MANAGING DIRECTOR S MESSAGE

Transcription

1 Dear Fellow Shareholders, MANAGING DIRECTOR S MESSAGE In our last letter, about an year ago, We had mentioned that the need to attain momentum to speed up over the year to move ahead and swim out of arguably the worst Economic crisis the world has ever seen was a priority for your company. The Economic scene of the past year made this a very challenging time for all of us here at Emmsons. But I am happy to share with you that, with increasing recovery being witnessed in all relevant spheres for the Industry and with the hard work of the entire team at Emmsons, who stand committed to maximise shareholder value, the tide has turned and the company is well on its way to execute and go a long way forward in our vision and ambition. The addition of new products to the trading basket for the Indian set-up and setting up of another trading subsidiary in Dubai, Emmsons Gulf DMCC were amongst the highlights of the previous year. The new subsidiary is fully functional now, after beginning its operations in the middle of the year. We draw immense satisfaction from the fact that Emmsons Gulf has been able to perform very well in the first year of operations. This, coupled with bright prospects in agricultural Trading for our Swiss based subsidiary, Emmsons S.A, gives us plenty of reasons to be cautiously optimistic that the future is not only bright, but one that will pave the way for this company going forward. We would like to be known as a Forward thinking organisation with a firm focus on creating value in the entire value chain for Agriculture and Energy Chain. Today's investment is Tomorrow's Opportunity, and keeping this in mind, the whole focus this year and the years to come would be to not only strengthen the existing Trading Operations, but also expanding in the other Strategic verticals such as Mining, Farming, Agricultural Processing and Storage. In addition, We are striving towards creating a strong, yet nimble organisations structure and the coming year would see the company go all out in hiring the best talent available in the Industry world-wide to supplement its current activities and grow the future Businesses. We thank all of you for continually supporting the Company and look forward to sharing many more milestones to come, at the same time, strengthening the core of our businesses. Best Regards Anil Monga, Managing Director (Anil Monga) Managing Director

2 CONTENTS 1. Company Information 1 2. Financial Highlights 2 3. Notice Directors' Report Report on Corporate Governance Auditors' Certificate on Corporate Governance CEO/CFO Certification Auditors' Report Balance Sheet Profit & Loss Account Cash Flow Statement Schedules Forming part of Balance Sheet and Profit and Loss Account Significant Accounting Policies and Notes on Accounts Balance Sheet Abstract and Company's General Business Profile Balance Sheet of Group Companies in US$ Profit and Loss Account of Group Companies in US$ Statement pursuant to Section 212 of the Companies Act, Financial information of subsidiaries companies Emmsons SA Emmsons Gulf DMCC Auditors' Report on Consolidated Financial Statements Consolidated Balance Sheet Consolidated Profit and Loss Account Consolidated Cash Flow Statement Schedules Forming part of Consolidated Balance Sheet and Profit and Loss Account. 24. Significant Accounting Policies and Notes on Consolidated Accounts Attendance Slip and Proxy Form 75 1

3 COMPANY INFORMATION BOARD OF DIRECTORS Anil Monga Rajesh Monga Shivaz Monga Vijay Kumar Kakkar Viresh Shankar Mathur Mohammad Tariq Raza Satish Chandra Gupta Managing Director Whole Time Director Executive Director Professional and Independent Director Professional and Independent Director Professional and Independent Director Professional and Independent Director KEY MANAGEMENT PERSONNEL B.B. Gandhi President (Commercial) Varinder Machhral Vice President (Trading) Rakesh Kumar Singh Business Head (Trading) Hamant Paul G.M.( Finance ) Shiraz Rehman D.G.M. ( Trading) COMPANY SECRETARY & COMPLIANCE OFFICER Suvindra Kumar BANKERS Company Secretary ORIENTAL BANK OF COMMERCE Overseas Branch, M-33, Greater Kailash-II, New Delhi INDIAN OVERSEAS BANK A-19/22, Moolchand Shopping Complex, Defence Colony, New Delhi STANDARD CHARTERED BANK 7A, DLF Building, DLF Cyber City, Sector 24, 25 & 25A, Gurgaon, Haryana ALLAHABAD BANK International Branch, 3rd Floor, 17, Parliament Street, New Delhi AUDITORS SURESH & ASSOCIATES 3A Bigjo s Tower, Netaji Subhash Place, Pitampura, Delhi OFFICES REGISTERED OFFICE 2637, First Floor, Naya Bazar, Delhi ADMN. OFFICE 101, South Delhi House, 12, Zamrudpur Community Centre, Kailash Colony, New Delhi FOREIGN OFFICES SWITZERLAND SUBSIDIARY EMMSONS S.A. Place du Marche 3, CP 156, 1860 Aigle, Switzerland DUBAI SUBSIDIARY EMMSONS GULF DMCC 3406, 1- Lake Plaza Plot No. T2, Jumeirah Lakes Towers, Dubai, U.A.E. SHARE REGISTRAR LINK INTIME INDIA PVT LTD A-40, 2nd Floor, Naraina Industrial Area, Phase-II, Near Batra Banquet Hall, New Delhi

4 Emmsons International Ltd. FINANCIAL HIGHLIGHTS (Rs. in lacs) P A R T I C U L A R S Gross Turnover/Income Earnings Before Depreciation, Interest and Tax (EBDIT) Depreciation Profit before Tax Profit After Tax Equity Dividend % Dividend Payout Equity Share Capital Equity Share Warrants Allotment / Application Money 10 Reserve and Surplus Net Worth Gross Fixed Assets Net Fixed Assets Total Assets Total Liabilities Market Capitalisation KEY INDICATORS P A R T I C U L A R S Earning Per Share (Basic) - Rs Turnover Per Share - Rs Book Value Per Share - Rs Debt : Equity Ratio 2.47:1 2.45: : : : 1 5 EBDIT / Gross Turnover - % Net Profit Margin - %

5 NOTICE NOTICE is hereby given that 17th Annual General Meeting of M/s Emmsons International Limited will be held on Wednesday, the 29th Day of September, 2010 at A.M. at Niryat Bhawan, Rao Tula Ram Marg, Opp. Army Hospital Research & Referral, New Delhi , to transact the following businesses : ORDINARY BUSINESS 1. To receive, consider and adopt the audited Balance Sheet as at 31st March, 2010 and Profit & Loss Account for the year ended on that date together with Report of Board of Directors and Auditor's Report thereon. 2. To Declare a Dividend on Equity Shares for the financial year To appoint a Director in place of Mr. Rajesh Monga, who retires by rotation and being eligible offers himself for re-appointment. 4. To appoint a Director in place of Mr. Shivaz Monga, who retires by rotation and being eligible offers himself for re-appointment. 5. To appoint M/s Suresh & Associates, Chartered Accountants, as Auditors of the company to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting and to authorize the Board of Directors to fix their remuneration. SPECIAL BUSINESS 6. To consider and if thought fit, to pass with or without modifications, the following resolution as an Ordinary Resolution : "RESOLVED THAT pursuant to the Provision of Section 198, 269, 309, 310 and Schedule XIII of the Companies Act, 1956 and other applicable provisions, if any of the Companies Act, 1956 and subject to the approval of the members of the Company at their ensuing General Meeting. Mr. Anil Monga be and is hereby re-appointed as the Managing Director of the Company for a further period of five years w.e.f. 1st September, 2010 at a remuneration and perquisite as detailed below : A. SALARY: Rs.3,12,500- (Rupees Three lacs twelve thousand five hundred Only) per month in the grade Rs. 3,12,500-42,500-3,55,000-45,000-4,00,000-50,000-5,00,000-75,000-Rs. 8,00,000. B. COMMISSION: Such percentage of net profits as may be decided by the Board of Directors in each Financial Year. C. PERQUISITES: In addition to Salary and Commission, he will be entitled to Perquisites like furnished accommodation, gas, electricity, water and furnishings, medical reimbursement, leave travel concession, club fees including membership fee of two clubs, personal accident insurance etc. in accordance with the rules of the Company, such perquisites being restricted to Rs. 10,00,000/- (Rupees Ten Lacs Only) per annum. i) For the purpose of calculating the above ceiling, perquisites shall be evaluated as per Income Tax Rules, wherever applicable, otherwise, at actual. Provisions for use of Company car for official duties and telephone at residence (including payment for local calls and long distance official calls) shall not be included in the computation of Perquisites for the purpose of calculating the said ceiling. ii) Company's contribution to Provident Fund and Superannuation Fund not exceeding twenty five percent of the remuneration shall not be included in the computation of limits for Perquisites aforesaid. iii) The total remuneration payable to him including Commission, value of Perquisites and Company's contribution towards Provident Fund and Superannuation Fund shall not exceed the limit set out in Section 309, 198 and Schedule XIII of the Companies Act, D. OTHER TERMS: i) The total remuneration including commission perquisites and company's contribution towards provident fund and superannuation fund payable to him shall not exceed five percent where there is only one Managing Director and ten percent where there are more than one Managing Director, of the profits calculated in accordance with section 198 and 309 of the Companies Act,

6 ii) Emmsons International Ltd. The Managing Director shall be entitled to reimbursement of all actual expenses, including on entertainment and traveling, incurred in the course of the company's business. iii) The Managing Director shall also be entitled to the benefits under other benefits, schemes, privileges and amenities such as hospitalization etc. as are granted to the senior executives of the company, in accordance with the company's practice, rules and regulations in force from time to time. iv) The company or the Managing Director shall be entitled at any time to terminate this appointment by giving three months written notice or by any shorter notice as may be mutually agreed to, by both the parties. v) In the event of loss or inadequacy of profits in any financial year, the Managing Director shall be paid, subject to the compliance of schedule XIII of the Companies Act, 1956 in this regard, remuneration by way of salary and perquisites as specified above. vi) The Managing Director, so long as he functions as Managing Director, shall not be paid any sitting fee for attending meeting of the Board of Directors or Committees thereof. "RESOLVED FRUTHER THAT the consent of the Board be and is hereby accorded that the above remuneration of Mr. Anil Monga, with all terms and conditions, shall be effective from "RESOLVED FURTHER THAT the Managing Director will be authorized to exercise such powers of management, as may be delegated to him by the company from time to time, subject however, to the overall superintendence, control and supervision of the Board of Directors of the company." "RESOLVED FURTHER THAT in the event (s) of any statutory amendment or modification or relaxation in the provisions relating to the payment of remuneration to the managerial persons or to Schedule XIII to the Companies Act, 1956, the Board of Directors be and is hereby authorized to vary or increase the remuneration including salary, commission, perquisites, etc. within such prescribed limits." "RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to take such steps expedient or desirable to give effect to this resolution." 7. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution: "RESOLVED THAT in accordance with the provisions of 81(1A) and other applicable provisions, if any, of the Companies Act, 1956 (the Act) (including any amendments or re-enactments thereof) and subject to enabling provisions of the Memorandum and Articles of Association of the company, the listing agreements entered into by the Company with the Stock Exchanges where the company's shares are listed, and in accordance with the applicable guidelines for Preferential issue SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009, issued by The Securities and Exchange Board of India ("SEBI"), and any other relevant statutory/regulatory authorities and clarification thereon issued from time to time, if any, and subject to all such approvals, permissions, and sanctions of any authorities as may be necessary and subject to such conditions and modifications as may be prescribed or imposed by any of them while granting such approvals, permissions, and sanctions and which may be agreed to by the Board of Directors of the company (hereinafter referred to as the 'Board' which term shall include committee thereof), the consent of the company be and is hereby accorded to the Board to offer, issue and allot in one or more trenches, to the persons and their nominees other than the persons belonging to the category of promoters' as determined by the Managing Director or Whole Time Directors of the Company upon such terms and conditions as may be deemed appropriate by them, upto 10,00,000 (Ten Lacs only) equity warrants convertible into equity shares, equity shares or both, on preferential basis of the face value of the Rs. 10/- each. The exercise price of equity share shall be as determined according to Regulation 76 of chapter VII of SEBI (ICDR) Regulations, Such shares shall ranking pari passu in all respects, including as to dividend, with the existing equity shares of the Company. The "relevant date" for this purpose being 30th August, 2010, and on such further terms and conditions, as may be finalized by the Board of Directors in accordance with guidelines/ rules applicable to Preferential allotment of equity warrants convertible into equity shares and equity shares or both, by Govt. of India, Securities and Exchange Board of India (SEBI) or any other authority(ies), as the case may be, and/or any modification thereof and subject to the following terms and conditions: 1. IN CASE OF ALLOTMENT OF EQUITY WARRANTS CONVERTIBLE INTO EQUITY SHARES : a. A sum of 25% of the price of the equity warrants convertible into equity shares, determine in accordance with Chapter VII of SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009 shall be payable by the Allotees at the time of allotment of the Equity Warrants. 4

7 If the Allotees do not exercise the Equity Warrants during the conversion period, the price so paid shall be forfeited by the Company. In case the Allotees exercise the Equity Warrants, the price so paid shall be adjusted against the share application monies payable by the Allotees and only the balance 75% shall be payable by them. b. The Equity Warrants shall be allotted within a period of 15 (Fifteen) days of the passing of the resolution at the general meeting held to consider and approve the issue of Equity Warrants, provided that where the allotment in one or more lots on preferential basis is pending on account of pendency of any of the approval of such allotment by any regulatory authority or the Central Government, the allotment shall be completed within 15 (Fifteen) days from the date of such approval. c. The Equity Warrants shall be exercisable at the option of the holder, in such number of options exercised by the holder, in one or more lots at the option of the holder of such Equity Warrants at any time within the exercise period. The exercise period shall not exceed 18 months from the date of allotment of such warrants. d. The terms relating to such Equity Warrants including the exercise period and relating to the Equity Shares being allotted on their exercise may be decided in accordance with SEBI Guidelines and other provisions of law as may be applicable to the transaction, by the Board of Directors. e. The Equity Shares so allotted on exercise and conversion of the Equity Warrants shall be subject to the provisions of the Memorandum and Articles of Association of the Company and shall rank pari passu in all respects with the then existing Equity Shares of the Company. f. The Equity Warrants and the Equity Shares allotted on the conversion of such Equity Warrants shall be locked in the manner specified, during the lock-in period so specified, in the SEBI (Issue if Capital and Disclosure Requirements), Regulations, 2009 except to the extent and in the manner permitted there under. g. The said Equity Warrants and the Equity Shares allotted on conversion of such Equity Warrants shall be subject to such further terms and conditions, if any, as may be agreed to by and between, the Board of Directors, and the Regulatory Authorities, and Subscriber(s) of Equity Warrants. 2. IN CASE OF ALLOTMENT OF EQUITY SHARES : a. Full consideration of equity shares issued in accordance with Chapter VII of SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009 shall be payable by the Allotees at the time of allotment of the such Equity Shares. b. The Equity Shares shall be allotted within a period of 15 (Fifteen) days of the passing of the resolution at the general meeting held to consider and approve the issue of Equity shares, provided that where the allotment in one or more lots on preferential basis is pending on account of pendency of any of the approval of such allotment by any regulatory authority or the Central Government, the allotment shall be completed within 15 (Fifteen) days from the date of such approval. c. The Equity Shares so allotted shall be subject to the provisions of the Memorandum and Articles of Association of the Company and shall rank pari passu in all respects with the then existing Equity Shares of the Company. d. The Equity Shares allotted shall be locked in the manner specified, during the lock-in period so specified, in the SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009 except to the extent and in the manner permitted there under. e. The said Equity Shares allotted shall be subject to such further terms and conditions, if any, as may be agreed to by and between, the Board of Directors, and the Regulatory Authorities, and Subscriber(s) of Equity Shares. RESOLVED FURTHER THAT: 1. the relevant date for the purpose of calculating the minimum price for issue of the equity warrants convertible into equity shares, equity shares or both in accordance with Chapter VII of SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009 be fixed as 30th Day of August, 2010, being the 30th day prior to 29th Day of September, 2010, the day of Annual General Meeting, in terms of Section 81(1A) of the Companies Act, 1956, to consider the proposed issue. In view of the above, the price of per equity warrants convertible into equity shares or equity share or both proposed to be issued on preferential basis shall be the price as determined in accordance to the Regulation 76 of chapter VII of SEBI (ICDR), Regulations,

8 Emmsons International Ltd. 2. the offer, issue and allotment of the aforesaid securities shall be made at such time or times as the Board may in its absolute discretion decide, subject however to the compliance with applicable guidelines, notifications, rules and regulations. 3. the issue of equity warrants convertible into equity shares under the Preferential issue, shall have the option of conversion into equity shares within a period of 18 Months (Eighteen Months) from the date of its allotment and the allotment of equity shares, upon conversion of equity warrants shall be locked-in for a period of one year. In case of issue of equity shares under the Preferential issue, shall be locked in for period of one year from the date of its allotment. 4. any of the securities issued above, that may remain unsubscribed for any reason whatsoever, may be offered and allotted by the Board in its absolute discretion to any other person/ entity/ investor within the same category/class, on the same terms and conditions. 5. the Board be and is hereby authorized to accept any modification(s)/amendment to or to modify the terms of issue of the said Preferential issue subject to the provisions of the Companies Act, 1956 and SEBI Guidelines/Regulations, without being required to seek any further consent or approval of the Company in general meeting. 6. the Board be and is hereby authorized to delegate all or any of the powers herein conferred by this resolution to any director or directors or to any committee of directors or any other officer or officers of the Company to give effect to the aforesaid resolution. 7. for the purpose of giving effect to this resolution the Board be and is hereby authorized to do all acts, deeds and things as the Board may in its absolute discretion consider necessary, proper, desirable or appropriate for making the said Preferential issue and to settle any question, difficulty or doubt that may arise in this regard including the power to allot over-subscribed/ under-subscribed portion if any, in such manner and to such person(s) as the Board may deem fit and proper in its absolute discretion to be most beneficial to the Company. 8. the Board be and is hereby authorized to accept such amendments, modifications, variations and alterations as the Government of India, SEBI, Reserve Bank of India, Financial Institutions, or Stock Exchanges may stipulate in that behalf. 9. the Board be and is hereby authorized to take necessary steps for listing of the Equity Shares so allotted and issued, on one or more recognized Stock Exchanges, in India or abroad, where the Company's shares are listed, as per the terms and conditions of the Listing Agreement with the Stock Exchanges concerned, and in accordance with such other guidelines, rules and regulations as may be applicable with regard to such listing. For and on behalf of the Board Dated : Place : New Delhi Sd/- (ANIL MONGA) Managing Director 6

9 NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF, AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE INSTRUMENT OF APPOINTING PROXY SHOULD, HOWEVER, BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. (Blank proxy form is enclosed). 2. Corporate members intending to send their authorised representative to attend the meeting are requested to send a certified copy of the Board Resolution authorizing their representative to attend and vote on their behalf at the meeting. 3. The Register of Members and the Share Transfer Books of the company shall remain closed from Tuesday, the 21st Day of September 2010, to Wednesday, the 29th Day of September 2010 (both days inclusive) for the purpose of Annual General Meeting and payment of dividend if approved/declared. 4. The Dividend on equity shares, if declared at the meeting, will be payable to those share holder, whose names appear on the Companies Register of Members at the close of business hours on Monday 20th Day of September, In respect of shares held in dematerialized form, the dividend will be paid on the basis of particulars of beneficial ownership furnished by the depositories as at the close of business hours on Monday 20th Day of September, Members are requested to notify immediately the changes in their address, if any. 6. Members holding shares in identical order of names in more than one folio are requested to write to the Company / Share registrar, enclosing their share certificates, to enable the Company to consolidate their holding in one folio. 7. Members who hold shares in dematerialized form are requested to bring their client ID and DP ID numbers for identification. 8. An explanatory statement pursuant to section 173(2) of the Companies Act, 1956, relating to Special Business to be transacted at Annual General Meeting is annexed herewith. 9. Members / Proxies are requested to hand over the enclosed Attendance Slip, duly signed in accordance with their specimen signature registered with the company for admission to the meeting hall. EXPLANATORY STATEMENT PURSUANT TO THE SECTION 173(2) OF THE COMPANIES ACT, 1956 Item No. 6 Mr. Anil Monga was appointed as Managing Director of the Company for a period of five years w.e.f. 1st September, 2005 by the members of the Company at 12th Annual General Meeting held on 29th September, The said terms of appointment of Mr. Anil Monga expired on 31st August, Considering his successful result oriented track record and his experience in the field and his active involvement in the affairs of the Company, the Remuneration Committee at their meeting held on 26th April, 2010 approved the re-appointment and recommended the same to the Board of Directors. The Board of Directors of the Company at their meeting held on 26th April, 2010 confirmed the re-appointment of Mr. Anil Monga as Managing Director. Board has decided to re-appoint him as a Managing Director for a further period of 5 years with effect from 1st September, 2010 subject to the approval of the members of the Company. Pursuant to the provisions of Section 269 read with schedule XIII of the Companies Act, 1956, approval of the members is required for the appointment/ re-appointment of the Managing Director of the Company. Accordingly, Your Director recommends the passing of resolution no.6 of this notice as an Ordinary Resolution. Mr. Anil Monga is a graduate and is associated with the company since its incorporation. He has to his credit vast rich and varied experience in the field of procurement and International trading of Agri Commodities. Due to the effort of Mr. Anil Monga, the Company made good reputation in the national and international market. The detailed terms and conditions stated in the resolution no.6 and in this explanatory notes may be considered as an abstract of terms and conditions of this re-appointment. Mr. Anil Monga, Mr. Rajesh Monga and Mr. Shivaz Monga may deem to be interested in this Resolution. Item No. 7 In terms of the provisions of Section 81(1A) of the Companies Act, 1956 read with the Guidelines for Preferential Issue of SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009, the Company may with the 7

10 Emmsons International Ltd. consent of the shareholders of the Company accorded by way of Special Resolution in a general meeting may issue/ sell/ allot upto 10,00,000 (Ten Lacs only) equity warrants convertible into equity shares, equity shares or both of Rs.10/- each to the person other than the persons belonging to the Category of promoters' Group, and/or their nominees (the allotees), whether or not they are members of the Company. The present resolution is proposed to be passed in order to enable the Board of Directors of the company to receipt of requisite corporate and regulatory approvals, and fulfilment of conditions precedent mentioned therein. The Requisite Disclosures under SEBI (ICDR), Regulations, 2009 are as under: OBJECTS OF THE ISSUE THROUGH PREFERENTIAL OFFER: a. To infuse further equity capital. b. To raise funds for various corporate actions viz., Capital Expenditure, augmenting working capital, and general corporate purposes. PRICING OF THE PREFERENTIAL ISSUE: The pricing of the equity warrants convertible into equity shares, equity shares or both to be allotted on preferential basis shall not be lower than the price as determined in accordance with the Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009 provided that the issue of securities on a preferential basis can be made at a price not less than the higher of the following : a. The average of the weekly high and low of the closing prices of the shares quoted on he stock exchange during the six months preceding the relevant date, or b. The average of the weekly high and low of the closing prices of the shares quoted on the stock exchange during the two weeks preceding the relevant date. The relevant date for the purpose of calculating the minimum price for equity warrants convertible into equity shares, equity shares or both under Chapter VII of SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009 is 30th August, 2010 (i.e. 30 days prior to the date on which the meeting of general body of shareholders is held in terms of Section 81(1A) of the Companies Act, 1956, to consider this proposed issue). The proposed price of above mentioned securities to be issued on preferential basis, shall be determined in accordance of the SEBI (ICDR), Regulations, 2009, as decided by the Board of Directors of the Company in their meeting held on 17th August, The Board proposes to issue equity warrants convertible into equity shares or equity shares or both on preferential basis for cash consideration, in terms of SEBI Guidelines as in force on the date of this notice and conditions including as to premium, etc., as the Board may, in its absolute discretion, deem fit and in accordance with the Articles of Association of the Company. The securities proposed to be issued to the proposed allottees would be issued at a price determined as per Regulation 76 of Chapter VII of SEBI (Issue of Capital and Disclosure Requirements), Regulations, The preferential issue and allotment of equity warrants convertible into equity shares, equity shares or both are proposed to be made at a price as determined in accordance to the Regulation 76 of Chapter VII of SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009, and as certified by the Company's Auditors. The proposed preferential allotment to the category belonging to the persons other than promoters' Group and/or their nominees as aforesaid would not result in any change in the control over the Company. The certificate from the Statutory Auditors, certifying that the issue of above mentioned securities on preferential basis is in accordance with the SEBI Guidelines as in force on the date of this Notice, will be placed before the Annual General Meeting where this resolution pertaining to preferential allotment of securities is being considered. INTENTION OF THE PERSON OTHER THAN PROMOTERS/DIRECTORS/KEY PERSONNEL TO SUBSCRIBE TO THIS OFFER : The Company proposes to issue the equity warrants convertible into equity shares, equity shares or both on preferential basis to the persons belonging to the Category other than promoters' Group, and/or their nominees (the allotees), whether or not they are members of the Company. As such they intend to subscribe to the offer. CONSEQUENTIAL CHANGES IN THE VOTING RIGHTS : There will be no change in the Board of Directors and management of the company as a consequence to the preferential issue of the above mentioned securities. The equity shares shall have the same voting right as available to the existing shareholders. Voting rights will change only in tandem with the post issue shareholding pattern. 8

11 WHETHER THERE WILL BE A CHANGE IN CONTROL OVER THE COMPANY: The preferential issue will not result in change in control of the company. The promoters who already have control over the company will continue to have control over the company. SHAREHOLDING PATTERN BEFORE AND AFTER THE OFFER : The information on shareholding pattern before and after the offer is as follows: Category Pre Issue Pre Issue Shareholding Post Issue Shareholding Shareholding After allotment of Equity After allotment of Equity Shares against proposed shares or Equity Shares * Equity Warrants against Equity Warrants to Promoter s Group to the person Other than Promoter s Group No. of Shares % of No. of Shares % of No. of Shares % of Held Shares Held Shares Held Shares Promoter s Group Holding Non Promoter s Group Holding GRAND TOTAL *Company now proposed to issue equity warrants as the BSE has rejected the application of one allottee, applied for equity warrants. PROPOSED TIME WITHIN WHICH ALLOTMENT SHALL BE COMPLETED: The Board proposes to allot the above securities on preferential basis within a period of 15 days from the date of passing of the resolution provided that where this allotment on preferential basis is pending on account of pendency of any approval of such allotment by any regulatory authority or the Central Government, the allotment shall be completed within 15 days from the date of such approval. The consent of the members for this special resolution is required in terms of the provisions of Section 81(1A) of the Companies Act, Your Directors, therefore, recommend the said resolution for your approval. None of your Directors are interested in the said resolution as the Share Warrants convertible into equity shares, equity shares or both under preferential issue are proposed to be allotted to the persons belonging to the Category other than promoters' group. For and on behalf of the Board Dated : Place : New Delhi Sd/- (ANIL MONGA) Managing Director ADDITIONAL INFORMATION ON DIRECTOR SEEKING RE-APPOINTMENT AT THIS A.G.M. Mr. Rajesh Monga is a graduate and having vast, rich and varied experience of 25 years in the field of procurement and trading of Agri Commodities. Due to his effort, the Company has a good reputation of quality of products traded in domestic as well as international market. He has successful result oriented track record and completely dedicated towards the work assigned to him, his rich and varied experience in the field of procurement and trading of Agri -Commodities and his active involvement in the affairs of the Company has helped the Company in its immense growth. He does not hold any Directorship in other companies apart from your company. He was appointed as a Director of the company since its incorporation and served the Company ever since. Mr. Shivaz Monga is a graduate from Swinburne University of Technology Melbourne and an MBA from Cass Business School, London. He is associated with the company since 2006; he is responsible for trading of coal in the company, also responsible for the HR/ Admin. and the travel department of the company. Prior to Emmsons he has worked with Emirates trading Agency LLC as export executive and KPMG as Analyst. He holds directorship in Emmsons Gulf DMCC, Dubai and Emmsons SA. Switzerland, both are the subsidiaries of the Emmsons International Ltd. He was appointed as a Director of the company in year 2008 and has served the company with distinction. 9

12 Emmsons International Ltd. DIRECTORS REPORT Dear Members, The Directors of your company have pleasure in presenting the 17th Annual Report and the Audited Accounts of the company for the financial year ended 31st March, FINANCIAL HIGHLIGHTS A summarized position of the sales turnover, profits and taxation for the year under review as compared to the previous year is given below: Particulars Amount (Rs. in Lacs) Amount (US$ in Million) Gross Sales and Income Profit before interest, Depreciation and taxation Less: Interest and financial Charges Depreciation Profit before taxation Less: Provision for taxation Provision for deferred (0.59) taxation/(tax effect of timing differences during year) Profit after taxation Add : Balance brought forward from the previous year Less: Short/(Excess) Provision of Income Tax in Earlier Years (4.57) (0.01) 0.09 Disposable Profits DIVIDEND Your Directors are pleased to recommend 20% on Equity Shares of Rs.10 each (i.e. Rs. 2 per share) for the financial year ended 31st March, 2010, which if approved at the ensuing Annual General Meeting, will be paid to: i. All those shareholders whose names appears in the Register of Members as on 20th September, 2010 and ; ii. All those whose names appears on the date, as mentioned above, as beneficial owners as furnished by National Securities Depository Limited and Central Depository Services Limited. 3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT a) Company Snapshot Recovering from the global meltdown, commodities again had a difficult year. With inflation in India remaining at high levels, the Government continued to exercise tight control on almost all agricultural commodities. The major agri-commodities like non-basmati rice and wheat remained under export ban. Treading cautiously with positive approach, your company was able to deliver a satisfactory performance. This year can be summed up as a year of consolidation. Looking forward, the company expects to make further progress during the current year. b) Future Directions With export potential of all major agro-commodities remaining uncertain, the company has shifted its focus to imports and third country trade. The third country trade is set to drive your company's next phase of growth. With trading subsidiaries in UAE & Switzerland and sourcing bases in Ukraine and Indonesia, besides other traditional centres, the company expects to grow on the back of imports and third country trade. On export front the company expects a major growth in basmati rice and maize etc. 10

13 c) Risk Management The company has been hedging its Imports and Exports on the main Commodity exchanges wherever possible. Company is also securing forward exchange contracts to minimize/ avoid the risk of variation in foreign currency rates. Risk Management techniques have been added at every level to ensure that company is prepared to take the competition head on without making itself vulnerable to the occasional bumps in the market. In event of unforeseen Risks, the company would rely on the experience and dedication of its Board to tackle any issues that may affect its performance. The Management structure as well as Staffing has also been shaken up to enhance the performance and make the board more accountable in the decision-making processes. d) Segment wise Performance As the company's business activity falls within single primary business segment viz. trading of commodities, hence reporting of segment wise performance is not applicable. e) Internal Control system and their adequacy Your company maintains adequate internal control system designed to provide reasonable assurance that assets are safeguarded. Transactions are executed in accordance with management's authorization and are properly recorded and accounting records are adequate for preparation of financial statements and financial information. Your company has well defined procedure to execute the financial transaction. Furthermore, the Audit Committee and the Board of Directors screen each financial transaction. f) Financial and Operational Performance During the year ended 31st March, 2010, the turnover of your company increased up to Rs Crore as compared to Rs Crore and Rs Crore for the year and respectively. Increase in Sales over the last five years : TURNOVER Turnover Rs. in Crore Turnover Year wise Increase in sales Company has also earned the profit after taxation Rs Crore during the year as Compared to Profit of Rs Crore and Rs Crore for the year and respectively. The financial statements of the company for the year under review have been prepared in Compliance with the requirements of the Companies Act, 1956 and Generally Accepted Accounting Principles in India. The management of the company accepts the responsibility for the integrity and objectivity of these financial statements. g) Human Resources and No. of employees employed Emmsons International Limited continues to focus on building the skills and capabilities of its human resources to enable them to perform effectively in a competitive market. Company constantly 11

14 4. INSURANCE Emmsons International Ltd. reviews its HR policies in order to keep pace with market changes and has embarked on a range of initiatives to create a positive work environment, ample opportunities for development and growth and high levels of motivation and engagement. The company has remained focus on strengthening human capital through continuous training and development and by upgrading the skills of employees to meet the company's objectives. The Human Resources function of the Company continued its initiatives to develop and nurture talent. Company offers ample avenues to its employees to not only contribute but also learn and grow. During the year under review, the company conducted surveys across various categories of employees at all level to gauge the level of employee satisfaction. Based on the feedback, appropriate initiatives were initiated. The Corporate Human Resources Department (HRD) of the Company is committed to improve employee satisfaction at all levels and create a motivated, responsive and accountable organization. The Company considers its human resources as one of its main assets and is constantly focusing on strengthening its organizational culture with a view to attract and retain best talent. Notable steps were taken in respect of critical area of knowledge building by giving special thrust to people development, learning, sharing of knowledge and best practices. At Emmsons International Ltd. employees are encouraged to live the vision and values adopted by the Company. Integrity and performance are recognized and rewarded. The total number of employees working with the company as on the end of the year under review was 80 and the company continued to enjoy a cordial and harmonious relation with its employees at all level. All assets of the company including its plant and machinery and stocks have been adequately insured. 5. FIXED DEPOSITS The company had not accepted any deposit from public during the year ended 31st March, 2010, pursuant to the provisions of section 58-A of the Companies Act, SUBSIDIARY COMPANIES The Company's vision of a being a Global Commodity Trader warrants its presence outside India. As a first step, the Company has established 2 Subsidiaries as mentioned below: NAME : EMMSONS GULF DMCC, DUBAI ACTIVITY : INTERNATIONAL TRADING During the year under review, the company's trading subsidiary in Dubai, Emmsons Gulf DMCC started operations during the current year. In its first few months of operations during the current year, the company registered a turnover of over USD million with net profit of USD 0.50 million approx. The company is expected to stabilize its operations and grow substantially during the current year on the back of expanded products basket. NAME : EMMSONS SA, SWITZERLAND ACTIVITY : INTERNATIONAL TRADING & SHIPPING With subdued export of agro commodities from India, the Swiss subsidiary could not make much headway during the year. However the company expects to record a complete turnaround during the current year. 7. INTERNATIONAL PROJECTS PROJECT : COAL MINING LOCATION : EAST KALIMANTAN, INDONESIA The progress on coal mining project in Indonesia remained sluggish on account of financial global slowdown. The company was able to achieve financial closure for its share of funding in the project. The current year is expected to see some major progress. 12

15 PROJECT : FARMING, PROCESSING AND STORAGE LOCATION : UKRAINE During the year under review the company has been able to make major progress on the Ukraine projects. The acquisition of farming companies in Ukraine in nearing completion and is expected to be completed by Sep, The agro-processing project is also expected to be completed during the year. Next year onward the Ukraine project is expected to start showing good results. 8. DIRECTORS Mr. Rajesh Monga and Mr. Shivaz Monga, Directors of the company will retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for reappointment. Further, the Board of Directors of the Company in their meeting held on 26th April, 2010 after recommendation by the Remuneration Committee has approved the re-appointment of Mr. Anil Monga as Managing Director w.e.f. 1st September, 2010, whose terms of appointment will be expired on 31st August, 2010 subject to approval of the members in the forthcoming Annual General Meeting. Your Directors recommend the reappointment of Mr. Rajesh Monga and Mr. Shivaz Monga as Directors and Mr. Anil Monga as Managing Director of the company. Further, pursuant to provisions of the clause 49 of the listing agreement, the brief resumes of the Directors, who are to be reappointed in this Annual General Meeting, are provided in the corporate governance section, which is a part of the Annual Report of the company. 9. AUDITOR'S REPORT The Auditors observations are self-explanatory and, therefore do not call for any further comments. 10. AUDITORS M/s Suresh & Associates, Chartered Accountants, the Auditors of the company retire at the ensuing Annual General Meeting and have expressed their willingness to continue in the office, if re-appointed. Members are requested to re-appoint them and authorize the Board to fix their remuneration and pay out of pocket expenses. 11. REPORT ON CORPORATE GOVERNANCE A detailed report on the procedures adopted by the company on the Corporate Governance along with the certificate of Auditors of your company regarding compliance of the conditions of Corporate Governance as stipulated in clause 49 of the listing agreement with Stock Exchanges is enclosed and form part of this Annual Report. 12. LISTING OF SECURITIES The Equity shares of the company are listed in The Bombay Stock Exchange, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai only. The scrip code for The Stock Exchange, Mumbai is The company had duly paid the listing fee to the aforesaid Stock Exchange for the Financial Year CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OTUGOING As the company is not covered in schedule A of Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988, provisions of Section 217(1) (e) of the Companies Act, 1956 are not applicable. 14. STATEMENT OF PARTICULARS OF EMPLOYEES Information required as per section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and forming part of Director's Reports for the year ended 31st March, 2010 is given in the Annexure 'A'. 15. DIRECTORS' RESPONSINBILITY STATEMENT As required under section 217(2AA) of the Companies Act, 1956, it is hereby stated that: a) in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; 13

16 Emmsons International Ltd. b) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for the period; c) the Directors had 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; and d) the Directors had prepared the Annual Accounts on a going concern basis. 16. ACKNOWLEDGEMENT Your Directors wish to place on record their thanks and gratitude to various Central and State Government Authorities for their co-operation and providing different approvals, Bankers of the company for the financial facilities and support extended, Overseas traders, customers, retailers and other associated with the company as its trading partners for their continued support & trust and the shareholders of the company for their confidence in the company. The Directors also sincerely appreciate and thank the employees of the Company at all levels for their valuable contribution and dedicated efforts in steering the Company successfully to break the previous records of excellent performance and move forward to climb greater heights. For and on behalf of the Board Dated : Place : New Delhi Sd/- (ANIL MONGA) Managing Director 14

17 ANNEXURE `A Information required as per section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and forming part of Director's Reports for the year ended 31st March, (A) Persons employed throughout the financial year, who were in receipt of remuneration for the year, which, in the aggregate, was not less than Rs Lacs. Name of Designation/ Remuneration Qualification Age Experience Date of Particulars Employee Nature of (in Rs.) (Yrs) Employment of last duties Employment Mr. B.B. President 27,42,021/- C.A Director, Gandhi (Commercial) Years Gaura Texfab Pvt. Ltd. (B) Persons employed for a part of the financial year who were in receipt of remuneration for any part of the year, at a rate which, in the aggregate, was not less than Rs Lacs per month. Nil (C) Persons employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate is in excess of that drawn by the Managing Director or Whole-time Director or Manager and holds by himself or along with his spouse and dependent children, not less than two percent, of the equity shares of the company. Nil Notes : 1. Remuneration includes Salary, House Rent Allowance, Bonus, Contribution to Provident Fund, Leave Travel Concession, Medical Assistance and other allowances paid in cash and taxable value of non cash perquisites. 15

18 REPORT ON CORPORATE GOVERNANCE COMPANY S PHILOSOPHY ON CORPORATE GOVERNANCE Emmsons International Ltd. At the top of hierarchy, in the case of a business enterprise is the Board of Directors. Boards of companies need not be uniform with respect to their composition, thinking styles and functioning methodologies. Their strength, in fact, lies in their diversity. Rigidities in thinking styles and composition are likely to reduce the Boards to mere ornamental organs. Such Boards fail to meet the multifaceted demands made on them by the emerging business -economic environment. Liberalization and Globalization initiatives have made it essential for Indian corporate to make appropriate changes in their Boards as well as their governance practices. Globalization of the marketplace has ushered in an era wherein the quality of corporate governance has become a crucial determinant of survival of corporates. The compatibility of corporate governance practices with global standards has also become an important constituent of corporate success. The practice of good corporate governance has therefore become a necessary pre-requisite for any Company to manage effectively in the globalized market. Objectives of Corporate Governance Good governance are integral to the very existence of a company. It inspires and strengthens investors' confidence by ensuring company's commitment to higher growth and profits. It seeks to achieve following objectives: (i) (ii) (iii) (iv) (v) (vi) (vii) A properly structured Board capable of taking independent and objective decisions is in place at the helm of affairs; The Board is balanced as regards the representation of adequate number of non - executive and independent directors who will take care of the interests and wellbeing of all the stakeholders; The Board adopts transparent procedures and practices and arrives at decisions on the strength of adequate information; The Board has an effective machinery to sub serve the concerns of stakeholders; The Board keeps the shareholders informed of relevant developments impacting the company; The Board effectively and regularly monitors the functioning of the management team; and The Board remains in effective control of the affairs of the company at all times. The overall endeavor of the Board should be to take the organization forward, to maximize long-term value and shareholders' wealth. BOARD OF DIRECTORS (I) COMPOSITION OF THE BOARD The Board of Directors of the Company comprises of an optimum combination of Executive and Non- Executive Directors with more than fifty percent of independent Directors. None of the Non-Executive & Independent Directors of the company have any pecuniary relationship or transactions with the Company, promoters, and management, which may affect their judgement in any manner. Your Company's Board comprises of a Managing Director, one Whole Time Director, one Executive Director and four other Non-Executive and Independent Directors representing the optimum combination of professionalism, knowledge and experience. The break up of the total composition of Board of Directors is as follows: Sl. Name Designation Executive/Non No. Executive/Independent 1. Mr. Anil Monga Managing Director Executive 2. Mr. Rajesh Monga Whole time Director Executive 3. Mr. Shivaz Monga Executive Director Executive 4. Mr. Vijay Kumar Kakkar Director Non Executive & Independent 5. Mr. Viresh Shankar Mathur Director Non Executive & Independent 6. Mr. Mohammad Tariq Raza Director Non Executive & Independent 7. Mr. Satish Chandra Gupta Director Non Executive & Independent 16

19 (II) DETAILS OF DIRECTOR S ATTENDANCE IN THE BOARD MEETINGS AND THE LAST AGM ALONGWITH THEIR DIRECTORSHIP : Sl. Name of Directors Attendance Directorship No. of Chairmanship/ Attendance No. at the of other Indian Membership of at the last Company s Companies other Board AGM Meetings Committees 1. Mr. Anil Monga 16 1 Nil Yes 2. Mr. Rajesh Monga 17 Nil Nil Yes 3. Mr. Vijay Kumar Kakkar 13 Nil Nil Yes 4. Mr. Viresh Shankar Mathur 13 3 Nil No 5. Mr. Mohhamad Tariq Raza 13 1 Nil No 6. Mr. Satish Chandra Gupta Nil Yes 7. Mr. Shivaz Monga 15 Nil Nil Yes (III) NO. OF BOARD MEETINGS HELD DURING THE FINANCIAL YEAR During the year under review, The Board of Directors met Seventeen (17) times on the dates as given herein below: No. of Board Dates of No. of Board Dates of Meetings Held Board Meeting Meetings Held Board Meeting Remuneration paid to Directors Details of Remuneration paid to Directors for the year The remuneration of Executive Directors is decided by the Board of Directors with due approval of the shareholders of the company and is also approved by the Remuneration Committee of the company. The details of the remuneration paid to the Directors including Managing Director and Whole time Director during the financial year is as under: Name Designation Tenure Salary Sitting Commission Provident Other Gross of (Amount Fees Fund Perquisite Remunappointment in Rs.) Contribution eration Mr. Anil Monga Managing Five years Nil Nil Director w.e.f Mr. Rajesh Monga Whole Time Five years Nil Nil Nil Director w.e.f Mr. Shivaz Monga Executive FiveYears Nil Nil Director w.e.f Mr.Vijay Kumar Independent Nil 40,000 Nil Nil Nil 40,000 Kakkar Director Mr.Viresh Independent Nil 60,000 Nil Nil Nil 60,000 Shankar Mathur Director Mr. Mohammad Independent Nil 80,000 Nil Nil Nil 80,000 Tariq Raza Director Mr.S.C. Gupta Independent Nil 80,000 Nil Nil Nil 80,000 Director 17

20 Emmsons International Ltd. Availability of Information to the Board The Board has unfettered and complete access to any information within the Company and to any employee of the Company. Among others, the information regularly supplied to the Board includes Annual Operating plans and budgets, capital budgets, and any updates thereon, Quarterly Unaudited/ Audited results of the Company, Information on recruitment and removal of senior officers just below the Board level, Declaration of Dividend (Interim/ Final), Materially important litigation, show cause, demand, prosecution and penalty notices. Details of Subsidiaries and its updates, Details of any joint venture or collaboration agreement, Quarterly details of foreign exchange exposure and the steps taken by management to limit the risk of adverse exchange rate movements. Minutes of meetings of audit committee and other committees of the Board. Materially Significant related party transactions Except for drawing remuneration, none of the Directors have any other materially significant related party transactions, pecuniary or business relationship with the Company. Attention of Members is drawn to the disclosures of transaction with related parties set out in Notes on Accounts in Schedule 21 to the annual accounts. BOARD COMMITTEES Committees appointed by the Board focus on specific areas, and take decisions within the authority delegated to them by the Board. The committees also make specific recommendations to the Board on various matters from time to time. All decisions and recommendations of the committees are placed before the Board for information or approval. Emmsons International Limited has three Board level committees: Audit Committee Remuneration Committee Shareholders/ Investors Grievances Committee Audit Committee The Audit Committee of the company is constituted as per the provisions of clause 49 of the listing agreement and section 292A of the Companies Act, The main terms of reference of the committee, inter alia, includes the following functions: 1. Overview the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. 2. Recommending the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor's and the fixation of audit fees. 3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors. 4. Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to the Matters required to be included in the Director's Responsibility Statement to be included in the Board's Report in terms of clause (2AA) of section 217 of the Companies Act, Changes, if any, in accounting policies and practices and reasons for the same. Major accounting entries involving estimates based on the exercise of judgment by management. Significant adjustments made in the financial statements arising out of audit findings. Compliance with listing and other legal requirements relating to financial statements. Disclosure of any related party transactions. Qualifications in the draft audit report. 18

21 5. Reviewing, with the management, the quarterly financial statement before submission to the Board for approval. 6. Reviewing, with the management, performance of statutory and internal auditors and adequacy of the internal control systems. 7. Reviewing the adequacy of internal audit function, if any, including the structure of the internal Audit Department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. 8. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. 9. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. The Audit Committee comprises of Mr. Viresh Shankar Mathur, Mr. Vijay Kumar Kakkar and Mr. Mohd. Tariq Raza with Mr. Anil Monga as the permanent invitee to all the meetings. Mr. Viresh Shankar Mathur is presently the Chairman of the committee.the minutes of each Audit Committee meeting are placed before and discussed in the Board. During the year under review, the Committee met four times on , , , and The attendance details of each member are given as under: Sl. Name of Member Meetings No. attended 1 Mr. Viresh Shankar Mathur 3 2 Mr. Vijay Kumar Kakkar 2 3 Mr. Mohammad Tariq Raza 4 Remuneration Committee a) Constitution and Terms of Reference The Remuneration Committee is constituted as per the provisions of schedule XIII of the Companies Act, 1956 and clause 49 of the listing agreement entered by the company with the Stock Exchanges. The Remuneration Committee consists of three members. The Chairman of the Committee is Mr. Vijay Kumar Kakkar, Mr. V.S Mathur and Mr. Mohd. Tariq Raza are the other members of the Committee. The Broad terms of reference of the Remuneration Committee are to review the performance of the Executive Directors, after considering the Company's performance and recommend to the Board, remuneration including salary, perquisites and commission to be paid to the Company's Executive Directors within the overall ceiling approved by the Shareholders and also keeping in view the overall remuneration structure in the industry. During the year under review, the remuneration committee met two times on , and The attendance details of each member are given as under: Sl. Name of Member Meetings No. attended 1 Mr. Vijay Kumar Kakkar 1 2 Mr. V. S. Mathur 2 3 Mr. Mohammad Tariq Raza 2 b) Remuneration Policy The Company paid sitting fee of Rs. 20,000/- per meeting to the non-executive directors for attending the meeting of the Board. The Company pays remuneration by way of salary, perquisites and allowances and commission to the executive directors. Salary is paid with in the range approved by the shareholders. The increments, as and when proposed are referred to the remuneration committee, which is later on recommended to the Board to which Board give their due approval. Shareholders/Investors Grievances Committee The Shareholders/Investors Grievances Committee comprises Mr. Vijay Kumar Kakkar, Mr. Anil Monga and Mr. Rajesh Monga, Directors of the company. Name and Designation of Compliance officer: Mr. Suvindra Kumar, Company Secretary & Compliance officer. id: co.secy@emmsons.com 19

22 Emmsons International Ltd. The main areas and functions looked after by Share Transfer and Shareholders/Investors Grievances Committee is as under: 1. Redressal of shareholders and investors complaints like transfer of shares, non-receipt of Annual Report, non-receipt of declared dividends etc. 2. Consolidation and sub-division of share certificates. 3. Approving the transfer(s), transmission(s) and issue of duplicate share certificates. During the year under review, complaints received regarding non receipt of dividend, non receipt of Annual Report, and issue of fully paid stickers etc. from shareholders/investors, which have been duly resolved. The details of grievances received from the shareholders during the year and their status on 31st March, 2010 is given below: Complaints outstanding as on April 1, 2009 Nil Complaints received during the year ended March 31, Complaints resolved during the year ended March 31, Complaints outstanding as on Mrach31, 2010 Nil The Committee also looks after the performance of Registrar & Transfer Agents of the Company. Management A detailed report on the Management discussion and Analysis is given separately in the Director's Report and is a part of Annual Report. Disclosure by Management During the year , there were no materially significant related party transactions, i.e., transaction of the Company of material nature, with its promoters, the Directors or the management, their subsidiaries and relatives etc. that may have potential conflict with the interest of the Company at large. Though all details relating to financial and commercial transactions where directors may have a potential interest are provided to the Board, and interested directors neither participate in the discussion, nor do they vote on such matters. Attention of Members is drawn to the disclosures of transactions with related parties set out in Notes on Accounts under Accounting Standard (AS 18), - Schedule 20, forming part of the Annual Report. For and on behalf of the Board Dated : Place : New Delhi Code of Business Conduct and Ethics for Directors and Senior Management The Company has adopted the Code of Business Conduct ethics for all directors, officers and employees of the Company ("the Code"). This Code is a comprehensive Code applicable to all Directors, Officers and employees of the Company. The Code while laying down, in detail, the standard of business conduct, ethics and governance, centers around the following theme- "All Directors, Officers and employees of the Company are committed to conducting its business in accordance with the applicable laws, rules and regulations and with highest standards of business ethics. This code is intended to provide guidance and help in recognizing and dealing with ethical issues, provide mechanisms to report unethical conduct, and to help foster a culture of honesty and accountability. Each Director, officer and employee is expected to comply with the letter and spirit of this Code". A copy of the code has been put on the Company's website The Code has been circulated to all Directors, Officers and Employees of the Company and they have affirmed the compliance of the same. A declaration signed by the Managing Director is given below. "I hereby confirm that: The Company has obtained from all directors, officers and employees, affirmation that they have complied with the Code of Business Conduct and Ethics for Directors and Senior Management in respect of the financial year ". Sd/- (ANIL MONGA) Managing Director 20

23 Information required under clause 49VI A of the listing agreement executed with the stock exchange in respect to the reappointment of Directors. Mr. Anil Monga is a graduate and is associated with the company since its incorporation. He has to his credit vast rich and varied experience in the field of procurement and International trading of Agri Commodities. Due to the effort of Mr. Anil Monga, the Company made good reputation in the national and international market. He hold Directorship in PHD Chamber of Commerce apart from your company. Mr. Rajesh Monga has been associated with the company since its incorporation. He is a graduate and having vast, rich and varied experience of 25 years in the field of procurement and trading of Agri Commodities. Due to his effort, the Company has a good reputation of quality of products traded in domestic as well as international market. He does not hold any Directorship in other companies apart from your company. Mr. Shivaz Monga he is a graduate from Swinburne University of Technology Melbourne and an MBA from Cass Business School, London. He is associated with the company since 2006; he is responsible for trading of coal in the company, also responsible for the HR/ Admin. and the travel department of the company. Prior to Emmsons he has worked with Emirates trading Agency LLC as export executive and KPMG as Analyst. He holds directorship in Emmsons Gulf DMCC, Dubai and Emmsons SA. Switzerland, both are the wholly owned subsidiary of the Emmsons International Ltd. General Body Meetings Details of the Extra Ordinary General Meeting and Annual General Meetings held during the last three years are as under: Sl. Date and Year of Time of EGM/AGM Venue of EGM/AGM No. EGM/AGM 1. 28th August, A.M. Jaypee Vasant Continental, Vasant Vihar, New Delhi th August, A.M. Jaypee Vasant Continental, Vasant Vihar, New Delhi th January, 2008 (EGM) A.M. Rockland Inn, B-207, C.R. Park (Near Nehru Place), New Delhi th July, A.M. Rockland Inn, B-207, C.R. Park (Near Nehru Place), New Delhi Resolutions are generally passed on a show of hands. No resolution was put through postal ballot in the 16th Annual General Meeting held on 28th August, Means of Communications a) Communication to Shareholders All vital Information relating to the Company and its performance, including quarterly results, Annual Results, Notices of the Meetings are submitted to the Stock Exchanges on which the shares of the company are listed and are also published in Leading English and Hindi Dailies like Business Standard. The Company has also posted information relating to its financial results and shareholding pattern of electronic data information filing and retrieval system (EDIFAR) at till December, 2009 quarter. Such electronic information from March, 2010 quarter are now available on pursuant to the deletion of Clause 51 of the Listing Agreement for EDIFAR filing, by Securities and Exchange Board of India vide circular No. CIR/CFD/DCR/3/2010 dated Furthermore, the copy of Annual Report consisting of Annual Accounts, Directors Report's etc. is send to every shareholder of the company by post. b) Investor Grievance: As mentioned before, the Company has constituted Shareholders/Investors Grievances Committee to look after into and redress Shareholders' and Investors' Complaints. c) Share transfer The Company has outsourced its share transfer function to M/s. Link Intime India Pvt. Ltd. which is registered with SEBI as category 1 Registrar and Transfer Agent. d) Details of Non- Compliance There has been no instance of the Company not complying with the matters related to capital markets. General Shareholders Information 1. Registered office of the company is situated at 2637, 1st Floor, Naya Bazar, Delhi and the Administrative office is situated at 101/12, Zamrudpur Community Centre, Kailash Colony, New Delhi

24 Emmsons International Ltd. 2. Financial Calendar of the company is April 1st to March 31st. 3. The 17th Annual General Meeting of the Company will be held on Wednesday the 29th Day of September, 2010 at A.M. at Niryat Bhawan, Rao Tula Ram Marg, Opp. Army Hospital Research & Referral, New Delhi The Register of members and share transfer books of the company will remain closed from Tuesday the 21st Day of September, 2010 to Wednesday the 29th Day of September, 2010 (both days inclusive). 5. The company's Equity Shares are listed in The Stock Exchange Mumbai, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai. (Scrip code ). 6. All inquires relating to shareholders accounting records, share transfers, transmission of shares, change of address, non-receipt of dividend, loss of share certificates etc. should be addressed to the Registrar and Transfer agent (RTA) of the Company. The address for the correspondence is: M/s Link Intime India Pvt. Ltd. A-40, 2nd Floor, Naraina Industrial Area, Phase-II, Near Batra Banquet Hall, New Delhi Tel: , Contact Person: Mr. Bharat Bhushan 7. The RTA processes shares sent for transfer, transmission etc. every days from the data of receipt thereof. Transfer/transmissions that are complete in all respects are processed and the certificates in respect thereof are returned to the lodger/shareholder within 30 days of lodgement. 8. Till 31st March 2010, 46,17, 376 Equity Shares (90 % of the equity capital of the company) were dematerialized. DEMAT POSITION AS ON CDS L, % PHYSICAL, 10.31% NSDL, 74.15% 9. Details of Share Capital of the company as on 31st March, 2010 is as under : Authorized Capital : Rs. 15, 00, 00,000/- Issued and Subscribed Capital : Rs. 5, 14, 80,200/- Paid Up Capital : Rs. 5, 14, 80,200/- 10. Performance in comparison to Broad Based indices, Comparison with BSE Sensex :- Month Share price (in Rs.) Sensex Highest Lowest Highest Lowest April May June July August September October November December January February March

25 11. Our Stock Performance: F.Y Closing Stock Price in Rs. (at BSE) Apr May June S tock Pe rformance July Aug Sep Oct Nov Dec Jan High Feb March Low 12. Sensex Movement : F.Y Sensex Movement 19,000 18,000 17,000 16,000 15,000 14,000 13,000 12,000 11,000 10,000 9,000 SENSEX High Low Apr M ay June July Aug Sep Oct Nov Dec Jan Feb M arch 13. Distribution of Shareholding as on 31st March, 2010 : Range Folio Shares No. of Shares Number % age Number % age Up to and Above Total

26 Emmsons International Ltd. AUDITOR S CERTIFICATE ON CORPORATE GOVERNANCE To the Members of Emmsons International Limited We have examined the compliance of conditions of Corporate Governance by Emmsons International Ltd., for the year ended on 31st March, 2010, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination has been limited to a review of the procedures and implementation thereof adopted by the company for ensuring compliance with the conditions of the Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the financial statement of the company. In our opinion and to the best of our information and according to the explanations given to us, and based on the representations made by Directors and the Management, we certify that the company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement. As required by the Guidance note issued by the Institute of Chartered Accountants of India we have to state that no investor grievances were pending for a period of one month against the Company as per the records maintained by the shareholder/investor's Grievance Committee. We further state that such compliance is neither an assurance as to the future viability of the company nor of the efficiency or effectiveness with which the management has conducted the affairs of the company. For SURESH & ASSOCIATES FRN: N Chartered Accountants Dated : Place : New Delhi CEO/CFO CERTIFICATION Sd/- (CA Narendra Arora) Partner M. NO To Board of Directors Emmsons International Limited (a) We have reviewed financial statements and the cash flow statement for the year and that to the best of our knowledge and belief: (i) These statements do not contain any materially untrue statement or omit any material facts or contain statements that might be misleading; (ii) These statements together present a true and fair view of the company's affairs and are in compliance with existing accounting standards, applicable laws and regulations. (b) There are, to the best of their knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the company's code of conduct. (c) We accept responsibility for establishing and maintaining internal controls and that we have evaluated the effectiveness of the internal control systems of the company and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies. (d) We have indicated to the auditors and the Audit Committee: (i) Significant changes in internal control over financial reporting during the year; (ii) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and (iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the company's internal control system over financial reporting. Sd/- Sd/- Date : ANIL MONGA HAMANT PAUL Place : New Delhi (Managing Director) G. M. (Finance) 24

27 AUDITOR S REPORT (iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement, dealt with by this report, are in agreement with the books of account ; (iv) 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 Act; (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 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 Act; (vi) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with notes thereon and attached thereto, give the information required by the Act, 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 (b) in the case of the Profit and Loss Account, of the profit for the year ended on that date and (c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date. For SURESH & ASSOCIATES FRN: N Chartered Accountants To The Members of M/s. EMMSONS INTERNATIONAL LIMITED 1. We have audited the attached Balance Sheet of EMMSONS INTERNATIONAL LIMITED (the Company) as at 31st March, 2010 and also related Profit and Loss Account and 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. 2. We have conducted our audit in accordance with the 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, 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 books and records of the Company as we considered appropriate and according to information and explanations given to us, 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 in paragraph 3 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 purpose 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; Sd/- (CA Narendra Arora) Partner M. No Dated : Place : New Delhi 25

28 ANNEXURE TO AUDITOR S REPORT Referred to Paragraph 3 of our report of even date attached Emmsons International Ltd. I a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of the assets. b) According to information and explanation given to us, the fixed assets of the Company have been physically verified by the management at reasonable intervals during the year. No material discrepancies have been noticed on such verification c) In our opinion and according to the information and explanations given to us, there was no substantial disposal of fixed assets by the Company during the year. II a) As explained to us, the inventory has been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable considering size and nature of the business. b) In our opinion and according to information and explanation given to us, the procedures of physical verification of inventory, followed by the management, are reasonable and adequate. c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory and no material discrepancies as compared to book records were noticed on physical verification. III IV We are informed that the Company has not granted or taken unsecured loans from the entities covered in the register maintained under Section 301 of the Act. In our opinion and according to information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business for purchase of inventory and fixed assets and sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to information and explanations given to us, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control system. V a) In our opinion and according to information and explanation given to us, the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered in the register required to be maintained under that section have been so entered. b) In respect of the transactions made in pursuance of such contracts or arrangements and exceeding value Rupees Five Lacs in respect of any party during the year, because of the absence of the comparable prices and variation in the quality of the goods involved, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time. VI VII VIII In our opinion and explanation given to us, the Company has not accepted any deposit from the public within the meaning of sections 58A and 58AA of the Act and rules framed there under. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. To the best of our knowledge and as explained, the maintenance of the cost records have not been prescribed by the Central Government under section 209(1)(d) of the Act, for any of the products of the Company. IX a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including provident fund, employee's state insurance, Income Tax, VAT, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Cess and other statutory dues as applicable with appropriate authorities. b) There are no disputed liabilities in respect of PF, ESI, Income Tax, Sales Tax, Wealth Tax Custom Duty, Excise Duty, Cess and other statutory dues which are outstanding as at 31st March, 2010 except following liabilities: S. No. Period of demand Amount Involved Particulars of demand Appeal Pending Before 1 AY Rs lacs Demand under Income Tax Act CIT (Appeals)-, New Delhi 2 AY Rs lacs Demand under Income Tax Act CIT (Appeals)-, New Delhi 26

29 X XI XII XIII XIV XV XVI XVII XVIII XIX XX XXI There are no accumulated losses of the Company as at The Company has also not incurred any cash losses during the financial year ended on that date and in the immediately preceding financial year. As per explanation and information provided to us, the Company has not defaulted in repayment of dues to any financial institution and banks as at the balance sheet date. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loan and advances on basis of security by way of pledge of shares, debentures, other securities. The provisions of clause (xiii) are not applicable to the Company. As per information given to us, Company is not dealing or trading in shares, securities, debentures and other investments. In our opinion and according to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks or financial institutions and terms and conditions whereof are not prejudicial to the interest of Company. In our opinion and according to information given to us, term loan availed by Company were prima facie applied by Company during the year for the purpose for which they were obtained. As per information and explanation given to us and overall examination of balance sheet of the Company, we report that funds raised on short term basis have prima facie not being used for long term investment and vice versa. As per information and explanation given to us the Company has not made any preferential allotment to the parties and companies covered in the register maintained under section 301 of the Companies Act. As per information and explanation given to us the Company has not issued any debentures and no security has been created against the debentures. As per the information and explanation given to us, the company has not raised money by public issue during the year ending Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per information & explanation given to us by the management, we report that no fraud on or by the company has been noticed or reported during the year. For SURESH & ASSOCIATES FRN: N Chartered Accountants Sd/- (CA Narendra Arora) Partner M. No Dated : Place : New Delhi 27

30 BALANCE SHEET AS AT 31ST MARCH, 2010 Emmsons International Ltd. P A R T I C U L A R S SCHEDULE As At As At 31 March, March, 2009 Rs. Rs. I. SOURCES OF FUNDS Shareholders Funds (a) Share Capital (b) Equity Warrants 2 Party Paid up Equity Warrants (c) Reserves and Surplus Deferred Tax Liability Loan Funds (a) Secured Loans (b) Unsecured Loans TOTAL II. APPLICATION OF FUNDS Fixed Assets 6 (a) Gross Block (b) Less: Depreciation Net Block Capital Work in Progress Investments Current Assets, Loans & Advances (a) Inventories (b) Sundry Debtors (c) Cash and Bank balances (d) Loans and Advances Less:Current Liabilities & Provisions (a) Current Liabilities (b) Provisions Net Current Assets TOTAL SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 21 As per our separate report of even date attached For SURESH & ASSOCIATES For and on behalf of Board FRN: N Chartered Accountants Sd/- Sd/- Sd/- Sd/- Sd/- (CA NARENDRA ARORA) (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA) Partner GM - Finance Company Secretary Director Managing Director M. No Date : 17th August, 2010 Place : New Delhi 28

31 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 P A R T I C U L A R S SCHEDULE As At As At 31 March, March, 2009 Rs. Rs. INCOME Sales of Products and other income TOTAL EXPENDITURE Cost of Goods Sold Direct Expenses Office and Administrative Expenses Financial Charges Selling & Distribution Expenses Other Expenses TOTAL Profit before Depreciation Depreciation Profit before Taxation Provision For Taxation Provision for Fringe Benefit Tax Provision for Deferred Income Tax Liability/(Asset) (59666) (Tax effect of timing differences during the year) Profit after Taxation Balance of Profit brought Forward from Previous Years Less/(Add): Short/ (Excess) Provision of Income Tax for earlier Years (457033) Balance Available for Appropriation APPROPRIATIONS Transfer to General Reserve Proposed Dividend Tax on Dividend Surplus Carried Forward EARNINGS PER SHARE (RS.) Basic Diluted SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 21 As per our separate report of even date attached For SURESH & ASSOCIATES For and on behalf of Board FRN: N Chartered Accountants Sd/- Sd/- Sd/- Sd/- Sd/- (CA NARENDRA ARORA) (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA) Partner GM - Finance Company Secretary Director Managing Director M. No Date : 17th August, 2010 Place : New Delhi 29

32 Emmsons International Ltd. CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010 (Rs. In `000) (Rs. In `000) Year ended Year ended 31st March, 10 31st March, 09 A. CASH FLOW FROM OPERATING ACTIVITIES : Net Profit/(Loss) before taxation and extraordinary items Adjustment for : (Profit)/Loss on sale of fixed assets Depreciation Foreign exchange (Gain)/Loss Discarding of assets 67 2 FCTR Written off 0 (12494) (Profit)/Loss on sale of Investment Dividend income (88) (103) Interest Expenses OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES Adjustment for : (Increase)/Decrease in Sundry Debtors & other receivables (806157) (Increase)/Decrease in Inventories (689883) (663615) Increase/(Decrease) in Sundry Creditors & other payables Cash generated from operations (288063) Direct Tax Paid (49396) Interest paid 0 (128744) Cash flow before extraordinary items (21737) (466203) Extraordinary items 0 0 NET CASH FROM OPERATING ACTIVITIES (21737) (466203) B. CASH FLOW FROM INVESTING ACTIVITIES : Purchase of fixed assets (19683) (16270) Sale of fixed assets Investment in Others (20927) (25027) Capital WIP (4876) Investment in Subsidiaries (37606) (2706) Sale of Investments Dividend received NET CASH USED IN INVESTING ACTIVITIES (54380) (28093) C. CASH FLOW FROM FINANCING ACTIVITIES : Proceeds from Equity Share Warrants (Application Money) 0 (250) Net Proceeds from long term borrowings (33778) Net Proceeds from short term borrowings Interest Paid (201611) 4273 Dividend paid (6023) (12046) NET CASH USED IN FINANCING ACTIVITIES Net increase in cash and cash equivalents Opening cash and cash equivalents balance (See Note) (24038) Closing cash and cash equivalents balance (See Note) Note to the cash flow statement Cash and Cash Equivalents Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts. - Cash in hand and balances with banks Margin with Bank and Accrued Interest Cash and cash equivalents as restated For and on behalf of Board Sd/- Sd/- Sd/- Sd/- (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA) GM - Finance Company Secretary Director Managing Director As per our separate report of even date attached FOR SURESH & ASSOCIATES FRN: N CHARTERED ACCOUNTANTS Sd/- (CA NARENDRA ARORA) Partner Membership No Date : Place : New Delhi 30

33 SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010 P A R T I C U L A R S As At As At 31 March, March, 2009 Rs. Rs. SCHEDULE 1 : SHARE CAPITAL AUTHORISED Equity Shares of Rs 10 each (Previous Year Equity Shares of Rs. 10/- each) ISSUED, SUBSCRIBED, CALLED AND PAID UP Equity shares of Rs 10 each (Previous Year Equity Shares of Rs. 10/- each) SCHEDULE 2 : EQUITY WARRANTS Partly Paid up Convertible Equity Warrants (Paid up Rs 25 per equity warrant against equity warrants of Rs 10 each issued at premium of Rs 240/- each Convertible in to equity share of Rs. 10/- each at a premium of Rs.240/-) SCHEDULE 3 : RESERVES AND SURPLUS General Reserve Capital Reserve Security Premium Account Profit and Loss Account SCHEDULE 4 : SECURED LOANS a) Long Term Secured Loan Vehicle Loans from ICICI Bank (Secured against hypothecation of Cars) Vehicle Loans from Kotak Mahindra Prime Limited (Secured against hypothecation of Cars) Vehicle Loans from Tata Capital Ltd (Secured against hypothecation of Cars) Working Capital Term Loan from Indian Overseas Bank (Secured against the personal gurantees of Directors, equitable mortgage of properties of the company and the Directors of the Company) Sub Total (a) b) Short Term Secured Loan Packing Credit with Oriental Bank of Commerce (Secured against hypothecation of Stocks and advances, equitable, mortgage of Properties and Personal guarantees of Directors) Packing Credit with Indian Overseas Bank (Secured against hypothecation of Stocks and advances, equitable, mortgage of Properties and Personal guarantees of Directors) Packing Credit with Canara Bank Mortgage of Properties and Personal guarantees of Directors) Packing Credit with Indian Bank (Secured against hypothecation of Stocks,equitable (Secured against hypothecation of Stocks,equitable Mortgage of Properties and Personal guarantees of Directors) Packing Credit with Allahabad Bank (Secured against hypothecation of current assets,equitable Mortgage of Properties and Personal guarantees of Directors ) PCFC with Standard Chartered Bank (Secured against hypothecation of current assets,equitable Mortgage of Properties and Personal guarantees of Directors ) Buyer's Credit from Oriental Bank of Commerce (Secured against hypothecation charge over the goods, equitable mortgage of Properties and Personal guarantees of Directors ) Buyer's Credit from Indian Overseas Bank (Secured against hypothecation charge over the goods, equitable mortgage of Properties and Personal guarantees of Directors ) Sub Total (b) Total (a + b) SCHEDULE 5 : UNSECURED LOANS Purchase Bill Finance from Standard Chartered Bank

34 Emmsons International Ltd. SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010 SCHEDUILE 6 : FIXED ASSETS GROSS BLOCK DEPRICIATION NET BLOCK PARTICULARS As At Addition Deduction/ As At As At For the Deduction/ As At As At As At During the Adjustments Period Adjustments Period Land Building Plant & Machinery Furniture & Fixture Vehicles Computers Office Equipments & Fittings Generator Website Development Charges Trade Mark TOTAL (Current Year) TOTAL(Previous Year) P A R T I C U L A R S As At As At 31 March, March, 2009 Rs. Rs. SCHEDULE 7 : INVESTMENTS Investment in Subsidiary Emmsons SA (99999 equity Shares of CHF 10/- Each fully paid up) (Previous year 9999 equity Shares pf CHF 10/- Each fully paid up) Emmsons Gulf DMCC (4 Shares of AED 50000/- Each fully paid up) Others Fully Paid up Quoted equity shares Fully Paid up Unquoted equity shares SCHEDULE 8 : INVENTORIES (As taken, Valued and Certified by the management) Trade Stock Packing Material Goods in Transit

35 SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010 P A R T I C U L A R S As At As At 31 March, March, 2009 Rs. Rs. SCHEDULE 9 : SUNDRY DEBTORS Considered good Outstanding for a period exceeding six months Other Debts Considered doubtful SCHEDULE 10 : CASH AND BANK BALANCES Cash in Hand Balances with Schedule Banks -Current accounts EEFC accounts Margin Money deposits Accrued Interest on deposits SCHEDULE 11 : LOANS AND ADVANCES Advances recoverable in cash or in Kind or for Value to be received Security Deposits SCHEDULE 12 : CURRENT LIABILITIES Sundry Creditors Other Liabilities SCHEDULE 13 : PROVISIONS Provision for Income Tax Provision for Wealth Tax Provision for Gratuity Provision for Leave Encashment Provision for FBT Provision for Proposed Dividend Provision for Dividend Distribution Tax

36 Emmsons International Ltd. SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010 P A R T I C U L A R S As At As At 31 March, March, 2009 Rs. Rs. SCHEDULE 14 : SALES AND OTHER INCOME Sale of Products Domestic Exports Difference in Exchange ( ) Export Incentives received Discount Received Other Incomes Forward Contract Forex Gain/ (Loss) ( ) Receipt from Hotel Booking SCHEDULE 15 : COST OF GOODS SOLD Opening Stock Add: Purchases Less: Closing Stock SCHEDULE 16 : DIRECT EXPENSES Brokerage and Commission Detention, Demurrage & Claim Forward Contract Commodity loss Contract Settlements Corporation / Export Cess Final Discharge Shortage Freight & Cartage Fumigation & Phyto Expenses Godown,Ground Rent & Storage Inspection Charges Packing Charges Insurance Port Charges Processing/Sotex Charges Survey Fees Hotel Booking Charges

37 SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010 P A R T I C U L A R S As At As At 31 March, March, 2009 Rs. Rs. SCHEDULE 17 : OFFICE & ADMINISTRATIVE EXPENSES Electricity & Water Expenses Gratuity (503152) Managerial Remuneration Postage and Telegram Printing,Stationery, Periodicals & Books Rent & Taxes Repairs and Maintenance Retainership & Consultancy Charges Salary and other amenities Telephone Expenses Travelling Expenses(including Foreign Travel) - Directors Others Vehicle Repair & Maintenance Expenses SCHEDULE 18 : FINANCIAL CHARGES Bank Charges & Interest ECGC Premium Indirect Other Interest Less: Interest received SCHEDULE 19 : SELLING & DISTRIBUTION EXPENSES Advertisement and Publicity Business Promotion Documentation Charges Discount Allowed Balance Written off SCHEDULE 20 : OTHER EXPENSES Auditor Remuneration Festival Celebration Insurance Claim Written off Stamping & Filling Fees Legal and Professional Charges Licence & Registration Fees Loss on Sale of Fixed Assets Meeting & Seminar Expenses Membership Fees and Subscriptions Miscellanious Expenses Security Transaction Tax Sitting Fee

38 Emmsons International Ltd. SCHEDULE 21 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS I. SIGNIFICANT ACCOUNTING POLICIES 1. BASIS OF ACCOUNTING The Financial Statements have been prepared to comply with the Mandatory Accounting Standards issued by The Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, The Financial Statements have been prepared under the historical cost convention on accrual basis. The Accounting Policies have been consistently applied by the Company unless otherwise stated. 2. REVENUE RECOGNITION The accrual basis of accounting has been followed in respect of income and expenditure. Sales figures are net of sales tax. The Export Sale is recognized at the time of issuance of Bill of Lading. 3. ACCOUNTING FOR TAXES ON INCOME The Deferred tax expense or benefit is recognized on timing differences being the difference between taxable incomes and accounting incomes that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. 4. FOREIGN CURRENCY TRANSACTIONS (i) (ii) Foreign Currency transactions during the year are recorded at the rate of exchange prevailing on the date of transaction. Foreign Currency monetary assets and liabilities are translated into Rupees at the rate of exchange prevailing on the date of the Balance Sheet except investment in shares of subsidiary company which has been carried at historic cost. All Exchange differences are dealt with in the Profit and Loss Account except for investment in overseas subsidiary. Foreign Currency monetary items are reported using the closing rate. Where the company has entered into forward exchange contracts, the difference between the forward rate and spot rate at the date of the contract is recognized in the statement of the profit and loss over the life of the contract and difference between the spot rate at the date of contract and the exchange rate prevailing on the balance Sheet date is recognized as per Accounting Standard (AS) -11 (Revised) issued by the Institute of Chartered Accountants of India. Any Profit or Loss arising on cancellation or renewal of forward exchange contract is recognized as Income or as expenses for the year. 5. FIXED ASSETS Fixed Assets are stated at cost less accumulated depreciation. The company has capitalized all costs relating to acquisition and installation of fixed assets. 6. DEPRECIATION Depreciation on fixed assets is provided using straight-line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, except on intangible assets, which are not specified in the above schedule. Depreciation on intangible assets has been provided in compliance of Accounting Standard AS INVENTORIES Items of Inventories are valued at cost or net realizable value, whichever is lower. 8. RETIREMENT BENEFITS Liability of Gratuity at retirement/cessation and Leave Encashment is provided for based on valuations, as at the Balance Sheet date, made by independent actuaries as per Accounting Standard (AS)-15 (Revised) issued by the Institute of Chartered Accountants of India. 9. EXPORT BENEFITS/ INCENTIVES Export Entitlements in respect of the exports made under various scheme are recognized in the Profit and Loss Account when the right to receive credit as per the terms of the Schemes are established. 10. EARNINGS PER SHARE Basic Earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted Earnings per share are not different from basic earning per share. 11. RECOGNITION OF PRIOR PERIOD ITEMS Prior period expenses and incomes below Rs.15000/- are treated as current year's expenses / incomes. 36

39 II. NOTES ON ACCOUNTS 1. Previous year's figures have been regrouped, rearranged, reworked and reclassified wherever necessary to make them comparable with corresponding figures of current year. 2. Figures have been rounded off to the nearest rupee. Figures in bracket indicate negative balances. 3. The loans and advances include the following :- CURRENT YEAR (Rs. in Lacs) PREVIOUS YEAR (Rs. in Lacs) a) Amount due by firms and companies, in which directors are interested : Due at the end of the year NIL NIL Max. Outstanding during the year NIL NIL b) Amount due from Subsidiary at the end of the year Max. Outstanding during the year c) Dues from Directors : Due at the end of the year NIL NIL Max. Outstanding during the year NIL FORFEITER OF EQUITY WARRANTS : During the Financial Year , the company had allotted to the promoter's group on preferential basis Equity warrants at the rate of Rs. 250/- per equity warrant convertible into Equity Shares of Rs. 10/- each at a premium of Rs. 240/- per share against payment of Rs. 25/- per warrant in terms of approval received from The Bombay Stock Exchange Limited. For non receipt of balance amount Company has forfeited all Equity Warrants during the year and amount of Rs /- received alongwith application has been transferred to Capital Reserve Account. 5. CALCULATION OF DEFERRED TAX : PARTICULARS Amount in Rs. WDV of Fixed Assets As per Books WDV of Fixed assets As per Depreciation Chart under Income Tax Act Difference in the value of fixed assets due to higher allowance of depreciation Under Income Tax Act Provision made for Gratuity Provision for Leave Encashment Disallowance of late payment of TDS u/s 40(a)(i) Net amount of income on which deferred tax is provided % Add: Surcharge Education Cess Total Deferred Tax Liability Less: Deferred Tax Liability created in earlier years NET Deferred Tax Assets provided during the year WEALTH TAX : The provision of taxable wealth has been made as per the provisions of the Wealth Tax Act, INCOME TAX : Provision for Income Tax has been made as per the provisions of Income Tax Act, Balances of Debtors, Creditors, Loans and advances are subject to Confirmation. The debtors include an amount of Rs Lacs (Previous year: Rs Lacs), for which the company had obtained a decree against State Bank of India and Unialchem Fertilizer Limited. The execution of Decree is in abeyance as the State bank of India has filed an appeal in the Supreme Court of India.The management is confident of recovering the amount after the disposal of at the appeal and the amount is considered good for recovery. 9. A sum of Rs Lacs (Previous Year Rs lacs) paid by the company to Food Corporation of India and others against purchases of rice and wheat on account of arbitrary price increase by FCI in violation of its contractual obligation with the company, has not been treated as part of purchase cost for the concerned financial year and the same is shown under Loans and advances. Company is taking all remedies for recovery for said amount in accordance with legal opinion obtained by the company. 37

40 Emmsons International Ltd. 10. The Company has entered into agreement of purchase of semi finished flat and has spent Rs lacs on construction and shown under the head Capital work in progress. Future expenses to be incurred on said flat are estimated at Rs. 25 lacs. 11. SUITS FILED AGAINST THE COMPANY : (I) (II) Legal suit filed by owner of vessel hired by the company which received minor damage on transportation of goods has been finally settled. A sum of Rs lacs was provided in earlier year and rest of the amount has been charged to Profit & Loss Account. The company has entered an arbitration suit against the Punjab State Warehousing Corporation. The arbitration tribunal has issued its award. However, both the parties have filed separate applications in the court with requests for setting aside the award. The case is still in progress and as such quantification of any liability or recovery, if any, is not possible, hence no provision for the same has been made. However, the company is fairly confident of its position and expects to get a favorable judgment in the case. (III) The company has entered an arbitration suits against the Mawana Sugar Ltd for not lifting of Sugar on account of Government ban on sugar. Claims and counter claims have been filed by both the parties before the arbitrators. The company expects to settle the dispute soon. (IV) The Olympia Spinning & Weaving Mills Ltd. Pakistan has commenced arbitration proceeding against Company for recovery of alleged claim on account of non supply of cotton. The company has contested the claim that the contract was cancelled as a result of default of Olympia. The company has filed the appeal, the same is still in progress and as such quantification of any liability or recovery, if any, is not possible, hence no provision for the same has been made. However, the company is fairly confident of its position in the case and expects to get a favorable award in the case. 12. MANAGERIAL REMUNERATION CURRENT YEAR Rs. PREVIOUS YEAR Rs. a) Remuneration to Managing Director Salary Bonus Perquisites Commission b) Remuneration to Whole time Director Salary Bonus Perquisites Nil Nil Commission c) Remuneration to Executive Director Salary Bonus Perquisites Commission Nil Total Managerial Remuneration Computation of Net Profit u/s 198 read with Section 349 of the Companies Act, 1956 for calculation of commission Payable to Directors Net Profit Add : a) Director s Remuneration b) Sitting Fees c) Loss on Sale of fixed assets Adjusted Net Profit as per section 349 of the Companies Act, Permissible Remuneration to Whole Time Directors Permissible Remuneration to Managing Director

41 13. AUDITOR S REMUNERATION : CURRENT YEAR PREVIOUS YEAR As Statutory Auditors Taxation Matters Tax Audit Fee Limited Review Audit Company Law matters Total SEGMENT REPORTING : Segment reporting as per AS-17 is not applicable to the company as it does not have any reportable segment. 15. Disclosure of Sundry Creditors under current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the Micro, Small and Medium Enterprises Development Act, Amounts due as on 31st March, 2010 to Micro, Small and Medium Enterprises on account of principal amount together with Interest, aggregate to Rs. Nil. (Previous Year: Rs. NIL). 16. Contingent Liabilities not provided for : (Amounts Rs. In Lacs) a) Guarantees to sales tax authorities : 5.90 (Previous year 5.90) b) Corporate Guarantees for Credit facilities to subsidiary : (Previous year Nil) c) Letter of Credit issued for purchases : (Previous year 21.23) d) Other Guarantees : (Previous year ) e) The Entry Tax demands Rs lacs raised by the authorities have been protested by the company and final determination is yet to be made by the appellate authorities. The company has however made the payment against these demands under protest and the same is included in the list of Loans and advances. In the event case is finally decided against the Company the said amount of Rs Lacs shall be required to be charged as an expense to Profit & Loss account. f) Tax Demands totaling Rs Lacs raised by the Income Tax Department is being contested by the Company in appeal. No provision has been made for the liability in the accounts under report. 17. RELATED PARTIES DISCLOSURES: As required by Accounting Standard-18, Related Party Disclosures issued by the Institute of Chartered Accountants of India, relevant information is provided here below: Related parties with whom transactions have taken place during the year : S.NO. NAMES RELATIONSHIP A Mr. Anil Monga Key Managerial Personnel B Mr. Rajesh Monga Key Managerial Personnel C Mr. Shivaz Monga Key Managerial Personnel D Mr. Vijay Kumar Kakkar Key Managerial Personnel E Mr. Viresh Shankar Mathur Key Managerial Personnel F Mr. Mohd. Tariq Raza Key Managerial Personnel G Mr. Satish Chandra Gupta Key Managerial Personnel H Ms. Manya Kumar Key Managerial Personnel's relative I M/s Emmsons S.A. Subsidiary (Control Exists) J M/s Emmsons Gulf DMCC Subsidiary (Control Exists) Following are the details of the transactions with the related parties : Nature of Transactions Related Parties Amount (Rs. in Lacs) Salaries, Allowances & Perquisites Key Managerial Personnel's Salaries, Allowances & Perquisites Key Managerial Personnel's Relatives 2.58 Sitting Fee Key Managerial Personnel's 2.60 Rent Key Managerial Personnel's 3.00 Investment in Shares Subsidiaries Advances to Subsidiaries Subsidiaries Sales to Subsidiaries Subsidiaries EARNINGS PER SHARE : Basic and diluted earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The company has not issued any potential equity share, accordingly, basic and diluted earnings per share are the same. S.N PARTICULARS CURRENT YEAR PREVIOUS YEAR a Profit after taxation and exceptional items (Rs.) b Weighted average number of shares outstanding during the year c Nominal Value Per Share (Rs.) d Basic and diluted earning per share (In Rs.) d = (a/b)

42 Emmsons International Ltd. III. ADDITIONAL INFORMATION PURSUANT TO PART II OF SCHEDULE VI TO THE COMPANIES ACT, 1956 : A) Particulars of Capacity and Production are not applicable. B) Purchase, Sales and Stocks. OPENING STOCK PURCHASES SALES CLOSING STOCK QTY/MT (RS.IN 000) QTY/MT (RS.IN 000) QTY/MT (RS.IN 000) QTY/MT (RS.IN 000) 1 SULPHUR (PREVIOUS YEAR)* ( ) (5153) ( ) (282625) ( ) (230932) ( ) (34206) 2 COAL (PREVIOUS YEAR)* ( ) (15627) ( ) (246352) ( ) (232110) ( ) (103978) 3 PALM (PREVIOUS YEAR)* ( ) (25018) ( ) (27285) WHEAT (PREVIOUS YEAR)* RICE (PREVIOUS YEAR)* ( ) (357979) ( ) ( ) ( ) ( ) ( ) (498859) 6 SUGAR (PREVIOUS YEAR)* ( ) (37546) ( ) (406317) ( ) (491752) ( ) (24635) 7 SOYABEAN (PREVIOUS YEAR)* ( ) (538934) ( ) (504328) ( ) (17874) 8 SORGHUM (PREVIOUS YEAR)* ( ) (127875) ( ) (152610) BARLEY (PREVIOUS YEAR)* ( ) (17144) ( ) (316984) ( ) (353330) MAIZE (PREVIOUS YEAR)* ( ) (78865) ( ) (570135) ( ) (578540) ( ) (150191) 11 RAPESEED (PREVIOUS YEAR)* ( ) (42326) ( ) (34222) ( ) (2327) 12 CHICK PEAS (PREVIOUS YEAR)* ( ) (30788) ( ) (30788) 13 YELLOW PEAS (PREVIOUS YEAR)* ( ) (594877) ( ) (351373) ( ) (301300) 14 TOOR WHOLE (PREVIOUS YEAR)* ( ) (6827) ( ) (6827) 15 LENTILS (PREVIOUS YEAR)* PIGEON PEAS (PREVIOUS YEAR)* BAGS (In No.) (USED / NEW) (PREVIOUS YEAR)** ( ) (25633) ( ) (59977) ( ) (12230) ( ) (30576) NOTES : * The Opening and Closing stocks Includes the stocks in Transit. ** Rice and Wheat is purchased in jute bags and purchase of rice and wheat includes the cost of jute bags. Bags quantities are in numbers. CURRENT YEAR PREVIOUS YEAR (Rs. in Lacs) (Rs. in Lacs) C) Earnings in Foreign Currency Export of Goods calculated on FOB value Service Charges Received D) CIF Value of Import (including Highseas Purchases) E) Expenditure in Foreign Currency Professional Fees Other Matters Dividend Paid For SURESH & ASSOCIATES For and on behalf of Board FRN: N Chartered Accountants Sd/- Sd/- Sd/- Sd/- Sd/- (CA NARENDRA ARORA) (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA) Partner GM - Finance Company Secretary Director Managing Director M. No Date : Place : New Delhi 40

43 BALANCE SHEET ABSTRACT AND COMPANY S GENERAL BUSINESS PROFILE I. REGISTRATION DETAILS : Registration No State Code 55 Balance Sheet Date 31st March, 2010 II. CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. THOUSANDS) Public Issue Rights Issue Employees Stock Options Bonus Issue Private Placement NIL NIL NIL NIL NIL III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN RS. THOUSANDS) Total Liabilities Total Assets SOURCES OF FUNDS Paid-Up-Capital Reserves & Surplus Unsecured Loans Secured Loans Deferred tax liability 2483 APPLICATION OF FUNDS Net Fixed Assets Investments Net Current Assets Misc. Expenditure NIL Accumulated Losses NIL IV. PERFORMANCE OF COMPANY (AMOUNT IN RS. THOUSANDS) Turnover Total Expenditure Profit/Loss before Tax Profit/Loss after tax Earning Per Share (Rs.) Dividend Rate (%) 20% V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS OF THE COMPANY Item Code No Product Description Rice Item Code No Product Description Sugar Item Code No Product Description Coal For SURESH & ASSOCIATES FRN: N Chartered Accountants For and on behalf of Board Sd/- Sd/- Sd/- Sd/- Sd/- (CA NARENDRA ARORA) (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA) Partner GM - Finance Company Secretary Director Managing Director M. No Date : Place : New Delhi 41

44 BALANCE SHEET AS AT 31ST MARCH, 2010 (US$) Emmsons International Ltd. (Fig. in Millions) P A R T I C U L A R S EMMSONS EMMSONS SA EMMSONS CONSOLIDATED INTERNATIONAL SWITZERLAND GULF DMCC LIMITED INDIA DUBAI l. SOURCES OF FUNDS Shareholders Funds (a) Share Capital (b) Reserves and Surplus (0.12) Deferred Tax Liabitity Loan Funds (a) Secured Loans (b) Unsecured Loans Minority Interest TOTAL ll. APPLICATION OF FUNDS Fixed Assets (a) Gross Block (b) Less: Depreciation Net Block Capital Work in Progress Investments Current Assets, Loans & Advances (a) Inventories (b) Sundry Debtors (c) Cash and Bank balances (d) Loans and Advances Less:Current Liabilities & Provisions (a) Current Liabilities (b) Provisions Net Current Assets Miscellaneous Expenditure (To the extent not written off) TOTAL Conversion Rate to INR to US$ as per closing price as on

45 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 (US$) (Fig. in Millions) P A R T I C U L A R S EMMSONS EMMSONS SA EMMSONS CONSOLIDATED INTERNATIONAL SWITZERLAND GULF DMCC LIMITED INDIA DUBAI INCOME Sales of Products and other income TOTAL EXPENDITURE Cost of Goods Sold Direct Expenses Office and Administrative Expenses Financial Charges Selling & Distribution Expenses Other Expenses 0.47 (0.03) TOTAL Profit before Depreciation Depreciation Profit before Taxation Provision For Taxation Provision for Deferred Income Tax (0.00) (0.03) Liability /(Asset) Profit after Taxation Balance of Profit brought Forward 4.05 (0.14) from Previous Years Less/ (Add): Short/ (Excess) (0.01) (0.01) Provision of Income Tax for earliar Years Less: Minority Interest (0.00) Balance Available for Appropriation 6.95 (0.12) APPROPRIATIONS Transfer to General Reserve Proposed Dividend Tax on Dividend Surplus Carried Forward 6.37 (0.12) (0.12) EARNINGS PER SHARE (Fig. in Cents) Basic Diluted Conversion Rate to INR to US$ as per closing price as on

46 Emmsons International Ltd. STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES NAME OF THE SUBSIDIARY Emmsons SA Emmsons Gulf DMCC 1. Financial year of the Subsidiary ended on Date from which they become subsidiary Share of the subsidiary held by the company as on 31 st March, a) Number & face value 99,999 equity shares of 4 Shares of AED 50,000/- CHF 10/- each fully paid up Each b) Extent of holding 99.99% 100% 4. The net aggregate amount of the subsidiary Companies Profit/(Loss) so far as it concerns the member of the holding Company a) Not dealt with in the holding Company s accounts i) For the financial year Rs. 9,84, Rs. 2,21,91, ended 31 st March, 2010 ii) upto the previous financial year Net Loss of Company had obtained the of the subsdiary company Rs. 63,03, trading license on 13 th April, 2009, hence no business was commenced till 31st March, 2009, therefore no profit/loss was earned for the period b) Dealt with in the holding Company s accounts i) For the financial year Nil Nil ended 31 st March, 2010 ii) For the previous financial year of Nil Nil the subsidiary company since they become the holding Company s subsidiaries Sd/- Sd/- Sd/- Sd/- (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA) GM - Finance Company Secretary Director Managing Director 44

47 FINANCIAL INFORMATION OF SUBSIDIARY COMPANIES EMMSONS S.A Report of the Statutory Auditory on the Limited Statutory Examination As statutory auditors, we have examined the financial statements (balance sheet, income statement and notes) of Emmsons SA for the year ended 31 March These financial statements are the responsibility of the board of directories. Our responsibility is to perform a limited statutory examination on these financial statements. We confirm that we meet the licensing and independence requirements as stipulated by Swiss Law. We conducted our examination in accordance with the Swiss Standard on the Limited Statutory Examination. This standard requires that we plan and perform a limited statutory examination to identify material misstatements in the financial statements. A limited statutory examination consists primarily of inquiries of company personnel and analytical procedures as well as detailed tests of company documents as considered necessary in the circumstances. However, the testing of operation al processes and the internal control system, as well as inquiries and further testing procedures to detect fraud or other legal violations, are not within the scope of this examination. Based on our limited statutory examination, nothing has come to our attention that causes us to believe that the financial statements and the proposed appropriation of available earnings do not comply with Swiss law and the company's articles of incorporation. Aigle, 7 th June 2010 Baker & Norton Fiduciaire SA Enclosures : Financial statements consisting of : Balance Sheet Income Statement Notes to Financial Statement Result Sharing Rating S/d- Regis Devenes Expert-reviseur 45

48 EMMSONS S.A. - AIGLE 2. BALANCE SHEET AT 31 MARCH, 2010 Emmsons International Ltd (In CHF) (In CHF) (In INR) (In INR) ASSETS Current Assets BNP Paribas 86070/1C BNP Paribas 86070/3E EUR BNP Paribas 86070/2D USD BNP Paribas 86070/4F GBP Debtors Advances Recoverable Prepaid assets VAT receivable Fixed Assets Deposit Set up costs Computers Apartment TOTAL ASSETS LIABILITIES Current Liabilities Others Payables Creditors Expenses payable Equity Shareholder s capital Result Previous year result Net profit exercise TOTAL LIABILITIES

49 EMMSONS S.A. - AIGLE 3. INCOME STATEMENT 2009/2010 (As 1st April, 2009 at 31st March, 2010) (In CHF) (In CHF) (In INR) (In INR) INCOME PURCHASES GROSS MRGIN Salary and personnel costs Rent Administrative expenses Auditing and accounting fees Publicity Consulting Fees Expenses Ukraine Other charges OTHER OPERATING CHARGES OPERATING PROFIT (before financial result) Financial costs Interest Exchange rate differential Loan Exchange rate differential FINANCIAL RESULT OPERATING PROFIT 2- cash flow (before depreciation) Depreciation RESULT BEFORE EXCEPTIONAL PRODUCTS Benefit on sale appartment RESULT (before tax) Tax NET PROFIT EXERCISE NOTES TO FINANCIAL STATEMENT ART. 663B CO Global amount of the guarantees, obligation of guarantees and constitution of pledges in favour of third NONE NONE 4.02 Global amount of the credits pawned or to yield to guarantees proper engagements and credits subject to property NONE NONE 4.03 Amount of the debts rising contracts of leasing not carried to the assessment NONE NONE 4.04 Value of the insurance fire of the body immobilization NONE NONE 4.05 Amount debts towards the institutions of precaution in favour of the personnel NONE NONE 4.06 Amount, rate of interest and expiries of the loans debenture holder emitted by the company NONE NONE 4.07 Essential participations NONE NONE 4.08 Global amount coming from the dissolution of the reserves of replacement or the latent reserves NONE NONE 4.09 Indications on the object and the amount of the revaluations NONE NONE 4.10 Clean actions held by the company NONE NONE 4.11 Amount of the authorized increase and the conditional increase of capital NONE NONE 4.12 Realization of an evaluation of the risk NONE NONE 4.13 Motives which led to the resignation of the organ of revision NONE NONE 4.14 Other indications envisaged by the law. NONE NONE 47

50 Emmsons International Ltd. EMMSONS S.A. - AIGLE 5. RESULT SHARING Your Board of Directors propose to report, an opening balance, the previous year result to 31st March 2010 from Fr (Rs ) of the following manner : Previous year result Fr Rs Net Profit exercise ACCUMLATED LOSS BALANCE Fr Rs RATING 6.01 Fixed Assets Particulars Book value at Purchase Depreciation/ Sale Book Value Fr.(CHF) (In INR) Fr.(CHF) (In INR) Fr.(CHF) (In INR) Fr.(CHF) (In INR) First etablishment expenses Computers Apartment Total (In CHF) (In INR) 6.02 Advances Recoverable Emmsons Grains Ltd Emmsons Grains Ltd Emmsons Gulf DMCC LLC Krinichkaskoe Advances to supplier Others Payables Central Pacific Ltd Starcom Resource Singapore Emmsons International Ltd Expenses payable Provision accounting fees 2009/ Provision Retraites populaires february and march Provision tax 2009/

51 INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDER OF EMMSONS GULF DMCC Report on the financial statements We have audited the accompanying financial statements of EMMSONS GULF DMCC, which comprise the statement of financial position as at 31 March 2010, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the period then ended, and a summary of significant accounting policies and other explanatory notes set out on pages 3 to 18. Management's responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor's responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of EMMSONS GULF DMCC as of 31 March 2010, and of its financial performance and its cash flows for the period then ended in accordance with International Financial Reporting Standards. Emphasis of matter Without qualifying our opinion, we draw attention to Note '11', which states that bank borrowings and loans are subject to certain financial covenants. Report on other legal and regulatory requirements We further confirm that the financial statements comply with provisions of Implementing Regulation No. 1/03 issued by the Dubai Multi Commodity Centre Authority. Sd/- PKF Dubai United Arab Emirates 23 June

52 Emmsons International Ltd. EMMSONS GULF DMCC STATEMENT OF FINANCIAL POSITION 31 MARCH AED INR NON-CURRENT ASSETS Property, plant and equipment CURRENT ASSETS Trade and other receivables Amount due from a related party Cash and cash equivalents Other current financial assets TOTAL ASSETS CURRENT LIABILITIES Bank borrowings Trade and other payables NON-CURRENT LIABILITIES Provision for staff end of service gratuity Long term loan from a related party SHAREHOLDER'S FUNDS Share capital Retained earnings Equity funds Loan from the shareholder TOTAL EQUITY AND LIABILITIES The accompanying notes form an integral part of these financial statements. The report of the independent auditor is enclosed herewith. We confirm that we are responsible for these financial statements, including selecting the accounting policies and making the judgments underlying them. We confirm that we have made available all relevant accounting records and information for their compilation. Authorised for issue by the board of directors on 17 June For EMMSONS GULF DMCC Sd/- DIRECTORS 50

53 EMMSONS GULF DMCC STATEMENT OF COMPREHENSIVE INCOME PERIOD ENDED 31 MARCH AED INR REVENUE Cost of sales 18 ( ) ( ) GROSS PROFIT Other operating income Staff costs 20 (93864) ( ) Depreciation 21 (18942) (230610) Other operating expenses 22 ( ) ( ) PROFIT FROM OPERATING ACTIVITIES Interest income Finance costs 24 (261069) ( ) PROFIT FOR THE PERIOD Other comprehensive income TOTAL COMPREHENSIVE INCOME FOR THE PERIOD The accompanying notes form an integral part of these financial statements. The report of the independent auditor is enclosed herewith. STATEMENT OF CHANGES IN EQUITY PERIOD ENDED 31 MARCH 2010 Share Share Retained Retained Total Total capital capital earnings earnings AED INR AED INR AED INR Issue of share capital Total comprehensive income for the period As at The accompanying notes form an integral part of these financial statements. The report of the independent auditor is enclosed herewith. 51

54 Emmsons International Ltd. EMMSONS GULF DMCC STATEMENT OF CASH FLOWS PERIOD ENDED 31 MARCH AED INR Cash used in operations Cash used in operations 25 ( ) ( ) Interest paid (261069) ( ) Net cash used in operating activities ( ) ( ) Cash flows from investing activities Purchase of property, plant and equipment ( ) ( ) Increase in current financial asset ( ) ( ) Increase in amount due from a related party ( ) ( ) Interest received Net cash used in investing activities ( ) Cash flows from financing activities Issue of share capital Proceeds from trust receipts (net) Receipt of long term loan from a related party Receipt of loan from the shareholder Receipts from bank overdraft (net) Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period - - Cash and cash equivalents at end of period The accompanying notes form an integral part of these financial statements. The report of the independent auditor is enclosed herewith. 52

55 EMMSONS GULF DMCC NOTES TO FINANCIAL STATEMENTS PEREIOD ENDED 31 MARCH LEGAL STATUS AND BUSINESS ACTIVITY a) EMMSONS GULF DMCC is a limited liability company registered in Dubai Multi Commodity Centre, Dubai, United Arab Emirates in accordance with laws and regulations issued by Dubai Multi Commodities Centre Authority. The registered office is P. O. Box , Dubai, UAE. The company was registered on 1 February 2009 and commenced operations on 13 April b) The company is engaged in the business of trading in agricultural commodities. c) The company is a wholly owned subsidiary of Emmsons International Limited which is consider to be the ultimate parent company. 2. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies adopted, and which have been consistently applied, are as follows: a) Basis of preparation The financial statements are presented in UAE Dirhams and prepared using historical cost, and in accordance with International Financial Reporting Standards issued or adopted by the International Accounting Standards Board (IASB) and which are effective for accounting periods beginning on or after 1 January 2009, and the requirement of the laws and regulations of Dubai Multi Commodity Centre Authority. b) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The cost less estimated residual value, where material, is depreciated from the date the asset is available for use until it is derecognised, using the straight-line method over the estimated useful lives of the assets as follows: Freehold property Furniture, fixtures and office equipment 60 years 6-16 years An assessment of residual values is undertaken at each reporting date and, where material, if there is a change in estimate, an appropriate adjustment is made to the depreciation charge. c) Inventories Inventories are stated at the lower of cost and net realizable value. Cost is arrived at using the specific identification method and comprises invoice value plus applicable landing charges less discounts. Net realizable value is based on estimated selling price less any estimated cost of completion and disposal. d) Staff end-of-service gratuity Provision is made for end-of-service gratuity payable to the staff at the reporting date in accordance with the local labour laws. e) Revenue Revenue represents the amount invoiced, net of discounts and returns, for goods delivered during the period. The company's sales are in the form of Merchanting Trade or Third Country Trade. The company sells the goods to its customers on the basis of transfer of documents received from suppliers. Revenue is recognised when significant risks and rewards relating to the ownership of goods concerned are 53

56 Emmsons International Ltd. transferred to customer and is based on amount invoiced to customers for trans-shipment made during the period. f) Leases Leases under which substantially all the risks and rewards of ownership of the related asset remain with the lessor are classified as operating leases and the lease payments are charged to profit or loss on a straight-line basis over the period of the lease. g) Foreign currency transactions Transactions in foreign currencies are translated into UAE Dirhams at the rate of exchange ruling on the date of the transactions. Monetary assets and liabilities expressed in foreign currencies are translated into UAE Dirhams at the rate of exchange ruling at the reporting date. Gains or losses resulting from foreign currency transactions are taken to profit or loss. h) Cash and cash equivalents Cash and cash equivalents comprise cash, bank current accounts, bank deposits free of encumbrance with a maturity date of three months or less from the date of deposit and highly liquid investments with a maturity date of three months or less from the date of investment. i) Financial instruments Financial assets and financial liabilities are recognised when, and only when, the company becomes a party to the contractual provisions of the instrument. Financial assets are de-recognised when, and only when, the contractual rights to receive cash flows expire or when substantially all the risks and rewards of ownership have been transferred. Financial liabilities are de-recognised when, and only when, they are extinguished, cancelled or expired. Current financial assets that have fixed or determinable payments and for which there is no active market, which comprise trade and other receivables and related party receivables, are classified as loans and receivables and stated at cost or, if the impact is material, at amortised cost using the effective interest method, less any write down for impairment losses plus reversals of impairment losses. Impairment losses and reversals thereof are recognised in profit or loss. Current and non-current financial liabilities, which comprise current bank borrowings, trade and other payables and related party payables and loan from the shareholder are measured at the cost or, if the impact is material, at amortised cost using the effective interest method. 3. SIGNIFICANT JUDGMENTS EMPLOYED IN APPLYING ACCOUNTING POLICIES The significant judgments made in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are as follows: Impairment At each reporting date, management conducts an assessment of property, plant and equipment, and all financial assets to determine whether there are any indications that they may be impaired. In the absence of such indications, no further action is taken. If such indications do exist, an analysis of each asset is undertaken to determine its net recoverable amount and, if this is below its carrying amount, a provision is made. In the case of loans and receivables, if an amount is deemed irrecoverable, it is written off to profit or loss or, if previously a provision was made, it is written off against the provision. Reversals of provisions against loans and receivables are made to the extent of the related amounts being recovered. 4. KEY SOURCES OF ESTIMATION UNCERTAINTY Key assumptions made concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are as follows: 54

57 Carrying values of property, plant and equipment Residual values are assumed to be zero unless a reliable estimate of the current value can be obtained for similar assets of ages and conditions that are reasonably expected to exist at the end of the assets' estimated useful lives. Doubtful debt provisions Management regularly undertakes a review of the amounts of loans and receivables owed to the company either from third parties, (see Note 7) or from related parties (see Note 8) and assesses the likelihood of non-recovery. Such assessment is based upon the age of the debts, historic recovery rates and assessed creditworthiness of the debtor. Based on the assessment assumptions are made as to the level of provisioning required. Impairment Assessments of net recoverable amounts of property, plant, equipment and all financial assets other than loans and receivables (see above) are based on assumptions regarding future cash flows expected to be received from the related assets. Staff end-of-service gratuity The company computes the provision for the liability to staff end-of-service gratuity stated at AED 3,641 assuming that all employees were to leave as of the reporting date. The management is of the opinion that no significant difference would have arisen had the liability been calculated on an actuarial basis as salary inflation and discount rates are likely to have approximately equal and opposite effects. 5. ADOPTION OF NEW INTERNATIONAL FINANCIAL REPORTING STANDARDS The following International Financial Reporting Standards, amendments thereto and Interpretations that became effective for the current reporting period and which are applicable to the company are as follows. Their adoption has resulted in presentation and disclosure changes only: Amendment to IAS 1: Presentation of Financial Statements Amendment to IAS 16: Property, Plant and Equipment Amendment to IAS 23: Borrowing Costs Amendment to IAS 32: Financial Instruments: Presentation Amendment to IAS 36: Impairment of Assets Amendment to IAS 39: Financial Instruments: Recognition and Measurement Reclassification of Financial Assets - Amendments to IAS39: Financial Instruments: Recognition and Measurement and IFRS7: Financial Instruments: Disclosures Reclassification of Financial Assets - Effective Date and Transition - Amendments to IAS39: Financial Instruments: Recognition and Measurement and IFRS7: Financial Instruments: Disclosures Improving Disclosures about Financial Instruments - Amendments to IFRS7 The following International Financial Reporting Standards, amendments thereto and Interpretations that are assessed by management as likely to have an impact on the financial statements have been issued by the IASB prior to the date the financial statements were authorised for issue but have not been applied in these financial statements as their effective dates of adoption are for future accounting periods. It is anticipated that their adoption in the relevant accounting periods will have an impact only on presentation and disclosures within the financial statements: 55

58 Improvements to IFRS IAS1: Presentation of Financial Statements (1 January 2010) IAS7: Statement of Cash Flows (1 January 2010) IAS17: Leases (1 January 2010) IAS18: Revenue (1 January 2010) IAS36: Impairment of Assets (1 January 2010) IAS39: Financial Instruments: Recognition and Measurement (1 January 2010) IAS 24: Related Party Disclosures ( 1 January 2011) IFRS 9: Financial Instruments ( 1 January 2013) 6. PROPERTY, PLANT AND EQUIPMENT Emmsons International Ltd. Freehold Property Furniture, fixtures Total and office equipment AED INR AED INR AED INR Cost Additions As at 31 March Accumulated depreciation Depreciation As at 31 March Net book values As at March 2010 Note: Freehold property with net book value of AED 2,082,681 representing Unit No at Lake Plaza Building, Emirates Hills Community, Dubai is mortgaged with Bank of Baroda against facilities granted. 7. TRADE AND OTHER RECEIVABLES AED INR Trade receivables Advances Prepayments Other receivables An age analysis of trade receivables that are past due but not impaired is as follows: days Trade receivables not past due and not impaired

59 As at the period end, there are no trade receivables considered to be impaired due to non-recovery or perceived difficulty in recovery. The company holds post-dated cheques amounting to AED 21,781,285 (INR 26,51,77,410) as security against trade receivables. 8. RELATED PARTIES The company enters into transactions with entities that fall within the definition of a related party as contained in International Accounting Standard 24. The management considers such transactions to be in the normal course of business and at prices determined by the management. Related parties comprise the parent company, companies under common ownership/ management control and directors. At the reporting date significant balances with related parties were as follows: Parent company Directors Companies under Total common ownership/ 2010 management control AED INR AED INR AED INR AED INR Trade and other receivables Trade and other payables Long term loan from a related party Loan from the shareholder Due from a related party All balances are unsecured and are expected to be settled in cash. Repayment and other terms are set out in Note 14,16 and 26. Significant transactions with related parties during the period were as follows: Parent company Companies under Directors Total common Management to control AED INR AED INR AED INR AED INR Purchases Management remuneration Purchase of property, plant and equipment The parent company has provided corporate guarantee of USD 1 million to bank on behalf of the company. The company also provides fund to/receives fund from related parties as working capital facilities free of interest/ fixed rate of interest. 9 CASH AND CASH EQUIVALENTS AED INR Cash on hand Bank balances in current accounts

60 10 OTHER CURRENT FINANCIAL ASSETS Emmsons International Ltd. Fixed deposits BANK BORROWINGS Overdrafts Trust Receippts An analysis by bank of amounts outstanding is as follows: Bank of Baroda Standard Chartered Bank Bank facilities are secured against: Lien over fixed deposits. Assignment of leasehold rights and mortgage of office building located on Plot No. JLT-PH2 T2 Jumeirah lake Towers. Assignment of leasehold rights and mortgage of residential flat registered in the name of Mr. Kanishk Monga, Director. Continuing corporate guarantee for USD 1,000,000 signed by Emmsons International Limited. Promissory note of USD 1,000,000. Personal guarantee of the directors. Corporate guarantee of M/s. Emmsons International Limited. The bank borrowings and loans are subject to certain financial covenants including debt/equity ratio not to exceed 3:1 and current asset/current liability ratio to be maintained above A maturity analysis of total bank borrowings is as follows: AED INR 0-3 months Overdraft TRADE AND OTHER PAYABLES AED INR Trade payables Accruals Advance received from customers PROVISION FOR STAFF END-OF-SERVICE GRATUITY Opening Stock Provision for the period Closing Stock LONG TERM LOAN FROM RELATED PARTY This represents long term from a related party, free of interest upto 31 March Further loan is subject to 5% interest, payable from 31 March The loan is repayable by 31 March 2015 with a put option to the company to repay at any time during the tenure without any prepayment charges or penalty. 15 SHARE CAPITAL AED INR Issued and paid up: 4 shares of AED 50,000 each 200,

61 16. LOAN FROM THE SHAREHOLDER This represents interest free long term loan with no fixed repayment schedule. 17. MANAGEMENT OF CAPITAL The company's objectives when managing capital are to ensure that the company continues as a going concern and to provide the shareholder with a rate of return on their investment commensurate with the level of risk assumed. Capital comprises equity funds as presented in the statement of financial position together with amounts due to/from related parties and loan from the shareholder. Debt comprises total amounts owing to third parties, net of cash and cash equivalents. Funds generated from internal accruals together with funds received from related parties are retained in the business, net of dividend declared, to limit bank borrowings within covenants and according to the business requirements and maintain capital at desired levels. The nature of such covenants is set out in Note to to AED INR 18 COST OF SALES Purchases (net of discount) Other direct expenses OTHER OPERATING INCOME Commission income Miscellaneous income STAFF COSTS Staff salaries and benefits Staff end-of-service gratuity DEPRECIATION Depreciation of property, plant and equipment OTHER OPERATING EXPENSES Management remuneration Contract cancellation charges Other expenses INTEREST INCOME On bank deposits FINANCE COSTS On bank loans and overdrafts

62 25 CASH GENERATED FROM OPERATIONS Emmsons International Ltd. Profit for the period Adjustments for: Depreciation of property, plant and equipment Finance costs Interest income (23822) (290022) Operating profit before changes in operating assets and liabilities Increase in trade and other receivables ( ) ( ) Increase in trade and other payables Increase in staff gratuity provision FINANCIAL INSTRUMENTS ( ) ( ) The net carrying amounts as at the reporting date of financial assets and financial liabilities are as follows: Loans and receivables Financial liabilities AED INR AED INR Trade and other receivables Amount due from a related party Cash and cash equivalents Other current financial assets Bank borrowings Trade and other payables Long term loan from a related party Loan from the shareholder Management of risk The management conducts and operates the business in a prudent manner, taking into account the significant risks to which the business is or could be exposed. The primary risks to which the business is exposed, comprise credit, exchange, liquidity and cash flow interest rate risks. Credit risk is managed by assessing the creditworthiness of potential customers and the potential for exposure to the market in which they operate, combined with regular monitoring and follow-up. As part of the company's credit risk management, where it is considered necessary, such receivables are covered by letters of credit or bank guarantees in favour of the company, issued by high credit quality financial institutions. The company buys and sells goods and services in foreign currencies. Exposure is minimised where possible by denominating such transactions in US dollars to which the UAE Dirham is pegged. Management continuously monitors its cash flows to determine its cash requirements and makes comparison with its funded and un-funded facilities with banks in order to manage exposure to liquidity risk. Borrowing facilities are regularly reviewed to ensure that the company obtains the best available pricing, terms and conditions on it borrowings. Exposures to the aforementioned risks are detailed below: Credit risk Financial assets that potentially expose the company to concentrations of credit risk comprise principally bank accounts, trade and other receivables and amounts due from related parties. The company's bank accounts are placed with high credit quality financial institutions. 60

63 Amounts due from related parties, trade and other receivables are stated net of the allowance for doubtful recoveries. At the reporting date, the company's maximum exposure to credit risk from such receivables situated outside the UAE is as follows: Trade receivable Advances Other receivables AED INR AED INR AED INR GCC countries India Thailand At the reporting date 50% of trade receivables were due from three customers, 98% of advances were due from three parties (including director) and 100% of other receivables were due from three parties. There is no significant concentration of credit risk from customers outside the industry in which the company operates. Interest rate risk Fixed deposit accounts and loan from the shareholder are subject to fixed interest rates at levels generally obtained in the UAE and are therefore exposed to fair value interest rate risk. All other loans receivable and borrowings are subject to floating interest rates at levels generally obtained in the UAE or are linked to LIBOR and are therefore exposed to cash flow interest rate risk. Reasonably possible changes to interest rates at the reporting date are unlikely to have had a significant impact on profit or equity. Exchange rate risk There are no significant exchange rate risks as substantially all financial assets and financial liabilities are denominated in UAE Dirhams or US Dollars to which the Dirham is fixed. Reasonably possible changes to exchange rates at the reporting date are unlikely to have had a significant impact on profit or equity Fair values The fair value of a financial instrument is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction. The fair values of the financial assets and financial liabilities which are required to be carried at cost or at amortised cost approximate to their carrying value except from long term loan from a related party which due to its terms and nature, would have fair value below its carrying value CONTINGENT LIABILITIES AED INR Letters of guarantee 62, COMPARATIVE FIGURES These are the first set of financial statements for the company since the date of its incorporation and, accordingly, no comparative information is presented. For EMMSONS GULF DMCC Sd/- DIRECTORS 61

64 Emmsons International Ltd. AUDITOR S REPORT TO THE BOARD OF DIRECTORS OF EMMSONS INTERNATIONAL LIMITED ON THE CONSOLIDATED FINANCIAL STATEMENTS OF EMMSONS INTERNATIONAL LIMITED We have examined the attached Consolidated Balance Sheet of Emmsons International Limited and its subsidiaries as at March 31, 2010 and the consolidated Profit and Loss account for the period then ended. These Financial Statements are the responsibility of the group's Management. Our responsibility is to express an opinion on these Financial Statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards of India. These Standards require that we plan and perform the audit to obtain reasonable assurance whether the Financial Statements are prepared, in all material respects, in accordance with an identified financial reporting framework and are free of material misstatements. 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 Statements. We believe that our audit provides a reasonable basis for our opinion. We did not audit the Financial Statements of subsidiaries, Financial Statements of subsidiaries reflect the following total assets as at 31st March 2010 and Revenue for the period then ended. (INR in lacs) S.No Name of the Subsidiary Total Assets Total Revenue 1 Emmsons S.A Emmsons Gulf DMCC These Financial Statements have been audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included in respect of the subsidiaries, is based solely on the report of the other auditors. We Report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India and on the basis of the separate audited Financial Statements of Emmsons International Limited and its subsidiaries included in the Consolidated Financial Statements. On the basis of the information and explanation given to us and on the consideration of the separate audit reports on individual audited Financial Statements of Emmsons International Limited and its aforesaid subsidiaries, we are of the opinion that : 1. The Consolidated Balance sheet gives a true and fair view of the Consolidated state of affairs of Emmsons International Limited and its subsidiaries as at March 31, 2010 and 2. The Consolidated Profit and Loss Account gives a true and fair view of the Consolidated results of operations of Emmsons International Limited and its subsidiaries for the period then ended 3. The Consolidated Cash flow statement gives a true and fair view of the Consolidated cash flow of Emmsons International Limited and its subsidiaries for the year then ended. For SURESH & ASSOCIATES FRN : N Chartered Accountants Sd/- (CA Narendra Arora) Partner M. No Date : Place : New Delhi 62

65 CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2010 P A R T I C U L A R S SCHEDULE As At As At 31 st March, st March, 2009 Rs. Rs. I. SOURCES OF FUNDS Shareholders Funds (a) Share Capital (b) Equity Warrants 2 Party Paid up Equity Warrants (c) Reserves and Surplus Deferred Tax Liability Loan Funds (a) Secured Loans (b) Unsecured Loans Minority Interest 347 TOTAL II. APPLICATION OF FUNDS Fixed Assets 6 (a) Gross Block (b) Less: Depreciation Net Block Capital Work in Progress Investments Minority Interest _ 230 Current Assets, Loans & Advances (a) Inventories (b) Sundry Debtors (c) Cash and Bank balances (d) Loans and Advances Less:Current Liabilities & Provisions (a) Current Liabilities (b) Provisions Net Current Assets Miscelaneous Expenditure (To the extent not written off) TOTAL SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 21 As per our separate report of even date attached For SURESH & ASSOCIATES FRN: N For and on behalf of Board Chartered Accountants Sd/- Sd/- Sd/- Sd/- Sd/- (CA NARENDRA ARORA) (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA) Partner GM - Finance Company Secretary Director Managing Director M. No Date : 17th August, 2010 Place : New Delhi 63

66 Emmsons International Ltd. CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 P A R T I C U L A R S SCHEDULE As At As At 31 st March, st March, 2009 Rs. Rs. INCOME Sales of Products and other income TOTAL EXPENDITURE Cost of Goods Sold Direct Expenses Office and Administrative Expenses Financial Charges Selling & Distribution Expenses Other Expenses TOTAL Profit before Depreciation Depreciation Profit before Taxation Provision For Taxation Provision for Fringe Benefit Tax Provision for Deferred Income Tax Liability/(Asset) ( ) (61354) (Tax effect of timing differences during the year) Profit after Taxation Balance of Profit brought Forward from Previous Years Less/(Add): Short/(Excess) Provision of Income Tax for earlier Years (457033) Less: Minority Interest (69) (677) Balance Available for Appropriation APPROPRIATIONS Transfer to General Reserve Proposed Dividend Tax on Dividend Surplus Carried Forward EARNINGS PER SHARE (RS.) Basic Diluted SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 21 As per our separate report of even date attached For SURESH & ASSOCIATES FRN: N For and on behalf of Board Chartered Accountants Sd/- Sd/- Sd/- Sd/- Sd/- (CA NARENDRA ARORA) (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA) Partner GM - Finance Company Secretary Director Managing Director M. No Date : 17th August, 2010 Place : New Delhi 64

67 CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010 P A R T I C U L A R S (Rs. in 000) (Rs. in 000) Year ended Year ended 31 st March, st March, 2009 A. CASH FLOW FROM OPERATING ACTIVITIES : Net Profit/(Loss) before taxation and extraordinary items Adjustment for : Misc. Expenditure Written Off 448 (Profit)/Loss on sale of fixed assets Depreciation Transfer To Capital Reserve On Consolidation 0 Discarding of assets 2 Transfer To FCTR 2484 FCTR Written off (15215) (Profit)/Loss on sale of Investment 1499 Dividend income (88) (103) Interest Expenses OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES Adjustment for : (Increase)/Decrease in Sundry Debtors (252270) (923055) (Increase)/Decrease in Inventories (689883) (663615) (Increase)/Decrease in other receivables (123292) Increase/(Decrease) in Sundry Creditors & other payables Increase/(Decrease) in Provisions Cash generated from operations (273267) (390038) Income Tax Paid (37075) (49305) Wealth Tax Paid 3 (91) FBT Paid (390) Interest paid (125637) Cash flow before extraordinary items (310730) (565071) Extraordinary items NET CASH FROM OPERATING ACTIVITIES (310730) (565071) B. CASH FLOW FROM INVESTING ACTIVITIES : Purchase of fixed assets (45825) (42530) Capital WIP (4876) Sale of fixed assets Purchase of Investments (25027) Sale of Investments Dividend received NET CASH USED IN INVESTING ACTIVITIES (13655) (51647) C. CASH FLOW FROM FINANCING ACTIVITIES : Minority Interest 1 Proceeds from Equity Share Warrants (Application Money) (250) Net Proceeds from long term borrowings (12672) (33778) Net Proceeds from short term borrowings Proceeds From Unsecured Loans Miscellaneous Expenditure (375) Interest Paid (205319) Dividend paid (6023) (12046) NET CASH USED IN FINANCING ACTIVITIES Net increase in cash and cash equivalents (44459) Opening cash and cash equivalents balance (See Note) Closing cash and cash equivalents balance (See Note) Note to the cash flow statement Cash and Cash Equivalents Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts. - Cash in hand and balances with banks Margin with Bank and Accrued Interest Cash and cash equivalents as restated As per our separate report of even date attached For SURESH & ASSOCIATES FRN: N For and on behalf of Board Chartered Accountants Sd/- Sd/- Sd/- Sd/- Sd/- (CA NARENDRA ARORA) (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA) Partner GM - Finance Company Secretary Director Managing Director M. No Date : 17th August, 2010 Place : New Delhi 65

68 Emmsons International Ltd. SCHEDULES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010 P A R T I C U L A R S As At As At 31 st March, 2010 Rs. 31 st March, 2009 Rs. SCHEDULE 1 : SHARE CAPITAL AUTHORISED Equity Shares of Rs 10 each (Previous Year Equity Shares of Rs. 10/- each) ISSUED, SUBSCRIBED, CALLED AND PAID UP Equity shares of Rs 10 each (Previous Year Equity Shares of Rs. 10/- each) SCHEDULE 2 : EQUITY WARRANTS Partly Paid up Convertible Equity Warrants (Paid up Rs 25 per equity warrant against equity warrants of Rs 10 each issued at premium of Rs 240/- each Convertible in to equity share of Rs. 10/- each at a premium of Rs.240/-) SCHEDULE 3 : RESERVES AND SURPLUS General Reserve Capital Reserve Capital reserve on Consolidation (416) (447) Security Premium Account Foreign Currency Translation Reserve ( ) Profit and Loss Account SCHEDULE 4 : SECURED LOANS a) Long Term Secured Loan Vehicle Loans from ICICI Bank (Secured against hypothecation of Cars) Vehicle Loans from Kotak Mahindra Prime Limited (Secured against hypothecation of Cars) Vehicle Loans from Tata Capital Ltd (Secured against hypothecation of Cars) Working Capital Term Loan from Indian Overseas Bank (Secured against the personal gurantees of Directors, equitable mortgage of properties of the company and the Directors of the Company) Sub Total (a) b) Short Term Secured Loan Packing Credit with Oriental Bank of Commerce (Secured against hypothecation of Stocks and advances, equitable, mortgage of Properties and Personal guarantees of Directors) Packing Credit with Indian Overseas Bank (Secured against hypothecation of Stocks and advances,equitable, mortgage of Properties and Personal guarantees of Directors) Packing Credit with Canara Bank (Secured against hypothecation of Stocks,equitable Mortgage of Properties and Personal guarantees of Directors) Packing Credit with Indian Bank (Secured against hypothecation of Stocks,equitable Mortgage of Properties and Personal guarantees of Directors) Packing Credit with Allahabad Bank (Secured against hypothecation of current assets,equitable Mortgage of Properties and Personal guarantees of Directors) PCFC with Standard Chartered Bank (Secured against hypothecation of current assets,equitable Mortgage of Properties and Personal guarantees of Directors) Buyer's Credit from Oriental Bank of Commerce (Secured against hypothecation charge over the goods, equitable mortgage of Properties and Personal guarantees of Directors) Buyer's Credit from Indian Overseas Bank (Secured against hypothecation charge over the goods, equitable mortgage of Properties and Personal guarantees of Directors) Bank of Baroda-Overdrafts/Trust Receipts Standard Chartered Bank-Overdrafts/Trust Receipts Sub Total (b) Total (a + b) SCHEDULE 5 : UNSECURED LOANS Purchase Bill Finance from Standard Chartered Bank

69 SCHEDULES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010 SCHEDUILE 6 : FIXED ASSETS GROSS BLOCK DEPRICIATION NET BLOCK PARTICULARS As At Addition Deduction/ As At As At For the Deduction/ As At As At As At During the Adjustments Year Adjustments Year Land Building Plant & Machinery Furniture & Fixture Vehicles Computers Office Equipments & Fittings Generator Website Development Charges Trade Mark TOTAL (Current Year) TOTAL (Previous Year) P A R T I C U L A R S As At As At 31 st March, st March, 2009 Rs. Rs. SCHEDULE 7 : INVESTMENTS Fully Paid up Quoted equity shares Fully Paid up Unquoted equity shares SCHEDULE 8 : INVENTORIES (As taken, Valued and Certified by the management) Trade Stock Packing Material Goods in Transit

70 Emmsons International Ltd. SCHEDULES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010 P A R T I C U L A R S As At As At 31 st March, st March, 2009 Rs. Rs. SCHEDULE 9 : SUNDRY DEBTORS Considered good Outstanding for a period exceeding six months Other Debts Considered doubtful SCHEDULE 10 : CASH AND BANK BALANCES Cash in Hand Balances wih Schedule Banks -Current accounts EEFC accounts Margin Money deposits Accrued Interest on deposits SCHEDULE 11 : LOANS AND ADVANCES Advances recoverable in cash or in Kind or for Value to be received Security Deposits SCHEDULE 12 : CURRENT LIABILITIES Sundry Creditors Other Liabilities SCHEDULE 13 : PROVISIONS Provision for Income Tax Provision for Wealth Tax Provision for Gratuity Provision for Leave Encashment Provision for FBT Provision for Proposed Dividend Provision for Dividend Distribution Tax

71 SCHEDULES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010 P A R T I C U L A R S As At As At 31 st March, st March, 2009 Rs. Rs. SCHEDULE 14 : SALES AND OTHER INCOME Sale of Products Domestic Exports Difference in Exchange ( ) Export Incentives received Discount Received Other Incomes Forward Contract Forex Gain/ (loss) ( ) Receipt from Hotel Booking SCHEDULE 15 : COST OF GOODS SOLD Opening Stock Add: Purchases Less: Closing Stock SCHEDULE 16 : DIRECT EXPENSES Brokerage and Commission Detention, Demurrage & Claim Forward Contract Commodity loss Contract Settlements Corporation / Export Cess Final Discharge Shortage Freight & Cartage Fumigation & Phyto Expenses Godown,Ground Rent & Storage Inspection Charges Packing Charges Insurance Port Charges Processing/Sotex Charges Survey Fees Hotel Booking Charges

72 Emmsons International Ltd. SCHEDULES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010 P A R T I C U L A R S As At As At 31 st March, st March, 2009 Rs. Rs. SCHEDULE 17 : OFFICE & ADMINISTRATIVE EXPENSES Electricity & Water Expenses Gratuity (503152) Managerial Remuneration Postage and Telegram Printing,Stationery, Periodicals & Books Rent & Taxes Repairs and Maintenance Retainership & Consultancy Charges Salary and other amenities Telephone Expenses Travelling Expenses(including Foreign Travel) -Directors Others Vehicle Repair & Maintenance Expenses Miscelleneous Expenditure written off SCHEDULE 18 : FINANCIAL CHARGES Bank Charges & Interest ECGC Premium Indirect Other Interest Less: Interest received SCHEDULE 19 : SELLING & DISTRIBUTION EXPENSES Advertisement and Publicity Business Promotion Documentation Charges Discount Allowed Balances Written off SCHEDULE 20 : OTHER EXPENSES Auditor's Remuneration Festival Celebration Insurance Claim Written off Stamping & Filling Fees Legal and Professional Charges Licence & Registration Fees Loss on Sale of Fixed Assets Meeting & Seminar Expenses Membership Fees and Subscriptions Miscellanious Expenses Security Tansaction Tax Sitting Fee

73 SCHEDULE 21: SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTING TO THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT AS AT 31ST MARCH A SIGNIFICANT ACCOUNTING POLICIES 1. BASIS OF ACCOUNTING The Financial Statements have been prepared under the historical cost convention on accrual basis, in accordance with the generally accepted accounting principles in respective country of establishment. The Accounting Policies have been consistently applied by the Company unless otherwise stated. 2. USE OF ESTIMATES The preparation of financial statements is in conformity with generally accepted accounting principals requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the results of operations during the reporting period end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. 3. REVENUE RECOGNITION The accrual basis of accounting has been followed in respect of income and expenditure. Sales figures are net of sales tax. The Export Sale is recognized at the time of issuance of Bill of Lading. 4. ACCOUNTING FOR TAXES ON INCOME Tax expense comprises of current tax and deferred tax. Provision for current income tax is made on the taxable income at the applicable tax rates. The Deferred tax expense or benefit is recognized on timing differences being the difference between taxable incomes and accounting incomes that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. 5. FOREIGN CURRENCY TRANSACTIONS (i) Foreign Currency transactions during the year are recorded at the rate of exchange prevailing on the date of transaction. Foreign Currency monetary assets and liabilities are translated into Rupees at the rate of exchange prevailing on the date of the Balance Sheet except investment in shares of subsidiary company which has been carried at historic cost. All Exchange differences are dealt with in the Profit and Loss Account except for investment in overseas subsidiary. Foreign Currency monetary items are reported using the closing rate. (ii) Where the company has entered into forward exchange contracts, the difference between the forward rate and spot rate at the date of the contract is recognized in the statement of the profit and loss over the life of the contract and difference between the spot rate at the date of contract and the exchange rate prevailing on the balance Sheet date is recognized as per Accounting Standard (AS) -11 (Revised) issued by the Institute of Chartered Accountants of India. Any Profit or Loss arising on cancellation or renewal of forward exchange contract is recognized as Income or as expenses for the year. 6. FIXED ASSETS Fixed Assets are stated at cost less accumulated depreciation. The company has capitalized all costs relating to acquisition and installation of fixed assets. 7. INVENTORIES Items of Inventories are valued at cost or net realizable value, whichever is lower. 8. RETIREMENT BENEFITS Retirement and other employee benefits to employees comprise payment of gratuity, leave encashment and provident fund under the scheme of the company in respect of employee in India, due provisions has been made for gratuity and leave encashment based on actuarial valuation as prescribed in AS 15 issued by ICAI. In respect of employees outside India provisions for Liability on retirement and other benefits have been made in accordance with applicable laws of concerned countries. 9. EXPORT BENEFITS/ INCENTIVES Export Entitlements in respect of the exports made under various scheme are recognized in the Profit and Loss Account when the right to receive credit as per the terms of the Schemes are established. 10. EARNINGS PER SHARE Basic Earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted Earnings per share are not different from basic earning per share. 71

74 11. INVESTMENTS Emmsons International Ltd. Investments other than in subsidiary have been accounted as per Accounting Standard (AS) 13 on Accounting for Investment. B NOTES ON ACCOUNTS TO THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT 1. PRINCIPLE OF CONSOLIDATION The consolidated financial statements relate to Emmsons International Limited (the Company) and its subsidiaries companies, Emmsons SA & Emmsons Gulf DMCC. The consolidated financial statements have been prepared on the following basis: (a) The financial statements of the Company and its subsidiaries companies are combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intragroup balances and intra-group transactions resulting in unrealized profit or losses in accordance with Accounting Standard (AS)-21 - "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India. (b) Minority Interest's Share of the net profit of consolidated subsidiaries for the year is identified and adjusted against the income/ loss of the group in order to arrive at the net income attributed to shareholders of the Company. (c) Since the company holds 99.99% stake in the subsidiary company therefore, Minority Interest's Share of the net assets of consolidated subsidiary is identified and presented in the consolidated balance sheet under the head Reserve & Surplus together with other reserves of the group company. (d) Accounts of subsidiaries companies have been drawn up in accordance with accounting principles followed in country where subsidiaries companies has been incorporated. While consolidating results of subsidiaries companies some of the items have been re-classified so that consolidated financial statements are prepared in a manner so as to comply with accounting policies followed in India. 2. THE SUBSIDIARIES COMPANIES CONSIDERED IN THE CONSOLIDATED FINANCIAL STATEMENTS : Name of the Subsidiaries Country of Proportion of Incorporation ownership interest 1. Emmsons S.A. Switzerland 99.99% 2. Emmsons Gulf DMCC Dubai % 3. RELATED PARTIES DISCLOSURES : As required by Accounting Standard-18, "Related Party Disclosures" issued by the Institute of Chartered Accountants of India, relevant information is provided here below: Related parties with whom transactions have taken place during the year: S.NO. NAMES RELATIONSHIP A Mr. Anil Monga Key Managerial Personnel B Mr. Rajesh Monga Key Managerial Personnel C Mr. Shivaz Monga Key Managerial Personnel D Mr. Vijay Kumar Kakkar Key Managerial Personnel E Mr. Viresh Shankar Mathur Key Managerial Personnel F Mr. Mohd. Tariq Raza Key Managerial Personnel G Mr. Satish Chandra Gupta Key Managerial Personnel H Mr. Jonathan Grange Key Managerial Personnel I Mr. Kanishk Monga Key Managerial Personnel J Mrs. Manya Kumar Key Managerial Personnel s relative K M/s Emmsons S.A. Subsidiary (Control Exists) L M/s Emmsons Gulf DMCC Subsidiary (Control Exists) M M/s Star Emmsons International Ltd. Associate Concern 72

75 Following are the details of the transactions with the related parties : Nature of Transactions Related Parties Amount (Rs. in Lacs) Salaries, Allowances & Perquisites Key Managerial Personnel's Salaries, Allowances & Perquisites Key Managerial Personnel's Relatives 2.58 Sitting Fee Key Managerial Personnel's 2.60 Rent Key Managerial Personnel's 3.00 Advances by Subsidiaries Key Managerial Personnel's Advances by Subsidiaries Associate Concern ACCOUNTING FOR TAXATION OF INCOME AS PER AS - 22 As per the mandatory Accounting Standard - 22 on "Accounting for Taxes on Income" issued by the ICAI, the company has recorded the cumulative Deferred Tax Liability (Net) in respect of timing differences as at 31st March Consolidated Deferred Tax Asset/ Liability Amounts (In Rs) Deferred tax Liability Emmsons International Ltd Losses of Emmsons SA available for set off for Tax Benefit ( ) Tax Asset 21.4% of losses available for set off ( ) Company's ( ) Deferred Tax Liability as on SEGMENT REPORTING AS PER AS -17: Company is primarily engaged in business of trading accordingly company is single business segment company The geographic segments have been identified as below : (Rs. In Lacs) Current Year Previous Year India Outside India Outside India India Total Revenue Less : Inter Segment External Revenue Segment results before interest and Tax Less: Interest Expense Profit before Tax Less: Current Tax Fringe benefit Tax Deferred Tax (0.60) (10.96) (16.93) Net Profit after Tax Segment assets Segment Liabilities Capital Expenditure Depreciation EARNINGS PER SHARE Basic and diluted earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The company has not issued any potential equity share, accordingly, basic and diluted earnings per share are the same. 73

76 Emmsons International Ltd. S.No Particulars Current Year Previous Year a Profit after taxation and exceptional items (Rs.) b Weighted average number of shares outstanding during the year c Nominal Value Per Share (Rs.) d Basic and diluted earning per share (In Rs.) d = (a/b) Contingent Liabilities not provided for (Amounts Rs. In Lacs) a) Guarantees to sales tax authorities : Rs (Previous year Rs.5.90) b) Corporate Guarantees for Credit facilities to subsidiary : Rs (Previous year Nil) c) Letter of Credit issued for purchases : Rs (Previous year 21.23) d) Other Guarantees : Rs (Previous year Rs ) e) The Entry Tax demands Rs lacs raised by the authorities have been protested by the company and final determination is yet to be made by the appellate authorities. The company has however made the payment against these demands under protest and the same is included in the list of Loans and advances. In the event case is finally decided against the Company the said amount of Rs Lacs shall be required to be charged as an expense to Profit & Loss account. f) Tax Demands totaling Rs Lacs raised by the Income Tax Department is being contested by the Company in appeal. No provision has been made for the liability in the accounts under report. 8. The Company has entered into agreement of purchase of semi finished flat and has spent Rs lacs on construction and shown under the head Capital work in progress. Future expenses to be incurred on said flat are estimated at Rs. 25 lacs. 9. The Previous year Figures have been re-arranged and re grouped wherever necessary to make them comparable with those of current year. 10. Schedule No. 1 to 20 form integral part of the consolidated Balance Sheet and profit & Loss Account ended on 31st March, For SURESH & ASSOCIATES FRN: N For and on behalf of Board Chartered Accountants Sd/- Sd/- Sd/- Sd/- Sd/- (CA NARENDRA ARORA) (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA) Partner GM - Finance Company Secretary Director Managing Director M. No Date : 17th August, 2010 Place : New Delhi 74

77 EMMSONS INTERNATIONAL LIMITED 2637, FIRST FLOOR, NAYA BAZAR, DELHI PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL NAME AND ADDRESS OF THE SHAREHOLDER ATTENDANCE SLIP Master Folio No. No. of Shares held : I/We hereby record my/our presence at the 17th ANNUAL GENERAL MEETING of the Company held on Wednesday, the 29th day of September, 2010 at A.M. at Niryat Bhawan, Rao Tula Ram Marg, Opp. Army Hospital Research & Referral, New Delhi ( ) ( ) NAME OF THE SHAREHOLDER OR PROXY Signature of the Shareholder or Proxy (In Block Letters) PROXY FORM EMMSONS INTERNATIONAL LIMITED 2637, FIRST FLOOR, NAYA BAZAR, DELHI I/We of being a member/members of EMMSONS INTERNATIONAL LIMITED appoint of or falling him/her of as my/our proxy to attend and vote for me/us and on my/our behalf at the 17th ANNUAL GENERAL MEETING of the Company held on Wednesday, the 29th day of September, 2010 at A.M. at Niryat Bhawan, Rao Tula Ram Marg, Opp. Army Hospital Research & Referral, New Delhi and at any adjournment thereof. Signed this day of Affix a Rupee One Revenue Stamp Note : This Proxy in order to be effective should be duly stamped, completed and signed and must be deposited at the Registered Office of the Company not less than 48 hours before the time for holding the aforesaid meeting. The proxy need not be a member of the Company. NO GIFTS WILL BE GIVEN AT THE ANNUAL GENERAL MEETING. 75