CORPORATE INFORMATION

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2 LOHIA SECURITIES LTD. CORPORATE INFORMATION BOARD OF DIRECTORS Mr. Hari Kishan Lohia Mr. Mahesh Kumar Bajaj Mr. Vineet Goenka Mr. Sameer Bajaj Mr. Rajesh Kumar Bajaj - Managing Director Mr. Sudheer Kumar Jain - Whole-time Director BANKERS HDFC Bank Ltd. Oriental Bank of Commerce United Bank of India Allahabad Bank Federal Bank CITI Bank N.A. Standard Chartered Bank Punjab National Bank ICICI Bank Ltd. Axis Bank Ltd. COMPANY SECRETARY Mr. Narendra Kumar Rai REGISTERED OFFICE 6, Lyons Range 1st Floor Kolkata AUDITORS PATNI & CO. Chartered Accountants 1, India Exchange Place 2nd Floor, Room No. 219 Kolkata REGISTRAR AND SHARE TRANSFER AGENTS M/s. Niche Technologies Pvt. Ltd. D-511, Bagree Market 71, B. R. B. B. Road Kolkata Annual Report

3 LOHIA SECURITIES LTD. CONTENTS Lohia Securities Ltd. Notice 3-8 Directors Report 9-12 Management Discussion & Analysis Report on Corporate Governance Auditors Report Balance Sheet 28 Profit & Loss Account 29 Cash Flow Statement 30 Schedules to Accounts Balance Sheet Abstract 53 Statement u/s Subsidiaries Trade City Securities Pvt. Ltd Trade City Commodities Pvt. Ltd Trade City Real Estate Pvt. Ltd Trade City Barter Pvt. Ltd Consolidated Financial Statement Financial Snapshot & Graph Annual Report

4 LOHIA SECURITIES LTD. NOTICE NOTICE is hereby given that the 16th Annual General Meeting of the Members of Lohia Securities Limited will be held on Saturday, the 25th day of September, 2010 at 4 Brabourne Road, 5th floor, Kolkata at A.M. to transact the following business: Ordinary Business: 1 To consider and adopt the Accounts of the Company for the financial year ended 31st March 2010, the Balance Sheet as at that date and reports of the Directors and Auditors thereon. 2. To declare dividend on ordinary shares for the year ended 31st March, To appoint a Director in place of Mr. Mahesh Kumar Bajaj, who retires by rotation and being eligible, offers himself for reappointment. 4. To appoint a Director in place of Mr. Sameer Bajaj, who retires by rotation and being eligible, offers himself for reappointment. 5. To consider and, if thought fit, to pass the following resolution, with or without modification(s) as Ordinary Resolution: Resolved that M/s Patni & Co., Chartered Accountants, be and are hereby re-appointed as Statutory Auditors of the Company to hold office from the conclusion of this meeting until the conclusion of next Annual General Meeting of the Company, on such remuneration as may be decided by the Board of Directors of the Company. Special Business: 6. To consider and, if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution: "RESOLVED THAT pursuant to the provisions of Section 17 and other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modifications or re-enactment thereof for the time being in force), and subject to the necessary approvals, required if any in this regard from appropriate authorities, and subject further to such other terms, conditions, stipulations, alterations, amendments or modifications as may be required, specified or suggested by any of such appropriate authorities; which terms, conditions, stipulations, alterations, amendments or modifications, the Board of Directors (hereinafter referred to as "the Board", which term shall include any of its duly authorised Committee or individual Director) is hereby authorised to accept as it may deem fit; consent of the members of the Company be and is hereby accorded for alteration of the existing Main Object Clause of the Company, i.e. Clause 3A of the Memorandum of Association of the Company in the following manner: The following new sub-clause (4) be inserted after the sub-clause (3) under the main object clause of the Company, i.e. Clause 3A (4) of the Memorandum of Association; (4) To undertake Depository Participant activities, functions and responsibilities and such other activities which are incidental or ancillary to the same." RESOLVED FURTHER THAT the existing Memorandum of Association of the Company, duly modified as aforesaid, or as suggested by any appropriate authority and accepted by the Board, be adopted as the Memorandum of Association of the Company. RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board, be and is hereby authorised to do all such acts, deeds, matters and things as may be deemed necessary and settle any or all questions / matters arising with respect to the above matter, and to execute all such deeds, documents, agreements and writings as may be necessary for the purpose of giving effect to this resolution, take such further incidental and ancillary steps in this regard, as may be considered desirable or expedient by the Board in the best interest of the Company and its shareholders." 7. To consider and, if thought fit, to pass with or without modification(s) the following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309, 310 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, and subject to the approval of the Central Government, if required, the Company hereby accords its approval to the revision in remuneration payable to Mr. Rajesh Kumar Bajaj, Managing Director with effect from 1st April, 2010 as set out in the Explanatory Statement annexed to this Notice. Annual Report

5 LOHIA SECURITIES LTD. NOTICE (Contd.) 8. To consider and, if thought fit, to pass with or without modification(s) the following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, the Company hereby accords its approval to the re-appointment of Mr. Rajesh Kumar Bajaj as Managing Director of the Company for a period of five years with effect from 24th September, 2010, on the terms and conditions including those relating to remuneration as set out in the Explanatory Statement annexed to this Notice. 9. Appointment of Mr. Mayank Bajaj under Section 314(1B) for holding office or place of profit To consider and if thought fit, to pass with or without modification, the following resolutions as SPECIAL RESOLUTION: "RESOLVED THAT pursuant to Section 314 and other applicable provisions, if any, of the Companies Act, 1956 including statutory modification or re-enactment thereof for the time being in force and as may be enacted from time to time and subject to such approvals, permissions and sanctions, if required and as may be necessary, the consent of the Company be and is hereby accorded to Mr. Mayank Bajaj, who is a relative of a Director to hold an office or place of profit under the Company as Research Head or with such designation as the Board of Directors of the Company may, from time to time, decide upon a monthly basic salary and other allowances, benefits, amenities and facilities with effect from April 1, 2010 upto the monthly remuneration of Rs.45,000/- or such other permissible total monthly remuneration that may be prescribed in this behalf from time to time under Section 314 of the Companies Act, RESOLVED FURTHER THAT pursuant to Section 314 and other applicable provisions, if any, of the Companies Act, 1956 including statutory modification or re-enactment thereof for the time being in force and as may be enacted from time to time, the Directors' Relatives (Office or Place of Profit) Rules, 2003 and as recommended/approved by the Remuneration Committee at its Meeting held on July 30, 2010 and as approved by the Board of Directors at their Meeting held on July 30, 2010 and subject to such approvals including the approval of the Central Government, as may be required, the consent of the Company be and is hereby accorded to Mr. Mayank Bajaj, who is a relative of a Director to hold an office or place of profit under the Company as Research Head or with such designation as the Board of Directors of the Company may, from time to time, decide, for his appointment and revision of his remuneration for a period of five years from October 1, 2010, upto a maximum remuneration (excluding reimbursement of expenses, if any) of Rs. 12,00,000/- (Rupees Twelve Lacs only) per annum as set out in the explanatory statement attached hereto which shall be deemed to form part hereof with liberty and authority to the Board of Directors to alter and vary the terms and conditions of the said appointment and remuneration from time to time. "FURTHER RESOLVED THAT the Board of Directors of the Company be and is hereby authorised to promote him to higher cadres and/or to sanction him increments and/or accelerated increments within the said cadre or higher cadre as and when the Board of Directors deem fit, subject, however, to the rules and regulations of the Company, in force, from time to time, including with the approval of the Central Government, as may be required, pursuant to the provisions of Section 314(1B) and other applicable provisions of the Companies Act, "RESOLVED FURTHER THAT the Board of Directors of the Company be and they are hereby authorised to take, perform and execute such further steps, acts, deeds and matters, as may be necessary, proper or expedient to give effect to this resolution. FURTHER RESOLVED THAT the Board of Directors of the Company be and is hereby authorised to agree to such modification and/or variation as may be suggested by the Central Government while granting its approval. Place : Kolkata Date : 30th July, 2010 By Order of the Board For Lohia Securities Limited Narendra Kr. Rai Company Secretary 4 - Annual Report

6 LOHIA SECURITIES LTD. NOTICE (Contd.) Notes : 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING (AGM) MAY APPOINT A PROXY TO ATTEND AND VOTE ON A POLL ON HIS/ HER BEHALF. THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXIES, IN ORDER TO BE EFFECTIVE, MUST BE RECEIVED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN FORTY-EIGHT HOURS BEFORE THE COMMENCEMENT OF THE MEETING. 2. The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, 18th September, 2010 to Saturday 25th September, 2010 (both days inclusive). 3. As per recommendations of SEBI Committee on Corporate Governance for appointment of the Directors/ re-appointment of the retiring Directors, a statement containing details of the concerned Directors are attached herewith. 4. Dividend on equity shares, if declared at the meeting, will be made payable on or after 29th September, 2010 in respect of shares held in physical form to those members whose names appear in the Register of Members of the Company after giving effect to all valid share transfers lodged with the Company as at the end of business hours on 17th September, 2010 and in respect of shares held in the electronic form to those Deemed Members whose names appear in the statement of Beneficial Ownership furnished by the National Securities Depository Ltd. (NSDL) and the Central Depository Services (India) Ltd. (CDSL). 5. Members/ Proxies are requested to bring their Attendance Slip alongwith their copies of the Annual Report and Accounts to the Meeting. 6. Members seeking any information as regards the Accounts are requested to write to the Company at least one week in advance so as to enable the Management to keep the information ready. 7. Members who are holding Company s shares in dematerialized form are requested to bring details of their Depository Account number for identification. 8. Members holding shares in physical form are requested to notify/ send the following to company s Registrar and Share Transfer Agent- M/s. Niche Technologies Pvt. Ltd., D-511, Bagree Market, 71, B.R.B.B. Road, Kolkata i) Any change in their address/ mandate/ bank details ii) iii) Particulars of their bank account, in case the same have not been sent earlier, and Share certificate(s), held in multiple accounts in identical order of names, for consolidation of such shareholdings into one account. 9. Shareholders holding shares in electronic form may kindly note that their bank account details as furnished by their depositories to the Company will be printed on their dividend warrants as per the applicable regulations of the depositories. Members are requested to notify any change in their bank account details to their Depository Participants immediately and not to send requests for change in their bank account details directly to the Company or to the Registrar and Share Transfer Agent. 10. Members are informed that dividends remaining unclaimed/ unpaid over a period of seven years shall be transferred to the Investor Education and Protection Fund of the Central Government. Members who have not encashed their dividend warrant(s)/ cheques are requested to make their claims to the Company before the expiry of the statutory period of seven years. Annual Report

7 LOHIA SECURITIES LTD. NOTICE (Contd.) 11. Members desirous of making a nomination in respect of their shareholding in the Company, as permitted under Section 109A of the Companies Act, 1956, are requested to submit the prescribed Form 2B for this purpose to the Registrar and Share Transfer Agent of the Company. 12. Transaction at Sl. no. 6 requires consent of shareholders through postal ballot. 13. Securities and Exchange Board of India vide its circulars dated 27th April, 2007 and 25th June, 2007 has made its mandatory with effect from 2nd July, 2007, for every participant in the securities/ capital market to furnish income tax Permanent Account Number (PAN). Accordingly, all the shareholders (including joint holders) holding shares in physical form are requested to submit copy of their PAN Card duly attested by the Notary Public/ Gazetted Officer/ Bank Manager under their official seal stating their full name and address, registration number to our Registrar & Share Transfer Agent, M/s. Niche Technologies Pvt. Ltd. ANNEXURE TO THE NOTICE EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, RESOLUTION NOS. 3 & 4 Reappointment of Directors: Pursuant to the provisions of Articles of Association Mr. Mahesh Kumar Bajaj and Mr. Sameer Bajaj, Directors are retiring at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The brief resumes of all these directors and other information as per clause 49 of the Listing Agreement with the Stock Exchange are provided elsewhere in the Annual Report. RESOLUTION NO. 6 Alteration of Object Clause Members are aware that Lohia Securities Limited (LSL) is a depository participant of National Securities Depository Limited (NSDL) and Central Depository Services (India) Ltd. (CDSL) from The said registrations as depository participant are due for renewal and CDSL and NSDL have requested the Company to include specific object clause entitling the Company to undertake services of depository participant. In view of the above and to enable the Company to continue with the activities of depository participant, it is proposed to alter the Main Object Clause of the Memorandum of Association of the Company, by inserting certain new activities relating to depository participant in the main object clause, i.e. Clause 3 A (4) as stated in the proposed special resolution. This is in accordance with the provisions of Section 17 of the Companies Act, 1956 and hence the special resolution is proposed for your approval. Further, in view of the requirements of Section 192A of the Act, the proposed resolution is being placed for your approval through postal ballot. The proposed new object will enable the Company to carry on its business more economically and efficiently, and by new or improved means, as envisaged in Section 17 of the Companies Act, A copy each of the existing Memorandum of Association and a new set of the Memorandum of Association after incorporating the proposed alterations in its object clause will be available for inspection of the members at the Registered Office of the Company on all working days, including the date of the meeting between 10:30 a.m. to 1:00 p.m. and during the tenure of the meeting. None of the Directors of the Company is any way concerned or interested in the aforesaid Special Resolution. Your Directors consider the said resolution in the interest of the Company and therefore recommends the same for your approval. 6 - Annual Report

8 LOHIA SECURITIES LTD. NOTICE (Contd.) RESOLUTION NO. 7 and 8 Appointment and fixation of remuneration of Managing Director: Mr. Rajesh Kumar Bajaj has been associated with the Company since its incorporation. Mr. Bajaj was appointed Director of the Company on 18th January, Later on Mr. Bajaj was appointed the Managing Director of the Company with effect from September 28, 2000, for a period of five years with the approval of the Shareholders. Subsequently, he was reappointed the Managing Director for a term of five years for the period from September 24, 2005 to September 23, The said remunerations were further revised at the General Meeting of 27th September, 2006, 27th September, Your Board proposes to re-appointment Mr. Rajesh Kumar Bajaj. The terms of remuneration as recommended for Mr. Bajaj at the meetings of the Remuneration Committee/ Board of Directors are as under: Particulars of Remuneration Salary (per month) Mr. Rajesh Kumar Bajaj, Managing Director Salary of Rs. 1,25,000 per month (from 1st April, 2010) in the pay scale of Rs. 1,25,000-2,00,000. Allowances i) Medical: Reimbursement of all medical and hospitalization expenses for self and family restricted to Rs.15000/- per annum; ii) Provision of Car: Provision of car (subject to recovery of an amount from salary as per the provisions of Income Tax Act, 1961 for personal use of the car) iii) Provision of Communication Facilities at Residence: Telephone at residence for use on Company business; other media, internet connection and such other communication facilities at residence for use on Company business; Minimum Remuneration Revision in Remuneration Termination of Appointment Retirement by Rotation Where in any financial year, during the currency of the tenure, the Company has no profits or its profits are inadequate, the remuneration by way of salary and perquisites shall not exceed the limits specified in Schedule XIII of the Companies Act, 1956 or any subsequent modification thereof. The aforesaid remuneration including salary, allowances, commission, perquisites, etc. may be increased by the Board of Directors/ Remuneration Committee as may be considered appropriate from time to time as well as in the event of any statutory amendment, modification or relaxation by the Central Government to Schedule XIII of the Companies Act, 1956, within such prescribed limits. The appointment shall be terminable by three months' notice or by payment of three months' salary in lieu of notice by either party. The appointment shall not be subject to retirement by rotation. No sitting fees shall be paid for attending meetings of the Board of Directors or any Committee thereof. The Board/ Remuneration Committee has recommended the above revision of salary with effect from 1st April Annual Report

9 LOHIA SECURITIES LTD. NOTICE (Contd.) Shri Rajesh Kumar Bajaj is interested in the proposed resolution at item no(s). 7 and 8 above to the extent of his appointment, remuneration, and benefits he would enjoy. The resolution given under the items nos. 7 & 8 and this explanatory statement taken together, may be construed as an Abstract and Memorandum of Concern and Interest under Section 302 of the Companies Act, RESOLUTION NO. 9 Appointment to the Office of Profit Mr. Mayank Bajaj has completed Masters in Business Administration from ICFAI University, Hyderabad. He further holds a Bachelor of Commerce degree from the St. Xavier College, Kolkata. He has obtained Honours degree in Accounts and Finance through University of Calcutta. Mr. Mayank Bajaj is working as a Research Head in our Company since April 1, 2010 on a monthly remuneration of Rs.45,000/- including usual allowances, and perquisites and benefits, amenities and facilities applicable to other employees in the similar post within the same grade which is well within the permissible limit of Rs.50,000/- per month subject to the approval of the Shareholders in the ensuing Annual General Meeting of the Company. He is son of Mr. Mahesh Kumar Bajaj, Director of the Company. However, he has not drawn any remuneration from the Company till date. Mr. Mayank Bajaj's current salary is not commensurate with the role and responsibility carried out by him. Hence, on the recommendation/ approval by the Remuneration Committee at its Meeting held on July 30, 2010, the Board of Directors at their Meeting held on July 30, 2010 approved him maximum upper limit of remuneration (excluding reimbursement of expenses, if any) at Rs. 12,00,000/- (Rupees Twelve Lacs only) per annum for a period of five years from October 1, 2010, subject to the approval of the Shareholders in the ensuing Annual General Meeting and of the Central Government. Further the Board shall have discretion and authority to revise his remuneration from time to time as it may deem fit, however within the above overall limit as approved by the members and by the Central Government. Payment of remuneration to a relative of director exceeding Rs.50,000 per month attracts provisions of Section 314(1B) of the Companies Act, 1956 and requires prior consent of the shareholders of the Company by way of a Special Resolution and approval of Central Government. Mr. Mayank Bajaj being son of Mr. Mahesh Kumar Bajaj, Director of the Company, consent of the shareholders is being sought for the special resolution as proposed in the Notice for the overall limit and to authorize the Board for payment of remuneration to Mr. Mayank Bajaj within the limit. All other terms and conditions will be on the same lines as those applicable to other employees of the Company in the same grade as of Mr. Mayank Bajaj. His basic salary with effect from April 1, 2010 (including Bonus) and other Allowances, etc (excluding reimbursement of expenses) amounts approximately to Rs Lac per annum, which is well within the maximum limit of Rs. 6,00,000/- per annum. The Board of Directors recommends the passing of the resolutions at Item No.9 of the Notice convening the Meeting for the approval of the Members under Section 314 of the Companies Act, 1956 by way of a special resolution. The Company shall file an appropriate application with the Central Government for approval. The revision in remuneration will be effective only after obtaining all necessary approvals in this regard. Mr. Mahesh Kumar Bajaj being his relative is concerned or interested in the resolution at Item No.9 of the Notice. Place : Kolkata Date : 30th July, 2010 By Order of the Board For Lohia Securities Limited Narendra Kr. Rai Company Secretary 8 - Annual Report

10 LOHIA SECURITIES LTD. DIRECTOR S REPORT Dear Shareholders, Your Directors have pleasure in presenting the 16th Annual Report and the Audited Accounts of your Company for the financial year ended 31st March, FINANCIAL HIGHLIGHTS Financials of the Company on the Standalone basis: The Profit and loss account of your Company on standalone basis shows a profit after tax of Rs lakhs (Previous Year: Loss of Rs lakhs). The disposable profit is Rs lakhs (Rs lakhs) after taking into account the balance of Rs lakhs (Rs lakhs) brought forward from the previous year. The brief financial highlights are as below: Particulars Current Year ended (Rs. in lakhs) Previous Year ended (Rs. in lakhs) Gross profit before interest, depreciation Less : Interest Depreciation Profit before Tax Less : Provision for Taxes Current Tax Income TAx for Earlier Years Provision for Fringe Benefit Tax Securities Transaction Tax Paid Provision for Deferred Tax Profit / (Loss) after Tax (290.71) Add Balance in Profit and Loss Account Amount Available for Appropriation Appropriation : Proposed Dividend on Equity Shares Tax on Dividend Balance carried to Balance Sheet Earnings per Share 3.96 (5.83) DIVIDEND The Directors of your Company are pleased to recommend a dividend of Re.1.00 per equity shares i.e. 10% (Previous year 10%) on par value of Rs.10/- each for the year ended 31st March, As, the Company will also pay a dividend tax of % (Previous year %), the total dividend outgo will be Rs lacs (Previous year Rs lacs). Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, the declared dividend which remained unpaid/ unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund established by the Central Government pursuant to Section 205C of the said Act. OPERATIONS: Operating Income for the period ended 31st March, 2010 was Rs lakhs as compared to Rs lakhs for the period ended 31st March, 2009 resulting in annualized increase of 53.37%. Operating Profit (Earnings before interest, depreciation and income tax) for the period ended 31st March, 2010 was Rs lakhs as against Rs lakhs for the year ended 31st March 2009 with annualized increase at %. Annual Report

11 LOHIA SECURITIES LTD. DIRECTOR S REPORT (Contd.) The Company has earned Profit before Tax of Rs lakhs (as compared to last year s Rs lakhs) after meeting interest expenses of Rs lakhs (last year s Rs lakhs) and depreciation of Rs lakhs (last year s Rs lakhs) for the year ended 31st March, The Net Profit for the year was Rs lakhs (as compared to last year s net loss of Rs lakhs). In view of the meager profit earned during the year your Board has decided not to transfer anything from Profit & loss account to General Reserve this year (Previous year -Nil). SUBSIDIARY COMPANIES & CONSOLIDATED RESULTS OF OPERATIONS As on 31st March, 2010, Lohia Securities has four 100% subsidiaries. Details of their business and operations are given below:- Trade City Securities Private Limited has a Trading Membership of NSE in Capital and F&O Segment. Your Board has decided not to transfer the trading right of CSE to Trade City Securities Pvt. Ltd.- as per the permission granted by the shareholders at the last AGM. The said subsidiary company is acquiring membership of BSE directly. Trade City Commodities Private Limited is a member of NCDEX, NCDEX Spot, MCX and ICEX and is engaged in Commodity trading and registered with FMC. It has recently acquired membership of India Commodity Exchange Limited (ICEX). Trade City Real Estate Private Limited is engaged in property and real estate business. It is also investing surplus moneys in shares and securities. Trade City Barter Private Limited is a non-banking finance company and is engaged in investment and financing activities. The Total Group Profit earned after tax was lakhs as against loss of Rs lakhs of last year. During the year under review, Trade City Securities Pvt. Ltd., the material non-listed 100% subsidiary company has earned the revenue of Rs lakhs. The Statement pursuant to section 212 of the Companies Act, 1956 containing details of the Company s subsidiaries is attached. The Consolidated Financial Statements of your Company and its subsidiaries prepared in accordance with Accounting Standard- 21 prescribed by the Institute of Chartered Accountants of India, form part of the Annual Report and the Accounts. The Copies of the Balance Sheet, Profit & Loss Account, Reports of the Board of Directors and Auditors of the subsidiaries have been attached with the Balance Sheet of the Company. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, the directors hereby confirm that: i) in the preparation of the annual accounts, applicable accounting standards have been followed and that there are no material departures from the same. ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2010 and of the profit of the company for the year ended on that date. iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) the directors have prepared the annual accounts on a going concern basis. PUBLIC DEPOSITS The company has not accepted any deposit from the public or from employees during the year under review. DIRECTORS In accordance with the provisions of the Companies Act, 1956 and Article 90 of the Articles of Association of the Company, Mr. Mahesh Kumar Bajaj and Mr. Sameer Bajaj retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. The term of appointment of Mr. Rajesh Kumar Bajaj as a Managing Director of the Company for a period of 5 years 10 - Annual Report

12 LOHIA SECURITIES LTD. DIRECTOR S REPORT (Contd.) expires on 24th September, Your Board recommends his re-appointment on the terms and conditions stated in the notice calling the Annual General Meeting. You may note that the monthly remuneration of Mr. Rajesh Kumar Bajaj has been revised to Rs.1,25,000 from the existing remuneration of Rs.1,00,000. Brief resume of the Directors proposed to be re-appointed, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships/ chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreement with the stock exchange, are provided with the Annexure to the Notice of Annual General Meeting. Your Board of Directors has recommended their re-election. AUDITORS: M/s. Patni & Co., Chartered Accountants, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, AUDITORS REPORT: The statutory auditors of the Company submitted their report on the accounts of the Company for the accounting year ended 31st March, 2010, which was self explanatory and needed no comment. PARTICULARS OF EMPLOYEES : A statement of particulars of the employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (particulars of employees) Rules, 1975 is given below: Persons employed for full/ part of the year ended March 31, 2010 who were in receipt of remuneration which in aggregate was not less than Rs.24,00,000/- p.a. or Rs.2,00,000/- p.m. respectively: Name of Employee and Designation Qualification Remuneration (Rs.) Age and Experience (in Yrs.) Date of Commencement of employment in the Company Previous Employment held before joining the Company Mr. Pawan Kumar Bothra, Incharge of Arbitrager BCOM 16,75,269/- 33 years, 9 yrs. 01/09/2008 Self Employed CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION: The company has no activity relating to conservation of energy or technology absorption, details of which are required to be furnished in this report as per the provision of Section 217(1)(e) of the Companies Act, FOREIGN EXCHANGE EARNINGS AND OUTGO: Total Foreign Exchange used and earned are as below (Rs. in lakhs) Expenditure in Foreign Currency Particulars Conference Fees (including traveling expenses for conference) Books & Periodicals Examination Fees Total Annual Report

13 LOHIA SECURITIES LTD. DIRECTOR S REPORT (Contd.) Inflow in Foreign Currency Particulars Refund of Software Expenses Refund of Conference Expenses Total CORPORATE GOVERNACE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT Your Directors affirm their commitment to the Corporate Governance standards prescribed by the Securities Exchange Board of India (SEBI). Corporate Governance and Management Discussion and Analysis Report are set out as separate annexure to this report. The certificate of the Auditors, Messrs. Patni & Co., confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Calcutta Stock Exchange is contained elsewhere in the Annual Report. POSTAL BALLOT During the financial year , the members approved the proposals through postal ballot: for transfer of trading rights arising out of the membership of the Calcutta Stock Exchange Limited to 100% subsidiary company M/s. Trade City Securities Private Limited. However, the said subsidiary has made direct application for the membership of BSE. Consent of the members has been sought throuhg postal ballot for alteration in the Main Object Clause of the Memorandum of Association by insertion of activities of a depository participant. ACKNOWLEDGEMENTS The Directors express their gratitude for the guidance and cooperation received from the Central Government, West Bengal Government, SEBI and other government regulatory agencies. Your directors thanks all the valued clients, sub-brokers, shareholders, banks, financial institutions, stock exchanges, depositories and other stake holders for their patronage and support and take this opportunity to express their appreciation of the dedicated and committed team of employees of the Company. For and on behalf of the Board of Directors Rajesh Kumar Bajaj Sudheer Kumar Jain Kolkata, the 30th day of July, 2010 Managing Director Whole-time Director 12 - Annual Report

14 LOHIA SECURITIES LTD. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Industry Structure and Developments The Indian economy is back on track and poised to grow by 7.2% in , higher than 6.7% in the previous year. The strong industrial recovery and continuing momentum in service sector is the key underlying strength behind the higher growth. On the agricultural front, decline in farm output is expected to be contained at around-0.2% against growth of 1.6%in , due to good ravi harvest, partially offsetting the kharif losses suffered because of the worst South West Mansoon since There were movements in the Capital markets during the year. The National Stock Exchange (NSE) Index (S&P CNX Nifty) which was at points in March 2009, moved to points in March 2010, registering a increase of 73.76%. The Bombay Stock Exchange (BSE) Sensitive Index (Sensex) also registered increase of 80.54% from points to points during the same period. In the month of March 2010, BSE Sensex reached points and NSE S&P CNX Nifty reached (in March 2010). The lowest BSE sensex was and NSE (S&P CNX Nifty) Index was in the month of April Thus, there was a fluctuation of % between High and Low in BSE Sensex during the year and 79.71% between NSE s High and Low. In the NSE trading volume for CM segment during the year was Rs.21,44, crore as compared to previous year Rs.27,49,450 crore. The F&O segment of NSE has achieved a trading value of Rs.176,63,663 crore during the year as compared to Rs.110,10,482 crore of the year BSE registered total equity turnover during of Rs.13,78, crore compared to previous year s 11,00, crore. In F&O BSE had a turnover of Rs crore during the year agst. previous year s Rs crores. Your Company has a note-worthy presence in the eastern region of the Indian Capital Market with Trading and Clearing Corporate Membership of the National Stock Exchange (Capital Market Segment as well as Derivative Market Segment), Membership of the Calcutta Stock Exchange and Dealership of the OTC Exchange of India and Deposit based membership of Bombay Stock Exchange Limited. Your Company is also a Clearing and Trading Member of F&O Segment of BSE. Your Company has acquired trading cum clearing membership of Currency Derivative of NSE and trading membership of Exchange Traded Currency Derivative (ETCD) of BSE. Your Company is also acquiring Membership of Currency Derivative of MCX Stock Exchange. The stock broking and depository services have huge growth opportunities due to existing low penetration levels. However, these businesses are facing tremendous competitive pressures and regulatory compliances. As per SEBI, there were 8652 brokers (Cash market), 4079 corporate brokers, sub-brokers, 1587 Derivative Brokers (Trading and Clearing members) and 714 Depository participants as on Stockbrokers and Depository Participants have to comply with various laws. The advances in technologies have also affected these businesses. Your Company is gearing up well to face all such developments by increasing its reach across geographical areas and client segments, improving its infrastructure and technological, financial and human resources. Opportunities and Threats Your Company has diversified into other businesses by acquiring/ promoting subsidiary companies. It has acquired 100% stake in (a) Trade City Commodities Private Limited-engaged in Commodity Trading, (b) Trade City Real Estate Private Limited-Property Dealing (c) Trade City Securities Private Limited-Share broking with Membership of NSE-Cash and Derivative Segment -especially in retail business, (d) Trade City Barter Private Limited- an NBFC Company. Your Company has started trading activities on Currency Derivative of MCX Stock Exchange on proprietary basis. The Company is concentrating its activities to a cross section of society across India by opening branches in Kolkata, Mumbai, Patna, Giridih, Gauwahati and Purulia. It is providing professional, value added, comprehensive and integrated financial and wealth management solutions across equities, derivatives, and depository segments. This feature helped the Company in generating more business than its competitors. The entry of large broking houses and banking companies with huge financial stake, is posing a threat to the Company. However, the stringent regulatory and government policies have made the expansion of the business tough. Activities- wise performance Your Company has performed satisfactorily despite the recession in the economy and stiff competition. During the year, the Broking & Trading activities of the Company posted a gross revenue of Rs lacs as compared to Rs lacs for the year ended resulting in annualized increase of 53.29%. The Depository managed to bring in revenue of Rs lacs during the year as compared to Rs lacs of last year (an increase of 62.65%). Outlook The Company is now well prepared to grow its business in spite of the competitive environment it is facing. All out efforts are being made to keep the expenses under check so that resources could be deployed more gainfully. The Company is encouraging its workforce to acquire more and more knowledge about the market and intermediation works. Your Board expects that the positive industrial growth trends are likely to continue in current fiscal. Your Company has an active role in trading in capital as well as derivative market. With increase in volume in both the markets, better price discovery is expected and Annual Report

15 LOHIA SECURITIES LTD. MANAGEMENT DISCUSSION AND ANALYSIS REPORT (Contd.) it may enable the Company to earn better revenue through its trading activities. With the separation of trading operations and accounting and back office operations, the personals and the equipments would concentrate on the core area of operations. The reduction of burden of machines in general and server etc. in particular would help the Company in the long run. Now, the system personnel would concentrate in the proper maintenance of all the equipments. Again, the shifting of retail business to one of the subsidiary company has helped the Company to concentrate in its core activity i.e. arbitrage business Risks and Concerns Your Company recognizes the importance of a comprehensive Risk Management system. This system will help not only to meet and comply with regulatory requirements but also to bring about an improvement in asset quality and profitability. It will eventually increase the shareholders value. The Market Risk and Operational Risk, need to be identified, assessed, controlled and managed for effective and efficient operation. Your Company has endeavored to bench-mark its Risk Management System on lines of market best practices and emerging regulatory norms. A comprehensive risk evaluation methodology and processes for early identification and mitigation of all kinds of risks being in place, except for unforeseen circumstances and marginal exposure to financial risk in retail capital markets division, your Company is quite a risk free business. Internal Control System The Company has an adequate system of internal control implemented by the management towards achieving efficiency in operations, optimum utilization of resources and effective monitoring thereof and compliance with applicable laws. The philosophy of the Company with regard to internal control systems and their adequacy has been formulation of effective systems and their implementation to ensure that assets and interests of the Company are safeguarded with required checks and balances in place to determine the accuracy and reliability of accounting data. The Company has an independent appraisal function to examine and evaluate the adequacy and effectiveness of the Company s internal control system. It appraises periodically about its activities and audit findings to the Audit Committee, Statutory Auditors and top management. Internal Audit ensures that systems are designed and implemented with adequate internal controls commensurate with the size and operations; transactions are executed in accordance with the Company s policies and authorisation. The internal audit department undertakes extensive programmes of both pre and post audit checks and reviews and also carries out regular follow-up on observations made. The Audit Committee of the Board reviews the internal audit reports and the adequacy of internal control. Discussion on financial performance with respect to operational performance During the year due to poor participation of retail investors in Indian Capital Market, the Company could not be able to attain expected performance. Clear understanding of business dynamics, emphasis on efficient recovery system alongwith an integrated approach to risk management has enabled the Company to make the best use of the available resources and achieve better results. The management s relentless focus was on assets productivity, strengthening of internal efficiency, cost consciousness and improved realization on turnovers. During the year under review, the Operating Income of the Company for the period ended 31st March 2010 was Rs lakhs as compared to Rs lakhs for the period ended 31st March 2009 resulting in annualized increase of 53.37%. Operating Profit (Earnings before interest, depreciation and income tax) for the period ended 31st March, 2010 was Rs lakhs as against profit of Rs lakhs for the year ended 31st March 2009 with annualized increase at %. Material developments in human resource, industrial relation including number of people employed The relations between the Management and the Employees at various levels have been quite cordial. To improve efficiency and for a more effective manpower utilisation, the Company has been constantly providing opportunities for learning and competitive remuneration. A challenging work environment has always been encouraged so as to create awareness amongst the employees for evaluation of their performance against the demanding standards. The employees are encouraged to improve their performance. They are provided training on the job as well as outside. Periodic group and individual meetings are conducted with employees and their feedback taken. The actual number of persons employed in the Company as on 31st March, 2010 were 111 (previous year: 153). For and on behalf of the Board of Directors Rajesh Kumar Bajaj Sudheer Kumar Jain Kolkata, the 30th day of July, 2010 Managing Director Whole-time Director 14 - Annual Report

16 Annexure to the Director s Report LOHIA SECURITIES LTD. REPORT ON CORPORATE GOVERNANCE The Directors present the Company s Report on Corporate Governance The Company s Governance Philosophy Your Company is strongly committed to the adoption of the best Corporate Governance practices and their adherence in true spirit in all its business dealings to serve the best interest of all stakeholders encompassing clients, employees, shareholders and the society at large. The Company endeavours to ensure integrity, transparency, fairness and social accountability in all its business practices and dealings Board of Directors In terms of the Company s Corporate Governance policy, all statutory and other significant and material information are placed before the Board to enable it to discharge its responsibilities of strategic supervision of the Company and as trustees of stakeholders. Composition The Board of Lohia Securities Limited is a balanced one, comprising Executive and Non-Executive Directors. The Executive Directors do not exceed one-third of the total strength of the Board. The Non-Executive Directors are eminent professionals, drawn from amongst persons with experience in business /finance /law. The Board of Directors elected Mr. Sameer Bajaj, an independent director, as Chairman at each of their meetings. Name of the Directors Category of Directors No. of other Directorships held(*) Mr. Hari Kishan Lohia Non-Executive Director, Promoter Nil Mr. Mahesh Kumar Bajaj Non-Executive Director, Promoter Nil Mr. Rajesh Kumar Bajaj Executive Director, Promoter Nil Mr. Sudheer Kumar Jain Executive Director, Promoter Nil Mr. Vineet Goenka Independent, Non-Executive Director Nil Mr. Sameer Bajaj Independent, Non-Executive Director Nil The Directorships held by Directors as mentioned above, do not include Alternate Directorships and Directorships of Foreign Companies, Section 25 Companies and Private Limited Companies. The Company did not have any material pecuniary relationship or transaction with the non-executive directors during the period under review. Meetings and Attendance Thirteen Board meetings were held during the year, as against the minimum requirements of four meetings. The Company has held at least one Board Meeting in every three months and maximum time gap between any such two meetings was not more than four months. During the financial year ended 31st March 2010, Board Meetings were held on , , , , , , , , , , , and Attendance at Board Meetings and at Annual General Meeting (AGM) Name of the Directors No. of Board Meeting Whether Attended the Held Attended last AGM Mr. Hari Kishan Lohia Yes Mr. Mahesh Kumar Bajaj Yes Mr. Rajesh Kumar Bajaj Yes Mr. Sudheer Kumar Jain Yes Mr. Vineet Goenka No Mr. Sameer Bajaj Yes Annual Report

17 LOHIA SECURITIES LTD. REPORT ON CORPORATE GOVERNANCE (Contd.) COMMITTEES OF THE BOARD A. Audit Committee Composition Your Company has an Audit Committee comprising of following three Non Executive Directors (two of them independent). All of them financially literate and most of them have accounting or related financial management expertise. The Chairman of the Committee is an independent Director. Mr. Sameer Bajaj, Chairman Mr. Mahesh Kumar Bajaj Mr. Vineet Goenka Terms of Reference The terms of reference of the Audit Committee cover the matters specified under Clause 49 of the Listing Agreement read with Section 292A of the Companies Act, 1956, such as overseeing of the Company s financial reporting process, recommending the appointment/ reappointment of statutory auditors, reviewing with the Management quarterly and annual financial statements, internal audit reports and controls of the Company and other matters as stated under the role of Audit Committee in Clause 49 of the Listing Agreement. Attendance During the financial year ended on 31st March, 2010 meeting of the Audit Committee were held on 30th June, 2009, 30th July, 2009, 30th October, 2009 and 29th January, 2010 which were attended by all the above members. The gap between two meetings never exceeded four months. Head of Finance, Accounts, Internal Auditors and Statutory Auditors also attended said meetings as and when invited by the Committee. The Company Secretary acts as the Secretary to the Committee. B. Remuneration Committee Composition The Remuneration Committee comprises of three Non Executive Directors, two of whom are independent. The Chairman of the Remuneration Committee is Mr. Sameer Bajaj. Mr. Mahesh Kumar Bajaj and Mr. Vineet Goenka are the two other members of this Committee. Terms of Reference The Remuneration Committee has been constituted to recommend/ review remuneration of the Managing Director and Whole-time Director based on their performance and defines assessment criteria. Meetings and Attendance The Remuneration Committee met on The remuneration committee at that meeting recommended the remuneration of Mr. Sudheer Kumar Jain on the proposal of his re-appointment. Remuneration of Directors The Remuneration Committee, comprising only of Non-Executive Directors, determines remuneration of Executive Directors and Senior Executive. The aggregate amount of salary paid for the year ended 31st March, 2010, to Mr. Rajesh Kumar Bajaj, Managing Director of the Company was Rs. 12,00,000/- and Mr. Sudheer Kumar Jain Whole-time Director was Rs.9,00,000/-. The Non-executive Directors were not paid any sitting fees for attending meeting of the Board and Committee thereof. During the year under report, no commission on net profit was paid to Non-Executive Directors. C. Shareholders/ Investors Grievance Committee Composition The Shareholders/ Investors Grievance Committee presently comprises of three Non Executive Directors, two of whom are independent. The Chairman of the Shareholders/ Investors Grievance Committee is Mr. Sameer Bajaj. The other members of the Committee are Mr. Mahesh Kumar Bajaj and Mr. Vineet Goenka. Company Secretary is the Compliance Officer of the Committee. Terms of Reference 16 - Annual Report

18 LOHIA SECURITIES LTD. REPORT ON CORPORATE GOVERNANCE (Contd.) Role of the Committee includes redressal of shareholders complaints relating to transfer of shares, exchange of share certificates, nonreceipt of balance sheet, non-receipt of declared dividends etc. Pursuant to Clause 49IVG(iv) of the Listing Agreement, the Board of the Company has delegated the power of Share Transfer to Whole-time Director Mr. Sudheer Kumar Jain. Mr. Jain attended to share transfer formalities on a fortnightly basis and the same was ratified by the Committee at its meeting. Number of complaints received and solved during the financial year ended on 31st March, 2010 and pending as on that date were as follows: Number of Shareholder Complaints received during the year. Number not solved to the satisfaction of the shareholders till 31st March, 2010 Number of Complaints pending as at 31st March, 2010 Nil Nil Nil Meetings and Attendance During the financial year ended 31st March, 2010, only one meeting of the Shareholders/ Investors Grievance Committee was held on for consideration of the future policies of the Company in relation to handling of investor grievances. General Body Meetings Location and time, where last three AGMs held Financial Year Date Time Place Saturday, 29th September, A.M. The Palladian Lounge Telegraph Room, 6 Netaji Subhas Road, 2nd Floor, Kolkata Saturday, 27th September, A.M. Somany Conference Hall, Merchant Chamber of Commerce, 15B, Hemanta Basu Sarani, 2nd Floor, Kolkata Wednesday, 23rd September P.M. 4 Brabourne Road, 5th Floor Kolkata Special Resolutions passed at the last 3 (three) AGM held Financial Year Items Nil Nil Nil A Resolution in terms of Notice dated 3rd October, 2007 for creation of charges under section 293(1)(a) was passed through Postal Ballot on 26/11/2007. A Resolution in terms of Notice dated 1st September, 2009 for transfer of trading rights of Calcutta Stock Exchange was passed through Postal Ballot on 15th October, A Resolution for change in the Object Clause of the Company is proposed at the ensuing Annual General Meeting for passing through Postal Ballot Papers. Procedure for Postal Ballot After receiving approval from the Board of Directors, Notice of the Postal Ballot, text of the Resolution and Explanatory Statement, relevant documents, Postal Ballot Form and self addressed postage prepaid Inland letter card are sent to the shareholders to enable them to consider and vote for or against the proposal within a period of 30 days from the date of dispatch. The Company files the calendar of events containing the activity chart with the Registrar of Companies after passing of the resolution by the Board of Directors. After the last date of receipt of ballot, the scrutiniser, after due verification, submit the results to the Chairman. Thereafter, the Chairman declares the result of the Postal Ballot. The same is published in the Newspaper and displayed on the Website and Notice Board. Annual Report

19 LOHIA SECURITIES LTD. REPORT ON CORPORATE GOVERNANCE (Contd.) Resume and other information of the Directors proposed to be re-appointed (including those retiring by rotation) at the ensuing Annual General Meeting are given in the Notice relating thereto to the shareholders as required under Clause 49IV(G) of the amended Listing Agreement. Disclosures: A Statement in summary form of transactions with related party in the ordinary course of business is placed periodically before the Audit Committee. The pricing of all transactions with the related parties were on arms length basis. There are no materially significant related party transactions i.e. transactions material in nature, with its Promoters, the Directors or the Management, their subsidiaries or relatives etc. having potential conflict with the interests of the Company at large. While preparation of financial statements for the year under review, no accounting treatment which was different from that prescribed in the Accounting standard followed. For the list of disclosures of related party relationship and transactions as per Accounting Standard AS-18, Related Party Disclosures, Note 3 on Schedule Q to the Annual Audited Accounts of the Company for the year ended 31st March, 2010 may be referred to. In accordance with the requirement of Corporate Governance the Board of Directors of the Company has formulated a Code of Conduct for Directors and Senior Management Personnel of the Company and all concerned thereof has affirmed the compliance. The required declaration to this effect signed by the Managing Director and the Whole-time Director is appended as a separate Annexure to this Report. The Code of Conduct has been hosted on the Company s web site. No stricture was imposed on the Company by any regulatory authority on any matter related to capital market during the last three years. The Company has laid procedure to inform the Board Members about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management control risks through means of a properly defined framework. In accordance with the Securities & Exchange Board of India (Prohibition of Insider Trading) Regulation, 1992 as amended in February, 2002, the Board of Directors of the Company has formulated the Code of Conduct for prevention of insider trading in Equity Shares of the Company by its Directors and Employees. The Board of Directors of the Company have received a Certificate from the Managing Director and a Whole-time Director of the Company in compliance of Clause 49(V) of the Listing Agreement. The Company has not made any public issue/ rights issue and preferential issues during the period under review. The Company does not presently have a Whistle Blower Policy. Non-Mandatory requirement to the extent of formation of Remuneration Committee, have been adopted. Means of Communication Quarterly Results SUBJECT Newspaper wherein results published Any website, where displayed Whether it also displays official news released and presentation made to institutuional Investors / Analysis Whether MD&A is a part of Annual Report DETAILS Published in the newspaper in terms of Clause 41 of the Listing Agreement The Financial Express - English Kalantar - Bengali No Yes, the same is part of Directors Report 18 - Annual Report

20 LOHIA SECURITIES LTD. REPORT ON CORPORATE GOVERNANCE (Contd.) In compliance with the requirements of the Listing Agreements, the Company regularly intimates unaudited as well as audited financial results to the Calcutta Stock Exchange as well as BSE immediately after the Board takes them on record. Further coverage is given for the benefit of the shareholders and investors by publication of the financial results in the Financial Express and a Bengali newspaper circulating in the state of West Bengal. General Shareholder Information 1. Annual General Meeting : Date, time and Venue Date 25th September, 2010 (Saturday) Time A.M. Venue 4 Brabourne Road, 5th Floor, Kolkata Financial Calendar (Tentative): Financial reporting for the quarter ending June, 30, 2010 Last week of July 2010 Financial reporting for the quarter ending September 30, 2010 Last week of October 2010 Financial reporting for the quarter ending December, 31, 2010 Last week of January 2011 Financial reporting for the year ending March 31, 2011 Last week of May 2011 Annual General Meeting for the year ended March 31,2011 Last fortnight of September, Dates of Book Closure: The Register of Members will be closed from Saturday, 18th September, 2010 to Saturday 25th September, 2010 (both dates inclusive) as annual closure for the Annual General Meeting and payment of dividend, if declared. 4. Dividend Payment Date : The Board has recommended a dividend of Re. 1 per equity share for the year ended 31st March, 2010; if declared at the AGM, this would be payable on or after 29th September, Listing on Stock Exchange: The Calcutta Stock Exchange Association Limited 7, Lyons Range, Kolkata Note: All listing and custodial fees to the stock exchange and depositories have been paid to the respective institutions. 6. Stock Code : a. The Calcutta Stock Exchange Limited LOHIASEC b. Bombay Stock Exchange Limited c. ISIN in National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited-INE803B Market Price Data : Monthly high and low quotes and volume of shares traded on Calcutta Stock Exchange (CSE): There were no trading of the equity shares of Lohia Securities Limited for the period from 01/04/2009 to 31/03/2010 at the Calcutta Stock Exchange. The close price as on 31st March 2010 is Rs The shares of the Company were permitted for trading on BSE platform with effect from and the closing price as on 31st March was Rs Annual Report

21 LOHIA SECURITIES LTD. REPORT ON CORPORATE GOVERNANCE (Contd.) The market price data i.e. monthly high and low prices of the Company s shares on BSE are given below: Month Open Price High Price Low Price Close Price No. of Shares April May June July August September October November December January February March Stock Performance (Indexed) &Stock : The Company s share does not form a part of the CSE-40 or CSE-50 Performance during the last year index. Similarly it is not form of BSE Sensex 9. Registrars and Transfer Agents (Share : M/s. Niche Technologies Pvt. Ltd. transfer and communication regarding share certificates, dividends and change of address) 20 - Annual Report D-511, Bagree Market, 71, B.R.B.B. Road Kolkata Share Transfer System : Share transfers are registered and returned within a period of 15 days from the date of receipt, in case documents are complete in all respects. All share transfers are approved by the whole-time Director under the authority delegated to him by the shareholders/ investors Grievance Committee. During the year ended 31st March, 2010, shares in physical form were transferred and the transfer process was completed within an average time period of not more than 15 days from the date of lodgement unless notices were required to be sent to the Registered Owners in certain identified categories of cases. 11. a) Distribution of Shareholding as at the year ended : No. of Shares No. of % of Total No. of Shares % of Total Shareholders. Upto , , ,001-50, ,001-1,00, ,00,001- & above Total

22 LOHIA SECURITIES LTD. REPORT ON CORPORATE GOVERNANCE (Contd.) b) Categories of Shareholders as at the year ended Category No of No of % of Total Shareholders Shares % of Total Bodies Corporate: Promoters Others Resident Individuals Promoters (Directors & Relatives) Others TOTAL Dematerialisation of Shares and Liquidity : Trading in the Company s shares is permitted only in dematerialized form. The Company has established connectivity with both the depositories viz. NSDL and CDSL through the Registrar M/s. Niche Technologies Pvt. Ltd., whereby the investors have the option to dematerialize their shares with either of the depositories. As on 31st March, 2010, about 70.73% of the Company s shares were held in dematerialized form. None of the Company s shares are under lock-in period for any purpose. Company obtains a certificate from practicing Company Secretaries every quarter, which confirms that total issued capital of the Company is in agreement with total number of shares in dematerialized form with NSDL and CDSL and shares in physical form. Shares held in dematerialized and physical mode as on March 31, Category Number of % of Total Share Shareholders Shares Capital Dematerialised NSDL CDSL Subtotal Physical Mode Grand Total Outstanding GDR/ Warrants : None 14. Address for Correspondence For matters related to shares, transfer/ transmission requests: M/s. Niche Technologies Pvt. Ltd. D-511, Bagree Market,71, B.R.B.B. Road, Kolkata Phone No / 71. For queries/ assistance on issues other than shares (including those related to financial statements) Mr. Narendra Kumar Rai Company Secretary Lohia Securities Ltd. 1 R.N.Mukherjee Road, 1st floor, Room No.11, Kolkata Declaration of Code of Conduct As required by Clause 49(1)(d) of the Listing Agreement it is hereby affirmed that all the Board members and Senior Management personnel have complied with the code of conduct of the Company. Annual Report

23 LOHIA SECURITIES LTD. REPORT ON CORPORATE GOVERNANCE (Contd.) Details of the Directors seeking re-appointment at the 16th Annual General Meeting Name of the Director Mr. Mahesh Kumar Bajaj Mr. Sameer Bajaj Mr. Rajesh Kumar Bajaj Date of Birth Date of Appointment Qualification BCOM BCOM, ACA BCOM Expertise in specific functional areas List of Companies in which outside Directorship held He has over 25 years experience of stock market. He was Vice President of the Calcutta Stock Exchange from 1996 to July He is actively involved in carrying out research activity in the Capital Market. Public Companies: Nil Private Companies: 1. Bajaj Portfolio Services Private Limited 2. Madhusudhan Enclave Private Limited 3. Trade City Commodities Pvt. Ltd. 4. Trade City Securities Private Limited. 5. Trade City Real Estate Private Limited 6. Trade City Barter Private Limited He is a Chartered accountant and has more than 13 years experience of capital market. He is giving his advises to Board on matters relating to administration, finance, investment and taxation. Public Companies: Nil Private Companies: 1. Ridhi Sidhi Distributors Private Limited He is Managing Director of the Company since He has more than 14 years experience of Capital Market. He is a Commerce Graduate from University of Calcutta and is looking after general administration and institutional dealings of the Company. Public Companies: Nil Private Companies: 1. Ridhi Sidhi Distributor Pvt. Ltd. 2. Narayani Publishers & Media Support Private Ltd. 3. Narayani Infrastucture & Logistics Pvt. Ltd. 4. Narayani Commodities Private Ltd. 5. Presidency Medical Centre Pvt. Ltd. 6. Trade City Real Estate Private Limited 7. Bajaj Realties Private Limited 8. Daadi Stock Broking Private Limited 9. Trade City Securities Private Limited 10. Trade City Barter Private Limited 11. Ranisati Career Institute Private Limited 12. Ranisati Programme Trading Career Institute Private Limited 22 - Annual Report

24 LOHIA SECURITIES LTD. REPORT ON CORPORATE GOVERNANCE (Contd.) 13. Ranisati Retail & Distribution Career Institute Private Limited 14. Ranisati Commodity Career Institute Private Limited 15. Ranisati Compliance Clearing & Settlement Career Institute Private Limited 16. Ranisati Currency Career Institute Private Limited 17. Ranisati Debt Career Institute Private Limited 18. Ranisati Market Feed Back Career Institute Private Limited 19. Ranisati Internet Trading Career Institute Private Limited 20. Igneous Career Institute Private Limited Chairman/ Member of the Committee of the Board of Directors of the Company (Lohia Securities Ltd.) Member of Audit Committee Member of Investors Grievance Committee Member of Remuneration Committee Member of Audit Committee Member of Investors Grievance Committee Member of Remuneration Committee Nil Chairman/ Member of the Committees of the Directors of other Companies in which he is a Director Nil Nil Nil Kolkata, the 30th day of July, 2010 Rajesh Kumar Bajaj Managing Director Sudheer Kumar Jain Whole-time Director Annual Report

25 LOHIA SECURITIES LTD. REPORT ON CORPORATE GOVERNANCE (Contd.) Auditors Certificate on Corporate Governance The Board of Directors Lohia Securities Limited 6, Lyons Range, 1st Floor Kolkata We have exmined the compliance of condition of Corporate Governance by M/s. Lohia Securities Limited for the year ended 31st March, 2010 as stipulated in cluse 49 of the Listing Agreement of the said Company with Stock Exchange. The compliance of the condition of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in clause 49 of the Listing Agreement. We state that no investor grievances are pending for a period exceeding one month against the Company as per records maintained by the Investors Grievance Committee. We further state that such compliance is neither an assurance as to the further viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. Place : 1, India Exchange Place Kolkata Date : The 30th day of July, 2010 For PATNI & CO. Chartered Accountants S. Sureka Partner Membership No Annual Report

26 LOHIA SECURITIES LTD. AUDITORS REPORT TO THE MEMBERS OF LOHIA SECURITIES LTD. 1. We have audited the attached Balance Sheet of M/s. Lohia Securities Limited as at 31st March, 2010, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are responsibility of the management of the company. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence to support the financial statement, amounts and disclosure in the financial statement. An audit also includes assessing the accounting principles used in the preparation of financial statements, assessing significant estimates made by the Management in the preparation of financial statements and evaluating overall financial statement preparation. 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) issued by the Central Government in term of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: - a) We have obtained all the information and explanations to the best of our knowledge and belief, were necessary for the purposes of our audit. b) In our opinion, proper books of accounts as required by law have been kept by the company as far as appears from our examination of the books. c) The Balance sheet and Profit & Loss Account referred to in this report are in agreement with the books of account. d) In our opinion, the Profit & Loss Account and Balance Sheet comply with the Accounting Standard referred to in sub-section 3(C) of section 211 of the Companies Act, e) On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the director is disqualified as on March 31, 2010 from being appointed as a director in terms of section 274(1)(g) of the Companies Act, f) In our opinion and to the best of our information and according to the explanations given to us and subject to notes given there on, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view:- (a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, And (b) In the case of the Profit & Loss Account, of the Profit of the company for the year ended on that date. And (c) In the case of the Cash Flow statements of the cash flow for the year ended on that date. Place : 1, India Exchange Place Kolkata Date : The 29th day of May, 2010 For PATNI & CO. Chartered Accountants S. Sureka Partner Membership No Annual Report

27 LOHIA SECURITIES LTD. ANNEXURE TO THE AUDITOR S REPORT In term of the information and explanations given to us and books of account examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under: - i) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. These fixed assets were physically verified by the management during the year. We have been informed that no discrepancies were noticed on such physical verification. Substantial part of fixed assets has not been disposed of during the year, which will affect its status as going concern. ii) Physical verification of inventories has been conducted by the management during the year at reasonable intervals. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. The company is maintaining proper records of inventory. As informed to us, no discrepancies were found on physical verification of inventories as compared to book records. iii) A) The Company had granted advance to one party covered in the register required to be maintained u/s 301 of the Companies Act, The maximum amount involved during the year was Rs. 2,00,00,000/-. In our opinion, the terms and conditions of advances given by the company to companies, firms or other parties listed in the register required to be maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company. There is no closing balance as on B) The Company has taken unsecured loan from five parties covered in the register required to be maintained u/s 301 of The Companies Act, The maximum amount involved during the year was Rs. 7,32,25,000/-. In our opinion, the rate of interest and terms and conditions of loan taken by the company from companies, firms or other parties listed in the register required to be maintained under section 301 of the Companies Act, 1956, are not, prima facie, prejudicial to the interest of the company. The company is regular in payment of interest. There is no specific stipulation with regard to repayment of loans. iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for purchase of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control. v) According to the information and explanations given to us, in our opinion contracts or arrangements that need to be entered into the register required to be maintained u/s 301 of the Companies Act, 1956 have been so entered. In our opinion, each of these contracts or arrangements made has been made at prices which are reasonable having regard to the prevailing market price at the relevant time. vi) According to information and explanations given to us, the company has not accepted any public deposit upto vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business. viii) The company is not engaged in production, processing, manufacturing or mining activities. Hence, the provisions of section 209(1)(d) do not apply to the company. Hence, no comment on maintenance of cost records u/s 209(1)(d) is required. ix) According to the records of the company, the company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Service tax, Sales Tax, Customs Duty, Excise Duty & Cess and any other statutory dues with appropriate authorities applicable to it. According to information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service Tax, sales tax, custom duty and excise duty were outstanding as at the last date of the accounting year for a period of more than six months from the date they became payable. According to records of the company, there are no dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute. x) The company has no accumulated losses. The company has not incurred any cash loss in the current financial year and incurred cash loss of Rs.2,81,55,163/- in the immediately preceding financial year Annual Report

28 LOHIA SECURITIES LTD. ANNEXURE TO THE AUDITOR S REPORT (Contd.) xi) xii) xiii) xiv) xv) xvi) xvii) The Company has not defaulted in repayment of dues to financial institution or bank or debenture holders. As informed to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other similar securities. The company is not a chit fund, nidhi or mutual benefit fund / society. The company has maintained proper records of the transactions and contracts of dealing in shares, securities, debenture and other investment and we have been informed that timely entries have been made therein. As explained to us, all the shares have been held by the company in its own name except to the extent of exemption granted u/s 49 of the Companies Act, The company has not given any guarantee for loans taken by others from bank or financial institutions. The term loans obtained by the company have been applied for the purpose for which they were raised. According to the information and explanation given to us, we report that no funds raised on short-term basis have been used for long term investment by the company. xviii) The company has not made any preferential allotment of shares to parties and companies covered in the Register required to be maintained under section 301 of the Act. xix) The company has not issued any debenture. xx) The company has not raised any money by public issues during the period covered by our audit report. xxi) During the checks carried out by us, no fraud on or by the company has been noticed or reported during the year under report. Place : 1, India Exchange Place Kolkata Date : The 29th day of May, 2010 For PATNI & CO. Chartered Accountants S. Sureka Partner Membership No Annual Report

29 LOHIA SECURITIES LTD. BALANCE SHEET AS AT 31ST MARCH SCHEDULES Rs. P. Rs. P. I. SOURCES OF FUNDS 1. SHAREHOLDER S FUNDS a) Share Capital A 49,872, ,872, b) Reserves & Surplus B 272,216, ,271, LOAN FUNDS a) Secured Loans C 52,236, ,677, b) Unsecured Loans D 9,200, ,000, TOTAL 383,525, ,821, II. APPLICATION OF FUNDS 1. FIXED ASSETS Gross Block E 97,778, ,535, Less:Depreciation 65,559, ,123, Net Block 32,219, ,412, INVESTMENTS F 104,066, ,566, DEFERRED TAX ASSETS 981, ,027, CURRENT ASSETS AND LOANS & ADVANCES a) Inventories G 29,299, ,409, b) Sundry Debtors H 1,531, ,100, c) Cash & Bank Balances I 193,626, ,896, d) Other Current Assets J 4,645, ,293, e) Loans & Advances K 61,385, ,896, ,488, ,595, LESS : CURRENT LIABILITIES AND PROVISIONS a) Current Liabilities L 34,156, ,240, b) Provisions M 10,101, ,647, ,258, ,887, NET CURRENT ASSETS 246,229, ,707, MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) a) Interest Suspense 27, , , , TOTAL 383,525, ,821, Significant Accounting Policies Notes to the Accounts Schedules referred to above form an integral part of the Balance Sheet Q As per our attached report of even date For PATNI & CO. Chartered Accountants For and on behalf of Board of Directors S. Sureka Partner Membership No Place : Kolkata Date : 29th May, 2010 Narendra Kumar Rai Company Secretary Rajesh Kumar Bajaj Managing Director Sudheer Kumar Jain Whole-time Director 28 - Annual Report

30 LOHIA SECURITIES LTD. PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 SCHEDULES Rs. P. Rs. P. I. INCOME Income from Operation N 217,225, ,904, Dividend from Shares lying in Inventories 226, , Dividend from Shares lying in Investment 1, Brokerage (T.D.S Rs. 59/-; P.Y. 3,077/-) 18,894, ,804, Interest Income (T.D.S. Rs. 15,45, ,047, ,640, Previous Year Rs. 34,16,256.08) Receipts from DP Division (T.D.S. : 79,700/-;P.Y.Nil) 2,443, ,502, Profit on Sale of Investment 35, Profit On Sale of Fixed Assets 56, Miscellaneous Income 501, , TOTAL 253,431, ,238, II. EXPENDITURE Payments to and Provision for Employees O 30,093, ,171, Other Expenses P 107,442, ,499, Securities Transaction Tax 60,637, ,384, Interest Expenses 9,130, ,338, Depreciation 11,072, ,094, TOTAL 218,377, ,488, PROFIT/(LOSS) BEFORE TAX (A-B) 35,054, (42,249,954.00) Less : Provision for Taxes Current Tax 3,661, Deferred Tax 10,045, (13,724,927.00) Fringe Benefit Tax - 314, Income Tax For Earlier Year 1,592, , PROFIT/(LOSS) AFTER TAX 19,755, (29,070,608.43) Add : Balance Brought Forward from previous year 143,898, ,799, ,654, ,728, Less: Proposed Dividend for the year 4,983, ,983, Less: Provision for Dividend Tax 827, , Balance Carried to Balance Sheet 157,844, ,898, Basic/Diluted Earning Per Share 3.96 (5.83) Significant Accounting Policies and Notes to the Accounts Q Schedules referred to above form an integral part of the Profit & Loss Account As per our attached report of even date For PATNI & CO. Chartered Accountants S. Sureka Partner Membership NO Place : Kolkata Date : 29th May, 2010 Narendra Kumar Rai Company Secretary For and on behalf of Board of Directors Rajesh Kumar Bajaj Managing Director Sudheer Kumar Jain Whole-time Director Annual Report

31 LOHIA SECURITIES LTD. CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010 PURSUANT TO CLAUSE 32 OF LISTING AGREEMENTS(S) (AS AMENDED) Rs. Lacs Rs. Lacs Rs. Lacs Rs. Lacs A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax & Extraordinary Items (422.50) Adjustment for : Depreciation Interest Expenses Miscellaneous Balance Written Off Interest Received (140.48) (176.41) Provision for Bad & Doubtful Debts (Profit)/Loss On Sales Of Investment (0.35) - (Profit)/Loss On Sales Of Fixed Assets (0.57) (306.56) Operating Profit before Working Capital Adjustment (Increase)/Decrease in Inventories (158.90) (Increase)/Decrease in Debtors (Increase)/Decrease in Other Current Assets (3.53) (Increase)/Decrease in Loans & Advances (8.23) Increase/(Decrease) in Current Liabilities (151.19) Payment of Tax Net cash flow from operating activities B. CASH FLOW FROM INVESTING ACTIVITIES Sale Proceed of Investment Purchase of Long Term Investment - (536.08) Advance for Property Purchase of fixed assets (50.92) (57.54) Sales Proceeds of Fixed Assets Interest Received (Increase)/decrease in fixed deposit (353.80) Net cash used in investing activities (256.20) C. CASH FLOW FROM FINANCING ACTIVITIES Increase/(Decrease) in Secured Loan (104.41) (442.22) Increase/(Decrease) in Unsecured Loan (8.00) Payment of Dividend & Dividend Tax (58.30) (69.96) Interest Paid (91.31) (133.38) Share Capital & Security Premium Misc. Expenses W/off Net cash realised from financing activities (261.22) (543.56) Net increase/(decrease) in cash and cash equivalent (406.49) OPENING CASH & CASH EQUIVALENT CLOSING CASH & CASH EQUIVALENT Notes to the Cash Flow Statement for the year ended 31st March 2010 CLOSING CASH & CASH EQUIVALENT Rs. Lacs Rs. Lacs Cash in Hand Cash at Bank Bank Overdraft (1.16) (0.44) As per our attached report of even date For PATNI & CO. Chartered Accountants S. Sureka Partner Membership NO Place : Kolkata Date : 29th May, Annual Report Narendra Kumar Rai Company Secretary For and on behalf of Board of Directors Rajesh Kumar Bajaj Managing Director Sudheer Kumar Jain Whole-time Director

32 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS Rs. P Rs. P. SCHEDULE - A SHARE CAPITAL Authorised 75,00,000 Equity shares of Rs. 10/- each 75,000, ,000, Issued & Subscribed 50,00,000 Equity shares of Rs. 10/- each 50,000, ,000, Paid Up Capital 49,83,000 Equity Shares of Rs. 10/- each fully paid up Add: Forfeited Shares 49,830, , ,830, , TOTAL 49,872, ,872, Note : Out of the above shares, 50,000 shares are alloted as fully paid up pursuant to a contract without payment being received in cash. SCHEDULE - B RESERVE & SURPLUS A. General Reserve Opening Balance 95,000, ,000, Sub -Total :- A 95,000, ,000, B. Profit & Loss A/c Profit & Loss Account 157,844, ,898, C. Sub -Total :- B 157,844, ,898, Security Premium Opening Balance 19,372, ,307, Add: Amount Received during the year Sub -Total :- C - 19,372, , ,372, TOTAL : - (A + B+ C) 272,216, ,271, SCHEDULE - C SECURED LOAN Loan against Car 1. ICICI BANK LTD. 85, , (Repayable within one year Rs.85,680/- Previous Year Rs. 1,14,027/-) 2. HDFC BANK LTD. 448, , (Repayable within one year Rs.4,25,595/- Previous year Rs.4,51,860/- ) Term Loan 1. HDFC BANK 32,000, ,000, (Refer Note No.B(8) of schedule Q) (Repayable within one year Rs.3,20,00,000/- Previous year Rs. 2,20,00,000/- ) 2. HDFC BANK - 8,333, (Secured against movable Plant & Machinery and Furniture & Fittings at Office located at 4. Brouborne Road, 5th Floor, Kolkata - 1) (Repayable within one year Nil, Previous year Rs.66,66, ) Bank overdraft 1. HDFC Bank LAS A/c (Secured against pledge of Shares) 7,862, HDFC Bank FD /OD A/c (Refer Note No.B(8) Of schedule Q) 1,800, ,612, HDFC BANK (Secured against personal guarantee of 10,039, ,631, Directors and office premises of Wholly Owned Subsidiary Company & of a company in which one of the director is interested) TOTAL 52,236, ,677, SCHEDULE - D UNSECURED LOAN From body Corporates 9,200, ,000, TOTAL 9,200, ,000, Annual Report

33 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS SCHEDULE - E FIXED ASSETS Particulars As on GROSS BLOCK Addition Deduction As at As on Fro the Year DEPRECIATION Adjustent for Sale As at As at NET BLOCK As at A) TANGIBLE ASSETS Office 4,893, ,893, ,350, , ,477, ,415, ,542, Office Equipment 4,535, , ,695, ,421, , ,871, ,823, ,114, Furniture & Fixtures 11,762, , , ,809, ,479, ,323, , ,798, ,011, ,283, Air Conditioner 3,735, , ,773, ,372, , ,705, ,068, ,362, Car 4,835, , ,398, ,811, , , ,964, ,433, ,023, Computer & Accessories 57,004, ,085, , ,695, ,042, ,886, , ,654, ,041, ,961, Electrical Instalation 4,544, , ,612, ,081, , ,567, ,044, ,463, Generator 891, , ,773, , , , ,369, , B) INTANGIBLE ASSETS Software 1,332, ,793, ,126, , , ,114, ,011, , TOTAL 93,535, ,092, , ,778, ,123, ,072, , ,559, ,219, ,412, PREVIOUS YEAR 87,908, ,753, , ,535, ,080, ,094, , ,123, ,412, ,828, Annual Report

34 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS Rs. P. Rs. P. SCHEDULE F INVESTMENT LONG TERM INVESTMENTS (AT COST) A) In Equity Shares Unquoted, Trade In Wholly Owned Subsidiaries Trade City Securities Pvt. Ltd. 25,000, ,000, ,00,000 (Previous Year : 25,00,000) Equity Shares of Rs.10/- each fully paid up Trade City Real Estate Pvt. Ltd. 14,50,000 (Previous Year :14,50,000) Equity Shares of Rs. 10/- each fully paid up 50,750, ,750, Trade City Commodities Pvt. Ltd. 10,55,000 (Previous Year :10,55,000) Equity Shares of Rs. 10/- each fully paid up 15,825, ,825, Trade City Barter Pvt. Ltd. 4,25,200 (Previous Year : 4,25,200) Equtiy Shares of Rs. 10/- each fully paid up 9,779, ,779, Sub Total (i) 101,354, ,354, In Others The Calcutta Stock Exchange Association Ltd. 250 (Previous Year : 250) Equity Shares of Rs.1/- each fully paid up 500, , Sub Total (ii) 500, , Quoted, Non Trade Sidheshwari Garments Ltd. 8,700 (Previous Year: 8,700) Equity Shares of Rs.10/- each fully paid up 87, , Sub Total (iii) 87, , Unquoted, Non Trade Nimbus Communication Ltd. 5,000 (Previous Year : 5,000) Equity Shares of Rs.5/- each fully paid up 1,125, ,125, Sub Total (iv) 1,125, ,125, TOTAL : - A (i+ii+iii+iv) 103,066, ,066, B. In Mutual Fund Unquoted (Non Trade) LIC MF India Vision Fund 1,000, ,000, ,00,000 (Previous Year : 1,00,000) Units of Rs.10/- each fully paid up Escorts Leading Sector Fund - 500, Nil (Previous Year : 48,899.75) Units of Rs.10/- each fully paid up TOTAL : - B 1,000, ,500, TOTAL : - (A + B) 104,066, ,566, Market value of Quoted Shares 26, , Net Assets Value of Mutual Fund 853, , Annual Report

35 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS SCHEDULE G Inventories Shares (Non Traded, Quoted) Fully Paid up Name of the Company Face Value in Rs Qty Amount Amount ABAN Offshore Limited 2 1 1, Adhunik Metaliks Limited , Aditya Birla Money Limited Aftek Limited 2 100,000 1,665, Akar Tools Limited 10 5, , Aksh Optifibre Limited 5 10, , ,000 97, Alok Industries Limited 10 1,000 22, , , Alps Industries Limited 10 8,000 88, Anco Communications Limited. 10 1,000 2, ,000 2, Ansal Property & Infrastructure Limited , Andhara Bank Limited , , Aqua Logistics Limited , Arvind Remedies Limited 1 100, , , , Axis Bank Limited , Bajaj Hindustan Limited ,900 91, Balaji Distilleries Limited 10 11, , Bang Overseas Limited 10 3, , , , Baroda Rayon Corporation Limited , , Bengal & Assam Company Limited , Benchmark Mutual Fund Nifty Bees , Bharati Airtel Limited Bharati Shipyard Limited , Bharat Electronics Limited , Bharat Heavy Electricals Limited , Bharat Starch Product Limited , , Bhourkla Aluminium Limited 2 4,000 66, ,000 66, Bhushan Steel Limited , Bodal Chemicals Limited , , Bombay Dyeing & Manufacturing Company Limited , Brigade Enterprises Limited , , Brushman India Limited 10 7,675 84, , , Cairn India Limited , Cals Refinery Limited 1 1,525, , ,050, , Century Textiles Limited , Cipla Limited 2 4 1, Cochin Minerals & Rutiles Limited 10 1,000 39, ,000 25, Dena Bank , Digjam Limited 10 95, , DLF Limited 2 7,550 2,332, Dolat Investments Limited 1 50, , , , Dr. Reddy s Laboratories Limited , Dredging Corporation of India Limited , , Dunlop India Limited. 10 2,851 18, ,851 25, Dynacons Systems & Solution Limited 2 5,000 4, ,000 2, Electrosteel Castings Limited ,000 14, Essar Oil Limited ETC Networks Limited Fame India Limited Federal - Mogul Goetze India Limited , First Source Solution Limited Qty 34 - Annual Report

36 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS Face Value in Rs Qty Amount Qty Amount Foundary Fuel Products Limited 10 45, , , , Forties Healthcare Limited GAIL (India) Limited , Gallant Metal Limited , Gateway Distripark Limited ,000 53, Gayatri Sugar Limited , , Glenmark Pharmaceuticals Limited , Globus Spirits Limited 10 5, , GMR Infrastructure Limited 1 9, , G V Films Limited 10 15,000 27, ,000 12, Goodyear India Limited , , , Godrej Industries Limited , Grasim Industries Limited , Gufic Biosciences Limited , GVK Power & Infrastructure Limited Himachal Futuristic Communication Limited , , ,000 56, Himadri Chemical Limited , Hindalco Industries Limited , Hinduja Foundaries Limited 10 9, , Hindustan Oil Exploration Company Limited 10 1, , Hindustan Motors Limited 10 2,500 51, ,900 38, Hitachi Home & Life Solution Limited Housing Development Finance Corporation Limited , Housing Development & Infrastructure Limited , , IBN18 Broadcast Limited , ICICI Bank Limited , , IDEA Cellular Limited Infrastructure Development Finance Company Limited 10 2, , , , IFCI Limited 10 11, , I-Flex Solution Limited IG Petrochemicals Limited 10 5, , , , IKF Technologies Limited 1 5,000 19, ,000 11, India Bulls Real Estate Limited Infosys Technologies Limited 5 1 2, Intra Décor Limited 1 8,333 2, Industrial Development Bank of India Limited , ,000 1, Information Technologies India Limited IVR Prime Urban Developers Limited 10 10,000 1,562, , , Jaiprakash Associates Limited , Jai Prakash Power Venture Limited Jaysynth Dyechem Limited 1 5,000 39, ,000 27, Jet Airways (India) Limited , J B Chemicals & Pharma Limited ,000 36, JK Cement Limited , JK Synthetic Limited 10 35,436 96, ,971 84, Jindal Saw Limited , Jindal Southwest Hold Limited , Jindal Steel & Power Limited 1 2 1, JSW Energy Limited 10 5, , JSW Steel Limited , Kale Consultants Limited 10 8, , Annual Report

37 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS Face Value in Rs Qty Amount Qty Amount Kaashyap Technologies Limited 1 43,721 21, ,721 19, Kernex Microsystems (India) Limited 10 16,000 1,745, Kingfishers Airlines Limited 10 6, , , , Kinetic Engineering Limited 10 1, , Kitply Industries Limited 10 2,000 14, ,900 13, La Opala RG Limited 10 1,000 39, ,000 14, Larsen & Toubro Limited , Madras Cement Limited , , Magnum Ventures Limited 10 1,000 8, ,000 5, Mahindra Gesco Developers Limited , Mahindra Lifespace Developers Limited , Mercator Lines Limited ,000 84, Man Industries (India) Limited 5 1,250 88, Mcleod Russel India Limited , , , Mid-Day Multimedia Limited , Mangalore Refinery & Petrochemicals Limited 10 2, , Mahanagar Telephone Nigam Limited , MPS Limited 10 8, , Mukand Limited 10 20,000 1,215, National Thermal Power Corporation Limited National Alluminium Company Limited , Nectar Lifesciences Limited , Neyveli Lignite Corporation NMDC Limited 1 1, , Nocil Limited 10 3,000 67, ,000 34, Noida Toll Bridge Communication Limited ,000 23, Orbit Corporation Limited , , Orchid Chemicals & Pharmaceuticals Limited Orient Paper & Industries Limited. 1 7, , , , Pankaj Polymers Limited ,000 40, Paramount Communication Limited 2 2,000 24, ,000 13, Parsvnath Developers Limited , , Pennar Aluminium Company Limited. 10 3,500 6, ,500 4, Petronet LNG Limited , , Pipavav shipyard Limited , , Pioneer Embroderies Limited , Prudential Sugar Corporation Limited Power Finance Corporation Limited Porwal Auto Components Limited 10 3,000 44, ,000 19, Power Grid Corporation Limited , , , Punjab National Bank Limited , Prajay Engineers Syndicate Limited , ,500 32, Praj Industries Limited PTC India Limited Pyramid Sai Theat Limited , Rajshree Sugars & Chemicals Limited , Rama Newsprint & Papers Limited Ramco Sysytems Limited 10 4, , Ranbaxy Laboratories Limited , Rei Agro Limited , Reliance Capital Limited Reliance Communication Limited Annual Report

38 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS Face Value in Rs Qty Amount Qty Amount Reliance Industries Limited , , Reliance Power Limited , , Reliance Infrastructure Limited Reliance Natural Resources Limited Reliance Petroleum Limited Revathi Equipment Limited , Roman Tarmat Limited , Rural Electrification Corporation Limited , Sahara Housing Finance Corporation Limited , Sahara One Media & Entertainment Limited , Satyam Computer Services Limited , , , SE Investment Limited , , Sesa Goa Limited Shree Mahaganga Sugar Limited 1 2, ,000 2, Sical Logistic Limited 10 10, , Simens Limited , Simens Healthcare Dignostics Limited , Sobha Developers Limited , , Shoppers Stop Limited , , Shaw Wallace Limited ,832 1,998, Shree Renuka Sugars Limited 1 5, , Shree Synthetics Limited SREI Infrastructure Finance Limited 10 2, , Sun Pharmaceuticals Industries Limited 5 1 1, Suzlon Energy Limited 2 10, , ,000 84, Sika Interplant Limited , Silverline Animation Technologies Limited , , SRF Limited , Steel Authority of India Limited Sumeet Industries Limited ,500 15, Surat Textiles Mills Limited 1 10,000 45, ,000 18, Swil Limited. 10 7,866 35, ,866 26, Tata Iron & Steel Co. Limited , Tata Motors Limited , , Tata Power Company Limited , Tata Consultancy Services Limited Titan Industries Limited , Teledata Technologies Limited ,000 5, TeleData Info Marin Limited 2 1,000 5, ,000 5, Thinksoft Global Services Limited 10 1, , T Spiritual World Limited 10 1,600 3, ,600 1, The Great Eastern Shipping Limited The Indian Hotels Company Limited Trigyn Technologies Limited 10 2,500 50, ,500 18, Tata Teleservices (Maharastra) Services Limited 2 7, , Temptation Food Limited 10 9, , ,869 1,399, Unitech Limited 2 1, , ,600 55, Unity Infraprojects Limited , United Spirits Limited , Valiant Communications Limited 10 49,191 1,308, , , Vishal Retail Limited , Vijaya Bank Limited Annual Report

39 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS Face Value in Rs. Qty Amount Qty Amount Visu International Limited , Welspun Global Brands Limited Welspun Investments Limited Welspun India Limited ,000 20, Welspun Gujstani Rohren Limited , , Wipro Limited 2 2 1, Total 2,438,707 29,299, ,842,124 13,409, Rs. P. Rs. P. SCHEDULE - H SUNDRY DEBTORS Debts outstanding for a period exceeding Six months 2,077, ,224, Others 1,342, ,637, ,419, ,861, Less: Provison for Bad & Doubtful Debts 1,888, ,760, TOTAL 1,531, ,100, SCHEDULE - I CASH & BANK BALANCES Cash in hand (As certified by the management) 1,203, ,303, Balance with Scheduled Banks -On Current Account 13,108, ,658, On Fixed deposit Account 179,314, ,934, (Refer note no. B(1)(a),(8) & (9) of Schedule Q ) TOTAL 193,626, ,896, SCHEDULE - J OTHER CURRENT ASSETS Dividend Receivable 50, Interest Receivable 4,595, ,292, TOTAL 4,645, ,293, SCHEDULE - K LOANS & ADVANCES (Recoverable in cash or in kind or for value to be received) ADVANCES IncomeTax 11,109, ,862, Fringe Benefit Tax 616, , Prepaid Expenses 3,350, ,191, Margin with Exchange 1,300, ,691, Other Advances 8,002, ,231, DEPOSITS Deposits with Exchange 27,415, ,670, Telephone Deposits 127, , Electricity Deposits 741, , Security Deposits For Office 7,800, ,957, Other Deposits 922, , TOTAL 61,385, ,896, Annual Report

40 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS Rs. P. Rs. P. SCHEDULE - L Current Liabilities Sundry Creditors for Goods 2,732, , Sundry Creditors for Expenses and others 7,891, ,417, Advances Received from clients 174, , Margin from Clients 22,624, ,159, Book Overdraft with Banks 115, , Mark to Market Margin 618, ,147, TOTAL 34,156, ,240, SCHEDULE - M Provisions Provision for Income Tax 3,661, Provision for Fringe Benefit Tax 630, , SUB - TOTAL : - A 4,291, , Proposed Dividend 4,983, ,983, Provision for Dividend Tax 827, , SUB - TOTAL : - B 5,810, ,829, TOTAL :- (A+B) 10,101, ,647, SCHEDULE - N Income from Operation Sales 823,373, ,959, Closing Stock 29,299, ,409, Profit/(Loss) from Future & Option Dealing 217,323, ,619, Profit/(Loss) from Currency Dealing (139,847.50) 384, ,069,856, ,372, Less: Purchases 834,315, ,432, Less: Opening Stock 13,409, ,063, Less: Loss from Share Dealing 4,906, ,971, TOTAL 217,225, ,904, SCHEDULE - O PAYMENTS TO AND PROVISIONS FOR EMPLOYEES Salary & Bonus 27,377, ,504, Contribution to Provident Fund, ESI & Gratuity 640, ,049, Staff Welfare 2,075, ,617, TOTAL 30,093, ,171, Annual Report

41 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS Rs. P. Rs. P. SCHEDULE - P OTHER EXPENSES Advertisement 121, , Auditors Remuneration 127, , Bank Charges and Guarantee Commission 3,320, ,358, Books & Periodicals 55, , Broker Note Stamp Expenses 1,214, ,426, Bad Debts 1, , Car Expenses 253, , Communication(including V-SAT) Expenses 7,604, ,960, Computer & Software Expenses 3,467, ,874, Depository Charges 33, , Donation 923, , Electricity Charges 4,276, ,862, Fees & Subscription 2,001, ,527, General Expenses 521, , Insurance Charges 341, , Internal Audit Fees 139, , NSDL/ CDSL Charges 533, , NSE, BSE, CSE & SEBI Expenses 27,327, ,099, Postage & Couriers 252, , Provision for Bad & Doubtful Debts 127, ,760, Printing & Stationery 974, ,387, Professional Charges 43,022, ,926, Legal & Professional Fees 945, ,346, Loss on Sales of Fixed Assets - 41, Rates & Taxes 688, , Registration & Share Transfer Expenses 15, , Rent 3,558, ,329, Repairs & Maintenance - Machinery 1,067, , Building 1,246, ,095, Others 1,243, ,612, ,557, ,490, Sub Brokerage 304, , Training Charges 198, , Travelling & Conveyance Expenses 1,532, ,090, TOTAL 107,442, ,499, Annual Report

42 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS SCHEDULE - Q SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS A. Significant Accounting Policies a) Basis of Preparation The Financial Statements are prepared under the historical cost convention, on an accrual basis and in accordance with the Companies Act, 1956, and the Accounting Standards issued under the Companies (Accounting Standards) Rules b) Use of Estimates The preparation of the financial statements in conformity with the accounting standards generally accepted in India requires, the management to make estimates that affect the reported amount of assets & liabilities disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenue and expenses for the year. Actual results could differ from these estimates. c) Fixed Assets & Depreciation i) Fixed Assets are stated at their original cost of acquisition less accumulated depreciation. ii) Depreciation on fixed assets has been provided under written down value method on pro-rata basis as per rate prescribed under Schedule XIV of the Companies Act, iii) Intangible assets have been amortized over the period of four years. d) Inventory Inventories are valued at lower of cost or market price. The costs of the shares are determined on First In & First Out Basis. e) Investments Long term Investments are stated at cost less provision for diminution,other than temporary, in the value of Investments. f) Revenue Recognition: i) Income from Brokerage is recognized on the trade date of transaction.. ii) Dividend income is recognized when the right to receive the income is established. g) Retirement Benefit i) Defined Contribution Plan: Company s contribution paid/payable during the year to the Provident Fund is charged to Profit and Loss Account. The Company s contribution to Employee s State Insurance Scheme are also charged to Profit & Loss Account of the year to which the contributions relate. (ii) Defined Benefit Plan: The Company has opted for a Group Gratuity-cum Life Assurance Scheme of the Life Insurance Corporation of India (LIC), and contribution towards gratuity liability as determined by LIC as required under AS-15 (Revised) i.e under Projected Unit Credit method is charged to the Profit & Loss Account. As far as company s liabilities towards leave encashment, company has the policy of paying the leave encashment at the end of the financial year. h) Derivative Market Trading 1. In respect of Option Contract, premium paid for contract expiring beyond the balance sheet date has been treated as current assets, adjusted for loss, if any 2. In respect of Futures Contract, Mark-to-Market debit balance has been recognized in the Profit & Loss Account and Mark-to-Market credit balance has been treated as current liabilities as per the guidance note issued by ICAI on accounting of Future & Option contract. Annual Report

43 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS i) Taxation Provision of current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge is recognized using the enacted tax rate. Deferred Tax Assets are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized. At each balance sheet date the Company re- assesses unrecognized deferred tax assets. It recognizes unrecog nized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred Tax Assets/Liabilities are reviewed as at balance sheet date based on the developments during the year and reassess assets/liabilities in terms of AS-22 issued by ICAI j) Foreign Currency Transaction a) Initial Recognition Foreign currency monetary items are reported in the reporting currency, by applying to the foreign currency amount, the exchange rate between the reporting currency and the foreign currency at the date of transaction. b) Conversion Foreign currency monetary items are reported using the closing rates. c) Exchange Difference Exchange differences arising on the settlement of reporting company s monetary items at rates different from those at which they were initially recorded during the period are recognized as income or expense. B. Notes on Accounts 1.a) Contingent Liability Bank Guarantee The Company has taken Bank Guarantee of Rs 1,130 Lakhs from HDFC Bank Ltd. against pledge of fixed deposit receipts of Rs. 565 Lakhs, of Rs. 250 Lakhs from Punjab National Bank against pledge of Fixed Deposit of Rs. 125 Lakhs and of Rs. 100 Lakhs from United Bank Of India against pledge of fixed deposits of Rs. 50 lakhs and creation of first charge against movable Plant & Machinery and book debts. The company has also taken bank guarantee of Rs. 500 Lakhs from Oriental Bank of Commerce against pledge of fixed deposits of Rs. 250 lakhs and creation of second charge against movable Plant & Machinery and book debts. The above mentioned bank guarantees have been given as margin money in favour of National Securities Clearing Corporation Ltd. The Company has taken Bank Guarantee of Rs. 150 lakhs from HDFC Bank against pledge of fixed deposit of Rs. 75 lakhs which has been given in favour of BOI Shareholding Limited, towards margin money and trade guarantee fund for trading in Bombay Stock Exchange Limited. 2. Director s Remuneration Salary & Bonus includes Rs. 21,00,000/- for the year (Rs. 21,25,000/- for the year ) payment to Director's towards managerial remuneration under Sec. 198 of the Companies Act, Payments made to Directors are as follow: Name of othe Director Amount of Remuneration 1. Mr. Rajesh Kumar Bajaj Rs. 12,00,000/- 2. Mr. Sudheer Kumar Jain Rs. 9,00,000/ Annual Report

44 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS 1% commission on net profit payable to directors in terms of the resolution passed at AGM held on 27th September 2006 have been waived off by the directors. Consent Letter for the waiver of the same has been received from directors. In terms of the shareholders resolution passed at AGM on 26th September 2009 the executive directors were eligible for monthly salary of Rs. 1,00,000/- each. However, in view of recession Mr. Sudheer Kumar Jain has voluntarily drawn Rs. 9,00,000/- respectively during the year.. Consent letter for the wavier of the same has been received from him. 3. Compliance of Accounting Standards issued by the Institute of Chartered Accountants of India. (a) Segment Reporting The company's operation predominantly comprises of only one segment i.e Activity relating to Capital Market and therefore segment reporting is not applicable to the company. (b) Related Party Disclosure: Information given in accordance with Accounting Standard- 18 A. Related party relationship i. Enterprise that are controlled by the reporting enterprises : 1. Trade City Securities Pvt. Ltd. Wholly Owned Subsidiary Company 2. Trade City Commodities Pvt. Ltd. Wholly Owned Subsidiary Company 3. Trade City Real Estate Pvt. Ltd. Wholly Owned Subsidiary Company 4. Trade City Barter Pvt. Ltd. Wholly Owned Subsidiary Company ii Key Management Personnel: 1. Mr. Rajesh Kumar Bajaj 2. Mr. Sudheer Kumar Jain iii. Relative of Key Management Personnel 1. Sunita Bajaj 2. Neena Jain iv. Enterprises over which key management personnel exercises significant influence exists: - 1. Shiv Lalit Consultancy Pvt. Ltd. 2. Narayani Commodities (P) Ltd. 3. Snehdeep Commerce (P) Ltd. 4. Ridhi Sidhi Distributor Pvt Ltd. 5. Daadi Stock Broking Pvt Ltd. 6. Rajesh Kumar Bajaj (HUF) 7. Sudheer Kumar Jain (HUF) Annual Report

45 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS B. Transaction with Related Parties : Figures in Lakhs DESCRIPTION OF THE NATURE OF TRANSACTIONS Wholly Owned Subsidiaries Key Management Personnel (KMP) Enterprises over which KMP exercise significant influence Relatives of KMP Brokerage Earned (1.64) (0.06) (---) (.11) Remuneration (---) (21.25) (---) (---) Margin Deposit Received for Trading (29.75) (---) (213.75) (42.60) Margin Deposit Received for Trading Refunded (29.75) (---) (213.75) (42.60) Margin Deposits Received 2, from Trading Member for (433.44) (---) (---) (---) clearing Margin Deposits Refunded to 2, Trading Member (298.44) (---) (---) (---) Rent, Electricity Maintenance, Rates & Taxes, Telephone & (8.12) (---) (.56) (---) Generator Expenses Paid Equity Contribution Trade City Securities Pvt. Ltd (75.00) (---) (---) (---) Trade City Real Estate Pvt Ltd. (245.00) (---) (---) (---) Purchase of Shares of Trade City Commodities Pvt Ltd. --- (22.50) (---) (---) Trade City Real Estate Pvt Ltd. --- (.04) (---) (---) Trade City Barter Pvt. Ltd (---) (18.02) (---) (18.02) Loan Taken 1, , (2,842.40) (---) (2,107.26) (---) Loan Repaid 1, , (2,842.40) (---) (2,107.26) (---) Interest Paid (9.59) (---) (11.35) (---) Demat Charges Received Inclusive of service tax (0.34) (.03) (.15) (.01) Temporary Loan Given (Received during the year) (---) (---) (---) (---) * Previous year figures are given in bracket 44 - Annual Report

46 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS C. (i) Amount due from Wholly Owned Subsidiaries : - Rs. 37, (ii) Amount due from KMP : - Rs. 3, (iii) Amount due from relative of KMP : - Rs (iv) Amount due from enterprise over which :- Rs KMP exercise significant influence D. Provision to be made with regard to Outstanding Amount : - Nil 4. Employee Benefits: A. Defined Contribution Plan Sl. No. Particulars (Rs.) (Rs.) 1. Contribution to Provident Fund 1,03,666 88, Contribution to Employee State Insurance 1,16,845 3,23,325 B. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets Gratuity on terms not lower than the amount payable under the Payment of Gratuity Act, The aforesaid scheme is funded with LIC. The following table summarizes the components of net benefit expenses recognized in profit & loss account. I Net Employee Expense / ( benefit) Sl. No. Particulars (Rs.) (Rs.) 1. Current Service Cost 5,04,243 5,15, Interest Cost on benefit obligation 1,36,665 88, Expected REturn on plan assets (1,85,421) (1,40,655) 4. Net Actuarial (gain) / Loss recognised in the year (35,683) (6,337) 5. Total employee expenses recognised in Profit & Loss Account 4,19,794 4,57,478 I I Actual return on plan assets Particulars (Rs.) (Rs.) Actual return on plan assets 1,85,421 1,40,655 III IV Benefit Asset / (Liability) Sl. No. Particulars (Rs.) (Rs.) 1. Defined benefit obligation 21,61,099 17,08, Fair Value of Plan Assets 22,60,132 17,66, Benefit Asset / (Liability) 99,033 58,098 Movement in benefit / Liability Sl. No. Particulars (Rs.) (Rs.) 1. Opening defined benefit obligation 17,08,192 11,10, Interest Cost 1,36,655 88, Current Service Cost 5,04,243 5,15, Benefits Paid (1,52,308) Actuarial (gains) / Loss on obligation (35,683) (6,337) 6. Closing Benefit Obligation 21,61,099 17,08,192 Annual Report

47 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS V Movement in fair value of plan assets Sl. No. Particulars (Rs.) (Rs.) 1. Opening fair value of plan assets 17,66,290 9,88, Return on plan assets (actual) 1,85,421 1,40, Contribution by employer 4,60,729 6,36, Benefits paid (1,52,308) Closing fair value of plan assets 22,60,132 17,66,290 VI The Principal acturial assumptions are as follows Sl. No. Particulars Discount Rate 8.00% 8.00% 2. Salary increase 6.50% 6.90% 3. Withdrawal Rate 1%-3% depending 1%-3% depending on age of employee on age of employee 4. Expected Rate of return on Plan Assets 9.00% 9.00% VII The major categories of Plan Assets as a percentage of fair value of the total plan assets. Sl. No. Particulars Investment with Insurer 100% 100% Note: a) The estimates of future salary increase considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. b) The Company expects to contribute Rs lacs to Gratuity Fund in Financial Year Outstanding contracts Outstanding contracts of the clients for the settlement period for which settlement has not taken place has not been considered for the purpose of financial statement made up to 31st March' However brokerage income and other charges receivable on such contract has been accounted for. 6. Auditors Remuneration (excluding service tax) Particulars (Rs.) (Rs.) (a) Statutory Audit Fee 50, , (b) Tax Audit Fee 10, , (c) Certification & Other Charges 67, , Total 1,27, ,19, Additional information pursuant to part - IV of Schedule VI to the Companies Act, 1956 is annexed as Annexure - I hereto 8. The company has obtained a term loan of Rs. 320 lacs from HDFC Bank against pledge of Fixed Deposits of Rs. 160 lacs. The company has also obtained a bank overdraft limit of Rs 18 lacs from HDFC Bank against pledge of Fixed Deposits of Rs. 20 lakhs. 9. The Company has pledged fixed deposit receipts of Rs 548 Lacs with National Securities Clearing Corporation Limited as Margin Money Annual Report

48 10. Quantitative details of item traded during the year ended 31st March LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS Qty Amount Qty Amount Opening Stock Shares 18,42,124 1,34,09, ,17,578 5,50,63, Mutual Fund Nil Nil Nil Nil 1,34,09, ,50,63, Purchases Shares 87,33,359 35,43,15, ,67,775 42,64,32, Mutual Fund 2,24,67, ,00,00, Nil Nil 83,43,15, ,64,32, Sales Shares 81,36,776 34,28,51, ,43,229 45,09,59, Mutual Fund 2,24,67, ,05,21, Nil Nil 82,33,73, ,09,59, Closing Stock Shares 24,38,707 2,92,99, ,42,124 1,34,09, Mutual Fund Nil Nil Nil Nil 2,92,99, ,34,09, The Company has pledged the following shares with the HDFC Bank Ltd. towards Loan against security. Sl. No. Name of the Company No. of Shares Book Value (Rs.) 1. DLF Ltd 7,000 21,62, Infrastructure Development Finance Company Limited 2,400 3,73, NOCIL Limited 3,000 67, Siemens Limited 700 5,15, Suzlon Energy Limited 10,000 7,18, Unitech Limited 1,500 1,07, Total 24,600 39,43, Expenditure in Foreign Currency : Particulars (Rs.) (Rs.) Conference Fees (including travelling for conference) -- 3,30, Books & Periodicals -- 1,47, Examination Fees -- 11, Total -- 4,89, Inflow in Foreign Currency : Particulars (Rs.) (Rs.) Refund of Software Expenses , Refund of Conference Fees -- 1,18, Total ,21, Annual Report

49 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS 14. components of Deferred Tax Liability (Net) Shown in the Balance Sheet is as follows : Particulars As at (Rs.) For the year As at (Rs.) Liability Items : Depreciation (25,45,475.00) 5,48, (19,97,367.00) Total (25,45,475.00) 5,48, (19,97,367.00) Assets Items : Business Loss 87,81, (58,02,335.00) 29,79, Unabsorbed Depreciation 47,90, (47,90,820.00) --- Total 1,35,72, (1,05.93,155.00) 29,79, Deferred Tax (Liabilities)/Assets (Net) 1,10,27, (1,00,45,047.00) 9,81, Prior period Items General Expenses include Rs.20, pertaining to previous financial year. 16. In respect of Option Contract, position of open interest as on the Balance Sheet date is as under: Option Contract in respect of which premium is paid Name of the Stock Option Option Premium Carried Forward Net of Loss (Rs.) ABAN 50, ALBK 16, AMBUJACEM 95, ANDHARABANK 1,73, APOLLOTYRE 17, AXIS BANK 10, BAJAJHIND 70, BANKINDIA 60, CAIRN 53, CHAMBLFERT 16, DENABANK 23, ESSAROIL 8, GMRINFRA 32, HDIL 38, HEROHONDA 43, HINDALCO 9,33, HINDUNILVR 1,30, IBREALEST 7, IDEA 2, IDFC 43, IFCI 1,38, INDIAINFO 4, ISPATIND 3, ITC 47, JINDALSTEEL 2,48, JPASSOCIAT 3, JPPOWER 8, LICHSGFIN 4,81, LITL 7, Annual Report

50 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS Name of the Stock Option MARUTI 19, MTNL 47, MUDRAPORT 6, NEYVELILIG 9, NPTC 13, PETRONET 2, PNB 92, POWERGRID 5, PUNJLLOYD 43, RECLTD 1,21, RELIANCE 1,17, RENUKA 1,39, RNRL 59, RPOWER 20, SAIL 27, SCI 8, SESAGOA 93, SUZLON 56, TATAMOTORS 1,91, TATASTEEL 72, TCS 1,07, TECHM 9, UNITECH 1,98, Sub Total:-(i) 42,36, Name of Index Option Option Premium Carried Forward Net of Loss (Rs.) NIFTY 12,74, Sub - Total : - (ii) 12,74, Sub - Total : - A = (i + ii) 55,11, Option Contract in respect of which premium is received Name of the Stock Option Option Premium Carried Forward Net of Loss (Rs.) Option Premium Carried Forward Inclusive of Loss (Rs.) ACC 10, ASHOKLEY 1,91, BALRAMCHIN 20, BHARTIARTL 52, BPCL 11, CENTURYTEX 9, DLF 4,97, EDUCOMP 12, FORTIS 2,25, GTLINFRA 6, HDFC 30,585,00 HDFC BANK 27, HINDPETRO 2, HOTELEELA 3, Annual Report

51 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS Name of the Stock Option Option Premium Carried Forward Inclusive of Loss (Rs.) ICICIBANK 1,21, IDBI 6, INDHOTEL 4,19, INDIACEM 18, INFOSYSTCH 8,32, loc 8, JINDALSAW 21, JSWSTEEL 40, LT 63, MRPL 93, NAGARFERT 9, NATIONALUM 14, ONGC 14, RANBAXY 23, RCOM 7, RELCAPITAL 5, SBIN 28, TTML 3, VIJAYABANK 15, WIPRO 7, Sub-Total:-(i) 28,58, Name of Index Option Option Premium Carried Forward Inclusive of Loss (Rs.) MININIFTY 6, Sub-Total :- (ii) 6, Sub-Total B (i+ii) 28,64, Net open position in respect of equity future contract are as follows NAME OF THE EQUITY STOCK FUTURE NO OF CONTRACTS Long No of Units Short ABAN 29APR ABB 29APR ACC 29APR ALBK 29APR AMBUJACEM 29APR ANDHRABANK 29APR APOLLOTYRE 29APR ASHOK LEY 29APR BAJAJHIND 29APR BALRAMCHIN 29APR BANKINDIA 29APR BHARTIARTL 27MAY BHARTIARTL 29APR BIOCON 29APR BPCL 29APR CAIRN 29APR CENTURYTEX 29APR CESC 29APR Annual Report

52 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS NAME OF THE EQUITY STOCK FUTURE NO OF CONTRACTS Long No of units Short CROMPGREAV 29APR CUMMINSIND 29APR DENABANK 29APR DLF 29APR DRREDDY 29APR EDUCOMP29APR EKC 29APR ESSAROIL 29APR FORTIS 29APR GMRINFRA 29APR GRASIM 27MAY GRASIM 29APR HCC29APR HDFC 29APR HDFCBANK 29APR HDIL 29 APR HEROHONDA 27MAY HEROHONDA 29APR HINDALCO 29APR HINDPETRO 29APR HINDUNILVR 27MAY HINDUNILVR 29APR HOTELEELA 29APR IBREALEST 29APR ICICIBANK 29APR IDBI 29APR IDFC 29APR IFCI 29APR INDHOTEL 29APR INDIACEM 29APR INDIAINFO 29APR INFOSYSTCH 29APR IOB 27MAY IOB 29APR IOC 29APR ISPATIND 29APR ITC 29APR IVRCLINFRA 29APR JINDALSAW 29APR JINDALSTEEL 29APR JISLJALEQS 29APR JPASSOCIAT 29APR JSWSTEEL 29APR KFA 29APR KOTAKBANK 29APR LICHSGFIN 29APR LT 29APR MCDOWELL-N 29APR MCLEODRUSS 29APR MP HASIS 29APR MRPL 29APR MTNL 29APR NAGARFERT 29APR NATIONALUM 29APR Annual Report

53 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS NTPC 27MAY ONGC 29APR OPTOCIRCUI 29APR PETRONET 29APR PNB 29APR POWERGRID 29APR PUNJLLOYD 29APR RANBAXY 29APR RCOM 29APR RECLTD 29APR RELCAPITAL 29APR RELIANCE 27MAY RELIANCE 29APR RENUKA 29APR RNRL 29APR ROLTA 29APR RPOWER 29APR SBIN 29APR SESAGOA 29APR SIEMENS 29APR SUZLON 29APR TATAMOTORS 27MAY TATAMOTORS 29APR TATAPOWER 27MAY TATAPOWER 29APR TATASTEEL 29APR TATATEA 29APR TCS 29APR TECHM 29APR TV-18 29APR ULTRACEMCO 29APR UNIPHOS 29APR UNITECH 29APR VIDEOIND 29APR VIJAYABANK 29APR WIPRO 29APR TOTAL EQUITY INDEX FUTURE NO OF CONTRACTS Long No of units Short NIFTY 24JUN NIFTY 27MAY NIFTY 29 APR MININIFTY 27MAY MININIFTY 29APR BANKNIFTY 29APR TOTAL Information pursuant to Section 212 of the Companies Act, 1956 is annexed as Annexure II hereto 18. Previous year s figures have been regrouped / rearranged wherever considered necessary. As per our attached report of even date For PATNI & CO., Chartered Accountants S. Sureka, Partner Membership NO Place : 1 India Exchange Place, Kolkata - 1 Date : 29th May, Annual Report Narendra Kumar Rai Company Secretary For and on behalf of Board of Directors Rajesh Kumar Bajaj Managing Director Sudheer Kumar Jain Whole-time Director

54 LOHIA SECURITIES LTD. STATEMENT PURSUANT TO PART - IV OF SCHEDULE VI OF THE COMPANIES ACT,1956 BALANCE SHEET ABSTRACT AND COMPANY S GENERAL BUSINESS PROFILE i) REGISTRATION DETAILS ANNEXURE - 1 REGISTRATION NO. : L67120WB1995PLC STATE CODE : 21 BALANCE SHEET DATE : ii) CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. 000) Public Issue N I L Right Issue N I L Bonus Issue N I L Private Placement N I L iii) POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN RS. 000) Total Liabilities Total Assets Sources of Funds : Paid up Capital Reserve & Surplus Secured Loans Deferred tax Liabilities Unsecured Loans N I L Application of Funds : Net Fixed Assets Investments Deferred Tax Assets Net Current Assets Misc. Expenditure 2 8 Accumulated Losses N I L iv) PERFORMANCE OF COMPANY(AMOUNT IN RS. 000) Turnover Total Expenditure Profit/(Loss) before Tax Profit/(Loss) after Tax Earning per Share in Rs Dividend Rate (%) 1 0 v) GENERIC NAME OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY (AS PER MONETARY ITEMS) Item Code No. (ITC Code) Product Description : N.A. : Shares & Securities Place : Kolkata Date : 29th May, 2010 Narendra Kumar Rai Company Secretary Rajesh Kumar Bajaj Managing Director Sudheer Kumar Jain Whole-time Director Annual Report

55 LOHIA SECURITIES LTD. STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT 1956 ANNEXURE-II RELATING TO SUBSIDIARY COMPANIES PARTICULARS Trade City Securities Pvt. Ltd. Trade City Real Estate Pvt. Ltd. NAME OF THE BUSINESS Trade City Commodities Pvt. Ltd. Trade City Barter Pvt. Ltd. 1. The Financial Year of the Subsidiary Company ended on (a) The No of Equity Shares held 25,00,000 equity shares of 14,50,000 equity shares of 10,55,000 equity shares of 4,25,200equity shares of by Lohia Securities Limited and Rs. 10 each fully paid up Rs. 10 each fully paid up Rs. 10 each fully paid up Rs. 10 each fully paid up its nominees in the Subsidiary as at March 31, 2010 (b) Extent of interest of Lohia 100% 100% 100% 100% Securities Limited in the Capital of the Subsidiary. 3. Net aggregate amount of the Profits/Loss of the Subsidiary so far it concerns the members of Lohia Securities Limited as it not dealt with the Company's Accounts: (a) Profit/(Loss)for the year ended Rs.16,67,451.25/- Rs.2,48,265/- Rs. (2,90,876/-) Rs. 5,15,468/- March 31, 2010 of the Subsidiaries (b) Profit/(Loss)for the previous Financial Year of the subsidaries, Rs.(34,91,223.25/-) Rs. (10,51,869/-) Rs.(2,91,769/-) Rs. (2,69,436/-) since it became a Subsidiary of Lohia Securities Limited 4. Net aggregate amount of the Profits/Loss of the Subsidiary so far as dealt with or provision is made for those losses in Lohia Securities Limited's Accounts (a) Profit/Loss for the year ended Nil Nil Nil Nil March 31, 2010 of the Subsidiaries (b) Profit/Loss for the previous Financial Year of the subsidaries, Nil Nil Nil Nil since it became a Subsidiary of Lohia Securities Limited Place : Kolkata Date : 29th May, 2010 Narendra Kumar Rai Company Secretary Rajesh Kumar Bajaj Managing Director Sudheer Kumar Jain Whole-time Director 54 - Annual Report

56 TRADE CITY SECURITIES PVT. LTD. DIRECTOR S REPORT TO THE MEMBERS OF TRADE CITY SECURITIES PVT. LTD. Your Directors have pleasure in presenting the Third Annual Report together with the audited Accounts of the Company for the year ended 31st March 2010, along with Auditor s Report thereon. FINANCIAL RESULTS The Financial result of the company for the year ended 31st March 2010, are summarized below: Current Year Previous Year Profit/(loss) before Taxation 32,91, (48,14,048.25) Less:Provision for Taxation: - current tax (5,14,000) Deferred Tax (11,10,538.00) (14,66,452.00) -Fringe Benefit Tax: , Profit/(Loss) after Tax 16,67, (33,57,096.25) Balance Brought Forward (34,91,223.25) (1,34,127.00) Balance Carried to Balance sheet (18,23,772.00) (34,91,223.25) Earnings Per Share 0.67 (1.61) DIVIDEND Due to carry forward losses your Directors do not recommend any dividend for the year OPERATION During the year your Company has earned a total revenue of Rs lakhs consisting of interest on Fixed Deposit of Rs lakhs, brokerage on stock trading of Rs lakhs and other income of Rs..39 lakhs. However, due to operational costs of Rs lakhs, finance cost of Rs and amortisation cost of Rs.4.48, there was only a profit of Rs lakhs in comparison to loss of previous year s Rs lakhs. The Company was in full operation during the year and has concentrated mainly in increasing the clients in retail sector. Due to stiff competition and increase in staff cost, the management is concentrating in reduction in costs and efficiency in management in its resources. DIRECTORS As per provision of section 255 of the Companies Act, 1956 and Article 18 of Articles of Association of the company, Mr. Sudheer Kumar Jain retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment.. Annual Report

57 TRADE CITY SECURITIES PVT. LTD. DIRECTOR S REPORT (Contd.) During the year, the Executive Directors of the Company were paid a total remuneration of Rs.14,00,000 for the year As you are aware they are also designated directors of the Company as per requirement of National Stock Exchange. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirement under section 217(2AA) of the Companies Act,1956 with respect to Directors Responsibility Statement, it is hereby confirmed: i) that in the preparation of the annual account for the financial year 31st March,2010 the applicable accounting standard had been followed along with proper explanation relating to material departure. ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the year under review. iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act,1956 for safeguarding the assets of the company and for preventing and detecting fraud and irregularities. iv) that the directors had prepared the accounts for the financial year ended 31st March,2010 on a going concern basis. SECRETARIAL COMPLIANCE CERTIFICATE Pursuant to proviso to section 383A of the Companies Act, 1956, a secretarial compliance certificate from a practicing Company secretary has been obtained and is attached herewith. AUDITORS PATNI & CO. Chartered Accountants hold office until the conclusion of the forthcoming Annual General Meeting and are recommended for reappointment. The Company has received a certificate from them to the effect that their reappointment, if made, would be within the limits prescribed under section 224(1B) of the Companies Act, AUDITORS REPORT The observation made in the Auditor s Report are self explanatory and therefore, do not call for any further explanations under Sections 217 of the Companies Act,1956. PARTICULARS OF EMPLOYEES For smooth functioning and to look after Secretarial work of the Company, the Board has appointed Shri Natwar Lal Agarwala, an Associate Member of the Institute of Company secretaries of India, to work as Company Secretary of 56 - Annual Report

58 TRADE CITY SECURITIES PVT. LTD. DIRECTOR S REPORT (Contd.) the Company. The appointment took place on During the year none of the employees was in receipt of remuneration in excess of the limit prescribed under section 217(2A) of the companies Act, Hence, particulars required under the Companies Rules, 1975 are not given. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION The Company has no activity relating to conservation of energy or technology absorption. The Company has no foreign earnings and outgoes during the year under preview. FOREIGN EXCHANGE EARNINGS AND OUTGO The Total Foreign Currency used and earned during the year are as below: 1. Expenditure in Foreign currency Particulars Tours & Travels NIL 1,64, Total NIL 1,64, Inflow in Foreign Currency Particulars Total NIL NIL ACKNOWLEDGEMENTS Your Directors express their sincere appreciation and value the assistance, co-operation and support extended to your company by the various central and state Government agencies, customers, bankers and other business associates. For and behalf of the Boards Place: Kolkata Date: 29th May, 2010 Hari Kishan Lohia Director Mahesh Kumar Bajaj Director Annual Report

59 THE COMPANIES ACT, 1956 CIN NO. U MH 2007 PTC AUTHORISED CAPITAL : RS.3,00,00,000/- PAID UP CAPITAL : RS.2,50,00,000/- To, The Members, Trade City Securities Private Limited 1602B, Lady Rattan Tower 72 Dainik Shivner Marg, Gandhi Nagar, Worli Mumbai TRADE CITY SECURITIES PVT. LTD. COMPLIANCE CERTIFICATE UNDER SECTION 383A(1) OF THE COMPANIES ACT, 1956 I have examined the registers, records, books and papers of M/s. Trade City Securities Private Limited, 1602B, Lady Rattan Tower, 72 Dainik Shivner Marg. Gandhi Nagar, Worli, Mumbai as required to be maintained under the Companies Act, 1956, (the act) and the rules made there under and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 31st march, In my opinion and to the best of my information and according to the examinations carried out by me and explanations furnished to me by the Company, its officers and agents, i certify that in respect of the aforesaid financial year: 01. The company has kept and maintained all registers as stated in Annexure "A" to this certificate, as per the provisions and the rules made there under and all entries therein have been duly recorded. 02. The Company has duly filed the forms and returns as stated in Annexure "B" to this certificate with the Registrar of Companies, within the time prescribed under the Act and the rules made there under. 03. The company being a private limited company has the minimum prescribed paid-up capital and its maximum number of members during the said financial year was 02 excluding its present and past employees and the company during the year under scrutiny :- (i) has not invited public to subscribe for its shares or debentures. (ii) has not invited or accepted any deposits from persons other than its members, directors or their relatives. 04. The Board of Directors duly met 10 (Ten) times on , , , , , , , , & in respect of which meetings proper notices were given and the proceedings were properly recorded and signed including the circular resolutions passed in the Minutes Book maintained for the purpose. 05. The company has not closed its Register of Members, U/s.154 of the Act during the financial year. 06. The Annual General Meeting for the financial year ended on 31st March, 2009 was held on after giving due notice to the members of the company and the resolutions passed thereat were duly recorded in Minutes Book maintained for the purpose. 07. No Extra Ordinary General Meeting was held during the financial year. 08. The Company being a private company, section 295 of the Act is not applicable. 09. The Company has not entered into contract under section 297 of the Act during the financial year and complied with the provision of the Act. 10. The company has maintained the register under section 301 of the Act. 11. As there was no instances falling within the purview of section 314 of the Act, the company has not obtained any approval from the Board of Directors, members, or Central Government. 12. The Company has not issued any duplicate share Certificates during the financial year. 13. The company has:- (i) not made allotment of Equity Share and transfer or transmission of share or securities during the financial year Annual Report

60 TRADE CITY SECURITIES PVT. LTD. COMPLIANCE CERTIFICATE UNDER SECTION 383A(1) OF THE COMPANIES ACT, 1956 (Contd.) (ii) not declared any dividend for the year ended on 31st March, (iii) not deposited any amount in separate bank account as no dividend was declared during the financial year. (iv) not posted any dividend warrants to it's members as it was not required to do so. (v) duly complied with the requirements of section 217 of the Act. 14. The Board of Directors of the company is duly constituted and there was no appointment of additional directors, alternate directors and directors to fill casual vacancies during the financial year. 15. The Company being a private company provisions of section 269 of the Act with regard to appointment of Managing Director/ Whole-time Director/Manager are not applicable. 16. The Company has not appointed any sole-selling agents during the financial year. 17. The company was not required to obtain any approval of the Central Government, Company Law Board, Regional Director, Registrar or such other authorities as prescribed under the various provisions of the Act during the financial year. 18. The Directors have disclosed their interest in other firms/ companies to the Board of Directors Pursuant to the provisions of the Act and the rules made there under. 19. The company has not issued equity shares, debentures, or other securities during the financial year. 20. The company has not bought back any shares during the financial year. 21. There was no redemption of preference shares/debentures during the financial year. 22. There was no transactions necessitating the company to keep in abeyance rights to dividend, right shares and bonus shares pending registration of transfer of shares. 23. The company has not accepted/invited deposits from Public including unsecured loans falling with in the purview of section 58A during the financial year. 24. The company, being a private company, the borrowings made during the financial year do not attract provisions of section 293(1)(d) of the Act. 25. The company being a Private Limited Company, provision of 372(A) of the Act with respect to loan & guarantees given or provided to other body corporate is not applicable. 26. The company has not altered the provision of it's Memorandum of Association with respect to situation of the company's registered office from one State to another during the year under scrutiny. 27. The company has not altered the provisions of it's Memorandum of Association with respect to the objects of the company during the year under scrutiny. 28. The company has not altered the provisions of it's Memorandum of Association with respect to name of the Company during the year under scrutiny. 29. The company has not altered the provisions of it's Memorandum of Association with respect to Share Capital of the company during the year under scrutiny. 30. The company has not altered its Articles of Association during the financial year. 31. There was no prosecution initiated against or show cause notices received by the company and no fines or penalties or any other punishment imposed on the company during the financial year for offences under the Act. 32. The company has not received any money as security from its employees during the financial year. 33. The company has not deposited contribution to provident fund as the same is not applicable. Place: KOLKATA Date : DEBASISH MUKHOPADHYAY (COMPANY SECRETARY) C.P.NO.: 5323 Annual Report

61 TRADE CITY SECURITIES PVT. LTD. COMPLIANCE CERTIFICATE UNDER SECTION 383A(1) OF THE COMPANIES ACT, 1956 (Contd.) Annexure - A Registers as maintained by the Company 01. Members Register U/s Directors Register U/s Director's Share Holding Register U/s Loan & Investment Register U/s 372A 05. Share Transfer Register. 06. Register of Contract. 07. Minutes of Directors & Shareholders meetings under section 193. Annexure - B Forms and Returns as filed by the Company with the Registrar of Companies, Regional Director, Central Government or other authorities during the financial year ended on 31st March, Balance Sheet for U/s.220 filed on Annual Return for AGM held on U/s.159 filed on Secretarial Compliance certificate for u/s 383A(1) filed on Form No. 22B filed on Annual Report

62 TRADE CITY SECURITIES PVT. LTD. AUDITOR S REPORT TO THE MEMBERS OF TRADE CITY SECURITIES PVT. LTD. 1. We have audited the attached Balance Sheet of Trade City Securities Pvt. Ltd. as at 31st March, 2010 and also the annexed Profit & Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are responsibility of the management of the Company. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence to support the financial statement, amounts and disclosure in the financial statement. An audit also includes assessing the accounting principles used in the preparation of financial statements, assessing significant estimates made by the Management in the preparation of financial statements and evaluating overall financial statement preparation. 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), issued by the Central Government in term of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit. b) In our opinion, proper books of account as required by law, have been kept by the company so far as appears from our examination of the books. c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account. d) In our opinion, the Profit & Loss Account and Balance Sheet comply with the Accounting Standards referred to in subsection 3(c) of section 211 of the Companies Act, e) On the basis of written representations received form the directors, as on March, 31, 2010 and taken on record by the Board of Directors, we report that none of the director is disqualified as on March 31, 2010 from being appointed as a director in terms of section 274(1)(g) of the Companies Act, f) In our opinion and to the best of our information and according to the explanations give to us and subject to notes given there on, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view:- (i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, and (ii) In the case of the Profit and Loss Account, of the Profit of the Company for the year ended on that date. and (iii) In so far as it relates to Cash Flow Statement, of the Cash Flow of the company for the year ended on that date. For PATNI & CO. Chartered Accountants 1, India Exchange Place Kolkata Dated : The 28th day of May, 2010 S. Sureka Partner Membership No Firm Regn No E Annual Report

63 TRADE CITY SECURITIES PVT. LTD. ANNEXURE TO THE AUDITOR S REPORT In term of the information and explanations given to us and books of account examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under: - i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The fixed assets of the company were physically verified by the management during the year. We have been informed that no material discrepancies have been noticed on such physical verification. Substantial parts of fixed assets have not been disposed off during the year, which will affect its status as going concern. ii) Since the Company has not dealt in any of the commodities. Hence requirement of reporting on physical verification of inventory or maintenance of inventory records does not arise. iii) The company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register required to be maintained under section 301 of the Companies Act, Hence question of reporting whether the terms and conditions of such loans are prejudicial to the interest of the company, whether reasonable steps for recovery of over dues of such loans are taken does not arise. The company had taken unsecured loan from six parties covered in the register required to be maintained u/s 301 of the Companies Act, The maximum amount involved during the year was Rs. 5,75,00,000/-. In our opinion, the rate of interest and other terms and conditions of loan taken by the company from companies, firms or other parties listed in the register required to be maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company. The company is regular in the payment of interest and principal. iv) In our opinion and according to the information and explanations given to us, there is adequate internal control procedure commensurate with the size of the company and the nature of its business for purchase of fixed assets and for providing services. During the course of audit, we have not observed any continuing failure to correct major weakness in internal control system. v) As per information and explanations given to us we are of the opinion that the contracts or arrangements that need to be entered into a register required to be maintained in pursuance of section 301 of the Act have been so entered. In our opinion, each of these contracts or arrangements made in pursuance of contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. vi) According to information and explanations given to us, in our opinion, the company has not accepted public deposits upto vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business viii) The Company is not engaged in production, processing, manufacturing or mining activities. Hence, the provisions of section 209(1)(d) do not apply to the company. Hence in our opinion, no comment on maintenance of cost records u/s 209(1)(d) is required. ix) According to the records of the company, the company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty & Cess and any other statutory dues with appropriate authorities applicable to it. According to information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, custom duty and excise duty were outstanding as at the last date of the accounting year for a period of more than six months from the date they became payable. According to records of the company, there are not dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute. x) The company was incorporated on Since a period of five years has not elapsed since the date of incorporation as at the balance sheet date, we are of the opinion that no comment is required under this clause. xi) The Company has not defaulted in repayment of dues to financial institution or bank or debenture holders xii) As informed to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities Annual Report

64 ANNEXURE TO THE AUDITOR S REPORT (Contd.) TRADE CITY SECURITIES PVT. LTD. xiii) xiv) xv) xvi) xvii) The company is not a chit fund, nidhi or mutual benefit fund/society. The company is not dealing or trading in shares, securities and other investments. The company has not given any guarantee for loans taken by others from bank or financial institutions. The term loans obtained by the company have been applied for the purpose for which they were raised. According to the information and explanations given to us, we report that no funds raised on short-term basis have been used for long term investment by the company. xviii) The company has made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the company. xix) The company has not issued any debenture. xx) The company has not raised any money by public issues during the period covered by our audit report. xxi) During the checks carried out by us, no fraud on or by the company has been noticed or reported during the year under report. For PATNI & CO. Chartered Accountants Place : 1, India Exchange Place Kolkata Date : The 28th day of May, 2010 S. Sureka Partner Membership No Annual Report

65 TRADE CITY SECURITIES PVT. LTD. BALANCE SHEET AS AT 31ST MARCH SCHEDULES Rs. P. Rs. P. I. SOURCES OF FUNDS 1. SHAREHOLDER S FUNDS a) Share Capital A 25,000, ,000, LOAN FUND a) Secured Loan B 5,000, b) Unsecured Loan C 13,500, ,675, TOTAL 43,500, ,675, II. APPLICATION OF FUNDS 1. FIXED ASSETS D Gross Block 6,209, , Less: Accumulated Depreciation & Amortization 709, , ,499, , Deferred Tax Assets 376, ,487, CURRENT ASSETS AND LOANS & ADVANCES a) Sundry Debtors E 1,473, , b) Cash & Bank Balances F 22,967, ,389, c) Other Current Assets G 360, , d) Loans & Advances H 36,466, ,286, Total (A) 61,269, ,963, LESS : CURRENT LIABILITIES AND PROVISIONS a) Current Liabilities I 24,759, ,985, b) Provision J 808, , Total (B) 25,568, ,995, NET CURRENT ASSETS (A-B) 35,700, ,968, MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) a) Preliminary Expenses 98, , b) Profit & Loss Account 1,823, ,491, TOTAL 43,500, ,675, Significant Accounting Policies and Notes to the Accounts Schedules referred to above form an integral part of the Balance Sheet As per our attached report of even date For PATNI & CO., Chartered Accountants S. Sureka, Partner Membership NO Place : Kolkata Date : 28th May, Annual Report M For and on behalf of Board of Directors Mahesh Kumar Bajaj Director Hari Kishan Lohia Director

66 TRADE CITY SECURITIES PVT. LTD. PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 SCHEDULES Rs. P. Rs. P. I. INCOME Brokerage Income 18,590, , Interest Income (T.D.S. Rs. 2,01,441.77/-, Previous Year 1,992, , T.D.S. Rs. 84,679.95/-) Other Income 39, , TOTAL (A) 20,622, ,180, II. EXPENDITURE Payments to and Provision for Employees K 8,441, ,083, Other Expenses L 5,896, ,495, Interest Expenses 2,544, , Depreciation & Amortization 447, , TOTAL (B) 17,330, ,994, PROFIT/(LOSS) BEFORE TAX (A-B) 3,291, (4,814,048.25) Less : Provision for Taxes Current Tax 514, Deferred Tax 1,110, (1,466,452.00) Fringe Benefit Tax - 9, PROFIT/(LOSS) AFTER TAX 1,667, (3,357,096.25) Add: Balance Brought Forward from Previous Year (3,491,223.25) (134,127.00) Balance to be Carried Forward to Balance Sheet (1,823,772.00) (3,491,223.25) Basic/Diluted Earning Per Share 0.67 (1.61) Significant Accounting Policies and Notes to the Accounts M Schedules referred to above form an integral part of the Profit & Loss Account As per our attached report of even date. For PATNI & CO., Chartered Accountants S. Sureka, Partner Membership No Place : Kolkata Date : 28th May, 2010 For and on behalf of Board of Directors Mahesh Kumar Bajaj Director Hari Kishan Lohia Director Annual Report

67 TRADE CITY SECURITIES PVT. LTD. CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010 PURSUANT TO CLAUSE 32 OF LISTING AGREEMENTS (AS AMENDED) Amount (Rs.) Amount (Rs.) Amount (Rs.) Amount (Rs.) A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax & Extraordinary Items (48.14) Adjustment for : Preliminary Expenses Written Off Interest Received (19.92) (4.13) Interest Expenses Depreciation & Amortization (47.65) Operating Profit before Working Capital Adjustment (Increase)/Decrease in Debtors (14.01) (0.73) (Increase)/Decrease in Other Current Assets (1.46) (2.15) (Increase)/Decrease in Loans & Advances (86.66) (113.03) Increase/(Decrease) in Current Liabilities (34.23) Less: Payment of Taxes (5.14) - Net Cash Flow From Operating Activities (34.23) B. CASH FLOW FROM INVESTING ACTIVITIES Purhcase of Fixed Assets (53.64) (8.46) (Increase)/Decrease in Fixed Deposits (101.14) (50.00) Interest Received Net Cash Flow From Investing Activities (134.86) (54.33) C. CASH FLOW FROM FINANCING ACTIVITIES From Issue of Shares Preliminary Expenses - (0.35) Increase/(Decrease) in Loans & Advances Interest Expenses (25.45) (1.54) Net Cash Flow From Financing Activities Net increase/(decrease) in cash and cash equivalent Add : Opening Cash & Cash Equivalent Closing Cash & Cash Equivalent As per our attached report of even date. For PATNI & CO., Chartered Accountants S. Sureka, Partner Membership No Place : Kolkata Date : 28th May, 2010 For and on behalf of Board of Directors Mahesh Kumar Bajaj Director Hari Kishan Lohia Director 66 - Annual Report

68 TRADE CITY SECURITIES PVT. LTD. SCHEDULES ATTACHED AND FORMING PART OF THE FINANCIAL STATEMENT Rs. P. Rs. P. SCHEDULE A SHARE CAPITAL Authorised 30,00,000 Equity shares of Rs. 10/- each 30,000, ,000, Issued, subscribed & paid up 25,00,000 Equity shares of Rs. 10/- each 25,000, ,000, fully paid up (All the above 25,00,000 shares are held by Lohia Securities Limited, Holding Company and its nominee) TOTAL 25,000, ,000, SCHEDULE B SECURED LOAN From Bank 5,000, (Repaybale within one year Rs.50,00,000/- Previous Year, Nil) (Refer point no B(5) of Schedule M ) TOTAL 5,000, SCHEDULE - C UNSECURED LOAN From Body Corporate 13,500, ,675, TOTAL 13,500, ,675, SCHEDULE - E SUNDRY DEBTORS More than Six Months Other Debts From Holding Company Lohia Securities Limited 722, (Maximum amount outstanding during the year Rs. 7,22,155.27, P.Y. :- Nil) Others 751, , TOTAL 1,473, , SCHEDULE - F CASH & BANK BALANCES Cash in hand (As certified by the management) 242, , Balance with Scheduled Banks In Current Account 7,610, ,245, In Fixed Deposits Account 15,114, ,000, TOTAL 22,967, ,389, Annual Report

69 TRADE CITY SECURITIES PVT. LTD. SCHEDULES ATTACHED AND FORMING PART OF THE FINANCIAL STATEMENT SCHEDULE : - D DETAILS OF FIXED ASSETS AS ON 31ST MARCH 2010 Sl. No. Name of the Assets A. TANGIBLE ASSETS AS ON ADDITION DURING THE YEAR GROSS BLOCK DEDUCTION DURING THE YEAR AS ON AMOUNT AS ON DEPRECIATION FOR THE YEAR DEPRECIA- TION ON SALE AMOUNT AS ON W.D.V. AS ON NET BLOCK W.D.V. AS ON Office Space - 4,234, ,234, , , ,193, Computers & Accessories 710, , ,159, , , , , , Office Equipment 60, , , , , , , Car - 634, , , , , Air Conditioner - 45, , , B. INTANGIBLE ASSETS 1 Software 74, , , , , , , Total 845, ,363, ,209, , , , ,499, , Previous Year - 845, , , , , Annual Report

70 TRADE CITY SECURITIES PVT. LTD. SCHEDULES ATTACHED AND FORMING PART OF THE FINANCIAL STATEMENT Rs. P. Rs. P. SCHEDULE - G OTHER CURRENT ASSETS Interest Receivable 360, , TOTAL 360, , SCHEDULE - H LOANS & ADVANCES (Recoverable in cash or in kind or for value to be received) ADVANCES Taxes Paid 697, , Prepaid Expenses 228, , Other Advances 719, , DEPOSITS Deposits With Exchange 12,500, ,500, Telephone Deposits 5, , Electricity Deposits 80, , Other Deposits 511, , Margin to Trading Member -Lohia Securities Limited (Holding Company) 21,725, ,500, (Maximum Outstanding during the year Rs. 5,72,78,000/- P.Y. Rs. 1,56,94,000/-) TOTAL 36,466, ,286, SCHEDULE - I CURRENT LIABILITIES Advance received from Client 20, Sundry Creditors for Expenses and others 2,078, , Margin From Client 22,660, ,705, TOTAL 24,759, ,985, SCHEDULE - J PROVISIONS Provision for Gratuity Charges 285, Provision for Income Tax , Provision for Fringe Benefit Tax , , TOTAL 808, , SCHEDULE - K PAYMENT TO AND PROVISIONS FOR EMPLOYEES Salaries & Bonus 7,680, ,083, Employer Contribution to Provident Fund 4, Gratuity Charges 285, Staff Welfare Expenses 470, TOTAL 8,441, ,083, Annual Report

71 TRADE CITY SECURITIES PVT. LTD. SCHEDULES ATTACHED AND FORMING PART OF THE FINANCIAL STATEMENT Rs. P. Rs. P. SCHEDULE - L OTHER EXPENSES Advertisement 3, Auditor Remuneration 24, , Bank Charges & Bank Guarantee Commission 226, , Broker Note Stamp Expenses 856, , Client Referral Fees 9, Car Expenses 5, Communication (including V-SAT) Expenses 899, , Computer & Software Expenses 665, , Depository Charges 275, , Electricity Expenses 117, , Filing Fees 2, , General Expenses 137, , Insurance Charges 34, , Internal Audit Fees 100, NSE & SEBI Charges 719, , Printing & Stationery 122, , Postage & Courier Charges 239, , Professional Charges 376, Professional Fees 691, , Rent 192, , Rates & Taxes 4, , Travelling & Conveyance 96, , Preliminary Expenses Written Off 45, , Repairs & Maintenance Charges Others 49, , TOTAL 5,896, ,495, Annual Report

72 Schedule : - M A.) SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS TRADE CITY SECURITIES PVT. LTD. SCHEDULES ATTACHED AND FORMING PART OF THE FINANCIAL STATEMENT Significant Accounting Policies (1) System of Accounting The Financial Statements are prepared under the historical cost convention, on accrual basis and in accordance with the provision of the Companies Act, 1956, and the Accounting Standard issued under the Companies (Accounting Standard) Rules (2) Use of Estimates The preparation of the Financial Statements in conformity with the Accounting Standard generally accepted in India requires, the management to make estimates that affect the reported amount of assets & liabilities disclosure of contingent liabilities as at the date of the financial statement and reported amount of revenue and expenses for the year. Actual results could differ from these estimates. (3) Fixed Assets & Depreciation i) Fixed Assets are stated at their original cost of acquisition less accumulated depreciation. ii) Depreciation on fixed assets has been provided under written down value method on pro- rata basis as per the rate prescribed under Schedule XIV of the Companies Act, 1956 iii) Software has been amortized over the period of four years. (4) Revenue Recognition Income from Brokerage is recognized on the trade date of transaction. (5) Preliminary Expenses Preliminary Expenses are being written off over a period of Five Financial Years. (6) Leave Encashment & Gratuity The company has policy of paying the leave encashment amount at the end of the financial year. Provision for Gratuity has been made in accordance with Payment of Gratuity Act, 1972 (7) Taxation Provision of current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge is recognized using enacted tax rate. Deferred Tax assets are recognized and carried forward to the extent that there is a virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. B) Notes On Accounts (1) Contingent Liability The company has taken Bank Guarantee of Rs. 150 Lakhs from HDFC Bank against pledge of fixed deposits of Rs. 75 lakhs, which has been given as margin money in favour of National Securities Clearing Corporation Limited for Capital Market Segment (2) Director s Remuneration Salary & Bonus includes Rs. 14,00,000/- for the year (Previous Year : - Rs. 20,75,000/-) payment to Director s towards managerial remuneration under section 198 of the Companies Act, Payments made to Directors are as follows: Annual Report

73 TRADE CITY SECURITIES PVT. LTD. SCHEDULES ATTACHED AND FORMING PART OF THE FINANCIAL STATEMENT Name of the Director Amount of Remuneration 1. Mr. Hari Kishan Lohia Rs. 8,00,000/- 2. Mr. Mahesh Kumar Bajaj Rs. 6,00,000/- In terms of the shareholders resolution passed at AGM on 20th September 2008 the executive directors were eligible for monthly salary of Rs. 1,00,000/- each. However, in view of recession Mr. Hari Kishan Lohia and Mr. Mahesh Kumar Bajaj have voluntarily drawn Rs. 8,00,000/- and Rs. 6,00,000/- respectively during the year. Consent letter for the wavier of the same has been received from them. (3) Compliance of Accounting Standards issued by the Institute of Chartered Accountants of India. (a) Segment Reporting The company s operation predominantly comprises of only one segment Activity relating to Capital Market and therefore segment reporting is not applicable to the company. (b) Related Party Disclosure: Information given in accordance with Accounting Standard 18 (A) Names of Related Parties & Relationship (i) Enterprises that directly or indirectly exercise control over or that are controlled by or that are under common control with the reporting enterprises. 1. Holding Company : a) Lohia Securities Limited 2. Fellow Subsidiary : a) Trade City Commodities (P) Ltd. b) Trade City Real Estate (P) Ltd. c) Trade City Barter Pvt. Ltd. (ii) Key Management Personnel (KMP) : a) Mr. Hari Kishan Lohia b) Mr. Mahesh Kumar Bajaj (iii) Relatives of KMP : a) Poonam Bajaj b) Mayank Bajaj c) Megha Bajaj (iv) Enterprise over which KMP : a) Daadi Stock Broking (P) Ltd. Exercise significant influence : b) Ridhi Sidhi Distributors (P) Ltd. c) Shiv Lalit Consultancy (P) Ltd. d) Hari Kishan Lohia (HUF) e) Mahesh Kumar Bajaj (HUF) f) Bajaj Portfolio Services (P) Ltd. g) Satya Narayan Bajaj (HUF) h) SNB Stock Broking (P) Ltd Annual Report

74 TRADE CITY SECURITIES PVT. LTD. SCHEDULES ATTACHED AND FORMING PART OF THE FINANCIAL STATEMENT (B) Transaction with Related Parties: Description of the nature of Transaction Holding Company Fellow Subidiaries Key Management Personnel (KMP) Relative of KMP (Figures in Lakhs) Enterprise over which KMP exercise Significant Influence Brokerage Earned (---) (.20) (---) (.04) (.33) Depository 2.89 (---) (---) (---) (---) Charges Paid (.18) (---) (---) (including service tax) Remuneration Paid (---) (---) (---) (---) (---) (---) (20.75) Margin Deposits (---) Taken for Trading (---) (93.70) (---) (---) (50.80) Margin Deposits (---) Taken for Trading Refunded (---) (93.70) (---) (---) (45.80) Margin Deposits 2, (---) (---) (---) (---) Given to Clearing (430.24) (---) (---) Margin Deposits 2, (---) (---) (---) (---) Given to Clearing (320.24) (---) (---) Member Received Back Loan Taken (---) (---) 1, (---) (---) (---) (---) (196.00) Loan Repaid (---) (---) 1, (---) (---) (---) (---) (---) Interest Paid (---).49 (---) (---) 6.96 (---) (---) (---) (---) (1.53) Interest Received 9.56 (---) (---) (---) (---) On FD Margin (---) (---) (---) (---) (---) Equity (---) (---) (---) (---) (---) Contribution (75.00) (---) (---) (---) (---) *Previous year figures are given in bracket (C) Amount outstanding : Margin money Receivable from Clearing Member :- Rs lakhs (Holding Company ) Interest On Fixed Deposits Receivable from Holding :- Rs lakhs Company (On Client FD as per instruction of client which is payable to client) (D) Provision to be made : - Nil Annual Report

75 (4) Auditor Remuneration (excluding service tax) TRADE CITY SECURITIES PVT. LTD. SCHEDULES ATTACHED AND FORMING PART OF THE FINANCIAL STATEMENT Particulars (Rs.) (Rs.) (a) Satutory Audit Fee 15, , (b) Tax Audit Fee 5, (c) Certification Charges 4, Total 24, , (5) The company has obtained a term loan of Rs. 50 lacs from HDFC Bank against pledge of Fixed Deposits of Rs. 25 lacs (6) The company has given Fixed Deposits of Rs. 50 lakhs to National Stock Exchange of India Ltd. as a Margin money for Capital Market segment. (7) Expenditure in Foreign Currency Particulars (Rs.) (Rs.) Tours & Travel NIL 1,64, TOTAL NIL 1,64, (8) Component of Deferred Tax Assets (Net) shown in the Balance Shet is as follow :- Particulars As at (Rs.) For the year As at (Rs.) Liability Items : Diff in WDV as per Companies Act 67, , ,54, & Income Tax Act. Total 67, , ,54, Assets Items :- Carry Forward Business Loss 15,54, (10,23,598.00) 5,31, Total 15,54, (10,23,598.00) 5,31, Deferred Tax Assets(Net) 14,87, (11,10,538.00) 3,76, (9) Earning per Share Particulars Numerator Used - Profit After Tax Rs. 16,67, Rs. (33,57,096) Denominator Used - Weighted Average No. Shares 25,00,000 20,83,333 Basic / Diluted Earning per Share Rs Rs. (1.61) (10) Additional Information pursuant to part IV of Schedule VI to the Companies Act, 1956 is annexed as Annexure I hereto (11) Previous Year figures have been regrouped/rearranged wherever necessary. For PATNI & CO., Chartered Accountants S. Sureka, Partner Membership No Place : Kolkata Date : 28th May, 2010 For and on behalf of Board of Directors Mahesh Kumar Bajaj Director Hari Kishan Lohia Director 74 - Annual Report

76 TRADE CITY SECURITIES PVT. LTD. BALANCE SHEET ABSTRACT AND COMPANY S GENERAL BUSINESS PROFILE STATEMENT PURSUANT TO PART IV OF SCHEDULE VI OF THE COMPANIES ACT ANNEXURE - 1 i) REGISTRATION DETAILS REGISTRATION NO. : U67120MH2007PTC STATE CODE : 11 BALANCE SHEET DATE : ii) CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. 000) Public Issue N I L Right Issue N I L Bonus Issue N I L Private Placement N I L iii) POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN RS. 000) Total Liabilities Total Assets Source of Funds : Paid up Capital Reserve & Surplus I N L Secured Loans Unsecured Loans Application of Funds : Net Fixed Assets Investments N I L Deferred Tax Assets Net Currnet Assets Misc. Expenditure 9 9 Accumulated Losses iv) PERFORMANCE OF COMPANY(AMOUNT IN RS. 000) Turnover Total Expenditure Profit/(Loss) before Tax Profit/(Loss) after Tax Earning per Share in Rs Dividend Rate (%) N I L v) GENERIC NAME OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY (AS PER MONETARY ITEMS) Item Code No. (ITC Code) Product Description : N.A. : Shares & Securities For PATNI & CO., Chartered Accountants S. Sureka, Partner Membership No Place : Kolkata Date : 28th May, 2010 For and on behalf of Board of Directors Mahesh Kumar Bajaj Director Hari Kishan Lohia Director Annual Report

77 TRADE CITY COMMODITIES PVT. LTD. DIRECTORS REPORT TO THE MEMBERS OF TRADE CITY COMMODITIES PRIVATE LIMITED Your Directors have pleasure in presenting the Sixth Annual Report together with the audited Accounts of the Company for the year ended 31st March 2010, along with Auditor s Report thereon. FINANCIAL RESULTS The Financial result of the company for the year ended 31st March 2010, are summarized below: Profit/(loss) before Taxation (207,491.90) (570,712.52) Less:Provision for Taxation: -Current Tax Deferred Tax (83,384.00) 158, Fringe Benefit Tax: - ( ) Profit/(Loss) after Tax (290,875.90) (413,758.52) Balance Brought Forward 1,399, ,813,081.11) Balance Carried to Balance sheet 1,108, ,399, Earnings Per Share (0.28) (0.39) 76 - Annual Report Current Year Previous Year DIVIDEND Due to loss yours Directors regret for not recommending any dividend for the year OPERATION Total Revenue for the period ended 31st March, 2010 was Rs lakhs as compared to Rs lakhs for the period ended 31st March, 2009 resulting in annualized fall of Rs lakhs. The Loss after Tax for the year was Rs.2.91lakhs as compared to last year s loss after tax of Rs.4.14 lakhs resulting in annualized downfall of 1.23 lakhs. This downfall in loss is due to continual contraction in the business of the company. ICEX Membership Your Company has recently acquired membership of India Commodities Exchange Limited. As you are aware, we have membership of MCX Exchange, NCDEX Exchange, NCDEX Spot Exchange. DIRECTORS In accordance with the provisions of section 256 of the Companies Act, 1956, Mr. Mahesh Kumar Bajaj retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirement under section 217(2AA) of the Companies Act,1956 with respect to Directors Responsibility Statement, it is hereby confirmed: i) that in the preparation of the annual account for the financial year 31st March,2010 the applicable accounting standard had been followed along with proper explanation relating to material departure. ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for the year under review. iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act,1956 for safeguarding the assets of the company and for preventing and detecting fraud and irregularities.

78 TRADE CITY COMMODITIES PVT. LTD. DIRECTORS REPORT (Contd.) iv) that the directors had prepared the accounts for the financial year ended 31st March,2010 on a going concern basis. SECRETARIAL COMPLIANCE CERTIFICATE Pursuant to proviso to section 383A of the Companies Act, 1956, a secretarial compliance certificate from a practicing Company secretary has been obtained and is attached herewith. AUDITORS V.Lohia & Co Chartered Accountants hold office until the conclusion of the forthcoming Annual General Meeting and are recommended for reappointment. The Company has received a certificate from them to the effect that their reappointment, if made, would be within the limits prescribed under section 224(1B) of the Companies Act,1956. AUDITORS REPORT The observation made in the Auditor s Report are self explanatory and therefore, do not call for any further explanations under Sections 217 of the Companies Act,1956. PARTICULARS OF EMPLOYEES During the year none of the employees was in receipt of remuneration in excess of the limit prescribed under section 217(2A) of the companies Act, Hence, particulars required under the companies Rules, 1975 are not given. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION The Company has no activity relating to conservation of energy or technology absorption. The Company has no foreign earnings and outgoes during the year under preview. FOREIGN EXCHANGE EARNINGS AND OUTGO The Company has no foreign earnings and outgoes during the year under review. ACKNOWLEDGEMENTS Your Directors express their sincere appreciation and value the assistance, co-operation and support extended to your company by the various central and state Government agencies, customers, bankers and other business associates. For and on behalf of Board of Directors Place : Kolkata Date : 28th May, 2010 Sudheer Kumar Jain Director Hari Kishan Lohia Director Annual Report

79 TRADE CITY COMMODITIES PVT. LTD. COMPLIANCE CERTIFICATE UNDER SECTION 383A(1) OF THE COMPANIES ACT, 1956 CIN NO. U WB 2004 PTC AUTHORISED CAPITAL : RS.3,00,00,000/- PAID UP CAPITAL : RS.1,05,50,000/- To, The Members, TRADE CITY COMMODITIES PRIVATE LIMITED D- 402, 4TH FLOOR DC BLOCK, CITY CENTER KOLKATA I have examined the registers, records, books and papers of M/s. Trade City Commodities Private Limited, D- 402, 4th Floor, DC Block, City Center, Kolkata as required to be maintained under the Companies Act, 1956, (the Act) and the rules made there under and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 31st March, In my opinion and to the best of my information and according to the examinations carried out by me and explanations furnished to me by the company, its officers and agents, I certify that in respect of the aforesaid financial year: 01. The company has kept and maintained all registers as stated in Annexure "A" to this certificate, as per the provisions and the rules made there under and all entries therein have been duly recorded. 02. The Company has duly filed the forms and returns as stated in Annexure "B" to this certificate with the Registrar of Companies, within the time prescribed under the Act and the rules made there under. 03. The company being a private limited company has the minimum prescribed paid-up capital and its maximum number of members during the said financial year was 02 excluding its present and past employees and the company during the year under scrutiny:- (i) has not invited public to subscribe for its shares or debentures. (ii) has not invited or accepted any deposits from persons other than its members, directors or their relatives. 04. The Board of Directors duly met 11 (Eleven) times on , , , , , , , , , & in respect of which meetings proper notices were given and the proceedings were properly recorded and signed including the circular resolutions passed in the Minutes Book maintained for the purpose. 05. The company has not closed its Register of Members, U/s.154 of the Act during the financial year. 06. The Annual General Meeting for the financial year ended on 31st March, 2009 was held on after giving due notice to the members of the company and the resolutions passed thereat were duly recorded in Minutes Book maintained for the purpose. 07. No Extra Ordinary General Meeting was held during the financial year. 08. The Company being a private company, section 295 of the Act is not applicable. 09. The Company has not entered into contract under section 297 of the Act during the financial year and complied with the provision of the Act. 10. The company has maintained the register under section 301 of the Act. 11. As there was no instances falling within the purview of section 314 of the Act, the company has not obtained any approval from the Board of Directors, members, or Central Government. 12. The Company has not issued any duplicate share Certificates during the financial year Annual Report

80 TRADE CITY COMMODITIES PVT. LTD. COMPLIANCE CERTIFICATE UNDER SECTION 383A(1) OF THE COMPANIES ACT, 1956 (Contd.) 13. The company has:- (i) not made allotment of Equity Share and transfer or transmission of share or securities during the financial year. (ii) not declared any dividend for the year ended on 31st March, (iii) not deposited any amount in separate bank account as no dividend was declared during the financial year. (iv) not posted any dividend warrants to it's members as it was not required to do so. (v) duly complied with the requirements of section 217 of the Act. 14. The Board of Directors of the company is duly constituted and there was no appointment of additional directors, alternate directors and directors to fill casual vacancies during the financial year. 15. The Company being a private company provisions of section 269 of the Act with regard to appointment of Managing Director/ Whole-time Director/Manager are not applicable. 16. The Company has not appointed any sole-selling agents during the financial year. 17. The company was not required to obtain any approval of the Central Government, Company Law Board, Regional Director, Registrar or such other authorities as prescribed under the various provisions of the Act during the financial year. 18. The Directors have disclosed their interest in other firms/ companies to the Board of Directors Pursuant to the provisions of the Act and the rules made there under. 19. The company has not issued equity shares, debentures, or other securities during the financial year. 20. The company has not bought back any shares during the financial year. 21. There was no redemption of preference shares/debentures during the financial year. 22. There was no transactions necessitating the company to keep in abeyance rights to dividend, right shares and bonus shares pending registration of transfer of shares. 23. The company has not accepted/invited deposits from Public including unsecured loans falling with in the purview of section 58A during the financial year. 24. The company, being a private company, the borrowings made during the financial year do not attract provisions of section 293(1)(d) of the Act. 25. The company being a Private Limited Company, provision of 372(A) of the Act with respect to loan & guarantees given or provided to other body corporate is not applicable. 26. The company has not altered the provision of it's Memorandum of Association with respect to situation of the company's registered office from one State to another during the year under scrutiny. 27. The company has not altered the provisions of it's Memorandum of Association with respect to the objects of the company during the year under scrutiny. 28. The company has not altered the provisions of it's Memorandum of Association with respect to name of the Company during the year under scrutiny. 29. The company has not altered the provisions of it's Memorandum of Association with respect to Share Capital of the company during the year under scrutiny. 30. The company has not altered its Articles of Association during the financial year. 31. There was no prosecution initiated against or show cause notices received by the company and no fines or penalties or any other punishment imposed on the company during the financial year for offences under the Act. 32. The company has not received any money as security from its employees during the financial year. 33. The company has not deposited contribution to provident fund as the same is not applicable. Place : Kolkata DEBASISH MUKHOPADHYAY Date : 28th May, 2010 (COMPANY SECRETARY) C. P. NO Annual Report

81 TRADE CITY COMMODITIES PVT. LTD. COMPLIANCE CERTIFICATE UNDER SECTION 383A(1) OF THE COMPANIES ACT, 1956 (Contd.) Annexure - A Registers as maintained by the Company 01. Members Register U/s Directors Register U/s Director's Share Holding Register U/s Loan & Investment Register U/s 372A 05. Share Transfer Register. 06. Register of Contract. 07. Minutes of Directors & Shareholders meetings under section 193. Annexure - B Forms and Returns as filed by the Company with the Registrar of Companies, Regional Director, Central Government or other authorities during the financial year ended on 31st March, Balance Sheet for U/s.220 filed on Annual Return for AGM held on U/s.159 filed on Secretarial Compliance certificate for u/s 383A(1) filed on Form No. 22B filed on Annual Report

82 TRADE CITY COMMODITIES PVT. LTD. AUDITOR S REPORT TO THE MEMBERS OF TRADE CITY COMMODITIES PVT LTD 1. We have audited the attached Balance Sheet of TRADE CITY COMMODITIES PVT LTD, as at 31st March 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended as at that date both annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors' Report) Order, 2003, as amended by the Companies (Auditors' 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, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; b) in our opinion, proper books of account as required by law have been kept by the Company, so far as appears from our examination of the books; c) the Balance Sheet, the Profit & Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account; d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act 1956; e) on the basis of the written representations received from the directors as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on March 31, 2010, from being appointed as director, in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; f) in our opinion, and to the best of our information and according to the explanations given to us, the said financial statements read together with the other Notes thereon, give the information required by the Companies Act 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; (i) in the case of the Balance Sheet, of the state of affairs of Company as at March 31, 2010, and (ii) in the case of the Profit and Loss Account, of the Loss of the Company for the year ended on that date. (iii) in the case of Cash Flow statement, of the cash flows for the year ended on that date. For V. LOHIA & CO. Chartered Accountants (Firm Regn No E) Kolkata, the 28th day of May, 2010 VISHNU LOHIA, FCA (Partner) Membership NO Annual Report

83 TRADE CITY COMMODITIES PVT. LTD. ANNEXURE TO THE AUDITOR S REPORT (Referred to in paragraph 3 of our Report of even date) i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) As informed to us the Fixed Assets of the company have been physically verified by the Management at the year end and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No discrepancies were noticed on such physical verification. (c) The Company has not disposed off any fixed assets during the year. ii) The inventory of Commodities being held in electronic mode, in our opinion, no comments are called for under clause 4(ii) of the Order. iii) (a) The Company has not granted any loans during the year. Therefore the provisions of sub- clause (a) to (d) of clause 4(iii) of the Order are not applicable to the Company. (e) The Company has taken loan from one company covered in the register maintained u/s 301 of the Companies Act during the year. The maximum amount involved during the year is Rs 65 lacs and the year end balance was Rs. 50 lacs. (f) In our opinion, the rate of interest and terms and conditions of loan taken by the company covered in the register maintained under section 301 of the Companies Act, are prima facie, not prejudicial to the interest of the company. (g) The company is regular in payment of principal amount and interest. iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and with regard to the sale of goods and services. Further, during the course of our audit we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid control system. v) (a) On the basis of our examination of the books of account, the transactions made in pursuance of contracts or arrangements, particulars of which need to be entered in the register maintained under Section 301 of the Companies Act 1956 have been so entered. (b) The transactions made in pursuance of such contracts or arrangements are not exceeding five lacs rupees, therefore reporting under clause 4(v)(b) is not Required. vi) The Company has not accepted any deposits under the provisions of Sections 58A, 58AA or other relevant provisions of the Act and the rules framed there under. vii) In our opinion, the internal audit of the company is done by the management, which is commensurate with its size and nature of its business. viii) In our opinion, the Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company. ix) (a) According to the records of the Company, Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service Tax, Customs duty, Excise duty, Cess and other material Statutory Dues applicable to it have been generally regularly deposited during the year with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31, 2010 for a period of more than six months from the date on which they become payable. (b) According to the information and explanation given to us, there are no dues of Income tax, Sales tax, Wealth tax, 82 - Annual Report

84 ANNEXURE TO THE AUDITORS REPORT (Contd.) TRADE CITY COMMODITIES PVT. LTD. Service Tax, Customs duty, Excise duty, Cess which have not been deposited on account of any dispute except Income Tax demand of Rupees 344,803/- disputed before Commissioner of Income Tax for the Financial Year x) The Company does not have accumulated losses at the end of the financial year. Further the Company has not incurred cash losses during the financial year covered by our audit but has so incurred in the immediately preceding financial year. xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution, bank or debenture holders. xii) Based on our exanimation of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit funds/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company. xiv) The Company is neither a trader nor a dealer in shares, securities, debentures and other investments. xv) In our opinion, the Company has not given any guarantee for loans taken by others. Therefore, the provisions of clause 4(xv) of the Order are not applicable to the Company. xvi) In our opinion, the Company has not raised any term loan. Therefore, the provisions of clause 4(xvi) of the Order are not applicable to the Company. xvii) According to the information and explanations given to us and on the basis of overall examination of the Balance Sheet of the Company, we report that the Company has not used fund raised on short-term basis for long term investments. xviii) According to the information and explanation given to us, the Company has not made any allotment of shares during the year. Therefore the provisions of clause 4(xviii) of the Order are not applicable to the Company. xix) The Company has not issued any debentures. Therefore, the provisions of clause 4(xix) of the Order are not applicable to the Company. xx) The Company has not raised any sum by way of public issue. Therefore, the provisions of clause 4(xx) of the Order are not applicable to the Company. xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management. For V. LOHIA & CO. Chartered Accountants (Firm Regn No E) Kolkata the 28th day of May, 2010 VISHNU LOHIA, FCA (Partner) Membership NO Annual Report

85 TRADE CITY COMMODITIES PVT. LTD. BALANCE SHEET AS AT 31ST MARCH SCHEDULE AS AT AS AT Rs. P. Rs. P. A) SOURCES OF FUNDS 1 SHAREHOLDER S FUNDS Equity Share Capital 1 10,550, ,550, Reserves & Surplus 2 9,258, ,549, LOAN FUNDS Unsecured Loans From Bodies Corporate 5,000, ,500, TOTAL 24,808, ,599, B) APPLICATION OF FUNDS 1 FIXED ASSETS 3 Gross Block 6,022, ,331, Less : Depreciation 2,617, ,108, NET BLOCK 3,404, ,222, Deferred Tax Assets 95, , CURRENT ASSETS, LOANS & ADVANCES Inventories 860, , Sundry Debtors 4 429, , Cash and Bank Balances 5 11,894, ,894, Other Current Assets 6 475, , Loans and Advances 7 10,882, ,015, Less: 24,543, ,871, CURRENT LIABILITIES & PROVISIONS 8 3,234, ,673, NET CURRENT ASSETS 21,308, ,198, TOTAL 24,808, ,599, Significant Accounting Policies & Notes on Accounts 13 As per our Report of even date for V. LOHIA & CO. Chartered Accountants (Firm Regn. No E) VISHNU LOHIA, FCA (Partner) Membership No Place : Kolkata Date : 28th May Annual Report For and on behalf of Board of Directors Sudheer Kumar Jain Director Hari Kishan Lohia Director

86 TRADE CITY COMMODITIES PVT. LTD. PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 31ST MARCH 2010 For the Year Ended For the Year Ended SCHEDULE Amount in Rs. Amount in Rs. A) INCOME Income from Commodity Operations 9 5,075, ,602, Brokerage Income (Gross) 736, , (TDS Rs.Nil/- Previous Year :- 1,023/-) Interest on Fixed Deposit(Gross) 848, , (TDS - Rs.83,099.36, P.Y. Rs.1,94, ) Other Income 10 5, , TOTAL (A) 6,665, ,049, B) EXPENDITURE Operating Expenses 11 4,491, ,657, Administrative Expenses 12 1,482, ,473, Loss On Sale of Car - 150, Interest Expenses 391, , Depreciation & Amortisation 508, , Preliminary Expenses written off - 24, TOTAL (B) 6,872, ,620, Profit before Taxation (A - B) (207,491.90) (570,712.52) Provision for Taxation -Current Tax - - -Deferred Tax (83,384.00) 158, Fringe Benefit Tax - (1,700.00) Profit After Taxation (290,875.90) (413,758.52) Balance Brought Forward from Previous Year 1,399, ,813, Balance Carried to Balance Sheet 1,108, ,399, Basic/Diluted Earning Per Share (Face value - Rs10/-) (0.28) (0.39) Significant Accounting Policies & Notes on Accounts 13 As per our Report of even date for V. LOHIA & CO. Chartered Accountants (Firm Regn. No E) VISHNU LOHIA, FCA (Partner) Membership No Place : Kolkata Date : 28th May 2010 For and on behalf of Board of Directors Sudheer Kumar Jain Director Hari Kishan Lohia Director Annual Report

87 TRADE CITY COMMODITIES PVT. LTD. CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, Amount (Rs.) Amount (Rs.) Amount (Rs.) Amount (Rs.) A) CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax & Extraordinary Items (207,491.90) (570,712.52) Adjustment for : Preliminary Expenses Written Off - 24, Depreciation 508, , Interest Paid 391, , Interest Received (853,712.02) (951,372.13) Provision for Gratuity 33, Loss on Sale of Car - 79, , , Operating Profit Before Working Capital Changes (127,909.92) (32,454.05) Adjustment for (Increase)/Decrease in Sundry Debtors (199,464.78) 1,963, (Increase)/Decrease in Other Current Assets 395, (209,212.45) Increase/(Decrease) in Current Liabilities (2,402,774.85) (1,042,539.16) (Increase)/Decrease in Loans & Advances 132, (2,074,527.02) (867,459.53) (155,635.58) (2,202,436.94) (188,089.63) Tax Payments - - Cash Flow From Operating Activities (2,202,436.94) (188,089.63) B) CASH FLOW FROM INVESTING ACTIVITIES Interest Received 853, , Addition to Fixed Assets (691,000.00) (500,000.00) Sales of Fixed Assets - 205, Fixed Deposits - (0.13) Cash Flow From Investing Activities 162, , C) CASH FLOW FROM FINANCING ACTIVITIES Increase/(Decrease) in Unsecured Loan (1,500,000.00) 1,000, Repayment of Secured Loan - (4,347.00) Interest Paid (391,211.00) (644,987.00) Cash Flow From Financing Activities (1,891,211.00) 350, Net Increase/(Decrease) in Cash and Cash Equivalent (3,930,935.92) 818, Add: Opening Balance of Cash & Cash Equivalent 5,825, ,006, Closing Balance Cash & Cash Equivalent 1,894, ,825, As per our Report of even date for V. LOHIA & CO. Chartered Accountants (Firm Regn. No E) VISHNU LOHIA, FCA (Partner) Membership No Place : Kolkata Date : 28th May Annual Report For and on behalf of Board of Directors Sudheer Kumar Jain Director Hari Kishan Lohia Director

88 TRADE CITY COMMODITIES PVT. LTD. SCHEDULE ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS For the year ended For the year ended Amount in Rs. Amount in Rs. SCHEDULE - 1 SHARE CAPITAL Authorised 30,00,000 Equity Share of Rs.10/- each 30,000, ,000, Issued, Subscribed and Paid-up 10,55,000 Equity Share of Rs.10/- each fully paid up in cash 10,550, ,550, (All the above 10,55,000 Shares are held by Lohia Securities Ltd.,the Holding Company & its nominee) 10,550, ,550, SCHEDULE - 2 RESERVES & SURPLUS Securities Premium Account 8,150, ,150, Profit & Loss Account 1,108, ,399, ,258, ,549, SHCEDULE - 4 SUNDRY DEBTORS (Unsecured Considered Good) More than Six Months Other Debts 429, , , , SCHEDULE - 5 CASH AND BANK BALANCES Cash on hand (as certified by Management) 78, , Balance with Scheduled Banks on Current Accounts 1,815, ,792, on Fixed Deposit A/cs. (kept as Margin Money 10,000, ,000, against Bank Guarantee) 11,894, ,894, SHCEDULE - 6 OTHER CURRENT ASSETS Accrued Interest on Fixed Deposit 222, , Prepaid Expenses 252, , , , SCHEDULE - 7 LOANS & ADVANCES (Unsecured, considered good unless otherwise stated) Advances Recoverable in Cash or kind or value to be received 423, , Margin Money with Exchange 4,500, ,500, Security Deposits 4,499, ,482, Tax Payments 1,460, ,271, ,882, ,015, Annual Report

89 TRADE CITY COMMODITIES PVT. LTD. SCHEDULE ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS SCHEDULE - 3 FIXED ASSETS Particulars As on GROSS BLOCK Addition Deduction As at As on DEPRECIATION / AMORTISATION For the Year Deduction As at As at NET BLOCK As at I. TANGIBLE ASSETS Air Conditioners 95, , , , , , , Computer & Accessories 1,847, ,847, ,344, , ,545, , , Leasehold Office * 2,111, ,111, , , , ,796, ,891, VSAT Equipment 133, , , , , , , Furnitures & Fittings 63, , , , , , , Generator - 441, , , , , II. INTANGIBLE ASSETS User Access Licence 580, , , , , , , Membership Fees** 500, , , , , **(refer schedule 13(B)(2)) TOTAL 5,331, , ,022, ,108, , ,617, ,404, ,222, Previous Year 5,598, , , ,331, ,851, , , ,108, ,222, ,747, * Office Premises being taken on long lease life of 99 years has been categorised under Tangible Assets and accordingly depreciation has been charged at the rate and in the manner prescribed under the Companies Act Annual Report

90 TRADE CITY COMMODITIES PVT. LTD. SCHEDULE ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS For the year ended For the year ended Amount (Rs.) Amount (Rs.) SCHEDULE - 8 CURRENT LIABILITIES & PROVISIONS CURRENT LIABILITIES Sundry Creditors 1, , Margin money for Commodity Segment-From Clients 1,425, ,686, Mark to Market A/c. 161, , Bank Overdraft (Temporary Overdrawn) - 69, Outstanding Liabilities 454, , Statutory Liabilities 111, , PROVISIONS Provision for Gratuity 33, Tax Provisions 1,047, ,047, ,234, ,673, SCHEDULE - 9 INCOME FROM COMMODITY OPERATIONS Sales 863, , Closing Stock 860, , Income from Commodity Futures (net of Charges) 5,070, ,626, ,795, ,112, Less:Purchases 858, , Less:Opening Stock 860, , ,075, ,602, SCHEDULE - 10 OTHER INCOME Interest on Security Deposits (TDS Rs. 533/-, P.Y. Rs. 1,048/-) 5, , , , SCHEDULE - 11 OPERATING EXPENSES Transaction Charges 3,335, ,405, VSAT Charges 92, , Leasedline Charges 324, , Internet Charges - 10, User ID Charges 12, , Annual Maintenance Charges 153, , Annual Subscription Fees 125, , Bank Guarantee Commission 296, , Depository Charges 32, , Examination Charges 3, , Insurance Charges 20, , Software Expenses 85, , Telephone Charges 8, , Delivery and Warehouse Charges 4, , ,491, ,657, Annual Report

91 TRADE CITY COMMODITIES PVT. LTD. SCHEDULE ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS For the year ended For the year ended Amount (Rs.) Amount (Rs.) Schedule - 12 ADMINISTRATIVE EXPENSES Salary & Bonus 637, , Staff Welfare 58, , Gratuity Expenses 33, Rent (including Lease Rent Paid Rs. 9,912/-P.u) 275, , Auditors Remuneration -Statutory Audit Fees 7, , Tax Audit Fees 3, , Others - 8, Electricity Charges 341, , Exchange Processing Fees 3, , Bank Charges 1, , Filling Fees 2, , Conveyance Expenses 4, , General Expenses 11, , Generator Expenses 14, , Insurance Claim Written Off - 53, Postage & Stamp 1, , Printing & Stationery 8, , Professional Fees 5, , Rates & Taxes 21, , Repairs & Maintenance Charges Own Premises 10, , Rented Premises 40, , Others ,482, ,473, Annual Report

92 Schedule 13 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS TRADE CITY COMMODITIES PVT. LTD. SCHEDULE ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS A. SIGNIFICANT ACCOUNTING POLICIES (a) System of Accounting : The Financial Statements are prepared under the historical cost convention on accrual basis, in accordance with the generally accepted accounting principles in India and the relevant provisions of the Companies Act. (b) Fixed Assets : i) Fixed Assets are stated at their original cost of acquisition less accumulated depreciation. ii) Depreciation on Fixed Assets has been provided under written down value method on pro-rata basis as per rate prescribed under Schedule XIV of the Companies Act, 1956 iii) Intangible Assets are amortized over the period of four years. (c) Inventory : Inventory are valued at lower of cost and market value. Cost is calculated on weighted average basis. (d) Leave Encashment & Gratuity : The company has policy of paying the leave encashment amount at the end of the financial year. Provision for Gratuity has been made in accordance with Payment of Gratuity Act, 1972 (e) Taxation Provision of current tax is made with reference to taxable income computed for the accounting year for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax is recognized, subject to consideration of prudence in respect of deferred tax assets, on timing difference, being the difference between the taxable income and accounting income that originate in one period and are capable of reversed in one or more subsequent periods. Deferred tax assets are recognized only if there is virtual certainty that future taxable income will be available against which such deferred tax assets will be realized. Such assets are reviewed as at balance sheet date based on the developments during the year and reassess realization/ liabilities in terms of AS-22 issued by ICAI. B. NOTES ON ACCOUNTS : 1. Contingent Liabilities : - a) Bank Guarantee: The company has taken Bank Guarantee of Rs. 1,50,00,000/- from HDFC Bank against Fixed Deposits Receipt of Rs. 75,00,000.13/- and of Rs. 50,00,000/- from United Bank of India against pledge of fixed deposits receipt of Rs. 25,00,000/ -. Out of the above Bank Guarantee amounting to Rs. 80,00,000/- has been given to NCDEX and Rs. 1,20,00,000/- has been given to MCX as margin money. b) In respect of disputed demand of Rs.3, 44,803/- towards Income Tax for the F.Y ,the Company has filed an appeal to Commissioner of Income Tax/Kol.The Company has not made the provision of the entire amount demanded by Income Tax department as it is reasonably hopeful that the case would be decided in its favour. The company has become member of Indian Commodity Exchange Limited during the year. However the membership is not activated by the exchange because of connectivity ground. Again the membership of National Spot exchange has not been activated by exchange due to non-payment of prescribed security deposits. As the membership of both the exchange has not been activated fees paid therefore has not been amortized during the year Annual Report

93 TRADE CITY COMMODITIES PVT. LTD. SCHEDULE ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS 3. Compliance of Accounting Standard issued under the Companies (Accounting Standard) Rules, 2006 a) The company s operation predominantly comprises of only one segment Activity related to Commodity Market and therefore segment reporting is not applicable to the company. b) Related Party Disclosure Name of the related parties & Nature of their Relationship i) Holding Company : - Lohia Securities Limited ii) Fellow Subsidiaries : - a) Trade City Securities Pvt. Ltd. b) Trade City Real Estate Pvt. Ltd. c) Trade City Barter Pvt. Ltd. (iii) Enterprise over which KMP exercise significant influence: - a) Shiv Lalit Consultancy (P) Ltd. b) Daadi Stock Broking (P) Ltd. c) Ridhi Sidhi Distributor (P) Ltd. (2) Transaction wih Related Parties (Amount in Rupees) Sl. No. Nature of Transaction Holding Company Fellow Subsidiaries Enterprise over which KMP exercise significant influence 1. Rent Paid (29,040/-) 2. Maintenance Charges Paid (32,675) 3. Electricity Charges Paid (1,04,794/-) 4. Generator Charges Paid (71,040/-) 5. Property Tax Paid (39,496) 6. Demat Charges (6,623.43) 7. Margin Received for Trading ,00,000/- (21,28,471.78) 8. Margin Received for Trading ,10,000/- Refund (21,28,471.78) 9. Brokerage Earned ,134/- (9,936/-) 10. Loan Taken ,71,50,000/- (3,64,00,000/-) 11. Repayment of Loan ,86,50,000/- (2,99,00,000/-) 12. Interest Paid ,90,366/- (4,88,392/-) 92 - Annual Report

94 TRADE CITY COMMODITIES PVT. LTD. SCHEDULE ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS 4. Component of Deferred Tax Assts (Net) shown in the Balance Sheet is as Follow :- (Amount in Rupees) Particulars As on For the year As on Liabilities Items : Depreciation 1,25,181/- (27,388/-) 97,793/- Total 1,25,181/- (27,388/-) 97,793/- Assets Items :- Expenses Disallowed U/s. 40(a) 2,627/- (2,627/-) --- Unabsorbed Depreciation 3,01,233/- (1,08,145/-) 1,93,088/- Total 3,03,860/- (1,10,772/-) 1,93,088/- Net Deferred Tax Assets/(Liabilities) 1,78,679/- (83,384/-) 95,295/- 4. Quantitative details of items traded during the year ended 31st March 2010 Particulars Qty Amount Qty Amount Opening Stock - Gold Kg. 8,60, Kg. 8,60, Purchases Gold Guinea.008 Kg 13, Gold Mini.500 Kg 8,44, Silver Kg. 6,48, ,58, ,48, Sales Gold Guinea.008 Kg 13, Gold Mini.500 Kg 8,50, Silver Kg. 6,25, ,63, ,25, Closing Stock - Gold Kg. 8,60, Kg. 8,60, Earning Per Shares :- Particulars Numerator Used (2,90,875.90) (4,13,758.52) Denominator Used 10,55,000 10,55,000 Basic / Diluted per Share (FV Rs. 10) (0.28) (0.39) Annual Report

95 TRADE CITY COMMODITIES PVT. LTD. SCHEDULE ATTACHED AND FORMING PART OF FINANCIAL STATEMENTS 6. Net Open Positions in respect of future contract are as follows :- PARTICULARS NUMBER OF CONTRACTS 7. Additional information as required under Part II of the schedule VI to the Companies Act to the extent not applicable is not given. 8. Additional information pursuant to part - IV of schedule VI to the Companies Act, 1956 is annexed as Annexure - 1 hereto. 9. Previous Year figures have been regrouped / rearranged wherever necessary Number of units Long Short (MCX) ALUMINIUM30APR COPPER 30 APR CRUDEOIL 19 APR GOLD 05 JUN GOLDM 05APR GOLDM 05 MAY NICKEL 30 APR NICKEL 38 MAY SILVERM 5 MAY SILVERM 30 JUN ZINC 30 APR NCDEX CHARJDDEL 20 MAY GARGUMJDR 20 APR GARGUMJDR 20 MAY GARSEDJDR 20 APR GARSEDJDR 20 MAY PPRMLGKOC 20 APR RMSEEDJPR 20 MAY As per our Report Attached for V. LOHIA & CO. Chartered Accountants (Firm Regn. No E) VISHNU LOHIA, FCA (Partner) Membership No Place : Kolkata Date : 28th May 2010 For and on behalf of Board of Directors Sudheer Kumar Jain Director Hari Kishan Lohia Director 94 - Annual Report

96 TRADE CITY COMMODITIES PVT. LTD. STATEMENT PURSUANT TO PART-IV OF SCHEDULE VI OF THE COMPANIES ACT, 1956 BALANCE SHEET ABSTRACT AND COMPANY S GENERAL BUSINESS PROFILE i) REGISTRATION DETAILS ANNEXURE - 1 REGISTRATION NO. : U74999WB2004PTC STATE CODE : 21 BALANCE SHEET DATE : ii) CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. 000) Public Issue N I L Right Issue N I L Bonus Issue N I L Private Placement N I L iii) POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN RS. 000) Total Liabilities Total Assets Source of Funds : Paid up Capital Reserve & Surplus Secured Loans N I L Unsecured Loans Application of Funds : Net Fixed Assets Investments N I L Deferred Tax Assets Net Current Assets Misc. Expenditure N I L Accumulated Losses N I L iv) PERFORMANCE OF COMPANY(AMOUNT IN RS. 000) Turnover Total Expenditure Profit/(Loss) before Tax ( ) Profit/(Loss) after Tax ( ) Earning per Share in Rs. (. 2 8 ) Dividend Rate (%) N I L v) GENERIC NAME OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY (AS PER MONETARY ITEMS) Item Code No. (ITC Code) Product Description For V. LOHIA & CO. Chartered Accountants VISHNU LOHIA, FCA (Partner) Membership No Place : Kolkata Date : 28th May 2010 : N.A. : Commodity Brokers For and on behalf of Board of Directors Sudheer Kumar Jain Director Hari Kishan Lohia Director Annual Report

97 TRADE CITY REAL ESTATE PRIVATE LIMITED DIRECTOR S REPORT TO THE MEMBERS OF TRADE CITY REAL ESTATE (P) LTD. Your Directors have pleasure in presenting the Fourteenth Annual Report together with the audited Accounts of the Company for the year ended 31st March 2010, along with Auditor s Report thereon. FINANCIAL RESULTS The Financial result of the company for the year ended 31st March 2010, are summarized below: Profit/(loss) before Taxation 446, (25,827.84) Less:Provision for Taxation: - Current Tax (196,000.00) (28,000.00) - Deffered Tax Income Tax for earlier year ( ) Profit/(Loss) after Tax (53,827.84) Balance Brought forward (1,199,482.49) (1,145,654.56) Balance carried to Balance Sheet (951,217.28) (1,199,482.49) OPERATION The total income of the company during the year was Rs lakhs against the total income of Rs 3.56 lakhs in the previous year registering a growth of lakhs over the same. During the year your Company has earned interest of Rs lakhs and profit on sale of assets Rs lakhs DIVIDEND During the year company has earned a profit before tax of Rs lakhs but due to carried forward of losses to the tune of Rs lakhs, your Directors has thought it prudent not to recommend any dividend for the financial year ended,31st March,2010 DIRECTORS RESPONSIBILITY STATEMENT In confirmation of Section 217(2AA) of the Companies Act,1956 with respect to Directors Responsibility Statement, your directors hereby confirmed that: i) In preparation of the Annual Account for the financial year ended 31st March,2010 applicable Accounting standard had been followed along with proper explanation relating to material departure. ii) Appropriate Accounting policies have been selected and applied consistently, and judgement and estimates have been made that are reasonably prudent so as to give a true and fair view of the state of affairs of the company as at 31st March,2010 and of the profits of the company for the said period. iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the requirement of the Companies Act,1956. Adequate systems and control for safeguarding the assests of the company and for preventing and detecting fraud and other irregularities have been ensured. iv) Annual Accounts of the company have been prepared on a going concern basis. DIRECTORS As required under section 255 & 256, of the Companies Act, 1956, 2/3 of the total strength of the board shall be liable for retire by rotation of which 1/3 shall actually retires in the annual general meeting Annual Report

98 TRADE CITY REAL ESTATE PRIVATE LIMITED DIRECTORS REPORT (Contd.) During the year Mr. Hari Kishan Lohia is retiring by rotation as required under Companies Act,1956 under Sec 256, and being eligible offer himself for reappointment. SECRETARIAL COMPLIANCE CERTIFICATE Pursuant to proviso to section 383A of the Companies Act, 1956, a secretarial compliance certificate from a practicing Company secretary has been obtained and is attached herewith. AUDITORS M/S V.LOHIA & CO. Chartered Accountants hold office until the conclusion of the fourteenth Annual General Meeting and are recommended for reappointment. The Company has received a certificate from them to the effect that their reappointment, if made, would be within the limits prescribed under section 224(1B) of the Companies Act,1956. PERSONNEL Information as per Section 217(2A) of the Companies Act, 1956 has not been given as the Company has not employed any personnel during the year. AUDITORS REPORT The Auditors Report on the Accounts of the Company for the year under review is self explanatory and requires no comment and do not call for any further explanations under Sections 217 of the Companies Act,1956. CONSERVATION OF ENERGY TECHNOLOGY, ABSORPTION The Company has no activity relating to conservation of energy or technology absorption. FOREIGN EARINGS AND OUTGO The Company has no foreign earnings and outgoes during the year under preview. ACKNOWLEDGEMENTS Your Directors express their sincere appreciation and value the assistance, co-operation and support extended to your company by the various central and state Government agencies, foreign collaborators, customers, bankers, employees and other business associates. For and on behalf of Board of Directors Place : Kolkata Date : 28th May, 2010 Sudheer Kumar Jain Director Hari Kishan Lohia Director Annual Report

99 TRADE CITY REAL ESTATE PRIVATE LIMITED COMPLIANCE CERTIFICATE UNDER SECTION 383A(1) OF THE COMPANIES ACT, 1956 CIN NO. U WB 1996 PTC AUTHORISED CAPITAL : RS.3,00,00,000/- PAID UP CAPITAL : RS.1,45,00,000/- To, The Members, TRADE CITY REAL ESTATE PRIVATE LIMITED D- 402, 4TH FLOOR DC BLOCK, CITY CENTER KOLKATA I have examined the registers, records, books and papers of M/s. Trade City Real Estate Private Limited, D- 402, 4th Floor, DC Block, City Center, Kolkata as required to be maintained under the Companies Act, 1956, (the Act) and the rules made there under and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 31st March, In my opinion and to the best of my information and according to the examinations carried out by me and explanations furnished to me by the company, its officers and agents, I certify that in respect of the aforesaid financial year: 01. The company has kept and maintained all registers as stated in Annexure "A" to this certificate, as per the provisions and the rules made there under and all entries therein have been duly recorded. 02. The Company has duly filed the forms and returns as stated in Annexure "B" to this certificate with the Registrar of Companies, within the time prescribed under the Act and the rules made there under. 03. The company being a private limited company has the minimum prescribed paid-up capital and its maximum number of members during the said financial year was 02 excluding its present and past employees and the company during the year under scrutiny:- (i) has not invited public to subscribe for its shares or debentures. (ii) has not invited or accepted any deposits from persons other than its members, directors or their relatives. 04. The Board of Directors duly met 07 (Seven) times on , , , , , , & in respect of which meetings proper notices were given and the proceedings were properly recorded and signed including the circular resolutions passed in the Minutes Book maintained for the purpose. 05. The company has not closed its Register of Members, U/s.154 of the Act during the financial year. 06. The Annual General Meeting for the financial year ended on 31st March, 2009 was held on after giving due notice to the members of the company and the resolutions passed thereat were duly recorded in Minutes Book maintained for the purpose. 07. No Extra Ordinary General Meeting was held during the financial year. 08. The Company being a private company, section 295 of the Act is not applicable. 09. The Company has not entered into contract under section 297 of the Act during the financial year and complied with the provision of the Act. 10. The company has maintained the register under section 301 of the Act. 11. As there was no instances falling within the purview of section 314 of the Act, the company has not obtained any approval from the Board of Directors, members, or Central Government Annual Report

100 TRADE CITY REAL ESTATE PRIVATE LIMITED COMPLIANCE CERTIFICATE UNDER SECTION 383A(1) OF THE COMPANIES ACT, 1956 (Contd.) 12. The Company has not issued any duplicate share Certificates during the financial year. 13. The company has:- (i) not made allotment of Equity Share and transfer or transmission of share or securities during the financial year. (ii) not declared any dividend for the year ended on 31st March, (iii) (iv) (v) not deposited any amount in separate bank account as no dividend was declared during the financial year. not posted any dividend warrants to it's members as it was not required to do so. duly complied with the requirements of section 217 of the Act. 14. The Board of Directors of the company is duly constituted and there was no appointment of additional directors, alternate directors and directors to fill casual vacancies during the financial year. 15. The Company being a private company provisions of section 269 of the Act with regard to appointment of Managing Director/ Whole-time Director/Manager are not applicable. 16. The Company has not appointed any sole-selling agents during the financial year. 17. The company was not required to obtain any approval of the Central Government, Company Law Board, Regional Director, Registrar or such other authorities as prescribed under the various provisions of the Act during the financial year. 18. The Directors have disclosed their interest in other firms/ companies to the Board of Directors Pursuant to the provisions of the Act and the rules made there under. 19. The company has not issued equity shares, debentures, or other securities during the financial year. 20. The company has not bought back any shares during the financial year. 21. There was no redemption of preference shares/debentures during the financial year. 22. There was no transactions necessitating the company to keep in abeyance rights to dividend, right shares and bonus shares pending registration of transfer of shares. 23. The company has not accepted/invited deposits from Public including unsecured loans falling with in the purview of section 58A during the financial year. 24. The company, being a private company, the borrowings made during the financial year do not attract provisions of section 293(1)(d) of the Act. 25. The company being a Private Limited Company, provision of 372(A) of the Act with respect to loan & guarantees given or provided to other body corporate is not applicable. 26. The company has not altered the provision of it's Memorandum of Association with respect to situation of the company's registered office from one State to another during the year under scrutiny. 27. The company has not altered the provisions of it's Memorandum of Association with respect to the objects of the company during the year under scrutiny. 28. The company has not altered the provisions of it's Memorandum of Association with respect to name of the Company during the year under scrutiny. 29. The company has not altered the provisions of it's Memorandum of Association with respect to Share Capital of the company during the year under scrutiny. Annual Report

101 TRADE CITY REAL ESTATE PRIVATE LIMITED COMPLIANCE CERTIFICATE UNDER SECTION 383A(1) OF THE COMPANIES ACT, 1956 (Contd.) 30. The company has not altered its Articles of Association during the financial year. 31. There was no prosecution initiated against or show cause notices received by the company and no fines or penalties or any other punishment imposed on the company during the financial year for offences under the Act. 32. The company has not received any money as security from its employees during the financial year. 33. The company has not deposited contribution to provident fund as the same is not applicable. Place : Kolkata Date : 28th May, 2010 Annexure - A Registers as maintained by the Company 01. Members Register U/s Directors Register U/s Director's Share Holding Register U/s Loan & Investment Register U/s 372A 05. Share Transfer Register. 06. Register of Contract. 07. Minutes of Directors & Shareholders meetings under section 193. DEBASISH MUKHOPADHYAY (COMPANY SECRETARY) C. P. NO Annexure - B Forms and Returns as filed by the Company with the Registrar of Companies, Regional Director, Central Government or other authorities during the financial year ended on 31st March, Balance Sheet for U/s.220 filed on Annual Return for AGM held on U/s.159 filed on Secretarial Compliance certificate for u/s 383A(1) filed on Form No. 22B filed on Place : Kolkata Date : 28th May, 2010 DEBASISH MUKHOPADHYAY (COMPANY SECRETARY) C. P. NO Annual Report

102 TRADE CITY REAL ESTATE PRIVATE LIMITED AUDITORS REPORT TO THE MEMBERS OF THE COMPANY 1. We have audited the attached Balance Sheet of Trade City Real Estate Private Limited as at 31st March 2010, the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended as on that date both annexed thereto. These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on this financial statement based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors 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, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order. 4. Subject to our comments in the Annexure referred to in paragraph (3) above, we report that: a) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; b) in our opinion, proper books of account as required by law have been kept by the Company, so far as appears from our examination of the books; c) the Balance Sheet, the Profit & Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account; d) in our opinion, the Balance Sheet, the Profit & Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act 1956; e) on the basis of the written representations received from the directors as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on March 31, 2010, from being appointed as director, in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; f) in our opinion, and to the best of our information and according to the explanations given to us, the said accounts read together with other Notes thereon, give the information required by the Companies Act 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; i) in the case of the Balance Sheet, of the state of affairs of Company as at March 31, 2010; and ii) in the case of the Profit & Loss Account, of the Profit of the Company for the year ended on that date. iii) in the case of Cash Flow statement, of the cash flows for the year ended on that date. For V. LOHIA & CO. Chartered Accountants (Firm Regn No E) Kolkata the 28th day of May, 2010 VISHNU LOHIA, FCA (Partner) Membership No Annual Report

103 TRADE CITY REAL ESTATE PRIVATE LIMITED ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph 3 of our Report of even date) i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) As informed to us the fixed assets of the company have been physically verified by the Management at the year end and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No discrepancies were noticed on such physical verification. (c) The Company has not disposed off any fixed assets during the year. ii) The Company has not acquired any inventory during the year Therefore; the provisions of clause 4(ii) of the Order are not applicable to the Company. iii) (a) The Company has granted unsecured loans to four Companies covered in the register maintained under section 301 of the Companies Act. The maximum amount involved during the year is Rs Lacs and the year end balance was Rs. 174 Lacs. (b) In our opinion the rate of interest and other terms and conditions of loans given by the Company are prima facie not prejudicial to the interest of the Company. (c) The receipt of principal amount and interest are regular. (d) There was no amount overdue. (e) The Company has not taken any loan during the year, hence comments under clauses iii (e), iii (f) & iii (g) of the Order are not required. iv) The Company has neither purchased any inventory nor fixed assets nor sold any goods or services during the year, hence the provision of clause 4(iv) of the Order are not applicable to the Company. v) (a) On the basis of our examination of the books of account, the transactions made in pursuance of contracts or arrangements, particulars of which need to be entered in the register maintained under Section 301 of the Companies Act 1956 have been so entered. (b) The transactions made in pursuance of such contracts or arrangements are not exceeding five lacs rupees, therefore reporting under clause 4(v)(b) is not required. vi) The Company has not accepted any deposits under the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the rules framed there under. vii) In our opinion, the internal audit of the company is done by the management, which is adequate in relation to the size of the Company and nature of its business. viii) In our opinion, the Central Government has not prescribed maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 for any of the products of the Company. ix) (a) According to the records of the Company, Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service Tax, Customs duty, Excise duty, Cess and Other Material Statutory Dues applicable to it have been regularly deposited during the year with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect to above were in arrear, as at March 31, 2010 for a period of more than six months from the date they became payable. (b) As at 31st March 2010, there has been no amounts payable in respect of disputed Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess. x) The company has accumulated losses at the end of financial year which is less than fifty percent of its networth. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year. xi) In our opinion and according to the information and explanations given to us, the Company has not taken any loan from any Annual Report

104 TRADE CITY REAL ESTATE PRIVATE LIMITED ANNEXURE TO THE AUDITORS REPORT financial institution, bank or debentures holders. Therefore, the provisions of clause 4(xi) of the Order are not applicable to the Company. xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit funds/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company. xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Order are not applicable to the Company xv) According to the information and explanations given to us, the Company has given Corporate Guarantee in favour of a Scheduled Bank for the Credit Facility extended to its Holding Company. The terms and conditions of such guarantee appear to be prima facie not prejudicial to the interest of the Company. xvi) In our opinion, the Company has not raised any term loan. Therefore, the provisions of clause 4(xvi) of the Order are not applicable to the Company. xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that the Company has not raised any fund during the year, therefore, the provisions of clause 4(xvii) of the Order are not applicable to the Company. xviii) According to the information and explanations given to us, the company has not made any allotment of shares during the year and hence, the provisions of clause 4(xviii) of the Order are not applicable to the Company. xix) The Company has not issued any debentures. Therefore, the provisions of clause 4(xix) of the Order are not applicable to the Company. xx) The Company has not raised any sum by public issue. Therefore, the provisions of clause 4(xx) of the Order are not applicable to the Company. xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management. For V. LOHIA & CO. Chartered Accountants (Firm Regn No E) Kolkata, the 28th day of May, 2010 VISHNU LOHIA, FCA (Partner) Membership No Annual Report

105 BALANCE SHEET AS AT 31ST MARCH TRADE CITY REAL ESTATE PRIVATE LIMITED AS AT AS AT SCHEDULE No. Amount (Rs.) Amount (Rs.) I. SOURCES OF FUNDS 1. SHAREHOLDER S FUNDS Share Capital 1 14,500, ,500, Reserves & Surplus 2 36,000, ,000, T O T A L 50,500, ,500, II. APPLICATION OF FUNDS 1. FIXED ASSETS Gross Block 3 7,395, ,395, Less: Depreciation 1,853, ,561, Net Block 5,542, ,833, INVESTMENTS 4 745, , DEFERRED TAX ASSET 27, , CURRENT ASSETS, LOANS & ADVANCES Cash & Bank Balances 5 1,501, ,416, Sundry Debtors 6-174, Loans & Advances 7 43,583, ,823, ,085, ,415, Less: CURRENT LIABILITIES & PROVISIONS 8 1,851, ,721, NET CURRENT ASSETS 43,233, ,693, PROFIT & LOSS ACCOUNT 951, ,199, T O T A L 50,500, ,500, Significant Accounting Policies & Notes on Accounts 11 As per our Report Attached for V. LOHIA & CO. Chartered Accountants (Firm Registration No E) VISHNU LOHIA, FCA (Partner) Membership No Place : Kolkata Date : 28th May Annual Report Sudheer Kumar Jain Director For and on behalf of Board Hari Kishan Lohia Director

106 TRADE CITY REAL ESTATE PRIVATE LIMITED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 For the year ended For the year ended SCHEDULE No. Rs. P. Rs. P. INCOME Interest Received (Gross including T.D.S. Rs. 1,45,778/- 1,457, , Previous Year Rs. 12,738/-) Rental Income 9 360, , Profit On Sale of Assets 714, , Profit On Sale of Investment 64, T O T A L 2,597, , EXPENDITURE Administrative Expenses , , Loss from Derivatives Transactions 1,705, Depreciation 291, , T O T A L 2,150, , Profit / (Loss) before Taxation 446, (25,827.84) Provision for Taxation : Current Tax (196,000.00) (28,000.00) Deferred Tax - - Income Tax for Earlier Year (2,137.00) - Profit/(Loss) after Taxation 248, (53,827.84) Profit/(Loss) Brought Forward (1,199,482.49) (1,145,654.65) Profit/(Loss) Carried to Balance Sheet (951,217.28) (1,199,482.49) Basic / Diluted Earnings Per Share (F.V.per share Rs.10) 0.17 (0.05) Significant Accounting Policies & Notes on Accounts 11 As per our Report Attached for V. LOHIA & CO. Chartered Accountants (Firm Regn. No E) VISHNU LOHIA (Partner) Membership No Place : Kolkata Date : 28th May 2010 Hari Kishan Lohia Director For and on behalf of Board Sudheer Kumar Jain Director Annual Report

107 TRADE CITY REAL ESTATE PRIVATE LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, Amount (Rs.) Amount (Rs.) Amount (Rs.) Amount (Rs.) A) CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax & Extraordinary Items 446, (25,827.84) Adjustment for : Depreciation 291, , Interest Received (1,457,772.00) (61,834.00) Provision for Gratuity 3, Profit on Sale of Assets (714,471.00) (149,200.00) Profit On Sale of Investment (64,759.59) (1,941,763.59) - 96, Operating Profit Before Working Capital Changes (1,495,361.38) 70, Adjustment for (Increase)/Decrease in Sundry Debtors 174, (173,877.00) Increase/(Decrease) in Current Liabilities 126, (27,482.00) (Increase)/Decrease in Loans & Advances (13,875,866.00) (13,574,757.00) (3,834,956.00) (4,036,315.00) (15,070,118.38) (3,966,133.84) Tax Payments (198,137.00) - Cash Flow From Operating Activities : (15,268,255.38) (3,966,133.84) B) CASH FLOW FROM INVESTING ACTIVITIES Sales of Mutual Fund 68,664, Purchase of Mutual Fund (68,600,000.00) Sale Of Plot - 650, Interest Received 1,457, , Advance Payment for Property (24,864,907.00) (33,211,764.72) Refund of Advance for Property 16,695, ,000, Cash Flow From Investing Activities : (6,647,169.19) 1,500, C) CASH FLOW FROM FINANCING ACTIVITIES Receipt from Issue of Shares - 24,500, Cash Flow From Financing Activities : - 24,500, Net Increase/(Decrease) in Cash and Cash Equivalents (21,915,424.57) 22,033, Add: Opening Balance of Cash & Cash Equivalents 23,416, ,383, Closing Balance Cash & Cash Equivalents 1,501, ,416, As per our Report Attached for V. LOHIA & CO. Chartered Accountants (Firm Registration No E) VISHNU LOHIA, FCA (Partner) Membership No Place : Kolkata Date : 28th May Annual Report Hari Kishan Lohia Director For and on behalf of Board Sudheer Kumar Jain Director

108 TRADE CITY REAL ESTATE PRIVATE LIMITED SCHEDULES 1 TO 11 FORMING PART OF THE FINANCIAL STATEMENTS Rs. P. Rs. P. SCHEDULE - 1 SHARE CAPITAL AUTHORISED 30,00,000 Equity Shares of Rs.10/- each 30,000, ,000, ,000, ,000, ISSUED, SUBSCRIBED & PAID UP 14,50,000 Equity Shares of Rs.10/-each fully paid 14,500, ,500, (Out of the above all the shares are held by Lohia Securities Ltd, the Holding Company and its nominee) T O T A L 14,500, ,500, SCHEDULE - 2 RESERVES & SURPLUS Securities Premium Account 36,000, ,000, T O T A L 36,000, ,000, SCHEDULE - 4 INVESTMENTS (Non Trade) In Immovable Properties Land 745, , T O T A L 745, , SCHEDULE - 5 CASH AND BANK BALANCES Cash in hand (as certified by the Management) 41, , Cheque In Hand 45, Balance with Scheduled bank on Current Account 1,415, ,360, T O T A L 1,501, ,416, SCHEDULE - 6 SUNDRY DEBTORS (Unsecured Considered Good) Outstanding for More than Six Month - - Other Debts -From Lohia Securities Limited - 139, (Maximum Outstanding during the year is Rs. 1,69,603/- Previous Year :- Rs. 1,39,503/-) -From Trade City Commodities (P) Ltd - 34, (Maximum Outstanding during the year is Nil/-; Previous year Rs. 34,874/-) - Others - - T O T A L - 174, Annual Report

109 TRADE CITY REAL ESTATE PRIVATE LIMITED SCHEDULES 1 TO 11 FORMING PART OF THE FINANCIAL STATEMENTS SCHEDULE : - 3 FIXED ASSETS Particulars AS AT GROSS BLOCK ADDITION DEDUCTION AS AT AS AT DEPRECIATION FOR THE YEAR AS AT AS AT NET BLOCK AS AT Lease Hold Office Premise 7,395, ,395, ,561, , ,853, ,542, ,833, Total 7,395, ,395, ,561, , ,853, ,542, ,833, Previous Year 7,395, ,395, ,254, , ,561, ,833, ,140, * Office Premises has mortgage in favour of HDFC Bank for providing the Corporate Guarantee to Lohia Securities Ltd, the Holding Company Annual Report

110 TRADE CITY REAL ESTATE PRIVATE LIMITED SCHEDULES 1 TO 11 FORMING PART OF THE FINANCIAL STATEMENTS Financial Year. Financial Year Amount in Rs. Amount in Rs. SCHEDULE - 7 LOANS & ADVANCES LOAN Lohia Securities Limited -Holding Company 9,200, (Maximum Outstanding during the year is Rs. 3,43,50,000/- Previous Year : Nil) Trade City Barter Pvt. Ltd. -Fellow subsidiary 8,200, ,755, (Maximum Outstanding during the year is Rs. 2,64,50,000/- Previous Year : - Rs. 1,06,05,000/-) (Unsecured Considered Good) Advances Recoverable in cash or in kind or for value to be received Advance for Property 25,525, ,641, Tax Deducted At Source 454, , Advance to Staff 25, , SECURITY DEPOSIT 177, , T O T A L 43,583, ,823, SCHEDULE - 8 CURRENT LIABILITIES & PROVISIONS Sundry Creditors for Expenses 19, , Advance Against Office - 34,000, Security Deposits Received 1,550, ,550, TDS Payable - 46, PROVISIONS Provision for Gratuity Charges 3, Provision for Income Tax 279, , T O T A L 1,851, ,721, SCHEDULE - 9 RENTAL INCOME Rent Received 360, , Recovery of Maintenance Charges 103, , (Gross including TDS Rs.74,875/-, Previous Year Rs.53,718/-) 463, , Less: Maintenance Charges 103, , T O T A L 360, , Annual Report

111 TRADE CITY REAL ESTATE PRIVATE LIMITED SCHEDULES 1 TO 11 FORMING PART OF THE FINANCIAL STATEMENTS Financial Year. Financial Year Amount in Rs. Amount in Rs. SCHEDULE - 10 ADMINISTRATIVE EXPENSES Audit Fees (including Service Tax Rs. 515/-) 5, , Bank Charges Demat Charges - 1, Filing Fees 2, , General Expenses 5, Gratuity Charges 3, Professional Fees 15, , Lease Rent 1, , Rates & Taxes 2, , Printing & Stationery 1, , Salary & Bonus 110, , Staff Welfare Expenses 6, T O T A L 153, , Annual Report

112 TRADE CITY REAL ESTATE PRIVATE LIMITED SCHEDULES 1 TO 11 FORMING PART OF THE FINANCIAL STATEMENTS SCHEDULE 11 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS: A. SIGNIFICANT ACCOUNTING POLICIES:- (a) System of Accounting: (b) (c) (d) The Financial Statements are prepared under the historical cost convention, on accrual basis, in accordance with the generally accepted accounting principles in India and the relevant provision of the Companies Act, Fixed Assets: i) Fixed Assets are stated at their original cost of acquisition less accumulated depreciation. ii) Depreciation on Fixed Assets has been provided under written down value method on pro-rata basis as per rate prescribed under Schedule XIV of the Companies Act, Investment: Investments are classified as long term Investments. Long term investments are stated at cost less provision for diminution in the value other than temporary, in the value of Investments. Taxation: Provision of current tax is made with reference to taxable income computed for the accounting year for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax is recognized, subject to consideration of prudence in respect of deferred tax assets, on timing difference, being the difference between the taxable income and accounting income that originate in one period and are capable of reversed in one or more subsequent periods. A deferred tax asset is recognized only if there is virtual certainty that future taxable income will be available against which such deferred tax assets will be realized. Such assets are reviewed as at balance sheet date based on the developments during the year and reassess realization/liabilities in terms of AS-22 issued by ICAI. B.NOTES ON ACCOUNTS:- a) Contingent Liabilities: i) Corporate Guarantee Contingent Liabilities not provided for in respect of Corporate Guarantee valuing Rs.5, 00,00,000/- executed in favour of HDFC Bank Limited on behalf of Lohia Securities Limited, the holding Company. ii) Capital Commitment for Property Capital Commitment amounting to Rs. 2,24,14,476/- is pending towards purchase of property b) Compliance of Accounting Standards issued under the Companies (Accounting Standards) Rules, 2006 i) Segment Reporting The Company s operation predominantly comprises of only one segment i.e Real Estate Business and therefore segment reporting is not applicable to the company. ii) Related Party Disclosure Information given in accordance with Accounting Standard 18 Annual Report

113 TRADE CITY REAL ESTATE PRIVATE LIMITED SCHEDULES 1 TO 11 FORMING PART OF THE FINANCIAL STATEMENTS (1) Name of the related parties & Nature of their Relationship 1. Holding Company: - Lohia Securities Limited 2. Fellow Subsidiary: - a) Trade City Securities Pvt. Ltd. b) Trade City Commodities Pvt. Ltd. c) Trade City Barter Pvt. Ltd. 3. Enterprise over which KMP exercise significant influence : Shiv Lalit Consultancy (P) Ltd. : Daadi Stock Broking (P) Ltd. : Ridhi Sidhi Distributors (P) Ltd. (2) Transactions with Related Parties (Amount in Rupees) Nature of Transaction Holding Company Fellow Subsidiaries Enterprise over which KMP exercise significant influence 1. Rent Received 3,00,000/ (1,16,160/-) (29,040/-) (---) 2. Reimbursement of Maintenance 1,03,705/ Charges (1,44,627/-) (36,151/-) (---) 3. Reimbursement of Electricity 2,95,596/ Charges (4,30,397/-) (1,04,794/-) (---) 4. Reimbursement of Property Tax 49,490/ (1`,14,784) (39,496) (---) 5. Interest Received 3,40,419/- 10,78,501 38,852/- (---) (55,053/-) (6,781/-) 6. Depository Charges Paid (---) (---) (---) 7. Equity Contribution (2,45,00,000/-) (---) (---) 8. Loan Given 17,54,45,000/- 18,10,95,000/- 5,04,85,000/- (2,85,25,000/-) (1,97,80,000/-) (1,35,00,000/-) 9. Refund of Loan 16,62,45,000/- 17,66,50,000/- 5,04,85,000/- (2,85,25,000/-) (1,97,80,000/-) (1,35,00,000/-) 10. Loan Taken (Repaid During the year) (---) (---) (1,59,00,000) 11. Brokerage, Transaction Charges & , Broker Note Paid (---) (---) (---) 12. Interest Paid (---) (---) (2,25,154/-) *KMP Key Management Personnel ** Previous Year Figures are given in bracket Annual Report

114 TRADE CITY REAL ESTATE PRIVATE LIMITED SCHEDULES 1 TO 11 FORMING PART OF THE FINANCIAL STATEMENTS (3) Amount due : - From Holding Company :- Rs. 92,00,000/- (4) Provision to be made with regard to Outstanding Amount : - Nil c) Component of Deferred Tax Asset shown in the Balance Sheet date is as follows: Particulars As at (Rs.) For the year As at (Rs.) Asset Items Brought Forward Loss 27, ,800 Total 27, ,800 d) Earning Per Share Profit After Tax 2,48, (53,827.84) No of Shares (Weighted Average) 14,50,000 11,10,417 Basic/Diluted Earning Per Share (FV Rs. 10).17 (.05) e) Additional information as required under Part - II of Schedule VI to the Companies Act, 1956 to the extent not applicable are not given f) Additional information pursuant to Part - IV of Schedule VI to the Companies Act, 1956 is annexed as Annexure I hereto. g) Previous years figures have been regrouped / rearranged wherever necessary. As per our Report Attached for V. LOHIA & CO. Chartered Accountants (Firm Regn. No E) VISHNU LOHIA (Partner) Membership No Place : Kolkata Date : 28th May 2010 From Fellow Subsidiaries :- Rs. 82,00,000/- Hari Kishan Lohia Director For and on behalf of Board Sudheer Kumar Jain Director Annual Report

115 TRADE CITY REAL ESTATE PRIVATE LIMITED STATEMENT PURSUANT TO PART-IV OF SCHEDULE OF THE COMPANIES ACT, 1956 BALANCE SHEET ABSTRACT AND COMPANY S GENERAL BUSINESS PROFILE i) REGISTRATION DETAILS ANNEXURE - 1 REGISTRATION NO. : U51109WB1996PTC STATE CODE : 21 BALANCE SHEET DATE : ii) CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. 000) Public Issue N I L Right Issue N I L Bonus Issue N I L Private Placement N I L iii) POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN RS. 000) Total Liabilities Total Assets Source of Funds : Paid up Capital Reserve & Surplus Secured Loans N I L Unsecured Loans N I L Application of Funds : Net Fixed Assets Investments Deferred Tax Assets Net Current Assets Misc. Expenditure N I L Accumulated Losses iv) PERFORMANCE OF COMPANY(AMOUNT IN RS. 000) Turnover (incl. other income) Total Expenditure Profit/(Loss) before Tax Profit/(Loss) after Tax Earning per Share in Rs Dividend Rate (%) N I L v) GENERIC NAME OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY (AS PER MONETARY ITEMS) Item Code No. (ITC Code) Product Description : N.A. : N.A. For V. LOHIA & CO. Chartered Accountants (Firm Regn. No E) VISHNU LOHIA, FCA, (Partner) Membership No Kolkata, 28th May Annual Report Hari Kishan Lohia Director For and on behalf of Board Sudheer Kumar Jain Director

116 TRADE CITY BARTER PRIVATE LIMITED DIRECTOR S REPORT To THE MEMBERS OF TRADE CITY BARTER PRIVATE LIMITED. Your Directors have pleasure in presenting the 15th.Annual Report together with the audited Accounts of the Company for the year ended 31st March 2010, along with Auditor s Report thereon. FINANCIAL RESULTS The Financial result of the company for the year ended 31st March 2010, are summarized below: Current Year Previous Year Profit/(loss) before Taxation 810, (526,121.26) Less:Provision for Taxation: - Current Tax 96, Deferred Tax (Expenses/ Benefits) 198, (266,816.00) - Fringe Benefit Tax: Income Tax for Earlier Years Profit/(Loss) after Tax 515, (259,436.26) Less: Transferred to Statutory Reserve Fund 104, Balance Brought Forward 221, , Balance Carried to Balance sheet 633, , OPERATIONS Total Revenue for the year ended 31st March, 2010 was Rs lakhs as compared to Rs lakhs for the year ended 31st March, 2009 resulting in annualized increase of Rs lakhs.the profit after tax for the year was Rs.5.15 lakhs as compared to last year's loss of Rs.2.59 lakhs. Thus there was a surplus of Rs lakhs as compared to last year. DIVIDEND In view of smallness of profit, yours Directors regret for not recommending any dividend for the year Directors During the year Mr. Hari Kishan Lohia, is retiring by rotation as required under the Companies Act, 1956 under Section 256, and being eligible, offer himself for reappointment. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirement under section 217(2AA) of the Companies Act,1956 with respect to Directors Responsibility Statement, it is hereby confirmed: i) That in the preparation of the annual account for the financial year 31st March,2010 the applicable accounting standard had been followed along with proper explanation relating to material departure. ii) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the year under review. iii) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies act,1956 for safeguarding the assets of the company and for preventing and detecting fraud and irregularities. Annual Report

117 TRADE CITY BARTER PRIVATE LIMITED DIRECTOR S REPORT (Contd.) iv) That the directors had prepared the accounts for the financial year ended 31st March,2010 on a going concern basis. SECRETARIAL COMPLIANCE CERTIFICATE Pursuant to proviso to section 383A of the Companies Act, 1956, a secretarial compliance certificate from a practicing Company secretary has been obtained and is attached herewith. AUDITORS V. Lohia & Co., Chartered Accountants hold office until the conclusion of the Next Annual General Meeting and are recommended for reappointment. The Company has received a certificate from them to the effect that their reappointment, if made, would be within the limits prescribed under section 224(1B) of the Companies Act,1956. PERSONNEL Information as per Section 217(2A) of the Companies Act, 1956 has not been given as the Company has not employed any personnel during the year. AUDITORS REPORT The observation made in the Auditor s Report are self explanatory and therefore, do not call for any further explanations under Sections 217 of the Companies Act,1956. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION The Company has no activity relating to conservation of energy or technology absorption. FOREIGN EARINGS AND OUTGO The Company has no foreign earnings and outgoes during the year under preview. ACKNOWLEDGEMENTS Your Directors express their sincere appreciation and value the assistance, co-operation and support extended to your company by the various central and state Government agencies, customers, bankers, employees and other business associates. For and on behalf of Boards Place : Kolkata Date : 28th May, 2010 Sudheer Kumar Jain Director Hari Kishan Lohia Director Annual Report

118 CIN NO. U WB 1995 PTC AUTHORISED CAPITAL : RS.3,00,00,000/- PAID UP CAPITAL : RS.42,52,000/- To, The Members, TRADE CITY BARTER PRIVATE LIMITED 1, R.N.MUKHERJEE ROAD, 1ST FLOOR ROOM NO.11 KOLKATA TRADE CITY BARTER PRIVATE LIMITED COMPLIANCE CERTIFICATE UNDER SECTION 383A(1) OF THE COMPANIES ACT, 1956 I have examined the registers, records, books and papers of M/S. TRADE CITY BARTER PRIVATE LIMITED, 1, R.N.MUKHERJEE ROAD, 1ST FLOOR, ROOM NO.-11, KOLKATA as required to be maintained under the Companies Act, 1956, (the Act) and the rules made there under and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 31st March, In my opinion and to the best of my information and according to the examinations carried out by me and explanations furnished to me by the company, its officers and agents, I certify that in respect of the aforesaid financial year: 01. The company has kept and maintained all registers as stated in Annexure "A" to this certificate, as per the provisions and the rules made there under and all entries therein have been duly recorded. 02. The Company has duly filed the forms and returns as stated in Annexure "B" to this certificate with the Registrar of Companies, within the time prescribed under the Act and the rules made there under. 03. The company being a private limited company has the minimum prescribed paid-up capital and its maximum number of members during the said financial year was 02 excluding its present and past employees and the company during the year under scrutiny:- (i) has not invited public to subscribe for its shares or debentures. (ii) has not invited or accepted any deposits from persons other than its members, directors or their relatives. 04. The Board of Directors duly met 09 (Nine) times on , , , , , , , ,& in respect of which meetings proper notices were given and the proceedings were properly recorded and signed including the circular resolutions passed in the Minutes Book maintained for the purpose. 05. The company has not closed its Register of Members, U/s.154 of the Act during the financial year. 06. The Annual General Meeting for the financial year ended on 31st March, 2009 was held on after giving due notice to the members of the company and the resolutions passed thereat were duly recorded in Minutes Book maintained for the purpose. 07. No Extra-Ordinary General Meeting was held during the financial year. 08. The Company being a private company, section 295 of the Act is not applicable. 09. The Company has not entered into contract under section 297 of the Act during the financial year and complied with the provision of the Act. 10. The company has maintained the register under section 301 of the Act. 11. As there was no instances falling within the purview of section 314 of the Act, the company has not obtained any approval from the Board of Directors, members, or Central Government. 12. The Company has not issued any duplicate share Certificates during the financial year. Annual Report

119 TRADE CITY BARTER PRIVATE LIMITED COMPLIANCE CERTIFICATE UNDER SECTION 383A(1) OF THE COMPANIES ACT, 1956 (Contd.) 13. The company has:- (i) not made allotment of Equity Share and transfer or transmission of share or securities during the financial year. (ii) not declared any dividend for the year ended on 31st March, (iii) not deposited any amount in separate bank account as no dividend was declared during the financial year. (iv) not posted any dividend warrants to it's members as it was not required to do so. (v) duly complied with the requirements of section 217 of the Act. 14. The Board of Directors of the company is duly constituted and there was no appointment of additional directors, alternate directors and directors to fill casual vacancies during the financial year. However in f.y , four additional directors were appointed, these additional directors were regularized at the AGM held ON The Company being a private company provisions of section 269 of the Act with regard to appointment of Managing Director/ Whole-time Director/Manager are not applicable. 16. The Company has not appointed any sole-selling agents during the financial year. 17. The company was not required to obtain any approval of the Central Government, Company Law Board, Regional Director, Registrar or such other authorities as prescribed under the various provisions of the Act during the financial year. 18. The Directors have disclosed their interest in other firms/ companies to the Board of Directors Pursuant to the provisions of the Act and the rules made there under. 19. The company has not issued equity shares, debentures, or other securities during the financial year. 20. The company has not bought back any shares during the financial year. 21. There was no redemption of preference shares/debentures during the financial year. 22. There was no transactions necessitating the company to keep in abeyance rights to dividend, right shares and bonus shares pending registration of transfer of shares. 23. The company has not accepted/invited deposits from Public including unsecured loans falling with in the purview of section 58A during the financial year. 24. The company, being a private company, the borrowings made during the financial year do not attract provisions of section 293(1)(d) of the Act. 25. The company being a Private Limited Company, provision of 372(A) of the Act with respect to loan & guarantees given or provided to other body corporate is not applicable. 26. The company has not altered the provision of it's Memorandum of Association with respect to situation of the company's registered office from one State to another during the year under scrutiny. 27. The company has not altered the provisions of it's Memorandum of Association with respect to the objects of the company during the year under scrutiny. 28. The company has not altered the provisions of it's Memorandum of Association with respect to name of the Company during the year under scrutiny. 29. The company has not altered the provisions of it's Memorandum of Association with respect to Share Capital of the company during the year under scrutiny. 30. The company has not altered its Articles of Association during the financial year Annual Report

120 TRADE CITY BARTER PRIVATE LIMITED COMPLIANCE CERTIFICATE UNDER SECTION 383A(1) OF THE COMPANIES ACT, 1956 (Contd.) 31. There was no prosecution initiated against or show cause notices received by the company and no fines or penalties or any other punishment imposed on the company during the financial year for offences under the Act. 32. The company has not received any money as security from its employees during the financial year. 33. The company has not deposited contribution to provident fund as the same is not applicable. Annexure - A Registers maintained by the Company 01. Members Register U/s Directors Register U/s Director's Share Holding Register U/s Loan & Investment Register U/s 372A 05. Share Transfer Register. 06. Register of Contract. 07. Minutes of Directors & Shareholders meetings under section 193. Annexure - B Forms and Returns as filed by the Company with the Registrar of Companies, Regional Director, Central Government or other authorities during the financial year ended on 31st March, Balance Sheet for U/s.220 filed on Annual Return for AGM held on U/s.159 filed on Secretarial Compliance certificate for u/s 383A(1) filed on Form No. 22B filed on Form No. 32 dated Filed on Form No. 32 dated Filed on Form No. 32 dated Filed on Place : Kolkata Date : 28th May, 2010 DEBASISH MUKHOPADHYAY (COMPANY SECRETARY) C. P. NO Annual Report

121 TRADE CITY BARTER PRIVATE LIMITED AUDITORS REPORT TO THE MEMBERS OF THE COMPANY 1. We have audited the attached Balance Sheet of TRADE CITY BARTER PRIVATE LIMITED as at 31st March 2010, the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended as on that date annexed thereto. These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors 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, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; b) in our opinion, proper books of account as required by law have been kept by the Company, so far as appears from our examination of the books; c) the Balance Sheet, the Profit & Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account; d) in our opinion, the Balance Sheet, the Profit & Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act 1956; e) on the basis of the written representations received from the directors as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on March 31, 2010, from being appointed as director, in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; f) in our opinion, and to the best of our information and according to the explanations given to us, the said accounts read together with other Notes as given in Schedule 15 thereon give the information required by the Companies Act 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; i) in the case of the Balance Sheet, of the state of affairs of Company as at March 31, 2010; and ii) in the case of the Profit & Loss Account, of the profit of the Company for the year ended on that date. iii) in the case of Cash Flow statement, of the cash flows for the year ended on that date. Kolkata the 28th day of May, 2010 For V. LOHIA & CO. Chartered Accountants (Firm Regn No E) VISHNU LOHIA, FCA (Partner) Membership No Annual Report

122 ANNEXURE TO THE AUDITORS REPORT TRADE CITY BARTER PRIVATE LIMITED (Referred to in Paragraph 3 of our Report of even date) i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) As informed to us the fixed assets of the company have been physically verified by the Management at the year end and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No discrepancies were noticed on such physical verification. (c) The Company has not disposed off any fixed assets during the year. ii) The Inventory of Shares being held in electronic mode, in our opinion, no comments are called for under clause 4(ii) of the Order. iii) (a) The Company has granted unsecured loans to two Companies covered in the register maintained under section 301 of the Companies Act, 1956 in which entries are correctly and comprehensively recorded. The maximum amount involved during the year is Rs lacs and the year-end balance is Nil. (b) The rates and other terms and conditions of the loans given are prima-facie not prejudicial to the interest of the Company. (c) According to the information and explanations given to us, the Company has received the principal and interest as per the stipulations. (d) In respect of the aforesaid loan there is no overdue amount. (e) The Company has taken unsecured loan from four Companies covered in the register maintained under section 301 of the Companies Act, The maximum amount involved during the year was Rs lacs and the year-end balance was Rs. 265 lacs. (f) The rate and other terms and conditions of the loan taken are prima-facie reasonable having regard to the prevailing bank rates at the relevant time and not prejudicial to the interest of the Company. (g) According to the information and explanations given to us, the Company has repaid the principal and interest as per the stipulation. iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory and with regard to the sale of goods. Further, during the course of our audit we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid control system. v) (a) On the basis of our examination of the books of account, the transactions made in pursuance of contracts or arrangements, particulars of which need to be entered in the register maintained under Section 301 of the Companies Act 1956 have been so entered. (b) The transactions made in pursuance of such contracts or arrangements are not exceeding five lacs rupees, therefore reporting under clause 4(v)(b) is not required. vi) The Company has not accepted any deposits under the provisions of Sections 58A and 58AA of the Act or any other relevant provisions of the Act and the rules framed there under. vii) In our opinion, the Company's present internal audit system is commensurate with its size and nature of its business. viii) In our opinion, the Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company. Annual Report

123 TRADE CITY BARTER PRIVATE LIMITED ANNEXURE TO THE AUDITORS REPORT ix) (a) According to the records of the Company, Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, Cess and other material statutory dues applicable to it have been generally regularly deposited during the year with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect to above were in arrears, as at March 31, 2010, for a period of more than six months from the date on which they become payable. (b) As at 31st March 2010, there have been no amounts payable in respect of disputed Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, Cess. x) The Company does not have accumulated losses at the end of the financial year. Further the Company has not incurred cash losses during the financial year covered by our audit but has so incurred in the immediately preceding financial year. xi) In our opinion and according to the information and explanations given to us, the Company has not taken any loan from any financial institution, bank or debentures holders. Therefore, the provisions of clause 4(xi) of the Order are not applicable to the Company. xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit funds/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company. xiv) In our opinion, the company has maintained records of transactions and contracts in respect of shares, debentures & other investments and timely entries have been made therein. As explained to us, all the shares held as investments as well as inventories have been held by the Company in its own name. xv) In our opinion, the Company has not given any guarantee for loans taken by others. Therefore, the provisions of clause 4(xv) of the Order are not applicable to the Company. xvi) In our opinion, the Company has not raised any term loan. Therefore, the provisions of clause 4(xvi) of the Order are not applicable to the Company. xvii) According to the information and explanations given to us and on the basis of overall examination of the Balance Sheet of the Company, we report that the Company has not used short-term funds for long-term investments. xviii) According to the information and explanations given to us, the Company has not made any allotment of shares during the financial year. Therefore, the provisions of clause 4(xviii) of the Order are not applicable to the Company. xix) The Company has not issued any debentures. Therefore, the provisions of clause 4(xix) of the Order are not applicable to the Company. xx) The Company has not raised any sum by public issue. Therefore, the provisions of clause 4(xx) of the Order are not applicable to the Company. xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management. Place : Kolkata Date : 28th May, Annual Report For, V. Lohia & Co. Chartered Accountant (Firm Regn. No E) VISHNU LOHIA, FCA Partner Membership No. : 55683

124 TRADE CITY BARTER PRIVATE LIMITED AUDITORS REPORT To THE BOARD OF DIRECTORS TRADE CITY BARTER PRIVATE LIMITED 1 R N Mukherjee Road, Kolkata Dear Sirs, As required under the Non-banking Financial Companies Auditors' Report (Reserve Bank) Directions, 2008,we have examined the books and records for the year ended 31st March 2010 of Trade City Barter Pvt Ltd. (Regn No: B ) and we report as under: (i) The Company is engaged in the business of Non-banking Financial Institution and has obtained a Certificate of Registration (CoR) from the Bank; (ii) The Company is entitled to continue to hold CoR in terms of its asset/income pattern as on 31st March 2010; (iii) As explained, the Company has not been classified as Asset Finance Company (AFC) and hence, no comments are called for under paragraph 3(A)(III) of the Order; (iv) The Board of Directors has passed a resolution for non-acceptance of Public Deposits; (v) According to the records of the Company, it has not accepted any Public Deposits during the financial year ended 31st March 2010; (vi) (vii) The company has complied with prudential norms relating to income recognition, accounting standard, asset classification and provisioning for bad & doubtful debts as applicable to it. The Company is not a systematically important Non Deposit Taking Company, and therefore, no comments are called for as regards correctness of Capital Adequacy Ratio, compliance with minimum prescribed CRAR and also timely furnishing of Annual Statement i.e. NBS-7. Kolkata, the 28th day of May, 2010 For V. LOHIA & CO. Chartered Accountants (Firm Regn No E) VISHNU LOHIA, FCA (Partner) Membership No Annual Report

125 TRADE CITY BARTER PRIVATE LIMITED BALANCE SHEET AS AT 31ST MARCH, 2010 SCHEDULES Rs. P. Rs. P. I. SOURCES OF FUNDS 1 SHAREHOLDER S FUNDS a) Share Capital 1' 4,252, ,252, b) Reserves & Surplus 2 6,165, ,649, LOAN FUNDS a) Unsecured Loans 3 42,500, ,705, ,917, ,606, II. APPLICATION OF FUNDS 1 FIXED ASSETS Gross Block (Flat) 310, , Less: Depreciation 30, , Net Block 279, , INVESTMENTS 4 5,800, ,800, DEFERRED TAX ASSETS 68, , CURRENT ASSETS, LOANS & ADVANCES a) Inventory 5 39,700, ,693, b) Sundry Debtors 6 5,075, ,160, c) Cash & Bank Balances 7 409, ,886, d) Other Current Assets 8 197, , e) Loans & Advances 9 1,976, ,673, ,358, ,461, Less: CURRENT LIABILITIES & PROVISIONS a) Current Liabilites , ,109, b) Provisions , , NET CURRENT ASSETS 46,768, ,245, ,917, ,606, Significant Accounting Policies & Notes on Accounts 15' As per our Report attached for V. LOHIA & CO. Chartered Accountants (Firm Regn. No E) VISHNU LOHIA, FCA (Partner) Membership No Kolkata, the 28th of May Annual Report Hari Kishan Lohia Director For and on behalf of the Board Sudheer Kumar Jain Director

126 TRADE CITY BARTER PRIVATE LIMITED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 SCHEDULES Rs. P. Rs. P. INCOME Income from Operations 12 3,456, ,143, Dividend from Shares a) Lying at Inventories 167, , b) Lying at Long Term Investments 205, , Interest Received 173, ,078, (Gross including TDS:Rs.11,118/-; Previous Year-Rs.2,15,702/-) Other Income 1, ,003, ,643, EXPENDITURE Payment to and Provisions for Employees , , Administrative & Other Expenses 14 46, , Securities Transaction Tax 1,034, , Interest Expenses 1,777, ,274, Depreciation 14, , ,192, ,169, Profit/(Loss) before Taxation 810, (526,121.26) Less: Provision for Taxation : Current Tax 96, Deferred Tax Expenses/(Benefit) 198, (266,816.00) Fringe Benefit Tax Income Tax for Earlier Year 1, Profit/(Loss) After Taxation 515, (259,436.26) Less: Transferred to Statutory Reserve Fund(Refer Note- B.a) 104, , (259,436.26) Balance Brought Forward 221, , Balance Carried to Balance Sheet 633, , Basic / Diluted Earnings Per Share (Face Value Rs.10/-) 1.21 (0.61) Significant Accounting Policies & Notes on Accounts 15 As per our Report attached for V. LOHIA & CO. Chartered Accountants (Firm Regn. No E) VISHNU LOHIA, FCA (Partner) Membership No Kolkata, the 28th of May 2010 Hari Kishan Lohia Director For and on behalf of the Board Sudheer Kumar Jain Director Annual Report

127 TRADE CITY BARTER PRIVATE LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, Amount (Rs.) Amount (Rs.) Amount (Rs.) Amount (Rs.) A) CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax & Extraordinary Items 810, (526,121.26) Adjustment for : Depreciation 14, , Gratuity Expenses 20, Dividend Received (205,000.00) (170,141.00) (246,000.00) (230,500.00) Operating Profit Before Working Capital Changes 640, (756,621.26) Adjustment for (Increase)/Decrease in Inventories (33,006,005.96) (1,291,688.47) (Increase)/Decrease in Sundry Debtors (3,914,890.82) (1,159,612.57) (Increase)/Decrease in Other Current Assets (149,045.00) (48,014.00) (Increase)/Decrease in Loans & Advances (207,408.00) (1,530,432.00) Increase/(Decrease) in Unsecured Loan 35,795, ,705, Increase/(Decrease) in Current Liabilities (742,580.76) (2,224,930.54) 1,099, , (1,584,358.31) 18, Tax Payments (97,341.00) (347.00) Cash Flow From Operating Activities : (1,681,699.31) 17, B) CASH FLOW FROM INVESTING ACTIVITIES Dividend Received 205, , Cash Flow From Investing Activities : 205, , C) CASH FLOW FROM FINANCING ACTIVITIES Cash Flow From Financing Activities : - - Net Increase/(Decrease) in Cash and Cash Equivalents (1,476,699.31) 263, Add: Opening Balance of Cash & Cash Equivalents 1,886, ,622, Closing Balance Cash & Cash Equivalents 409, ,886, As per our Report Attached As per our Report attached for V. LOHIA & CO. Chartered Accountants (Firm Regn. No E) VISHNU LOHIA, FCA (Partner) Membership No Place : Kolkata Date : 28th May 2010 Hari Kishan Lohia Director For and on behalf of the Board Sudheer Kumar Jain Director Annual Report

128 TRADE CITY BARTER PRIVATE LIMITED SCHEDULES 1 TO 15 FORMING PART OF THE FINANCIAL STATEMENTS Rs. P. Rs. P. SCHEDULE - 1 SHARE CAPITAL Authorised 30,00,000 Equity Shares of Rs.10/- each 30,000, ,000, ,000, ,000, Issued, Subscribed and Paid-up 4,25,200 Equity Shares of Rs.10/-each fully paid 4,252, ,252, (All the above shares are held by Lohia Securities Ltd, the Holding company and its nominee) 4,252, ,252, SCHEDULE - 2 RESERVES & SURPLUS Securities Premium Account 5,250, ,250, Statutory Reserve Fund 281, , Profit & Loss Account Balance 633, , ,165, ,649, SCHEDULE - 3 UNSECURED LOANS From Bodies Corporate 42,500, ,705, ,500, ,705, SCHEDULE - 4 INVESTMENTS (Non Trade) LONG TERM In Quoted Equity Shares Lohia Securities Ltd. 2,800, ,800, ,05,000 (Previous Year : 2,05,000) Equtiy Shares of Rs. 10 each fully paid up Sub-Total A 2,800, ,800, In Unquoted Equity Shares Daadi Stock Broking Private Limited 3,000, ,000, ,00,000 (Previous Year : 3,00,000) Equtiy Shares of Rs. 10 each fully paid up Sub-Total B 3,000, ,000, Total (A+B) 5,800, ,800, Market value of Qouted Shares 12,812, ,648, Annual Report

129 128 - Annual Report TRADE CITY BARTER PRIVATE LIMITED SCHEDULES 1 TO 15 FORMING PART OF THE FINANCIAL STATEMENTS SCHEDULE Inventories (as taken, valued and certified by Management) Face Value (Fully Paid Up Quoted Equity Shares) Per Share Nos Rs. P. Rs. P. AKAR TOOL LIMITED 10 10, , BANG OVERSEAS LIMITED 10 1,586 68, , , BATA INDIA LIMITED , BIRLA PRECISION TECHNOLOGIES LIMITED 2 26, , CADILA HEALTHCARE LIMITED , , CALS REFINERIES LIMITED 1 650, , , , CASTROL INDIA LIMITED ESCORTS INDIA LIMITED , , GMR INFRASTRUCTURE LIMITED ,000 52, GRAPHITE INDIA LIMITED , , GULF OIL CORPORATION LIMITED , , HINDUJA FOUNDARIES LTD (ENFRFO) LIMITED 10 19,518 1,902, HBL POWER SYSTEMS LIMITED , , ICICI BANK LIMITED , INFRASTRUCTURE DEVELOPMENT FINANCIAL CO. LIMITED , JMD TELEFILMS INDUSTRIES LIMITED 1 75,000 4,931, JAI PRAKASH ASSOCIATES LIMITED 2 5, , KERNEX MISCROSEYSTEM (INDIA) LIMITED 10 24,000 2,709, KALE CONSULTANTS LIMITED ,500 59, KINECTIC ENGINEERING LTD 10 10, , KILBURN ENGINEERING LIMITED , , KOHINOOR FOODS LIMITED , , KULKARNI POWER & TOOLS LIMITED 5 12, , MANGALAM CEMENT LIMITED ,885 1,004, MADHINDRA FORGINGS LIMITED , MOUNT EVEREST MINERAL WATER LIMITED , , MUKUND LIMITED ,543 7,588, NMDC LIMITED 1 1, , PIRAMAL HOLDINGS LIMITED , , RAMCO SYSTEM LIMITED 10 59,111 5,503, , , RAMBAXY LABORATORIES LIMITED , SICAL LOGISTICS LIMITED , ,000 77, SOLAR INDUSTRIES (I) LIMITED , STRIDES ARCOLAB LIMITED , STER TOOLS LIMITED , SUBEX LIMITED , , TEXMO PIPE & PRODUCT LTD 10 1,000 91, TANEJA AGRO & AVIAT LTD 5 149,279 6,187, TATA METALIKS LIMITED , , THE STATE TRADING CORPORATION LIMITED , TEMPTATION FOOD LIMITED , , TITAGARH WAGONS LIMITED , , WENDT (INDIA) LIMITED 10 2,379 1,616, WIRE & WIRELESS (I) LIMITED 1 5,500 32, WIDE INDIA LIMITED 10 14,144 4,494, ,192,134 39,700, ,453 6,693, Market value of Quoted Shares 40,624, ,849,626.10

130 TRADE CITY BARTER PRIVATE LIMITED SCHEDULES 1 TO 15 FORMING PART OF THE FINANCIAL STATEMENTS Rs. P. Rs. P. SCHEDULE - 6 SUNDRY DEBTORS (Unsecured considered Good) More than Six Months - - Others Debts -From Lohia Securities Limited 1,723, ,157, (Maximum outstanding during the year Rs. 50,73, Previous year Rs. 39,33,592.83) -From Trade City Securities (P) Ltd. 3,351, (Maximum outstanding during the year Rs. 33,51, Previous Year Rs. Nil/-) Others - 2, ,075, ,160, SCHEDULE - 7 CASH AND BANK BALANCES Cash in hand (as certified by the Management) 41, , Balance with Scheduled bank on Current Accounts 368, ,824, , ,886, SCHEDULE - 8 OTHER CURRENT ASSETS Interest Receivable 197, , , , SCHEDULE - 9 LOANS & ADVANCES LOANS 1,600, ,300, (Unsecured, considered good) ADVANCES (Receivable in cash or in kind or for value to be received) Income Tax 364, , Fringe Benefit Tax 1, , Advance to staff 8, , DEPOSITS Security Deposits for Telephone 2, , ,976, ,673, SCHEDULE - 10 Current Liabilities : Sundry Creditors for Expenses 32, , Sundry Creditors for Goods - 131, Mark to Market received on Future Contract 145, Net Option Premium Receievd on Option Contract 11, TDS Payable 177, , , ,109, Annual Report

131 TRADE CITY BARTER PRIVATE LIMITED SCHEDULES 1 TO 15 FORMING PART OF THE FINANCIAL STATEMENTS Rs. P. Rs. P. SCHEDULE - 11 Provisions : Provision for Gratuity 20, Provision For Taxation 201, , Provision For FBT , , SCHEDULE - 12 INCOME FROM OPERATIONS Sales 388,913, ,371, Closing Stock 39,700, ,693, Profit from Commodity Dealing - 12,134, Profit from Share Dealing - Equity 872, Profit from Share Dealing - Currency Profit from Share Dealing - F&O (12,410,229.50) 857, ,075, ,057, Less: Purchase 406,925, ,427, Less: Opening Stock 6,693, ,402, Less: Loss from Share Dealing -Equity - (84,332.98) 3,456, ,143, SCHEDULE - 13 Payment to and Provisions For Employees a) Salary & Bonus 293, , b) Staff Welfare 5, , c) Gratuity Expenses 20, , , SCHEDULE - 14 ADMINISTRATIVE & OTHER EXPENSES Auditors Remuneration 12, , Bank Charges Convenyence Expenses 1, , Depository Charges 11, , Filing Fees 3, , General Expenses 2, , Postage & Courier Charges Printing & Stationery 1, , Professional Fees 4, , Rates & Taxes 6, , Repair & Maintenance Charges -Others 3, , , , Annual Report

132 TRADE CITY BARTER PRIVATE LIMITED SCHEDULES 1 TO 15 FORMING PART OF THE FINANCIAL STATEMENTS SCHEDULE 15 A. SIGNIFICANT ACCOUNTING POLICIES : - (1) System of Accounting The Financial Statements are prepared under the historical cost convention, on accrual basis, in accordance with the generally accepted accounting principles in India and the relevant provision of the Companies Act, The company has complied with the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions' 2007 with regard to Income Recognition, Assets Classification, Accounting Standard and Provision for Bad & Doubtful Debts as applicable to it. (2) Fixed Assets: (i) (ii) (3) Investments: Fixed Assets are stated at their original cost of acquisition less accumulated depreciation. Depreciation on Fixed Assets has been provided under written down value method on pro-rata basis as per rate prescribed under Schedule XIV of the Companies Act, Investments are classified as long term Investments. Long term investments are stated at cost less provision for diminution in the value other than temporary, in the value of investments. (4) Inventories: Inventories are valued at lower of cost or market price. The costs of the shares are determined on First In First Out basis. (5) Derivative Market Trading 1. In respect of Option Contract, premium paid for contract expiring beyond the balance sheet date has been treated as current assets, adjusted for loss, if any 2. In respect of Future Contract, Mark to Market debit balance has been recognized in the Profit & Loss and Mark to Mark credit balance has been treated as current liabilities as per the guidance note issued by ICAI on accounting of Future & Option contract (5) Taxation: Provision of current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge is recognized using the enacted tax rate. Deferred Tax Assets/Liabilities are reviewed as at Balance Sheet date based on the development during the year and reassess realization/liabilities in terms of AS-22 issued by ICAI. B. Notes on Accounts 1. Compliance of Accounting Standard issued by the Institute of Chartered Accountant of India a) Related Party Disclosure: Information given in accordance with Accounting Standard 18 Annual Report

133 TRADE CITY BARTER PRIVATE LIMITED SCHEDULES 1 TO 15 FORMING PART OF THE FINANCIAL STATEMENTS (A) Names of Related Parties & Relationship i) Enterprises that directly or indirectly exercise control over or that are controlled by or that under common control with the reporting enterprises. 1. Holding Company : a) Lohia Securities Limited 2. Fellow Subsidiaries : a) Trade City Commodities (P) Ltd b) Trade City Real Estate (P) Ltd. c) Trade City Securities (P) Ltd. 3. Associates : a) Daadi Stock Broking (P) Ltd. 4. Enterprise over which KMP : a) Ridhi Sidhi Distributor (P) Ltd. exercise significant influence b) Shiv Lalit Consultancy (P) Ltd. Sl. No. ii) or where common control exsits Transaction with Related Party PARTICULARS Holding Company Fellow Subsidiaries Associates Enterprise over with KMP excrise significant influence 1. Interest received 1,332/- 189/ (9,59,054/-) (---) (---) (64,376/-) 2. Interest Paid ,29,506/- 4,23,409/- 2,36,953/- (---) (55,053/-) (79,767/-) (14,422/-) 3. Dividend Received 2,05,000/ (2,46,000/-) (---) (---) (---) 4. Brokerage, Service Tax, Transaction 1,56,493/- 3,94,295/ Charges & Boker Note Paid (1,63,728/-) (94/-) (---) (---) 5. Depository 11,093/ Charges (8,712/-) (---) (---) (---) 6. Loan Given (Received during 37,00,000/- 11,50,000/ the year (25,57,15,000/-) (13,50,000/-) (---) (15,53,77,00/-) 7. Loan Taken ,79,95,000/- 12,35,50,000/- 5,84,75,000/- (---) (1,97,80,000/-) (1,26,00,000/-) (39,09,000/-) 8. Loan Repaid ,35,50,000/- 1,09,40,000/- 5,29,75,000/- (---) (1,60,25,000/-) (1,26,00,000/-) (39,09,000/-) 9. Margin for trading given --- 1,04,50,000/ (Received during the year) (1,43,75,000/-) (---) (---) (---) Annual Report

134 TRADE CITY BARTER PRIVATE LIMITED SCHEDULES 1 TO 15 FORMING PART OF THE FINANCIAL STATEMENTS iii) Amount outstanding from Holding Company : Rs. 17,23,411.78/- Fellow subsidiary : Rs. 33,51,591.61/- iv) Provision to be made : Nil 2. Earning Per Share Earning Per Share (Rs.) (Rs.) Profix After Tax Rs. 5,15, Rs. (2,59,436/-) Number of Shares 4,25,200 4,25,200 Basic / Diluted Earning Per Share Rs Rs. (.61) 3. Component of Deferred Tax Particulars As at (Rs.) For the year As at (Rs.) Assets Items Business Loss 2,66,816/- (1,98,035/-) 68,781/- Total 2,66,816/- (1,98,035/-) 68,781/- 4. Quantitative details of item (shares) Traded during the year ended 31st March 2010 Particulars Qty Amount Qty Amount Opening Stock 7,94,453 66,93, ,610 54,02, Purchases 69,94,605 40,69,25, ,77,297 16,24,27, Sales 65,96,924 38,89,13, ,24,454 15,03,71, Closing Stock 11,92,134 3,97,00, ,94,453 66,93, Flat shown under the head Fixed Assets was purchased from one of the director of the company. However registry of the same has not been done yet. Annual Report

135 134 - Annual Report TRADE CITY BARTER PRIVATE LIMITED SCHEDULES 1 TO 15 FORMING PART OF THE FINANCIAL STATEMENTS 6. Net open position in respect of equity & index future contract are as follow PARTICULARS NO OF CONTRACTS Long No of units ABAN 29APR10 3 1, ACC 29APR ALBK 29APR10 1 2, APIL 29APR BANKBARODA29APR BHARTIARTL 29APR CIPLA 29 APR , FORTIS 29ARP GTL INFRA 29APR GTOFFSHORE 29APR10 2 1, HCC 29 APR , IDEA 29 APR , IFCI 29 APR , INFOSYSTCH 29APR JPASSOCAIT 29APR10 1 1, KOTAKBANK 29 APR MCDOWELL-N 29APR ONMOBILE 29 APR POLARIS 29 APR ,400 PUNJLLOYD 29 APR , RANBAXY 29 APR RELCAPITAL 29 APR , RELINFRA 29 APR , SESAGOA 29 APR ,000 SUZLON 29 APR ,000 TATASTEEL 29 APR TOTAL 85,790 12,100 INDEX FUTURE MININIFTY 29 APR TOTAL Additional information as required under Part II of Schedule VI to the Companies Act, 1956, to the extent not applicable are not given. 8. (a) As the Company has incurred losses during the year henceforth no amount is transferred to Statutory Reserve Fund. (b) Information pursuant to Non Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 is annexed as Annexure II hereto 9. Additional information pursuant to part IV of Schedule VI to the Companies Act 1956 is annexed as Annexure I hereto 10. Previous years figures have been regrouped/rearranged wherever necessary. As per our Report Attached for V.LOHIA & CO. Chartered Accountants For and on behalf of Board (Firm Regn. No E) VISHNU LOHIA (Partner) Membership No Kolkata, the 28th day of May 2010 Hari Kishan Lohia Director Short Sudheer Kumar Jain Director

136 TRADE CITY BARTER PRIVATE LIMITED STATEMENT PURSUANT TO PART-IV OF SCHEDULE VI OF THE COMPANIES ACT, 1956 BALANCE SHEET ABSTRACT AND COMPANY S GENERAL BUSINESS PROFILE i) REGISTRATION DETAILS ANNEXURE - 1 REGISTRATION NO. : U51909WB1995PTC STATE CODE : 21 BALANCE SHEET DATE : ii) CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. 000) Public Issue N I L Right Issue N I L Bonus Issue N I L Private Placement N I L iii) POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN RS. 000) Total Liabilities Total Assets Source of Funds : Paid up Capital Reserve & Surplus Secured Loans N I L Unsecured Loans Deferred tax Tax Liabilities N I L Application of Funds : Net Fixed Assets Investments Deferred Tax Assets Net Current Assets Misc. Expenditure N I L Accumulated Losses N I L iv) PERFORMANCE OF COMPANY(AMOUNT IN RS. 000) Turnover (incl. other income) Total Expenditure Profit/(Loss) before Tax Profit/(Loss) after Tax Earning per Share in Rs Dividend Rate (%) N I L v) GENERIC NAME OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY (AS PER MONETARY ITEMS) Item Code No. (ITC Code) Product Description As per our Report of even date for V.LOHIA & CO. Chartered Accountats VISHNU LOHIA (Partner) Membership No Kolkata, 28th May 2010 : N.A. : FUND BASED FINANCIAL ACTIVITIES Hari Kishan Lohia Director For and on behalf of Board Sudheer Kumar Jain Director Annual Report

137 CONSOLIDATED AUDITOR S REPORT LOHIA SECURITIES LTD. To The Board of Directors of Lohia Securities Ltd.Group 1. We have audited the attached Consolidated Balance Sheet of M/s. Lohia Securities Limited Group as at 31st March, 2010, the Consolidated Profit & Loss Account and also the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are responsibility of the Lohia Securities Ltd.'s management and have been prepared by the management on the basis of the separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence to support the financial statement, amounts and disclosure in the financial statement. An audit also includes assessing the accounting principles used in the preparation of financial statements, assessing significant estimates made by the management in the preparation of financial statements and evaluating overall financial statement preparation. We believe that our audit provides a reasonable basis for our opinion. 3. We did not audit the financial statements of three subsidiaries whose financial statement reflect total assets of Rs. 12,82,25, as at 31st March 2010, total revenue of Rs. 1,32,65, and net cash outflows amounting to Rs. 2,73,23, for the year ended on that date. These financial statements and other financial information have been audited by the other auditors whose reports have been furnished to us by the management of the group, and our opinion is based on the reports of other auditors. 4. We report that the consolidated financial statements have been prepared by the Lohia Securities Ltd.' management in accordance with the requirement of Accounting Standard (AS) 21 Consolidated Financial Statements as notified under the Companies (Accounting Standards) Rules, Based on our audit and on consideration of reports of other auditors on separate financial statements and on the other financial information of the components, and to the best of our information and according to the explanations given to us, the attached financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:- (a) In the case of the Consolidated Balance Sheet, of the state of affairs of the Lohia Securities Ltd Group as at 31st March, And (b) In the case of the Consolidated Profit & Loss Account, of the Profit for the year ended on that date. And (c) In the case of the Consolidated Cash Flow statements of the cash flow for the year ended on that date. Place : 1, India Exchange Place Kolkata Date : The 29th day of May, 2010 For PATNI & CO. Chartered Accountants S. Sureka Partner Membership No Annual Report

138 CONSOLADATED BALANCE SHEET AS AT 31ST MARCH LOHIA SECURITIES LTD. SCHEDULES Rs. P. Rs. P. I. SOURCES OF FUNDS 1. SHAREHOLDER S FUNDS a) Share Capital A 47,822, ,822, b) Reserves & Surplus B 273,062, ,976, LOAN FUNDS a) Secured Loans C 57,236, ,677, b) Unsecured Loans D 52,800, ,125, TOTAL 430,921, ,601, II. APPLICATION OF FUNDS 1. FIXED ASSETS Gross Block E 117,715, ,417, Less:Depreciation 70,769, ,071, Net Block 46,945, ,346, INVESTMENTS F 6,457, ,957, DEFERRED TAX ASSETS 1,550, ,987, CURRENT ASSETS AND LOANS & ADVANCES a) Inventories G 69,860, ,963, b) Sundry Debtors H 8,509, ,405, c) Cash & Bank Balances I 230,399, ,483, d) Other Current Assets J 5,426, ,169, e) Loans & Advances K 130,873, ,147, ,069, ,170, LESS : CURRENT LIABILITIES AND PROVISIONS a) Current Liabilities L 56,730, ,218, b) Provisions M 12,497, ,893, ,228, ,112, NET CURRENT ASSETS 375,841, ,058, MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) a) Interest Suspense 27, , b) Preliminary Expenses 98, , TOTAL 430,921, ,601, Significant Accounting Policies and Notes to the Accounts Schedules referred to above form an integral part of the Balance Sheet As per our attached report of even date For PATNI & CO. Chartered Accountants S. Sureka, Partner Membership No Kolkata, 29th May, 2010 Q Narendra Kumar Rai Company Secretary For and on behalf of Board of Directors Rajesh Kumar Bajaj Managing Director Sudheer Kumar Jain Whole-time Director Annual Report

139 LOHIA SECURITIES LTD. CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 SCHEDULES Rs. P. Rs. P. I. INCOME Income from Operation N 224,578, ,650, Dividend from Shares lying at Inventories 393, , Dividend from Shares lying at Investment 206, , Brokerage (T.D.S Rs. 1,297/-; P.Y.3,077/-) 37,694, ,065, Interest Income (T.D.S. Rs.19,87, ,133, ,131, Previous Year Rs. 34,16,256.08/-) Receipts from DP Division (T.D.S. :Rs. 79,700/-;P.Y.Nil/-) 2,150, ,470, Profit on Sale of Investment 99, , Profit On Sale of Fixed Assets 771, Miscellaneous Income 542, , TOTAL 284,571, ,277, II. EXPENDITURE Payments to and Provision for Employees O 39,704, ,267, Other Expenses P 117,964, ,604, Securities Transaction Tax 61,672, ,775, Interest Expenses 13,453, ,397, Depreciation 12,335, ,349, Preliminary Expenses Written Off 45, , TOTAL 245,175, ,464, PROFIT/(LOSS) BEFORE TAX (A-B) 39,395, (48,186,663.87) Less : Provision for Taxes Current Tax 4,467, , Deferred Tax 11,437, (15,616,849.00) Fringe Benefit Tax - 325, Income Tax For Earlier Year 1,595, , PROFIT/(LOSS) AFTER TAX 21,896, (33,154,727.30) Less: Preacquistion Profit - (7,368,612.95) Less: Transfer to Statutory Reserve Fund 104, TOTAL PROFIT AFTER TAX 21,792, (40,523,340.25) Add : Balance Brought Forward from previous year 136,434, ,787, PROFIT AVAILABLE FOR APPROPRIATION 158,226, ,264, APPROPRIATION Proposed Dividend On Equity Share Capital 4,983, ,983, Provision for Dividend Tax 827, , ,810, ,829, BALANCE CARRIED TO BALANCE SHEET 152,415, ,434, Basic/Diluted Earning Per Share 4.58 (6.65) Significant Accounting Policies Q and Notes to the Accounts Schedules referred to above form an integral part of the Profit & Loss Account As per our attached report of even date For PATNI & CO. Chartered Accountants S. Sureka Partner Membership No Place : Kolkata Date : 29th May, Annual Report Narendra Kumar Rai Company Secretary For and on behalf of Board of Directors Rajesh Kumar Bajaj Managing Director Sudheer Kumar Jain Whole-time Director

140 LOHIA SECURITIES LTD. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, Amount (Rs.) Amount (Rs.) Amount (Rs.) Amount (Rs.) A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax & Extraordinary Items (481.87) Adjustment for : Depreciation Preliminary Expenses Written Off Miscellaneous Balance Written Off Interest Expenses Provision for Bad & Doubtful Debts Dividend Received (2.05) (2.46) Interest Received (183.52) (177.02) Provision for Gratuity 0.57 (Profit)/Loss On Sales Of Invetment (1.00) (1.49) (Profit)/Loss On Sales Of Fixed Assets (7.71) (347.74) Operating Profit before Working Capital Adjustment (Increase)/Decrease in Inventories (488.96) (Increase)/Decrease in Debtors (Increase)/Decrease in Other Current Assets (2.53) (Increase)/Decrease in Loans & Advances (183.58) Increase/(Decrease) in Current Liabilities (21.57) (49.27) Payment of Tax Net cash flow from operating activities (92.20) B. CASH FLOW FROM INVESTING ACTIVITIES Sale Proceed of Investment Purchase of Investment (686.00) (536.08) Advance for Property (248.65) (332.12) Advance Received for Property Refund Received for Property Purchase of fixed assets (111.47) (71.00) Sales Proceeds of Fixed Assets Dividend Received Interest Received (Increase)/decrease in fixed deposit (454.94) Net cash used in investing activities (453.86) C. CASH FLOW FROM FINANCING ACTIVITIES Increase/(Decrease) in Secured Loan (54.41) (442.26) Increase/(Decrease) in Unsecured Loan Payment of Dividend & Dividend Tax (58.30) (69.96) Interest Paid (120.67) (141.37) Share Capital & Security Premium Fees Paid for Increase in Capital - (0.35) Misc. Expenses W/off Net cash realised from financing activities (137.33) (168.14) Net increase/(decrease) in cash and cash equivalent (175.79) (174.01) OPENING CASH & CASH EQUIVALENT CLOSING CASH & CASH EQUIVALENT As per our attached report of even date For PATNI & CO. Chartered Accountants S. Sureka, Partner Membership No Kolkata, 29th May, 2010 Narendra Kumar Rai Company Secretary For and on behalf of Board of Directors Rajesh Kumar Bajaj Managing Director Sudheer Kumar Jain Whole-time Director Annual Report

141 140 - Annual Report LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS Rs. P. Rs. P. SCHEDULE A SHARE CAPITAL Authorised 75,00,000 Equity shares of Rs. 10/- each 75,000, ,000, Issued & Subscribed 50,00,000 Equity shares of Rs. 10/- each 50,000, ,000, Paid Up Capital 47,78,000 Equaity Shares of Rs. 10/- each 47,780, ,780, fully paid up (Refer Note No. B(3) Of Schedule Q) Add: Forfeited Shares 42, , TOTAL 47,822, ,822, Note : Out of the above shares, 50,000 shares are alloted as fully paid up pursuant to a contract without payment being received in cash. SCHEDULE - B RESERVE & SURPLUS A. General Reserve Opening Balance 91,086, ,000, Less: Adjustment for Pre-Acquisition Reserve - (3,913,871.12) Sub -Total :- A 91,086, ,086, B. Profit & Loss A/c Profit & Loss Account 152,415, ,434, Sub -Total :- B 152,415, ,434, C. Security Premium Opening Balance 18,551, ,307, Less: Adjustment for Pre-Acquisition - (820,868.55) Security Premium Add: Amount Received during the year - 65, Sub -Total :- C 18,551, ,551, D. Capital Reserve on Consolidation 10,726, ,726, ,726, ,726, E. Statutory Fund 177, , Add: Amount credited during the year 104, , , TOTAL : - (A + B+ C + D + E) 273,062, ,976, SCHEDULE - C SECURED LOAN Loan against Car From Banks 534, ,099, (Repayable within one year Rs.5,11,275/- Previous Year Rs.5,65,887/-) Term Loan From Banks 37,000, ,333, (Repayable within one year Rs.3,70,00,000/- Previous year Rs. 2,86,66,666.72/- ) (Secured against personal guarantee of Directors, by charge of Fixed Assets of Subsidiaries & against Fixed Deposits) Bank overdraft (Secured against Shares & Fixed Deposits) 19,702, ,244, TOTAL 57,236, ,677,569.11

142 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS SCHEDULE - E FIXED ASSETS Amount in Rs. Particulars As on GROSS BLOCK Addition Deduction As at As on Fro the Year DEPRECIATION Adjustent for Sale As at As at NET BLOCK As at A) TANGIBLE ASSETS Office 14,709, ,234, ,943, ,146, , ,716, ,227, ,562, Office Equipment 4,596, , ,755, ,428, , ,885, ,869, ,167, Furniture & Fixtures 11,826, , , ,872, ,501, ,330, , ,828, ,044, ,324, Air Conditioner 3,830, , ,914, ,399, , ,742, ,172, ,430, Car 4,835, , , ,032, ,811, , , ,049, ,982, ,023, Computer & Accessories 59,562, ,534, , ,703, ,623, ,382, , ,731, ,971, ,938, Electrical Instalation 4,544, , ,612, ,081, , ,567, ,044, ,463, Generator 891, ,323, ,214, , , , ,769, , VSAT - Equipment 133, , , , , , , B) INTANGIBLE ASSETS Software 1,987, ,793, ,781, , , ,728, ,052, ,204, Membership Fees 500, , , , , TOTAL 107,417, ,147, , ,715, ,071, ,335, , ,769, ,945, ,346, PREVIOUS YEAR 101,212, ,099, , ,417, ,185, ,349, , ,071, ,716, ,515, Annual Report

143 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS Rs. P. Rs. P. SCHEDULE - D UNSECURED LOAN From body Corporates 52,800, ,125, TOTAL 52,800, ,125, SCHEDULE F INVESTMENT LONG TERM INVESTMENTS (AT COST) A) In Equity Shares Quoted, Non Trade Sidheshwari Garments Ltd. 8,700 (Previous Year: 8,700) Equity Shares of Rs. 10 each fully paid up 87, , Sub Total (i) 87, , UnQuoted, Trade The Calcutta Stock Exchange Ltd. 250 (Previous Year : 250) Equity Shares of Rs. 1 each fully paid up 500, , Sub Total (ii) 500, , In Equity Shares - Unquoted, Non Trade Nimbus Communication Ltd. 5,000 (Previous Year : 5,000) Equity Shares of Rs. 10 each fully paid up 1,125, ,125, Daadi Stock Broking Pvt. Ltd. 3,000, ,000, ,00,000 (Previous Year :3,00,000) Equity Shares of Rs. 10 each fully paid up Sub Total (iii) 4,125, ,125, TOTAL : - A (i+ii+iii) 4,712, ,712, B. In Mutual Fund Unquoted (Non Trade) LIC MF India Vision Fund 1,000, ,000, ,00,000 (Previous Year : 1,00,000) Units of Rs. 10 each fully paid up Escorts Leading Sector Fund - 500, Nil(Previous Year :48, ) Units of Rs. 10 each fully paid up TOTAL : - B 1,000, ,500, C. Investment in Properties 745, , TOTAL : - C 745, , TOTAL : - (A + B +C) 6,457, ,957, Market value of Quoted Shares 26, , Net Assets Value of Mutual Fund 835, , Annual Report

144 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS SCHEDULE G Inventories Shares (Non Traded, Listed) Fully Paid up Name of the Company Face Value in Rs Amount ABAN Offshore Limited 2 1 1, Adhunik Metaliks Limited , Aditya Birla Money Limited Aftek Limited 2 100,000 1,665, Akar Tools Limited 10 15, , Aksh Optifibre Limited 5 10, , ,000 97, Alok Industries Limited 1 1,000 22, , , Alps Industries Limited 10 8,000 88, Anco Communications Limited. 10 1,000 2, ,000 2, Ansal Property & Infrastructure Limited , Andhara Bank Limited , , Aqua Logistics Limited , Arvind Remedies Limited 1 100, , , , Axis Bank Limited , Bajaj Hindustan Limited ,900 91, Balaji Distilleries Limited 10 11, , Bang Overseas Limited 10 5, , , , Baroda Rayon Corporation Limited , , Bata India Limited , Bengal & Assam Company Limited , Benchmark Mutual Fund Nifty Bees , Birla Precision Technologies Limited 2 26, , Bharati Airtel Limited Bharati Shipyard Limited , Bharat Electronics Limited , Bharat Heavy Electricals Limited , Bharat Strach Product Limited , , Bhourkla Aluminium Limited 2 4,000 66, ,000 66, Bhushan Steel Limited , Bodal Chemicals Limited , , Bombay Dyeing & Manufacturing Company Limited , Brigade Enterprises Limited , , Brushman India Limited 10 7,675 84, , , Cadila Healthcare Limited , , Cairn India Limited , Cals Refinery Limited 1 2,175, , ,700, , Castrol India Limited Century Textiles Limited , Cipla Limited 2 4 1, Cochin Minerals & Rutiles Limited 10 1,000 39, ,000 25, Dena Bank , Digjam Limited 10 95, , DLF Limited 2 7,550 2,332, Dolat Investments Limited 1 50, , , , Dr. Reddy s Laboratories Limited , Dredging Corporation of India Limited , , Dunlop India Limited. 10 2,851 18, ,851 25, Dynacons Systems & Solution Limited 2 5,000 4, ,000 2, Qty Qty Amount Annual Report

145 Face Value in Rs Amount LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS Electrosteel Castings Limited ,000 14, Escort India Limited , , Essar Oil Limited ETC Network Limited Fame India Limited Federal - Mogul Goetze India Limited , First Source Solution Limited Foundary Fuel Products Limited 10 45, , , , Forties Healthcare Limited GAIL (India) Limited , Gallant Metal Limited , Gateway Distripark Limited ,000 53, Gayatri Sugar Limited , , Glenmark Pharmaceuticals Limited , Globus Spirits Limited 10 5, , GMR Infrastructure Limited 1 9, , G V Films Limited 10 15,000 27, ,000 12, Goodyear India Limited , , , GMR Infrastructure Limited ,000 52, Godrej Industries Limited , Grasim Industries Limited , GVK Power & Infrastructure Limited Graphite India Limited , , Gulf Oil Cprporation Limited , , HBL Power System Limited , , Himachal Futuristic Communication Limited , , ,000 56, Himadri Chemical Limited , Hindalco Industries Limited , Hinduja Foundaries Limited 10 28,595 2,767, Hindustan Oil Exploration Limited 10 1, , Hindustan Motors Limited 10 2,500 51, ,900 38, Housing Development Finance Corporation Limited , Housing Development & Infrastructure Limited , , IBN18 Broadcast Limited , ICICI Bank Limited , , IDEA Cellular Limited Infrastructure Development Finance Company Limited 10 2, , , , IFCI Limited 10 11, , IG Petrochemicals Limited 10 5, , , , IKF Technologies Limited 1 5,000 19, ,000 11, India Bulls Finance Service Limited Infosys Techonologies Limited 5 1 2, Intra Décor Limited 1 8,333 2, Industrial Development Bank of India , ,000 1, Information Technologies India Limited IVR Prime Urban Developers Limited 10 10,000 1,562, , , JMD Telefilms Industries Limited 1 75,000 4,931, Jaiprakash Associates Limited. 2 5, , , Jai Prakash Power Venture Limited Qty Qty Amount Annual Report

146 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS Face Value in Rs. Qty Amount Qty Amount Jaysynth Dyechem Limited 1 5,000 39, ,000 27, Jet Airways (India) Limited , J B Chemicals & Pharma Limited ,000 36, JK Cement Limited , JK Synthetic Limited 10 35,436 96, ,971 84, Jindal Saw Limited , Jindal Southwest Hold Limited , Jindal Steel & Power Limited 1 2 1, JSW Energy Limited 10 5, , JSW Steel Limited , Kernex Miscrosystem (India) Limited 10 40,000 4,455, Kaashyap Technologies Limited 1 43,721 21, ,721 19, Kale Consultants Limited 10 8, , ,500 59, Kingfishers Airlines Limited 10 6, , , , Kilburn Engineering Limited , , Kinetic Engineering Limited 10 11, , Kitply Industries Limited 10 2,000 14, ,900 13, Kulkarni Power & Tools Limited 5 12, , Kohinoor Foods Limited , , La Opala RG Limited 10 1,000 39, ,000 14, Larsen & Toubro Limited , Madras Cement Limited , , Mangalam Cements Limited ,885 1,004, Magnum Ventures Limited 10 1,000 8, ,000 5, Mahindra Gesco Developers Limited , Mahindra Lifespace Developers Limited , Mahindra Forgings Limited , Mercator Lines Limited ,000 84, Man Industries (India) Limited 5 1,250 88, Mcleod Russel India Limited , , , Mid-Day Multimedia Limited , Mangalore Refinery & Petrochemicals Limited 10 2, , Mahanagar Telephone Nigam Limited , Mounteverest Minerals Water Limited , , MPS Limited 10 8, , Mukand Limited ,543 8,803, NMDC Limited 1 2, , National Thermal Power Corporation Limited National Alluminium Co Limited , Nectar Lifesciences Limited , Neyveli Lignite Corporation Nocil Limited 10 3,000 67, ,000 34, Noida Toll Bridge Communication Limited ,000 23, Orbit Corporation Limited , , Orchid Chemicals Limited Orient Paper & Industries Limited. 1 7, , , , Pankaj Polymers Limited ,000 40, Paramount Communication Limited 2 2,000 24, ,000 13, Parsvnath Developers Limited , , Annual Report

147 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS Face Value in Rs. Qty Amount Qty Amount Pennar Aluminium Company Limited. 10 3,500 6, ,500 4, Petronet LNG Limited , , Pipavav Shipyard Limited 10 12, , Pioneer Embroderies Limited , Piramal Holdings Limited , , Prudential Sugar Corporation Limited Porwal Auto Components Limited 10 3,000 44, ,000 19, Power Grid Corporation Limited , , , Punjab National Bank , Prajay Engineers Syndicate Limited , ,500 32, Praj Industries Limited PTC India Limited Pyramid Sai Theat Limited , Rajshree Sugars & Chemicals Limited , Rama Newsprint & Papers Limited Ranbaxy Laboratories Limited , , Ramco System Limited 10 63,255 5,889, , , Rei Agro Limited , Reliance Capital Limited Reliance Communication Limited Reliance Industries Limited , , Reliance Power Limited , , Reliance Infrastructure Limited Reliance Natural Resources Limited Reliance Petroleum Limited Revathi Equipment Limited , Roman Tarmat Limited , Rural Electrification Corporation Limited , Sahara Housing Finance Corporation Limited , Sahara One Media & Entairtainmnet Limited , Satyam Computer Services Limited , , , Sical Logistic Limited 10 10, , ,000 77, SE Investment Limited , , Sesa Goa Limited Shree Mahaganga Sugar Limited 1 2, ,000 2, Simens Limited , Simens Healthcare Dignostic Limited , Sobha Developers Limited , , Shoppers Stop Limited , , Shaw Wallace Limited ,832 1,998, Shree Renuka Sugars Limited 1 5, , Shree Synthetics Limited Solar Industries (India) Limited , Strides Arcolab Limited , Ster Tools Limited , SREI Infastructure Finance Limited 10 2, , Sun Pharmaceuticals Industries Limited 5 1 1, Suzlon Energy Limited 2 10, , ,000 84, Sika Interplant Limited , Annual Report

148 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS Face Value in Rs. Qty Amount Qty Amount Silverline Animation Technologies Limited , , SRF Limited , Steel Authorithy of India Limited Sumeet Industries Limited ,500 15, Surat Textiles Mills Limited 1 10,000 45, ,000 18, Subex Limited , , Swil Limited. 10 7,866 35, ,866 26, Tata Iron & Steel Co. Limited , Tata Motors Limited , , Tata Metaliks Limited , , Taneja Agro & Aviat Limited 5 149,279 6,187, Tata Power Company Limited , Tata Consultancy Services Limited Titan Industries Limited , Teledata Technologies Limited ,000 5, TeleData Info Marin Limited 2 1,000 5, ,000 5, Texmo Pipe & Product Limited 10 1,000 91, Thinksoft Global Services Limited 10 1, , T Spiritual World Limited 10 1,600 3, ,600 1, The Great Eastern Shipping Limited The Indian Hotels Company Limited Trigyn Technologies Limited 10 2,500 50, ,500 18, Tata Teleservices (Maharastra) Services Limited 10 7, , Temptation Food Limited 10 9, , ,869 1,546, Titagarh Wagons Limited , , The State Trading Corporation Limited , Unitech Limited 2 1, , ,600 55, Unity Infraprojects Limited , United Spirits Limited , Valiant Communications Limited 10 49,191 1,308, , , Vishal Retail Limited , Vijaya Bank Limited Visu International Limited , Welspun India Limited ,000 20, Welspun Global Brands Limited Welspun Investments Limited Welspun Gujstanl Rohren Limited , , Wendt (India) Limited 10 2,379 1,616, Wire & Wireless India Limited (Partly Paid-up) 1 5,500 32, Wide India Limited 10 14,144 4,494, Wipro Limited 2 2 1, Sub-Total - A 3,630,341 68,996, ,636,577 20,103, Commodities Gold 1 Kg 860, Kg 860, Sub-Total - B 1 Kg 860, Kg 860, TOTAL (A+B) 69,856, ,963, Annual Report

149 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS Rs. P. Rs. P. SCHEDULE - H SUNDRY DEBTORS Debts outstanding for a period exceeding Six months 2,077, ,224, Others 8,320, ,942, ,398, ,166, Less: Provison for Bad & Doubtful Debts 1,888, ,760, TOTAL 8,509, ,405, SCHEDULE - I CASH & BANK BALANCES Cash in hand (As certified by the management) 1,607, ,668, Cheque In Hand 45, Balance with Scheduled Banks -On Current Account 24,319, ,880, On Fixed deposit Account 204,428, ,934, TOTAL 230,399, ,483, SCHEDULE - J OTHER CURRENT ASSETS Dividend Receivable 50, Interest Receivable 5,376, ,169, TOTAL 5,426, ,169, SCHEDULE - K LOANS & ADVANCES (Recoverable in cash or in kind or for value to be received) LOAN GIVEN 1,600, ,300, ADVANCES IncomeTax 14,022, ,754, Fringe Benefit Tax 682, , Prepaid Expenses 3,831, ,700, Margin with Exchange 5,800, ,191, Other Advances 34,704, ,811, DEPOSITS Deposits With Exchange 42,415, ,670, Telephone DeposIts 151, , Electricity Deposits 933, , Security Deposits For Office 9,645, ,803, Other Deposits 17,086, , TOTAL 130,873, ,147, Annual Report

150 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS Rs. P. Rs. P. SCHEDULE - L Current Liabilities Sundry Creditors for Goods 2,733, , Sundry Creditors for Expenses and others 10,765, ,026, Advances Received from clients 194, , Advance Against Office - 34,000, Option Premium Received 11, Margin from Clients 41,985, ,051, Book Overdraft With Banks 115, , Mark to Market Margin 925, ,422, TOTAL 56,730, ,218, SCHEDULE - M Provisions Provision for Gratuity 342, Provision for Income Tax 5,650, ,183, Provision for Fringe Benefit Tax 693, , SUB - TOTAL : - A 6,686, ,063, Proposed Dividend 4,983, ,983, Provision for Dividend Tax 827, , SUB - TOTAL : - B 5,810, ,829, TOTAL :- (A+B) 12,497, ,893, SCHEDULE - N Income from Operation Sales 1,213,278, ,956, Closing Stock 69,860, ,963, Profit/(Loss) from Share Dealing (3,976,635.71) (7,056,185.80) Profit/(Loss) from Future & Option Dealing 203,416, ,476, Profit/(Loss) from Commodity Dealing 5,070, ,760, Profit/(Loss) from Currency Dealing (139,847.50) 384, ,487,508, ,486, Less: Purchases 1,241,966, ,509, Less: Opening Stock 20,963, ,326, TOTAL 224,578, ,650, Annual Report

151 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS Rs. P. Rs. P. SCHEDULE - O PAYMENTS TO AND PROVISIONS FOR EMPLOYEES Salary & Bonus 36,099, ,571, Contribution to Provident Fund, ESI & Gratuity 988, ,049, Staff Welfare 2,616, ,646, TOTAL 39,704, ,267, SCHEDULE - P OTHER EXPENSES Advertisement 125, , Auditors Remuneration 179, , Bank Charges and Guarantee Commission 3,845, ,511, Books & Periodicals 55, , Broker Note Stamp Expenses 2,071, ,457, Bad Debts 1, , Car Expenses 258, , Communication(including V-SAT) Expenses 8,928, ,695, Computer & Software Expenses 4,218, ,975, Depository Charges 59, , Delivery & Warehouse Charges 4, , Donation 923, , Electricity Charges 4,734, ,460, Fees & Subscription 2,014, ,604, Foreign Exchange Fluctuation - - General Expenses 677, , Insurance Charges 396, , Internal Audit Fees 239, , NSDL/ CDSL Charges 533, , NSE, BSE, CSE & SEBI Expenses 28,047, ,618, NCDEX & MCX Charges 3,463, ,555, Postage & Courriers 493, , Provision for Bad & Doubtful Debts 127, ,760, Printing & Stationery 1,108, ,530, Professional Charges 43,410, ,931, Legal & Professional Fees 1,662, ,449, Loss on Sales of Fixed Assets - 192, Rates & Taxes 723, ,009, Registration & Share Transfer Expenses 15, , Rent 3,668, ,351, Repairs & Maintenance -Machinery 1,130, , Building 1,297, ,142, Others 1,400, ,828, ,759, ,694, Service Tax - - Sub Brokerage 313, , Training Charges 198, , Travelling & Conveyance Expenses 1,635, ,363, TOTAL 117,964, ,604, Annual Report

152 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS SHEDULE - Q A. SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS: Significant Accounting Policies a) Basis of Consolidation The consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS 21) Consolidated Financial Statements, notified by the Companies (Accounting Standards) Rules The consolidated financial statements have been prepared applying uniform accounting policies for like transaction and events in similar circumstances and appropriate adjustments are made if the differences in accounting policies have a material impact. The financial statements of the Company and its subsidiaries have been 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 intra-group balances and transactions resulting in unrealized profit/loss. The excess of cost of investment over the Company s share in the net assets of subsidiaries at the date on which investment is made is recognized as goodwill and the excess of the company share over the cost of investment is treated as Capital Reserve. Capital Reserve is separately disclosed after netting of Goodwill n the Consolidated Financial Statements. b) Fixed Assets & Depreciation i) Fixed Assets are stated at their original cost of acquisition less accumulated depreciation. ii) Depreciation on fixed assets has been provided under written down value method on pro-rata basis as per rate prescribed under Schedule XIV of the Companies Act, iii) Intangible assets has been amortized over a period of four year. c) Inventory Inventories are valued at lower of cost or market price. The costs of the shares are determined on First In & First Out Basis. d) Investments Long term Investments are stated at cost less provision for diminution in the value other than temporary, in the value of Investments. e) Revenue Recognition: Income from Brokerage is recognized on the trade date of transaction.. Dividend income is recognized when the right to receive the income is established. (f) Retirement Benefit i) Defined Contribution Plan: Company s contribution paid/payable during the year to the Provident Fund is charged to Profit and Loss Account. The Company s contribution to Employee s State Insurance Scheme are also charged to Profit & Loss Account of the year to which the contributions relate. ii) Defined Benefit Plan: The Company has opted for a Group Gratuity-cum Life Assurance Scheme of the Life Insurance Corporation of India (LIC),and contribution towards gratuity liability as determined by LIC is charged to the Profit & Loss Account. As far as company s liabilities towards leave encashment, company has the policy of paying the leave encashment at the end of the financial year. (g) Taxation Provision of current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge is recognized using the enacted tax rate. Deferred Tax Assets are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized. At each balance sheet date the Company re- assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. Annual Report

153 LOHIA SECURITIES LTD. SCHEDULES ATTACHED AND FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS B. Notes on Accounts 1. Details of subsidiaries included in the Consolidated Financial Statements : Name of the Subsidiary Companies Country of Incorporation Share in Ownership Trade City Securities Pvt. Ltd. India 100% Trade City Real Estate Pvt. Ltd. India 100% (Formerly : Choudhary Distributors Pvt. Ltd.) Trade City Commodities Pvt. Ltd. India 100% (Formerly : Lohia Commodities Pvt. Ltd.) Trade City Barter Pvt. Ltd. India 100% (Formerly : Ratnagiri Barter Pvt. Ltd.) 2. Contingent Liability : Particulars As at (Rs.) Bank Guarantee 93,31,42,000/- Corporate Guarantee 5,00,00,000/- Capital Commitment 2,30,16,725/- 3. As M/S. Trade City Barter Pvt. Ltd. have 2,05,000 equity shares of Lohia Securities Limited, henceforth Share Capital of the company to the extent held by Trade City Barter Pvt. Ltd. has been reduced during consolidation. 4. Components of Deferred Tax Liability (Net) shown in the Balance Sheet is as follow : Particulars As at (Rs.) For the year As at (Rs.) Liability Items : Depreciation (27,37,985.00) 4,88, (22,49,429.00) Total (27,37,985.00) 4,88, (22,49,429.00) Assets Items : Disallowance u/s. 40(a) 2, (2,627.00) -- Carried Forward Loss 1,06,30, (70,23,968.00) 36,06, Unabsorbed Depreciation 50,92, (48,98,965.00) 1,93, Total 1,57,25, (1,19,25,560.00) 38,00, Deferred Tax (Liabilities) / Assets (Net) 1,29,87, (1,14,37,004.00) 15,50, As per our attached report of even date For PATNI & CO. Chartered Accountants S. Sureka Partner Membership No Place : Kolkata Date : 29th May, 2010 Narendra Kumar Rai Company Secretary For and on behalf of Board of Directors Rajesh Kumar Bajaj Managing Director Sudheer Kumar Jain Whole-time Director Annual Report

154 LOHIA SECURITIES LTD. Financial Snapshot Lohia Securities Limited Standalone (Rs. in lacs) Financial Years Total Income 2, , , , , Employee Cost Administation & other Expenses 1, , EBITDA (148.17) 2, , Interest Depreciation PBT (422.50) 2, , (9.87) Tax (131.79) (3.35) 8.64 PAT (290.71) 1, (6.52) Equity Share Capital Reserves & Surplus 2, , , , , NetWorth 3, , , , , , , , Basic EPS (Rs.) 3.96 (5.83) (0.13) 6.52 NPM(%) 7.80 (17.59) (4.33) RONW (%) 6.13 (9.44) (0.65) Dividend (%) Annual Report

155 Total Income PAT Basic EPS (Rs.) Financial Years Dividend (%) Financial Year

156 Serial No. LOHIA SECURITIES LIMITED Registered Office:6, Lyons Range,1st Floor,Kolkata ATTENDANCE SLIP LOHIA SECURITIES LTD. DP Client Id* Regd. Folio No. *Applicable if shares are held in electronic form. I/We hereby record my/our presence at the 16th ANNUAL GENERAL MEETING of the Company on Saturday, the 25th day of September, 2010,at 4,brabourne Road,5th Floor, Kolkata at 10:30 A.M. Signature of the Shareholder/Proxy present: Name of the Proxy holder (where applicable)mr./ms.: Notes: 1. Shareholder/Proxy holder is requested to bring the Attendance Slip with them when they come to the meeting and hand it over at the entrance gate after affixing their signature on it. 2. Shareholder/Proxy holder who come to attend the meeting is requested to bring their copy of the Annual Report with them. 3. Every person holding equity share of the company and whose name is entered as a beneficial owner in the records of the depository shall be deemed to be a member of the company. Serial No. LOHIA SECURITIES LIMITED Registered Office:6, Lyons Range,1st Floor,Kolkata PROXY FORM DP Client Id* Regd. Folio No. *Applicable if shares are held in electronic form. I/We of. in the district of...being a member/ members of Lohia Securities Limited hereby appoint...of.....in the district of..failing him.....of.in the district.as my/our proxy to vote for me/us on my/ our behalf at the 16th ANNUAL GENERAL MEETING of the Company to be held on Saturday, the 25th September, 2010, at A.M. and at any adjournment thereof. For Office Use only Proxy No. : No. of Shares : Signature (s) Affix Re 1/- Revenue Stamp Notes: 1. The proxy form duly completed and signed should be deposited at the Registered Office of the Company not less than 48 hours before the time of the meeting. 2. In case of joint shareholding the proxy is required to be signed by all the members. 3. Every person holding equity share of the company and whose name is entered as a beneficial Annual Report owner - in the records - of 155 the depository shall be deemed to be a member of the Company.

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