 3,389,131

SCHEDULE "H" CURRENT LAIBILITES:

Sundry Creditors for expenses & Others 6,823,466 4,484,082 Security Deposit 900,000 627,160 Provision for Fringe benefit Tax - 16,801

7,723,466 5,128,043


BALANCE SHEET AS AT 31ST MARCH 2010


64


SCHEDULE "1" RENTAL AND OTHER INCOME:

RENTAL INCOME ( See Notes 1-e ) 2,175,110 1,457,350 ( Include TDS Rs. 6,82,388 /- Previous year Rs. 6,66,830/-)

INTEREST RECEIVED ( Include TDS Rs. 3,107 /-) 31068 0

----------------- -----------------2,206,178 1,457,350

========= =======SCHEDULE "2" EXPENDITURE AND OTHER PROVISION FOR EMPLOYESS

Salaries 1,247,210 1,201,393 ========= =======

SCHEDULE "3" OPERATING AND OTHER EXPENSES

Travelling & Local Conveyance 37,883 28,099 Books & Periodicals 8,600 12,600 Medical Expenses 61,395 22,760 Motor Car Expenses 69,496 22,831 Filing Fees 5,000 1,500 Bank Charges 849 2,069 Miscellaneous Expenses 767 700 Auditor's Remuneration -

Audit Fees ( Including Service Tax) 7,500 7,500 Other Service 7,500 7,500

- Staff Welfare Expenses 25,658 29,576 Electricity Expenses 188,147 146,602 Telephone Expenses 47,699 38,300 Legal & Professional Charges 328,788 183,933 Stamp Duty Chgs. - 5,010 Business Promotion Exp. 76,186 77,141 Security Service Charges 38,069 37,670 Membership Fee - 1,685 Printing & Statiopnery - 400 Rent Paid 24,000 27,000 Repairs & Maintenance 42,028 11,809

969,565 664,685



PROFIT AND LOSS ACCOUNT FOR THE PERIOD 31ST MARCH 2010

65


I' NOTES

1 Statement of significant accounting polocies:

a. The accounts of the company are prepared under historical cost conventions on an accrual basis.b. Fixed assets are valued at cost less depreciation.c. Investments are carried at cost.d. Depreciation on computers is provided on straight line method at 16.21% per annum e. Killick Nixon Limited is entitled to 50% of the income from letting of premises as per agreement entered in to with them. As such only 50% of the income has been shown in the account.f. Managerial remuneration to Director:

31.03.2010 31.03.2009

Salary 189600 379200

Reimbursement of expenses includedin the following heads in P & L A/C

1. Motor Car Expenses 14420 78312. Books & Periodicals 5600 96003. Medical Expenses 53895 152604. Refreshment 12950 24776 57467

276465 436667

These are the Schedules referred to Signature to Schedules 'A' to 'I'in our Report of even date. and Schedule'1' to '3' annexed

For Manesh Paymaster and Co. For and on behalf of the BoardChartered Accountants KILLICK INFOTECH LIMITED

}M.R. PAYMASTER } DirectorProprietor }Membership No. 38362

MUMBAI : MUMBAI :

Date : 25th August , 2010 Date : 25th August , 2010

66

Statement pursuant to section 212 of the companies act, 1956 relating to Subsidiary Companies

Name of the Subsidiary Financial Year Extent of Interest Net aggregate of Profit/ (Loss) of the SubsidiaryCompanies of the Subsidiary of the Holding Companies so far as they concern the members

ended on Company in of Holding Companythe Subsidiary Dealt with in the Not dealt with in the

Company's accounts of Holding accounts of HoldingEquity Share Company for the Company for

Capital year ended the year ended31.3.2010 31.3.2010

for the for the for the for thesubsidiary's Previous subsidiary's Previous finanical years finanical years year ended since it year ended since it31.3.2010 became 31.3.2010 became

holding holdingcompany's company'ssubsidiary subsidiary

Killick Challenger 31st March, 78% of Technologies Ltd. 2010 Rs.25,00,000 -- -- 505,754 (6,339,213)

FOR AND ON BEHALF OF THE BOARDKILLICK INFOTECH LIMITED

DIRECTORS

Place: Mumbai

DATED : 25th August, 2010


67


STATEMENT PURSUANT TO PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956 BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

REGISTRATION DETAILS:

1 Registration No. 25679 State Code 11

Balance Sheet Date: 31st March, 2010

2 CAPITAL RAISED DURING THE YEAR (AMOUNT IN Rs. THOUSANDS)

Public Issue NIL Rights Issue NIL Bonus Issue NIL Private Placement NIL

3 POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS(AMOUNT IN Rs. THOUSANDS)

Total Liabilities 15,500 Total Assets 15,500

Sources of Funds:Paid-up Capital 2,000 Reserves & Surplus 13,500Secured Loans NIL Unsecured Loans NIL

Application of Funds:Net Fixed Assets NIL Investments 10,350Net Current Assets (2,009 ) Misc. Expenditure NIL Accumulated Losses 7,159

PERFORMANCE OF COMPANY (AMOUNT IN Rs. THOUSANDS)

Turnover 2,267 Total Expenditure 2,224Profit/(Loss) before Tax 43 Profit/(Loss) after Tax (302) Earning per share -Rs. NIL Dividend @ % NIL

GENERIC NAMES OF THREE PRINCIPAL PRODUCTS OF COMPANY:

Item Code No. (ITC Code) N.A. Product Description

Note: The above particulars should be read alongwith the Balance Sheet as at 31.03.2010 theprofit and loss account for the year ended on that date and Schedules forming part thereof.

For Manesh Paymaster and Co. For and on behalf of the BoardChartered Accountants

M.R. PAYMASTER DirectorProprietor DirectorMembership No. 38362

MUMBAI : MUMBAI :

Date : 25th August , 2010 Date :25th August , 2010

68

KILLICK CHALLENGER TECHNOLOGIES LIMITED DIRECTORS’ REPORT

The Directors submit their Annual Report and audited statement of accounts for the year ended 31.3.2010. FINANCIAL RESULTS 31.3.2010 31.3.2009 Rupees Rupees Net Profit/(Loss) for the year Before Depreciation & Taxation 1,344,612 789,147 Depreciation 82,352 118,846 Taxation 400,000 227,006 Net Profit/(Loss) after Taxation 862,260 443,295 Add/(Less) : Surplus/(Deficit) brought forward from earlier Year (8,127,196) (8,570,491) Surplus/(Deficit)Balance carried forward to Balance Sheet (7,478,794) (8,127,196) DIRECTORATE: Ms. Vibha Khandelwal retires by rotation and being eligible offers herself for reappointment. EMPLOYEES: There is no employee covered under Section 217 (2A) of the Companies Act, 1956. STATEMENT UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956. 1. The Company has no activities relating to conservation of energy. 2. (a) The Company has made no provision for Research and Development expenditure.

(b) The Company has no activity relating to technology absorption, adoption and innovation. 3. (a) The Company has earned Foreign Exchange of Rs.NIL.

(b) The Company’s Foreign Exchange outgo is Rs.Nil DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that: • In the preparation of the annual accounts, the applicable accounting standards have been


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 31st March, 2010 and of the profit or loss of the Company for that period.


• The Annual accounts are prepared on a going concern basis. AUDITORS: M/s. Y. S. Moochhala & Co., Chartered Accountants, Mumbai, retire at the ensuing Annual General Meeting and are eligible for reappointment.

For and on behalf of the Board KILLICK CHALLENGER TECHNOLOGIES LIMITED

Registered Office: Basement, Commercial Union House, No.9, Wallace Street, Fort, Mumbai – 400 001

Director

Director

Place : Mumbai Dated 25th August, 2010

69


KILLICK CHALLENGER TECHNOLOGIES LIMITED 1. We have audited the attached Balance Sheet of KILLICK CHALLENGER

TECHNOLOGIES LIMITED, as at 31st March 2010 and the Profit and Loss Account for the year ended on that date annexed thereto (collectively referred to as “ financial statements“). 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 have 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 as to 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.

3. As required by the Companies (Auditor’s 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 as considered appropriate and according to the information and explanations given to us during the course of audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

(ii) In our opinion, proper books of account as required by law have

been kept by the Company so far as appears from our examination of those books.

(iii) The Balance Sheet and Profit and Loss Account dealt with by this

report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet and Profit and 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; except for accounting of retirement benefit cost for the year in respect of accrued gratuity liability [As stated in Accounting Policy L(1)(f) and Leave Encashment of Employees [As stated in Accounting Policy L(1)(f)] as required under Accounting Standard No. 15 on “Accounting for Retirement Benefits in the financial statements of Employers”, amount not ascertained.

70

(v) On the basis of written representations received from the directors,

as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to

the explanations give to us, the said accounts read with notes and the significant accounting policies thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

(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 the Profit and Loss Account, of the Profit for the year ended on that date.

For Y.S. MOOCHHALA & CO Chartered Accountants Y. S. MOOCHHALA PROPRIETOR Membership No.44006 PLACE : MUMBAI DATED : 25th August 2010

71


(REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE)

1) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) The management has committed that the fixed assets have been

physically verified by them at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) During the year there has not been any significant disposal of fixed

assets. 2) The company does not hold any stock of finished goods, store, spare parts

and raw materials being a service company 3) (a) (i) The Company has not granted any loan to companies or to other parties listed in the register maintained us under section 301 of the companies Act 1956.

(ii) The Company had taken unsecured interest free loans from a company covered in the register maintained under section 301 of the Companies Act 1956. The maximum amount involved during the year was Rs. 1045910/- and the year end balance of loans taken from such parties was Rs 1045910/-.

(b) In our opinion, the terms and conditions on which loans have been

taken from companies or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company. The loans taken/granted are interest free in nature.

(c) There is no overdue amount of loans taken by the Company.

4) In our opinion and according to the information and explanations given to

us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

5) There are no contracts or arrangement entered in the register maintained

under section 301 of the Companies Act 1956 and hence requirement of reporting regarding transaction of purchase of goods and materials and sale of goods, materials and services made in pursuance of such contracts aggregating during the year to Rs 5 Lacs or more in respect of each party does not arise.

72

6) The Company has not accepted any deposits from the public within the meaning of the provisions of section 58A and 58AA of the Companies Act, 1956 and rules made thereunder.

7) The Company does not have a formal Internal Audit system. 8) To the best of our knowledge, and according to information and

explanations given to us, the Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of any products dealt with by the Company.

9) (a) i) The Company has been regular in depositing undisputed statutory dues including Income Tax, Sales Tax and other

Material statutory dues with the appropriate authorities during the year.

ii) According to information and explanations given to us, the Company was not liable for any contributions to Investor Education and Protection Fund, Employees’ State Insurance Wealth Tax, Provident Fund, Customs Duty and for Excise Duty. iii) According to records of the Company there are no undisputed arrears of Statutory dues, which were outstanding as on 31st March 2010 for a period of more than six months from the date they become payable.

(b) According to the records of the Company there are no dues of Sales Tax, Custom Duty, Wealth Tax, Excise Duty and Cess, which have not been deposited on account of any dispute.

10) The accumulated losses are in excess of 50% of the paid up share capital

and free reserve. The company has neither incurred cash losses during the year nor in the immediately preceding financial year.

11) The Company has not defaulted in the repayment of dues to a Financial institution and a bank. The Company has not issued any debentures till date. 12) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) The Company is not a Chit fund Company or nidhi/mutual benefit fund/society and hence the requirements of clause (xiii) of the order is not applicable.

14) The Company is not engaged in dealing or trading in shares, securities, debentures and other investments and hence clause (xiv) of the order is not applicable.

73

15) According to the information and explanations given to us the Company has not given any guarantee for loans taken by others from banks or financial institutions. 16) As according to the information and explanation given to us the Company has not availed of any term loan. 17) Based on our examination of the Balance Sheet as at 31st March 2010

and other relevant data and the information and explanations given to us, on an overall basis, funds raised on short term basis, have not prima facie been used during the year for long term investment or vice versa.

18) The Company has not made any preferential allotment of shares during the year. 19) There are no debentures issued or outstanding during the year. 20) The Company has not raised any money by public issues during the year. 21) 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 was noticed or reported during the year. For Y.S. MOOCHHALA & CO. Chartered Accountants Y. S. MOOCHHALA PROPRIETOR Membership No.44006 PLACE : MUMBAI DATED : 25th August 2010

74

AS AT 31ST MARCH




a) Share Capital A 2,500,000 2,500,000

b) Reserves and Surplus B 9,000,000 9,000,000 2) Loan Funds :

Unsecured Loans C 1,045,910 525,910 -------------- --------------

TOTAL 12,545,910 12,025,910 ======== ========


1) Fixed Assets :

a) Gross block D 7,587,315 7,587,315

b) Less : depreciation 7,344,870 7,262,518

------------ -------------242,445 324,797

2) Current Assets, Loans and Advances :

a) Sundry Debtors E 1,574,974 1,065,191

b) Cash and Bank Balances F 91,571 23,666

c) Loans and Advances G 4,891,934 3,859,041 ------------ -------------

6,558,479 4,947,898

Less : Current Liabilities and Provisions : H 1,733,808 1,373,981 ------------ -------------

Net Current Assets 4,824,671 3,573,917 ======= =======

3) Miscellaneous Expenditure :(to the extent not written off or adjusted)

a) Profit and Loss Account Deficit As per Profit and Loss Account Annexed (7,478,794) (8,127,196)

------------- -------------TOTAL 12,545,910 12,025,910

======== ========-

This is the Balance Sheet referred For Notes forming Part of Accountto in our Report of even date refer Schedule 'L' annexed

FOR Y S MOOCHHALA & CO. FOR AND ON BEHALF OF THE BOARDChartered Accountants

PROPRIETOR DIRECTORSMembership No. 44006


DATED : 25th August, 2010 DATED : 25th August, 2010

KLLICK CHALLANGER TECHNOLOGIES LTD

BALANCE SHEET AS AT 31ST MARCH, 2010

75


INCOME :

Students Fees - 174,322

Software Development Charges 706,201 1,463,974

Placement Service - -

Retainers Fees 2,250,120 2,285,140

Compensation received 88,000 104,000

Sales of Scrap - - ------------ ------------3,044,321 4,027,436

TOTAL ======= =======

EXPENDITURE :

Administrative and Other Expenses I 1,698,353 3,225,665

Selling and Marketing Expenses J - 10,383

Financial Expenses K 1,356 2,241

Depreciation 82,352 118,846 ------------ ------------1,782,061 3,357,135 ======= =======

Profit/(Loss) before Tax 1,262,260 670,301

Less : Provision for Taxation 400,000 205,000

Less : Provision for Fringe benefit Tax - 22,006 ---------- ----------

Profit/ (Loss) for the year after Tax 862,260 443,295

Less : Short Provision of FBT 11,983 - Less : Debit Bal. w/off 201,875 -

Add : Loss Brought forward from previouse year (8,127,196) (8,570,491) ------------- --------------

DEFICIT CARRIED TO BALANCE SHEET (7,478,794) (8,127,196) ======= ========

This is the Profit and Loss Account referred For Notes forming part of accountto in our Report of even date refer Schedule 'L' Annexed

FOR Y S MOOCHHALA & CO. FOR AND ON BEHALF OF THE BOARDChartered Accountants

PROPRIETOR DIRECTORSMembership No. 44006PLACE : MUMBAI PLACE : MUMBAIDATED : 25th August, 2010 DATED : 25th August, 2010

KLLICK CHALLANGER TECHNOLOGIES LTD


76

AS AT 31ST MARCH

2,010 2,009 RUPEES RUPEES

A. SHARE CAPITAL :Authorised :5,00,000 Equity Shares of 10/- each 5,000,000 5,000,000 (Previous year 5,00,000 Equity Shares of 10/- each) ======= =======

Issued Subscribed and Paid Up :250,000 Equity Shares Fully Paid Up of Rs. 10/- each 2,500,000 2,500,000 (Previous year 2,50,000 Equity Shares of 10/- each) ======= =======

B. RESERVE AND SURPLUS :Share Premium Account 9,000,000 9,000,000

------------ -------------9,000,000 9,000,000 ======= =======

C. UNSECURED LOANS :Intercorporate 1,045,910 525,910

---------- ---------1,045,910 525,910

====== =====

E. SUNDRY DEBTORS :

(Unsecured, Considered Good)

Due for a period exceeding Six Months - -

Other Debts 1,574,974 1,065,191 ------------ -------------

1,574,974 1,065,191 ======= =======

F. CASH AND BANK BALANCES :

A) Cash on Hand : - 17,650

B) Balance with Scheduled Banks :Current Accounts 91,571 6,016

------- -----------91,571 23,666 ===== ======

KLLICK CHALLANGER TECHOLONIGIES LTD

SCHEDULES ANNEXED TO AND FORMING PART OF THEBALANCE SHEET AS AT 31ST MARCH, 2010

77

G. LOANS AND ADVANCES :(Unsecured, Considered Good)

Advance Recoverable in Cash or in Kind or for Value to be received 2,668,524 1,648,524

Sundry Deposits 6,000 206,000

Advance Tax and Tax Deducted at Source 2,217,410 2,004,517 (Include TDS Rs. 2,12,893 /- Previous year Rs. 2,79,308/-)

------------ ------------4,891,934 3,859,041 ======= =======

H. CURRENT LIABILITIES AND PROVISIONS :

Sundry Creditors 146,356 146,356

Deposits with Franchise 100,000 100,000

Other Liabilities 44,456 52,953

Amount overdrawn on Current Account with - 9,670 Scheduled Bank as per books

Provisions:Provision for Taxation 1,442,996 1,042,996

Provision for FBT - 22,006 ------------ -------------

1,733,808 1,373,981 ======= =======

78

SR. ASSETS GROSS BLOCK DEPRECIATION NET BLOCKNO.

Rate of Cost as Additions Assets sold Total Upto For the Assets sold Total As At 31st MarchDepreciation Per Last during Cost Last year during Depreciation 2010 2009

Balance Sheet the year Year the year

1 Computers 40% 6,617,861 - 6,617,861 6,495,537 48,930 - 6,544,467 73,394 122,324

2 Furniture & 18.10% 643,330 - 643,330 537,424 19,169 - 556,593 86,737 105,906 Fixtures

3 Ofiice Equipment 13.91% 315,374 - 315,374 221,952 12,995 - 234,947 80,427 93,422

4 Television & 40% 10,750 - - 10,750 7,605 1,258 - 8,863 1,887 3,145 Disk

TOTALS 7,587,315 - - 7,587,315 7,262,518 82,352 - 7,344,870 242,445 324,797

PREVIOUS YEAR 7,540,239 47,076 - 7,587,315 7,143,672 118,846 - 7,262,518 324,797 396,567


"D" FIXED ASSETS

79

2009-2010 2008-2009RUPEES RUPEES

I. Administrative and Other Expenses :Salary, Wages, Bonus and Allowances 561,539 968,322

Staff welfare Expense 6,042 26,975

Fees 2,500 10,000

Services Charges/Hire Charges - 44,948

Books and Periodicals 7,915 13,805

Telephone and Internet Expenses 37,949 85,244

Legal and Professional Fees 474,348 549,003

Auditor's Remuneration:

Audit Fees 10,000 10,000 Other Services - 10,000 Out of pocket expesnes ( Including Service Tax) 2,530 2,060

Printing and Stationery 45,943 64,634

Rent -

Travelling and Conveyance 152,781 225,065

Repairs and Maintenance : 34,355 29,348

Electricity Charges 193,629 152,012

Postages & Courier Charges 1,468 210

Miscellaneous Expenses 33,796 26,877

Software Development Expenses - 492,488

Service Tax Paid 130,188 344,614

Computer Expenses 63,611

Membership & Subscription Fees 3,088 106,180

Interest on TDS 282 269 1,698,353 3,225,665

J. SELLING AND DISTRIBUTION EXPENSES :

Marketing and Advertising Expenses - 9,684

Business promotion - 699

- 10,383 K. FINANCIAL EXPENSES :

Bank Charges/Commission 1,356 2,241

1,356 2,241


SCHEDULES ANNEXED TO AND FORMING PART OF THEPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010

80

KILLICK CHALLENGER TECHNOLOGIES LIMITED

SCHEDULE TO THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010

“L” NOTES :

1. SIGNIFICANT ACCOUNTING POLICIES :

a) Basis of Accounting :

The accounts are prepared in accordance with the accounting principles and are on the accrual basis of accounting.

b) Revenue Recognition :

Income is recognised on accrual basis.

c) Fixed Assets and Depreciation :

i) Fixed Assets are stated at historical cost less accumulated depreciation.

ii) Depreciation on Fixed Assets up till 31st March 1999 was provided

on written down value method as per Income Tax Act, 1961, thereafter it is provided on written down value method as per Schedule XIV of the Companies Act, 1956.

d) Stock in Trade :

Trading Stocks are valued at lower of Cost or Realisable Value.

e) Sundry Debtors :

Specific debts identified as irrecoverable are written off.

f) Privilege Leave Encashment :

Employees are entitled to accumulate leave and claim encashment thereof on superannuation or resignation. The encashment of leave is accounted for in the year of payment.

2. Estimated amount of contract remaining to be executed on capital account

not provided for net of Advance is Rs. NIL ( Rs. NIL ) 3. In the opinion of the Board the Current Assets, Loans and Advances are not

less than the values stated if realised in the ordinary course of business. Provisions for Depreciation and all known liabilities are adequate and not in excess of the amounts reasonably necessary. There are no contingent liability other than those stated above.

81

4. The Council of Institute of Chartered Accountants of India has made the Accounting Standards in respect of Cash flow statement (Revised) AS-3, Segment Reporting AS-17, Related party disclosure AS-18 and Accounting for taxes Income AS-22 mandatory only to companies listed or proposed to be listed on a recognised stock exchange in India and to commercial, industrial and business reporting enterprises whose turnover for the accounting year exceeds Rs. 50 Crores. Since the turnover of the Company during the year did not exceeded Rs. 50 Crores and the Company is also not listed, disclosures and treatment in respect of standards would be made by the Company as and when the said standards becomes applicable to the Company.

5. The Company does not owe any sum to any Small Scale Industrial

Undertakings as at 31st March, 2010.

6. Expenditure in Foreign currency for Travelling Expenses Rs. NIL (Rs. NIL)

7. Disclosures required by the Accounting Standards issued by the Institute of Chartered Accountants of India.

EARNINGS PER SHARE : (AS-20)

Earnings per Share (EPS) for the year has been computed in accordance with the Accounting Standard 20 issued by the Institute of Chartered Accountants of India after considering deferred tax adjustments for the year.

Earnings per share ( EPS ) for the Computation as per AS-20

March 31, 2010 March 31, 2009

Particulars Rupees Rupees

Numerator used for calculating basic and diluted earnings per share – profit/(loss) after taxation

862260 443295

Weighted average number of shares used as denominator for calculating basic and diluted earnings per share

250000 250000

Nominal value of shares 10 10 Basic and diluted earnings per share of Rs. 10/- each

3.45 1.77

82

8. Additional Information pursuant to Part IV of the Companies Act, 1956.

Registration Details Registration 92026 State Code 11 Balance Sheet Date 31-03-2010 II. Capital Raised during the year (Amount in Rs. Thousands) Public Issue Rights Issue NIL NIL Bonus Issue Private Placement NIL NIL III. Position of Mobilisation and

Deployment of Funds (Amount in Rs. Thousands)


Paid-Up Capital Reserves & Surplus 2500 9000 Secured Loans Unsecured Loans NIL 1046

Application of Funds

`

Net Fixed Assets Investments 242 NIL Net Current Assets Misc Expenditure 4825 NIL Accumulated Losses 7479 IV. Performance of Company (Amount in Rs. Thousands) Turnover (Gross Revenue) Total Expenditure 3044 1782

83

Profit / Loss Before Tax Profit / Loss After Tax 1262 862 Earnings Per Share in Rs. Dividend Rate % 3.45 NIL V. Generic Name of The Services of

Company

(as per monetary terms) Item Code No. (ITC Code) (i) Computer Training Centers N. A. (ii) Software Programming N. A.

9. Previous Year’s figures are in bracket and have been regrouped/recast/

Rearranged wherever necessary to conform to this year’s classification. These are Schedules referred Signatures to Schedules “A” to “L” to in our Report of even date. For Y.S. MOOCHHALA & CO ) Chartered Accountants ) ) ) DIRECTORS ) ) PROPRIETOR MEMBERSHIP NO. 44006 PLACE : MUMBAI PLACE : MUMBAI DATED : 25th AUGUST 2010 DATED : 25th AUGUST 2010

84

KILLICK IMPEX LIMITED DIRECTORS’ REPORT

The Directors submit their Annual Report and audited statement of accounts for the year ended 31.3.2010. FINANCIAL RESULTS 31.3.2010 31.03.2009 Rupees Rupees Net Profit/(Loss) for the year Before Depreciation & Taxation (17,179) (24,305) Depreciation -- -- Taxation -- -- Net Profit/(Loss) after Taxation (17,179) (24,305) Prior period interest expenses -- -- Add/(Less) : Surplus/(Deficit) brought forward from earlier Year (4,07,13,890) (4,06,89,585) Surplus/(Deficit)Balance carried forward to Balance Sheet (4,07,31,069) (4,07,13,890) DIRECTORS Mr. S. C. Parikh retires by rotation and being eligible offers himself for reappointment. EMPLOYEES: There is no employee covered under Section 217 (2A) of the Companies Act, 1956. STATEMENT UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956. 1. The Company has no activities relating to conservation of energy. 2. (a) The Company has made no provision for Research and Development expenditure.


(b) The Company’s Foreign Exchange outgo is Rs.Nil DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that: • In the preparation of the annual accounts, the applicable accounting standards have been followed along with

proper explanation relating to material departures; • They 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 as at 31st March, 2010 and of the profit or loss of the Company for that period.


• The Annual accounts are prepared on a going concern basis. AUDITORS’ REMARKS Auditors have made certain remarks which are dealt with here:

General Body Resolution under Section 293 (1) (d) of the Companies Act, 1956 has not been produced for our verification.-- The Company would like to inform that necessary action will be taken.

AUDITORS: M/S. Manesh Paymaster & Co. Chartered Accountants, Mumbai retire at the ensuing Annual General Meeting and are eligible for reappointment.

For and on behalf of the Board KILLICK IMPEX LIMITED

Registered Office: Plot No. 7, Chandivali Farm Road, Chandivali, Mumbai 400 072

Place : Mumbai Dated September 01, 2010.

T. B. Patel Director

Sanat C. Parikh Director

85

MANESH PAYMASTER & CO. CHARTERED ACCOUNTANTS EXAMINER PRESS BUILDING, 35 DALAL STREET, BOMBAY 400 023 PHONES : (O) 2267 3688, 2267 7504 (TELE-FAX) (R) 2364 5422, 2361 4146 M. R. PAYMASTER B. COM., F.C.A AUDITORS' REPORT TO THE SHAREHOLDERS We have audited the attached Balance Sheet of KILLICK IMPEX LIMITED as at 31st March 2010 and also the Profit & Loss Account for the year ended on that date 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. We conducted our audit in accordance with auditing standards generally accepted in India. These 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 the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company, as we considered appropriate, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said order to the extent applicable to the Company. Further to our comments in the Annexure referred to above, we report that: (a) 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; (b) In our opinion, proper books of account as required by law have been kept by

the Company, so far as it appears from our examination of these books; (c) The Balance Sheet and Profit & Loss Account referred to in this report are in

agreement with the books of account; (d) In our opinion, the Balance Sheet and Profit & Loss Account referred to in

this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable to the Company;

(e) On the basis of our review of the written representations received from directors of and taken on record by the Board of Directors, we report that none of the Director is disqualified as on March 31, 2010 from being appointed as a director under Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(f) General body resolution approving the borrowings in excess of the limits prescribed by section 293(1)(d) of the Companies act, 1956 has not been produced for our verification Subject to the above, in our opinion and to the best of our information and according to the explanation given to us, the said balance sheet & profit & loss account read together with the notes forming part thereof, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) In so far as it relates to the Balance Sheet, of the state of affairs

of the Company as at 31st March 2010. AND

ii) In so far as it relates to the Profit & Loss Account, of the loss of the Company for the year ended on that date.

For MANESH PAYMASTER & CO Chartered Accountants (M R PAYMASTER) Proprietor Mem No.: 38362 Mumbai Dated:01.09.2010

86



1) The Company did not have fixed assets at any point of time during the year. Hence Clause 4(i) of the said Order pertaining to fixed assets is not applicable.


3) The Company has not taken/granted any loan from/to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Hence Clause 4(iii) of the said Order pertaining to loans is not applicable.

4) Having regards to the activities of the Company during the year, in our opinion, Clause 4(iv) of the said order pertaining to internal control procedures is not applicable.



7) The Company did not have formal internal audit system during the year. 8) According to the information and explanations given to us, the Company

was not required to maintain cost records under section 209(1)(d) of the Companies Act, 1956.

9) According to the records of the Company, the Company was not required to deposit during the year any undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, wealth tax, sales tax, custom duty, excise duty, service tax & cess as none of them were applicable to it. According to the records of the Company, there were no dues in respect of sales tax, income tax, custom duty, wealth tax, excise duty, service tax or cess which have not been deposited on account of any dispute.

10) In our opinion the accumulated losses of the Company are more than 50% of its net worth as on 31st March, 2010. The Company has incurred cash losses during the financial year covered by our Audit and in immediately preceding financial year.

11) The Company did not have any borrowing from banks & financial institution or any outstanding debentures & hence the question of any default in payment thereof does not arise.



14) In our opinion, and according to the information and explanations given to us, the Company is not dealing or trading in share, securities, debentures & other investments. Hence Clause 4(xiv) of the said Order is not applicable.



87


17) The Company considers the funds raised by it (including amount of Rs

2,20,75,810/- shown under the head current liabilities) amounting to Rs.2,51,76,145/- at the end of the financial year to be of long term nature despite the same being payable on demand. These funds have been utilised to fund its losses. Subject to the foregoings, according to the information & explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis have been used for long term investment.

18) During the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19) The Company does not have outstanding debentures at any point of time during the year. Accordingly no securities or charge have been created.

20) The Company has not raised any money by public issues during the year. 21) According to the information and explanations given to us, no fraud on

or by the company has been noticed or reported during the year. For MANESH PAYMASTER & CO Chartered Accountants (M R PAYMASTER) Proprietor Mem No.: 38362 Mumbai Dated:01.09.2010

88

As at As at Schedule 31.03.2010 31.03.2009

Rupees RupeesI. SOURCES OF FUNDS:

(1) SHAREHOLDERS' FUNDS:Share Capital A 8,000,200 8,000,200

Reserves & Surplus B 7,500,000 7,500,000 15,500,200 15,500,200

(2) LOAN FUNDS:Unsecured Loans C 3,143,835 3,143,835

18,644,035 18,644,035

II. APPLICATION OF FUNDS:

(1) CURRENT ASSETS, LOANS & ADVANCES: D 48,545 48,694 LESS: CURRENT LIABILITIES & PROVISIONS E 22,135,579 22,118,549

(22,087,034) (22,069,855)

(2) PROFIT & LOSS ACCOUNT 40,731,069 40,713,890 18,644,035 18,644,035

Notes to Accounts G

As per our Report attached. For and on behalf of the Board,FOR MANESH PAYMASTER & CO. CHARTERED ACCOUNTANTS )

)) Directors)

M. R. PAYMASTER )PROPRIETOR

MEMBERSHIP NO : 38362

MUMBAI: DATED: 01.09.2010

KILLICK IMPEX LIMITEDBALANCE SHEET AS AT 31ST MARCH, 2010

89

As at As at Schedule 31.03.2010 31.03.2009

Rupees Rupees

INCOME: - -

EXPENDITURE: Administrative and Other Expenses F 17,179 24,305 Interest paid

17,179 24,305

LOSS FOR THE YEAR 17,179 24,305

Prior period interest Expense

Add: Balance brought forward from earlier year 40,713,890 40,689,585 Balance carried to the Balance Sheet 40,731,069 40,713,890

Notes to Accounts G

As per our Report attached. For and on behalf of the Board,FOR MANESH PAYMASTER & CO. CHARTERED ACCOUNTANTS )

)) Directors)

M. R. PAYMASTER )PROPRIETOR

MEMBERSHIP NO : 38362

MUMBAI: DATED: 01..09.2010

KILLICK IMPEX LIMITEDPROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010

90

As at As at 31.03.2010 31.03.2009

Rupees Rupees

SCHEDULE "A" - SHARE CAPITAL :

AUTHORISED:999,000 Equity Shares of Rs.10/- each. 9,990,000 9,990,000 100 14% Cumulative Preference Shares of Rs.100/- each 10,000 10,000

10,000,000 10,000,000

ISSUED, SUBSCRIBED AND PAID-UP:800,020 Equity Shares of Rs.10/- each fully paid-up. 8,000,200 8,000,200

SCHEDULE "B" - RESERVES AND SURPLUS:Share Premium Account 7,500,000 7,500,000

SCHEDULE "C" - UNSECURED LOANS:From Holding Company, Killick Nixon Ltd. (free of interest) 3,100,335 3,100,335 From Other Corporate Bodies 43,500 43,500

3,143,835 3,143,835

SCHEDULE "D":CURRENT ASSETS, LOANS AND ADVANCES: CURRENT ASSETS: Balance with scheduled bank in Current Account 48,545 48,694

LOANS AND ADVANCES: (Unsecured, considered good) Deposit with Business Centre - -

- - GRAND TOTAL: 48,545 48,694

KILLICK IMPEX LIMITED

FOR THE YEAR ENDED MARCH, 2010SCHEDULES ANNEXED TO AND FORMING PART OF THE ACCOUNTS

91

As at As at 31.03.2010 31.03.2009

Rupees RupeesSCHEDULE "E" :CURRENT LIABILITIES & PROVISIONS: CURRENT LIABILITES: Sundry Creditors 52,269 35,239 Killick Nixon Ltd (regarding settlement of dues of DMPL) 22,075,810 22,075,810 Other liabilities (0) (0)

22,128,079 22,111,049 PROVISIONS: For Taxation 7,500 7,500

22,135,579 22,118,549

SCHEDULE "F"ADMINISTRATIVE AND OTHER EXPENSES: Filing Fees 6,000 6,000 Business centre fees (including for prior period - amount is not ascertainable) 6,000 Deposit written off (Refer Note 3 - Schedule "G" ) Professional fees 1,124 Payment to Auditors: Audit Fees 5,515 5,515 Company Law & Other matters 5,515 5,515

11,030 11,030 Bank charges 149 151 Misc .Expenses

17,179 24,305

FOR THE YEAR ENDED MARCH, 2010SCHEDULES ANNEXED TO AND FORMING PART OF THE ACCOUNTS


92


' G' NOTES TO ACCOUNTS:

1 Previous year's figures are rearranged and regrouped wherever necessary.

2 Significant accounting policies

General

The Accoutns of the Company are maintained under Historical cost convention using accrual method of accounting.

3 The Company alongwith 12 (Twelve) other companies are Judgement Debtors of Dhanraj Mills P Ltd., a notifiedparty under THE SPECIAL COURT (Trial of offences relating to transactions in Securities) ACT, 1992. Therewere thirteen consent decrees passed in in favour of Dhanraj Mills P Ltd.

As mentioned in the previous year,s Balance Sheet, based on the principles adopted by Group and agreed byall Judgement Debtors, all the individual decrees against the Judgement Debtors got satisfied on 11.05.2006and an agreegate amount of Rs. 1,99,39,060 would be refundable to other two Judgement Debtorsas on 31.03.2007 for which an appropriate application has been made to the Special Court.

If the principle of appropriation advised above is rejected by the Special Court the total liability of theJudgement debtors as on 31.03.2007 amounting to Rs. 1,88,44,433/- may be the claimed by the Custodian from the Company as Judgement debtor and shall be accounted in the books accordingly.

Signature to Schedule to in 'A' to G" annexed

For MANESH PAYMASTER & CO., CHARTERED ACCOUNTANTS }

}} DIRECTORS}

PROPRIETOR } MEMBERSHIP NO: 38362MUMBAI :DATED : 01.09.2010 MUMBAI :

DATED : 01.09.2010

93


I. REGISTRATION DETAILS :Registration No. 44102State Code 11Balance Sheet date 31ST MARCH, 2010

RupeesII. CAPITAL RAISED DURING THE YEAR NIL

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS :

Total liabilities 18,644,035

Total assets 18,644,035

Sources of Funds :Paid-up capital 8,000,200Reserves and surplus 7,500,000Secured loans -Unsecured loans 3,143,835

Total 18,644,035

Application of funds :Net fixed assets -Investments -Net current assets (22,087,034)Miscellaneous Expenditure -Accumulated Losses 40,731,069

Total 18,644,035

IV. PERFORMANCE OF THE COMPANY FOR THE YEAR

i) Turnover (including other income) - ii) Total expenditure (including miscelleneous expenditure written off) 17,179 iii) Profit/(Loss) before tax (17,179) iv) Profit/(Loss) after tax (17,179) vi) Earning per share - vii) Dividend rate -

V Generic Names of Principal Products/Services of the Company : N.A.

Note : 1) The above particulars should be read alongwith the balance sheet as at 31st March,2010 the profit and loss account for the year ended on that date and the schedules forming part thereof.

For MANESH PAYMASTER & CO., CHARTERED ACCOUNTANTS

M. R. PAYMASTERProprietorMembership No. 38362

MUMBAI : MUMBAI :DATED : 01.09.2010 DATED : 01.09.2010


94

KILLICK POWER LIMITED DIRECTORS’ REPORT

The Directors submit their Annual Report and audited statement of accounts for the year ended on 31.3.2010. FINANCIAL RESULTS : During the year the Company incurred an expenditure of Rs.11,096/-. After adding thereto previous year’s preoperative expenses of Rs. 12,36,481/-, the total preoperative expenses of Rs. 12,47,577/- has been carried forward. FIXED DEPOSITS The Company is not accepting fixed deposits from the public. DIRECTORATE : Mr. P.S. Manjrekar retires by rotation and being eligible offers himself for reappointment. EMPLOYEES : There is no employee covered under Section 217 (2A) of the Companies Act, 1956. STATEMENT UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956. 1. The Company has no activities relating to conservation of energy. 2. (a) The company has made no provision for Research and Development expenditure.

(b) The company has no activity relating to technology absorption, adoption and innovation.

3. The Company has no activity relating to Foreign Exchange earnings and outgo. DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that: • In the preparation of the annual accounts, the applicable accounting standards have

been followed, along with proper explanation relating to material departure ; • They 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 as on 31st March, 2010 and of the profit or loss of the company for that period ;.

• Proper and sufficient care has been taken 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 ;

• The Annual accounts are prepared on a going concern basis. AUDITORS: M/s. Manesh Paymaster & Co., Chartered Accountants, Mumbai, Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for reappointment.

For and on behalf of the Board Registered Office: Basement, Commercial Union House, No.9, Wallace Street, Fort, Mumbai 400001.

S. R. Hemmady Director

P. S. Manjrekar Director

Place : Mumbai Dated September 01, 2010.

95

MANESH PAYMASTER & CO. CHARTERED ACCOUNTANTS EXAMINER PRESS BUILDING, 35 DALAL STREET, BOMBAY 400 023 PHONES : (O) 2267 3688, 2267 7504 (TELE-FAX) (R) 2364 5422, 2361 4146 M. R. PAYMASTER B. COM., F.C.A ------------------------------------------------------------------------------ AUDITORS' REPORT TO THE SHAREHOLDERS ------------------------------------ We have audited the attached Balance Sheet of KILLICK POWER LIMITED as at 31st March 2010 and also the schedule of pre-operative expenses for the year ended on that date annexed thereto. No profit & loss Account has been prepared, as the Company has not yet commenced its activities. 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. We conducted our audit in accordance with auditing standards generally accepted in India. These 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 the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company, as we considered appropriate, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said order to the extent applicable to the Company. Further to our comments in the Annexure referred to above, we report that:



3) The Balance Sheet and schedule of pre-operative expenses referred to in this report are in agreement with the books of account;



96


6) i) The Company has made investment of Rs. 50,000/- in shares of Parivartan

Co-operative Bank Ltd. in violation of the provision of section 372A of the Act.

Subject to the foregoing, in our opinion and to the best of our information and according to the explanation given to us, the said balance sheet read together with the notes forming part thereof, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March 2010.



Mem No.: 38362 Dated: 01.09.2010

97






4) In our opinion, as the Company did not carry on any activities during the year, Clause 4(iv) of the said order pertaining to internal control is not applicable.



7) As the Company did not fulfill any of the conditions specified in Clause 4(vii) of the said Order, it was not required to have formal internal audit system during the year.


9) According to the records of the Company, it was not required to deposit during the year any undisputed statutory dues statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, wealth tax, sales tax, custom duty, excise duty, Service tax & cess as none of them were applicable to it. According to the records of the Company, there were no dues in respect of sales tax, income tax, custom duty, wealth tax, excise duty, Service tax or cess which have not been deposited on account of any dispute.

10) The Company has not yet commenced its activities & hence the question of erosion in the net worth or the Company to the extent of at least fifty percent on account of accumulated losses or the question of it incurring cash losses does not arise. However miscellaneous expenditure aggregating to Rs 12,53,697/- at the end of the year exceeded fifty percent of its net worth.

11) The Company did not have outstanding debentures or outstanding loans from financial institution or bank during the year. Hence Clause 4(xi) of the said Order is not applicable.


98


13) The Company is not a chit fund/nidhi/mutual benefit fund/society.

Hence Clause 4(xiii) of the said Order is not applicable. 14) In our opinion, and according to the information and explanations

given to us, the Company did not deal or trade in shares, securities, debentures & other investments. Hence Clause 4(xiv) of the said Order is not applicable.



17) The Company considers liability in respect of dues payable to its holding company amounting to Rs 19,150/- at the end of the financial year to be of long term nature despite there being no stipulation as to repayment. This debt has been incurred to fund preliminary/pre-operative expenses of the Company. Subject to the above, according to the information & explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis have been used for long term investment.






(M R PAYMASTER) Proprietor Mem No.: 38362 Dated : 01.09.2010

99

KILLICK POWER LIMITED

Balance Sheet As At 31st March, 2010 Schedule As at 31st MarchAnnexed 2010 2009

Rupees Rupees

SOURCES OF FUNDS :1. Shareholder's Funds :

Share Capital A 500,000 500,000 Capital reserve (on write back of loan liability) 863,086 863,086

2. Loan Funds :

Unsecured Loan from Holding Company (4,568) 19,150

TOTAL 1,358,519 1,382,236

APPLICATION OF FUNDS :1. Investment at cost B 50,000 50,000

2. Current Assets, Loans and Advances C 90,915 114,698

Less: Current Liabilities D 36,093 25,063

Net Current Assets 54,822 89,635

2. Miscellaneous Expenditure : (to the extent not written off or adjusted)

Preliminary expenses 6,120 6,120

Pre-operative expenses E 1,247,577 1,236,481

1,253,697 1,242,601

Total : 1,358,519 1,382,236

This is the Balance Sheet For Notes forming part ofreferred to in our Report Accounts, refer Schedule 'F'of even date annexed.

For MANESH PAYMASTER & CO., } CHARTERED ACCOUNTANTS }

} DIRECTORS }

(M R Paymaster) }PROPRIETORMembership No: 38362


100


Schedules to the Balance Sheet as at 31st March, 2010

As at 31st March2010 2009

Rupees Rupees A. SHARE CAPITAL :

Authorised :

9,99,000 Equity Shares of 9,990,000 9,990,000 Rs.10/- each.

100 14% Cumulative Preference 10,000 10,000 shares of Rs.100/- each

10,000,000 10,000,000

Issued, subscribed and paid-up :50000 Equity shares of Rs. 10/- each fullypaid-up 500,000 500,000

(The entire share capital is held by the Holding Company and its nominees).

B INVESTMENTS (unquoted)

500 equity shares of Rs.100 each full paid-upof Parivartan Co-op. Bank Ltd. 50,000 50,000

C. CURRENT ASSETS,LOANS AND ADVANCES Current Assets :

Cash Balance on hand 0 0

Balance with Scheduled Banks in 90,915 114,698Current Accounts.

90,915 114,698

D. CURRENT LIABILITIES AND PROVISIONS : Current Liabilites :


101


Schedules to the Balance Sheet as at 31st March, 2010

E. PRE-OPERATIVE EXPENSES :

Incurred Incurredupto during the

31.3.2009 year Total

Filing fees 39,330 0 39,330

Stamp Duty 20,000 - 20,000

Auditors Remuneration:Audit fees 41,464 5,515 46,979Fees for Other Services 22,751 5,515 28,266

Printing & Stationery 2,925 2,925

Bank charges 4,438 66 4,504

Conveyance 550 - 550

Legal and Professional fees 94,343 0 94,343

Profession Tax 250 - 250

Sundry Expenses 10,430 - 10,430

Registration Fees 1,000,000 - 1,000,000

1,236,481 11,096 1,247,577

102


' F' NOTES:

(1) No Profit and Loss Account has been prepared as the Company has not yet

commenced its activities.

(2) Previous year's figures are rearranged and regrouped wherever necessary.

(3) Significant accounting policies:

(a) General

The Accoutns of the Company are maintained under Historical cost convention using accrual method ofaccounting.

(b) Investment

Investments are stated at cost and are in the nature of Trade Investment.

(c) Preliminary and Preoperative expenses :

These are intended to be written off in the year in which the Company commences itsactivities.

This is the Balance Sheet Signature to Schedule to in referred to in our Report 'A' to 'F' annexedof even date


} DIRECTORS}

(M R Paymaster) }PROPRIETORMembership No: 38362


103



I. REGISTRATION DETAILS :Registration No. 43,934State Code 11Balance Sheet date 31ST MARCH, 2010



Total liabilities 1,358,519

Total assets 1,358,519

Sources of Funds :Paid-up capital 500,000Reserves and surplus 863,086Secured loansUnsecured loans (4,568)

==================Total 1,358,519

==================Application of funds : Net fixed assets -Investments 50,000Net current assets 54,822Miscellaneous Expenditure 1,253,697Accumulated Losses -

----------------------------------Total 1,358,519

==================


i) Turnover (including other income) N.A. ii) Total expenditure (including miscellaneous N.A. expenditure written off) iii) Profit/(Loss) before tax N.A. iv) Profit/(Loss) after tax N.A. vi) Earning per share N.A. vii) Dividend rate N.A.


Note :

1) The above particulars should be read alongwith the balance sheet as at 31st March, 2010,the profit and loss account for the year ended on that date and the schedules forming part thereof. 104

KILLICK AGENCIES AND MARKETING LIMITED

DIRECTORS’ REPORT

The Directors submit their Annual Report and audited statement of accounts for the year ended 31.3.2010. FINANCIAL RESULTS 31.3.2010 31.3.2009 Rupees Rupees Gross Profit/(Loss) before depreciation & Taxation 5,489,062 3,595,940 Depreciation 381,281 481,670 Provision for Taxation 1,588,833 1,125,326 Net Profit / (Loss) for the year 3,518,948 1,988,944 Add / Less : Balance brought forward from earlier Years 4,284,651 2,295,707 Total amount available for appropriation 7,803,599 4,284,651 Appropriation Proposed Dividend 50,000 --- Corporate Dividend Tax 8,498 58,498 --- Balance carried forward to Balance Sheet 7,745,102 4,284,651 PERFORMANCE: Earnings of the Company during the current period were maintained. The recession which engulfed most of the World finally hit the Shipbuilding sector in India, in the current year. The recession having affected the Marine sector Worldwide, there was a very slow progress in building of the vessels by the Indian Shipyards. During the current year, the Company booked the first order for ELLICOTT Dredger from an Indian Dredging Contracting company as well as supplied Spare Parts for the ELLICOTT Dredges. There has been heightened interest in dredging equipment but there are no imminent dredging contracts for small dredgers. The Defence Forces orders which were expected for Racal equipment did not materialise. In the current year, the Company developed a sub-assembly of the Headset for Racal under contract manufacturing at Bangalore. The Company also booked the first order for NIELAND Hydraulic Press and Frame Bending Machine. After one year of operation with dual Agents, GLAMOX has decided to have KAML as sole agent. The Company strengthened the Service Department by adding two (2) Trainee Service Engineers. The Service Department has seen a steady rise in activity and income. The current recession would affect the deliveries of equipment in the coming year. The business prospects for current year depend on the economic recovery in the Western World as Indian Shipbuilding Industry earns 75% of its revenue from exports. There is a marginal increase in enquiries, but the situation is still critical.

105

DIVIDEND : Your Directors are pleased to recommend for your consideration a dividend of Rs.1.00 per share (i.e.10%) on 50,000 Equity Shares of Rs.10/- each for the year ended 31st March, 2010 DIRECTORATE: Ms. Vibha Khandelwal retires by rotation and being eligible offers herself for reappointment. EMPLOYEES: There is no employee covered under Section 217 (2A) of the Companies Act, 1956. STATEMENT UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956. 1. The Company has no activities relating to conservation of energy. 2. (a) The Company has made no provision for Research and Development expenditure.

(b) The Company has no activity relating to technology absorption, adoption and innovation.

3. (a) The Company has earned Foreign Exchange of Rs.33,860,134/- (b) The Company’s Foreign Exchange outgo is Rs.529,160/-

DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that: • In the preparation of the annual accounts, the applicable accounting standards have

been followed along with proper explanation relating to material departures; • They 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 as at 31st March, 2010 and of the profit or loss of the Company for that period.


• The Annual accounts are prepared on a going concern basis. AUDITORS: M/s. V. S. Paranjape & Co., Chartered Accountants, Mumbai retire at the ensuing Annual General Meeting and are eligible for reappointment.

For and on behalf of the Board KILLICK AGENCIES AND MARKETING LIMITED

Registered Office: Plot No.7, Chandivali Farm Road, Chandivali, Mumbai 400072.

Place : Mumbai Dated 26th July, 2010

Prakash F. Nagori Director

T. B. Patel Director

106

Report of the AuditorsTo the Members of Killick Agencies & Marketing Limited1

2

3

4

i)

ii)

iii)

iv)

v)

i)ii)

ii)

V.S. ParanjapeSole ProprietorM.No.36273Place MumbaiDate 26-Jul-10

On the basis of the written Representations received from directors of the company, and taken on record by the Board of Directors, we report that no director is disqualified as on March 31, 2010 from being appointed as a director under Clause (g) of sub-section (1) of Section 274 of the Companies Act,1956;

In our opinion, the Balance sheet and Profit & loss account referred to in this report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable to this Company;

In so far as it relates to the Profit & Loss Account, of the Profit of the Company for the year ended on that date.

We have audited the attached Balance Sheet of Killick Agencies & Marketing Limited as at 31st March-2010 and also Profit and Loss Account & the cash flow Statement for the year ended on that date annexed thereto. These financial statement are the responsibility of the company management .Our responsibility is to express an opinion on these financial statements based on our audit.

ANDIn case of Cash Flow statement, of the cash flows of the company for the year ended on that date.

Further to our comment in the Annexure referred to above , we report that :

The balance sheet, Profit & Loss account and Cash Flow statement dealt with by this report are in agreement with the books of account ;

In so far as it relates to the Balance Sheet , of the state of affairs of the Company as at 31st March 2010

In our opinion and to the best of our information and according to the explanations given to us, the said balance sheet & profit & loss account read together with the notes forming part thereof, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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 ;

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

As required by the Companies (Audit Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the companies act , 1956 and on the basis of such checks of books and records of the company, as we considered appropriate, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable to the Company.

Chartered Accountants

In our opinion, proper books of account as required by law have been kept by the Company, so far as it appears from our examination of these books;

For V.S.Paranjape & Co

107

KILLICK AGENCIES & MARKETING LIMITEDi)

ii)

iii)

iv)

v)

vi)

vii)

viii)

a) There was opening balance of Rs 15.67 Lacs for advance made to holding Company Killick Nixon Ltd .During the year further amount of Rs.55.75 Lacs was advanced to Killick Nixon Ltd Of the total payment of Rs 71.42 Lacs amount of Rs. 49.93 Lacs was adjisted towards royalty payments to Holding Company. Outstanding balance due from Killick Nixon Ltd as on 31st March 2010 is Rs 21.49 Lacs .

(c) In The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records

ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN OUR REPORT OF EVEN DATE OF

In our opinion and according to the information and explanations given to us there is adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of fixed assets and sale of goods. During the course of our audit we have not observed any continuing failure to correct major weakness in internal control system.According to the information and explanations given to us, in our opinion, there were no contract or arrangements needing entry in the register to be maintained under section 301 of the Companies Act, 1956. Hence Clause 4(v) of the said order is not applicable.

(a ) The inventories has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of the inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

In respect of the loans, secured and unsecured, granted by the company to the companies ,firms or other parties covered in the register maintained under section 301 of the Companies Act,1956 according to the information and explanations given to us:

As the Company did not fulfil any of the conditions specified in clause 4(vii) of the said Order , it was not required to have formal internal audit system during the year.

b) In our opinion and according to the information and explanations given to us, the rate of interest, where applicable and other terms and conditions, are not prima facie prejudicial to the interest of the company.

(b) All the assets have been physically verified by the management during the year there is regular programme of verification which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(a ) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets

(c) In our opinion, the company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the company is not affected.

In our opinion , and according to the information and explanations given to us, the Company has not accepted any deposit from the public within the meaning of the provisions of section 58A, 58AA or any other relevant provisions of the Act and the Rules framed there under.

According to the information and explanations given to us, the Company was not required to maintain cost records under section 209(1)(d) of the Companies Act, 1956.

108

ix)

x)

xi)

xii)

xiii)

xiv)

xv)

xvi)

xvii)

xviii)

xix)

xx)

xxi)

For V.S.Paranjape & CoChartered Accountants

V.S. ParanjapeSole ProprietorM.No.36273Place MumbaiDate 26-Jul-10

(b ) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty, cess were in arrears as at 31st March 2010 for a period of more than six months from the date they became payable.

The company has not raised any money by public issues during the year.

According to the information and explanation given to us, the company has not given guarantee for loans taken by others from bank or financial institutions.

In our opinion, and according to the information and explanation given to us, the company did not deal or trade in share ,securities, debentures & other investment . Hence Clause 4(xiv) of the said order is not

The Company is not a chit fund /nidhi/mutual benefit fund /society. Hence clause 4(xiii) of the said order is not applicable .

According to the information and explanations given to us , no fraud on or by the Company has been noticed or reported during the year.

(a ) According to the information and explanations given to us, the company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, investor education fund, employee's state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

In our opinion, the accumulated losses of the company are not more than fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence clause 4(xii) of the said Order is not applicable.

According to the information and explanations given to us, on an overall basis the term loans have been applied for the purpose for which they were obtained.

According to the information & explanation given to us and on an overall examination of balance sheet of the company , we report that during the year the company has not utilized short term funds for long term investment.During the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act , 1956.Hence Clause 4(xviii) of the said Order is not applicable.The Company did not have outstanding debentures at any point of time during the year. Accordingly no securities or charge have been created.

(c ) According to the information and explanations given to us, there are no dues of sales tax, income tax, custom duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

109

KILLICK AGENCIES & MARKETING LIMITEDBalance Sheet as at 31st March 2010

Schedule As at As at31-Mar-10 31-Mar-09

Rs. Rs.A. Sources of Funds

Shareholders' FundsShare Capital 1 500,000 500,000 Reserves & Surplus 2Profit and Loss account 7,745,102 4,284,651 Loan FundsSecured LoanICICI Bank Car Loan 509,576 703,227

Total 8,754,678 5,487,878 B. Application of Funds

Fixed Asset 3Gross Block 3,902,443 2,674,303 Less Depreciation 1,640,330 1,259,049 Net Block 2,262,113 1,415,254

Deferred Tax Asset 92,992 109,020

Current Assets, Loans and Advances 4Sundry Debtors 2,405,361 1,925,680 Cash & Bank Balances 2,065,939 921,267 Loans and advances 2,795,055 1,893,643

7,266,355 4,740,591

Current Liabilities & Provisions 5Liabilities 808,285 761,307 Provisions 58,498 15,680

866,783 776,987


Miscellaneous ExpenditurePreliminary expenses 6 - -

Total 8,754,678 5,487,878 Significant Accounting Policies & Notes to accounts 11

As Per our report of even dateFor V.S.Paranjape & Co Killick Agencies & Marketing LimitedChartered Accountants For and on behalf of Board

V.S. Paranjape T.B.Ruia Prakash F Nagori T.B.PatelProprietor Director Director DirectorM.No.36273Place MumbaiDate 26-Jul-10

The Schedules referred to above and the notes thereon form an integral part of the Financial Statements

110

KILLICK AGENCIES & MARKETING LIMITEDProfit and Loss account for the year ended on 31st March 2010

Schedule 31-Mar-10 31-Mar-09Rs. Rs.

IncomeSales (Export ) 11,806,348 222,078

Commission\Service charges 7 21,966,990 13,737,946

Other Income 8 401,476 109,448

34,174,814 14,069,472 ExpenditurePurchases 8,418,930 146,851

Personnel Expenses 9 4,829,434 4,607,739

Administration and other Expenses 10 15,437,388 5,699,059

Depreciation 3 381,281 481,670

Preliminary Expenses 6 - 19,882

29,067,033 10,955,202

Profit/Loss Before Tax 5,107,781 3,114,270

Provision for Taxation 1,562,276 1,007,224 Fringe Benefit Tax - 150,191 Deferred Tax liabilty (16,028) 53,192 Short provision of tax earlier years (10,529) 21,103 Profit After Tax 3,518,948 1,988,944 Add Brought Forward from previous year 4,284,651 2,295,707 Profit available for Appropriation 7,803,599 4,284,651 Proposed Dividend 50,000 - Income Tax on Proposed Dividend 8,498 - Balance carried to Balance sheet 7,745,102 4,284,651

Significant Accounting Policies & Notes to accounts 11

The Schedules referred to above and the notes thereon form an integral part of the Financial Statements



111

KILLICK AGENCIES & MARKETING LIMITEDSchedules forming part of financial statements for the year ended on 31st March 2010

31-Mar-10 31-Mar-09Rs. Rs.

Schedule 1 Share CapitalAuthorised Share Capital9,99,000 Equity Shares of Rs. 10/- each. 9,990,000 9,990,000 100 Cumulative 14% Preference Shares of Rs.100/- each 10,000 10,000

10,000,000 10,000,000

Issued Subscribed & Paid Capital50,000 Equity shares of Rs.10/- each fully paid up 500,000 500,000 ( 50,000 Shares of Face Value Rs.10/ held by Holding company Killick Nixon Ltd and its nominees )

Total 500,000 500,000 Schedule 2 Reserves & SurplusProfit and Loss accountOpening balance 4,284,651 Add Profit for the current year 3,460,451 7,745,102 4,284,651

Total 7,745,102 4,284,651

Schedule 4 Current Assets, Loans and Advances1 Sundry Debtors (unsecured, considered good)

Debts outstanding for a period exceeding six months 70,207 111,071 Other Debts 2,335,154 1,814,609

2 Cash & Bank BalancesCash on hand ( As certified by the directors) 25,429 Balance with schedule bank in current accounts 540,510 Fixed Deposits(Axis Bank) 1,500,000 2,065,939 921,267

B Loans and Advances (Unsecured, considered good)Advances Recoverable in cash or in kind 2,557,202 1,860,272 ( Includes Rs.2149209/=due from Killick Nixon Ltd Holding company) ( PY Rs.1567389/- )Tax Refund FY 08-09 Net of advance payments made 237,853 33,371

Total 7,266,355 4,740,591

Schedule 5 Current Liabilities & ProvisionsA. Current Liabilitiesa. Sundry Creditors for Goods/Services - - Micro Small and Medium Enterprises - -

Others 198,540 297,775 c. Other Liabilities 7,005 283,777 d.Duties & Taxes 602,740 179,755 e. Income Tax ( Net of Advance taxes and TDS)

Sub Total 808,285 761,307 B. ProvisionsIncome Tax on Proposed Dividend 8,498 - Income Tax Provision (Net of advance taxes and TDS) 15,680 Proposed Dividend 50,000

Sub Total 58,498 15,680

Total 866,783 776,987

( As informed to us by the company there are no dues payable to Micro Small and Medium Enterprises and to that extent auditor has relied upon the representation by management)

112


31-Mar-10 31-Mar-09Rs. Rs.

Schedule 6 Miscellaneous Expenditure to the extent not written off

Preliminary Expenses 19,882 Less Written off - 19,882

Total - -

Schedule 7 Commission/Service Charges IncomeCommission 18,493,259 9,921,842 (Received in Foreign currency)Service Charges 3,473,731 3,816,104

21,966,990 13,737,946

Schedule 8 Other IncomeInterest on FD/ICD 203,511 108,678 Miscellaneous Income 197,965 770

Total 401,476 109,448

Schedule 9 Personnel ExpensesSalary 3,244,458 3,369,776 Ex-gratia 74,200 67,135 Incentive 121,025 250,000 Refreshment Charges (Staff Welfare) 216,754 182,785 Medical Reimbursement 113,553 107,500 Conveyance Allowance 206,692 194,700 Leave Travel Allowance 218,030 148,167 Company's Contribution to R.P.F 246,439 227,832 P.F.Administration charges 28,167 24,337 Company Contribution to Gratuity 51,755 4,741 Company Contribution to Super Annuation Fund 99,996 99,996 Staff Insurance 14,535 10,809 Car Parking Charges 30,271 21,693 Service Charges Exp. 163,559 148,268

Total 4,829,434 4,857,739

Schedule 10 Administration and other ExpensesRoyalty to holding company 5,547,978 - Business Promotion Expenses 696,086 530,857 Marketing Commission 487,500 - Freight Charges 271,534 - Auditor's Remuneration 200,000 150,000 Books and Periodicals 59,870 58,483 Director's office Exp. 650,000 600,000 General Office Exp. 25,011 17,520 Interest & Bank Charges 144,936 153,186 Foreign Tour Exp./Foreign Exchange Purchased 529,160 741,960 Travelling Expenses 703,071 696,140 Conveyance Charges 217,561 172,321 Telephone Expenses 244,165 274,356 Professional Charges 3,302,000 862,000 Misc. Expenses 274,106 125,296

113


31-Mar-10 31-Mar-09Rs. Rs.

Administration and other Expenses Contd……Motor Car Expense 224,452 183,042 Service Tax Exps 375,437 411,003 Postage & Courier Charges 14,723 29,717 Printing Stationary 68,596 60,486 Profession Tax Paid ( Company ) 2,500 2,500 Subscription 33,160 23,285 Repair & Maintenance-Vehicle 55,156 49,733 Repair & Maintenance-Office 950 14,050 Repair & Maintenance-Computers 22,511 8,522 Loss on Foreign Exchange fluctuation 571,376 - Rent Rates & Taxes 661,932 518,874 Balances w/off 53,617 15,729

15,437,388 5,699,059 Schedule 11 Accounting Policies And Notes On AccountsSignificant Accounting Policies & Notes to accounts

1 Business

2 Significant Accounting Policiesa Income / Expenditure

Commission Income

b InvestmentsInvestments are stated at cost.

c Fixed AssetsFixed assets are stated at historical cost of acquisition less depreciation.

d DepreciationDepreciation is provided by using W.D.V. Method at the rates specified in Schedule XIV of the Companies Act,1956.

e Foreign Currency TransactionsIncome

Expenditure

Current Assets & Current Liabilities

f

In the case of current assets and current liabilities expressed in foreign currency the exchange rate prevalent at the end of the year is taken for the purpose of translation. Exchange differences arising on the foreign currency transactions are recognised as income or expenses in the year in which they arise.

Liabilities in respect of retirement gratuity to employees is accounted by taking policy from LIC and the premium for the same is accounted as expenditure in the accounts.

Provision for Retirement Benefits

Killick Agencies & Marketing Limited is public limited unlisted company. Company is acting as agent for various foreign principals for sale of Dredgers, Dredging equipments, Steerable Rudder Propulsions,Martime and aviation lighting, Acoustic communication equipments etc. Company also offers after sales services . Apart from this company is involved in exports of micro switches, engineering items, acoustics items & head sets.

Income from commission is accounted in the books of accounts when the equipments/machinery is installed/commissioned at the customers designated place.

Expenditure in foreign currency is accounted at the conversion rate prevalent when such expenditure is incurred. Where realisation are deposited into and disbursement made out of a foreign currency account, all transactions are recorded at the rate prevailing on the date of transactions.

In the case of sales/services made to clients outside India income is accounted on the basis of the exchange rate prevailing on the date of the raising of the invoices. Adjustments are made for any variations in the sale proceeds on conversion into Indian currency and the same is accounted in the Profit & Loss A/c for the year as Gain/Loss on Account of Foreign Exchange fluctuation as per the provisions of the Accounting Standard-11 (Revised) issued by The ICAI.

114


31-Mar-10 31-Mar-09Rs. Rs.

g

h

i

3 Earnings Per ShareParticularsProfit after Tax 3,518,948 1,988,944 Numerator used for calculating basic and diluted earnings per share-Weighted average number of shares used as denominator for calculatingbasic and diluted earnings per shareNumber of Equity shares outstanding on the first day of the year 50,000 50,000 Weighted Average Number of equity shares outstanding 50,000 50,000 Nominal Value of shares 10 10

Basic and Diluted Earnings per share 70.38 39.78

4 Related Party Disclosurea) Related party RelationshipDescription Killick SIL Business Relationship Holding Company under Opening balance Dr 15.67 0.02 CrAmounts paid during the year 55.75 0.45 Amounts adjusted during the year 49.93 0.47 Closing balance Dr 21.49 - Royalty Paid to Holding Company 5,547,978 (P.Y. Rs.Nil)

5 Deferred taxes AS 22Deferred Tax AssetsDepreciation 109,020 55,827 Depreciation - 53,192 Deferred Tax LiabilityDepreciation 16,028 -

Net Deferred Tax Asset 92,992 109,020 6 Statutory information1 Remuneration to Auditors

Audit Fees 60,000 55,150 Tax Audit Fees 60,000 55,150 Vat Audit Fees 20,000 - Other services 60,000 55,150

200,000 165,450 2 Expenditure in Foreign Currency

Foreign Tour Expenses 529,160 741,960 3 Earnings in Foreign Currency

Commission 18,910,360 13,635,058 Service charges 3,143,426 1,219,436 Sales 11,806,348 222,078

Impairment of Assets if any, is ordinarily assessed by comparing value in use with carrying value of assets.

Taxes on Income

Privilege Leave Encashment

Provision for current tax is computed as per total income returned under the Income Tax Act,1961 taking into account available deduction and exemptions.

Employees are entitled to accumulate their privilege leave within specified limit and can claim encashment thereof while in service or on separation or superannuation or otherwise. This is not treated as a specific retirement benefit and the cost thereof is accounted for, in the year of its payment.

Impairment of Assets

115


31-Mar-10 31-Mar-09Rs. Rs.

F) Notes to AccountsNo provision for Contingent Liabilities, if any has been made in this accounts.Figures has been rounded off to the nearest rupee.Loans & Advances and Debtors are subject to confirmations.Previous years figures have been regrouped rearranged wherever necessary.

CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31ST MARCH, 2010

A CASH FLOW FROM OPERATING ACTIVITIESNet Profit before tax 5,107,781 3,114,270 Adjustments forDepreciation 381,281 481,670 Interest Received (203,511) (108,678) Preliminary Expenses written off - 19,882 Excess / ( Short) Provision written back / off (10,529) (21,103) Operating Profit before working capital Changes 5,275,022 3,486,041 Changes inTrade Receivables (479,681) 3,874,833 Tax FY 08-09 Net of advance payments made (204,482) (33,371) Loans and Advances (696,930) (384,127) Current liabilities and Provisions 89,796 (792,672) Cash Generated from Operations 3,983,725 6,150,704 Income Taxes paid (1,562,276) (1,157,415) Proposed Dividend including Income tax thereon (58,498) -

Net cash Flow from operating Activities (A) 2,362,952 4,993,289

B CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Asset (1,228,140) (95,982) Interest Received 203,511 108,678

Net cash (used) from / investing activities (B) (1,024,629) 12,696 C CASH FLOW FROM FINANCING ACTIVITIES

Proposed Dividend including Income tax thereonIncrease in Borrowings (193,651) (7,549,375)

Net cash flow from Financing Activities (C) (193,651) (7,549,375)

Net increase/(decrease) in cash and cash equivalents (A+B+C) 1,144,672 (2,543,390)

Cash and cash equivalents as at the beginning of the year 921,267 3,464,657

Cash and cash equivalents as at the end of the year 2,065,939 921,267

116


31-Mar-10 31-Mar-09Rs. Rs.

G) Balance Sheet Abstract & Company General Business Profile 1 REGISTRATION DETAILS

Registration No. U67120MH1987PLC044103State Code 11 Balance Sheet Date 31-Mar-10

2 CAPITAL RAISED DURING THE YEAR ( Amt in Rs.Thousands)Public Issue NilRight Issue NilBonus Issue NilPrivate Placement Nil

3 POSITION OF MOBILISATION & DEPLOYMENT OF FUNDS ( Amt in Rs.Thousands) 31/Mar/10Total liabilities 8755Total Assets 8755SOURCES OF FUNDSPaid up capital 500 Reserves & Surplus 7,745 Secured Loans 510 Un-secured LoansAPPLICATION OF FUNDSNet Fixed Assets 2,262 Investments - Deferred Tax Asset 93 Net Current Assets 6,400 Mis. Expenditure - Accumulated Losses

4 PERFORMANCE OF THE COMPANY ( Amt in Rs.Thousands)Turnover 33,773 Total Expenditure 29,067 Profit Before Tax 5,108 Profit After Tax 3,519 Earnings per Share (in Rs.) 70 Dividend Rate (%) 10%

5 GENERIC NAMES OF THREE PRINCIPLE PRODUCTS / SERVICES OF THE COMPANY (As per monetary terms)Product Description Commission Item Code No.



117


Schedule 3 Fixed Assets

As on As on Up to Up to As on As on

1-Apr-09 Rate of Depn

Additions 31-Mar-10 31-Mar-09 For the Period

31-Mar-10 31-Mar-09 31-Mar-10

Computer & Software 276,389 40.00% 266,972 543,361 171,860 50,398 222,258 104,529 321,103

Motor Cars 2,200,190 25.89% 958,118 3,158,308 1,013,234 308,253 1,321,488 1,186,956 1,836,820

Furniture & Fixture 118,209 18.10% 118,209 48,004 12,707 60,711 70,205 57,498

Telephone Instrument/Mobile

49,149 18.10% 1,250 50,399 13,001 6,559 19,560 36,148 30,839

Electrical fittings 19,965 18.10% 19,965 8,957 1,992 10,949 11,008 9,016

EPABX systems 10,400 18.10% 10,400 3,992 1,160 5,152 6,408 5,248

Office Equipments - 18.10% 1,800 1,800 - 212 212 - 1,588

Total 2,674,303 1,228,140 3,902,443 1,259,049 381,281 1,640,330 1,415,254 2,262,113

P.Year 2,578,321 95,982 2,674,303 777,379 481,670 1,259,049 1,800,942 1,415,254

Description of Asset Gross Block (At Cost) Depreciation Net Block

118

KILLICK FINANCIAL SERVICES LIMITED

DIRECTORS’ REPORT The Directors submit their Annual Report and the Balance Sheet and Profit and Loss Account for the year ended 31.3.2010. WORKING FOR THE PERIOD During the year Company incurred a loss of Rs.11,525/-Adding thereto c/f loss of Rs.9,40,347/- the total loss of Rs.9,51,872/- has been carried forward. AUDITORS’ QUALIFICATION Auditors have made certain observations, notes to accounts are self-explanatory and do not required any elaboration. DIRECTORATE Mr.S. R. Hemmady retires by rotation and being eligible offers himself for reappointment. STATEMENT UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 PURSUANT TO SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956. 1) The Company has no activities relating to conservation of energy. 2) (a) The Company has made no provision for Research and Development

expenditure. (b) The Company has no activity relating to technology absorption, adoption

and innovation. 3) The Company has no activity relating to Foreign Exchange earnings and outgo. DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that : • In the preparation of the annual accounts, the applicable accounting standards

have been followed • They have selected such accounting policies and applied them consistently and

made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2010 and of the profit or loss of the Company for that period.

119

• Proper and sufficient care has been taken 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.

• The Annual Accounts are prepared on a going concern basis. PARTICULARS OF EMPLOYEES U/S 217(2A) : None of the employees of the Company was in receipt of remuneration of Rs. 2,40,000/- or more per annum during the year under review or if employed for a part of the year in receipt of Rs. 20,000/-per month. AUDITORS: Members are requested to appoint Auditors for the current year and to fix their remuneration. M/s. Manesh Paymaster & Co. Chartered Accountants, Mumbai, retire at the ensuing Annual General Meeting and are eligible reappointment.

By Order of the Board of Directors For KILLICK FINANCIAL SERVICES LTD.,

Registered Office : Basement, Commercial Union House, No.9, Wallace Street, Fort, Mumbai – 400 001.

S. R. Hemmady

P.S. Manjrekar Dated: September 01, 2010 DIRECTOR DIRECTOR

120

MANESH PAYMASTER & CO. CHARTERED ACCOUNTANTS EXAMINER PRESS BUILDING, 35 DALAL STREET, BOMBAY 400 023 PHONES : (O) 2267 3688, 2267 7504 (TELE-FAX) (R) 2364 5422, 2361 4146 M. R. PAYMASTER B. COM., F.C.A ------------------------------------------------------------------------------ AUDITORS' REPORT TO THE SHAREHOLDERS ------------------------------------ We have audited the attached Balance Sheet of KILLICK FINANCIAL SERVICES LIMITED as at 31st March 2010 and also the Profit & Loss Account for the year ended on that date 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. We conducted our audit in accordance with auditing standards generally accepted in India. These 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 the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company, as we considered appropriate, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said order to the extent applicable to the Company. Further to our comments in the Annexure referred to above, we report that:






121


6) The Company has taken unsecured loan from its holding company without

any stipulation as to repayment and interest. Outstanding balance as at 31st March 2010 was Rs 1,87,613/-. This loan has been taken in violation of the provision of section 293 (1)(d) of the Act.

Subject to the foregoing, in our opinion and to the best of our information and according to the explanation given to us, the said balance sheet & profit & loss account read together with the notes forming part thereof, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2010.

AND b) In so far as it relates to the Profit & Loss Account, of the loss

of the Company for the year ended on that date.



Mem No.: 38362 Dated: 01.09.2010

122






4) Having regards to the activities of the Company during the year, in our opinion, Clause 4(iv) of the said order pertaining to internal control procedures is not applicable.





9) According to the records of the Company, except for the dues of Rs. 6,197/- in respect of income tax deducted at source, the Company was generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, wealth tax, sales tax, custom duty, excise duty, Service tax & cess applicable to it. According to the information & explanations given to us, apart from the said dues of Rs. 6,197/- no such undisputed dues were in arrears as at 31st March 2010 for a period of more than six month from the date they became payable. According to the records of the Company, there were no disputed dues in respect of sales tax, income tax, custom duty, wealth tax, excise duty, Service tax or cess.

10) In our opinion, the accumulated losses of the Company were more than fifty percent of its net worth as at 31st March 2010. The Company incurred cash losses during the year ended 31st March 2010 as well as in the immediately preceding financial year.

11) The Company did not have outstanding debentures or outstanding loans from financial institution or bank during the year. Hence Clause 4(xi) of the said Order is not applicable.

123


12) The company has not granted any loans and advances on the basis of

security by way of pledge of shares, debentures and other securities. 13) The Company is not a chit fund/nidhi/mutual benefit fund/society.

Hence Clause 4(xiii) of the said Order is not applicable. 14) In our opinion, and according to the information and explanations

given to us, the Company did not deal or trade in shares, securities, debentures & other investments. Hence Clause 4(xiv) of the said Order is not applicable.



17) The Company considers funds raised by it from holding company amounting to Rs 1,87,613/- at the end of the financial year to be of long term nature despite there being no stipulation as to repayment. This debt has been incurred to fund its losses. Subject to the foregoing, according to the information & explanations given to us and on an overall examination of the balance sheet of the Company, we report that during the year the Company has not utilized short term funds for long term investments.







Mem No.: 38362 Dated:01.09.2010

124


Balance Sheet As At 31st March, 2010 Schedule As at 31st MarchAnnexed 2010 2009

Rupees Rupees

I SOURCES OF FUNDS :

1. Shareholders' Funds :

Share Capital A 500,000 500,000 Reserves and Surplus B 225,560 225,560

2. Loan Funds :

Unsecured Loan from Holding Company 187,613 187,613TOTAL 913,173 913,173

II APPLICATION OF FUNDS : 1. Current Assets, Loans and Advances C 4,025 4,520

Less: Current Liabilities D 42,724 31,694

Net Current Assets (38,699) (27,174)

2. Profit and Loss Account 951,872 940,347

Total : 913,173 913,173

This is the Balance Sheet referred to in our For Notes forming part of AccountsReport of even date refer Schedule 'E' annexed.


} DIRECTORS}}

(M R Paymaster)

PROPRIETORMembership No: 38362

MUMBAI : MUMBAI : DATED : 01.09.2010 DATED : 01.09.2010

125


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 SCH For the Year For the Year

Ended Ended31.03.10 31.03.09

EXPENDITURE

Operative and other Expenses 1 11,525 15,674

Total Expenses 11,525 15,674

Profit / (Loss) for the year (11,525) (15,674)

(11,525) (15,674) Add: Balance brought forword from previous year (940,347) (924,673)

Balance carried to balance sheet (951,872) (940,347)

This is the Profit and Loss Account For Notes forming Part of Accounts,referred to in our Report of even date refer Schedule 'E' annexed

For Manesh Paymaster & Co. ) Charterred Accountants )

)) DIRECTORS)

(M R Paymaster) )PROPRIETOR )

Membership No: 38362

MUMBAI : MUMBAI : DATED : 01.09.2010 DATED : 01.09.2010

126


Schedules to the Balance Sheet as at 31st March, 2010 As at 31st March

2010 2009Rupees Rupees

A. SHARE CAPITAL :

Authorised :

9,99,000 Equity Shares of Rs. 10/- each 9,990,000 9,990,000

100 14% Cumulative Preference shares of Rs.100/- each 10,000 10,000

10,000,000 10,000,000

Issued, subscribed and paid-up :

50000 (Previous year 50000) Equity shares of Rs.10/- each fully paid up. 500,000 500,000 (The entire share capital is held by the Holding Company and its nominees)

B. RESERVES AND SURPLUS:

Capital Reserve 225,560 225,560

C. CURRENT ASSETS,LOANS AND ADVANCES

Current Assets :

Cash Balance on hand - -

Balance with Scheduled Banks in Current Accounts 4,025 4,520

4,025 4,520Loans and Advances :

Advances recoverable in cash or in kind or for value to be received. - -

4,025 4,520

D. CURRENT LIABILITIES AND PROVISIONS :

Current Liabilities :


42,724 31,694

127


SCHEDULE ANNEXED TO AND FORMING PART OF THE PROFIT AND LOSS

ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 As at 31st March

2010 2009Rupees Rupees

SCHEDULE : "1" OPERATING AND OTHER EXPENSES

Filing Fees 0 1,500

Bank Charges 495 2,020

Professional fees - 1,124

Auditor's Remuneration Audit Fees (Including service tax) 5,515 5,515Taxation Matter 5,515 5,515

11,525 15,674

128


'E' NOTE:

1. Previous year's figure are rearranged and regrouped wherever necessary.

2. Statement of significate Accounting Policies.

General

Accounts of the Company are maintained under historical cost convention using accrual method of accounting.

These are the Schedules referred to Signature toin our report of even date. Schedules'A' to 'E'

and '1' annexedFOR MANESH PAYMASTER & CO.,CHARTERED ACCOUNTANTS )

)) DIRECTOR)

(M R Paymaster) )PROPRIETOR )Membership No: 38362

MUMBAI MUMBAI

DATED : 01.09.2010 DATED : 01.09.2010

129






Total liabilities 913,173

Total assets 955,897

Sources of Funds :Paid-up capital 500,000Reserves and surplus 225,560Secured loans -Unsecured loans 187,613

Total 913,173

Application of funds :Net fixed assets -Investments -Net current assets (38,699)Miscellaneous Expenditure -Accumulated Losses 951,872

Total 913,173


i) Turnover (including other income) NIL ii) Total expenditure (including miscellaneous expenditure written off) 11,525 iii) Profit/(Loss) before tax (11,525) iv) Profit/(Loss) after tax (11,525) vi) Earning per share N.A. vii) Dividend rate N.A.


Note :

1) The above particulars should be read alongwith the balance sheet as at 31st March,2010 the profit and loss account for the year ended on that date and the schedules forming part thereof.

For MANESH PAYMASTER & CO., CHARTERED ACCOUNTANTS

M. R. PAYMASTER ProprietorMembership No. 38362

MUMBAI : MUMBAI :DATED :01.09.2010 DATED : 01.09.2010

130

KILLICK PRESTRESSING PRIVATE LIMITED

DIRECTORS’ REPORT The Directors submit their report and audited statement of accounts for the year ended 31.3.2010. WORKING FOR THE PERIOD : During the year, the company incurred an expenditure to the extent of Rs.2,758/-. After adding thereto previous year’s pre-operative expenses of Rs.38,883/- the total pre-operative expenses of Rs.41,641/- are carried forward. DIRECTORATE: There has been no change in the directorship of the Company. EMPLOYEES: There is no employee covered under Section 217 (2A) of the Companies Act, 1956. STATEMENT UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956. 1. The Company has no activities relating to conservation of energy. 2. (a) The Company has made no provision for Research and Development expenditure.

(b) The Company has no activity relating to technology absorption, adoption and innovation. 3. (a) The Company has earned Foreign Exchange of Rs.NIL

(b) The Company’s Foreign Exchange outgo is Rs.NIL DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that: • In the preparation of the annual accounts, the applicable accounting standards have been


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 on 31st March, 2010 and of the profit or loss of the Company for that period.


• The Annual accounts are prepared on a going concern basis. AUDITORS: M/s. Jagtiani & Naik, Chartered Accountants, Mumbai retire at the ensuing Annual General Meeting and are eligible for reappointment.

For and on behalf of the Board KILLICK PRESTRESSING PVT. LTD.

Registered Office: Plot No.7, Chandivali Farm Road, Chandivli, Mumbai 400 072.

Director

Director

Place : Mumbai Dated 1st September, 2010

131


KILLICK PRESTRESSING PRIVATE LIMITED 1. We have audited the attached Balance Sheet of KILLICK PRESTRESSING PRIVATE

LIMITED, as at 31st March, 2010. No Profit and Loss Account has been prepared for the year ended 31st March, 2010 as the Company has not commenced any operation. However a statement of pre-operative expenses has been attached. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

2. We have 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 as to 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.

3. Attention is invited to Note : 2 of Schedule E regarding the Company being

deemed to be a defunct Company within the meaning of Section 560 of the Companies Act, 1956 due to non compliance the provisions of Companies (Amendment) Act, 2000.

4. The Company has not commenced any of its activity for which it was

incorporated, further the Company has no fixed assets, and the current assets have been stated at their historical values which is loan given to Killick Engineering Limited (Fellow subsidiary Company) which in the opinion of management is recoverable, hence no adjustment to the values reported in the Balance Sheet is deemed necessary as required by Standard on Auditing– 570 (Revised) on “Going Concern”

5. This report does not include a statement on the matters specified in Paragraph 4 of the

Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 issued by the Department of Company Affairs, in terms of Section 227(4A) of the Companies Act, 1956, since in our opinion and according to the information and explanations given to us, the said order is not applicable to the Company since at present the status of the Company is a Private Limited Company and which at any point of time during the financial year.

a) does not have its paid up capital and reserves exceeding fifty lakh rupees ; b) does not have loan outstanding twenty five lakh rupees or more from any bank or

financial institution ; and c) does not have a turnover exceeding five crore rupees.

6. Further to our comments referred to above, we report that :

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

132

(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

(iii) The Balance Sheet and Schedule of pre-operative expenses dealt with by this

report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet and Schedule of pre-operative 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;

(v) On the basis of 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 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(vi) Subject to the matters referred to Paragraphs 3 and 4 above, in our opinion

and to the best of our information and according to the explanations given to us, the said accounts read in conjunction with the Schedules “A” to “E” and notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 10

For JAGTIANI & NAIK Chartered Accountants ICAI Reg no-103854W J. G. NAIK PARTNER Membership No. 30614 PLACE : MUMBAI DATED : 1st SEPTEMBER 2010

133



Share Holders' Funds :

Share Capital A 100,000 100,000 ------------------- ------------------

TOTAL 100,000 100,000 ========== ==========


1) Current Assets, Loans and Advances : B

Loans and Advances 70,000 70,000 ------------------- ------------------

70,000 70,000

Less : Current Liabilities C 22,866 20,108 ------------------- ------------------

47,134 49,892 2) Miscellaneous Expenditure :

(to the extent not written off or adjusted)

Preliminary Expenses 11,225 11,225

Pre-operative Expenses D 41,641 38,883 ------------------- ------------------

52,866 50,108 ------------------- ------------------

TOTAL 100,000 100,000 ========== ==========

This is the Balance Sheet referred For Notes forming part of the Accounts,to in our report of even date. refer Schedule "E" Annexed.


))) DIRECTORS)




BALANCE SHEET AS AT 31ST MARCH, 2010AS AT

31ST MARCH

134


A. SHARE CAPITAL :

Authorised :

1,50,000 Equity Shares of Rs. 10/- each 1,500,000 1,500,000 ========== ==========

Issued Subscribed and Paid up :

10,000 Equity Shares of Rs. 10/- each fully paid up (the entire share capital is held by the Holding CompanyKillick Nixon Limited and its nominees) 100,000 100,000

========== ==========

B. CURRENT ASSETS, LOANS AND ADVANCES :

Loans and Advances :

Advances recoverable in cash or in kind or for value 70,000 70,000 ========== ==========

C. CURRENT LIABILITIES AND PROVISIONS :

Current Liabilities :

Sundry Creditors 22,866 20,108 ========== ==========

D. PRE-OPERATIVE EXPENSES :

INCURRED INCURREDUPTO DURING THE TOTAL

31.03.2009 YEAR RUPEES

Filing Fees 11,390 - 11,390

Legal and Professional Fees 15,311 - 15,311

Auditors Remuneration :

Audit Fees 23,000 2,500 25,500

Expenses Reimbursed 4,337 258 4,595

Printing and Stationery 797 - 797

Sundry Expenses (including Bank Charges) 2,365 - 2,365

57,200 2,758 59,958

Less : Sundry Liabilities Written Back (in 2004-2005) 18,317 - 18,317

38,883 2,758 41,641


SCHEDULES TO BALANCE SHEET AS AT 31ST MARCH, 2010

AS AT31ST MARCH

135


SCHEDULE TO ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 “E” NOTES :

1. SIGNIFICANT ACCOUNTING POLICIES :

a) Applicability of Accounting Standards :

The Company is a Small and Medium Company as defined in the Companies (Accounting Standards) Rules, 2006 in respect of Accounting Standards notified under the Companies Act, 1956. Accordingly, the Company has complied with the Accounting Standards as applicable to a Small and Medium Sized Company.

b) Basis of Accounting :

The financial statements have been prepared on accrual basis under the historical cost convention, in conformity in all material aspects with the generally accepted accounting principles in India, and the requirements of the Companies Act, 1956.

c) Pre-operative Expenses :

All expenditure incurred upto the date of setting up of the project is shown under the head pre-operative expenses. The project is yet to be completed and hence pre-operative expenses are shown separately. On setting up of the project, the pre-operative expenses will be allocated to various fixed assets.

c) Preliminary Expenses :

Preliminary Expenses would be amortised over a period of Five years from the date of commencement of operations, in accordance with Section 35-D of the Income Tax Act, 1961.

2. W ith effect from 27th June, 1988, consequent to the transfer of entire Capital of the

Company to Killick Nixon Limited, the Company became a subsidiary of Killick Nixon Limited and became a deemed public company under the provisions of Section 43-A of the Companies Act, 1956. The Company made necessary application for deleting the word “Private” from the name of the Company. However the necessary alteration in the Certificate of incorporation and its Memorandum of Association have till date not been made by the Registrar of Companies, Maharashtra. Consequent upon the amendments made to Section 3(1)(iv)(c), by the Companies (Amendment) Act, 2000, the Company is a Public Company w.e.f. 13th December, 2000 by virtue of its being a subsidiary of Killick Nixon Limited, a Public Company and accordingly the Company was required to :

136

i) Amend the Article 3 to remove the restrictive conditions normally contained in the Articles of a Private Company.

ii) Enhance paid up Share Capital to a minimum of Rs. 5, 00,000/- by 13th December, 2002 and

iii) Comply with all the provisions of the Act, relating to Public Companies. No steps have been taken to comply with the above requirements and hence in terms of Provisions of Section 3(5) of the Companies Act, 1956, the Company is deemed to be a defunct company within the meaning of Section 560 of the Companies Act, 1956 and its name may be struck off from the Register by the Registrar of Companies.

3. As there was no activity or other operations carried on by the Company during the year ended 31st March, 2010, no Profit and Loss Account has been prepared as it is considered not necessary. The expenditure incurred prior to commencement of operations have been shown in the pre-operative expenses.

4. The estimated amount of contracts remaining to be executed on Capital Account

and not provided for Rs. NIL (Previous Year Rs. NIL). 5. Related Party Disclosures under AS-18 issued by the Institute of Chartered

Accountants of India. The Company is controlled by Killick Nixon Limited which is the beneficial owner of

100% Equity Shares. The following related party transactions were carried out during the year.

Amount in Rupees Name of the related

party Nature of

Relationship Nature of

Transaction 31.03.2010 31.03.2009

i) Killick Nixon Ltd. Holding

Company a) Share

Capital 1,00,000 1,00,000

b) Creditors for expenses for the year

0 0

c) Repaid during the year

0 0

d) Outstanding Payable

7,926 7,926

ii) Killick Engineering

Ltd. Fellow Subsidiary

a) Advances given

0 0

b) Outstanding Receivable

70,000 70,000

137

6. Basic and diluted earning per share Rs. NIL (Rs. NIL). 7. As the Company has not commenced operations, there is no deferred tax asset /

liabilities. 8. The company has not received any intimation from suppliers/creditors regarding

their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure if any relating to amounts unpaid as at the year end together with the interest paid/payable as required under the said Act has not been made

9. BALANCE SHEET ABSTRACT AND COMPANYS GENERAL BUSINESS

PROFILE

I. Registration Details Registration No. 47724 State Code 11 Balance Sheet Date 31-03-2010 II. Capital Raised during the year (Amount in Rs. Thousands) Public Issue Rights Issue NIL NIL Bonus Issue Private Placement NIL NIL III. Position of Mobilisation and Deployment of

Funds (Amount in Rs. Thousands)


Paid-Up Capital Reserves & Surplus 100 NIL Secured Loans Unsecured Loans

NIL NIL Application of Funds Net Fixed Assets Investments NIL NIL Net Current Assets Misc Expenditure 47 53 Accumulated Losses

138

NIL IV. Performance of Company (Amount in Rs. Thousands) Turnover (Gross Revenue) Total Expenditure NIL NIL

Profit / Loss Before Tax Profit / Loss After Tax NIL NIL Earnings Per Share in Rs. Dividend Rate % NIL NIL V. Generic Name of The Services of Company (as per monetary terms) Item Code No. (ITC Code) NOT APPLICABLE Description

10. Previous years figures have been rearranged and regrouped wherever necessary.

These are the Schedules referred Signature to Schedules to in our report of even date attached ‘A’ to ‘E’ Annexed. For JAGTIANI & NAIK ) Chartered Accountants ) ) DIRECTORS J. G. NAIK ) PARTNER ) Membership No. 30614 PLACE : MUMBAI PLACE : MUMBAI DATED : 1st SEPTEMBER 2010 DATED : 1st SEPTEMBER 2010

139


DIRECTORS’ REPORT

Your Directors submit their Report and Audited statements of Accounts for the year ended 31st March, 2010.

1. FINANCIAL RESULTS/OPERATIONS : (a) The Company has not earned any income during the year (income in

the previous year Rs.NIL). 2. DIRECTORS

Mr. S. C. Parikh retires by rotation and eligible offers himself for reappointment.

3. DIRECTORS’ RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT, 1956.

The Directors confirm that: a. In the preparation of the annual accounts, the applicable accounting

standards have been followed along with proper explanation relating to material departures;

b. The directors have selected such accounting policies and applied them

consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c. 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;

d. that the directors have prepared the annual accounts on a going

concern basis. 4. AUDITORS’ REMARKS : The Report of the Auditors contains certain remarks on the accounts. In

this connection your Directors have to make the following observations :

140

a) Gratuity is being accounted for on cash basis and therefore it is not necessary to make any provision in this account.

b) On account of liquidity crunch faced by the company it was not possible to make payment for rent payable in respect of office premises, it would be accounted for as and when the liquidity position improves and the payment is made.

c) As regards the recovery of outstanding amount due by various debtors persuasive and legal steps wherever necessary being taken for the recover. The Company is hopeful of its efforts being successful.

d) For reasons stated in clause (b) above there has been delay in the deposit of Provident Fund and E.S.I.C. dues.

5. AUDITORS :

Messrs Manesh Paymaster Co., Chartered Accountants were reappointed at the Annual General Meeting held on 30th September, 2009.

6. PERSONNEL :

Relationship with the Company’s employees remained cordial throughout the year. There is no employee covered Under Section 217(2A) of the Companies Act, 1956.

7. PARTICULARS OF CONSERVATION OF ENERGY AND TECHNOLOGY

ABSORPTION : Since the Company is only providing services the provisions under Section

217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable.

For and on behalf of the Board For Killick Air Couriers and Forwarders Limited Place: Mumbai-400 072 Dated: 1st September, 2010

T. B. PATEL Director

SANAT C PARIKH Director

141

MANESH PAYMASTER & CO. CHARTERED ACCOUNTANTS EXAMINER PRESS BUILDING, 35 DALAL STREET, BOMBAY 400 023 PHONES : (O) 2267 3688, 2267 7504 (TELE-FAX) (R) 2364 5422, 2361 4146 M. R. PAYMASTER B. COM., F.C.A ------------------------------------------------------------------------------ AUDITORS' REPORT TO THE SHAREHOLDERS ------------------------------------ We have audited the attached Balance Sheet of KILLICK AIR COURIERS and FORWARDERS LIMITED as at 31st March 2010 and also the Profit & Loss Account for the year ended on that date 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. We conducted our audit in accordance with auditing standards generally accepted in India. These 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 the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company, as we considered appropriate, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said order to the extent applicable to the Company. Further to our comments in the Annexure referred to above, we report that:






6) a) Provision for accrued liability in respect of rent Rs

21,60,000/- (including Rs Nil for current year) has not been made in the accounts

142


b) General body approval in respect of its borrowings has not been

obtained resulting in violation of the provisions of section 293(1)(d) of the Act .

c) We are unable to comment on the propriety of preparing accounts

on going concern basis as the Company has not carried on any business for the last several years.

d) Confirmations in respect of Bank balances, unsecured loan taken & creditors have not been obtained.

Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said balance sheet & profit & loss account read together with the notes forming part thereof, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: a) In so far as it relates to the Balance Sheet, of the state of

affairs of the Company as at 31st March 2010 AND b) In so far as it relates to the Profit & Loss Account, of the

loss of the Company for the year ended on that date. For MANESH PAYMASTER & CO Chartered Accountants

(M R PAYMASTER) Proprietor Mem No.: 38362 Mumbai:1st September 2010

143



1) The Company did not have any fixed assets during the year. 2) The Company did not have inventory at any point of time during the

year. Hence Clause 4(ii) of the said Order pertaining to the inventory is not applicable.

3) The Company has not taken/granted any loan from/to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 during the year. Hence Clause 4(iii) of the said Order pertaining to loans is not applicable.

4) Having regard to the activities carried on by the Company during the year, in our opinion, and according to the information & explanations given to us, Clause 4(iv) of the said Order pertaining to internal control is not applicable.





9) According to the records of the Company & information given to us, the Company was not required to deposit during the year any statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty & cess as none of them were applicable to it. According to the records of the Company, there were no disputed dues in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty or cess.

10) In our opinion, the accumulated losses of the Company were more than fifty percent of its net worth as at 31st March 2010. The Company incurred cash losses during the year ended 31st March 2010 & in the year ended 31st March 2009.

11) The Company did not have outstanding debentures or outstanding loans from financial institution during the year.



14) In our opinion, and according to the information and explanations given to us, the Company did not deal or trade in shares, securities, debentures & other investments. Hence Clause 4(xiv) of the said Order is not applicable.


144


16) The Company had no term loans outstanding at any point of time

during the year. 17) The Company considers entire liability to its holding company to be

of long-term nature despite there being no stipulation as to its repayment. This liability has been incurred to fund its losses. Subject to the above, according to the information & explanations given to us and on an overall examination of the balance sheet of the Company, we report that during the year the Company has not utilized short-term funds for long-term investments.







Mem No.: 38362 Mumbai:1st September 2010

145

2010 2009Schedule Rupees Rupees Rupees

I. SOURCES OF FUNDS :1. SHAREHOLDERS' FUNDS : (a) Share Capital 1 9,990,000 9,990,000 (b) Reserves and Surplus 2 16,018,643 16,018,643

26,008,643 26,008,643 2. LOAN FUNDS : Secured Loans - - Unsecured Loans 3 14,864,123 14,864,123

14,864,123 14,864,123 TOTAL 40,872,766 40,872,766


1. INVESTMENTS :(UNQUOTED)A. (In subsidiary Company) 440100 Equity Shares of Rs.10/- each fully paid up of Air Survey Co.of India P.Ltd. 1,467,000 1,467,000

2. CURRENT ASSETS, LOANS AND ADVANCES : 4 (A) Current Assets:

(a) Cash and Bank Balances 30,354 30,354

(B) Loans and Advances : 38,950 38,950 69,304 69,304

3. Less: CURRENT LIABILITIES AND PROVISIONS : (a) Current Liabilities 5 832,573 809,543 (b) Provision 31,160 31,160

863,733 840,703 (794,429) (771,399)

4. Profit & Loss Account 40,200,195 40,177,165

5. TOTAL 40,872,766 40,872,766

6. Notes forming part of Accounts 7

This is the Balance Sheet referred to in our For and on behalf of the Board,Report of even date

For MANESH PAYMASTER & CO.Chartered Accountants

- DIRECTOR

M.R. PAYMASTERProprietorMembership No.38362 - DIRECTOR

Place: Mumbai Place: MumbaiDated: 01.09.2010 Dated: 01.09.2010

As at 31st MarchBALANCE SHEET AS AT 31ST MARCH,2010


146

As at As at31.03.2010 31.03.2009

Schedule Rupees Rupees

INCOME :

- -

EXPENDITURE :

Administration Expenses 6 23,030 23,411 23,030 23,411

Profit /(Loss) before Tax (23,030) (23,411) Provision for Taxation - - Profit /Loss after Tax (23,030) (23,411) Profit/Loss brought forward for earlier year (40,177,165) (40,153,754)

(40,200,195) (40,177,165)

Notes forming to Balance Sheet 7

This is the Profit & Loss Account referred to For and on behalf of the Board,in our Report of even date

For MANESH PAYMASTER & CO.Chartered Accountants

T. B. PATEL - DIRECTOR

M.R. PAYMASTERProprietor SANAT C PARIKH - DIRECTORMembership No. 38362

Place: Mumbai Place: MumbaiDated: 01.09.2010 Dated: 01.09.2010



147

As at As at31.03.2010 31.03.2009

Rupees Rupees

SCHEDULE "1" - SHARE CAPITAL

I. AUTHORISED : 999,000 Equity Shares of Rs.10 each 9,990,000 9,990,000 100 14% Cumulative Preferences Shares of Rs.100/- each 10,000 10,000

10,000,000 10,000,000

II. ISSUED, SUBSCRIBED and PAID UP: 999000 (Previous year 999000) Equity shares of Rs.10/- each fully paid-up 9,990,000 9,990,000

(The entire Share Capital is held by the Holding Company " Killick Nixon Limited " & its Nominees)

SCHEDULE "2" - RESERVES AND SURPLUS:

1. SHARE PREMIUM Balance as per the last Balance Sheet 14,970,000 14,970,000

2. CAPITAL RESERVE Remission of outstanding dues by the bank 1,048,643 1,048,643

TOTAL: 16,018,643 16,018,643

SCHEDULE "3" UNSECURED LOANS :

A. SHORT TERM LOANS & ADVANCES :Holding Company 14,864,123 14,864,123

TOTAL: 14,864,123 14,864,123

SCHEDULES ANNEXED TO & FORMING PART OF THE BALANCE SHEET AS AT 31st MARCH, 2010


148


Schedules annexed to and forming part of the Balance Sheet as at 31st March,2010

SCHEDULE "4" CURRENT ASSETS, LOANS & ADVANCES As at As at31.03.2010 31.03.2009

(Rupees) Rupees Rupees

(A) CASH & BANK BALANCES:

I ) Cash on hand - - ii) With Scheduled Banks in Current Accounts 30,354 30,354

30,354 30,354

( B ) LOANS & ADVANCES:

Prepayment of Taxes 38,950 38,95038,950 38,95069,304 69,304

SCHEDULE "5" CURRENT LIABILITIES & PROVISIONS: As at As at31.03.2010 31.03.2009

Rupees Rupees

(A) CURRENT LIABILITIES:

I ) Sundry Creditors for Expenses and Others 832,573 809,543

832,573 809,543

(B) PROVISION:

For Taxation 31,160 31,160

TOTAL 863,733 840,703

149

SCHEDULE "6" ADMINISTRATIVE AND OTHER EXPENSES: As at As at31.03.2010 31.03.2009

Rupees Rupees

Business Centre fees 12,000 12,000

Miscellaneous Expenses 0 1,281

Auditors Remuneration 11,030 10,130

Bank Charges - -

TOTAL: 23,030 23,411


Schedules annexed to and forming part of the Profit & Loss Account as at 31st March, 2010

150

' 7' NOTES TO ACCOUNTS:

1 Previous year's figures are rearranged and regrouped wherever necessary.

2 The Company has suspended its business operations since November 2001 onaccount of financial constraints. Pending final decision in this regard, the accountshave been prepared on going concern basis.

3 Bank balances & creditors balances are subject to confirmation

4 Significant accounting policies

General

The Accoutns of the Company are maintained under Historical cost convention using accrual method of accounting.

Investment by the Company is long term in nature & has been stated at cost.

Signature to Schedule to in '1' to "7" annexed


} DIRECTORS}}

PROPRIETOR MEMBERSHIP NO: 38362MUMBAI : MUMBAI :DATED : 01.09.2010 DATED : 01.09.2010


151





Total liabilities 40,872,766====================

Total assets 40,872,766====================

Sources of Funds :Paid-up capital 9,990,000Reserves and surplus 16,018,643Secured loans 0Unsecured loans 14,864,123

====================Total 40,872,766

====================Application of funds : Net fixed assets -Investments 1,467,000Net current assets (794,429)Miscellaneous Expenditure -Accumulated Losses 40,200,195

------------------------------------Total 40,872,766

====================


i) Turnover (including other income) ii) Total expenditure (including miscellaneous expenditure written off) 23,030 iii) Profit/(Loss) before tax (23,030) iv) Profit/(Loss) after tax (23,030) vi) Earning per share - vii) Dividend rate -

V Generic Names of Principal Products/Services of the Company : N.A.Note :

The above particulars should be read alongwith the balance sheet as at 1) 31st March, 2010,the profit and loss account for the year ended on that

date and the schedules forming part thereof.

M. R. PAYMASTERProprietorMembership No. 38362

MUMBAI :DATED : 01.09.2010


152

DIRECTORS’ REPORT The Directors submit their Annual Report and audited statement of accounts for the year ended 31.3.2010. FINANCIAL RESULTS 31.3.2010 31.3.2009 Rupees Rupees Net Profit/(Loss) for the year Before Depreciation & Taxation 5,075,314 5,696,484 Depreciation 3,068,127 3,330,708 Taxation (310,000) (361,948) Net Profit/(Loss) after Taxation 1,697,187 2,003,828 Add/(Less) : Surplus/(Deficit) brought forward from earlier Year 894,557 (1,109,271) Surplus/(Deficit)Balance carried forward to Balance Sheet 2,591,744 894,557 PERFORMANCE The Company has continued its good performance during the year under review although turnover declined marginally. Sales of Paints also improved the turnover and profits of the Company As informed in the previous year’s Directors Report of the Company is in the process of venturing into new business activities. At present it has crystallized a plan to manufacture chassis for specially designed trolleys. These chassis will be manufactured as per the specifications based on the customer’s technology. The Company has already received order for 100 units valued at Rs. 1 cr. and the party has indicated to give further orders for 1000 units in a span of three years. DIRECTORS Mr. Kushraj Gupta and Mr. S. K. Pachapurkar retire by rotation and being eligible offer themselves for reappointment. Mr. T. B. Ruia and Mr. D. S. Bhatiya were re-appointed as Wholetime Directors of the Company w. e. f. 06.08.2010. Mr.Kushaj Gupta was re-appointed as Wholetime Director of the Company w. e. f. 01.04.2010. Mr. Arvind Kumar Gupta was appointed as an Additional Director of the Company w. e. f. 09.04.2010. In terms of the provisions of the Companies Act, 1956, he will hold the office of Director up to the date of this Annual General Meeting. The Company has received Notice from a member under Section 257 of the Companies Act, 1956 proposing Mr. Arvind Kumar Gupta’s candidate for the office of the Director retiring by rotation at this Annual General Meeting. Mr. A. K. Gupta was also appointed as an Executive Director and Chief Executive Officer of the Company w. e. f. 01.09.2010. EMPLOYEES: There is no employee covered under Section 217 (2A) of the Companies Act, 1956. STATEMENT UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956. 1. The Company has no activities relating to conservation of energy. 2. (a) The Company has made no provision for Research and Development expenditure.


(b) The Company’s Foreign Exchange outgo is Rs.Nil DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that: • In the preparation of the annual accounts, the applicable accounting standards have been followed along

with proper explanation relating to material departures; • They 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 as at 31st March, 2009 and of the profit or loss of the Company for that period.

153


• The Annual accounts are prepared on a going concern basis. AUDITORS’ REMARKS Auditors have made certain remarks in their Report. The Company states that necessary action will be taken. AUDITORS: M/S. V S Paranjape & Co. Chartered Accountants, Mumbai retire at the ensuing Annual General Meeting. M/s. V, S, Paranjape & Co., Chartered Accountants, have expressed their inability to continue as Statutory Auditor of the Company. M/s. V. H. PORIYA & CO., Chartered Accountants, Mumbai, at the request of the Company have agreed to act as Statutory Auditor of the Company to audit the Accounts of 2009-10.

For and on behalf of the Board KILLICK ENGINEERING LIMITED

Registered Office: Plot No. 7, Chandivali Farm Road, Chandivali, Mumbai 400 072

Place : Mumbai Dated September 24, 2009. D. S. Bhatiya Director

P. S. Manjrekar Director

154

Report of the Auditors

To the Members of Killick Engineering Limited

1

2

3

4

a)

b)

c)

d)

e)

f)

We conducted our audit in accordance with auditing standards generally accepted in India. These standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financialstatement are free of material misstatement . An audit includes examining, on a test basis, evidence supportingthe amount and disclosures in financial statement . An audit also includes assessing the accounting principlesused and significant estimates made by the management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion .

In our opinion, the Balance sheet and Profit & loss account referred to in this report comply with theAccounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956 to theextent applicable to this Company;

We have audited the attached Balance Sheet of Killick Engineering Limited as at 31st March-2010 and also Profitand Loss Account & the cash flow Statement for the year ended on that date annexed thereto. These financialstatement are the responsibility of the company management .Our responsibility is to express an opinion onthese financial statements based on our audit.

Further to our comment in the Annexure referred to above , we report that :

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 ;

As required by the Companies (Audit Report) Order ,2003, issued by the Central Government of India in termsof Section 227(4A) of the companies act , 1956 and on the basis of such checks of books and records of thecompany, as we considered appropriate, we enclose in the Annexure a statement on the matters specified inparagraphs 4 and 5 of the said order to the extent applicable to the Company.

The balance sheet, Profit & Loss account and Cash Flow statement dealt with by this report are inagreement with the books of account ;

In our opinion, proper books of account as required by law have been kept by the Company, so far as itappears from our examination of these books;

On the basis of the written Representations received from directors of the company, and taken on recordby the Board of Directors, we report that no director is disqualified as on March 31, 2010 from beingappointed as a director under Clause (g) of sub-section (1) of Section 274 of the Companies Act,1956;

Treatment given by the company for the provision of gratuity is not in consonance with AS-15 issued byThe Institute of Chartered Accountants of India. Company has not made any provision towards gratuityliability.

155

i)

ii)

iii)

For V.H.Poriya & CoChartered Accountants

V.H.PoriyaProprietorM.No.31431Place MumbaiDate 01.09.2010

In so far as it relates to the Profit & Loss Account, of the Loss of the Company for the year ended on that date.

In so far as it relates to the Balance Sheet , of the state of affairs of the Company as at 31st March 2010

In our opinion and to the best of our information and according to the explanations given to us, subject to ourcomments in paragraph f as above, the said balance sheet & profit & loss account read together with thenotes forming part thereof, give the information required by the Companies Act, 1956 in the manner so requiredand give a true and fair view in conformity with the accounting principles generally accepted in India:

AND

In case of Cash Flow statement, of the cash flows of the company for the year ended on that date.

156

To the Members of Killick Engineering Limited

i)

ii)

iii)

iv)

v)

vi)

vii)

viii)

(b) The procedures of physical verification of inventories followed by the management can not becommented upon since records maintained are inadequate.

(c) During the year Company has not disposed of any part of fixed assets.

(a ) As informed to us, the inventories except goods in transit have been physically verified at the end ofthe year by the management. In our opinion management needs to increase frequency of suchverification.

(b) As informed to us All the assets have been physically verified by the management during the year,However in view of the inadequate records,we are unable to comment about the adequacy of suchprogramme.

(a ) The company has not maintained proper records showing full particulars including quantitativedetails and situation of fixed assets

ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN OUR REPORT OF EVEN DATE

According to the information and explanations given to us, in our opinion, there were no contract orarrangements needing entry in the register to be maintained under section 301 of the Companies Act,1956.Hence Clause 4(v) of the said order is not applicable.

In our opinion and according to the information and explanations given to us there is internal controlprocedures commensurate with the size of the company and the nature of its business with regard topurchase of fixed assets and sale of services. However in view of the size of operations the Internalcontrol system needs to be strengthened. During the course of our audit we have not observed anycontinuing failure to correct major weakness in internal control system.

The Company has taken/granted Loan from/to Companies, firms or other parties listed in the registermaintained under section 301 of the companies Act, 1956 .

b) In our opinion and according to the information and explanations given to us, the rate of interest,where applicable and other terms and condition, are not prima facie prejudical to the interest of thecompany.

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

(c) In our opinion and according to the information & explanation given to us, the company has notmaintained proper records of inventory. As informed to us the discrepancies noticed on verificationbetween the physical stock and the book records were not material and have been properly dealt with inthe books of account.

In our opinion , and according to the information and explanations given to us, the Company has notaccepted any deposit from the public within the meaning of the provisions of section 58A, 58AA or anyother relevant provisions of the Act and the Rules framed there under.

As informed to us company is not having formal internal audit system during the year.

According to the information and explanations given to us, the Company was not required to maintain costrecords under section 209(1)(d) of the Companies Act, 1956.

a) There was opening balance of Rs.341.35 lakhs for loan accepted from holding company Killick NixonLtd as on 1st April, 09 of this Rs. 36.41 lakhs were repaid during F.Y. 09-10 and closing balabce as on31st Mar, 10 Rs.304.94 lakhs

157

ix)

x)

xi)

xii)

xiii)

xiv)

xv)

xvi)

xvii)

xviii)

xix)

xx)

For V.H.Poriya & CoChartered Accountants

V.H.PoriyaProprietorM.No.31431Place MumbaiDate 01.09.2010

According to the information and explanations given to us , no fraud on or by the Company has beennoticed or reported during the year.

According to the records of the company, except for the income tax deducted at source dues of Rs.4635/-the company was regular in depositing with appropriate authorities undisputed statutory dues. Asinformed to us by the company, apart from the said dues of Rs. 4635/-, no such undisputed dues were inarrears as at 31st mar,2010.

The Company did not have outstanding debentures or outstanding loans from financial institution or bankduring the year. Hence clause 4(xi) of the said Order is not applicable.

The Company has not granted any loans and advances on the basis of security by way of pledge ofshares, debentures and other securities. Hence clause 4(xii) of the said Order is not applicable.

The company has not raised any money by public issues during the year.

During the year the company has not made any preferential allotment of shares to parties and companiescovered in the register maintained under section 301 of the Companies Act , 1956.Hence Clause 4(xviii) ofthe said Order is not applicable.

The Company is not a chit fund /nidhi/mutual benefit fund /society. Hence clause 4(xiii) of the said orderis not applicable .

According to the information & explanation given to us and on an overall examination of balance sheet ofthe company , we report that during the year the company has not utilized short term funds for long terminvestment.

The Company did not have outstanding debentures at any point of time during the year. Accordingly nosecurities or charge have been created.

In our opinion, and according to the information and explanation given to us, the company did not dealor trade in share ,securities, debentures & other investment . Hence Clause 4(xiv) of the said order is notapplicable.According to the information and explanation given to us, the company has not given guarantee for loanstaken by others from bank or financial institutions.The Company had no term loans outstanding at any point of time during the year

158

Killick Engineering LtdBalance Sheet at at 31st March 2010

Schedule As at As at31-Mar-10 31-Mar-09

Rs. Rs.A. Sources of Funds

1 Shareholders' FundsShare Capital 1 10,000,000 10,000,000

2 Reserves & Surplus 2Share Premium 5,970,000 5,970,000 Profit & Loss A/c 2,591,744 894,556

3 Loan Funds 3Secured 333,333 712,688 Unsecured 30,493,930 34,135,230

Total 49,389,007 51,712,474

B. Application of Funds1 Fixed Asset 4 20,356,684 22,060,934

2 Current Assets, Loans and Advances 5Inventories 42,879,975 50,683,279 Sundry Debtors 17,533,141 7,477,044 Cash & Bank Balances 4,580,027 3,232,633 Loans & Advances 20,949,030 42,877,401

Less: Current Liabilities & Provisions 6 56,909,849 74,618,817


3 Profit & Loss account -

KILLICK ENGINEERING LTDTotal 49,389,007 51,712,474

Notes to Accounts 13The Schedules referred to above and the notes thereon form an integral part of the Financial StatementsAs Per my report of even date For and on behalf of BoardFor V.H.Poriya & Co Killick Engineering LtdChartered Accountants

V.H.PoriyaProprietor Director DirectorM.No.31431Place MumbaiDate 01.09.2010

159

Killick Engineering LtdProfit & Loss Account for the year ended on 31st March-2010

Schedule 31-Mar-10 31-Mar-09Rs. Rs.

Income

Sales 7 159,817,149 122,991,551

Less Excise Duty /Vat Taxes 13,438,072 5,704,146

146,379,077 117,287,405

Other Income 8 1,019,219 490,117

Increase /( Decrease ) in Stock 9 (6,605,217) (2,590,819)

140,793,079 115,186,703

Expenditure

Consumption of Raw Material , Stores & Spares Parts 10 98,046,644 80,197,038

Administration Expenses 11 31,428,272 24,290,862

Selling and Distribution Expenses 12 6,242,849 5,002,319

Depreciation 4 3,068,127 3,330,708

138,785,892 112,820,927

Profit/Loss Before Tax 2,007,187 2,365,776

Less - -

Provision for Taxation (310,000) (350,000)

Provision for F.B.T. - (11,948)

Profit After Tax 1,697,187 2,003,828

Short Provisions For Prior Year

Less : Carried Forward of earlier Year 894,557 (1,109,271)

- Balance carried to Balance sheet 2,591,744 894,557

Notes to Accounts 13The Schedules referred to above and the notes thereon form an integral part of the Financial Statements

As Per my report of even date

For V.H.Poriya & Co For and on behalf of Board

Chartered Accountants Killick Engineering Ltd

V.H.Poriya

Proprietor

M.No.31431 Director Director

Place Mumbai

Date 01.09.2010

160

Killick Engineering LtdSchedules forming part of financial statements for the year ended on 31st March-10

31-Mar-10 31-Mar-09Rs. Rs.

Schedule 1 Share CapitalAuthorised Share Capital 50,00,000 Equity Shares of Rs. 10/- each 50,000,000 50,000,000

50,000,000 50,000,000

Issued Subscribed & Paid Capital10,00,000 Equity shares of Rs.10/- each fully paid up 10,000,000 10,000,000 (The Entire Share Capital is held by Holding Company and its Nominees)

Total 10,000,000 10,000,000

Schedule 2 Reserves & SurplusShare Premium 5,970,000 5,970,000 Profit & Loss A/c 2,591,744 894,556

Total 8,561,744 6,864,556

Schedule 3 Loan FundsSecuredCar Loan ICICI Bank (Secured by first charge on the motor car ) 333,333 712,688 Unsecured Killick Nixon Ltd (Unsecured Interest Free Loan from Holding Co.) 30,493,930 34,135,230

30,827,263 34,847,918

Schedule 5 Current Assets, Loans and AdvancesA. Current Assets1 Sundry Debtors (unsecured, considered good)

Debts outstanding for a period exceeding six monthsi) Considered Good ( Net of Advances ) 17,533,141 7,477,044 ii) Considered Doubtful 1,000,000 1,000,000 Other Debts

18,533,141 8,477,044 Less- Provisions for Doubtful Debts 1,000,000 1,000,000

17,533,141 7,477,044 2 Cash & Bank Balances

Cash on hand ( As certified by the directors) 79,820 61,256 Cash in Transit - 152,770 Balance with schedule bank in current accounts 4,500,207 3,018,607 Fixed Deposits with schedule banks - -

4,580,027 3,232,633 B Loans and Advances (Unsecured, considered good)

Advances Recoverable in cash or in kindDeposits 1,476,054 1,409,878 Duties & Taxes 6,802,431 5,094,081 Others division balances subject to reconciliations 12,670,545 36,373,442

20,949,030 42,877,401 C Inventories ( As taken valued & Certified by the management)

Finished goods 11,849,938 18,770,427 Work-in- Progress 4,172,541 3,678,310 Raw Materials & Components 26,247,707 27,645,029 Loose Tools, Jigs, Fixtures & Stores 609,789 589,513

42,879,975 50,683,279

TOTAL 85,942,172 104,270,357

161

Schedules forming part of financial statements for the year ended on 31st March-1031-Mar-10 31-Mar-09

Rs. Rs.Schedule 6 Current Liabilities & Provisions

A. Current Liabilitiesa. Sundry Creditors for Goods 37,180,905 24,217,443 b. Sundry Creditors for Expenses 3,242,175 32,736,607 c. Other Liabilities 2,609,561 10,557,554 d. Duties & Taxes 13,121,703 6,661,709

56,154,345 74,173,313 B. ProvisionsFor Gratuity - - For Income Tax F.Y 05-06 17,116 17,116 For Income Tax F.Y.08-09 350,000 350,000 For Income Tax F.Y 09-10 310,000 -For Fringe Benefit Tax 78,388 78,388

755,504 445,504

TOTAL 56,909,849 74,618,817

Schedule 7 SalesSales of Products 149,775,492 113,846,684 Sale Of Scrap 472,272 221,557 Recoveries & Pickings etc 9,569,386 8,923,309

- 159,817,149 122,991,550

Schedule 8 Other IncomeInterest - 5,390 Rent received 1,018,965 464,040 Miscellaneous Income 254 20,687

Total 1,019,219 490,117

Schedule 9 Increase or (Decrease) in Finished Goods and Work-in-ProgressClosing StockFinished Goods 11,849,938 18,949,386 Work-in-Progress - E 4,172,541 3,678,310

16,022,479 22,627,696 Opening Stock/Stock TransferFinished Goods 18,949,386 22,345,595 Work-in-Progress - E 3,678,310 2,872,920

22,627,696 25,218,515

Total (6,605,217) (2,590,819)

Schedule 10 Consumption of Raw Material , Stores & Spares PartsConsumption of Raw Materials & ComponentsOpening Stock 27,645,029 25,297,086 Add- Purchases during the year 94,441,592 76,900,879

122,086,621 102,197,965 Less- Closing Stock 26,247,707 27,645,029

95,838,914 74,552,936 Consumption of Stores & Spares PartsOpening Stock 589,513 1,200,654 Add- Purchases during the year 672,767 3,293,492

1,262,280 4,494,146 Less- Closing Stock 609,789 589,513

652,491 3,904,633 Conversion & Fabrication Expenses 1,555,239 1,739,469

Total 98,046,644 80,197,038

162


Rs. Rs.Schedule 11 Administration Expenses

Salaries & Staff Welfare Expenses 18,827,054 13,936,582 Lease Rent/ Hiring Charges 4,226,974 4,096,086 Electricity & Power 1,741,611 2,179,496 General Expenses 760,417 381,982 Motor Car Expenses 875,704 331,567 Professional Charges 1,141,703 611,075 Godown Expenses 37,536 19,461 Telephone Expenses Office 190,289 203,897 Transport Charges 369,332 411,248 Insurance Charges 37,211 43,305 Telephone Residence 56,611 40,532 Mobile Expenses 79,992 50,878 Printing Stationery 189,291 254,333 Local Conveyance 72,001 66,044 Godown Rent 204,006 244,203 Water Charges 341,035 257,803 Interest On Car Loan 110,045 117,974 Licenses Fees 27,541 62,590 Bank Charges 100,608 98,310 Repairs & Maintaince 56,189 87,176 Laboratory Expenses 5,388 23,991 Trading Expenses 609,046 234,290 Rent Office Premises 23,000 19,400 Courier Charges 65,337 60,954 Service Charges 75,021 61,906 Audit Fees 128,618 27,000 Rates & Taxes 170,363 72,825 Other Expenses 906,349 295,956

Total 31,428,272 24,290,864

Schedule 12 Selling and Distribution ExpensesTravelling Expenses 55,984 70,668 Discounts 2,655,919 2,261,998 Commission 402,724 669,364 Packing Expenses 972,302 928,012 Freight Outward & Octroi 2,151,420 1,027,797 Advertising & Sales Promotion Expenses 4,500 44,479

Total 6,242,849 5,002,318

Schedule 13 Accounting Policies And Notes On AccountsA) Business

Killick Engineering Limited is public limited unlisted company. Company is in the business of manufacturing construction equipments, concretetesting equipments, pretensioning/post tensioning of cables,grouting equipments,various types of bridge bearings, decorative paints and alliedproducts.Company also deals in the Trading of the Construction equipments. In addition to the above turnkey projects for post/pre tensioning ofFlyover bridge/Metro/Mono Rail Projects - super structures are also carried out by the company.

163


Rs. Rs.B) Significant Accounting Policies1 Income / Expenditure

Revenue

2 InvestmentsInvestments are stated at cost.

3 Fixed AssetsFixed assets are stated at historical cost of acquisition less depreciation.

4 DepreciationTangible Assets

Intangible assets

5

6

7

C) Earnings Per Share 31-Mar-10 31-Mar-09ParticularsProfit after Tax 1,697,187 2,003,828 Numerator used for calculating basic and diluted earnings per share-Weighted average number of shares used as denominator for calculatingbasic and diluted earnings per shareNumber of Equity shares outstanding on the first day of the year 1,000,000 1,000,000 Weighted Average Number of equity shares outstanding 1,000,000 1,000,000 Nominal Value of shares 10 10

Basic and Diluted Earnings per share 1.70 2.00 D) Related Party Disclosure

a) Related party Relationship1. Killick Nixon Ltd Holding Company List as provided by management is acceptedb) Related Party Transactionsi. Killick Nixon Ltd Loan taken and repaid during the year

Opening Balance Closing Balance30,494,230

E) Statutory information1 Managerial remuneration

Professional charges paid to directorsIn view of the inadequacy of profits company has paid remuneration as per the schedule XIII of the Companies Act,1956Salaries and allowances 4,204,256 2,323,750 Perquisites 396,717 388,519

Total 4,600,973 2,712,269 2 Remuneration to Auditors

Audit Fees 26,000 17,000 Tax Audit Fees 21,000 10,000 Other services

47,000 27,000

3,641,000

Provision for Retirement BenefitsLiabilities in respect of retirement gratuity to employees is paid as and when due. No provisions have been made. Privilege Leave Encashment-Retirements privileged leave is allowed for 45 days and paid as an when due.

Income from is accounted in the books of accounts when the equipments/machinery is installed/commissioned at the customers designated place.

Depreciation is provided by using W.D.V. Method at the rates specified in Schedule XIV of the Companies Act,1956.

Technical Know how are amortised over a period of five years by using straight line method

Taxes on Income

Impairment of Assets

34,135,230

Impairment of Assets if any, is ordinarily assessed by comparing value in use with carrying value of assets.

Loan Accepted

Provision for current tax is computed as per total income returned under the Income Tax Act,1961 taking into account available deduction andexemptions.

Loan repaid-

164


Rs. Rs.3 Expenditure in Foreign Currency Nil Nil4 Earnings in Foreign Currency Nil Nil5 Value of Raw Materials, Spare Parts & components consumed

Items Value % Value %

Imported -

Indigenous 57,312,074 100.00% 78,457,569 100.00%

Total 57,312,074 100.00% 78,457,569 100.00%

6 Consumption of Raw MaterialName of the Item

Unit Qty Value Rs. Qty Value Rs.

Steel, Aluminum & Copper Feet 96,214 6,569,492 93,579 6,574,861

Sq. Feet 5,940 1,088,624 5,082 961,667

Kgs 216,519 7,881,292 210,832 8,015,833

Oil, Paints, Fuel and Chemicals Liter 15,060 1,343,804 15,612 1,453,789

Casting Electrical and Non electrical Items excluding Nos 74,137 14,024,496 62,018 12,383,134

Prime movers Feet 76,549 1,698,622 79,639 2,336,608

Electrodes Nos 42,132 169,371 34,910 135,700

Prime movers Nos 2,230 13,435,750 1,940 12,394,660

Other material Rs. 11,100,623 14,588,950

Chemicals Kgs 44,001 11,110,577

Colour Pigments Kgs 2,000 4,279,386

Packaging Nos 2,435 2,091,938

Cements Kgs 51200 249,578

Other items Rs. 1,880,888

Total 57,312,074 78,457,569

7 Opening closing stock Purchases and turnover

Items Units Qty Value Qty Value Qty Value Qty Value

Vibrators Nos. 528 5,273,664 3792 4,012 37,030,760 308 2,833,908 CHJ - 5,328,576 Jacks/Pumps Nos. 503 2,513,491 1,134 1,230 6,902,760 407 1,760,275 DTX Sheathing Mtrs. 96,231 96,231 4,619,088 NIL NILRSC Accessories - 4,643,588 19,755,315 3,769,589 Elastomeric Pads

Nos. 16,745,033 Furnace/Drilling Accessories

- 5,896,950 2,608,760

Chemicals -

Colour Pigments -

Packaging -

17,759,319 90,949,906 10,972,532

Production/Purchases

Note: Company is in the process of maintaining the quantities records for various items of inventory/production and reconciling the same withphysical stock. The company has valued its inventory on 31 March 2010 based on the physical verification of stock. As such the details as certifiedby the management which were made available are reproduced.

Turnover Closing Stock

2008-2009

2008-2009

2009-2010

2009-2010

Opening Stock

165


Rs. Rs.F) Notes to Accounts123456

7

A CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31ST MARCH, 2009 31-Mar-10 31-Mar-09

CASH FLOW FROM OPERATING ACTIVITIESNet Profit before tax 2,007,187 2,365,775 Adjustments forDepreciation 3,068,127 3,330,708 Interest Received - (5,390) Prior Year Adjustments - Operating Profit before working capital Changes 5,075,314 5,691,093 Changes inTrade Receivables (10,056,097) 3,761,478 Loans and Advances 21,928,371 (37,331,639) Inventories 7,803,304 854,017 Current liabilities and Provisions (17,708,968) 31,673,472 Cash Generated from Operations 7,041,925 4,648,421 Income Taxes paid (310,000) (361,948) Net cash Flow from operating Activities (A) 6,731,925 4,286,473

B CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Asset (286,125) (8,850) Interest Received - 5,390 Capital work in progress (1,077,751) Net cash (used) from / investing activities (B) (1,363,876) (3,460)

C CASH FLOW FROM FINANCING ACTIVITIESIncrease in Borrowings (excluding book transfer of loss) (4,020,655) (7,123,226) Interest Paid - -

Net cash flow from Financing Activities (C) (4,020,655) (7,123,226)

Net increase/(decrease) in cash and cash equivalents (A+B+C) 1,347,394 (2,840,213)

Cash and cash equivalents as at the beginning of the year 3,232,633 6,072,848

Cash and cash equivalents as at the end of the year 4,580,027 3,232,633

Under Micro, small, medium Enterprises Development Act, 2006, certain disclosures are required to be made relating to Micro, small, MediumEnterprises. The company is in the process of compiling relevant information from its suppliers about their coverage under the said act. Since therelevant information is not readily available , no disclosures have been made in the accounts. However , in view of the management, the impact ofinterest , if any that may be payable in accordance with provisions of this act not expected to be material.

Loans & Advances and Debtors are subject to confirmations.

No provision for Contingent Liabilities, if any has been made in this accounts.

Previous years figures have been regrouped rearranged wherever necessary.Quantities details for opening stock, closing stock,& consumption are as certified by the directors and relied upon by the auditor.

As regards Paint division, Reconciliation of accounts of the customers/suppliers in few cases is under progress & necessary adjustments, if any, will be made on completion thereof.

Figures has been rounded off to the nearest rupee.

166


Rs. Rs.G) Balance Sheet Abstract & Company General Business Profile

1 REGISTRATION DETAILSRegistration No. 44103State Code 11 Balance Sheet Date 31-Mar-10

2 CAPITAL RAISED DURING THE YEAR ( Amount in Rs. Thousand )Public Issue NilRight Issue NilBonus Issue NilPrivate Placement Nil

3 POSITION OF MOBILISATION & DEPLOYMENT OF FUNDSTotal liabilities 49389Total Assets 49389SOURCES OF FUNDSPaid up capital 10,000 Reserves & Surplus 5,970 Secured Loans 333 Un-secured Loans 30,494 APPLICATION OF FUNDSNet Fixed Assets 20,357 Investments - Net Current Assets 29,032 Mis. Expenditure - Accumulated Losses -

4 PERFORMANCE OF THE COMPANYTurnover 159,817 Total Expenditure 138,786 Profit Before Tax 2,007 Profit After Tax 1,697 Earnings per Share (in Rs.) 1.70

5 Dividend Rate (%) N.A.GENERIC NAMES OF THREE PRINCIPLE PRODUCTS / SERVICES OF THE COMPANY (As per monetary terms)Product Description Engineering products Item Code No.

As Per my report of even date For and on behalf of BoardFor V.H.Poriya & Co Killick Engineering LtdChartered AccountantsV.H.PoriyaProprietor Director DirectorM.No.31431Place MumbaiDate 01.09.2010

167

Killick Engineering Ltd

Schedules forming part of financial statements for the year ended on 31st March-10

Schedule 4 Fixed Assets

As on As on Up to Up to As on As on1-Apr-09 Rate of

DeprenAdditions during the

year31-Mar-10 31-Mar-09 For the year 31-Mar-10 31-Mar-09 31-Mar-10

2,277,823 5.0% - 2,277,823 731,742 77,304 809,046 1,546,081 1,468,777

26,232,860 10.00% - 26,232,860 14,382,663 1,185,020 15,567,683 11,850,197 10,665,177

6,794,547 13.91% - 6,794,547 1,562,636 727,759 2,290,395 5,231,911 4,504,152

28,646 18.10% - 28,646 16,647 2,171 18,818 11,999 9,828

62,404 13.91% - 62,404 32,767 4,123 36,890 29,637 25,514

32,175 13.91% - 32,175 5,489 3,712 9,201 26,686 22,974

59,048 40.00% 22,250 81,298 35,752 10,592 46,344 23,296 34,954

43,105 13.91% 11,214 54,319 7,743 5,201 12,944 35,362 41,375

1,649,159 25.89% 252,661 1,901,820 743,393 252,245 995,638 905,766 906,182

37,179,767 286,125 37,465,892 17,518,832 2,268,127 19,786,959 19,660,935 17,678,933

4,000,000 - 4,000,000 1,600,000 800,000 2,400,000 1,600,000

41,179,767 286,125 41,465,892 19,118,832 3,068,127 22,186,959 19,660,935 19,278,933

- 1,077,751

Leasehold Land

Total

Laboratory Expenses

Furniture & Fixtures

Computer

Office Equipments

Technical Know-How

TOTAL

Intangible Assets

Vehicles

Capital Work In Progress

Workshop Machinery

Net BlockDescription of Asset Depreciation

Tangible Assets

Buildings

Plant & Machinery

Gross Block (At Cost)

168

LODESTAR SLOTTED ANGLES LIMITED

DIRECTORS’ REPORT The Directors submit their Annual Report and Audited Statement of Account for the year ended 31st March, 2010. FINANCIAL RESULTS Previous Year Rupees Rupees Gross Profit/(Loss) for the year before Depreciation

(13,899)

(16,905)

Depreciation ---- ---- Profit/(Loss) for the year before Tax (13,899) (16,905) Profit/(Loss) for the year after tax (13,899) (16,905) Deficit brought forward from earlier years (105,749,526) (105,732,621) Balance carried forward to Balance Sheet (105,763,425) (105,749,526) PARTICULARS UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956 There was no employee in the company during this period. DIRECTORATE Mr. S. R. Hemmady retires by rotation and being eligible offers himself for re-appointment. STATEMENT UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956. 1. The company has no activities relating to conservation of energy. 2. (a) The company has made no provision for Research and Development expenditure.

(b) The company has no activity relating to technology absorption, adoption and innovation.

3. The company has no activity relating to Foreign Exchange earnings and outgo. DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that: • In the preparation of the annual accounts, the applicable accounting standards have

been followed along with proper explanation relating to material departures. • They 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 as on 31st March, 2010 and of the profit or loss of the company for that period.

169


• The Annual accounts are prepared on a going concern basis. AUDITORS’ REMARKS The Report of the Auditors contains a reference to certain notes on the Accounts. The Directors consider that the notes are self-explanatory and give the necessary information. AUDITORS It is necessary to appoint Auditors of the Company until the conclusion of the next Annual General Meeting and to fix their remuneration.

For and on Behalf of the Board LODESTAR SLOTTED ANGLES LIMITED

Registered Office: Killick Estate, Baji Pasalkar Marg, Chandivali, Mumbai 400072.

Director Director Dated: 1st September, 2010

170



1. We have audited the attached Balance Sheet of LODESTAR SLOTTED ANGLES

LIMITED, as at 31st March, 2010 and also the Profit and Loss Account for the year ended on that date 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.

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 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.

3. As required by the Companies (Auditor’s 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 as we considered necessary and appropriate and according to the information and explanations given to us during the course of the audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. The accounts have been prepared on a going concern basis and the assets have been stated

at their historical values. We are of the opinion that this fundamental assumption is not valid due to the following: i) The Company has not carried on any business activities for the past few years. ii) All the fixed assets of the Company have been disposed under the arrangement as

stated in Note B-2, B-3 B-5. iii) The current assets and other receivables have been offered to the Custodian of the

Special Court towards these liabilities as stated in note B-3. iv) The Company owns no significant assets with which it could repay the remaining

liabilities and continue its operational existence. The receivables as on 31st March 2010, could not be verified and we are unable to verify the realisability of the same as mentioned in point 5(vi) of this report.

5. Further to our comments in the Annexure referred to in Paragraph 3 and our observations in

Paragraph 4 above we report that : i) No documents have been produced before us as to the status of Excise Duty

demands aggregating to Rs. 18,69,912/- claimed to have been disputed in appeal as stated in Note B-1(i), subject to the above we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

ii) In our opinion, subject to Note B-3 Note No. A(a) regarding non-provision of interest on Fixed Deposits with bank, proper books of account have been kept by the Company so far as appears from our examination of the books.

iii) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account.

iv) In our opinion, the, the Balance Sheet and Profit and 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;

v) On the basis of the representations received from the Directors, we report that these Directors are not disqualified as at 31st March 2010 from being reappointed as Directors under section 274(1)(g) of the Companies Act, 1956.

vi) We have not been able to verify the Register to be maintained u/s 301 of the Companies Act, 1956 as the same was not furnished to us. Hence we are unable to express any opinion on the same and the various clauses in the annexure to this report.

171

vii) We have not been able to verify the bank balances with the bank statements, due to unavailability of the bank statements.

6. Attention is invited to :

i) Note No. B-5 regarding the contingent liability of Rs. 1,88,44,433/-. ii) Excise Duty demand claimed to be disputed aggregating to Rs. 18,69,912/- as

referred to the Note B-1(i), the status of which is not known. iii) Note B-1(ii) and (iii) regarding non-provision of Income Tax Demands of Rs.

78,28,049/- for various years for which the Company has preferred appeals.

7. Subject to the matter referred to in Paragraph 6 and its effect on the accounts of the Company as indicated above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: 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 the Profit and Loss Account, of the Loss for the year ended on that

date. For BHANGARIA & Co. , Chartered Accountants NIKUNJ G. BHANGARIA PROPRIETOR M. No. 121369 PLACE : MUMBAI DATED : 1st September 2010

172



(REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE)

1. a) The Company has maintained accounting records to show full particulars including

quantitative details and situations of its fixed assets. b) The management has committed that the fixed assets have been physically verified by

them at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) The Compaany’s fixed assets have been attached by judicial authorities and the same have been disposed off as mentioned in the Note B-2 and B-5 , which in our opinion, has adversely affected the concept of going concern as stated in Paragraph 4(iii) of our report.

2. The Company does not have any inventory of finished goods, stores, spare parts and raw

materials. In the absence of any stocks and any activity relating to inventory, the clauses relating to its physical verification, procedures, maintenance of records and discrepancies are not applicable.

3. As mentioned in the clause 5(vii) of the Audit Report, we have not been able to verify the

register to be maintained u/s. 301, and hence we are unable to eapress any opinion on the loans granted to/ taken from parties disclosed u/s. 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business, for purchases of fixed assets. The Company has not carried any activity involving purchase of inventory and sale of goods. We have not noted any continuing failure to correct major weakness in the internal controls during the course of the audit.

5. As mentioned in the clause 5(vii) of the Audit Report, we have not been able to verify the

register to be maintained u/s. 301, hence we are unable to express any opinion about transactions that need to be entered into the register maintained u/s. 301 of the Companies Act, 1956.

6. the Company has not accepted any deposits from the public and consequently, the directives

issued by the Reserve Bank of India, the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder are not applicable.

7. The Company did not have an internal audit system during the year under report. 8. According to the information and explanations given to us, the Central Government the

maintenance of cost records under clause (d) of sub section (1) of section 209 of the Companies Act, 1956 in respect of services rendered by the Company.

ANNEXURE TO THE AUDITOR’S REPORT

Name of the statute

Nature of dues

Amount (Rs.)

Period to which amount relates

Forum where dispute is pending

The Income Tax Act, 1961

Income Tax Dues

43,04,293 A.Y. 1999-2000 Income Tax Appellate Tribunal

The Central Excise Act, 1944

Excise Duty Dues

18,69,912 1981 to 1987 Not Known

9.

a)(i) According to the information and explanations given to us, and on the basis of our examination of the books of account, the Company has been regular in depositing with appropriate authorities undisputed statutory dues including Income Tax and other material statutory dues applicable to it.

173

(ii) According to the information and explanations given to us, the Company was not liable for contribution towards Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Sales Tax and Wealth Tax, Custom Duty, Excise Duty, and Cess during the year. (iii) According to the records of the Company there are no undisputed arrears of statutory dues, which were outstanding as on 31st March, 2010 for a period of more than six months from the date they become payable.

b)According to the records of Company examined by us, there were no dues of Sales Tax, Customs Duty, Wealth Tax and Cess which have not been deposited on account of any dispute.

The particulars of dues of Income Tax and Excise Duty which have not been deposited on account of any dispute are as follows : 10. The Company has accumulated losses at the end of the financial year, which are more than

fifty percent of its net worth as at 31st March 2010. The Company has incurred cash losses during the financial year ended 31st March 2010 however it had not incurrede cash losses during the financial year ended 31st March 2009.

11. The Company has neither taken any loans from a financial institution or a bank nor issued any debentures.

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

13. In our opinion and according to information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

14. According to the information and explanations given to us, the Company is not dealing in shares, securities, debentures and other investments.

15. The Company had given guarantee to a Bank for credit facilities granted to other Companies, the terms and conditions of which are prima facie prejudicial to the interest of the Company. The guarantee Companies having defaulted in repayment of loans to the bank, the said guarantees have devolved on the Company as a result of which the Mumbai Debts Recovery Tribunal has attached the properties of the Company as referred to in Note B-2 to the accounts.

16. The Company has not obtained any new term loans during the financial year. 17. The company has not raised any funds on short term/long term basis during the financial

year. 18. As mentioned in the clause 5(vii) of the Audit Report, we have not been able to verify the

register to be maintained u/s. 301, hence we are unable to verify whether the Company has made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

19. The Company has not issued any debentures. So the clause for creation of securities in respect of debentures is not applicable to the Company.

20. The Company has not raised any money by public issues during the year. So the clause for disclosure on the end use of money raised by public issues and its verification is not applicable to the Company.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For BHANGARIA & Co., Chartered Accountants Nikunj G. Bhangaria Proprietor M.No. 121369 PLACE : MUMBAI DATED : 1st September 2010

174




a) Share Capital A 20,450,000 20,450,000

b) Reserves and Surplus B 137,291,392 137,291,392

157,741,392 157,741,392

2) Current Assets, Loans and Advances : C

b) Cash and Bank Balances C-1 27,838 28,237

c) Other Current assets C-2 3,592,656 3,592,656

d) Loans and Advances C-3 131,086,643 131,086,643

134,707,137 134,707,536

Less : Current Liabilities and Provisions : D

a) Current Liabilities D-1 82,672,512 82,659,012

b) Provisions D-2 56,658 56,658

82,729,170 82,715,670


3) Profit and Loss Account 105,763,425 105,749,526

157,741,392 157,741,392

Per Our Report Attached For and on behalf of the Board

For BHANGARIA & Co.Chartered Accountants )

)) DIRECTORS

Nikunj Bhangaria )Proprietor )

Membership No. 121369


DATED : 1st September 2010 DATED : 1st September 2010

AS AT31ST MARCH


BALANCE SHEET AS AT 31ST MARCH, 2010

175

SCHEDULE 2009-10 2008-2009ANNEXED RUPEES RUPEES

EXPENDITURE :

1) Operating and Other Expenses 13,899 16,905

Total Expenditure 13,899 16,905

Profit / Loss for the year before tax (13899) (16905)

(13899) (16905)

Deficit brought forward from previous year 105749526 105732621

DEFICIT CARRIED TO BALANCE SHEET 105763425 105749526

Per Our Report Attached For and on behalf of the Board

For BHANGARIA & Co. )Chartered Accountants )

)) DIRECTORS)

Nikunj Bhangaria Proprietor )

Membership No. 121369


DATED : 1st September 2010 DATED : 1st September 2010



176


A. SHARE CAPITAL :

1) Authorised :

5,000,000 Equity Shares of Rs. 10/- each 50,000,000 50,000,000

2) Issued subscribed and paid up :

2,045,000 (1,150,000) Equity Shares of Rs. 10/- each fully paid up 20,450,000 20,450,000

B. RESERVES AND SURPLUS :

1) Capital Reserve :

Compensation Received for termination of lease agreement 5,350,346 5,350,346

2) Share Premium Account :

As Per Last Balance Sheet 50,000,000 50,000,000

3) Sale of Property by Custodian 4,031,349 4,031,349

4) Sale of Property to Oman 77,909,697 77,909,697

5) Fixed Assets Revaluation Reserve :

As Per Last Balance Sheet - -

Less :Exess Balance in Revalution transfer to Reserve - -

- -

137,291,392 137,291,392

SCHEDULES TO THE BALANCE SHEET AS AT 31ST MARCH, 2010


AS AT31ST MARCH

177

C. CURRENT ASSETS :

C-1 Cash and Bank Balances :

i) Cash Balance on Hand 12,788 12,788

ii) Balances with Scheduled Banks

a) In Current Account 15,050 15,449

27,838 28,237

C-2 Other Current Assets :

Depsoits with Public Bodies/Others 68,900 68,900

Income Tax Paid and Tax Deducted At Source 3,523,756 3,523,756

3,592,656 3,592,656

C-3 Loans and Advances :(Unsecured and Considered Good)

Advances Recoverable in Cash or in Kind 131,086,643 131,086,643 or for the value to be received 131,086,643 131,086,643

D. CURRENT LIABILITIES AND PROIVISIONS :

D-1 Current Liabilities :

a) Sundry Creditors 352,262 338,762

b) Killick Nixon Ltd. ( Towards settlement of due 82,320,250 82,320,250 of Dhanraj Mill Ltd.)

82,672,512 82,659,012

D-2 Provisions :

For Excise Duty 56,658 56,658

56,658 56,658

178

2009-2010 2008-2009RUPEES RUPEES

SCHEDULE 1

OPERATING AND OTHER EXPENSES :

Auditors' Remuneration :

Audit Fees 12,000 12,000

Reimbursement of Expenses (including Service Tax Rs. 1236/-) 1,500 1,500

Filings Fees - 2,000

Legal & Professional Charges - 1,405

Bank Charges 399 -

13,899 16,905

SCHEDULES TO THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010


179

ASSETS

Cost or Deduction Total Upto For the Deduction TotalRevaluation Cost Last Year Year

As At 2008 200701.04.2008

Leasehold Land - - - - - - - - -

Land (Revisionery Right) - - - - - - - - -

Factory Building - - - - - - - - -

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------TOTAL - - - - - - - - -

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 146,206,381 - 146,206,381 95,915,899 - - 95,915,899 50,290,482 50,290,482

=========== =========== =========== =========== =========== =========== =========== =========== =========== NOTE : (*) Includes, due to revaluation.

Rs. 88738458 as at 31st March, 1992

Rs. 36888508 as at 31st March, 1993

As At31st March


SCHEDULE 'D' FIXED ASSETS

GROSS BLOCK DEPRECIATION NET BLOCK

180


NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2010 SCHEDULE “E” A. BASIS OF ACCOUNTING :

a) Financial statements are prepared on accrual basis in accordance with the provisions of Companies Act, 1956. Interest on Fixed Deposits with the banks is however accounted in the year of actual realization.

b) Fixed Assets: Fixed Assets are recorded at cost except for subsequent

revaluation as stated hereinafter in respect of building. The Company capitalises all costs relating to fixed assets acquisition and installation.

c) Depreciation: Depreciation on Fixed Assets other than leasehold is

provided on written down value method at the rates specified in Schedule XIV to the Companies Act, 1956. The amount of depreciation attributable to the incremental value of the building on all Revaluation is recouped from Revaluation Reserve.

B. NOTES ON THE BALANCE SHEET AND PROFIT AND LOSS

ACCOUNT :

1. Contingent Liabilities not provided for :

i) Excise Demands of Rs. 18,69,912/- (Previous Year Rs. 18,69,912/-) made by the department for the period 1st April, 1981 to 31st May, 1987 against which the company is in appeal.

ii) Payments made under Kar Vivad Samadhan Scheme

amounting to Rs. 7,47,499/- where the Company has filed Writ Petitions against the KVSS order for the Assessment Year’s 1990-91 and 1991-92.

iii) Income Tax Demand disputed in Appeal for Assessment Years

1997-98 and 1998-99 Rs. 27,76,257/- which is paid/adjusted in full and for Assessment Year 1999-2000 Rs. 43,04,293/- totaling to Rs. 70,80,550/-.

2. The Mumbai Debts Recovery Tribunal has vide its orders dated

15th March, 2002 under recovery proceedings nos. 99 & 100 / 2002 directed the Company to pay Oman International Bank Rs. 10,08,32,893.54 and Rs. 16,45,32,827.46 together with interest @ 15% per annum from 20th March, 1999 towards the liability arising out of the guarantees given by the Company to the Bank for credit facilities granted to other Companies. The Company’s guarantees to the Bank aggregates to Rs.24 crores. The Mumbai Debts Recovery Tribunal had subsequently issued Attachment Warrants on 21st August, 2002 in respect of land situated at Marol admeasuring approximately 4961 Square Meters in respect of which an equitable mortgage was created

181

by the Company in favour of Oman International Bank. Pursuant to an order dated 5th April, 2004 passed by the Special Court constituted under the Special Court (Trial of offences Relating to Transactions in Securities) Act, 1992, the Bank has through their Advocate’s letter dated 21st June, 2004 has given its consent for the sale of Company’s building including the mortgage land as an unencumbered provided a fair value is fixed for the land in the total sale proceeds and the Court Receiver to apportion the sale proceeds after the sale is completed as per the directions of the Special Court. D. R. T. auctioned the said property and an highest bidder was given the property on 16.05.2007. The matters had been disposed off by an Order of Sale. The Company has filed an Appeal against the said Order, which are pending at the D. R. T.

3. Pursuant to the order dated 14th February, 2003 passed by the

Special court constituted under the Special Court (Trial of offences Relating to Transactions in Securities) Act, 1992, the Court Receiver was appointed as receiver of the Company’s leasehold land at Bhiwadi and the building standing on the at Marol land (which is attached by the Debt Recovery Tribunal) and moveable assets of the Company for recovery of the principal amount and interest due by the Company to Dhanraj Mills Private Limited. Certain moveable assets have been appropriated by the Court Receiver towards this liability. However the status of the Fixed Deposit with Central Bank of India, the receipt of which was handed over to the Receiver is not known and hence no adjustment has been made in the accounts pending confirmation.

4. Sabara Industrial Services Private Limited, one of the illegal

occupants of the building belonging to the Company has filed a suit no. 708 of 2003 in the Small Causes Court, Mumbai, claiming tenancy rights in respect of the area occupied by them under the Maharashtra Rent Control Act, 1999 which is being defended by the Company.

5. The Company alongwith 12 other companies are Judgement

Debtors of Dhanraj Mills P Ltd., a notified party under THE SPECIAL COURT (Trial of offences Relating to Transactions in Securities) ACT, 1992. There were thirteen consent decrees passed in favour of Dhanraj Mills P Ltd.

As mentioned in the previous year ‘s Balance Sheet , based on the principles adopted by the Group and agreed by all Judgement Debtors, all the individual decrees got satisfied on 11.05.2006 and an agreegate amount of Rs. 1,99,39,060 would be refundable to two Judgement Debtors as on 31.03.2007 for which an appropriate application has been made to the Special Court. If the principle of appropriation advised above is rejected by the Special court the total liability of the judgement debtors as on 31.03.2007 amounting to Rs. 1,88,44,433/- may be claimed by the Custodian from the Company as judgement debtor and guarantor and shall be accounted in the books accordingly.

182

6. Earnings Per Share : (AS-20).

March 31, 2010 March 31, 2009 Particulars Rupees Rupees

Numerator used for calculating basic and diluted earnings per share - profit after taxation

(13899)

(16905) Weighted average number of shares used as denominator for calculating basic and diluted earnings per share

20,45,000

20,45,000 Basic and diluted earnings per share (0.007) (0.008)

7. Accounting for Taxes on Income (AS-22) In Respect of Unabsorbed Depreciation or Carry Forward Losses Deferred Tax Assets are recognized only if there is Virtual Certainty that sufficient future taxable income will be available against which such assets can be realized. In view of un-certainty of its utilization deferred tax assets is not recognized.

8. Previous Year's figures are re-arranged/re-grouped wherever

necessary. 9. To the best of information and belief by the Management Sundry

Creditors as on 31.03.2010 does not include outstanding dues to small Scale Industries within the meaning of Section 3 of the Industries (Development and regulation) Act, 1951.

Signatures to Schedules 'A' to 'D' and '1' and ‘E’ notes to Accounts. Per Our Report Attached For and on behalf of Board, For BHANGARIA & CO. ) Chartered Accountants ) ) ) DIRECTORS ) Nikunj Bhangaria ) PROPRIETOR ) Membership No. 121369 PLACE : MUMBAI PLACE : MUMBAI DATED : 01/09/2010 DATED : 01/09/2010

183


BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

Statement showing particulars as prescribed in the amendment to Schedule VI to the Company’s Act, 1956 vide Notification No. G.S.R.388(E) dated 15th May, 1995 :

I. Registration Details Registration No. 12460 State Code 11 Balance Sheet Date 31-03-10 II. Capital Raised during the year (Amount in Rs. Thousands) Public Issue Rights Issue NIL NIL Bonus Issue Private Placement NIL NIL III. Position of Mobilisation and Deployment of

Funds (Amount in Rs. Thousands)


Paid-Up Capital Reserves & Surplus 20450 137291 Secured Loans Unsecured Loans NIL NIL

Application of Funds Net Fixed Assets Investments NIL NIL Net Current Assets Misc Expenditure 51978 NIL Accumulated Losses 105763

184

IV. Performance of Company (Amount in Rs. Thousands) Turnover (Gross Revenue) Total Expenditure NIL 14 Profit / Loss Before Tax Profit / Loss After Tax (14) (14) Earnings Per Share in Rs. Dividend Rate % (0.007) NIL V. Generic Name of The Services of Company (as per monetary terms) Item Code No. (ITC Code) NOT APPLICABLE I. T. C. Code Products Description

Licence Fees/Compensation Received for use of Office Premises Note :

1) The above particulars should be read along with the Balance Sheet as at 31st March 2009 the Profit and Loss Account for the year ended on that date and the Schedules forming part thereof.

For and on behalf of the Board,

Director Director

Place: Mumbai Dated: 1st September, 2010

185

FILTRONA INDIA LIMITED DIRECTORS’ REPORT

The Directors submit their Annual Report and Audited Statement of Accounts for the year ended 31st March, 2010. FINANCIAL RESULTS 2009-10 2008-09 Rupees Rupees Gross Profit/(Loss) (678,737) (8,824)

Less : Depreciation --- ---

Net Profit / (Loss) for the year (678,737) (8,824)

Add / Less : Prior year Provision for taxation (Credit) --- ---

Profit/ (Loss) after taxation (678,737) (8,824)

Add / Less : Balance brought forward from earlier Years 11,318,612 11,327,436

Balance carried forward to Balance Sheet 10,639,875 11,318,612

PARTICULARS UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956 There was no employee in the company during the year under review. DIRECTORATE Mr. Sanat C. Parikh retires by rotation and being eligible offers himself for re-appointment. STATEMENT UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 PURSUANT TO SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956. 1. The Company has no activities relating to conservation of energy. 2. (a) The Company has made no provision for Research and Development expenditure.

(b) The Company has no activity relating to technology absorption, adoption and innovation. 3. The Company has no activity relating to Foreign Exchange earnings and outgo. DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that: • In the preparation of the annual accounts, the applicable accounting standards have been followed

along with proper explanation relating to material departures; • They have selected such accounting policies and applied them consistently and made judgments and

estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as on 31st March, 2010 and of the profit or loss of the Company for that period;

• Proper and sufficient care has been taken 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;

• The Annual accounts are prepared on a going concern basis. AUDITORS REMARK The Report of the Auditors contain a reference to certain notes on the Accounts. The Directors consider that the notes are self-explanatory and give the necessary information. AUDITORS It is necessary to appoint Auditors of the Company until the conclusion of the next Annual General Meeting and to fix their remuneration.

For and on Behalf of the Board FILTRONA INDIA LIMITED

Registered Office: Filtrona Building, Killick Estate, Baji Pasalkar Marg, Chandivli, Mumbai 400072

Dated: 1st September, 2010 S. R. HEMMADY S. C. PARIKH Director Director

186

REPORT OF THE AUDITORS To The Members of FILTRONA INDIA LIMITED. 1) We have audited the attached Balance Sheet of FILTRONA INDIA LIMITED as at 31st

March, 2010 and the Profit & Loss Account for the year ended on that date 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.

2) We have 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 amount and disclosures in the financial statement. An Audit also includes assessing the accounting principles used and significant estimates made by the 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 (Auditor’s Report) Order, 2003 issued by the Central

Government of India in terms of Section 227 (4A) of the Companies Act, 1956 of India (‘The Act’) and on the basis of such check of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the attached Annexure, a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4) With regard to advances in the nature of loans given to companies in earlier years and

outstanding at the year end the provisions of section 372A of the Companies Act, 1956 have been contravened in respect of following: a) Prior special resolution of the general body of the Company has not been taken for

giving the advance which is in excess of limits within the powers of the board of directors.

b) The advances have been given interest free which is in violation of section 372 A(3) of the Companies Act 1956.

c) The granting of advance has not been unanimously approved by the board of Directors as required under section 372A(2) of the Companies Act 1956.

d) Proper register showing particulars of advance made has not been maintained U/s 372A(5) of the Companies Act, 1956.

5) The contingent liability shown in the notes to account towards disputed income tax

demands aggregating to Rs 53,556,498 /- is just a repeat of previous years figure. The present status of these demands as on 31st March, 2010 has not been explained to us. In the absence of such explanation we are unable to opine on the accuracy of this figure or to form on opinion whether any of these contingent demands need a provision in the current year’s financial statements due to a change in their status during the year.

6) Note no.2 (ii) in the notes to accounts refers to a guarantee given by the Company for Rs.

450,000,000/- to a bank for securing the debt of another body corporate which has been involved by the bank in earlier year. The note also refers to the outstanding amount of liability on the guarantee being Rs.89,224,985 /-. This note is a repeat of previous years note. No details of the present position of this guarantee has been explained to us nor have any documents or other supporting been produced to us for verification of this guarantee as on 31st March, 2010. No supporting have been shown to us to satisfy us that the assets provided as security by the defaulting company is sufficient to cover the liability claimed by the bank as stated in the said note. Hence we are unable to express an opinion as to the accuracy of this note or to the claim made in the note that no liability on account of the guarantee will devolve on the Company.

187

7) No provision has been made for the doubtful recovery of an advance in the nature of loan amounting to Rs.205,000,000/- given to a company which, based on the documents examined by us, in our opinion, is doubtful of recovery.

8) Capital Reserve Account includes Profit on disposal of Factory Building Rs. 74,833,258/-

credited in the past instead of treating it as a revenue receipt and crediting it to the Profit & Loss Account. This is contrary to the generally accepted accounting principles.

9) On the basis of written representation received from the directors, we report that these

directors are not disqualified as on 31st March, 2010 from being appointed as directors under section 274(1)(g) of the Companies Act, 1956.

10) During the year the company has transferred the balance between many party accounts

without any documentary evidence, including some prior period adjustments. This, coupled with non-availability of confirmation from the parties for their year-end balances, we are unable to vouch for the correctness of the entries made in these parties accounts accounts and consequently unable to express any opinion about the correctness of the year end balances of these parties.

11) We have not been able to verify the Register to be maintained u/s 301 of the Companies

Act, 1956 as the same was not furnished to us. Hence we are unable to express any opinion on the same and the various clauses in the annexure to this report.

12) We have not been able to verify some of the bank balances with the bank statements, due to

unavailability of the bank statements. 13) Further to our comments in the Annexure referred to in paragraph 3 above, we report as

under: a) We have obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purpose of audit except in respect of the matters referred to in paragraphs 5 to 6 above;

b) In our opinion, proper books of account as required by law have been kept by the Company, so far as it appears from our examination of such books of account;

c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account;

d) In our opinion, the Profit and Loss Account and Balance sheet comply with the Accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e) In our opinion and as per the information and according to the explanations given to us, the said accounts, read together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required;

f) In view of the matters referred to in paragraphs 5 to 12 above, due to the substantial materiality of the amounts involved and the lack of information and explanations received in respect of the matters referred to in paragraphs 5 to 6 above, we are unable to express an opinion on, whether the accounts give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the Balance Sheet of the state of affairs of the Company as at 31st

March 2010 and ii) in the case of the Profit and Loss Account, of the Loss of the Company for the year

ended on that date. For Bhangaria and Co. Chartered Accountants Nikunj G. Bhangaria (Proprietor) M. No. 121369 Place: Mumbai Date: September 1, 2010

188

Annexure to the Auditors’ Report to the Members of Filtrona India Limited

(Referred to in paragraph 3 our report of even date)

As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central overnment in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanation given to us in the course of our audit, we further report that:

1) The custodian appointed under the THE SPECIAL COURT (Trial of Offences Relating to

Transactions in Securities) Act, 1992 disposed off all the fixed assets of the Company, except generator, and the generator has been written off in the accounts. The Fixed Assets of the Company as on the Balance Sheet date are nil, thereby affecting the going concern assumption.

2) The Company did not hold any inventories during the year. 3) To the best of our knowledge and belief and according to the information and

explanations given to us, we are of the opinion that the Company has not granted any loans, secured or unsecured, to Companies, firms and other parties covered in the register maintained under section 301 of the Companies Act 1956 during the year.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets. The Company did not have any sale of goods or services during the year. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

5) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the Company has not entered into any transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956.

6) The Company has not accepted any deposits within the meaning of Section 58A, 58AA or any other relevant provisions of the Act and Rules framed there under.

7) The Company did not have an internal audit system in operation during the year. 8) The Rules for maintenance of cost records under clause (d) of sub section (1) of section

209 of the Companies Act, 1956 prescribed by the Central Government are not applicable to the Company.

9) a. According to the information and explanations given to us, the Company is

generally regular in depositing with appropriate authorities undisputed Statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-Tax, Sales-Tax, Wealth-Tax, Customs Duty, Excise Duty, Cess and other Statutory dues wherever applicable. As per the information and explanation given to us, there are no undisputed arrears of statutory dues outstanding as at 31st March 2010 for a period of more than six months from the date they became payable.Regards the Provision for Taxation for Rs. 6,50,03,324/- as on 31st March ,2010, we are unable to comment on the same as we have not received any explanation or information on the same.

b. In our opinion and according to the information and explanations given to us, there were no disputed dues in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited as on 31st March 2010, except as stated below (save as stated in the last paragraph of this note):

189

Nature of Dues Pending Amount (Rs.) Forum of dispute

Income Tax A.Y. 1999-00 2,012,166/- Income Tax Appellate Tribunal Income Tax A.Y. 2002-03 115,707,022/- Income Tax Appellate Tribunal Income Tax A.Y. 2002-03 (Penalty)

41,695,289/- Income Tax Appellate Tribunal

However in respect of disputed dues relating to Income Tax, in absence of production of the necessary records and documents, we are unable to comment on whether any further such dues are pending other than the amounts mentioned above.

10) In our opinion the accumulated losses at the end of the financial year of the Company are not more than fifty percent of its net worth. The Company has incurred cash losses during the current financial year under audit as well as in the immediately preceding financial year.

11) In our opinion and according to information and explanation given to us, the Company has not taken any loan from financial institutions or banks. The Company has not issued any debentures.

12) In our opinion and according to information and explanation given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of clause 4 (xii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

13) The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / society are not applicable to the Company.

14) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments.

15) In our opinion and according to the information and explanations given to us and as per Note No. 2(ii) of the Notes to the Accounts, the Company has given guarantee of Rs. 450,000,000/- for the loans taken by a body corporate from a bank. As no records or documents relating to the same have been produced before us for our verification, we are unable to comment as to whether the terms or conditions thereof are prejudicial or not to the interest of the Company.

16) The Company has not taken or utilized any term loans during the year. 17) According to the information and explanation given to us and on an overall examination

of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long term assets.

18) According to the information and explanation given to us, the Company has not made preferential allotment of shares to parties covered in the register maintained under Section 301 of the Companies Act, 1956 during the year.

19) The Company has not issued any debentures during the year and therefore paragraph 4(xix) of the order is not applicable.

20) The Company has not raised any money by public issue during the year and therefore paragraph 4(xx) of the order is not applicable.

21) 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 course of our audit.

For Bhangaria and Co. Chartered Accountants Nikunj G. Bhangaria (Proprietor) M. No. 121369 Place: Mumbai Date: September 1, 2010

190

FILTRONA INDIA LIMITED

BALANCE SHEET AS AT 31ST MARCH, 2010Schedule As at 31.3.2010 As at 31.3.2009Reference

Rupees Rupees Rupees RupeesSOURCES OF FUNDS:SHAREHOLDERS' FUNDS: Share Capital A 16,350,000 16,350,000 Reserves and Surplus B 172,145,087 172,823,824

188,495,087 189,173,824

UNSECURED LOAN: Loan from Company - - Interest due on above Loan - -

- -

TOTAL: 188,495,087 189,173,824

APPLICATION OF FUNDS: Fixed Assets: Gross Block - - Less: Depreciation to-date - - Net Block - - Less: Deduction - - -

- Investments: 24,000 Equity Shares of Rs.10/- each of Maruti Ltd. - At written down value. 1 1

Current Assets, Loans & Advances: C 255,255,848 256,280,789

Less: Current Liabilities D 66,760,762 67,106,966 188,495,086 189,173,823

TOTAL : 188,495,087 189,173,824 Notes to Accounts F

Per our Report attached For and on behalf of the BoardFOR BHANGARIA AND CO.CHARTERED ACCOUNTANTS

NIKUNJ G. BHANGARIAPARTNER Director DirectorMem.No. 121369MUMBAI, DATED: 1st September, 2010 MUMBAI, DATED: 1st September, 2010

191


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

Schedule As at 31.3.2010 As at 31.3.2009Reference

Rupees Rupees Rupees Rupees Rupees Rupees

INCOME

Other Income - -

- -

EXPENDITURE:

Expenses E 678,737 8,824 Interest paid - -

Depreciation - - Less: Transferred from Fixed Assets Revaluation Reserve - -

- - 678,737 8,824

Profit/(Loss) before Tax and Prior period item (678,737) (8,824)

Prior period Expenses - - Provision for Taxation -

Current year - - Prior year- (Credit) - -

Profit/(Loss) after taxation (678,737) (8,824)

Add/Less: Balance brought forward from previous year 11,318,612 11,327,436

Balance carried forward to Balance Sheet 10,639,875 11,318,612

Composit Average Earning Per Share -0.42 -0.01Notes to Accounts F_______________________________________________________________________________________Per our Report attached For and on behalf of the BoardFOR BHANGARIA AND CO.CHARTERED ACCOUNTANTS


192


SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2010

As at 31.3.2010 As at 31.3.2009


SCHEDULE "A" - SHARE CAPITAL:

AUTHORISED:5,000,000 Equity Shares of Rs.10 each 50,000,000 50,000,000

ISSUED, SUBSCRIBED & PAID-UP:1,635,000 Equity Shares of Rs.10 each fully paid up 16,350,000 16,350,000

Of the above -160,000 Equity Shares are allotted as fullypaid-up by way of Bonus Shares byCapitalisation of General Reserve

SCHEDULE "B" - RESERVES AND SURPLUS:

CAPITAL RESERVES Compensation for termination of lease agreement 5,842,878 5,842,878 Sale of Assets 74,833,258 74,833,258

80,676,136 80,676,136

SECURITIES PREMIUM ACCOUNT 40,000,000 40,000,000

GENERAL RESERVETransfer from Fixed Assets Revaluation Reserve ondisposal of Revalued Assets 40,829,076 40,829,076

PROFIT AND LOSS ACCOUNT 10,639,875 11,318,612

172,145,087 172,823,824

193


SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH 2010

AS AT 31.3.2010 AS AT 31.3.2009


SCHEDULE "C" CURRENT ASSETS, LOANS AND ADVANCES

1. CASH AND BANK BALANCES: Cash on Hand 9,567 2,067 With Scheduled Banks: On Current Account 34,942 74,061 On Fixed Deposit - -

44,509 76,128

2. LOANS AND ADVANCES: Unsecured, Considered Good Advance to Company - 979,322 Deposits 54,885 54,885 Advances recoverable in cash or in kind or for value to be received. 254,900,205 205,037,850 Killick Nixon Ltd. (Towards settlement of dues - 49,876,355 of Dhanraj Mills Ltd.) Advance Income Tax paid 256,249 255,211,339 256,249 256,204,661

255,255,848 256,280,789

SCHEDULE "D"CURRENT LIABILITIES AND PROVISIONS:

CURRENT LIABILITIES: Sundry Creditors 1,465,738 1,811,942 Deposits - -

1,465,738 1,811,942

PROVISION:

For Taxation 65,295,024 65,295,024

66,760,762 67,106,966


SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010

AS AT 31.3.2010 AS AT 31.3.2009


SCHEDULE "E" - EXPENSES:

Audit Fees 10,000 8,824 Bank charges 3,911 - Filing Fees 2,624 - Prior Period Expenses 662,202 -

678,737 8,824

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NOTES TO ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010

SCHEDULE “F” ACCOUNTING POLICIES:

1) Factory Building under Fixed Assets is revalued on the basis of Valuation Report of

External Approved Valuer, to reflect the current market value in the Balance Sheet. The Fixed Assets Revaluation Reserve is debited with the annual depreciation on that portion of the value which is written up, by corresponding credit to Profit & Loss Account.

2) Balance of Revaluation Reserve is transferred to General Reserve on disposal of the

Revalued Fixed Assets.

3) Depreciation on Fixed Assets is provided on Written Down Value method in accordance with the provisions of Schedule XIV to the Companies Act, 1956.

4) Investments are valued at Re.1/- if, in the opinion of the management, the same is not

having any realizable value.

5) Accounting for Taxes Income (As 22) a. Deferred tax asset/liability is recognized for timing differences on items debited

/ credited in the books and allowability for income tax purposes. b. In respect of Unabsorbed Depreciation or carry forward losses deferred tax

assets are recognized only if there is virtual certainty that sufficient future taxable income will be available against which such assets can be realized.

NOTES TO ACCOUNTS:

1) The Accounts have been prepared on the basis of going concern. However the going concern assumption is affected by the disposal of all the Fixed Assets of the Company during the previous financial year.

2) Contingent Liabilities:

a. Disputed Income Tax demands under appeal: Rs. 53,556,498/- (Previous Year: Rs.53,556,498/-).

b. The Company has given a guarantee of Rs. 450,000,000/- (Previous year Rs.450,000,000/- to a Bank securing debt of a Corporate. The Bank has invoked the guarantee. The outstanding amount of liability on the guarantee is Rs. 89,224,985/- together with interest thereon @15% per annum from 1st May 2003 till the payment. However the Company is of the opinion that as the assets provided as security by the defaulting Company is sufficient to cover the liability claimed by the Bank, the Company is confident that no part of the liability will devolve on its self in its capacity as guarantor.

3) The Company alongwith 12 other companies are Judgement Debtors of

Dhanraj Mills P Ltd., a notified party under THE SPECIAL COURT (Trial of offences Relating to Transactions in Securities) ACT, 1992. There were thirteen consent decrees passed in favour of Dhanraj Mills P Ltd.

As mentioned in the previous year ‘s Balance Sheet , based on the principles adopted by the Group and agreed by all Judgement Debtors, all the individual decrees got satisfied on 11.05.2006 and an agreegate amount of Rs. 1,99,39,060 would be refundable to two Judgement Debtors as on 31.03.2007 for which an appropriate application has been made to the Special Court.

195

If the principle of appropriation advised above is rejected by the Special court the total liability of the judgement debtors as on 31.03.2007 amounting to Rs. 1,88,44,433/- may be claimed by the Custodian from the Company as judgement debtor and guarantor and shall be accounted in the books accordingly.

5. Information on Licensed and Installed Capacity and Production is not applicable as the

Company has stopped its manufacturing operations since 31st October, 1986 and has disposed off all its Fixed Assets.

6. In view of uncertainty of its realization Deferred Tax assets in respect of brought

forward business losses and unabsorbed business depreciation has not been recognized.

7. Loans and Advances include due from the companies under the same management. 31.03.2010 31.03.2009

Rs. Rs. Killick Financial Services Ltd., 10,000 10,000 Millenium Caribonum Ltd. 14,000

8. The custodian on behalf of Killick Nixon Limited and Group of Companies sold Factory

Building at Chandivali for Rs. 115,750,000 and appropriated the dues of the following companies on behalf of Killick Nixon Limited, and which was debited to the account of Killick Nixon Limited. Particulars Amount (Rs.)

Filtrona India Limited 47,080,162 Other Group Companies of Killick Nixon Limited 68,669,838 Total 115,750,000

9. To the best of information and belief by the Management Sundry Creditors as on

31.03.2010 does not include outstanding dues to Small scale Industries within the meaning of Section 3 of the Industries (Development and Regulation) Act, 1951.

Signature to Schedules “A” to “F”

Per our Report attached For and on behalf of the Board For Bhangaria and Co. Chartered Accountants Nikunj G. Bhangaria Director Director (Proprietor) M. No. 121369 MUMBAI, DATED: 01/09/2010 MUMBAI, DATED:01/09/2010

196


STATEMENT PURSUANT TO PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

REGISTRATION DETAILS:

1 Registration No. 12532 State Code 11

Balance Sheet Date: 31st March, 2010

2 CAPITAL RAISED DURING THE YEAR (AMOUNT IN Rs. THOUSANDS)

Public Issue NIL Rights Issue NIL Bonus Issue NIL Private Placement NIL

3 POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS(AMOUNT IN Rs. THOUSANDS)

Total Liabilities Total Assets

Sources of Funds:Paid-up Capital 16,350 Reserves & Surplus 172,145Secured Loans NIL Unsecured Loans NIL

Application of Funds:Net Fixed Assets NIL Investments NIL Net Current Assets 188,523 Misc. Expenditure NIL Accumulated Losses NIL

PERFORMANCE OF COMPANY (AMOUNT IN Rs. THOUSANDS)

Turnover NIL Total Expenditure 679Profit/(Loss) before Tax (679 ) Profit/(Loss) after Tax (679 )Earning per share -Rs. NIL Dividend @ % NIL

GENERIC NAMES OF THREE PRINCIPAL PRODUCTS OF COMPANY:

Item Code No. (ITC Code) N.A. Product Description

Note: The above particulars should be read alongwith the Balance Sheet as at 31.03.2010 theprofit and loss account for the year ended on that date and Schedules forming part thereof.

Per our Report attached For and on behalf of the BoardFOR BHANGARIA AND CO.CHARTERED ACCOUNTANTS


197

KILLICK NIXON LIMITED Registered Office : Basement, Commercial Union House, No.9, Wallace Street, Fort, Mumbai - 400001.

ATTENDANCE SLIP

To be handed over at the entrance of Meeting Hall

Members attending the Meeting in person or by proxy are requested to complete the

attendance slip and hand it over at the entrance of the meeting hall.

I hereby record my presence at the 62nd Annual General Meeting of the above named

Company being held at Conference Hall, KEL House, Plot No.7, Opp.: Oberoi Garden

Estates, Chandivali Farm Road, Chandivli, Andheri (E), Mumbai – 400 072 on Thursday, the

30th September, 2010 at 5.00 p.m.

Folio No.___________________ Name of the Member

_____________________ No. of Shares ______________ Signature of Member / Proxy

_______________ __________________________________ Tear here ____________________________________

KILLICK NIXON LIMITED Registered Office : Basement, Commercial Union House, No.9, Wallace Street, Fort, Mumbai - 400001.

Folio No.___________________ No. of Shares _______________

FORM OF PROXY I / We ______________________________________of __________________________

being a member / members of Killick Nixon Limited hereby appoint

________________________________ of ___________________________ or failing him

________________________________ of ___________________________ or failing him

________________________________ of ___________________________ as my / our

proxy to vote for me /us on my / our behalf at the 62nd Annual General Meeting of the

Company to be held on Thursday, the 30th September, 2010 at 5.00 p.m. Signed this __________ day of September, 2010

Signature ________ Re.1

Revenue Stamp

_______

NOTE : The Form duly completed and signed should be deposited at Chandivli Office of the Company

NOT LATER THAN 48 HOURS before the time of the meeting.

198

BY COURIER

If undelivered please return to : KILLICK NIXON LIMITED, KEL House, Plot No.7, Opp.: Oberoi Garden Estates, Chandivali Farm Road, Chandivali, Andheri (E), MUMBAI – 400 072.

To

199

Documents

KILLICK NIXON LIMITED · Companies (Special Provisions) Act, 1985 (SICA) vide the order of BIFR dated 29-8-2006. BIFR BIFR has appointed IDBI as the Operating Agency to prepare a