Abhishek Industries Annual Report 202008 9[1]

ABHISHEK INDUSTRIES LIMITED 19th Annual Report 2008-9

INSPIRED BYCHALLENGE

CONTENTS

2About Abhishek

3Managing Director’s Message

4Financial Highlights

6Inspired by Challenge

14Business Overview

18Directors’ Profile

20Directors’ Report

30Management’s Discussion and Analysis

38Corporate Sustainability Report

42Corporate Governance Report

60Standalone Financial Statements

89Consolidated Financial Statements

“THE TRIDENT CREDO”

In life as in business, change is the only constant. Keeping in mind

the events of the last year, Trident Group has undertaken a corporate

rebranding program with a simple philosophy – Inspired by challenge.

Three simple words, yet it has profound impact on our business and our

lives.

Throughout history we have witnessed how the world has progressed

when people challenged the status quo, questioned the conventional

wisdom and overcame the challenges to create what never existed. This

is the genesis of human progress.

What does this philosophy mean to the Trident Group? Everything.

For us it means constantly raising the bar and creating new benchmarks.

For us it means newer ways to do business and overcome any challenge

that comes in the way.

But then mere words won’t help. It is all about imbibing this credo in our

day-to-day work. It’s about internalizing the belief in our lives.

As we experienced the global downturn of 2008-9, our motto is the

need of the hour. To overcome all the challenges business throws at

us.

Mahatma Gandhi said, “One needs to be slow to form convictions,

but once formed they must be defended against the heaviest

odds.”

AT ABHISHEK, INSPIRED BY CHALLENGE IS A CONVICTION.

Abhishek Industries Limited2About Abhishek Inspired by ChallengeManaging Director’s

MessageBusiness OverviewFinancial Highlights Directors’ Profi le

ABOUT ABHISHEK

OUR BUSINESS

We deal in yarn, terry towels, paper and chemicals along with our energy segment which serves all

the other divisions. Therefore we exist in the segments replete with opportunities and consistent in

growth.

OUR CALLING CARD

Flagship Company of the Trident Group

Headquartered in Ludhiana

Manufacturing facilities in Barnala, Punjab and Budni, Madhya Pradesh

Listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE)

Company Identification Number (CIN) : L99999PB1990PLC010307

OUR RANKING

World’s largest wheat straw based paper manufacturer

One of the world’s largest terry towel manufacturers

One of India’s largest yarn spinners.

Recognised by the ICSI as the best Indian Company for adopting corporate governance practices

OUR VISION

Inspired by challenge, we will add value to life, and together prosper globally.

OUR VALUES

To provide customer satisfaction, through teamwork, based on honesty and integrity, for continuous growth

and development.

OUR CORPORATE PHILOSOPHY

To continue growth by leading national and international standards and ethical means, in harmony with the

environment, ensuring customer delight, stakeholders’ trust and social responsibility.

Birth of Abhishek

1990

No of employees

Over 9200

Exports across

65 countries

Net Sales growth

33 percent over

the last year

Exports growth

32 percent over

the last year

Balance Sheet Size

Rs 20,362.1 million as

on March 31, 2009

Public shareholding

36.52 percent as on

March 31, 2009

Foreign shareholding

6.32 percent as on

March 31, 2009

3Directors’ Report Corporate

Governance Report Management’s Discussion and Analysis

Standalone Financial Statements

Corporate Sustainability Report

Consolidated Financial Statements

MANAGING DIRECTOR’S MESSAGE

Dear Shareholders

It’s always a pleasure to talk to you – our valued

shareholder. At Abhishek Industries, we have

grown through the years, by questioning existing

paradigms and by challenging assumptions. In

essence, through our unconventional wisdom,

we have prospered at every stage and gained

confidence to take on fresh challenges every day.

As you are aware, 2008-9 was a tumultuous

period. While on one hand, we have witnessed

global downturns, economic uncertainities and

stagnation; on the other we have seen geopolitical

shifts and newer challenges.

With our motto being Inspired by Challenge, we are

transforming our experiences into wisdom and are

honing our skills through learning. The challenges

of the recent past have made us that much wiser

and as a consequence we are reworking and re-

strategizing on our business premise - people,

products, processes and geo locations.

We are indeed grateful for the faith and trust

you have reposed on us and assure you that the

coming year will mark a new era in creating global

benchmarks and great economic value additions.

Wishing you a great year ahead!

Warm regards,

Rajinder Gupta

With our motto being Inspired by Challenge, we are transforming our experiences into wisdom and are honing our skills through learning



FINANCIAL PERFORMANCE

(Rs million)

Period ended Mar 2005 Mar 2006 Mar 2007 Mar 2008 Mar 2009

No. of months 15 12 12 12 12

Gross Turnover 8296 8885 9860 12062 15456

Net Sales 7056 7436 8166 10487 13981

Exports 3300 4190 4352 5193 6862

Gross Profit (PBIDT) 1464 1588 1794 1818 2605

Net Profit after tax 426 568 409 400 (530)

Net Worth 3150 3585 3995 4452 4463

Fixed Assets (gross block) 8218 10074 12101 13273 21032

Current Assets (Net) 2422 2863 3372 2785 2365

FINANCIAL HIGHLIGHTS

3300

4190 4352

5193

6862

2004-5 2005-6 2006-7 2007-8 2008-9

Exports (Rs million)

8296 88859860

12062

15456

2004-5 2005-6 2006-7 2007-8 2008-9

Gross Turnover (Rs million)

14641588

1794 1818

2605

2004-5 2005-6 2006-7 2007-8 2008-9

3150

35853995

4452 4463

2004-5 2005-6 2006-7 2007-8 2008-9

Net Worth (Rs million)






KEY FINANCIAL INDICATORS

Period ended Mar 2005 Mar 2006 Mar 2007 Mar 2008 Mar 2009

No. of months 15 12 12 12 12

Gross Profit Margin (%) 21 21 22 17 19

Return on Net worth (%) 14 16 10 9 --

Export Sales/Net Sales (%) 47 56 53 50 49

Debt/equity 1.47 1.92 2.48 2.88 3.49

CEPS (Rs) 6.16 6.35 6.46 6.32 2.80

EPS (Rs) 2.19 2.93 2.11 2.06 (2.64)

Book Value/Share (Rs) 16.22 18.12 20.57 22.92 20.09

Turnover per share (Rs) 42.72 45.75 50.77 62.11 69.56

821810074

1210113273

21032

2004-5 2005-6 2006-7 2007-8 2008-9

Fixed Assets (gross block) (Rs million)

16.2218.12

20.5722.92

20.09

2004-5 2005-6 2006-7 2007-8 2008-9

Book Value/Share (Rs)

42.72 45.7550.77

62.11

69.56

2004-5 2005-6 2006-7 2007-8 2008-9

Turnover per share (Rs)

CEPS (Rs)

6.16 6.35 6.46 6.32

2004-5 2005-6 2006-7 2007-8 2008-9



Our paper business witnessed a significant expansion, with the commissioning of new machine of 1,25,000 tpa.

We also added 82 looms in our terry towel business






Corporate robustness and resilience are defined not only the ability to maintain a continuum in operations during phases of economic slowdown, but actually to increase the level of engagement with the market.

We, at Abhishek have focused on enhancing

internal strengths and transforming them into

opportunities. Amid a climate of economic

adversity, we continued investing in enhancing

our capacities, and stabilizing capacities that

went on stream at the beginning of the year. We

analysed competencies, allocated resources and

re-visited our strategies to ensure that these new

capacities were not rendered idle.

The vivid reflection of our efforts has been the

Budni plant in Madhya Pradesh. The first phase

of the integrated plant was commissioned with

50,400 spindles becoming operational. The

capacity at Budni is planned on special yarns like

compact, Elli-Twist, core spun yarn and special

cottons like Supima, Organic and Giza, which would

help us differentiate our product in the market.

In the terry towel division , we added 82 looms

as part of our terry towel expansion program and

added newer and higher value added products like

super fine zero twist, anti microbial towel, super

absorbent towel, quick dry towel, organic slub

towel to name a few. In addition, we also produced

exclusive ranges for many premium private labels.

On an expanded capacity, these value added

products will result in higher contributions,

reflecting a forward-looking proactivity in

production planning and product innovation.

Our paper business witnessed a significant

expansion, with the commissioning of new

machine of 1,25,000 tpa . This machine, together

with a pulping capacity of 90,000 tpa has

significantly enhanced our capacity to service

paper demand in our market territories and has

enabled us to move up in value chain. It is also

the first agro-based paper manufacturer of India

to use Elemental Chlorine Free (ECF) technology,

considered to be the most environment friendly

paper manufacturing process.

This expansion will allow Abhishek to emerge as

an important player in the writing and printing

segment. We launched our own brand Copier

paper called ‘SPECTRATM COPIER’ and ‘MY CHOICE’,

which will help create a B-to-C brand.

Thus, we as Abhishek have endeavoured to give

a pragmatic approach to the present downturn.

By harnessing strengths and expanding, we have

made ourselves an organization that is ready to

face future challenges with aplomb.

EXPANSION AMID ADVERSITY



The employees have been empowered to take decisions, experiment thereby promoting entrepreneurial mindset






Economic adversity is often an imperative phenomenon, which brings with it related opportunity to sharpen efficiencies and build capabilities that operate at these enhanced levels. The future is subject to resources and how we use them. During periods traumatized by economic perils, it is the ability to weather abnormalities that determines sustainability.

To be resourceful enough to face a fairer and

more promising business climate, we took care

to become stronger in our people relations and

thereby worked towards an overall tightening of

our organizational people networks.

We promoted the flat organizational structure

which facilitates decision-making. The employees

have been empowered to take decisions,

experiment thereby promoting entrepreneurial

mindset. There is a fair flexibility in deciding the

career paths with growing elements of cross

functionality.

We remain committed to our philosophy of

continued operational excellence. To that effect,

the business excellence initiatives continued with

satisfying operational results.

We continued our focus on ensuring a right-fit in

each of our various functions, and recalibrated the

internal structure to match competencies with

business objectives at all levels.

And most importantly, we ensured that the team

morale remained strong and that the motivation

levels were even higher to ensure a prompt

response to market conditions.

Being stronger therefore, is the product of

active and healthy synergies. Be it the work

environment, the remuneration structures or

the zeal to recruit and retain the best talent, we

have proactively etched a path that has bravely

penetrated through the barren economic scene.

Facing challenges through internal strengths is

our simple mantra.

FOSTERING INTERNAL STRENGTH



Operationally, the year witnessed nearly 70 per cent improvement in PBDITA - 2,605.3 million from

Rs 1,540.0 million in the previous year






There is never a better time to revisit norms of prudence and control filters in an organisation than when the overall business climate is unfavourable. This allows the learnings to be applied to a higher base as and when the turnaround happens, ensuring higher value creation.

We, at Abhishek believe in a continuous process

of optimizing potential. As we await fairer

weather, we endeavour to alleviate the gloom by

taking measures which accrue to protecting and

safeguarding our hard earned successes.

During 2008-9, our functioning was impacted

by a significant foreign exchange fluctuation.

Operationally, the year witnessed nearly 70

percent improvement in PBDITA - 2,605.3 million

from Rs 1,540.0 million in the previous year,

on a 33 per cent turnover increase. However,

the severe foreign exchange impact saw this

positive operational surplus turn into a net loss of

Rs 530.4 million.

In order that such unpredictability and unrelated

skews don’t impact performance, we have invested

in creating a completely new forex strategy with a

inbuilt derisking mechanism. This will protect our

bottomline from unnatural currency fluctuations.

We believe we have insulated ourselves from any

troughs in external factor that may potentially

damage our bottomline. Internally, we also

emphasized on leveraging our efficiencies for

lower operating costs, and strengthened our

collection mechanism to ensure that our balance

sheet is always well capitalised and protected

from unpredictable fluctuations in currency rates,

and that our cash flow is positive.

Thus, being spirited enough to face a challenge

as huge as a global slowdown, requires a good

degree of prudent planning that accrues from

experience and wisdom. The business of emerging

as a competent player requires us to be financially

viable and internally strong.

PRUDENCE TO PROFITABILITY



Our project of the second phase of expansion at Budni, to take the total number of spindles to 1,00, 800 involving

a total capital outlay of Rs 3737 million is on track






Adversity often impacts not only current productive ability but also has a destabilizing effect on plans for the future. However, a philosophy based on the principle of continuous investment often serves as a security against future downturns. It is also the clearest sign of organisational resilience.

For Abhishek, a year of economic instability and

economic downturn is seen as an aberration,

and not as a continuing reality. This inspires

us maintain the momentum of capacity and

productivity enhancement, based on a well

considered business plan.

Our strategy is based on a long-term view of the

market opportunities, and our plans are aligned

towards extracting maximum leverage from them.

Therefore, our expansion plans across each of our

business lines continued uninterrupted, even in a

difficult year, reflecting our ability to rise above

challenges and the sanctity of our own forward

planning.

Our project of the second phase of expansion

at Budni, to take the total number of spindles to

1,00,800 involving a total capital outlay of

Rs 3737 million is on track.

Similarly, in our terry towel division, we have

undertaken to upgrade the existing 18 looms

and set up 24 new looms. This investment of

almost Rs 360 million will be operationalised by

the second quarter of 2009-10, allowing us to

approach emerging demand with a larger portfolio

and greater ability to service it.

In our paper division too, we have undertaken a

debottlenecking and process streamlining project

with a capital outlay of Rs 400 million, which will

ensure that we derive maximum value from the

recent addition of a new production line.

Thus, this culture of following our viable vision and

adopted strategy is the harbinger of good tidings.

In order to keep the wheel of progress rolling,

we have constantly invested on new projects

and product innovations to broaden our product

base and enter newer markets and acquire newer

customers.

Thus, market challenges have inspired us to

continue undeterred on the path of investing in

creating an organisation relevant in the future.

INVESTING FOR A BETTER FUTURE



BUSINESS OVERVIEW

CAPITAL EXPENDITURE

The Company is setting up 1,00,800 spindles at Budni, Madhya Pradesh which involves a total capital outlay

of Rs 3,737 million. This project is being implemented in phased manner. The first phase of expansion

consisting of 50,400 spindles has been completed in April 2009 and the second phase is scheduled to be

fully operational during the third quarter of financial year 2009-10.

PRODUCT BASKET

100 percent cotton yarn with count range of

Ne 13 to Ne 32 in carded yarns and Ne 12 to

Ne 40 in combed yarns

Single and TFO doubled

Hosiery and weaving (combed and carded)

Open end yarn for weaving & hosiery

Slub yarn/multi counts/compact yarn

Core spun yarns

Elli twist yarns

Yarn from imported premium cotton varieties

like supima & egyptian

Zero twist yarns

Poly cotton blended yarn

Cotton bamboo, cotton modal, cotton soya

and other blends

Certified organic cotton

Certified fair trade cotton

KEY FEATURES

Consumed captively and also marketed within

India and exported

Five units housing 1,76,352 spindles and

1920 rotors

Manufacturing value-added products like

yarn from organic yarns, fair trade cotton

yarns, egyptian/supima cotton yarns, zero

twist yarns, slub yarns, cotton bamboo yarns,

cotton modal & core spun yarn etc

Varied counts- combed and carded as

mentioned above

Focused efforts on value added products

Exports to 17 nations across the globe

Geographical diversification with expansion

of spinning capacity at Budni, Madhya

Pradesh by installing 50,400 spindles in first

phase and another 50,400 spindles are being

installed in second phase

The expanded capacity in Budni would focus

on special yarns like compact, elli-twist,

corepsun yarn and special cottons like supima,

organic and giza etc

YARN

KEY NUMBERS

2007-8 2008-9

Capacity

Cotton spindles 125952 125952

Rotors 1920 1920

Production (tonnes) 42244 40072

Revenue (Rs Million)* 4382.3 4608.4

PBIT (Rs Million) 334.6 58.4

*includes inter-segment sales

REVENUE MIX

Captive

consumption : 22%

Domestic

sales : 68%

Exports : 10%

10% 22%

68%






BUSINESS OVERVIEW

CAPITAL EXPENDITURE

The Company has undertaken another expansion project of its terry towel division under which Company

is upgrading its existing 18 looms and 24 new looms are being set up. This project is being implemented in

textile park developed by Lotus Integrated Texpark Limited, a special purpose vehicle, with a capital outlay

of Rs 359.8 million and shall be completed by second quarter of financial year 2009-10.

PRODUCT BASKET

Terry towel and toweling products

Piece-dyed dobbies, yarn-dyed ,single and

double jacquards, unidyed jacquards, yarn-

dyed stripes, terry and velour finish, beach

towels, bath sheets, bath towels, hand

towels, guest towels, face fringes, bath mats,

kitchen towels and made ups like bath robes

and beach bags

KEY FEATURES

Integrated unit housing 350 looms

Combination of state of the art technology,

know how from the worlds leading suppliers

and vertically integrated manufacturing

infrastructure

Exports to 37 nations across the globe.

Products mainly exported to highly quality

conscious & cost competitive markets

Supplying to most of World’s reputed retail

chain stores across the globe

Increasing footprint in domestic market -

single largest supplier of towels to the five-

star hotels and resorts. Aggressively focusing

to enhance the reach to mass market through

distributors and agents. Catering to major

retail chains in India

Implementing viable vision concept in the

business based on TOC methodology

Quality control laboratory complying with the

AATCC and ISO standards

Production facility complying with CT-PAT

requirement for overseas customers

Conferred the “2006 Supplier of the Year”

award by JC Penney Corporation. Recipient of

“Wal*Mart International Supplier of the Year”

award for 4 times

More focus on innovative and value added

products; and enhancing market base

Addition of new products like super fine zero

twist, anti microbial towel, super absorbant

towel, quick dry towel , organic slub towel, etc

during the year

TERRY TOWEL

KEY NUMBERS

2007-8 2008-9

Capacity

Looms 282 350

Processed yarn (tonnes) 6825 6825

Production

Towel (tonnes) 24616 28311

Processed yarn (tonnes) 5024 5236


PBIT (Rs Million) 579.0 (95.3)


REVENUE MIX

Export : 92%

Domestic : 8%

92%

8%



BUSINESS OVERVIEW

CAPITAL EXPENDITURE

The Company has undertaken a debottlenecking and process-streamlining project with a capital outlay of

Rs 400 million. Major areas of development would be finishing house, lime kiln and pulping section.

PRODUCT BASKETMain Products

Writing and printing paper grades Branded copier paper ‘SPECTRATM copier’ (75

GSM, 88% ISO brightness) Branded copier paper ‘My Choice’ copier (70

GSM, 87% ISO brightness) Surface size maplitho paper gold line (90% ISO

brightness), silverline (88% ISO brightness), crystalline (86% ISO brightness)

Super white maplitho Ivory white Eco print Bible printing Offset printing Cream wove Deluxe super print Trident base paper Watermark paper

Sulphuric acid Commercial grade Battery grade

By Products Caustic soda

KEY FEATURESPaper

Integrated paper & pulp plants having total capacity of paper manufacturing of 1,75,000 tpa and pulping facility of 1,25,000 tpa

Environment friendly manufacturer of a variety of papers. Among India’s lowest-cost paper producers, using agro residue as raw material

Launched ‘SPECTRATM copier’ brand and My Choice copier in copier segment. Presence in the A- grade segment of India’s paper market, with vast customer base across India & abroad

Plans to move up the value-chain by producing computerline, natureline and baseline maplitho

First agro based paper manufacturer in India to adopt Elemental Chlorine Free (ECF) technology

Exports to 22 nations across the globe

Sulphuric acid Having sulphuric acid manufacturing capacity

of 1,00,000 tpa

One of the north India’s largest manufacturer of sulphuric acid

Consumers include the detergent manufacturers, steel units, textile factories among others

Plan to add more products of sulphuric acid viz. LR grade & AR grade into product basket

Close to 75 per cent is sold within Punjab, the balance is marketed to the adjoining states

PAPER & CHEMICALS

KEY NUMBERS

2007-8 2008-9

Capacity

Paper (tpa) 40500 175000

Sulphuric acid (tpa) 100000 100000

Production

Paper (tonnes) 40832 67302

Sulphuric acid (tonnes) 68437 60968


PBIT (Rs Million) 222.0 326.3


REVENUE MIX

Export : 6%

Domestic : 94%

6%

94%






BUSINESS OVERVIEW

KEY FEATURES

Having facilities for 50 MW power generation

and 338 tph of steam

Operates a co-generation power plant that

caters to the power and steam requirement

of yarn, terry towel and paper divisions

Ensures uninterrupted power supply to all

business units of the Company and helps in

cost reduction

Equipped with latest technology and multi

fuel boilers

India’s first organization to adopt fuzzy logic

for burner management in lime klin

ENERGY

KEY NUMBERS

2007-8 2008-9

Power capacity (MW) 50 50

Power generation (Mwh) 152951 274521

Consumption per unit of production (Kwh/kg)

Cotton yarn 2.43 2.38

Towel 2.49 2.51

Yarn processing 2.23 2.54

Paper 1.34 0.89

Sulphuric acid 0.07 0.07

REVENUE MIX

Captive

consumption : 100%

100%



DIRECTORS’ PROFILE

MR RAJINDER GUPTA

(DIN 00009037)

Mr Rajinder Gupta, aged 50 years, is the founder of

Abhishek Industries Limited and has been serving

the Company as Managing Director since 1992.

Mr Gupta is a first generation entrepreneur having

rich & varied exposure of promoting industrial

ventures over the last two decades. He is the

person behind the stupendous growth of the

Trident Group Companies. He holds directorship of

various companies and is also actively associated

with several philanthropic ventures.

Mr Rajinder Gupta has been awarded with the

prestigious “Padmashree” award 2007 by Hon’ble

President of India in recognition of his distinguished

services in the field of trade and industry.

Mr Rajinder Gupta was also conferred with

the Udyog Ratna award for the year 2005

by PHD Chamber of Commerce and Industry

and PHD Chamber of Commerce Distinguished

Entrepreneurship Award, 2005 by the President

of India.

MR S K TUTEJA

(DIN 00594076)

Sh S K Tuteja, aged 64 years, is retired IAS Officer

of 1968 batch. He holds a Masters degree in

Commerce from Delhi University and is a Fellow

member of the Institute of Company Secretaries

of India. He served the government in several

key positions at the state and national level and

was secretary to the Government of India in the

Department of Food & Public Distribution at the

time of retirement. He has been a consultant to

the World Bank and UNIDO.

Mr Tuteja has rich & varied experience of 41 years.

He is also a member of the executive committee

of the International Sugar Organisation and

the International Grain Council, London. He

has contributed to a number of national and

international events in India & abroad concerning

SMEs. He was a member of Indian delegation in

the ministerial conference of WTO at Doha.

MS PALLAVI SHROFF

(DIN 00013580)

Ms Pallavi Shroff, aged 53 years, is MMS, Bachelor

of law and is lawyer by profession. She has

a vast experience of 27 years as a leading

litigation practitioner in the area of corporate

law and banking. She has been recognized by

international publications for her leading practice

in arbitration and dispute resolution. As a member

of several high powered committees, appointed

by the Government of India, she has been closely

associated with the formulation of several

important commercial statutes.

Ms Pallavi is presently a partner of M/s Amarchand

& Mangaldas & Suresh A Shroff & Co., leading

legal firm of India. She is regularly called upon

by the Government departments and ministries

to advice them on various issues. Ms Pallavi’s

area of expertise inter alia include corporate and

commercial laws, anti dumping, arbitration and

dispute resolution, competition and anti-trust,

intellectual property rights, etc.






MS RAMNI NIRULA

(DIN 00015330)

Ms Ramni Nirula, aged 57 years, is Senior General

Manager and Head of Corporate Banking of ICICI

Bank Limited. She holds a Masters in Business

Administration from Delhi University.

Ms Nirula has more than three decades of

experience in the financial sector. She is a part of

the senior management team at ICICI Bank and

has played an active role in its transformation

from a term-lending institution to a technology-

led, diversified financial services group. She has

previously served as the MD and CEO of ICICI

Securities Ltd. and has held leadership position

in the areas of leasing, planning, resources and

corporate banking.

MR RAJIV DEWAN

(DIN 00007988)

Mr Rajiv Dewan, aged 47 years, is a Fellow

member of the Institute of Chartered Accountants

of India and is a practising Chartered Accountant.

Mr Dewan possesses a rich and varied experience

in tax planning, management consultancy,

business restructuring, capital market operations,

SEBI related matters and other corporate laws.

Prior to starting his own practice, Mr Dewan

worked in senior positions in some of the

renowned textile companies of north India.

MR KARAN AVTAR SINGH

(DIN 01685074)

Mr Karan Avtar Singh, aged 48 years, is a B.A,

L.L.B, Ph.D (Economics) by qualification and is

an IAS officer and Managing director of PSIDC.

He joined Indian Administrative Services in the

year 1984 and since then he has been diligently

serving the Government at higher posts.

He has experience in handling various

administrative profiles as well as providing

corporate services at Board levels. He holds the

positions of Chairman, Managing director and

Director in various Companies. Apart from holding

the above stated corporate positions he has

also worked as Deputy Commissioner, Jalandhar,

Finance Secretary, Union Territory, Chandigarh,

Managing Director, Punjab Infrastructure

Development Board and Secretary to Govt. of

Punjab, Development of P.W.D (B&R).

MR RAMAN KUMAR

(DIN 00028180)

Mr Raman Kumar, aged 57 years, is Masters

in Economics and Post Graduate in Business

Management. He has also worked with

government sector in various capacities

and is presently on the Board of number of

Companies. He has rich and varied experience in

administration, liaisoning, legal and corporate

affairs. Mr Raman Kumar has been associated

with the Group since its inception and was in

charge of trust which takes care of social security

and other welfare measures of employees of the

Group.

Mr Raman Kumar can be briefly characterized as

a person with a vast working experience having

an in depth legal knowledge and a good legal

acumen, blended with sharp liaisoning skills and a

result-oriented attitude.



DIRECTORS’ REPORT

(Rs million)

Particulars Current Year Previous Year

a) Net sales 13980.6 10486.7

b) PBIDT 2605.3 1540.0

c) Less : Interest 833.2 473.2

d) PBDT 1772.1 1066.8

e) Less : Depreciation 1159.3 863.8

f) Profit before tax 612.8 203.0

g) Less: Foreign exchange gain/(loss) (1440.7) 278.1

h) Profit/(loss) before tax after extraordinary item (827.9) 481.1

i) Less : Provision for tax (297.5) 81.6

j) Net Profit /(loss) (530.4) 399.5

k) Add : Profit brought forward 2146.7 1756.8

l) Amount carried to balance sheet 1616.3 2146.7

m) Earning per share (Rs) (2.64) 2.06

Dear ShareholdersYour Directors are pleased to present the 19th annual report and audited accounts of the Company for the

year ended March 31, 2009.

FINANCIAL RESULTS

The financial performance of your Company for the year ended March 31, 2009 is summarised below:

CORPORATE OVERVIEW

The Company operates in diversified business

segments viz. yarn, terry towel, paper and

chemical and has captive power plant to cater

to needs of it’s business segments. As on March

31, 2009, the Company is having following

manufacturing capacities installed & operational:

Textile

Yarn 1,76,352 spindles

Yarn processing 6,825 tpa

Open end yarn 1,920 rotors

Terry towels 350 looms

Paper & Chemicals

Writing & printing paper 1,75,000 tpa

Sulphuric acid 1,00,000 tpa

Caustic soda 110 tpd

Energy

Co-generation of power 50 MW

Steam 338 tph

as compared to Rs 10,486.7 million in the

previous financial year, registering a growth of

33.32 percent. The Operating profit for the year

has increased by Rs 1,065.3 million in absolute

terms, a growth of approximately 70 percent as

compared to last year and accordingly the gross

profit margin has increased by approximately 4

percent. During the year under review, Company

has incurred a net loss of Rs 530.4 million due to

volatility in foreign exchange resulting into foreign

exchange loss; and higher amount of depreciation

and interest attributable to expansion projects of

the Company.

The Company had negative earning per share

of Rs (2.64) and cash earning per share was

Rs 2.80 during the current year. Total paid up

capital of your Company has increased from

Rs 1,941.9 million to Rs 2,221.9 million.

During the year under review, your Company has

allotted 2,80,00,000 equity shares pursuant to

conversion of warrants issued on preferential

basis. More details on issued equity shares are

provided elsewhere in this annual report.

Analysis of other relevant figures of balance

RESULTS OF OPERATIONS

Financial review

The net sales of the Company for the year

under review increased to Rs 13,980.6 million






Directors’ Report (Contd.)

sheet and profit and loss account is given in

“management discussion and analysis report”

forming part of annual report.

Performance Review

A detailed discussion on performance of

operations of the Company is given elsewhere in

this annual report under “management discussion

& analysis report”.

DIVIDEND

Keeping in view the loss incurred during the year,

ongoing expansion, modernization and other

future investment possibilities in order to meet

competition, your directors have decided not

to recommend any dividend for the year under

review.

CONTRIBUTION TO THE NATIONAL

EXCHEQUER

The Company contributed a sum of Rs 249.3

million to the exchequer by way of central excise

duty in addition to other direct and indirect taxes

during the year under review.

EXPORTS

Export sales accounted for 49 percent of net

sales. During the year under review, export sales

increased by 32 percent from Rs 5,192.8 million

in the previous year to Rs 6,861.5 million in the

current year.

EXPANSIONS/MODERNISATION

Directors of the Company takes pleasure in

informing you that during the year under review,

Company has stabilized the operations and

started commercial production on newly installed

state-of-the-art pulp and paper machines after

completing, balancing and synchronization

activities. This integrated pulp and paper

expansion project of the Company involved a

capital outlay of Rs 8,250 million. The Company is

further incurring a capital expenditure of Rs 400

million for de-bottlenecking of paper project as

to enhance production level and quality of final

products. After this expansion, your Company has

emerged as World’s largest agro straw based paper

Company with a production capacity of 1,75,000

tpa of both printing & writing paper using wheat

straw as the main raw material, which saves about

5,000 trees a day. This project has enabled your

Company to penetrate into value added paper

segment and your Company has launched two

branded copier paper products – ‘Spectra’ and ‘My

Choice’ during the year under review.

As reported in our last year report, the Company

has established its first manufacturing venture

outside the State of Punjab by completing first

phase of yarn expansion project consisting

of 50,400 spindles installed in Budni, Madhya

Pradesh. The commercial production on these

spindles was started during the month of April,

2009. This project entails setting up of 1,00,800

spindles at a total capital outlay of Rs 3,737 million

in two phases. The Company has laid foundation

stone and started civil works for the second phase

consisting of another 50,400 spindles which shall

be operational by third quarter of financial year

2009-10.

During the year under review, your Company

also completed terry towel expansion plan by

installing 82 looms. Out of this, 14 looms had

already become operational during the financial

year 2007-8. The Company has commenced

commercial production on remaining looms

during the third quarter of financial year 2008-9.

This project, which involved setting of 82 looms

and balancing cum modernisation of textile

manufacturing facilities, was fully completed

with a capital investment of Rs 2,130 million.

Further, the Company has undertaken another

expansion project of its terry towel division under

which Company is upgrading its existing 18 looms

and 24 new looms are being set up. This project

is being implemented with a capital outlay of

Rs 359.8 million and is being set up in textile park

developed by Lotus Integrated Texpark Limited, a

special purpose vehicle, and shall be completed by

second quarter of financial year 2009-10.

SUBSIDIARIESAs on the last day of financial year under review,

Company had two foreign subsidiaries, i.e.

Abhishek Industries Inc, a wholly owned

subsidiary situated at USA and Abhishek Europe

SA, a subsidiary in Neuchatel; apart from one

Indian wholly owned subsidiary Abhishek Global

Ventures Limited.

The completion of Integrated paper and pulp project has enabled your Company to penetrate into value added paper segment



However, the Company has disinvested its

entire holding in Abhishek Europe SA, Neuchatel

by way of transferring 1,000 equity shares on

May 18, 2009 and consequent to this transfer,

the Abhishek Europe SA ceased to be a Subsidiary

Company of Abhishek Industries Limited and the

Company does not hold any voting right/control

in Abhishek Europe SA from the aforesaid date of

disinvestment.

The Ministry of Corporate Affairs, Government

of India, vide its letter no. 47/251/2009-CL-3

dated May 8, 2009 has granted exemption to the

Company from attaching balance sheet, profit

& loss accounts, etc of the aforesaid subsidiary

companies to the accounts of the Company for

the financial year 2008-9. The Annual accounts

of the subsidiary companies alongwith the

reports of the Directors and Auditors thereon

and all related detailed information are open for

inspection by any investor including investor

of subsidiary companies at the head office of

the Company and of the subsidiary companies

concerned. The Company will make available

these documents to investors including investors

of subsidiary companies upon receipt of request

from them. The investors, if they desire, may write

to the Company to obtain a copy of the financials

of the subsidiary companies.

A statement giving information on the financials

of subsidiaries for the year ended March 31,

2009 and the consolidated financial statements

prepared by the Company in accordance with

Accounting Standard are given in the annual

report for the reference of the members.

DIRECTORS

During the year under review, Mr Anurag

Verma ceased to be a director of the Company

consequent to withdrawal of his nomination by

PSIDC. Mr Karan Avtar Singh was appointed as an

additional director by the Board and holds office

upto the ensuing annual general meeting.

Further, in accordance with the provisions of

Articles of Association of the Company, all the

directors, for the time being, except the Managing

directors and Whole time director, shall retire

annually and accordingly Mr S.K. Tuteja, Ms Pallavi

Shroff, Ms Ramni Nirula and Mr Rajiv Dewan,

directors are retiring at the ensuing annual general

meeting. All retiring directors, offer themselves

for re-appointment.

As per the approval of shareholders in last annual

general meeting, Mr Rajinder Gupta has been re-

appointed as Managing director of the Company

for a period of three years w.e.f. April 1, 2009.

The Board has appointed Mr Raman Kumar as

Whole time director of the Company for a period

of three years w.e.f. September 24, 2008 and

recommends his appointment alongwith

remuneration for the approval of shareholders.

FIXED DEPOSITS


not accepted any fixed deposits and no amount

of principal or interest was outstanding as of

balance sheet date.

NO DEFAULT

The Company has not defaulted in payment of

interest and/or repayment of loans to any of the

financial institutions and/or banks during the year

under review.

CORPORATE GOVERNANCE

Your Company is committed to adhere to the

best practices & highest standards of corporate

governance. It is always ensured that the

practices being followed by the Company are in

alignment with its philosophy towards corporate

governance. The well-defined vision and values of

the Company drives it towards meeting business

objectives while ensuring ethical conduct with all

stakeholders and in all systems and processes.

Your Company proactively works towards

strengthening relationship with constituent of

system through corporate fairness, transparency

and accountability. In your Company, prime

importance is given to reliable financial

information, integrity, transparency, fairness,

Your Company proactively works towards strengthening relationship with constituent of system through corporate fairness, transparency and accountability







empowerment and compliance with law in letter

and spirit. Your Company proactively revisits its

governance principles and practices as to meet

the business and regulatory needs.

Detailed compliances with the provisions of

Clause 49 of the Listing Agreement for the year

2008-9 has been given in corporate governance

report, which is attached and forms part of this

report. The Auditors’ certificate on compliance

with corporate governance norms is also attached

thereto.

HUMAN RESOURCE DEVELOPMENT AND

INDUSTRIAL RELATIONS

The human resources development function of

the Company is guided by a strong set of values

and policies. Your Company strives to provide the

best work environment with ample opportunities

to grow and explore. Your Company maintains a

work environment that is free from physical, verbal

and sexual harassment. The details of initiatives

taken by the Company for development of human

resources are given in management discussion &

analysis report.

The Company maintained healthy, cordial and

harmonious industrial relations at all levels.

RECOGNITIONS & AWARDS


been conferred Silver Trophy for outstanding

export performance for “Top Exporters –

Madeups” in the Category of “Terry Towels” for

the year 2007-8 by The Cotton Textiles Export

Promotion Council (TEXPROCIL).

AUDITORS & AUDITORS’ REPORT

M/s Deloitte, Haskins & Sells, Chartered

Accountants, Statutory Auditors of the Company,

hold office until the conclusion of ensuing

annual general meeting and are eligible for

re-appointment. The Company has received a

certificate from M/s Deloitte, Haskins & Sells,

Chartered Accountants, under Section 224(1)

of the Companies Act, 1956 confirming their

eligibility and willingness to accept the office of

the Statutory Auditors for the year 2009-10, if

re-appointed.

The Statutory Auditors of the Company have

submitted auditors’ report on the accounts of

the Company for the accounting year ended

March 31, 2009. In their report, they have made

an observation that loss on valuation of open put

derivative options could not be determined by the

Company due to certain reasons as specified in

Note 18 of the Notes to Accounts. The ultimate

outcome of these transactions and their effect

on these accounts cannot be ascertained at this

stage.

As you are aware that a major part of revenue of

your Company comes from export sales and as

such Company has foreign currency fluctuation

exposure. Your Company hedges its foreign

currency fluctuation exposure by way of foreign

currency derivative options. The Company has

taken various foreign currency options from

various banks and as at March 31, 2009, there

were certain open put options outstanding

having a maturity period up to January 2013.

These derivative options are proprietary products

of banks, which do not have a ready market and as

such are marked to a model, which is usually bank

specific instead of being marked to market. In the

view of the significant uncertainty associated

with the above derivative options whose ultimate

outcome depends on future events, the loss if

any, on such open derivative options cannot be

determined at this stage.

The other points of auditors’ report are self-

explanatory and needs no comments.

COST AUDIT

Pursuant to the provisions of Section 233B of the

Companies Act, 1956 and subject to the approval

of the Central Government, the Board of Directors

of your Company has re-appointed M/s Ramanath

Iyer & Co., Cost Accountants, New Delhi as Cost

Auditor for the accounting year 2009-10 to carry

out an audit of cost accounts of the Company in

respect of textile, paper and chemical divisions.





CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION, FOREIGN EXCHANGE

EARNINGS AND OUTGO

A statement giving details of conservation of

energy, technology absorption, foreign exchange

earnings and outgo, in accordance with Section

217(1)(e) of the Companies Act, 1956, read

with the Companies (Disclosure of Particulars in

the Report of Board of Directors) Rules, 1988, is

given as Annexure I hereto and forms part of this

report.

DISCLOSURE ON ESOP

The Abhishek Employee Stock Options Plan, 2007

has been constituted in accordance with the

Securities and Exchange Board of India (Employee

Stock Options Scheme & Employee Stock Purchase

Scheme) Guidelines, 1999. The relevant disclosure

on Company’s stock options scheme as per these

guidelines has been provided in Annexure II hereto

and forms part of this report.

PARTICULARS OF THE EMPLOYEES

As per the provisions of Section 217(2A) of the

Companies Act, 1956, the statement of particulars

of the employees, etc forms part of this report.

However, as per the provisions of Section 219(1)

(b)(iv) of the Companies Act, 1956, the annual

report excluding the abovesaid information is

being sent to all the members and other entitled

persons. Any member interested in obtaining such

particulars may write to the Company Secretary

at the registered office of the Company.

RESPONSIBILITY STATEMENT OF

DIRECTORS

A Directors’ Responsibility Statement, setting out

the requirements pursuant to the provisions of

Section 217(2AA) of the Companies Act, 1956 is

annexed as Annexure III hereto and forms part of

this report.

ACKNOWLEDGEMENTS

It is our strong belief that caring for our business

constituents has ensured our success in the

past and will do so in future. Your Directors

acknowledge with sincere gratitude the

co-operation and assistance extended by the

Central Government, Government of Punjab,

Government of Madhya Pradesh, Financial

Institution(s), Bank(s), Customers, Dealers,

Vendors and society at large.

Your Directors also wish to convey their

appreciation for collective contribution & hard

work of employees across all level. The Board,

also, takes this opportunity to express its deep

gratitude for the continued co-operation and

support received from its valued shareholders and

their confidence in Company’s management and

look forward to their continued support in future

too.

For and on behalf of the Board

S K Tuteja Rajinder Gupta

Chairman Managing Director

Place : New Delhi

Date : July 23, 2009






Energy conservation measures taken by the Company has resulted in saving of energy and reduction in cost of production

ANNEXURE I to the Directors’ Report

1.4 Total energy consumption and consumption per unit of production as per form a of the annexure in respect of industries specified in the schedule thereto:

Particulars UnitsYear ended

31.03.2009Year ended

31.03.20081.4.1 Power and fuel consumption 1.4.1.1 Electricitya) Purchased

Units MWH 75985 86003Total amount Rs Million 328.08 372.69Rate per unit Rs/KWH 4.32 4.33

b) Own generation i) Through diesel generator

Units MWH 206 218Units/litre of diesel KWH 3.33 3.40Cost per unit Rs/KWH 9.81 8.06

ii) Through Steam turbine/generatorUnits MWH 269010 158417Units per tonne of steam KWH 148 156Cost per unit Rs/KWH 3.57 4.12

1.4.1.2 CoalQuantity MT 222118 79669Total amount Rs Million 736 319.77Average Rs/MT 3312 4014

1.4.1.3 Furnace Oil1.4.1.4 Other /Internal Generation

Information as per section 217(1) (e) read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the directors’ report for the year ended March 31, 2009.

1. CONSERVATION OF ENERGY 1.1 Energy conservation measures taken: 1. Reduction in power consumption by increasing flow of chilled water 2. Installation of eco ventilator in process house and sizing area 3. Optimum use of H-plant and reducing its power consumption by re-engineering 4. Maintaining the power factor 0.97 through out the year by proper utilization of capacitors

so that system loss is minimum 5. Installation of HT capacitors, Energy Monitoring Systems (EMS) and Variable Frequency

Drives (VFDs) 6. Installation of timers and stabilizers for all lighting in lighting distribution panel

1.2 Additional investments and proposals, if any, being implemented for reduction of consumption of energy

1. Installation of HPA system in humidification plant 2. Re-engineering of humidification plant and compressor line to optimize the pressure

systems 3. Reduction of unburnt carbon residue to improve boiler efficiency 4. Energy Audit for process improvements and reduce power consumption

1.3 Impact of measures taken at 1.1 and 1.2 above for reduction of energy consumption and consequent impact on the cost of production of goods:

On account of the aforesaid measures adopted by the Company, considerable saving of energy & reduction in cost of production has been achieved. However, the power consumption per kilogram as compared to the previous year in paper & yarn has increased because of new technology absorption and increase in the production of value-added products, which require a substantial amount of extra energy.



ANNEXURE I to the Directors’ Report

2. TECHNOLOGY ABSORPTION Efforts made in technology absorption as per Form B RESEARCH & DEVELOPMENT (R & D) 2.1.1 (a) Specific areas in which R & D carried out by the Company: 1. New product development in textile - organic yarn, FLO yarn, cotton covered lycra

yarn, karded slub yarn, cotton/soya, 100 % synthetic and synthetic blended yarn in both R/F and TFO, Quick dry towel, eco friendly zero twist without using PVA, herbal dyes

2. Developing fine zero twist yarn in cotton, cotton/modal and cotton/bamboo up to 20s Ne

3. New product development in paper- Copier Paper under the name of Spectra-75 GSM and MY Choice Copier-70 GSM with the use of GCC in alkaline sizing, surface sized maplitho paper under the name of Crystaline and Silver Line Paper

4. Impact of varying chlorine dioxide dosages on optical properties and shrinkage loss of straw and wood pulps

5. Pulp characteristics & its behaviour at various PFI refining levels

2.1.1 (b) Benefits derived as a result of the above R & D: 1. Increased process flexibility for running different types of yarns 2. Increase in Revenue and EBIDTA Margin

3. Improved brand image in market 4. Improvement in runnability of paper in Multi-color Offset Printing Machine 2.1.1 (c) Future plan of action: 1. Planning for increased share of value added and innovative products 2. Accelerate safety, health, and environment programs across the organization 3. Environment friendly products

4. Optimization studies of bleaching chemicals 5. Use of drainage aid for improvement in formation of paper and dryness of paper

after press section

2.1.1 (d) Expenditure incurred on R & D: Expenses incurred on R & D are booked under respective general accounting heads and as

such no amount can be quantified separately under the head of R & D expenses

2.1.2 Technology absorption, adaptation & innovation: 2.1.2 (a) Efforts, in brief, made towards technology absorption, adaption and innovation : 1. Installation of amsler core soun yarn and caipo slub yarn technology

Particulars UnitsYear ended

31.03.2009Year ended

31.03.2008

1.4.2 Electricity consumption per unit of productionProductCotton yarn KWH/kg 2.43 2.38Towel KWH/kg 2.49 2.51Yarn processing KWH/kg 2.23 2.54Paper KWH/kg 1.34 0.89Sulphuric acid KWH/kg 0.07 0.07

New product development in paper- Copier Paper under the name of Spectra-75 GSM and MY Choice Copier-70 GSM with the use of GCC in alkaline sizing, surface sized maplitho paper under the name of Crystaline and Silver Line Paper






ANNEXURE I to the Directors’ Report (Contd.)

2. Installation of latest technology in weaving, processing, cut stitch & pack in towel division. Improved productivity per person with the new automatic machines and expansion

3. Cost optimization with improvement in quality by new technology in process house 4. The ECF technology in new paper machine 5. The fibreline system is a modern environmentally sound process utilising an oxygen

delignification and a D-Eop-D sequence for final bleaching of pulp 6. Commissioning of latest state of art technology new paper machine 7. Commissioning of pasaban sheeter for improving the sheeting quality of paper 8. Use of alkaline sizing in copier and maplitho paper for photocopying and printing

2.1.2 (b) Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product development, import substitution, etc :

The company was able to cater to a large number of customers with multiple productsportfolio and a better quality based on environment-friendly technology. The manufacturingcosts were rationalized towards optimization.

2.1.2 (c) In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished :

(i) Technology imported The latest state of the art technology in TFO, sectional warping , direct warping,

sizing machine, looms, material movement trolley, knotting machines, package dyeing machines, fabric dyeing machines, length cutting , length hemming machine, automatic cross cutting & hemming machines, supersonic lobtex PP clearer for manufacturing contamination free yarn, continuous pulping digester & ECF technology from world renowned suppliers, for improving productivity and product quality, besides reducing consumption of energy and scare resources.

(ii) Year of import 2004 to 2008

(iii) Has technology been fully absorbed? Yes

(iv) If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action.

Not Applicable

3. FOREIGN EXCHANGE EARNINGS AND OUTGO

3.1 Activities relating to exports, initiatives taken to increase exports; development of new export markets for products and services; and export plans

The Company is presently exporting its products to around 65 countries across the globe. The Company is growing its market base. Consistent efforts are being made to capture new avenues for exports.

3.2 Total foreign exchange used and earned(Rs million)

Particulars Current year Previous yearEarnings (FOB value of exports) 6861.5 5192.8Outgo (CIF value of imports) 1356.4 2300.4Travelling expenses 3.2 8.8Other expenses 103.6 98.8



ANNEXURE II to the Directors’ Report

DISCLOSURE RELATED TO EMPLOYEE STOCK OPTION SCHEME OF THE COMPANY

In financial year 2007-8, the Company had introduced Abhishek Employee Stock Options Plan, 2007. The

plan was approved by the special resolution of shareholders passed on June 29, 2007 by way of postal

ballot. As per the plan, the Board of Directors can grant maximum upto 97,01,933 options. There has

been only one grant under this scheme till March 31, 2009. The grant was made during the financial

year 2007-8 by the Compensation Committee of the Board of Directors on July 9, 2007 under which

79,01,462 options to eligible employees of the Company were allotted. The options were granted at

the latest available closing market price prior to the date of meeting. The Company calculates employee

compensation cost using the intrinsic value of option.

The relevant information with respect to Company’s stock options plan as on March 31, 2009 is given

below:

Details of Options

Total option granted 79,01,462

Exercise price Rs. 17.55

Options vested 5,85,039

Options exercised Nil

Total no. of shares arising as result of exercise of options Nil

Options lapsed * (*Lapsed options include options forfeited and options cancelled / lapse)

24,14,026

Variation in terms of options None

Money realised by exerise of options Nil

Total number of options in force 54,87,436

Employee wise details of options granted to:

- Senior managerial personnel** Name of employees are not given keeping in view the sensitivity

13,36,376

- Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year

None

- Employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding warrants and conversions) of the company at the time of grant

None

DIFFERENCE BETWEEN INTRINSIC VALUE AND FAIR VALUE OF STOCK OPTIONS AND IMPACT

OF THIS DIFFERENCE ON NET PROFIT AND EPS

Pro forma adjusted net income/(loss) and earning per share

Net Profit/(loss) as reported (Rs million) (530.4)

Add: Intrinsic value compensation cost (Rs million) 0

Less: Fair value compensation cost (Rs million) 17.7

Adjusted Pro forma net profit/(loss) (Rs million) (548.1)

EARNING PER SHARE (RS)

Basic Diluted

As reported (2.64) (2.64)

Adjusted Pro forma (2.73) (2.82)






WEIGHTED AVERAGE EXERCISE PRICE AND WEIGHTED AVERAGE FAIR VALUE OF OPTIONS

GRANTED DURING THE YEAR(Rs)

Particular Exercise Price Fair Value

Exercise price equals market price 17.55 8.81

Exercise price is greater than market price Not applicable Not applicableExercise price is less than market price Not applicable Not applicable

DESCRIPTION OF METHOD AND SIGNIFICANT ASSUMPTIONS USED TO ESTIMATE THE FAIR

VALUE OF OPTIONSThe fair value of the options granted has been estimated using the Black-Scholes option pricing model. Each tranche of vesting have been considered as a separate grant for the purpose of valuation. For estimation of fair values of option, following weighted average values have been used for options granted:

Stock price 17.70

Volatility 63.33%Risk free rate 7.68%Exercise price 17.55Time to maturity 5.50Dividend yield 3.11%

ANNEXURE III to the Directors’ Report

Directors’ Responsibility Statement pursuant to the provisions of Section 217 (2AA) of the

Companies Act, 1956 and forming part of the Directors’ Report for the year ended March 31,

2009.

The statement of the Directors’ responsibility on the annual accounts of the company for the year ended

March 31, 2009 is provided below:

i) That in the preparation of the annual accounts, the applicable accounting standards had been followed

along with proper explanation relating to material departures.

ii) That the Directors had 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, 2009 and of the profit/loss of the Company for the

year ended March 31, 2009.

iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting

records in accordance with the provisions of the Companies Act, 1956 in safeguarding the assets of

the Company and for preventing and detecting fraud and other irregularities.

iii) That the Directors had prepared the annual accounts on a going concern basis.


Place: New Delhi S K Tuteja Rajinder Gupta

Date: July 23, 2009 Chairman Managing Director

Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 in safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities



MANAGEMENT’S DISCUSSION AND ANALYSIS

Through this report, the management shall look at the future, explore the different frontiers, identify the trends and present arguments on how it should gear up for the threats and advantages. This comprehensive report analyses the impact of the business environment on the Company’s performance and should be read in conjunction with the audited financial statements and notes for the year ended March 31, 2009 and the audited financial statements and notes for the year ended March 31, 2008. All references to ‘AIL’, ‘Abhishek’, ‘we’, ‘our’ or the ‘Company’ in this report refer to Abhishek Industries Limited and should be construed accordingly.

BUSINESS OVERVIEWThe Company primarily operates in textiles, papers and chemicals segment. The Company, over a period of time has added 50 MW capacities for power generation. The energy segment of the Company is presently catering to the power needs of all the three businesses of the Company.

The Company has manufacturing set up based in Barnala, Punjab and the Corporate office is located at Ludhiana, Punjab. As part of geographical derisking and diversification, the Company has set up a new yarn project at Budni, Madhya Pradesh. This is the first manufacturing venture of the Company outside the state of Punjab.

The Company is a recognized player in its respective segments and respected for its professional ethics, state of art technology, innovative concepts and quality management.

ECONOMY OVERVIEWIndia has displayed admirable fortitude in the face of the global economic crisis. As economic distress looms over US, UK, Europe and Japan, global real GDP is forecasted to decline by 0.5 percent to 1 percent as in 2009 as against a growth rate of 3.2 percent in 2008-a clear indication of challenges ahead.

After clocking an average annual growth rate of 8.9 percent during last five years i.e. 2004-5 to 2007-8, growth has stagnated in the financial year 2008-9, due to the the global financial crisis.

The global economic crisis has had quantifiable

repercussions across the primary, secondary and tertiary sectors in the economy. The industrial sector is estimated to grow by a mere 4.2 percent as compared to 7.4 per cent in 2007-8. The slowdown has been majorly attributed to the deceleration in the manufacturing sector, which is estimated to grow by a nominal 4.1 percent during 2008-9 as compared to 8.2 percent last year.

The last year had started with a strong economic performance for India, but the momentum was lost as the months passed, as India faced the ripple effects of the gloom in the global economy. The global economic crisis, took a turn for the worse in September 2008 with the collapse of several international financial institutions, including investment banks, mortgage lenders and insurance companies. India’s growth rate was less than hoped as its exports shrank at the end of 2008.

TEXTILE INDUSTRY OVERVIEWThe Indian textile industry is one of the oldest and most significant industries in the country. It accounts for around 4 per cent of the gross domestic product (GDP), 14 per cent of industrial production and over 13 per cent of the country’s total export earnings. In fact, it is the largest foreign exchange earning sector in the country. Moreover, it provides employment to over 35 million people.

The Indian textile industry is estimated to be around US$ 52 billion and is likely to reach US$ 115 billion by 2012. The domestic market is likely to increase from US$ 34.6 billion to US$ 60 billion by 2012. It is expected that India’s share of exports to the world would also increase from the current 4 per cent to around 7 per cent during this period.

India’s textile exports have shot up from US$ 19.14 billion in 2006-7 to US$ 22.13 billion in 2007-8, registering a growth of over 15 per cent.

India is facing increased business opportunities in the domestic retail sector due to skewed population towards the young, an increase in disposable incomes and a rapid growth in organised retail.

Consequently, the domestic market is estimated

The management of the Company has devised an ongoing system to assess the operations of the Company on real time basis. The Company is proactively engaged in a formulaic approach towards the handling of critical projects and is attentive to the pre requisites. The Company prioritizes opportunities, strategise decisions and embark on expansions.






Management’s Discussion and Analysis (Contd.)

to grow to over US$ 50 billion by 2014. Significantly, the textile sector is estimated to offer an incremental revenue potential of no less than US$ 50 billion by 2014 and over US$ 125 billion by 2020.

The textile industry has attracted FDI worth US$ 850 million during August 1991 and December 2008.

India is speeding towards attaining the status of a global player in textile and apparel-sourcing with its abundant multi-fibre raw material base, well established production bases, design capability and skilled labour force.

Government InitiativesIn an effort to increase India’s share in the world textile market, the government has introduced a number of progressive steps:

100 per cent FDI allowed through theautomatic route

De-reservation of readymade garments, hosiery and knitwear from the small-scale industries sector in end-2000

Technology Mission on Cotton was launched in February 2000 to make quality raw material available at competitive prices

Technology Upgradation Fund Scheme (TUFS) which was launched to facilitate the modernisation and upgradation of the textiles industry in 1999 has been given further extension till 2011-12. A total of 18773 applications involving a project cost of US$ 24.91 billion have been sanctioned under TUFS upto March 31, 2008

40 textile parks are being set up under the Scheme for Integrated Textile Parks (SITP) which will attract an investment of US$ 4.38 billion

In the face of a global meltdown, the government has come out with an economic stimulus package for the textile industry. This includes:

Additional allocation of US$ 285.66 million to clear the entire backlog in TUFS, which would enhance cash flow of the exporters

Extension of interest rate subvention of 2 per cent on pre and post shipment credit

Additional fund of US$ 224.42 million for refund of terminal excise duty

ABHISHEK’S YARN DIVISION INITIATIVESThe Company is one of the largest yarn spinners

of India with spinning capacity of 1,25,952 spindles at single location. The Company has total spinning capacity of 1,76,352 spindles and also has 1920 rotors.

The year under review has witnessed special focus on value added products as recognized to be the major drivers of growth. To this effect, the division has undertaken modernization and expansion of capacity leading to increase in turnover.

Optimization of resources, lean manufacturing and energy saving techniques have been the cornerstones of the year improving productivities and other operational parameters.

The Company is perpetually engaged in the process of making efforts to be globally relevant in a competitive scenario and therefore is expanding the spinning capacity by 1,00,800 spindles at Budni in Madhya Pradesh. The first phase of this expansion consisting of 50,400 spindles has already been completed. The expanded capacity would concentrate on manufacturing special yarns like compact, elli-twist, corespun and special cottons like supima, organic and giza. This would foster expansion of product base with count range extending to Ne 60. The Company has adapted the latest technology, encourages better customer relationships and religiously organizes yarn dealers’ meets to the effect.

Strengths and OpportunitiesTechnology: The division has adopted state of art technology and is abreast of all the current advancements in the field due to its attempts of accumulating technological updates.Projected growth of textile industry: Considering the immense growth potential of Industry, companies like us who have implemented process and technology of global standards can live on substantial hopes of success. Access to raw materials: The major raw material, cotton is sourced locally following the Company’s principle of establishing integrated synergies in raw material sourcing, manufacturing facilities and markets, therefore helping in lean manufacturing. Geographical diversification: The Company is setting up textile facility at Madhya Pradesh for fine counts which would enhance the division’s product basket and hence increase customer base.

Challenges and ThreatsIncreased competition: The increase in

Optimization of resources, lean manufacturing and energy saving techniques have been the cornerstones of the year improving productivities and other operational parameters




capacity in the yarn spinning industry in recent time and globalization momentum have led to manifold increase in competition internationally as well as domestic.

Cotton sourcing: Government intervention in fixing Minimum Support Price (MSP) has badly impacted international competitiveness of industry and likely to have the impact in the future as well.

Capital ExpenditureThe Company is setting up 1,00,800 spindles at Budni, Madhya Pradesh which involves a total capital outlay of Rs 3,737 million. This project is being implemented in phased manner. The first phase of expansion consisting of 50,400 spindles has been completed in April 2009 and the second phase is scheduled to be fully operational during the third quarter of financial year 2009-10.

TERRY TOWEL INDUSTRY OVERVIEWTerry towels constitute 6-9 percent of the overall Home Textile assortment. In the US market, the major market share is with the retailers (discount stores, department stores, specialty stores etc). Owing to the financial challenges and tough market scenario the towel sales registered a major reduction during the year but Abhishek was able to maintain its growth trajectory. The market is becoming more matured in terms of product needs. From a generic product market, a shift is seen towards products with functional attributes like quick dry, anti microbial etc.

India along with China, Pakistan and Brazil has major manufacturers for the terry towel industry. The industry faces major challenges due to the volatility of foreign exchange and input costs. This however is hardly unusual since any global industry would face such challenges in a bid to keep the price competitive.

ABHISHEK’S TERRY TOWEL DIVISION INITIATIVESThe Company is one of the World’s largest terry towel manufacturers. As a value added segment having a continuous growth momentum, the terry towel business is the most important source of export earnings and international recognition for the Company.

The year 2008-9 was a challenging year for the Company. In the beginning of the year, a steep rise in the commodity prices was witnessed,

which resulted in the higher manufacturing costs hitting the bottom line. However the prices were normalized towards the end of the year. Further in the current retail environment there were lesser opportunities in the market. The Company has seen very competitive prices being quoted despite the scanty opportunities in the market. This has also given an opportunity to the Company to expand in markets other than US and focus on Brand alliances.

During the year under review, the Company has added new products like super fine zero twist, anti microbial towel , super absorbant towel , quick dry towel , organic slub towel and many more. The Company is constantly expanding/modernizing its manufacturing capacities with an objective to attain increased volumes with lower overheads, better quality and replacement of old technology with the latest world class technology.

The improvement initiatives along with viable vision initiatives based on theory of constraints were continued to enhance operational efficiencies, customer satisfaction and market share.

Entering the Domestic MarketIndian market in itself offers tremendous opportunity for the Company. The growth in shopping space and need for Home textiles product has positive bearings for the Company. The Company is aggressively aiming to tap the domestic market. The Company’s prime focus is to build brand for its towels & toweling products in the national market and enlarge distribution channel for the products to reach masses. It is also working to customize products to suit all Indian needs.

Strengths and OpportunitiesTechnology: State-of-the art technology, machinery know-how from the best international suppliers and vertically integrated plants, gives the Company a very strong footprint in the industry.

Reliability: A strong client base and a great track record in terms of client servicing backed by technology, supply chain partnerships and on time delivery are key strengths.

Markets: Latin America, Middle East, Eastern European and Domestic markets are an opportunity to spread business.

Challenges and ThreatsIncreased competition: This segment faces







competition within India and from neighboring countries. The globalization has intensified competition.

Logistics: The distance between plant and ports increases supply time and cost.

Product’s lifecycle: The long life cycle of towels could stagger fresh off take.

Agriculture based raw-material: The major raw-material is cotton yarn where prices are driven by uncertainties of weather, size of world crop and Govt. regulations on Import/Export trade.

Capital ExpenditureThe Company has undertaken another expansion project of its Terry towel division under which Company is upgrading its existing 18 looms and 24 new looms are being set up. This project is being implemented in textile park developed by Lotus Integrated Texpark Limited, a special purpose vehicle, with a capital outlay of Rs 359.8 million and shall be completed by second quarter of financial year 2009-10.

PAPER INDUSTRY OVERVIEWGlobal paper market is dominated by North America, Europe and Asia. Current global paper and paperboard consumption is around 395 million MT, which is expected to grow to 420 million MT by 2010. For the fast developing Asian markets, their share in global paper and paperboard consumption has risen to 35 per cent from the 32 per cent in the last couple of years; and expected to grow even further. The share of mature markets like North America and Europe is expected to fall to around 50 per cent by 2010.

Asia’s principal markets are China, Japan, India, Malaysia, Singapore and Thailand. India, with a per capita consumption as low as 8.2 kg, clearly has a long way to go, as compare to Japan (250 kg), China (45 kg) and the world average (56 kg). With social development in terms of increased education levels, there is considerable headroom for increasing paper consumption in India. Global demand is expected to increase at a rate of 2.4 percent and India by 6.7 percent.

In the first half of FY 2008-9, Indian paper industry was booming and demand leading the supplies and prices going up. But in second half, with the newer capacity addition, supplies started leading the demand, which started increasing pressure on prices. The scenario got worst with lot of factors

coming into play viz; industry down cycle, rate of capacity addition leading the rate of increase in demand, change in consumption pattern, cheaper imported material from China, Malaysia, Singapore, Thailand, which has lead to pressure on domestic pricing.

In these conditions, only way to survive is to control the cost of production and simultaneously build the brand through quality and increase the share in value added products like copier & business stationary.

Overall demand is expected to get steady in second quarter of FY 2009-10, and it can start catching its pace in third and fourth quarter of financial year.

ABHISHEK’S PAPER DIVISION INITIATIVESThis has been a year of expansion, growth and looking ahead into a future which promises to yield results and would take the Company to a new dimension of success. The major concern this year has been to stabilize new plant and establish the Company in the market as “A” grade mill with quality product range. This paper plant expansion at Barnala is anticipated to produce fruitful results in the field of writing & printing paper.

With completion of this expansion, the Company has emerged as first agro-based paper manufacturer of India to use Elemental Chlorine Free (ECF) technology.

The Company has launched its own brand of Copier paper called ‘SPECTRATM COPIER’ which has helped Company to move forward from commodity segment to customer oriented Organization. The Company is producing high quality paper which is getting utilized in the manufacturing of diaries, notebooks and text books. Its customer base has increased substantially with strong services & quality products.

Strengths and OpportunitiesTechnology: The Company has installed modern and hi tech paper & pulp machine with world class art of technology.

Environmental friendly: The Company has already been complying with the CREP environmental norms and saves 5,000 trees per day as compared to 100 percent wood pulp based units. Also the Company has adopted ECF technology.

Proximity to raw material: Agro residues are sourced locally leading to saving in logistics cost

A strong client base and a great track record in terms of client servicing backed by technology, supply chain partnerships and on time delivery are key strengths




Capacity enhancement: The Company has expanded its manufacturing capacity which would enable it to widen its product basket.Better realization: Excise duty on paper has been cut from 8 percent to 4 percent, giving manufacturing companies a better realization benefit during recession.

Challenges and ThreatsCompetition: Capacity expansion by a number of players, a sign of tough competition ahead, has and will prove a deterrent. Decrease in consumption: Due to global recession, overall consumption of paper has gone down and export market is getting hit. Even imported quantities are coming in huge stocks and expected to create tough competition in market. Crop pattern: Movement for changes in crop pattern and environment factor may lead to raw material scarcity

Capital ExpenditureThe Company has recently completed its integrated state of the art paper & pulp expansion project with installing paper machine having capacity of 1,25,000 tpa; pulping facility having capacity of 90,000 tpa and a captive power plant of 20 MW with a capital investment of Rs 8,250 million. In the current year, the Company is undertaking a debottlenecking and process streamlining project with a capital outlay of Rs 400 million.

CHEMICAL INDUSTRY OVERVIEWThe chemical industry in India is well established and has recorded a steady growth in the overall Indian industrial scenario. The chemical and allied industries have been amongst the faster growing segments of the Indian industry. The chemical industry is highly heterogeneous encompassing many sectors like organic and inorganic chemicals, dyestuffs, paints, pesticides and specialty chemicals. Some of the prominent individual chemical industries are caustic soda, soda ash, carbon black, phenol, acetic acid, methanol and azo dyes.

Currently, there is tremendous scope for growth in chemical sector. The per capita consumption of chemicals in India is well below the prevailing world level.

ABHISHEK’S CHEMICAL DIVISION INITIATIVESThe Chemical Division has facility to produce 1,00,000 tonnes per annum of sulphuric acid and the Company also produces battery grade

sulphuric acid. The chemical division caters to the need of leading battery manufacturers, detergent industry, zinc sulphate industry, alum manufacturing, dyes & chemicals and fertilizer industry etc.

Marketing of sulphuric acid is strategically planned so as to utilize full potential of the installed capacity. In this direction, strategic purchase of sulphur is being done as sulphur is the main raw material and contributes to more than 50 percent cost of production.

Strengths and OpportunitiesCapacity: Maximum production capacity in entire Northern regionInventory: Low inventory carrying costs for customersValue added services: Increasing revenue & profitability from offering value added services to customers

Challenges & ThreatsRaw material: Forecasting of sulphur prices & availability of sulphurClient base: Customer retention & new customer developmentSubstitution: Alternate products available in the market wherever possible.

POWER SECTOR OVERVIEWThe power & energy infrastructure sector in India is poised for a major take-off. The present installed capacity is inadequate for the nation’s needs, and there are plans for rapid growth. The APDRP (Accelerated Power Development & Reforms Programme 2002 - 2012) has seen an addition of around 22,000 MW during last five years. And during the next five years, a capacity addition of over 78,000 MW has to be setup by 2012.

The Market potential to sustain the GDP growth rate of India @ 8 percent plus per annum needs the power sector to grow at 1.8 - 2 times the GDP rate of growth as espoused by economists, planners and industry experts. This would mean a YOY capacity addition of 18,000 - 20,000 MW to achieve this ambitious plan of moving India to a developed economy status, as an economic global powerhouse. The target mission : ‘POWER for All by 2012’ would mean achieving the target of 1000 KwHr (Units) of per capita consumption of electricity by this period. To achieve this goal, the engagement of the private sector gains significance.

The net sales of paper & chemicals division witnessed a significant increase of 75 percent in FY 2008-9 with increase in total production of paper

by 65 pecent







The share of textile segment in external sales contributed to 78 percent, which is lower, compared to 84 percent in the preceding year. During the FY 2008-9, yarn sales grew by 15 percent over the preceding year. Yarn production decreased by 5 percent, due to change in product as well as count mix. The division during the year also concentrated on production of value added yarn. The proportion of external sales to the total sales of yarn increased from 66 percent in FY 2007-8 to 71 percent in FY 2008-9. The contribution of Yarn division to the net sales of the company decrease marginally from 28 percent in FY 2007-8 to 24 percent in FY 2008-9. Inspite of increase in revenue, the division’s PBIT registered a decline of 83 percent over the preceding year’s level due to increase in raw material prices.

The net sales of Terry towel division grew by 30 percent in FY 2008-9, whereas the total production of terry towels increased by 15 percent. The net realization per unit of sale increased by about 20 percent in FY 2008-9 owing to depreciation of Indian rupee vis-à-vis the US dollar. The contribution of the towel to the net sales of the company decreased marginally from 55 percent in FY 2007-8 to 54 percent in FY 2008-9. The Company has taken forward contracts and option deals to hedge its export sales. Due to adverse currency movements, the Company suffered losses in these hedged position, as a result the terry towel division’s PBIT decreased by 116 percent in FY 2008-9.

The net sales of Paper & chemicals division witnessed a significant increase of 75 percent in FY 2008-9 with increase in total production of

paper by 65 percent. The increase in production is in line with capacity enhancement of paper division with the state of the art technology which was stabilized and started commercial production during the Q3 of FY 2008-9. The sale of chemicals, primarily sulphuric acid, too registered a growth but this increase was more than offset by the rise in prices of raw materials including those of sulphur, which recorded a historic increase in its price in the FY 2008-9. Overall PBIT of division registered a growth of 47 percent in FY 2008-9.

ExpenditureRaw material costRaw material forms the largest component of the total expenditure incurred by the Company. The cost on this account rose by 34 percent in absolute terms in FY 2008-9 against the 43 percent increase in FY 2007-8. During the year under review, the quantity of raw material consumed went up due to increase in production by different business units and the businesses witnessed a sharp increase in prices of raw materials during the FY 2008-9. As a percentage of the net sales, cost of raw material has remained same at 51 percent in FY 2008-9. As bulk of the raw material sourced by the Company is agro-based, the Company is exposed to the resultant price fluctuations on account of monsoon and crop success.

Manufacturing expenditureThe manufacturing cost as a proportion of net sales of the Company decreased from 15 percent in FY 2007-8 to 13 percent in FY 2008-9 on account of topline growth, cost cutting measures and increase in captive consumption of power of the Company.

ABHISHEK’S ENERGY DIVISION INITIATIVESThe Company has made investment in power generation in its effort to be self reliant for its energy needs. The in-house generation of power leads to an uninterrupted supply for the smooth production process, meeting delivery schedules and cost saving.

FINANCIAL ANALYSIS WITH RESPECT TO OPERATIONAL PERFORMANCERevenuesThe net turnover of the Company increased by 33 percent to Rs 13,980.6 million in FY 2008-9. Of the total turnover, Rs 6,861.5 million was on account of income from exports. A snapshot of segmental financial performance for the FY 2008-9 and its comparison with the preceding fiscal year is tabulated below:

(Rs Million)

DivisionCurrent year Previous year Growth

Sales * PBIT Sales * PBIT Sales * PBITYarn 3397.0 58.4 2948.3 334.6 15% -83%Towels 7560.5 (95.3) 5814.1 579.0 30% -116%Paper & Chemicals 3023.1 326.3 1724.3 222.0 75% 47%* Excluding inter-segment sales




Manpower costThe manpower cost as a proportion of net sales of the Company decreased from 12 percent in FY 2007-8 to 9 percent in FY 2008-9. Reduction in personnel cost is mainly due to capacity growth & improvement in operational efficiency in different business units.

Selling costThe Company is constantly endeavoring to bring down its distribution and supply chain management costs. The selling cost declined from 6 percent of net sales in FY 2007-8 to 5 percent in FY 2008-9.

Administrative costThere is no significant change in administrative cost from previous year as percentage of net sales. Administration cost stands at 3 percent of net sales for the year.

DepreciationA sum of Rs 1,159.3 million had been provided towards depreciation during the year under review. The cost on account of depreciation in absolute terms stands increased by 34 percent in FY 2008-9. The significant increase in depreciation is witnessed on account of new capacity of paper business & expansion in towel business of the Company.

Profits and ProfitabilityThe earnings before depreciation interest and taxation (PBDITA) increased from Rs 1,540.0 million in FY 2007-8 to Rs 2,605.3 million in FY 2008-9. The Company incurred a net loss of Rs 530.4 million during the year due to foreign exchange loss. The Company had negative earning per share as on March 31, 2009 of Rs 2.64 on face value of Rs 10.

Balance Sheet ReviewThe balance sheet size of the Company increased to Rs 2,0361.4 million in FY 2008-9 as compared to Rs 1,7952.9 million during the preceding fiscal year on account of capital expenditure incurred by the Company for augmenting its manufacturing capacities.

Share capital and equity warrantsThe total paid up share capital of the Company increased to Rs 2,221.9 million during the FY 2008-9 as compared to Rs. 1,941.9 million during the preceding fiscal year. One equity share of the Company is having a face and paid up value

of Rs 10. The book value of each share stood at Rs 20.09.

During the FY 2008-9, the Company has allotted 2,80,00,000 equity shares of Rs 10 each at a premium of Rs 11.30 per share on conversion of equivalent number of warrants issued on preferential basis. The proceeds received from this issue have been utilized towards meeting part of capital expenditure for Integrated paper and pulp project of the Company.

Reserve and surplusThe Company recorded a loss of Rs 5,30.4 million during the year under review. Thereby reserves stood at Rs 2,241.5 million as on March 31, 2009 against Rs 2,450.4 million in the preceding year.

Secured and unsecured loansThe total borrowing of the Company increased from Rs 12,855.9 million in FY 2007-8 to Rs 15,569.0 million in FY 2008-9. Secured loans, which amount to Rs 15,536.9 million, form a predominant part of the total borrowings. The Company is maintaining its basket of borrowings in such a manner, which enables it to maintain a lower cost of funding.

Fixed assets and investmentsThe Company’s gross block stood at Rs 21,032.1 million compared to Rs 13,273.2 million recorded at the end of the preceding financial year. This increase in gross block is on account of substantial enhancement in paper capacity & increase in looms in the towel division.

The Company has recently (in Q1 of FY 2009-10) completed Phase I of yarn expansion project in Budni, Madhya Pradesh wherein 50,400 spindles have been added. The expansion programme comprising of another 50,400 spindles at Budni and expansion of looms in towel division at Dhaula are at advance stage of implementation.

Working capitalThe net current assets of the Company decreased from Rs 2,784.8 million to Rs 2,363.7 million in FY 2008-9. The Company continues to purchase cotton at strategic points since it is available seasonally and is maintaining sufficient inventory levels and in turn avoid any disruption in the production of yarn. As regards other raw materials that are available throughout the year, the Company deploys just in time (JIT) method in order to minimize the carrying costs of inventory.







The Company’s approach to leadership development, business transition, diversity, and human resource planning continued to add value to organizational effectiveness

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACYThe Company has designed an internal control system which is independent and has objective assurance and consulting activity designed to add value and improve an organization’s operations. The prime objective of internal control system is to bring a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.

The internal control and audit framework is robust and rigorous considering the size and scale of the organization, complexities faced overall risk profile of the Company. The internal auditors strive to assess the control and governance process for the organization. The Company has also retained management auditors to periodically review the adequacy of the system and refinement of processes followed.

The internal audit report along with plans, significant audit findings, compliance with accounting standards, is in turn reviewed by the Audit Committee of the Company to ensure the proper audit coverage, adequate consideration along with execution of recommendations of auditors.

IMPROVEMENT INITIATIVESThe volatile, competitive and fast paced environment continuously pushes the Company to look for opportunities for performance improvement. The Company also continued with various ongoing and adopted certain new initiatives.

During the year under review, the Company continued to strive for a cost savvy, cleaner, healthier and safer working environment. These initiatives inter-alia included viable vision, lean manufacturing, organization infrastructure review, PMS, leadership development, kaizen, 5S, six sigma, etc. Also the Company adopted daily/hourly monitoring, empowerment of middle management, dashboard, collaborative leadership; which led to tangible and intangible gains for the Company.

HUMAN RESOURCE MANAGEMENT & INDUSTRIAL RELATIONSHuman Resources, as a strategic business partner, strive to provide support to the organization through the delivery of key business outcomes.

During the year under review, the company continued to enhance its activities in all areas of human resource management and facilitation including labour relations, client services, organizational development, occupational health and total compensation.

The Company’s approach to leadership development, business transition, diversity, and human resource planning continued to add value to organizational effectiveness. HRM’s organizational strength is our people Human Resources is well positioned to assist the organization in its efforts to attract, motivate and retain a highly talented workforce.

Workforce CompositionThe company’s organizational structure is - IB, DC, Frontline Entrepreneur, Facilitators and Operatives. Towards the close of the financial year under review, the total strength of the Company was around 9200 employees. The Average age of the organization talent is 27.5, a judicious mix of youth and experience.

Management Team Institution Builder (IB) 19Development Coaches (DC) 140Frontline Entrepreneurs (FLE) 406Total 565

OUTLOOKThe Company is pretty excited in its outlook. The stabilization of paper plant coupled with operational improvement in textile plant is expected to yield handsome results. The eco-friendly technology, massive capacities, improvement initiatives, motivated manpower make our outlook pretty optimistic.

CAUTIONARY STATEMENTThis discussion contains certain forward-looking statements based on current expectations, which entail various risk and uncertainties that could cause the actual results to differ materially from those reflected in them. The actual could be materially different from the one stated herein below. Market data and product information contained in this report is gathered from published and unpublished reports and their accuracy cannot be assured.

The management reserves every right to re-visit any predictive statement as may be deemed fit.



CORPORATE SUSTAINABILITY REPORT

ECONOMIC SUSTAINABILITY

Risk management and framework:

Since the business environment of the Company

is too competitive and uncertainties and

business risks are so intricately wrapped up,

which at times are fundamental to the Company

which necessitates structured, consistent

and continuous process applied across the

organisation for identification and assessment

of risks, control and effective monitoring. During

the year, risk management systems were further

re-structured and fine-tuned to effectively

manage the risks confronted by the company.

The key elements of framework include a risk management strategy, risk management structure, risk portfolio management and measuring, monitoring and optimising. The implementation of the framework is supported through a criterion for risk assessment and categorization, a risk escalation matrix, risk register and MIS. The Company considers risk management to be one of the most critical components of its business framework. The Company continually works towards making risks as manageable as possible by means of efficient procedures and appropriate risk awareness. The approach to Risk management adopted by the Company is :

Abhishek Industries has been consistently working towards integrating CSR into the values,

culture, operations and business decisions at all levels of the organization. The Company adopts

a business approach that creates a long term shareholder value by embracing opportunities

and managing risks deriving from economic, environmental and social developments. At

Abhishek Industries, we tend to grow without damaging prospects of future generation.

Over the years, the nature of the company’s involvement with the community has undergone a

change. It has moved away from “charity & dependence” to “empowerment & partnership”.






1. To continuosly identify and assess the risks incurred within all important business operations using a

uniform and methodical approach

2. To monitor implementation of the measures defined to counteract risks

3. To develop and continuously maintain a risk-oriented insurance strategy as a means of risk mitigation

4. Through Internal Audit which has a comprehensive framework of measurement and monitoring risks

Categorisation of Risk: Risks are categorized taking into consideration the factors and circumstances from

which they emanate. The below are the listed risks which may arise from external factors affecting the

Company or the internal factors from within the Company.

Strategy risk

Business segments

Substitution risk

Competition risk

Concentration risk

Operational risk

Force majeure

Cost competitiveness

Quality

Obsolescence risk

Proprietary risks/contingencies

Financial risk

Funding risk

Foreign currency risk

Receivable management risk

Working capital cycle risk

Legal, regulatory and

compliance risk

Contractual risk

Compliance and regulatory risk

Human resource risk Performance and attrition risk

Technology and information

system riskStorage and safety

Corporate Sustainability Report (Contd.)




Risk management process

The process of risk management comprises of:

Identification and assessment of risks in the

context of the Company’s risk appetite

Categorization and recording of risks, which

assists in prioritization of risks

Control and mitigation of risks keeping in

view the risk appetite and development of

action plan depending upon risk retention,

risk mitigation and risk transfer

Review of risk control and mitigation

measures in order to check its effectiveness

and updating the same, if needed

To ensure economic sustainability of the Company,

the Company has adopted a proactive approach

to identify and mitigate risks confronted by the

Company.

ENVIRONMENT SUSTAINABILTY

The Company has lived to its commitment to

community with focus not just on commercial

aspect but from ecological perspective and is

continuously going for environment friendly

process and initiatives. The Company ensures

safer, healthier and pleasant environment in

working area as well as in community it operates

into.

The Company has formed SHE (Safety, Health &

Environment) committee with three task forces,

viz Safety, Health & Environment. Environment

task force is continuously focusing on all

parameters to improve environment not only for

the employees but also to save earth.

The Company has undertaken various initiatives

in above direction which include:

1. Environment friendly product development –

Paper with ECF Technology

2. Practicing 3r (reduce, reuse and recycle) &

waste management in Industrial plants

3. Energy conservation drives by installing

power saving technology on the machines

in the industrial plants and procurement of

energy efficient machines

4. Enhance recycle & reuse of treated effluent

for purposes of plantation, maintenance

activities in various sections of the industrial

plants

5. The Company has implemented rain water

harvesting to recharge the aquifers.

6. Upgradation of effluent treatment plant

(ETP)

7. Commissioning of a water treatment plant

(WTP) resulting into the use of the surface

water by industrial plants in place of ground

water and thereby saving ground water of

the area

8. Proper treatment of sewerage water through

STP (sewerage treatment plant) and use of

treated water for plantation to reduce waste

and also reduce water consumption

9. Producing organic yarn, which is totally

environmental friendly and having zero

pesticide

10. Adoption of cost effective cleaner

technologies, waste minimization techniques

and appropriate pollution control/abatement

technologies

11. Generate wealth from waste in various

processes in the industrial plants

12. Accreditation of manufacturing facilities of

the Company to ISO 140001

We continuously improve our environmental

programs and explore inventive solutions to save

our precious environment for future generations.

SOCIAL SUSTAINABILITY:

At Abhishek, we have a value system of sharing

and paying back to society which has been

cornerstone to the success of the Company. The

Company has created organizational structures to

support a wide range of activities in such areas

as environmental protection, social contribution,

human resource development, information

disclosure and compliance.

Some of the CSR initiatives taken by the Company

are highlighted as below:

The Company has created organizational structures to support a wide range of activities in such areas as environmental protection, social contribution, human resource development, information, disclosure and compliance






1. Continuous participation in development of

Sacred Heart School at Barnala

2. Formulation of ASMITA (women empowerment

cell) to particularly address the concerns of

female members

3. Conducting free medical check up camps

to address issues like general health care,

gynecological problems, orthopedic issues

and other health problems

4. Disaster management initiatives for outside

the premises of the Company in coordination

with civil authorities

5. Provision of residential colonies for operatives

at plant sites

6. Organized blood donations camps on a

regular basis

7. Funding the rural economy on a large scale

by way of outsourcing 20 percent of its

raw material from the adjacent areas and

villages

8. Imparting education to the females of the

adjoining villages on various social issues

9. Regular contributions to provide sponsorships

to aspiring professionals with in industry

10. Provision of canteens and residential colonies

for employees

HUMAN SUBSTANTIALITY

The Company is building internal competencies;

continue investment in people and infrastructure.

The Company is committed to respect the rights

of its employees and aim to promote human rights

within its sphere of influence by:

Transparent working environment

Social security and other medical coverage

Training programs from renowned faculties

Endeavors to be ‘Great Place to Perform’

Celebration of festivals in the organization at

all locations thereby strengthening TRIDENT

PARIVAAR

Discussing major initiatives through Large

Scale Interactive Process (LSIP) with

participation of all the members

And as far as general masses are concerned, the

Company is continually transforming its portfolio

of products to keep up with growing demand for

healthier choices through:

New products and approaches

Reformulation of existing products

Eco-friendly products

Healthy environment for future generations

The Company is committed to respect the rights of its employees and aim to promote human rights within its sphere of influence




CORPORATE GOVERNANCE REPORT

COMPANY’S PHILOSOPHY ON CORPORATE

GOVERNANCE

Corporate governance at Abhishek cares for the

overall well-being and welfare of all constituent

of the system and takes into account the

stakeholders interest at every business decision.

The Company is committed to pursue growth by

adhering to the highest national & international

standards of Corporate governance. The

Company’s philosophy on Corporate governance

is based on following principles:

Lay solid foundation for management

Structure the Board to add value

Promote ethical & responsible decision-

making

Safeguard integrity in financial reporting

Make timely & balanced disclosures

Recognize & manage business risks

Respect the rights of the shareholders

Encourage enhanced performance

Remunerate fairly & responsibly

Recognize the legitimate interest of the

stakeholders

Legal & Statutory compliances in its true

spirit

The Board of the Company has adopted ‘Combined

Code of Corporate Governance and Conduct’

based on the principles of good corporate

governance and best management practices

being followed globally besides complying with

the needs of the law of land. The Combined

Code of Corporate Governance and Conduct is

available on the official website of the Company –

www.tridentindia.com.

BOARD OF DIRECTORS

The Board comprises of seven directors, of

which more than 71 percent are Non-executive

directors and 57 percent are Independent

directors. The Company has a non-executive and

independent chairman. Moreover, the Board has

a representation of 29 percent woman directors.

Two directors on the Board are executive directors.

None of directors on the Board is Member of more

than five Board level Committees as required

under the Code except Mr S K Tuteja. However,

he is not a member of more than 10 Board level

committees as required under clause 49 of the

Listing Agreement.

Board’s Definition of Independent Director

Independent director shall mean Non-executive

director of the Company who:

a) apart from receiving director’s remuneration,

does not have any material pecuniary

relationships or transactions with the

Company, its promoters, its senior

management or its holding Company, its

subsidiaries and associated companies;

b) is not related to Promoters, Chairman,

Managing director, Whole time director,

Secretary, CEO or CFO and of any person

in the management at one level below the

board;

c) has not been an executive of the Company

in the immediately preceding three financial

years;

d) is not a partner or an executive of the

statutory audit firm or the internal audit firm

that is associated with the Company, and

has not been a partner or an executive of

any such firm for the last three years. This

will also apply to legal firm(s) and consulting

firm(s) that have a material association with

the entity.

e) is not a supplier, service provider or customer

of the Company. This should include lessor-

lessee type relationships also; and

f) is not a substantial shareholder of the

Company, i.e. owning two percent or more of

the block of voting shares.

The Board of the Company has also decided that

materiality of relationship with directors shall be

ascertained on the following basis:

The concept of materiality is relevant from

the recipient’s point of view and not from

that of Company;

The term material needs to be defined in

percentage. Ten percent (10%) or more

of recipient’s gross revenue/ receipt for

the preceding year should form a material

condition affecting independence.






Corporate Governance Report (Contd.)

Based on the above test of independence, Mr S K Tuteja, Ms Pallavi Shroff, Ms Ramni Nirula and Mr Rajiv Dewan are categorized as Independent directors. Other details relating to the Board are as follows:

Name Designation CategoryShareholding in

Company(No. of shares)

No. of Directorships

held in all public Companies #

No. of Board Committees

memberships held in all public Companies @

No. of Board Committees

Chairmanships held in all public Companies @

Mr S K Tuteja Chairman Non-Executive, Independent - 14 10 5

Mr Rajinder Gupta Managing Director Executive 588,266 7 1 -

Ms Pallavi Shroff Director Non-Executive, Independent - 7 2 -

Ms Ramni Nirula Director Non-Executive, Independent - 4 1 -

Mr Rajiv Dewan Director Non-Executive, Independent 23,290 8 5 -

Mr Karan Avtar Singh Additional Director Non-Executive - 6 - -

Mr Raman Kumar Whole Time Director Executive - 5 - -

# including Abhishek Industries Limited and excluding private and foreign companies

@ Board Committee for this purpose includes Audit Committee & Shareholders’/Investors’ Grievance Committee (including Board Committees of Abhishek Industries Limited)

GOVERNANCE STRUCTURE

Company has laid a strong foundation for making corporate governance a way of life by constituting a

Board with balanced mix of experts of eminence & integrity, forming a core group of top level executives,

inducting competent professionals across the organization and putting in place best system, process and

technology.

RoleChampioning purpose & values, challenging

assumptions, inspiring confidence & commitment

Institutional builders

Managing director

Board of Directors(Executive &

Non executive directors)

Shareholders

Management auditors & other Independent agencies

Committees of the Board1. Audit committee2. Compensation

committee3. Investors’ grievance

& share transfer committee

4. Strategy committee5. Screening committee6. Bank operation

committee

Management meetings

Discussions with middle management (followed by chain discussion)

Statutory auditors

Operatives(Delivery

on time, cost effectiveness)

Facilitators(Result

orientation, quality consciousness,

problem solving)

Front line entrepreneurs

(Innovation & growth, energy & drive,

frontline motivator)

Development coaches(Supporting &

coaching, creating contexts, linking

knowledge & practices,

relationships & reconciliations)

The Company is committed to pursue growth by

adhering to the highest national & international standards of Corporate governance




MEETINGSMeeting Details – Board & CommitteesThe Company holds atleast four Board meetings in a year, one in each quarter to review the financial results and other items of the agenda and the gap between the two Board meetings do not exceed four calendar months. Apart from the four scheduled Board meetings, additional Board meetings are also convened to address the specific requirements of the Company. Urgent matters are also approved by the Board by passing resolutions through circulation. The Company also holds atleast one Audit Committee meeting in each quarter to inter-alia review financial results.

Meeting of other Committees of the Board are held whenever matters falling under their terms of reference need discussion and decision. Every Director on the Board is free to suggest any item for inclusion in the agenda for the consideration of the Board/ Committee. The information as required under Clause 49 of the Listing Agreement and Combined Code of Corporate Governance and Conduct were made available to the members of the Board/ Committee.

Following are the details of meetings of Board of Directors and Committees thereof held between April 1, 2008 and March 31, 2009

The Company Secretary while preparing the agenda and minutes of the Board/Committee meeting is required to ensure adherence to the applicable provisions of the law including the Companies Act

Sl.No

Particulars No. of Meetings held during the year

Date of Meetings

1 Board meeting 7 May 11, 2008; June 27, 2008; July 21, 2008; September 24, 2008; October 24, 2008; January 3, 2009; January 24, 2009

2 Audit committee meeting 5 May 11, 2008; June 26, 2008; July 21, 2008; October 24, 2008; January 24, 2009

3 Compensation committee 1 June 26, 2008

4 Investor grievance & share transfer committee

5 April 23, 2008; June 2, 2008; August 28,2008; December 18, 2008; February 12, 2009

5 Strategy committee 1 June 27, 20086 Screening committee 3 June 26, 2008; July 21, 2008; January 3, 2009

The maximum time gap of 70 days between two consecutive Board meetings and 94 days between two consecutive Audit Committee meetings.

ATTENDANCE OF EACH DIRECTOR AT THE MEETINGS OF THE COMPANYThe detail of attendance of each director of the Company in Board and Committee meetings held during the financial year 2008-9 is given below:

Name of DirectorBoard Audit Committee Compensation

Committee

Investors’ Grievance &

Share Transfer Committee

Strategy Committee

Screening Committee

Held* Attended Held* Attended Held* Attended Held* Attended Held* Attended Held* Attended

Mr S K Tuteja 7 6 5 4 1 1 5 5 1 1 3 3

Mr Rajinder Gupta 7 7 ~ ~ ~ ~ 5 4 1 1 3 3

Ms Pallavi Shroff 7 1 ~ ~ 1 0 ~ ~ 1 0 3 1

Ms Ramni Nirula 7 2 5 2 1 1 ~ ~ ~ ~ ~ ~

Mr Anurag Verma# 6 2 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Mr Karan Avtar Singh## 1 0 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Mr Rajiv Dewan 7 7 5 5 ~ ~ 5 5 ~ ~ ~ ~

Mr Ajay Relan^ 3 0 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Mr Raman Kumar^^ 4 4 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~- * No. of meeting held during the tenure of respective directors.- ^ Mr Ajay Relan ceased to be a director w.e.f. September 24, 2008- ^^ Mr Raman Kumar was appointed as director w.e.f. September 24, 2008- # Mr Anurag Verma ceased to be a director w.e.f. January 03, 2009- ## Mr Karan Avtar Singh appointed additional director w.e.f. January 03, 2009- ~ Not a member of the Committee- Mr S K Tuteja, Mr Rajinder Gupta and Mr Rajiv Dewan were present in the Annual General Meeting of the Company held on September 24, 2008.- The Chairman of Audit Committee & Investors’ Grievance and Share Transfer Committee was present in Annual General Meeting of the Company

held on September 24, 2008.- Dr. M A Zahir, an HR Expert and Independent Person who is a member of Screening Committee of the Company, has attended two (out of total

three) meetings of the Committee held in the financial year 2008-9







Agenda and Minutes

All the departments in the Company communicate

to the Company Secretary well in advance with

regard to matters requiring approval of the Board/

Committees of the Board to enable him to include

the same in the agenda for the Board/Committee

meeting(s). Agenda papers are generally circulated

to the Board members well in advance before the

meeting of the Board.

The Company Secretary while preparing the

agenda and minutes of the Board/Committee

meeting is required to ensure adherence to the

applicable provisions of the law including the

Companies Act, 1956. The applicable Secretarial

Standards issued by the Institute of Company

Secretaries of India (ICSI) are also being complied

by the Company. The draft minutes of the

proceedings of each meeting duly initialed by

the Chairman of the meeting are circulated to

the members for their comments and thereafter,

confirmed by the Board/and respective Committee

in its next meeting. The Board also takes note of

the minutes of the Committee meetings duly

approved by their respective Chairman.

All material information is incorporated in the

Agenda papers for facilitating meaningful

and focused discussions at the meeting. The

information regularly supplied to the Board inter-

alia includes the following:

Annual operating plans and budgets and any

updates thereon

Capital budgets and updates

Quarterly results for the Company and its

operating divisions or business segments

Minutes of meetings of Audit Committee

and other committees of the Board

Legal compliances report and certificate

Accounts relating to the subsidiary

companies

Information on recruitment, resignation and

remuneration of senior officers

Show cause, demand, prosecution notices

and penalty notices issued against the

Company having material impact

Fatal or serious accidents, dangerous

occurrences, any material effluent or

pollution problems, if any

Any material default in financial obligations

to and by the Company, or substantial non-

recoveries against sale, if any

Any issue, which involves possible public or

product liability claims of substantial nature,

including any judgment or order which, may

have passed strictures on the conduct of the

Company or taken an adverse view regarding

another enterprise that can have negative

implications on the Company, if any

Details of any joint venture or collaboration

agreement, if any

Transactions that involve substantial

payment towards goodwill, brand equity, or

intellectual property, if any

Significant labour problems and their

proposed solutions. Any significant

development in Human Resources/ Industrial

Relations front like signing of wage

agreement, implementation of Voluntary

Retirement Scheme etc, if any

Sale of material, nature of investments,

subsidiaries, assets, which is not in normal

course of business, if any

Quarterly details of foreign exchange

exposures and the steps taken by

management to limit the risks of adverse

exchange rate movement, if material

Non-compliance of any regulatory,

statutory nature or listing requirements and

shareholders service such as delay in share

transfer etc

BOARD LEVEL COMMITTEESThe Board has constituted various Committees for smooth and efficient operation of the activities and is

responsible for constituting, assigning, co-opting and fixing the terms of reference for the committees in

line with the laws of land. The Chairman, quorum and the terms of reference of each committee have been

approved by the Board.




Terms of Reference of Board Level CommitteeThe Board while approving terms of reference of Committees ensures that the same is in line with laws of land. The Board proactively reviews terms of reference of Committees and modifies the same, if necessary, to meet the strategic and business needs. Following are brief terms of reference of Board Level Committees.

AUDIT COMMITTEEThe terms of reference of Audit Committee are as per Listing Agreement and Companies Act, 1956. The broad terms of reference of audit committee as adopted by the Board are as under:

a) Oversight of the Company’s financial

reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

b) Recommending the appointment and removal of external auditor, fixation of audit fee and also approval for payment of any other services.

c) Reviewing with management the annual financial statements before submission to the Board, focusing primarily on:

Any change in the accounting policies and practices

Major accounting entries based on exercise of judgment by management

Composition of Board Level CommitteesAudit Committee

1. Mr S K Tuteja, Independent director (Chairman of Committee)

2. Ms Ramni Nirula, Independent director

3. Mr Rajiv Dewan, Independent director

Compensation Committee1. Mr S K Tuteja,

Independent director (Chairman of Committee)

2. Ms Pallavi Shroff, Independent director

3. Ms Ramni Nirula, Independent director

Investors’ Grievance & Share Transfer Committee1. Mr S K Tuteja, Independent director (Chairman of Committee)2. Mr Rajinder Gupta, Managing director3. Mr Rajiv Dewan, Independent director

Strategy Committee1. Mr S K Tuteja,



3. Mr Rajinder Gupta, Managing director

Screening Committee1. Mr S K Tuteja,


2. Mr Rajinder Gupta, Managing director


4. Dr M A Zahir, HR Expert (Independent person)

Bank Operation Committee1. Mr Rajinder Gupta,

Managing Director (Chairman of Committee)

2. Mr Rajiv Dewan, Independent director

3. Mr Arun Goyal, Chief Financial Officer







Qualification on draft audit report

Significant adjustments arising out of audit

The going concern assumption

Compliance with accounting standards

Compliance with stock exchange and legal requirements concerning financial statements

Any related party transactions i.e. transaction of the Company of material nature, with promoters or the management, their subsidiaries or relatives etc that may have potential conflict with the interest of the Company at large

d) Reviewing with management, external and internal auditor, adequacy of internal control systems

e) Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit

f) Discussion with internal auditors any significant findings and follow up thereon

g) Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board

h) Discussion with external auditors before the audit commences on the nature and scope of audit as well as has post audit discussion to ascertain any area of concern

i) Reviewing the Company’s financial and risk management policies

j) To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payments of declared dividends) and creditors.

k) To approve unaudited Quarterly Financial results and publish the same as required in the Listing Agreement

Apart from above, the committee also reviews other matters as required under clause 49 of

the Listing Agreement and other laws, rules and regulations.

COMPENSATION COMMITTEEThe broad terms of reference of Compensation Committee inter-alia include determination and review of remuneration package of Executive directors/CEOs and formulation and administration of Employee Stock options plan of the Company.

INVESTORS’ GRIEVANCE AND SHARE TRANSFER COMMITTEEThe broad terms of reference of Investors’ Grievance and Share Transfer Committee inter-alia include monitoring of work related to transfer/transmission/conversion/dematerl isation/rematerlisation/subdivision/consolidation,etc of shares of the Company, approving issue of duplicate share certificate and ensuring redressal of all kinds of shareholders/investors complaints.

STRATEGY COMMITTEEThe broad terms of reference of Strategy Committee inter-alia include formulation of long-term & strategic planning as well as resources management, performance review and monitoring & review of projects.

SCREENING COMMITTEEThe broad terms of reference of Screening Committee inter-alia include determination of appropriate characteristics, skills and experience for the Board members and to make recommendation to the Board and to Shareholders on the induction of any new director.

BANK OPERATION COMMITTEEThe broad terms of reference of Bank Operations Committee inter-alia include Bank Operating Powers, changes thereon and other Banking related issues of the Company with the Banks/Financial Institutions.

DIRECTORS’ REMUNERATIONRemuneration policy of DirectorsExecutive directorThe remuneration paid to the Executive directors is recommended by the Compensation Committee and approved by the Board of Directors subject to the approval by the shareholders in the General Meeting and such authorities, as the case may be.

The Board proactively reviews terms of reference of Committees and modifies the same, if necessary, to meet the strategic and business needs




Non-executive directorNon Executive Directors are paid by way of sitting fee for the meeting of Board and Committee (as the case may be), attended by them. The remuneration paid to the Non executive directors is approved by the Board of Directors, subject to the approval by the shareholders in the General Meeting.

The synopsis of approvals for the remuneration paid to Mr Rajinder Gupta, Managing director, Mr Raman Kumar, Whole time director and sitting fees paid to Non executive directors during the year ended March 31, 2009 is given hereunder:

Sr Approving Authority

Date of Approval

Executive directors

Non executive directors

Mr Rajinder Gupta

(Managing director)

Mr Raman Kumar

(Whole time director)

1 Compensation Committee 25.01.2006 09.10.2008 Not applicable2 Board of Directors 25.01.2006 24.09.2008 03.01.2009

3 Shareholders in Extraordinary General Meeting 18.03.2006 Being placed in ensuing AGM 12.12.2003

During the period 2008-9, the Company did not advance any loan to any of its Directors. No stock options have been provided to directors of the Company during the year under review.

The details of the remuneration paid to the Directors alongwith their relationships and business interests is detailed below:

RELATIONSHIPS OF DIRECTORS, THEIR BUSINESS INTERESTS AND REMUNERATION

Name of the Director

Relationship with other Directors

Business relationship with

the Company, if any

Remuneration paid/payable during the year ended March 31, 2009

Sitting feeSalary

& perks(in Rs)

Commission Total (in Rs)

Mr S K Tuteja None None 3,80,000 - - 3,80,000

Mr Rajinder Gupta None None - 2,40,00,000 - 2,40,00,000**

Ms Pallavi Shroff None PartnerAmarchand & Mangaldas & Suresh A Shroff & Co., Solicitors to the Company

20,000 - - 20,000

Ms Ramni Nirula None Nominee of ICICI, a lender to the Company

1,00,000* - - 1,00,000

Mr Rajiv Dewan None None 3,40,000 - - 3,40,000

Mr Ajay Relan# None None - - - -

Mr Raman Kumar## None None - 8,72,667 - 8,72,667

Mr Anurag Verma^ None Nominee of PSIDC, an equity investor of the Company

40,000* - - 40,000

Mr Karan Avtar Singh^^ None Nominee of PSIDC, an equity investor of the Company

- - - -

* The sitting fee has been paid to the respective nominating institutions. # Ceased to be a director w.e.f. September 24, 2008; ## Appointed as Whole Time Director w.e.f. September 24, 2008 on a remuneration of Rs 1,40,000 p.m.^ Ceased to be a director w.e.f. January 3, 2009^^ Appointed as Additional Director w.e.f .January 3, 2009** An amount of Rs 2,40,00,000 has been provided in the books of accounts in respect of salary to Mr Rajinder Gupta, Managing Director, out of which Rs 48,00,000 has been paid and Rs 1,92,00,000 has been withheld due to inadequacy of profit as computed under Section 349 of the Companies Act, 1956, for which the management is confident of obtaining Central Government approval.

The Company has also taken Director’s & Officer’s (D&O) Liability Insurance to protect its directors’ personal liability for financial losses that may arise out of their unintentional wrongful acts







The Company has also taken Director’s & Officer’s (D&O) Liability Insurance to protect its directors’ personal liability for financial losses that may arise out of their unintentional wrongful acts.

Pecuniary relationship or transaction of Non executive directors vis-à-vis the CompanyThe Company does not have any direct pecuniary relationship/transaction with any of its Non executive directors. However, a sum of Rs. 3,00,000/- has been paid to M/s Amarchand & Mangaldas & Suresh A Shroff & Co., during the financial year 2008-9 towards fees for legal services. Ms Pallavi Shroff, a Non executive director of the Company is partner of M/s Amarchand & Mangaldas & Suresh A Shroff & Co. However, the above payment does not affect independence of Ms Pallavi Shroff as the same is not material as per criteria fixed by the Board.

Criteria for payment of CommissionIn addition to the monthly remuneration, the

Managing director is also entitled to receive commission at the rate of one percent of the net profits of the Company as computed under Section 349 of the Companies Act, 1956, as per the terms of his appointment recommended by the Compensation Committee in its meeting held on January 25, 2006 and approved by the Board in its meeting held on January 25, 2006 and the shareholders in their Extraordinary General Meeting held on March 18, 2006.

Termination of Agreement with Managing director & Wholetime director and severance feesThe employment of Managing director & Wholetime director shall terminate automatically in the event of their ceasing to be a director of the Company in the General Meeting and/or in the event of their resignation as a director of the Company and subsequent acceptance of the resignation by the Board.

DIRECTORSHIPS OF BOARD MEMBERS IN OTHER COMPANIESThe directors of the Company also holds positions as directors, committee members, partners and shareholders in other reputed companies, associations and firms. The committee memberships/chairmanships held by the directors in other Corporates as on March 31, 2009 are in compliance with the Clause 49 of the Listing Agreement. Details of the same are as follows:

Name of directors Name of Companies Position held/ Interest

Mr S K Tuteja Swaraj Mazda Limited Chairman- Board, Chairman- Audit Committee, Member- Share Transfer & Investors’ Relationship Committee

Shri Renuka Infraprojects Limited Chairman- Board

Adani Logistics Limited Chairman- Board

National Bulk Handling Corporation Limited Chairman-Board

Shorab Spinning Limited Chairman-BoardShree Renuka Sugar Limited Director on the Board, Member-

Share Transfer & Investors’ Relationship Committee

Mundra Port and Special Economic Zone Limited

Director on the Board, Member- Audit Committee, Member- Share Transfer & Investors’ Relationship Committee

HMT Limited Director on the Board, Chairman- Share Transfer & Investors’ Relationship Committee

Adani Powers Limited Director on the BoardChairman- Audit Committee

Small Industries Development Bank of India Director on the Board

SVIL Mines Limited Director on the Board

Indian Energy Exchange Limited Director on the Board

Axis Private Equity Fund Director on the BoardPrecision Pipes and Profiles Co Limited Director on the Board,

Member- Audit Committee




Name of directors Name of Companies Position held/ Interest

Mr Rajinder Gupta Abhishek Energy Corporation Limited Chairman- BoardShareholding > 2%

Himalayan Ayurvedic & Agro Research Centre Limited

Chairman- Board

Madhuraj Foundation Limited Chairman- BoardAbhishek Global Ventures Limited Chairman- BoardAbhishek Industries Inc. Director on the BoardTrident Infotech Inc. Director on the BoardTrinetra Technologies Limited Director on the BoardAbhishek Ventures & Projects Limited Director on the BoardPraneel Innovations Limited Shareholding > 2%Trident Towels Limited Shareholding > 2%

Ms Pallavi Shroff Maruti Suzuki India Limited Director on the BoardMember- Audit Committee

Kotak Mahindra Old Mutual Life Insurance Limited

Director on the Board

Juniper Hotels Limited Director on the BoardMember- Audit Committee

PTL Enterprises Limited Director on the BoardGIFT Collective Investment Management Company Limited


Artemis Health Sciences Pvt. Limited Director on the BoardArtemis Medicare Services Pvt. Limited Director on the BoardIndusInd Bank Limited Director on the BoardM/s Amarchand & Mangaldas & Suresh A Shroff & Co.

Partner

Ms Ramni Nirula Jindal Steel & Power Limited Director on the BoardICICI Comm Trade Limited Director on the BoardHaldia Petro Chemicals Limited Director on the Board

Mr Rajiv Dewan Madhuraj Agrotech Limited Chairman- BoardMalwa Industries Limited Director on the Board

Member- Audit CommitteePunjab Communications Limited Director on the Board

Member- Audit CommitteeMember- Investors’ Grievance Committee

Malwa Millenium Designs Limited Director on the Board

Trinetra Technologies Limited Director on the Board

Abhishek Ventures & Projects Limited Director on the Board

Trident Aerospace Limited Director on the Board

R Dewan & Co. Partner Mr Karan Avtar Singh Indian Acrylics Limited Chairman – Board

Punjab Venture Investor Trust Limited Chairman – BoardMilk Specialities Limited Chairman – BoardPunjab Alkalies & Chemicals Limited Director on the BoardPunjab State Industrial Development Corporation Limited

Managing Director- Board

Mr Raman Kumar Abhishek Corporate Services Limited Director on the Board

Rainbow Retail Limited Director on the Board

Trident Cotton Limited Director on the BoardHimalayan Ayurvedic & Agro Research Centre Limited








The Screening Committee & Board has recommended re-appointment of directors who are retiring and offer themselves for reappointment

A brief profile of the Directors is given elsewhere in this annual report, which forms part of the Corporate Governance Report.

MANAGEMENTThe management discussion and analysis report is given elsewhere in this annual report, which forms part of this Corporate Governance report.

SHAREHOLDERSa) Disclosures regarding appointment/re-

appointment of directors Pursuant to the Articles of Association of the

Company, all the directors for the time being except Managing director and Wholetime director shall retire annually and accordingly Mr S K Tuteja, Ms Pallavi Shroff, Ms Ramni Nirula and Mr Rajiv Dewan, directors are retiring at the ensuing Annual GeneralMeeting. All retiring directors, offer themselves for re-appointment. The Screening Committee & Board has recommended re-appointment of directors who are retiring and offer themselves for re-appointment.

Mr Karan Avtar Singh was appointed as additional director by the Board on January 3, 2009 and holds office till ensuing Annual General Meeting. The Company has received a notice under Section 257 of the Companies Act, 1956 proposing his name for appointment as director of the Company. The Screening Committee and Board has recommended appointment of Mr Karan Avtar Singh as director. Further, Mr Raman Kumar was appointed as Whole time director on September 24, 2008 and his remuneration and other terms of appointment was approved by the Compensation Committee and Board. Accordingly, The Board recommends approval of the appointment of Mr Raman Kumar as Whole time director of the Company.

The brief profile of the directors being appointed and re-appointed and other relevant Information is given elsewhere in this Annual Report, which forms part of the Corporate Governance Report.

b) Means of Communication The quarterly, half yearly and annual financial

results and quarterly shareholding pattern are posted on Company’s official website www.tridentindia.com. As per the requirements of the Listing Agreement, the Company also provides information to the Stock Exchanges and update its website on regular basis to include new developments in the Company. The quarterly, half yearly and annual results and quarterly shareholding pattern are also uploaded on the EDIFAR website of SEBI www.sebi.gov.in. The Company Secretary being the Compliance Officer ensures the correctness and authenticity of the information posted on the said website.

All material information about the Company is promptly sent through facsimile/e-mail to the Stock exchanges where the shares of the Company are listed.

Full version of the Annual Report including the Notice of Annual General Meeting, Management‘s Discussion and Analysis, Corporate Governance report, Balance Sheet, Profit & Loss Account, Cash Flow Statement alongwith the schedules and notes thereon, Directors report and Auditors report are sent to the shareholders within the stipulated time and are also uploaded on Company’s official website www.tridentindia.com.

The Company generally publishes its financial results in the Business Standard, Financial Express, and Desh Sewak. During the period under review, the Company published its financial results in the following newspapers:

Financial Results Newspapers Date of publicationUnaudited financial results for the quarter ended June 30, 2008

Business Standard Desh Sewak

22.07.200822.07.2008

Unaudited financial results for the quarter ended September 30, 2008

Business Standard Desh Sewak

25.10.200825.10.2008

Unaudited financial results for the quarter ended December 31, 2008

Financial Express Rozana Spokesman

25.01.200925.01.2009

Unaudited financial results for the quarter ended March 31, 2009

Financial Express Rozana Spokesman

16.05.200916.05.2009

c) Compliance Officer The Board has appointed following officials as Compliance Officer of the Company. 1. Mr Pawan Jain, Company Secretary (e-mail Id: [email protected].) 2. Mr Ratnesh P Rukhariyar, Deputy Company Secretary (e-mail Id: [email protected]) The Compliance officers can be contacted for any investor related matter relating to the Company on

contact no. +91-161-5039999, 5038888; and Fax no. is +91-161-5039900, 5038800.




DISCLOSURESa) Related party transactions There was no materially significant

related party transaction, pecuniary transactions or relationships between the Company and its directors, promoters or the management that may have potential conflict with the interests of the Company at large except the details of transactions annexed to the Balance Sheet disclosed as per Accounting Standard 18 of the Institute of Chartered Accountants of India

All details relating to financial and commercial transactions, where directors may have a potential interest are provided to the Board and the interested directors neither participate in the discussion, nor do they vote on such matters. The Audit Committee of the Company also reviews related party transactions on periodical basis

b) Compliances made by the Company The Company has continued to comply

with the requirements of the stock

exchanges, SEBI and other statutory authorities on all matters related to capital market during last three years

No penalties or strictures have been imposed on the Company by the stock exchanges, SEBI or any other authority on any matter related to capital market during the last three years

CORPORATE ETHICS As a responsible corporate citizen, the Company consciously follows corporate ethics in both business and corporate interactions. The Company has framed various codes and policies, which act as guiding principles for carrying business in ethical way. Some of our policies are:

a) Code of Conduct for Prevention of Insider Trading

b) Code of Corporate Disclosure

c) Whistle Blower Policy

d) Combined Code Of Corporate Governance & Conduct

e) Safety, Health and Environment (SHE) Policy

f) Values Framework

g) Risk Management Procedure

d) Annual General Body Meetings of the Company Details of last three Annual General Meetings of the Company is given hereunder:

AGM Day Date Time Venue Special Resolutions passed

18th Wednesday September 24, 2008

10:30 AM Trident Complex, Raikot Road, Barnala

Following two special resolutions were passed:

Re-appointmet of Mr Rajinder Gupta as Mangaing director & Remuneration thereof

Appointment of Mr Abhishek Gupta, son of Managing director as an employee of the Company

17th Thursday September 27, 2007

10:30 AM Trident Complex, Raikot Road, Barnala

None

16th Wednesday September 27, 2006

10.00 AM Trident Complex, Raikot Road, Barnala

None

e) Postal ballots No resolution by way of Postal Ballot was passed during the year 2008-9. Details of resolution to be passed through Postal ballot The Company has proposed Ordinary resolution to be passed under section 293(1)(a) of the Companies

Act, 1956 by way of Postal Ballot. The Postal ballot alongwith necessary resolution and detailed procedure is being sent to shareholders separately.

The Company has continued to comply with the requirements of the stock exchanges, SEBI and other statutory authorities on all matters related to capital market during last three years







COMPLIANCE STATUS WITH MANDATORY AND NON-MANDATORY REQUIREMENTS OF CLAUSE 49 OF LISTING AGREEMENTMandatory requirementsThe Company has complied with all the mandatory requirements of clause 49 of Listing Agreements entered into with Stock Exchanges.

Non-mandatory requirementsCompliance status with non-mandatory requirements is given below:

a) Chairman of the Company is entitled to seek any advice and consultancy in relation to the performance of his duties and is also entitled to claim reimbursement of the expenses incurred in this regard and other office facilities.

Independent directors of the Company do not have a term exceeding a period of nine years in aggregate on the Board of Company.

b) Company has set up Compensation Committee comprising of three Independent directors. Details of the Committee are given in this report under the head ‘Board Level Committees.’

c) Presently, half yearly financial performance is not being sent to each household of shareholders.

d) The performance evaluation of all directors (executive and non-executive) is done by the Screening Committee, which comprises of two Independent directors, one Executive director and one independent person having expertise in Human Resources.

e) The Company has adopted ‘Whistle Blower Policy’. No personnel have been denied access to the Audit Committee.

GENERAL SHAREHOLDERS INFORMATION

The following information would be useful to our shareholders:

a) Annual General MeetingDate August 27, 2009Day ThursdayTime 10.30 AM

Venue Trident Complex, Raikot Road, Barnala -148101

b) Financial CalendarNext Financial year April 1, 2009 to March 31, 2010

c) The Financial Results will be adopted as per the following tentative schedule:For the quarter ended June 30, 2009 July 2009 (4th week)For the quarter ended September 30, 2009 October 2009 (3rd week)For the quarter and year ended December 31, 2009 January 2010 (3rd week)For the quarter & year ended March 31, 2010 May 2010 (2nd week)

d) Date of Book Closure for the purpose of Dividend and Annual General Meeting:

The Share Transfer Book and Members’ Register shall remain closed from Friday, August 21, 2009 to Thursday August 27, 2009 (both days inclusive) for the 19th Annual General Meeting of the Company.

e) Listing on Stock Exchanges

As on March 31, 2009, the equity shares of the Company are listed on the following exchanges:1 Bombay Stock Exchange Limited

Phiroze Jeejeebhoy Towers, 25th Floor, Dalal Street, Mumbai – 400 001

2 National Stock Exchange of India LimitedExchange Plaza, Plot No. C/1 G Block, Bandra Kurla Complex, Bandra (E), Mumbai – 400 051

f) Listing FeesListing fees for the year 2009-10 has been paid to the Stock Exchanges where the equity shares of

the Company are listed in the month of April, 2009 i.e. within the stipulated time.




g) Stock Code

The Company’s code at the stock exchanges and news agencies are:

Sr Name of Stock Exchanges Stock code Reuters code Bloomberg

1 Bombay Stock Exchange Limited 521064 ABHP.BO ABIN IN

2 National Stock Exchange of India Limited ABSHEKINDS ABHP.NS NABIN IN

h) Market Price DataMonthly high and low prices of equity shares of Abhishek Industries Limited at the Bombay Stock Exchange Limited (BSE) and at the National Stock Exchange of India Limited (NSE) during the year under review in comparison to BSE (Sensex) and NSE (Nifty) are given hereunder:

Month

BSE NSE

Share PricesVolume

Sensex Share PricesVolume

Nifty

High Low High Low High Low High Low

April, 2008 21.00 15.85 2039989 17480.74 15297.96 21.05 16.00 2661283 5230.75 4628.75

May, 2008 20.50 17.15 1422870 17735.70 16196.02 20.30 17.10 2084896 5298.85 4801.90

June, 2008 17.60 14.65 994520 16632.72 13405.54 17.65 12.50 1493082 4908.80 4021.70

July, 2008 15.55 13.65 770331 15130.09 12514.02 15.50 13.25 1120350 4539.45 3790.20

August, 2008 16.95 13.30 689690 15579.78 14002.43 16.85 14.25 1020270 4649.85 4201.85

September, 2008 15.00 10.77 630939 15107.01 12153.55 15.30 10.60 864400 4558.00 3715.05

October, 2008 12.10 6.75 612077 13203.86 7697.39 12.35 6.70 935266 4000.50 2252.75

November, 2008 9.74 6.15 7129114 10945.41 8316.39 9.50 6.35 631108 3240.55 2502.90

December, 2008 10.20 5.95 3510738 10188.54 8467.43 9.85 5.25 1753614 3110.45 2570.70

January, 2009 8.71 6.62 461842 10469.72 8631.60 8.70 6.65 497034 3147.20 2661.65

February, 2009 7.69 6.46 351272 9724.87 8619.22 7.65 6.40 363506 2969.75 2677.55

March, 2009 7.43 6.05 484977 10127.09 8047.17 7.35 6.00 506009 3123.35 2539.45

Source: Reuters

Sensitivity at NSC

NIFTY AIL

0

5

10

15

20

25

Apr

-08

May

-08

Jun-

08

Jul-0

8

Aug

-08

Sep-

08

Oct

-08

Nov

-08

Dec

-08

Jan-

09

Feb-

09

Mar

-09

AIL

NIF

TY

Sensitivity at BSC

AIL SENSEX

0

5

10

15

20

Apr

-08

Ma

y-0

8

Jun-

08

Jul-0

8

Aug

-08

Se

p-0

8

Oct

-08

Nov

-08

Dec

-08

Jan-

09

Fe

b-0

9

Ma

r-0

9

AIL

0

5000

10000

15000

20000

SENSEX







i) Registrar & Share Transfer Agent M/s Alankit Assignments Limited, New Delhi has been appointed as the Registrar and Share Transfer

Agent of the Company for handling the share transfer work both in physical and electronic form. All correspondence relating to share transfer, transmission, dematerialization, rematerialization etc can be made at the following address:

M/s Alankit Assignments Limited (Unit: Abhishek Industries Limited) 2E/21 Jhandewalan Extension, New Delhi – 110 055 Tel : +91-11-23541234, 42541234, Fax : +91-11-41540064, E-mail: [email protected]

j) Share Transfer System All physical share transfers, dematerialization etc are handled by M/s Alankit Assignments Limited,

Registrar & Share Transfer Agent of the Company at 2E/21 Jhandewala Extension, New Delhi–110 055. Share transfers are registered and returned within a period of 7 days from the date of receipt.

k) Distribution of ShareholdingAs on March 31, 2009 the distribution of shareholding was as follows:

Shareholding of nominal value in RsShareholders Shareholding

Number % age Shares % ageUpto 5000 66,818 79.69 1,35,58,624 6.10

5001 to 10000 10,291 12.28 78,96,317 3.5510001 to 20000 4,169 4.97 61,22,143 2.7620001 to 30000 1,063 1.27 27,15,994 1.2230001 to 40000 387 0.46 13,92,385 0.6340001 to 50000 361 0.43 17,14,408 0.7750001 to 100000 436 0.52 32,65,365 1.47

100001 and above 321 0.38 18,55,29,439 83.50Total 83,846 100.00 22,21,94,675 100.00

l) Category wise shareholding as on March 31, 2009Category No. of shares held % of shareholdingPromotersIndian Promoters 14,10,43,373 63.48Institutional Investors- Mutual Funds 23,398 0.01- Banks, Financial Institutions 15,07,425 0.68- FIIs 1,40,34,560 6.32Others- Corporate Bodies 2,37,01,343 10.67- Indian Public 3,95,83,952 17.81- NRIs/OCBs 22,26,953 1.00- Shares in Transit 73,671 0.03Grand Total 222,194,675 100.00

Distribution of Share Holding

0.01%

6.32%

10.67%

1.00%

17.81% 0.03%

63.48%0.68%

Promoters

Financial Institutions & Banks

Mutual Funds

Foreign Institutional Investor

Bodies Corporates

NRIs

Public

Shares In Transit

All correspondence relating to share transfer, transmission, dematerialization, rematerialization etc should be addressed to Registrar and Share Transfer Agent



m) Details of shares held more than 1 percent as on March 31, 2009

Name of shareholder No. of shares held % of shareholding

Madhuraj Foundation 7,95,38,423 35.80

Citicorp Banking Corporation 1,35,95,152 6.12

Punjab State Industrial Development Corporation Limited

77,15,596 3.47

Smt Mayadevi Trust 38,79,480 1.75

Madhuraj Foundation Limited 4,93,21,608 22.20

Prudent Traders Private Limited 1,88,60,000 8.49

n) Dematerialization of SharesThe equity shares of the Company are compulsory traded and settled only in the dematerialized form under ISIN No. INE 064C01014. The details of the equity shares of the Company dematerialized as on March 31, 2009 is given hereunder:

ParticularsAs on 31.03.2009 As on 31.03.2008

No. of shares % age No. of shares % age

No of shares dematerialized 9,32,75,616 41.98 9,26,91,760 47.73

- NSDL 4,53,69,268 20.42 8,52,24,767 43.89

- CDSL 4,79,06,348 21.56 74,66,993 3.84

No. of shares in physical form 12,89,19,059 58.02 10,15,02,915 52.27

Total 22,21,94,675 100.00 19,41,94,675 100.00

o) Correspondence received/resolved

NatureNumber of letters (April 2008 – Mar 2009)

Received Attended Pending

Transfer of Shares 6 6 Nil

Dividend/Revalidation 135 135 Nil

Duplicate shares 45 45 Nil

Loss of shares 86 86 Nil

SEBI/Stock Exchange 15 15 Nil

Change of Address 463 463 Nil

Conversion 122 122 Nil

Misc. like Demat / Mandate / Nomination / POA /

Annual Report / Transmission etc.

317 317 Nil

Total 1189 1189 Nil


p) Share transfer/demat requests in process As on March 31, 2009, no request for the transfer of the shares or demat of the shares for

dematerlization was in process.

q) Warrants and Stock Options 1. The Company has granted options to its employees under Abhishek Employee Stock Options

Plan, 2007. Total 79,01,462 options were granted to eligible employees on July 9, 2007 by the Compensation Committee as per the terms & conditions of Abhishek Employee Stock Options Plan, 2007. As per the terms of the plan, the Company can allot a maximum of 99,09,733 options to eligible employees from time to time. One option entitles the participant for one equity share of the Company subject to fulfillment of vesting criteria. Since these are the options given to participants, the exact impact on the paid up capital of the Company depends on exercise of rights

Shareholders who have not yet encashed their dividend warrants for the year 2005-6 may approach the Company for re-validation, issue of duplicate warrants, etc






u) Plant LocationsThe Company’s manufacturing facilities are located at the following locations:

Yarn Division Terry Towel DivisionPaper and

Chemicals Division

Trident Complex,

Raikot Road, Barnala - 148 101

Punjab

Trident Complex, Hoshangabad Road, Budni,

Sehore-466 445

Madhya Pradesh

Trident Complex,

Mansa Road, Dhaula, Barnala - 148 107

Punjab

Trident Complex,

Mansa Road, Dhaula, Barnala - 148 107

Punjab

v) Address of Subsidiaries

US subsidiary Europe subsidiary* Indian subsidiary

Abhishek Industries Inc.

295 Fifth Avenue

Suite 909, New York

NY 10016, USA

Abhishek Europe SA

Place Pury 3

C/o Cabinet Béguin D’expertise Fiscale CBEF SA

2001 Neuchâtel, Switzerland

Abhishek Global Ventures Ltd.

Trident Complex

Raikot Road

Barnala, Punjab

* The Company disinvested its entire holding in Abhishek Europe SA and accordingly Abhishek Europe SA has cease to be a subsidiary of the Company w.e.f. May 18, 2009

w) Address for CorrespondenceAbhishek Industries LimitedE- 212, Kitchlu Nagar, Ludhiana 141 001, Punjab, IndiaPhone Nos. +91-161-5039999, 5038888; Fax No. +91-161-5039900,5038800; e-mail ID: [email protected]; website: www.tridentindia.com


of participants to convert these options into equity shares of the Company. There has not been any exercise of option during the financial year 2008-9.

2. The outstanding two crores eighty lacs (2,80,00,000) warrants of the face value of Rs 10/- each allotted on preferential basis on July 9, 2007, have been converted into equivalent number of equity shares of the Company on January 3, 2009, for cash at a premium of Rs. 11.30/- per equity share.

The Company has no other outstanding convertible instrument.

r) Exchange of shares of erstwhile Varinder Agro Chemicals Limited with Abhishek Industries Limited

After merger of Varinder Agro Chemicals Limited (VACL) with Abhishek Industries Limited (AIL), the Company has allotted 70 fully paid equity shares of AIL for every 24 fully paid equity shares of VACL. The Company sent individual letters to all the shareholders of VACL to exchange their share certificates of VACL for share certificates of AIL.

The shareholders who are still holding shares of erstwhile VACL are requested to surrender their share certificates of VACL at the Corporate office of the Company at E - 212 Kitchlu Nagar, Ludhiana – 141001 to get the share certificates of AIL.

s) Unclaimed Dividend Shareholders who have not yet encashed their dividend warrants for the year 2005-6 may approach the

Company for re-validation, issue of duplicate warrants, etc. Dividend which remains unpaid/unclaimed over a period of 7 years shall be transferred to the Investor Education and Protection Fund as per the law.

t) Nomination Shareholders holding shares in physical form and desirous of making nomination in respect of their

shareholding in the company are requested to submit their request to Company in Form 2B.



CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of

Abhishek Industries Limited

We have examined the compliance of conditions of Corporate governance by Abhishek Industries Limited for the year ended March 31, 2009, as

stipulated in clause 49 of the Listing Agreements of the said Company with stock exchanges.

The Compliance of conditions of Corporate governance is the responsibility of the management. Our examination was limited to procedures

and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate governance. It is neither an

audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with

the conditions of Corporate governance as stipulated in the above mentioned Listing Agreements.

We further state that such compliance is neither as assurance as to the future viability of the Company nor the efficiency or effectiveness with

which the management has conducted the affairs of the Company.

For Deloitte Haskins & Sells

Chartered Accountants

Manjula Banerji

Place: New Delhi Partner

Date: May 15, 2009 Membership No. 086423






MANAGING DIRECTOR & CHIEF FINANCIAL OFFICER CERTIFICATION

COMPLIANCE WITH CODE OF CONDUCT

We have reviewed financial statements and cash flow statement for the year April 1, 2008 to March 31, 2009 and to the best of our knowledge

and belief:

i) These statements do not contain any materially untrue statement or omit any material fact or contain statement that might be

misleading;

ii) These statements together present a true & fair view of the Company’s affairs and are in compliance with existing accounting standards,

applicable laws and regulations;

iii) No transaction entered into by the Company during the abovesaid period which are fraudulent, illegal or violative of the Company’s Code of

Conduct.

Further, we accept that it is our responsibility to establish and maintain internal controls for financial reporting. Accordingly, we have evaluated

the effectiveness of internal control systems of the Company pertaining to financial statements and have disclosed to the auditors and Audit

Committee, wherever applicable:

a) deficiencies in the design or operation of internal controls, if any, which came to our notice and steps have been taken/proposed to be taken

to rectify these deficiencies;

b) Significant changes in internal control over financial reporting during the year;

c) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements;

d) Instances of significant fraud of which we became aware and the involvement therein, if any, of the management or an employee having a

significant role in the Company’s internal control system over financial reporting.

Place: New Delhi (Arun Goyal) (Rajinder Gupta)

Date : May 15, 2009 Chief Financial Officer Managing Director

The Company has adopted “Combined Code of Corporate Governance & Conduct”. This code deals with the ‘Governance Practices’ which the

Company is expected to follow and ‘Code of Conduct’ for Board members and Senior Management of the Company.

It is hereby affirmed that during the year 2008-9, all the Directors and Senior Managerial personnel have complied with the Code of Conduct and

have given a confirmation in this regard.

Place: New Delhi (Pawan Jain) (Rajinder Gupta)

Date : May 15, 2009 Company Secretary Managing Director



AUDITORS’ REPORT

1. We have audited the attached balance sheet of Abhishek

Industries Limited as at March 31, 2009 and also the profit

and loss account and the cash flow statement of the Company

for the year ended on that date, annexed thereto. These

financial statements are the responsibility of the Company’s

management. Our responsibility is to express an opinion on

these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards

generally accepted in India. Those standards require that we

plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the

financial statements. An audit also includes assessing the

accounting principles used and significant estimates made

by management, as well as evaluating the overall financial

statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

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

issued by the Central Government of India in terms of Section

227(4A) of the Companies Act, 1956, we enclose in the

annexure a statement on the matters specified in paragraphs

4 and 5 of the said Order.

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 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 those books;

(c) the balance sheet, profit and loss account and cash flow

statement dealt with by this report are in agreement with

the books of account;

(d) in our opinion, the balance sheet, profit and loss account

and cash flow statement dealt with by this report comply

with the accounting standards referred to in Section

211(3C) of the Companies Act, 1956;

(e) on the basis of written representations received from

directors as on March 31, 2009 and taken on record by the

Board of Directors, we report that none of the directors is

disqualified as on March 31, 2009 from being appointed as

a director in terms of Section 274(1)(g) of the Companies

Act , 1956; and

(f) as indicated in note 18 in Schedule 18 the possible loss on valuation of open put derivative options, in view of the reasons stated therein could not be determined by the Company. The ultimate outcome of these transactions and their effect on these accounts cannot be ascertained at this stage.

subject to above, in our opinion and to the best of our

information and according to the explanations given to

us, the said accounts give the information required by the

Companies Act, 1956 in the manner so required and give

a true and fair view in conformity with the accounting

principles generally accepted in India:

- in the case of the balance sheet, of the state of

affairs of the Company as at March 31, 2009;

- in the case of the profit and loss account, of the

loss of the Company for the year ended on that

date; and

- in the case of the cash flow statement, of the cash

flows for the year ended on that date.

For Deloitte Haskins & SellsChartered Accountants

Manjula BanerjiPlace: New Delhi PartnerDate: May 15, 2009 Membership No. 086423

To the Members of Abhishek Industries Limited






ANNEXURE referred to in paragraph ‘3’ of the auditors’ report to the members of Abhishek Industries Limited on the accounts for the year ended March 31, 2009.

i) a) The Company is maintaining proper records showing full

particulars including quantitative details and situation of

its fixed assets.

b) According to the information and explanations given to

us, a portion of fixed assets has been physically verified

by the management during the year in accordance with

a phased programme of verification of all assets within a

period of 3 years, adopted by the Company. In our opinion,

the frequency of verification is reasonable having regard to

the size of the Company and the nature of its fixed assets.

The discrepancies noticed on such verification were not

material and have been properly dealt with in the books of

account.

c) In our opinion and according to information and

explanations given to us, a substantial part of the fixed

assets has not been disposed off by the Company during

the year.

ii) a) According to the information and explanations given

to us, the inventories have been physically verified by

the management during the year. However, in respect

of certain items, the inventories were verified by the

management on a visual estimation which has been relied

upon by us. In our opinion, the frequency of verification is

reasonable.

b) In our opinion and according to the information and

explanations given to us, the procedures of physical

verification of inventories followed by the management

are reasonable and adequate in relation to the size of the

Company and the nature of its business.

c) On the basis of our examination of the records of inventories,

we are of the opinion that the Company is maintaining

proper records of inventories. The discrepancies noticed

on physical verification of inventories as compared to book

records were not material and have been properly dealt

with in the books of account.

iii) a) The Company has granted unsecured loans to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, the details of which are as under:

No of Parties

Amount involved(Rs millions)

Balance at the beginning of the year. 1 111.3Loans granted during the year including funded interest. 1 34.4Balance at the end of the year 1 145.7

b) In our opinion, the rate of interest and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the Company.

c) According to the information and explanations given to us, the loans, as referred to in paragraph (iii) (a), is repayable on demand along with interest and the same has not been recalled. Accordingly, paragraph 4(iii) (d) of the Order is not applicable.

d) According to the information and explanations given to us, the Company has, during the year, not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4 (iii) (e), (f) and (g) of the Order are not applicable.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instance of major weaknesses in the aforesaid internal control systems.

Auditors’ Report (Contd.)




b) According to the information and explanations given to us and the records of the Company examined by us, there are no disputed dues of customs duty, wealth tax and cess matters. The details of disputed sales tax, excise duty, service tax and income-tax dues which have not been deposited by the Company with the authorities as at March 31, 2009 are as follows:

(Rs million)S.No Statute Nature Forum where pending Amount

involvedAmount paid under protest

Year to which the amount relates

1 Sales Tax Act Sales Tax Deputy Commissioner Excise and Taxation 0.2 0.1 2003-04

2 Central Excise Law

Excise Duty Customs, Excise and Service Tax Appellate Tribunal

3.7 - 2002-03

3 Service Tax Act Service Tax Customs, Excise and Service Tax Appellate Tribunal

0.7 - 2004-05 and2005-06

4 Income Tax Act Income Tax Income Tax Appellate Tribunal 8.9 4.7 2002-03 and2003-04

5 Income Tax Act Income Tax Commissioner of Income Tax (Appeals) 121.0 91.0 2004-05

6 Income Tax Act Penalty Commissioner of Income Tax (Appeals) 0.2 0.1 1995-96

The following matters have been decided in favour of the Company, although the Department has preferred appeals at higher levels:

(Rs million)Statute Nature

of duesAmount Period to which amount relates Forum where Department has preferred appeals

Central Excise Law

Excise Duty 48.4 2004-05, 2005-06 and 2006-07

Customs, Excise and Service Tax Appellate Tribunal

Service Tax Act Service Tax 1.3 2004-05 and 2005-06

Customs, Excise and Service Tax Appellate Tribunal

Income Tax Act Interest 1.7 1989-90 and 1990-91

High Court

v) a) According to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time except in the case of items stated to be of specialized nature for which, as informed, there are no alternate sources of supply to enable a comparison of the prices paid/ charged.

vi) According to the information and explanations given to us, the Company has not accepted deposits from the public within the meaning of Section 58A, Section 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, paragraph 4(vi) of the Order is not applicable.

vii) In our opinion and according to the information and explanations given to us, the Company has an internal audit system commensurate with its size and the nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government, the maintenance of cost records has been prescribed under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix) a) According to the information and explanations given to us and the records of the Company examined by us, the Company has been regular in depositing undisputed statutory dues including 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. We are informed that there are no undisputed statutory dues as at the year end outstanding for a period of more than six months from the date they became payable other than Work Contract Tax amounting to Rs 167,676.







x) The Company does not have accumulated losses as at March 31, 2009. Further, the Company has not incurred cash losses during the financial year ended March 31, 2009 and in the immediately preceding year ended March 31, 2008.

xi) According to the records of the Company examined by us and the information and explanations given to us, the Company, during the year, has not defaulted in repayment of dues to financial institutions and banks. The Company has not issued any debentures during the year.

xii) 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) The provisions of special statute as specified under paragraph 4(xiii) of the Order are not applicable to the Company.

xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interest of the Company.

xvi) In our opinion and according to the information and explanations given to us, the term loans taken during the year have been applied for the purpose for which they were obtained.

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 during the year short term funds have been utilized towards losses of Rs 530.4 million incurred during the year, including provision for foreign exchange losses (marked to market on forward contract) of Rs 419.0 million.

xviii) During the previous year the Company issued 28,000,000 warrants carrying an option to holder of such warrants to subscribe one equity share of Rs 10 each at a premium of Rs 11.30 per share on preferential basis in accordance with SEBI (Disclosure and Inventor Protection) Guidelines, 2000. During the year, these warrants were transferred to a Promoter Group Company, pursuant to the merger of the original allottee with the Promoter Group Company covered in the register maintained under Section 301 of the Companies Act, 1956. Pursuant to the terms of these warrants the Company has issued 17,700,000 equity shares on a preferential basis to the party covered under Section 301 of the Companies Act, 1956. In our opinion and as per the information and explanations given to us the price at which the equity shares have been issued are not prejudicial to the interest of the Company.

xix) The Company has not issued any debentures during the year.

xx) The Company has not raised money by way of public issue during the year.

xxi) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year ended March 31, 2009.

For Deloitte Haskins & Sells

Chartered Accountants

Manjula Banerji

Place: New Delhi Partner

Date: May 15, 2009 Membership No. 086423



BALANCE SHEET as at March 31, 2009

(Rs million)

ParticularsSchedule

No.As at

March 31, 2009As at

March 31, 2008I SOURCES OF FUNDS

1 Shareholders' funds

a) Share capital 1 2,221.9 1,941.9

b) Reserves and surplus 2 2,241.5 2,450.5

c) Equity warrants 3 - 4,463.4 60.0 4,452.4

2 Loan funds

a) Secured loans 4 15,536.9 12,828.1

b) Unsecured loans 5 32.1 15,569.0 27.8 12,855.9

3 Deferred tax liability (Refer Note 8) 329.0 644.6

Total 20,361.4 17,952.9

II APPLICATION OF FUNDS

1 Fixed assets 6

a) Gross block 21,032.1 13,273.2

b) Less : Depreciation 6,315.2 5,201.2

c) Net block 14,716.9 8,072.0

d) Capital work in progress 7 2,093.7 16,810.6 6,338.6 14,410.6

2 Investments 8 1,187.1 757.5

3 Current assets, loans and advances 9

a) Inventories 2,110.0 2,252.1

b) Sundry debtors 602.1 386.6

c) Cash and bank balances 201.1 397.6

d) Loans and advances 1,885.1 1,554.4

4,798.3 4,590.7

Less : Current liabilities and provisions 10

a) Liabilities 2,342.1 1,699.9

b) Provisions 92.5 106.0

2,434.6 1,805.9

Net current assets 2,363.7 2,784.8

Total 20,361.4 17,952.9

Notes to the accounts 18 - -

As per our report attached For and on behalf of the Board

For Deloitte Haskins & Sells S K Tuteja Rajinder GuptaChartered Accountants Chairman Managing Director

Manjula Banerji Pawan Jain Arun Goyal Partner Company Secretary Chief Financial Officer Membership No. 086423

Place : New Delhi Place : New DelhiDate : May 15, 2009 Date : May 15, 2009






PROFIT & LOSS ACCOUNT for the year ended March 31, 2009

As per our report attached to the Balance Sheet For and on behalf of the Board




(Rs million)

ParticularsSchedule

No. For the year ended March 31, 2009

For the year ended March 31, 2008

INCOMEGross turnover 15,456.1 12,062.2 Less: Excise duty 249.3 195.5 Less: Inter divisional transfers 1,226.2 1,380.0 Turnover 13,980.6 10,486.7 Other income 11 79.4 160.0 Total 14,060.0 10,646.7 EXPENDITURE

Raw materials consumed 7,105.6 5,314.3 Manufacturing expenses, etc. 12 1,834.2 1,578.0 Personnel expenses 13 1,285.4 1,230.3 Administrative and other expenses 14 438.1 316.3 Selling expenses 15 716.7 675.2 (Increase)/decrease in work in process and finished goods 16 81.9 (7.3)Increase/(decrease) in excise duty on finished goods (7.2) (0.1)Total 11,454.7 9,106.7 Profit before financial expenses, depreciation & tax 2,605.3 1,540.0 Financial expenses 17 833.2 473.2 Depreciation 1,159.3 863.8

Profit for the year before extraordinary/exceptional

item and tax 612.8 203.0

Foreign exchange gain/(loss) (1,440.7) 278.1 (Loss)/Profit for the year after extraordinary/ exceptional item before tax

(827.9) 481.1

Less: Provision for taxation- Current tax - 52.3 - Deferred tax liability/(asset) (315.6) (23.6)- Fringe benefit tax 11.5 (304.1) 12.0 40.7 MAT credit entitlement - (12.6)Provision for income tax for earlier years 6.6 53.5 (Loss)/Profit after tax (530.4) 399.5 Balance brought forward from previous year 2,146.7 1,756.8 Adjustment on account of employees' benefit - (9.6)

[Net of deferred tax of Rs Nil (Previous year Rs 4.9 million)](Refer Note 8)

Balance carried to balance sheet 1,616.3 2,146.7 Earning per share(equity shares, nominal value Rs 10 each) (Note 10)

- Basic (2.64) 2.06 - Diluted (2.64) 2.02 Notes to the accounts 18



CASH FLOW STATEMENT for the year ended March 31, 2009

(Rs million)Particulars Current year Previous yearA CASH FLOW FROM / (USED) IN OPERATING ACTIVITIES

Net Profit before tax (827.9) 481.1 Adjustments for:Depreciation 1,159.3 863.8 Financial expenses 833.2 473.2 Interest received on fixed deposits and from customers (35.9) (38.0)Doubtful debts/ advances written off 0.1 1.4 Provision for doubtful debts/ advances 17.3 - Provision for diminution in value of investments 81.7 32.8 Provisions no longer required written back (5.8) (10.8)Profit on sale of current investments (non trade) (8.9) (59.6)Loss on sale of current investments (non trade) 31.1 2.3 Dividend from, non-trade, unquoted, current investments (3.2) (6.9)Loss on sale of fixed assets 2.4 8.3 Profit on sale of fixed assets (3.6) 2,067.7 (51.6) 1,214.9 Operating profit before working capital changes 1,239.8 1,696.0 Adjustments for:(Increase)/decrease in trade and other receivables (520.5) (494.1)(Increase)/decrease in inventories 142.1 89.9 Increase/(decrease) in trade payables and other liabilities 975.0 596.6 147.8 (256.4)Cash generated from operations 1,836.4 1,439.6 Income tax paid (22.8) (85.3)Net cash from / used in Operating activities 1,813.6 1,354.3

B CASH FLOW FROM / (USED) IN INVESTING ACTIVITIESPurchase of fixed assets (3,904.9) (4,289.4)Sale of fixed assets 7.2 544.7 Purchase of investments (2,035.1) (2,841.1)Share application money to a wholly own subsidiary (5.0) (60.0)Share application money paid to others (31.0) - Sale of investments 1,504.8 2,572.5 Subsidy received from government 5.0 8.0 Interest received 28.8 33.9 Net cash from / used in Investing activities (4,430.2) (4,031.4)

C CASH FLOW FROM/(USED) IN FINANCING ACTIVITIESProceeds from issue of equity shares on conversion of warrants 536.4 - Proceeds from issue of equity warrants - 60.0 Proceeds from long term borrowings 2,799.9 3,829.3 Repayment of long term borrowings (1,543.8) (1,171.3)Changes in working capital loans/short term borrowings 1,457.0 298.8 Dividend paid - (0.2)Interest paid (829.4) (474.1)Net cash from/used in financing activities 2,420.1 2,542.5 Net increase/(decrease) in cash and cash equivalents (196.5) (134.6)Cash and cash equivalents as at April 1, 2008 397.6 532.2 Cash and cash equivalents as at March 31, 2009 201.1 397.6 Notes to the accounts Schedule 18










SCHEDULE 3 - EQUITY WARRANTS

Nil (Previous year 2,80,00,000) equity warrants, allotted on a preferential basis, carrying an

option to the holder of such warrants to subscribe to one equity share of Rs10 each at a

premium of Rs 11.30 per share for every warrant held, within 18 months from the date of

allotment (i.e. from July 9, 2007.) (Refer Note 19)

- 60.0

- 60.0

SCHEDULE 2 - RESERVES AND SURPLUS

Capital reserve

Opening balance 81.6 73.6

Addition during the year 5.0 86.6 8.0 81.6

Share premium account


Addition during the year (Refer Note 20) 316.4 538.6 - 222.2

Surplus, being balance in profit and loss account

Opening balance 2,146.7 1,756.8

Less: Adjustment on account of employees' benefit

(Net of deferred tax of Rs Nil (Previous year Rs 4.9 million)

- 9.6

2,146.7 1,747.2

Addition/(deduction) during the year (530.4) 1,616.3 399.5 2,146.7

2,241.5 2,450.5

SCHEDULES annexed to and forming part of the accounts

(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

SCHEDULE 1 - SHARE CAPITAL

Authorised

50,00,00,000 (Previous year 50,00,00,000) Equity shares of Rs 10 each 5,000 .0 5,000.0

10,00,00,000 (Previous year 10,00,00,000) Preference shares of Rs 10 each 1,000.0 1,000.0

6,000.0 6,000.0

Issued, subscribed and paid up

22,21,94,675 (Previous year 19,41,94,675) Equity shares of Rs 10 each fully paid up. 2,221.9 1,941.9

Of the above :

3,46,29,630 Equity shares of Rs 10 each have been allotted on July 28, 1999 to the

Shareholders of the erstwhile Abhishek Spinfab Corporation Limited on

amalgamation with the Company vide Order dated May 13, 1999 of the

Hon’ble High Court for the States of Punjab and Haryana at Chandigarh,

without payment being received in cash;

9,36,97,545 Equity shares of Rs 10 each have been allotted on March 28, 2002 to

the Shareholders of the erstwhile Varinder Agro Chemicals Limited on

amalgamation with the Company vide Order dated January 3, 2002 of the


without payment being received in cash; and

2,80,00,000 Equity shares issued for cash at a premium of Rs 11.30 per share during

the year, (Refer Note 19).

2,221.9 1,941.9



SCHEDULES annexed to and forming part of the accounts (Contd.)

(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008SCHEDULE 5 - UNSECURED LOANS

Short term deposits from customers 32.1 27.8 32.1 27.8

SCHEDULE 4 - SECURED LOANSLoans from banksTerm loans 11,382.2 10,053.3 Cash credits/working capital loans 4,008.5 2,555.8

Vehicle loans 22.2 23.9 Other loans Term loans from financial institutions 124.0 195.1

15,536.9 12,828.1 Term loansTerm loans from banks and financial institutions are secured by way of equitable mortgage created or to be created on all the present and future immovable properties including all buildings, structures and all plant and machinery attached thereon of the Company and hypothecation of all the movable properties including movable machinery spares, tools and accessories, etc., present and future, subject to prior charges created and/or to be created in favour of the Company’s bankers on stocks of raw materials, semi finished and finished goods, consumable stores and other movables, as may be required for working capital requirements in the ordinary course of business. The mortgages and charges referred to above rank pari-passu or otherwise as mentioned above. (Amount due within one year Rs 2,399.1 million; Previous year Rs 1,440.5 million)Cash credits/working capital loansCash credit/working capital loans are secured by hypothecation of raw materials, semi finished and finished goods, stock-in-process, consumable stores, other movable assets and book debts, present and future, of the Company. The limits are further secured by way of second pari passu charge on the immovable properties of the Company.Vehicles loansVehicle loans are secured by hypothecation of vehicles acquired against such loans. (Amount due within one year Rs 7.2 million; Previous year Rs 7.4 million).

SCHEDULE 6 - FIXED ASSETS(Rs million)

Gross Block Depreciation Net Block

Particulars As at

March 31,2008

Additionsduring the

year

Sales/Adjust-

ment

As atMarch 31,

2009

As atMarch 31,

2008

For theyear

Sales/Adjust-

ment

UptoMarch 31,

2009

As atMarch 31,

2009

As atMarch 31,

2008Tangible Assets Land - Freehold 438.3 94.6 - 532.9 - - - - 532.9 438.3 - Leasehold 29.3 7.7 - 37.0 3.5 0.5 - 4.0 33.0 25.8 Buildings 1,971.5* 589.4 - 2,560.9 281.3 64.8 - 346.1 2,214.8 1,690.2 Plant and machinery 10,362.1# 7,037.1 45.5 17,353.7 4,694.8 1,043.9 43.1 5,695.6 11,658.1 5,667.3 Furniture and fixtures 173.8 49.6 0.2 223.2 79.6 12.1 - 91.7 131.5 94.2 Vehicles 82.9 11.7 5.4 89.2 28.4 7.7 2.0 34.1 55.1 54.5 Computers 111.9 13.0 0.2 124.7 42.7 16.0 0.2 58.5 66.2 69.2 Intangible Assets Software 103.4 7.1 - 110.5 70.9 14.3 - 85.2 25.3 32.5 Current year 13,273.2 7,810.2 51.3 21,032.1 5,201.2 1,159.3 45.3 6,315.2 14,716.9 Previous year 12,101.0 1,711.4 539.2 13,273.2 4,375.2 863.8 37.8 5,201.2 8,072.0

Notes: 1. Additions to plant and machinery on account of exchange fluctuation in long term monetory items includes Rs 228.1 million (Previous year

Rs Nil), as a part of project and preoperative expense and Rs 78.1 million (Net of exchange gain of Rs 2.5 million for the year 2007-08) capitalised pursuant of notification issued by National Advisory Committee on Accounting Standard dated 31.03.2009 (Refer Note 21).

* Building includes Rs 16.0 million being expenses incurred by the Company towards construction of canal for sourcing of water, ownership of which belongs to Government of Punjab (Department of Irrigation), amortised over a period of five years.

# Plant and machinery includes Rs 15.5 million being expenses incurred by the Company towards laying of feeder line, ownership of which belongs to Punjab State Electricity Board, amortised over a period of five years.







(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

Non Trade

32,000 (Previous year 32,000) units of face value of Rs 1,000 each, Rs 350 per unit, paid up of Kotak India Venture Fund (Private Equity fund)

11.2 9.6

1,000 (Previous year 1,000) units of face value of Rs 1,00,000 each, Rs 3,000 per unit, paid up of Kotak India Growth Fund (Private Equity fund)

3.0 3.0

50 (Previous year 50) non convertible redeemable debentures of Citi Corp Finance, Series 195 of face value of Rs 10,00,000 each

50.0 50.0

64.2 62.6

Less: Dimunition in value of investment 28.8 -

35.4 62.6

SCHEDULE 7 - CAPITAL WORK IN PROGRESS

Building under construction 469.8 639.3

Machinery under erection 1,224.6 4,494.0

Capital advances 101.7 454.2

Project and pre-operative expenses pending allocation (Refer Note 12) 297.6 751.1

2,093.7 6,338.6

SCHEDULE 8 - INVESTMENTS (UNQUOTED, AT COST UNLESS OTHERWISE STATED)

Long Term (Trade) Subsidiaries1,000 (Previous year 1,000) equity shares of CHF 100 each fully paid up, of

Abhishek Europe SA. (A subsidiary incorporated in Switzerland) 3.6 3.6

50,000 (Previous year 50,000) equity shares of Rs 10 each fully paid up of Abhishek Global Ventures Limited

0.5 0.5

50,000 (Previous year 50,000) common stocks of USD 1 each fully paid up of Abhishek Industries Inc. (A wholly owned subsidiary, incorporated in USA)

- -

4.1 4.1

Long Term Others

Trade50,00,000 (Previous year 50,00,000) 7% Non cumulative redeemable preference

shares of Rs 10 each fully paid up of Praneel Innovations Limited (Investment in a company under same management as per Section 370 (1B) of the Companies Act, 1956)

50.0 50.0

50,00,000 (Previous year 50,00,000) 7% non cumulative redeemable preference shares of Rs 10 each fully paid up of IOL Chemicals & Pharmaceuticals Limited.

50.0 50.0

1,60,000 (Previous year 1,60,000) equity shares of Rs 10 each fully paid up of Nimbua Greenfield (Punjab) Limited

1.6 1.6

50,000 (Previous year 50,000) equity shares of Rs 10 each fully paid up of Trident Agritech Limited (formerly known as Madhuraj Agrotech Limited - Investment in a company under same management as per Section 370 (1B) of the Companies Act, 1956)

0.5 0.5

1,00,00,000 (Previous year 1,00,00,000) equity shares of Rs 10 each fully paid up of Lotus Integrated Texpark Limited

100.0 100.0

202.1 202.1



SCHEDULE 8 - INVESTMENTS (Unquoted, at cost unless otherwise stated) (Contd.)Current (Non Trade) (Unquoted, at cost or fair value, whichever is lower)Equity linked mutual funds

10,00,000 (Previous year 10,00,000) units of face value of Rs 10 each of Kotak Dynamic Asset Allocation

10.0 9.3

10,81,410 (Previous year 10,81,410) units of face value of Rs 10 each fully paid up of Kotak Global Emerging Market Fund

10.8 10.8

9,75,073 (Previous year 9,75,073) units of face value of Rs 10 each fully paid up of JM Small & Mid Cap Fund-Regular Dividend Plan

16.1 16.1

6,29,752 (Previous year 6,29,752) units of face value of Rs 10 each fully paid up of Fidelity Intl. Opportunities Fund -Growth

7.0 7.0

4,88,998 (Previous year 4,88,998) units of face value of Rs 10 each fully paid up of JM Contra Fund Dividend plan

5.0 5.0

5,83,470 (Previous year 5,83,470) units of face value of Rs 10 each fully paid up of Principal Large Cap Fund

13.0 13.0

6,18,283 (Previous year 3,18,831) units of face value of Rs 10 each fully paid up of IDFC Premier Equity Fund -Growth** (2,99,452 units acquired during the year)

13.0 7.0

2,44,499 (Previous year 2,44,499) units of face value of Rs 10 each fully paid up of ICICI Prudential Indo Asia Equity Fund - Retail Growth

2.5 2.5

7,50,000 (Previous year 7,50,000) units of Rs 10 each fully paid up of SBI Infrastructure Fund - Growth

7.5 7.5

12,50,000 (Previous year 12,50,000) units of Rs 10 each fully paid up of SBI Infrastructure Fund - Dividend

12.5 12.5

37,217 (Previous year 37,217) units of face value of Rs 10 each fully paid up of DSP India Tiger Fund - Growth

2.0 2.0

20,00,000 (Previous year 20,00,000) units of Rs 10 each fully paid up of Sundaram BNP Paribas-Energy Opportunities Fund - Dividend

20.0 20.0

9,77,995 (Previous year 9,77,995) units of face value of Rs 10 each of Reliance Natural Resources Fund Dividend Payout

10.0 10.0

1,94,035 (Previous year 1,40,865) units of face value of Rs 10 each of Reliance Growth Fund - Dividend Plan ** (53,170 units acquired during the year)

13.0 10.0

1,50,127 (Previous year 1,50,127) units of face value of Rs 10 each of Reliance Banking Fund

10.0 10.0

Repurchase price Rs 75.9 million (Previous year Rs 127.3 million) 152.4 142.7 Less: Diminution in value of investments 76.5 20.7

75.9 122.0 Debt based mutual funds

Nil (Previous year 1,09,771) units of face value of Rs 10 each of Reliance Liquid, Plus - Institutional Option - Growth*

- 120.0

Nil (Previous year 29,79,663) units of face value of Rs 10 each of Grindlays Super Saver Income - ST Plan C Fortnightly Dividend*

- 30.0

Nil (Previous year 1,16,527) units of face value of Rs 10 each fully paid up of ICICI Prudential Liquid Plan Institutional Plus - Growth Option*

- 2.3

Nil (Previous year 2,53,896) units of face value of Rs 10 each fully paid up of IDFC Floating Rate Fund- Long Term Institutional Plan B*

- 3.2

Nil (Previous year 70,25,716) units of face value of Rs 10 each fully paid up of Magnum Insta Cash Liquid Floater-Growth*

- 98.2

3,46,35,779 (Previous year Nil) units of face value of Rs 10 each fully paid up of Magnum Insta Cash - Cash Option - Growth**

680.1 -

3,39,554 (Previous year Nil ) units of face value of Rs 10 each fully paid up of Principal Income Fund - Dividend**

4.1 -

72,55,157 (Previous year Nil ) units of face value of Rs 10 each fully paid up of Principal Floating Rate SMP - Growth**

100.0 -

Repurchase price Rs 784.5 million (Previous year Rs 253.8 million) 784.2 253.7


(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008







(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

SCHEDULE 8 - INVESTMENTS (Unquoted, at cost unless otherwise stated) (Contd.)Investment under portfolio management services #Kotak Securities Limited

30,09,103 (Previous year Nil) units in Kotak Floater Long Term (G)** 41.3 - Nil (Previous year 2,38,649) units in K Liquid- Institutional Dividend Plan* - 2.4

Repurchase price Rs 41.8 million (Previous year Rs 2.4 million) 41.3 2.4 Equity Shares- Quoted (Non-Trade)

Nil (Previous year 39,152) equity shares of face value of Re. 1 each fully paid up of Zee Entertainment Enterprises Limited*

- 9.4

Nil (Previous year 2,032) equity shares of face value of Rs 2 each fully paid up of Larsen & Toubro Limited*

- 6.2

30,455 (Previous year 18,449) equity shares of face value of Rs 10 each fully paid up of ICICI Bank Limited** (18,449 equity shares sold and 30,455 equity shares acquired during the year)

8.3 17.6

Nil (Previous year 37,697) equity shares of face value of Rs 10 each fully paid up of GTL Limited*

- 7.0

Nil (Previous year 12,133) equity shares of face value Rs 10 each fully paid up of Bharat Petroleum Corporation Limited*

- 4.9

Nil (Previous year 19,697) equity shares of face value of Rs 10 each fully paid up of Hindustan Petroleum Corporation Limited*

- 5.8

Nil (Previous year 75,988) equity shares of face value of Rs 10 each fully paid up of Mysore Cements Limited*

- 3.5

1,82,246 (Previous year 94,530) equity shares of face value Re 1 each fully paid up of Sun Pharma Advanced Research Company Limited** (87,716 equity shares acquired during the year)

11.9 7.2

Nil (Previous year 25,964) equity shares of face value of Rs 10 each fully paid up of ING Vysya Bank Limited*

- 8.0

Nil (Previous year 26,997) equity shares of face value of Rs 10 each fully paid up of Shree Precoated Steels Limited*

- 10.2

Nil (Previous year 17,949) equity shares of face value of Rs 10 each fully paid up of Tata Tea Limited*

- 14.4

Nil (Previous year 34,248) equity shares of face value of Rs 10 each fully paid up of Tata Communications Limited*

- 16.1

1,10,390 (Previous year 62,844) equity shares of face value of Rs 10 each fully paid up of IRB Infrastructure Developers Limited** (47,546 equity shares acquired during the year)

15.8 12.4

35,353 (Previous year Nil) equity shares of face value of Rs 10 each fully paid up of Cairn India Limited**

5.6 -

4,03,487 (Previous year Nil) equity shares of face value of Rs 10 each fully paid up of Gujarat State Petronet Limited**

11.7 -

Market value Rs 50.5 million (Previous year Rs 115.7 million) 53.3 122.7 Less: Provision for diminution in value 9.2 12.1

44.1 110.6 Total 1,187.1 757.5 * Sold during the year** Acquired during the year.# Investments have been made under the Discretionay Portfolio Management Agreement

entered into between the Company and Kotak Securities Limited (Portfolio Managers) and are being held in the name of the Porfolio Manager as envisaged in the aforesaid Agreement.

Repurchase price of current unquoted investments 902.2 383.5 Aggregate book value of unquoted investments 1,143.0 646.9 Aggregate book value of current quoted investments 44.1 110.6 Market value of current quoted investments 50.5 115.7




(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

SCHEDULE 9 - CURRENT ASSETS, LOANS AND ADVANCES

A Current assets

Inventories

Stock in trade *

- Raw materials 1,025.8 1,353.4

- Finished goods 507.3 510.5

- Work in process 357.2 304.2

Stores and Spares ** 219.7 84.0

2,110.0 2,252.1

* At cost or net realizable value, whichever is lower

** At cost or under

Sundry debtors (Unsecured)

Debts outstanding for a period exceeding six months

- Considered good 120.6 81.4

- Considered doubtful 2.1 2.0

122.7 83.4

Less: Provision for doubtful debts 2.1 120.6 2.0 81.4

Others debts considered good 481.5 305.2

602.1 386.6

Cash and bank balances

Cash in hand 20.3 15.7

Balances with scheduled banks in :

- Current accounts 43.8 30.0

- Deposits accounts (including Rs 55.2 million held as margin with banks; Previous year Rs 101.0 million)

137.0 351.9

201.1 397.6

B Loans and advances (Unsecured, considered good, unless otherwise stated)

Advances recoverable in cash or in kind or for value to be received (Note 15)


- Considered doubtful 16.7 -

948.7 770.2

Less: Provision for doubtful debts 16.7 932.0 - 770.2

With customs, excise and port trust authorities 560.1 540.7

Security deposits 177.4 64.1

MAT credit entitlement 76.5 76.5

Share application money to

- a wholly owned subsidiary 65.0 60.0

- others 31.0 -

Advances to a wholly owned subsidiary (Maximum balance outstanding during the year Rs 48.8 million, Previous year Rs 42.9 million)

43.1 42.9

1,885.1 1,554.4

4,798.3 4,590.7







(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

SCHEDULE 10 - CURRENT LIABILITIES AND PROVISIONS

A Current liabilities

Acceptances 500.7 488.4

Sundry creditors (Refer Note 9) 1,739.7 1,137.8

Deposits and advances 48.7 22.0

Interest accrued but not due on loans 3.1 3.8

Unclaimed dividend* 4.4 4.4

Other liabilities 45.5 43.5

2,342.1 1,699.9

* Will be credited to Investor Education and Protection Fund on the expiry of 7 years from the due date.

B Provisions

Taxation :

- Current tax ( net of advance tax of Rs 431.7 million) 45.2 49.9

- Fringe benefit tax( net of advance tax of Rs 29.8 million) 1.5 1.5

Earned leaves * (Refer Note 7) 43.8 40.0

Gratuity payable (Refer Note 7) 2.0 14.6

92.5 106.0

2,434.6 1,805.9 * Includes provision for short term compensated absences Rs 12.0 million (Previous year Rs 10.7 million).

(Rs million)

ParticularsFor the year ended

March 31, 2009For the year ended

March 31, 2008SCHEDULE 11 - OTHER INCOME

Insurance claims 5.9 23.0 Profit on sale of fixed assets 3.6 51.6 Loss on sale of fixed assets (2.4) 1.2 (8.3) 43.3 Profit on sale of current investments (non-trade) - 59.6 Less: Provision for dimunition in value of investments - (32.8)Less: Loss on sale of current investments (non-trade) - - (2.3) 24.5 Dividend from non-trade, unquoted current investments 3.2 6.9

Interest received on fixed deposits and from customers (Tax deducted at source Rs 4.2 million ; Previous year Rs 5.7 million)

35.9 38.0

Miscellaneous receipts 27.4 13.5 Provisions no longer required written back 5.8 10.8

79.4 160.0 SCHEDULE 12 - MANUFACTURING EXPENSES

Purchase for resale 4.5 6.3 Stores and spares consumed 329.6 265.7 Power and fuel 1,032.5 953.3 Repair to plant and machinery 27.3 21.7 Packing material and charges 431.3 329.2 Job charges 9.0 1.8

1,834.2 1,578.0 SCHEDULE 13 - PERSONNEL EXPENSES

Salaries, wages, bonus and allowances 1,178.7 1,120.1 Contribution to provident and other funds 89.0 77.0 Workmen and staff welfare 17.7 33.2

1,285.4 1,230.3



(Rs million)



March 31, 2008SCHEDULE 14 - ADMINISTRATIVE AND OTHER EXPENSES

Rent 12.5 17.2 Rates and taxes 8.4 15.6 Insurance 40.0 41.9 Directors' sitting fees 0.9 1.0 Travelling and conveyance 41.6 45.2 Postage and telephone 20.0 17.4 Legal and professional 72.3 93.9 Buildings repairs 1.2 2.6 General repairs 13.6 19.8 Doubtful debts and advances written off 0.1 1.4 Provision for doubtful debts/advances 17.3 - Software maintenance expenses 16.4 17.5 Electricity and water charges 2.3 7.4 Provision for dimunition in value of investments 81.7 - Loss on sale of current investments (non-trade) 31.1 - Less : Profit on sale of current investments (non-trade) (8.9) 103.9 - -

Miscellaneous (Includes exchange loss of Rs 57.9 million; Previous year Rs 6.4 million)

87.6 35.4

438.1 316.3

SCHEDULES annexed to and forming part of the accounts

(Rs million)



March 31, 2008SCHEDULE 15 - SELLING EXPENSES

Commission 157.6 130.8 Freight, clearing and octroi charges 450.8 419.4 Rebates and discount 13.5 38.3 Advertisement 5.0 11.4 Business promotion 30.3 33.4 Others 59.5 41.9

716.7 675.2 SCHEDULE 16 - (INCREASE)/DECREASE IN WORK IN PROCESS AND FINISHED GOODS

Opening StockWork-in-process 304.2 369.6 Finished goods 510.5 814.7 437.8 807.4 Add: Stock on commissioning of new paper plant on 01.12.2008Work-in-process 60.6 - Finished goods 39.1 99.7 - - Less : Closing Stock #Work-in-process 339.3 304.2 Finished goods 493.2 832.5 510.5 814.7 (Increase) / decrease 81.9 (7.3)# Excludes production of work in process of Rs 17.9 million (Previous year Rs. Nil) and finished goods of Rs 14.1 million (Previous year Rs. Nil) under trial run for which expense are included in project and pre-operative expense.

SCHEDULE 17 - FINANCIAL EXPENSESInterest - On loans for fixed period 479.8 272.2 - Others 305.4 175.7 Bank and other charges 48.0 25.3

833.2 473.2







SCHEDULE 18 - NOTES TO THE ACCOUNTS

1. Significant Accounting Policies

A. Accounting convention The accounts are prepared on accrual basis under the Historical Cost Convention in accordance with the Accounting Standards referred

to in sub section (3C) of Section 211 of the Companies Act, 1956 and other relevant presentational requirements of the Companies

Act, 1956.

B. Revenue recognition The revenue in respect of sales is recognized as and when the risk and reward in the goods is transferred to the buyer.

The revenue in respect of DEPB benefit is recognized on post export basis at the rate at which the entitlement accrues and is

included in the turnover.

Insurance claims are recognized when there exists no significant uncertainty with regard to the amounts to be realized and the

ultimate collection thereof.

C. Borrowing costs Borrowing costs that are attributable to acquisition or construction of a qualifying asset are capitalized as part of cost of such assets

Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are

recognized as expenses in the period in which they are incurred.

D. Government grants / subsidy Government grant / subsidy related to revenue is deducted from the related expenses.

E. Accounting for taxes on income Provision for taxation for the year is ascertained on the basis of assessable profits computed in accordance with the provisions of the

Income-tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income

and accounting income that originates in one period and are capable of reversal in one or more subsequent periods. In respect of carry

forward of losses and unabsorbed depreciation, deferred tax assets are recognized based on virtual certainty that sufficient future taxable

income will be available against which such deferred tax asset can be realized.

F. Employee benefits The Company has various schemes of retirement benefits such as provident fund, gratuity and leave encashment, which is dealt with as

under:

a) Contributions to provident fund are made in accordance with the provisions of Employee’s Provident Fund and Miscellaneous Provisions

Act, 1952 and are charged to revenue every year.

b) The gratuity liability in respect of employees of the Company is covered through a policy taken by a trust from Life Insurance Corporation

of India. The contributions towards the premium of the policy paid to the trust are charged to revenue every year. (Refer Note 7 also).

c) Provision for leave encashment (including long term compensated absences) is made based on actuarial valuation.

Liability attributing to the long-term period of service, comprising mainly of bonus etc., is recognized on a straight-line basis to the

period of service to which it relates.

Liability on account of short term employee benefits, comprising mainly compensated absences and performance incentives, is

recognized on an undiscounted accrual basis during the period when the employee renders services/ vesting period of the benefit.

G. Fixed assets Fixed assets are stated at cost (net of CENVAT) less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and

other incidental expenses and interest on loan taken for the acquisition of qualifying assets up to the date of commissioning of assets.

In line with Notification No. G.S.R. 225(E) dated March 31, 2009 issued by The Ministry of Corporate Affairs, Government of India, the

exchange differences arising after April 1, 2007 on reporting of long term foreign currency monetary items at rates different from those at

which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of

a depreciable capital asset, have been added to or deducted from the cost of the asset and shall be depreciated over the balance useful life

of the asset. (Refer Note 21)

H. Depreciation/amortization i. Depreciation on fixed assets [other than those referred to in (ii) to (v) below] is provided on straight line method in accordance with

Schedule XIV to the Companies Act, 1956, except in case of one of the Co-generation and Recovery Plants, in respect of which higher



SCHEDULE annexed to and forming part of the accounts (Contd.)

SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)

depreciation is provided on the basis of technological evaluation of a Chartered Engineer and Management’s estimate of useful life of

these plants.

ii. Assets costing Rs 5,000 or less are fully depreciated in the year of purchase.

iii. The depreciable amount of intangible asset is systematically allocated over its useful life. The software acquired for internal use is amortized over a period of five years.

iv. The leasehold land is amortized over the lease period.

v. Capital expenditure in respect of assets not owned by the Company are amortized over the period of five years.

I. Investments Long-term investments are carried at cost less provision, if any, for diminution in value which is other than temporary. Current investments

are carried at lower of cost and fair value.

J. Inventories Raw materials, finished goods and work in process are valued at cost or net realizable value, whichever is lower. Stores and spares are valued

at cost or under. The cost formulas adopted in respect of inventories are as under:

Stores and spares: weighted average cost.

Raw materials: weighted average cost.

Finished goods: cost of raw materials plus conversion cost, packing cost and excise duty.

Work in process: cost of raw materials plus conversion cost depending upon the stage of completion.

K. Foreign currency transactions (i) Foreign currency transactions are recorded at the exchange rate prevailing as at the date of transactions except export sales which are

recorded at a rate notified by the customs for invoice purposes. Such rate is notified in the last week of the month and is adopted for recording export sales of the next month. The exchange fluctuation arising on billing through banker is accounted for as difference in exchange rates. The amount of such differences in exchange rate is included under turnover.

(ii) Monetary items denominated in a foreign currency are reported at the closing rate as at the date of balance sheet. Non-monetary items, which are carried at fair value denominated in a foreign currency, are reported at the exchange rate that existed when such values were determined, otherwise on historical exchange rate that existed on the date of transaction.

(iii) The exchange difference arising on the settlement of monetary items or on reporting these items at rate different from the rates at which these were initially recorded/reported in previous financial statements are recognized as income/expense in the period in which they arise except that such exchange differences which relate to fixed assets acquired up to March 31, 2004 and after April 1, 2007 are capitalized in the carrying amount of these assets and those exchange difference which relate to fixed assets acquired from outside India during April 1, 2004 to March 31, 2007 have been capitalized till March 31, 2007. Further, where foreign currency liabilities have been incurred in connection with fixed assets where the exchange difference during the construction period are adjusted in the cost of the concerned assets.

(iv) In case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortized as income or expense over the life of the contract. Further exchange difference on such contracts i.e. difference between the exchange rate at the reporting/settlement date and the exchange rate on the date of inception of contract/the last reporting date, is recognized as income/expense for the period except that such exchange difference which relate to fixed assets acquired up to March 31, 2004 and after April 1, 2007 are capitalized in the carrying amount of these assets and those exchange differences which relate to fixed assets acquired from outside India during April 1, 2004 to March 31, 2007 have been capitalized till March 31, 2007. Further where such contracts have been entered in connection with fixed assets, the exchange differences arising during construction period are adjusted in the cost of concerned assets.

(v) The exchange differences arising on reporting of long term foreign currency monetary item related to other than acquisition of a depreciable asset are accumulated in the “Foreign Currency Monetary Item Translation Difference Account” and amortized over the life of the monetary item but not beyond March 31, 2011.

L. Impairment of assets At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication

exists, an impairment loss, i.e., the amount by which the carrying amount of asset exceeds its recoverable amount is provided in the books of account.

M. Employee share-based payments Intrinsic Value Method is used to account for share based payments to employees.








2 Contingent liabilities not provided for:

(Rs million)

ParticularsAs at

March 31, 2009

As at

March 31, 2008

Claims* (excluding claims by employees where amounts are not ascertainable) not acknowledged as debt:

- Sales tax 0.3 0.3

- Service tax 0.7 -

- Excise duty 3.7 5.0

- Income tax 16.3 5.3

- Others 7.7 2.4

* All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings when ultimately concluded will not, in the opinion of the management, have a material effect on the results of operations or financial position of the Company.

- Bills discounted 801.2 630.8

- Estimated amount of contracts remaining to be executed on capital account (Net of advances) 458.5 1,286.7

- Guarantees given to bank on behalf of others - 300.0

- Amount payable under agreement 26.2 92.9

4. Auditors’ remuneration:

(Rs million)

ParticularsCurrent year(12 months)

Previous year(12 months)

As auditors (audit fee) 2.9 2.3

In other capacities

- Others 1.7 1.7

Reimbursement of expenses 0.2 0.1

3. There are no disputed dues of customs duty, wealth tax, service tax and cess matters which have not been deposited by the Company. The details of disputed sales tax, income-tax and excise duty dues as at March 31, 2009 are as follows:

(Rs million)

Statute Nature of dues Forum where pending Amount involved

Amount paid under protest

Year to which the amount

relatesSales Tax Act Sales Tax Deputy Commissioner Excise and Taxation 0.2 0.1 2003-04

Central Excise Law Excise Duty Customs, Excise and Service Tax Appellate Tribunal 3.7 - 2002-03

Service Tax Act Service Tax Customs, Excise and Service Tax Appellate Tribunal 0.7 - 2004-05 and

2005-06

Income Tax Act. Penalty Commissioner of Income Tax (Appeals) 0.2 0.1 1995-96

Income Tax Act. Income Tax Income Tax Appellate Tribunal 8.9 4.7 2002-03 and

2003-04

Income Tax Act. Income Tax Commissioner of Income Tax (Appeals) 121.0 91.0 2004-05

The following matters have been decided in favour of the Company, although the Department has preferred appeals at higher levels:

Statute Nature of dues

Amount(Rs million)

Period to which amount relates

Forum where Department has preferred appeals

Central Excise Law Excise Duty 48.4 2004-05, 2005-06 and 2006-07 Customs, Excise and Service Tax Appellate Tribunal

Service Tax Act Service Tax 1.3 2004-05 and 2005-06 Customs, Excise and Service Tax Appellate Tribunal

Income Tax Act Interest 1.7 1989-90 and 1990-91 High Court





5. Managerial remuneration paid/payable to Managing Director and Whole Time Director

(Rs million)


Previous year

(12 months)

Salary 9.9 9.6

Contribution to provident and other funds 1.7 1.6

Allowances 13.2 12.7

Insurance premium 0.1 0.1

Commission - 4.6

Total 24.9 28.6

6. Statement showing computation of net profit in accordance with section 349 read with Section 198 of the Companies Act, 1956

ParticularsCurrent year

(12 months)*

Previous year

(12 months)

Profit before tax - 481.0

Add : Managerial remuneration 28.6

Directors Fee - 1.0

Less : Profit on sale of Fixed Assets ( section 349(3)(c) of the Companies Act,1956 - 50.4

Profit under Section 349 of the Companies Act, 1956 - 460.2

Commission @ 1% of net profit as per Sec 349 - 4.6

Maximum permissible limit @ 5% - 23.0

* In view of inadequacy of profits, current year computation of profit has not been given.

The remuneration of Mr. Rajinder Gupta, Managing Director had been approved by the Shareholders in its EGM held on March 18, 2006.

An amount of Rs 24.0 million has been provided in the books of account in respect of the salary to the Managing Director, out of which

Rs 4.8 million has been paid and Rs 19.2 million has been withheld due to inadequacy of profits as computed under Section 349 of the

Companies Act, 1956, for which Management is confident of obtaining Central Government approval.

Provisions for incremental gratuity liability and leave encashment have not been considered, since the provision is based on actuarial basis

for the Company as a whole.

7. Employee benefits

(a) Defined contribution plans

The Company makes contribution towards employees’ provident fund and employees’ state insurance plan scheme. Under the schemes,

the Company is required to contribute a specified percentage of payroll cost, as specified in the rules of the schemes, to these defined

contribution schemes. The Company recognized Rs 98.2 million (Previous year Rs 77.0 million) during the year as expense towards

contribution to these plans. Out of Rs 98.2 million, Rs 9.2 million is included under Fixed assets/ Capital work in progress.

(b) Defined benefit plans

Gratuity scheme

The Company has entered into an agreement with Smt. Maya Devi Trust for the discharge of the gratuity liability to the employees of

the Company, who have acquired membership of the said Trust. The said Trust has taken a policy under Group Gratuity Scheme of the

Life Insurance Corporation and the Company is contributing to the Trust towards the payment of premium for such policy. The accrued

liability of the Company in respect of Gratuity payable to employees is covered in the manner aforesaid

(Rs million)



Company’s contribution to provident fund 71.1 55.7Company’s contribution to employees’ state insurance scheme 20.2 16.0Administrative charges on above 6.9 5.3








Earned LeavesLong term leaves includes earned leaves and sick leaves. These have been provided on accrual basis, based on year end actuarial

valuation.(Rs million)

As at

March 31, 2009

As at

March 31, 2008

Gratuity Scheme Earned leave

and sick leave

Gratuity

Scheme

Earned leave

and sick leaveA Expenses recognized in the statement of Profit and

Loss Account for the year ended March 31, 2009

Current service cost 19.4 7.6 17.8 7.2

Interest cost 4.7 2.5 2.4 1.3

Expected return on plan assets (4.9) - (3.4) -

Actuarial (gains)/ losses (2.9) (4.0) 18.5 5.1

Total expenses 16.3 6.1 35.3 13.6B Net liabilities recognized in the balance sheet as at

March 31, 2009Present value of defined benefit obligation as at March

31, 2009

78.0 31.8 62.3 29.3

Fair value of plan assets with LIC* (65.1) - (47.7) -

Funds with Employee Trust * (10.9) - - -

Net liability as at March 31, 2009 (unfunded) 2.0 31.8 14.6 29.3C Change in the obligation during the year ended

March 31, 2009Present value of defined benefit obligation at the

beginning of the year

62.3 29.3 31.7 18.7



Actuarial (gains)/losses (2.9) (4.0) 18.5 5.1

Benefits payments (5.5) (3.6) (8.1) (3.0)

Present value of defined benefit obligation at the end of the year

78.0 31.8 62.3 29.3

D Change in assets during the year ended March 31, 2009

Plan Assets at the beginning of the year 47.7 - 27.6 -

Expected return on plan assets 4.9 - 3.4 -

Contribution by the Company 18.0 - 24.8 -

Actual benefits paid (5.5) - (8.1) -

Plan Assets at the end of the year 65.1 - 47.7 -

E Main actuarial assumptions

Discount rate 7.5% 7.5% 7.5% 7.5%

Rate of increase in compensation levels 7% 7% 7% 7%

Rate of return on plan assets 9.25% - 9.25% -

Mortality rate LIC(1994-96) Ultimate

LIC(1994-96) Ultimate



* The plan assets are maintained with Life Insurance Corporation of India/ Trust. The details of the investment maintained by Life Insurance Corporation of India/ Trust are not available with the Company and have not been disclosed.





8. Deferred Taxation(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008Deferred tax liability (DTL) on account of accelerated depreciation 1,093.9 715.5Less : Deferred tax asset (DTA) arising on - expenses deductible on payment. (279.7) (70.9) - unabsorbed depreciation (to the extent DTL) (485.2) -Net deferred tax liability 329.0 644.6#

10. The Earnings Per Share (EPS) disclosed in the Profit and Loss Account have been calculated as under:(Rs million)



Profit/Loss attributable to equity shareholders (Rs million) (A) (530.4) 399.5Weighted average number of equity shares (Nos) (B) 20,09,45,360 19,41,94,675Potential dilutive equity shares on Employee Stock Options outstanding (Nos) (C) - 14,17,927Potential dilutive equity shares on Share Warrants (Nos) (D) - 17,50,000Weighted average number of equity shares in computing diluted earning per share (E) = (B+C+D)

20,09,45,360 19,73,62,602

Basic Earnings per share (Rs per share) (face value of Rs 10 each) (A)/(B) (2.64) 2.06Diluted Earnings per share (Rs per share) (face value of Rs 10 each) (A)/(E) (2.64) 2.02

11. Borrowing cost capitalized (including capital work in progress) during the year amounts to Rs 436.7 million (Previous year Rs 342.4 million).

The Company follows Accounting Standard (AS-22) “Accounting for taxes on Income”, and in consideration of prudence and also considering the favorable trend in the textile and paper business of the Company and potential orders for exports, the management is confident that even after losses in the current year, the Company would be in a position to make adequate taxable profits in the foreseeable future. Accordingly based on future projections, the management is of the view that sufficient future taxable income would be available to set off unabsorbed depreciation and accordingly deferred tax assets of Rs 485.2 million would be realized.

# Net of deferred tax asset of Rs 4.9 million on adjustment on account of employee benefit, pursuant to adoption of Accounting Standard (AS) 15 “Employee Benefits”.

9. Sundry Creditors includes Rs 5.6 million (Previous year Rs 0.1 million) being principal amount due to suppliers covered under “The Micro,Small and Medium Enterprises Development Act, 2006” (MSMED Act) to the extent such parties have been identified from the available information.

12. Project and pre operative expenses pending allocation includes:(Rs million)

Particulars As at

March 31, 2009As at

March 31, 2008

Opening Balance 751.1 239.1Add: Expenses incurred during the year: - Project & pre-operatives expenses

Loss on foreign exchange fluctuation 285.1 - Interest expenses 167.3 342.4 Salary, wages and bonus etc. 74.4 99.8 Legal and professional 61.4 86.2 Electricity and water charges 7.4 11.2 Travelling and conveyance 6.6 4.5 Others 7.1 18.7 Bank charges 4.9 10.6 Stores and spares consumed 2.0 -

616.2 573.4 - Expenses incurred during Trial Run period

Raw material consumed 737.0 - Steam consumed 377.8 - Interest expenses 269.4 - Electricity and water charges 246.6 -






Salary, wages and bonus etc. 154.8 - Store & spares consumed 63.6 - Rebates & discount 43.8 - Freight, clearing and octroi charges 29.7 - Other selling expenses 21.7 - Commission 17.2 - Legal and professional 5.0 - Repair and maintenance 3.0 - Travelling and conveyance 1.8 - Others 16.0 -(Increase) /decrease in work in progress and finished goods (131.7) -Increase /(decrease) in Excise duty 4.5 -

1,860.2 - Less: Income earned during trial run period

Sales 1,377.8 - Other incomes 0.3 -

1,378.1 482.1 - - Grand Total 1,849.4 812.5Less: Allocated to fixed assets and capital work in progress 1,551.8 61.4Closing Balance 297.6 751.1



12. Project and pre operative expenses pending allocation includes: (Contd.)(Rs million)

Particulars As at

March 31, 2009As at

March 31, 2008

13. The following current investments in the units of mutual funds were purchased and sold during the year:1,31,88,800 units of Rs 10 each fully paid up of Magnum Insta Cash Liquid Floater – Growth 24,33,202 units of Rs 10 each fully paid up of Magnum Insta Cash Liquid Floater – Dividend

1,06,76,224 units of Rs 10 each fully paid up of IDFC Floating Fund LT Institutional Plan B Growth 62,91,174 units of Rs 10 each fully paid up of Reliance Medium Term Fund Retail Plan Growth

8,870 units of Rs 10 each fully paid up of Grindlays Super Saver Income Fund- ST Plan C Fortnightly Dividend 82,84,798 units of Rs 10 each fully paid up of Grindlays Super Saver Income Fund- ST Plan C Growth

2,124 units of Rs 10 each fully paid up of Reliance Liquid Plus Fund - Retail Option – Growth 2,16,500 units of Rs 10 each fully paid up of HDFC FMP 90 Days Retail Plan Dividend Payout

2,85,43,014 units of Rs 10 each fully paid up of Magnum Insta Cash Fund – Cash Option 5,50,920 units of Rs 10 each fully paid up of Principal Floating Rate SMP Daily Div Reinvest

30,569 units of Rs 10 each fully paid up of Reliance Liquid Plus – Inst Growth 69,58,167 units of Rs 10 each fully paid up of Reliance Liquid Plus Cash

14. The related party disclosures as per Accounting Standard-18 are as under: i) Enterprises where control exists a) Enterprise that controls the Company - Madhuraj Foundation (directly or indirectly holds majority voting power) b) Enterprises that are controlled by the Company, i.e. subsidiary companies - Abhishek Industries Inc. - Abhishek Europe SA - Abhishek Global Ventures Limited ii) Other related parties where transactions have taken place during the year: a) Enterprises under the common control as the Company - Trident Agritech Limited (Formerly known as Madhuraj Agrotech Limited) - Madhuraj Foundation Limited - Praneel Innovations Limited - Rainbow Retail Limited (Formerly known as Abhishek Retail Limited) b) Enterprise on which Company exercises significant influence - Lotus Integrated Texpark Limited c) Key management personnel - Mr. Rajinder Gupta - Mr. Raman Kumar d) Relative of key management personnel - Mr. Abhishek Gupta



Disclosure of transactions between the Company and related parties during the year and outstanding balances as on March 31, 2009.(Rs million)

Particulars

Enterprise that controls the

Company

Subsidiaries Enterprises that are under common

control as the Company

Significant Influence

Key management personnel

Relative of key management

personnel

Current year

Previous year

Current year

Previous year

Current year

Previous year

Current year

Previous year

Current year

Previous year

Current year

Previous year

Purchase of Goods/Services - Praneel Innovations Limited 22.8 28.8 - Abhishek Global Ventures Limited 3.4 26.2 - Madhuraj Foundation Limited 0.3 - - Madhuraj Foundation 0.1 - - Lotus Integrated Texpark Limited 2.3 - Sale of Goods/Services - Rainbow Retail Limited 1.2 - Rent received - Praneel Innovations Limited - 0.6 - Mr. Rajinder Gupta 0.6 0.6 - Lotus Integrated Texpark Limited 0.2 0.2 Rent paid 0.5 7.2 Security Deposit made - Madhuraj Foundation 62.5 3.6 Security Deposit received - Praneel Innovations Limited 0.2 - Remuneration paid/payable - Mr. Rajinder Gupta 24.0 28.6 (Also refer Note 5) - Mr. Raman Kumar 0.9 - - Mr. Abhishek Gupta 0.7 -Sales of Assets: - Madhuraj Foundation. - 70.0 - Abhishek Global Ventures Limited - 261.8 - Lotus Integrated Texpark Limited - 210.0 Investments made: - Abhishek Global Ventures Limited - 0.5 - Lotus Integrated Texpark Limited - 100.0 Expenses incurred on behalf of: - Rainbow Retail Limited 16.2 - - Abhishek Global Ventures Limited 0.1 - - Praneel Innovations Limited 0.3 - Loans and advances given: - Madhuraj Foundation 2.7 3.6 - Abhishek Global Ventures Limited 2.5 32.2 - Trident Agritech Limited 34.4 98.4 - Praneel Innovations Limited 13.9 6.9 Guarantees given on behalf of - Asian Trading Corporation Limited - 300.0 Balances as at March 31, 2009: Share application money paid - Abhishek Global Ventures Limited 65.0 60.0 - Lotus Integrated Texpark Limited 1.0 - - Rainbow Retail Limited 30.0 - Guarantee outstanding - Asian Trading Corporation Limited - 300.0 Amounts receivable - Trident Agritech Limited 145.7 111.3 - Lotus Integrated Texpark Limited - 5.0 - Abhishek Global Ventures Limited 42.7 42.9 - Madhuraj Foundation 0.5 2.7 - Praneel Innovations Limited 10.0 - - Rainbow Retail Limited (net of provision of Rs 10.0 million)

7.4 -

Amounts payable - Praneel Innovations Limited - 3.7 - Lotus Integrated Texpark Limited 0.8 - - Mr. Rajinder Gupta 25.4 6.1 - Mr. Raman Kumar 0.1 - - Mr. Abhishek Gupta 0.1 -









15. Loans and advances includes amounts given to Companies under the same management referred to in Section 370 (1B) of The Companies

Act, 1956 of Rs 145.7 million (Previous year Rs 111.3 million), Rs 10.0 million (Previous year Rs Nil) and Rs Nil (Previous year Rs Nil),

recoverable from Trident Agritech Limited (formerly known as Madhuraj Agrotech Limited), Praneel Innovations Limited and Madhuraj

Foundation Limited respectively {maximum amount outstanding during the year Rs 145.7 million (Previous year Rs 112.4 million), Rs 16.2

million (Previous year Rs 2.0 million) and Rs 0.2 million (Previous year Rs Nil) respectively}.

16. Segment information:

I Segment Accounting Policies

a. The business segments comprise of the following:

• Yarn : Yarn manufacturing

• Towel : Towel, Dyed Yarn manufacturing

• Paper and Chemical : Paper and Sulphuric Acid

b. Business segments have been identified based on the nature and class of products and services, their customers and assessment

of differential risks and returns and financial reporting system within the Company

c. The geographical segments considered for disclosure are based on markets, broadly as under:

• Sale in the USA

• Sale in rest of the world

d. Segment accounting policies: In addition to the significant accounting policies, applicable to the business as set out in Note 1 of

schedule 18 “Notes to the Accounts”; the accounting policies in relation to segment accounting are as under:

i. Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of cash, debtors, inventories and

fixed assets including capital work in progress, net of allowances and provisions, which are reported as direct offset in the

balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities.

ii. Segment rev enue and expenses:

Joint revenue and expenses of segments are allocated amongst them on reasonable basis. All other segment revenue and

expenses are directly attributable to the segments.

iii. Inter segment sales: Inter segment sales are accounted for at cost and are eliminated in consolidation.





II Details of primary business segments:

(Rs million)

Particulars Yarn Towel Paper &Chemical Unallocable Eliminations Consolidated

Total

CurrentYear

Pervious Year

CurrentYear

Pervious Year

CurrentYear

Pervious Year

CurrentYear

Pervious Year

CurrentYear

Pervious Year

CurrentYear

Pervious Year

1 Segment Revenue - External sales 3,397.0 2,948.3 7,560.5 5,814.1 3,023.1 1,724.3 13,980.6 10,486.7 - Inter-segment sales 1,211.3 1,363.0 1.3 8.0 13.7 9.1 (1,226.3) (1,380.1) - - - Other Income 0.2 71.0 25.7 268.9 10.1 25.5 3.4 - (4.4) (0.1) 35.0 365.3 Total Revenue 4,608.5 4,382.3 7,587.5 6,091.0 3,046.9 1,758.9 3.4 - (1,230.7) (1,380.2) 14,015.6 10,852.0

2 Segment Results 58.4 334.6 (95.3) 579.0 326.3 222.0 289.4 1,135.6 Unallocated corporate expenses (net of unallocated income)

(284.1) (181.3)

Profit before interest and tax

5.3 954.3

Interest expense (833.2) (473.2) Provision for taxation 297.5 (81.6)

3 Profit/(Loss) after tax (530.4) 399.5 4 Other Information a) Segment assets 6,797.6 5,287.2 5,797.3 5,857.9 8,891.2 8,013.9 (783.1) (1,025.7) 20,703.0 18,133.3

Unallocated corporate assets

2,093.0 1,625.5 2,093.0 1,625.5

Total assets 6,797.6 5,287.2 5,797.3 5,857.9 8,891.2 8,013.9 2,093.0 1,625.5 (783.1) (1,025.7) 22,796.0 19,758.8 b) Segment liabilities 640.8 164.6 783.6 662.0 1,635.8 1,941.2 (783.1) (1,025.7) 2,277.1 1,742.1

Unallocated corporate liabilities

20,518.9 18,016.7 20,518.9 18,016.7

Total liabilities 640.8 164.6 783.6 662.0 1,635.8 1,941.2 20,518.9 18,016.7 (783.1) (1,025.7) 22,796.0 19,758.8 Capital Expenditure 1,775.1 389.1 371.6 792.9 1,354.2 3,283.8 13.1 33.8 3,514.0 4,499.6 Depreciation 275.8 307.7 520.5 465.9 337.0 58.8 26.0 31.4 1,159.3 863.8 Non-cash expenses other than depreciation

2.4 0.2 14.0 1.1 1.1 - 81.7 32.8 99.2 34.1

III Secondary Segment – Geographical: (Rs million)

Particulars Current year Previous yearSale in USA 5,150.7 4,126.8India and other countries 8,829.9 6,359.9Total Sales 13,980.6 10,486.7Segment Assets in: USA 6.9 36.7India and other countries 21,479.2 19,122.3Capital expenditure:USA - -India and other countries 3,514.0 4,499.6

17. The foreign currency exposure of the Company as on March 31, 2009 is as under:

a) Category wise quantitative dataNos. Amounts

Current year Previous yearPut and call Option contracts 9 From USD 5.0 million to 6.4 million per

month (Total from USD 205.0 million to USD 262.3 million)

From USD 5.0 million to 6.4 million per month (Total from USD 265.0 million

to USD 339.1 million),From Euro 0.3 million to Euro 0.5

million per week (Total from Euro 19.3 million to 38.5 million)

Forward contracts against exports 152 USD 106.9 million,Euro 0.1 millionGBP 0.2 million

USD 134.0 million,Euro 13.1 million








19. During the Financial year 2008-09, the Company has allotted for cash 2,80,00,000 equity shares of Rs 10 each at a premium of Rs 11.30 per share on conversion of equivalent number of warrants issued on preferential basis. The proceeds received from this issue have been utilized towards meeting part of capital expenditure for Integrated Paper and Pulp project of the Company.

20. The Board of Directors of the Company has granted options to the employees pursuant to Abhishek Employees Stock Options Plan 2007 on July 9, 2007. These options were granted at Rs 17.55 per option, being the latest available closing market price prior to the date of grant of options in accordance with SEBI guidelines. The quoted price of share on grant and the exercise price of option is equal and therefore there is no impact on profit and loss account due to Employee Share-based options as the Company is following intrinsic value method.

21. The Company has exercised the option given vide notification No. G.S.R. 225(E) dated March 31, 2009 issued by the Ministry of Corporate Affairs, Government of India and in accordance therewith, the Company has capitalized the loss aggregating to Rs 78.1 million arisen on translation of long term foreign currency monetary liabilities relating to acquisition of fixed assets, out of which Rs 0.2 million has been amortized during the year and the unamortized balance as at March 31, 2009 is Rs 77.9 million.

Had the Company not exercised the option given under the aforesaid Notification, gross fixed assets would have been Rs 20,954.0 million (as against reported figure of Rs 21,032.1 million), depreciation would have been Rs 1,159.1 million (as against reported figure of Rs 1,159.3 million), net exchange loss would have been Rs 1,36.0 million (as against reported figure of Rs 57.9 million) and loss after tax for the year would have been Rs 608.3 million (as against reported figure of Rs 530.4 million).

22. During the Financial year 2008-9, the Company completed its Integrated Paper and Pulp project. After installing and completing the project, the Company had to further incur additional capital expenditure on debottlenecking of critical processes of newly installed paper & pulp machines and finally started the commercial production w.e.f. December 1, 2008 after achieving normal level of production. The expenditure incurred on the project has been capitalized in the books of accounts.

23. Additional Information:a) Licensed and installed capacity: Annual Capacity

Particulars Unit Licensed capacity Installed capacity*As at

March 31, 2009As At

March 31, 2008As at

March 31, 2009As At

March 31, 2008Cotton spindles Nos. N A N A 125,952 125,952Rotors Nos. N A N A 1,920 1,920Processed yarn TPA N A N A 6,825 6,825Towel LOOMS N A N A 350 282Paper TPA N A N A 175,000 40,500Sulphuric acid TPA N A N A 100,000 100,000NA is not applicable* Installed capacity has been certified by the management and relied on by the auditors being a technical matter and are on annual basis.

Forward contracts against imports Nil Nil Euro 3.1 million,USD 3.4 million

b) All the derivative instruments are for hedging foreign exchange exposures against firm commitments and/or highly probable forecast transactions.

c) Foreign currency exposures remaining unhedged at the year end:Against Imports (Creditors) - Euro 2.1 million (Previous year Euro 2.1 million)

- Swedish Kroner 16.6 million (Previous year SEK 16.6 million)- USD 0.1 million (Previous year USD 0.8 million)

Against Exports (Debtors) - USD 0.6 million (Previous year USD 1.3 million)- Euro 0.2 million (Previous year Nil)- GBP 0.1 million (Previous year Nil)

Foreign Currency Loans - USD 51.3 million (Previous year USD 30.3 million)Acceptances - USD 8.8 million (Previous year USD 8.5 million)

- EUR 1.4 million (Previous year Euro 0.3 million)18. The Company hedges its foreign currency fluctuation exposure by way of foreign currency derivative options. The Company has taken various

USD/INR options from various banks and as at March 31, 2009, there are 9 open put options having a maturity period up to January 2013. These derivative options are proprietary products of banks, which do not have a ready market and as such are marked to a model, which is usually bank specific instead of being marked to market. Based on marked to a model concept the loss on valuation amounts to Rs 2,707.8 million. However, in the view of the management due to significant uncertainty associated with the above derivative options whose ultimate outcome depends on future events, the loss on such open derivative options cannot be determined at this stage.





c) Opening stock of finished goodsParticulars Unit Current year Previous year

Qty. Value (Rs million) Qty. Value (Rs million)Yarns* MT 973 104.5 1,213 108.5Processed yarn** MT 37 7.1 37 7.8Towel *** MT 1,842 361.2 1,586 314.1Paper****# MT 40 1.0 - -Sulphuric acid MT 1,968 18.8 308 0.4Others 17.9 7.0Total 510.5 437.8* Includes stock in transit 292 MT ** Includes stock in transit 7 MT *** Includes stock in transit 1217 MT **** Includes stock in transit 40 MT# Excludes opening stock of trial run production of 898 MT of Paper and Pulp expansion project as on 01.12.2008

d) Closing stock of finished goodsParticulars Unit Current year Previous year

Qty. Value (Rs million) Qty. Value (Rs million)Yarns * MT 568 63.5 973 104.5Processed yarn** MT 41 7.8 37 7.1Towel *** MT 1,854 372.6 1,842 361.2Paper MT 1,268 43.9 40 1.0Sulphuric acid MT 1,326 1.6 1,968 18.8Others 17.9 17.9Total 507.3 510.5* Includes stock in transit 110.081 MT** Includes stock in transit 5.707 MT *** Includes stock in transit 1,093.707 MT

b) Actual ProductionParticulars Unit Current year

Qty.Previous year

QtyYarn* MT 40,072 42,244Processed yarn** MT 5,236 5,024Towel*** MT 28,311 24,616Paper****# MT 67,302 40,832Sulphuric acid***** MT 60,968 68,437* Includes 11,819 MT (Previous year 14,473 MT) for captive consumption.** Includes 3,767 MT (Previous year 3,476 MT) for captive consumption.*** Includes 8 MT (Previous year 40 MT) for captive consumption. **** Includes 22 MT (Previous year 21 MT) for captive consumption. ***** Includes 4,220 MT (Previous year 1,870 MT) for captive consumption. # Excludes trial run production of 27,332 MT in Paper and Pulp expansion project

e) Turnover* Particulars Unit Current year Previous year

Qty. Value (Rs million) Qty. Value (Rs million)Yarn MT 28,658 3,155.8 28,036 2,728.4Processed yarn MT 1,465 290.6 1,548 302.1Towel** MT 28,291 7,224.4 24,319 5,184.2Paper*** MT 66,950 2,837.6 40,771 1,503.4Sulphuric acid MT 57,390 382.8 64,907 334.8Others 338.7 629.3Total 14,229.9 10,682.2* Net off inter division transfer but inclusive of excise duty.** Towel includes bathrobes, wash-mats and beach bags.***Excludes trial run sale of 26,434 MT of Paper and Pulp expansion project








f) Goods purchased for resaleParticulars Unit Current year Previous year

Qty. Value (Rs million) Qty. Value (Rs million)Yarn MT - - 24 6.3Others 4.5 - -

h) CIF value of imports(Rs million)

Particulars Current year Previous yearCapital goods 795.3 2,024.8Store and spares 103.4 58.2Raw materials 457.7 217.4

i) Expenditure in foreign currency(Rs million)

Particulars Current year Previous yearTraveling 3.2 8.8Others 103.6 98.8

g) Raw material consumedParticulars Unit Current year Previous year

Qty. Value (Rs million) Qty. Value (Rs million)Cotton MT 48,266 3,026.2 51,756 2,668.3Man made fiber MT 676 116.0 519 72.7Yarn MT 21,412 2,146.2 13,104* 1,178.4Towel fabric outsourced MT - - 739 143.6Agro straw MT 115,101 207.9 80,260 155.2Wood pulp MT 2313 114.0 1,700 60.1Sulphur MT 20,829 303.5 23,676 261.2Wood & wood species MT 29,695 94.3 - -Dyes and chemicals 1,064.7 771.1Others 32.8 3.7Total 7,105.6 5,314.3* Excluding 45 MT used for captive consumption

j) Value of raw material / stores and spares consumed (Rs million)

Particulars Current year Previous yearImported Indigenous Imported Indigenous

Raw materials 433.0 6,672.6 268.9 5,045.4Percentage % 6.1 93.9 5.0 95.0Components, store and spares and packing material

103.4 657.5 58.2 536.7

Percentage % 13.6 86.4 9.8 90.2

k) Earnings in foreign exchange(Rs million)

Particulars Current year Previous yearExport of goods calculated on FOB value 6,861.5 5,192.8

24 The figures of the previous year have been rearranged/ regrouped, wherever considered necessary to facilitate comparison.25 Schedules 1 to 18 form an integral part of the accounts.

For and on behalf of the Board S K Tuteja Rajinder Gupta


Place : New Delhi Pawan Jain Arun Goyal Date : May 15, 2009 Company Secretary Chief Financial Officer




BALANCE SHEET ABSTRACT and Company’s General Business Profile

The information required as under Part IV of Schedule VI to Companies Act, 1956

I Registration Details

Registration No. 0 1 0 3 0 7 State Code 1 6

Balance Sheet Date 3 1 0 3 2 0 0 9Date Month Year

II Capital raised during the year (Amount Rs Million)

Public Issue N I L Rights Issue N I L

Bonus Issue N I L Private Placement 5 3 6 . 4

III Position of Mobilisation and Deployment of Funds (Amount Rs Million)

Total Liabilities 2 0 3 6 1 Total Assets 2 0 3 6 1

Sources of Funds

Paid - up Capital 2 2 2 2 Reserves and Surplus * 2 5 7 0

Secured Loans 1 5 5 3 7 Unsecured Loans 3 2

Application of Funds

Net Fixed Assets 1 6 8 1 0 Investments 1 1 8 7

Net Current Assets 2 3 6 4 Miscellaneous Expenditure N I L

Accumulated Losses N I L

IV Performance of Company (Amount Rs Million)

Turnover 1 4 0 6 0 Total Expenditure 1 4 8 8 8+ – + –

Profi t Before Tax 8 2 8 Profi t After Tax 5 3 0(Please tick appropriate box + for profi t – for loss)Earning per Share in Rs - 2 . 6 4 Dividend Rate (%) N I L* includes deffered tax liability

V Generic Names of Three Principal Products /Services of Company

Item Code No. 5 2 . 0 5

Product Description C O T T O N Y A R N

T E R R Y T O W E L S


Product Description W R I T I N G A N D P R I N T I N G P A P E R


Product Description S U L P H U R I C A C I D

For and on behalf of the Board S K Tuteja Rajinder Gupta


Place: New Delhi Pawan Jain Arun Goyal Date: May 15, 2009 Company Secretary Chief Financial Officer






AUDITORS’ REPORT

1. We have audited the attached consolidated balance sheet of

Abhishek Industries Limited and its subsidiaries (collectively

referred to as “the Group”) as at March 31, 2009 and also the

consolidated profit and loss account and the consolidated

cash flow statement for the year ended on that date annexed

thereto. These consolidated financial statements are the

responsibility of the management of Abhishek Industries

Limited. Our responsibility is to express an opinion on these

consolidated financial statements based on our audit.

2. We conducted our audit in accordance with generally accepted

auditing standards 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

misstatements. An audit includes, examining, on a test basis,

evidence supporting the amounts and disclosures in the

financial statements. An audit also includes assessing the

accounting principles used and significant estimates made

by management, as well as evaluating the overall financial

statements presentation. We believe that our audit provides a

reasonable basis for our opinion.

3. We did not audit the financial statements of certain subsidiaries,

whose financial statements reflect the Group’s share of total

assets of Rs 282.63 millions as at March 31, 2009, Group’s

share of total revenue of Rs 2.63 millions and net cash outflows

amounting to Rs 1.40 millions for the year ended on that date

and an associate whose financial statements reflect the Group’s

share of loss upto March 31, 2009 of Rs 0.20 million and the

group’s share of loss of Rs 0.04 million for the year ended on

that date as considered in the Consolidated Accounts. These

financial statements and other financial information have been

audited by other auditors whose reports have been furnished

to us, and our opinion is based solely on the report of other

auditors

4. We report that the consolidated financial statements have been

prepared by the Company in accordance with the requirements of

Accounting Standard 21 - “Consolidated Financial Statements”

and Accounting Standards 23 - “Accounting for Investments in

Associates in Consolidated Financial Statements” as notified by

the Companies (Accounting Standards) Rules, 2006 and on the

basis of the separate audited financial statements of Abhishek

Industries Limited, its subsidiaries and associate included in the

consolidated financial statements.

5. As indicated in note 14 of Schedule 19 the possible loss on

valuation of open put derivative options, in view of the reasons

stated therein could not be determined by the Company. The

ultimate outcome of these transactions and their effect on

these accounts cannot be ascertained at this stage.

subject to Paragraph 5 above, on the basis of the information

and explanations given to us and on the consideration of

the separate audit reports on individual audited financial

statements of Abhishek Industries Limited, its subsidiaries and

associate, in our opinion, the consolidated 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

consolidated state of affairs of the Group as at March 31,

2009;

(b) in the case of the consolidated profit and loss account, of

the consolidated results of operations of the Group for the

year ended March 31, 2009; and

(c) in the case of the consolidated cash flow statement, of

the consolidated cash flows of the Group for the year

ended March 31, 2009.

For Deloitte Haskins & SellsChartered Accountants

Manjula BanerjiPlace: New Delhi PartnerDate: May 15, 2009 Membership No. 086423

REPORT OF THE AUDITORS TO THE BOARD OF DIRECTORS OF ABHISHEK INDUSTRIES LIMITED ON THE CONSOLIDATED FINANCIAL STATEMENTS OF ABHISHEK INDUSTRIES LIMITED AND ITS SUBSIDIARIES.



CONSOLIDATED BALANCE SHEET as at March 31, 2009

(Rs million)

ParticularsSchedule

No.As at

March 31, 2009As at

March 31, 2008I SOURCES OF FUNDS

1 Shareholders' funds

a) Share capital 1 2,221.9 1,941.9

b) Reserves and surplus 2 2,225.9 2,437.7

c) Share application money 0.1 0.1

d) Equity warrants 3 - 4,447.9 60.0 4,439.7

2 Loan funds

a) Secured loans 4 15,537.0 13,074.3

b) Unsecured loans 5 32.1 15,569.1 27.8 13,102.1

3 Deferred tax liability (Net) (Refer Note 6) 329.0 644.6

4 Minority Interest(Current year Rs 3131, Previous year Rs 3737)

- -

Total 20,346.0 18,186.4

II APPLICATION OF FUNDS

1 Fixed assets 6

a) Gross block 21,284.9 13,525.2

b) Less : Depreciation 6,315.5 5,201.4

c) Net block 14,969.4 8,323.8

d) Capital work in progress 7 2,096.4 17,065.8 6,341.1 14,664.9

2 Investments 8 1,182.8 753.2

3 Current assets, loans and advances 9

a) Inventories 2,110.0 2,252.0

b) Sundry debtors 602.1 386.6

c) Cash and bank balances 204.0 401.9

d) Loans and advances 1,799.7 1,543.1

4,715.8 4,583.6

Less : Current liabilities and provisions 10

a) Liabilities 2,526.0 1,709.4

b) Provisions 92.5 106.0

2,618.5 1,815.4

Net current assets 2,097.3 2,768.2

4 Miscellaneous expenditure

(To the extent not written off or adjusted)

11 0.1 0.1

Total 20,346.0 18,186.4

Notes to the accounts 19

As per our report attached For and on behalf of the Board









CONSOLIDATED PROFIT & LOSS ACCOUNT for the year ended March 31, 2009

(Rs million)

ParticularsSchedule

No.For the year ended


March 31, 2008INCOME

Gross turnover 15,456.1 12,062.2 Less: Excise duty 249.3 195.5 Less: Inter divisional transfers 1,226.2 1,380.0 Turnover 13,980.6 10,486.7 Other income 12 82.1 149.8 Total 14,062.7 10,636.5 EXPENDITURE

Raw materials consumed 7,105.6 5,314.3 Manufacturing expenses, etc. 13 1,837.5 1,578.0 Personnel expenses 14 1,286.0 1,230.3 Administrative and other expenses 15 439.6 317.4 Selling expenses 16 716.7 675.2 (Increase)/decrease in work in process and finished goods 17 81.9 (7.3)Increase/(decrease) in excise duty on finished goods (7.2) (0.1)Total 11,460.1 9,107.8 Profit before financial expenses, depreciation and tax 2,602.6 1,528.7 Financial expenses 18 833.2 473.2 Depreciation 1,159.4 863.9 Profit for the year before extraordinary/ exceptional item and tax

610.0 191.6

Foreign exchange gain/(loss) (1,440.7) 278.1 (Loss)/Profit for the year after extraordinary/exceptional item and before tax

(830.7) 469.7

Less: Provision for taxation- Current tax - 52.3 - Deferred tax liability/(asset) (315.6) (23.6)- Fringe benefit tax 11.5 (304.1) 12.0 40.7 MAT credit entitlement - (12.6)Provision for income tax for earlier years 6.6 53.5 (Loss)/Profit after tax (533.2) 388.1 Balance brought forward from previous year 2,133.9 1,755.4 Adjustment on account of employees' benefit(Net of deferred tax of Rs Nil; Previous year Rs. 4.9 million) (Refer Note 5)

- (9.6)

Balance carried to balance sheet 1,600.7 2,133.9 Earning per share (equity shares, nominal value Rs 10 each) (Note 8)-Basic (2.65) 2.00-Diluted (2.65) 1.97Notes to the accounts 19











CONSOLIDATED CASH FLOW STATEMENT for the year ended March 31, 2009

(Rs million)Particulars Current year Previous yearA CASH FLOW FROM / (USED) IN OPERATING ACTIVITIES

Net Profit before tax (830.7) 469.7 Adjustments for:Depreciation 1,159.4 863.9 Financial expenses 833.2 473.2 Interest received on fixed deposits and from customers (35.9) (38.0)Doubtful debts/ advances written off 0.1 1.4 Provision for doubtful debts/ advances 17.3 - Provision for diminution in value of investments 81.7 32.8 Provisions no longer required written back (7.6) (10.8)Profit on sale of current investments (non trade) (8.9) (59.6)Loss on sale of current investments (non trade) 31.1 2.3 Dividend from, non-trade, unquoted, current investments (3.2) (6.9)Loss on sale of fixed assets 2.4 8.3 Profit on sale of fixed assets (3.6) 2,066.0 (41.1) 1,225.5 Operating profit before working capital changes 1,235.3 1,695.2 Adjustments for:(Increase)/decrease in trade and other receivables (453.0) (542.8)(Increase)/decrease in inventories 142.0 89.9 Increase/(decrease) in trade payables and other liabilities 1,156.2 845.2 154.9 (298.0)Cash generated from operations 2,080.5 1,397.2 Income tax paid (27.8) (85.4)Net cash from / (used) in Operating activities 2,052.7 1,311.8

B CASH FLOW FROM / (USED) IN INVESTING ACTIVITIESPurchase of fixed assets (3,905.9) (4,547.0)Sale of fixed assets 7.2 534.3 Purchase of investments (2,035.1) (2,835.8)Sale of investments 1,504.8 2,572.4 Share application money paid to others (31.5) -Subsidy received from government 5.0 8.0 Interest received 30.9 33.9 Net cash from / (used) in Investing activities (4,424.6) (4,234.2)

C CASH FLOW FROM / (USED) IN FINANCING ACTIVITIESProceeds from issue of equity shares on conversion of warrants 536.4 - Proceeds from issue of equity warrants - 60.0 Share application money - 0.1 Proceeds from long term borrowings 2,799.9 4,075.5 Repayment of long term borrowings (1,789.9) (1,171.3)Changes in working capital loans/short term borrowings 1,457.0 298.8 Dividend paid - (0.1)Interest paid (829.4) (474.1)Net cash from / (used) in financing activities 2,174.0 2,788.9 Net increase/(decrease) in cash and cash equivalents (197.9) (133.5)Cash and cash equivalents as at April 1, 2008 401.9 535.4 Cash and cash equivalents as at March 31, 2009 204.0 401.9

Notes to the accounts Schedule 19






SCHEDULE 3 - EQUITY WARRANTS

Nil (Previous year 2,80,00,000) equity warrants, allotted on a preferential basis, carrying an

option to the holder of such warrants to subscribe to one equity share of Rs 10 each at a

premium of Rs 11.30 per share for every warrant held, within 18 months from the date of

allotment (i.e. from July 9, 2007). (Refer Note 15)

- 60.0

- 60.0

SCHEDULE 2 - RESERVES AND SURPLUS

1 Capital reserve


Addition during the year 5.0 86.6 8.0 81.6

2 Share premium account


Addition during the year (Refer Note 15) 316.4 538.6 - 222.2

3 Surplus being balance in profit and loss account

Opening balance 2,133.9 1,755.4

Less: Adjustment on account of employees’ benefit(Net of deferred tax of Rs Nil ; Previous year Rs 4.9 million)

- 9.6

2,133.9 1,745.8

Addition/(deduction) during the year (533.2) 1,600.7 388.1 2,133.9

2,225.9 2,437.7

SCHEDULES annexed to and forming part of Consolidated Financial Statements

(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

SCHEDULE 1 - SHARE CAPITAL

Authorised

50,00,00,000 (Previous year 50,00,00,000) Equity shares of Rs 10 each 5,000 .0 5,000.0

10,00,00,000 (Previous year 10,00,00,000) Preference shares of Rs 10 each 1,000.0 1,000.0

6,000.0 6,000.0

Issued, subscribed and paid up

22,21,94,675 (Previous year 19,41,94,675) Equity shares of Rs 10 each fully paid up, 2,221.9 1,941.9

Of the above :

3,46,29,630 Equity shares of Rs 10 each have been allotted on July 28, 1999 to the

Shareholders of the erstwhile Abhishek Spinfab Corporation Limited on

amalgamation with the Company vide Order dated May 13, 1999 of the


without payment being received in cash;

9,36,97,545 Equity shares of Rs 10 each have been allotted on March 28, 2002 to

the Shareholders of the erstwhile Varinder Agro Chemicals Limited on

amalgamation with the Company vide Order dated January 3, 2002 of the

Hon’ble High Court for the States of Punjab and Hariyana at Chandigarh

without payment being received in cash; and

2,80,00,000 Equity shares issued for cash at a premium of Rs 11.30 per share during the year (Refer Note 15)

2,221.9 1,941.9



SCHEDULES annexed to and forming part of Consolidated Financial Statements (Contd.)

(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008SCHEDULE 5 - UNSECURED LOANS

Short term deposits from customers 32.1 27.8 32.1 27.8

SCHEDULE 4 - SECURED LOANSLoans from banksTerm loans 11,382.2 10,299.5 Cash credits/working capital loans 4,008.5 2,555.8 Vehicle loans 22.3 23.9 Other loans Term loans from financial institutions 124.0 195.1

15,537.0 13,074.3 Term loansTerm loans from banks and financial institutions are secured by way of equitable mortgage created or to be created on all the present and future immovable properties including all buildings, structures and all plant and machinery attached thereon of the Company and hypothecation of all the movable properties including movable machinery spares, tools and accessories, etc., present and future, subject to prior charges created and/or to be created in favour of the Company’s bankers on stocks of raw materials, semi finished and finished goods, consumable stores and other movables, as may be required for working capital requirements in the ordinary course of business. The mortgages and charges referred to above rank pari-passu or otherwise as mentioned above. (Amount due within one year Rs 2,399.1 million; Previous year Rs 1,440.5 million)Cash credits/working capital loansCash credit/working capital loans are secured by hypothecation of raw materials, semi finished and finished goods, stock-in-process, consumable stores, other asset and book debts, present and future, of the Company. The limits are further secured by way of second pari passu charge on the immovable properties of the Company. Vehicles loansVehicle loans are secured by hypothecation of vehicles acquired against such loans. (Amount due within one year Rs 7.2 million; Previous year Rs 7.4 million).

SCHEDULE 6 - FIXED ASSETS(Rs million)

GROSS BLOCK DEPRECIATION NET BLOCK

Particulars As at

March 31,2008

Additionsduring the

year

Sales/Adjust-

ment

As atMarch 31,

2009

As atMarch 31,

2008

For theyear

Sales/Adjust-

ment

UptoMarch 31,

2009

As atMarch 31,

2009

As atMarch 31,

2008Tangible Assets Land - Freehold 689.8 94.6 - 784.4 - - - - 784.4 689.8 - Leasehold 29.3 7.7 - 37.0 3.5 0.5 - 4.0 33.0 25.8 Buildings 1,971.5 * 589.4 - 2,560.9 281.3 64.9 - 346.2 2,214.7 1,690.2 Plant and machinery 10,362.2 # 7,037.7 45.5 17,354.4 4,694.6 1,044.0 43.2 5,695.4 11,659.0 5,667.6 Furniture and fixtures 174.3 49.6 0.2 223.7 79.9 12.1 - 92.0 131.7 94.4 Computer 111.9 13.0 0.2 124.7 42.8 15.9 0.2 58.5 66.2 69.1 Vehicles 82.9 11.8 5.4 89.3 28.4 7.7 1.9 34.2 55.1 54.5 Intangible Assets Software 103.3 7.2 - 110.5 70.9 14.3 - 85.2 25.3 32.4 Current year 13,525.2 7,811.0 51.3 21,284.9 5,201.4 1,159.4 45.3 6,315.5 14,969.4 Previous year 12,101.6 1,963.0 539.4 13,525.2 4,375.4 863.9 37.9 5,201.4 8,323.8

Notes:1. Additions to plant and machinery on account of exchange fluctuation in long term monetory items includes Rs 228.1 million (Previous year Rs

Nil), as a part of project and preoperative expense and Rs 78.1 million (Net of exchange gain of Rs 2.5 million for the year 2007-08) capitalised pursuant of notification issued by National Advisory Committee on Accounting Standard dated 31.03.2009 (Refer Note 17).

* Building includes Rs 16.0 million being expenses incurred by the Company towards construction of canal for sourcing of water, ownership ofwhich belongs to Government of Punjab (Department of Irrigation), amortised over a period of five years.

# Plant and machinery includes Rs 15.5 million being expenses incurred by the Company towards laying of feeder line, ownership of which belongs to Punjab State Electricity Board, amortised over a period of five years.







(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

Non Trade

32,000 (Previous year 32,000) units of face value of Rs 1,000 each, Rs 350 per unit, paid up of Kotak India Venture Fund (Private Equity fund)

11.2 9.6

1,000 (Previous year 1,000) units of face value of Rs 1,00,000 each, Rs 3,000 per unit, paid up of Kotak India Growth fund (Private Equity fund)

3.0 3.0

50 Previous year 50) non convertible redeemable debentures of Citi Corp Finance, Series 195 of face value of Rs 10,00,000 each

50.0 50.0

64.2 62.6

Less: Dimunition in value of investment 28.8 -

35.4 62.6

SCHEDULE 7 - CAPITAL WORK IN PROGRESS

Building under construction 470.2 639.3

Machinery under erection 1,224.5 4,494.0

Capital advances 101.7 454.3

Project and pre-operative expenses pending allocation (Refer Note 10) 300.0 753.5

2,096.4 6,341.1

SCHEDULE 8 - INVESTMENTS (UNQUOTED, AT COST UNLESS OTHERWISE STATED)

Long Term (Trade) Associates

1,00,00,000 (Previous year 1,00,00,000) equity shares of Rs 10 each fully paid up of Lotus Integrated Texpark Limited (Includes capital reserve of Rs 29.2 million which diluted to Rs 18.3 million on further issue of share capital to third party)

100.0 100.0

Less : Group share of losses upto 31.03.2009 (0.2) (0.2)

99.8 99.8

Long Term Others

Trade

50,00,000 (Previous year 50,00,000) 7% Non cumulative redeemable preference shares of Rs 10 each fully paid up of Praneel Innovations Limited (Investment in a company under same management as per Section 370 (1B) of the Companies Act, 1956)

50.0 50.0

50,00,000 (Previous year 50,00,000) 7% non cumulative redeemable preference shares of Rs 10 each fully paid up of IOL Chemicals & Pharmaceuticals Limited

50.0 50.0

1,60,000 (Previous year 1,60,000) equity shares of Rs 10 each fully paid up of Nimbua Greenfield (Punjab) Limited

1.6 1.6

50,000 (Previous year 50,000) equity shares of Rs 10 each fully paid up of Trident Agritech Limited (formerly known as Madhuraj Agrotech Limited - Investment in a company under same management as per section 370 (1B) of the Companies Act, 1956)

0.5 0.5

102.1 102.1




(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

SCHEDULE 8 - INVESTMENTS (Unquoted, at cost unless otherwise stated) (Contd.)Current (Non Trade) (Unquoted, at cost or fair value, whichever is lower). Equity linked mutual funds

10,00,000 (Previous year 10,00,000) units of face value of Rs 10 each of Kotak Dynamic Asset Allocation

10.0 9.3

10,81,410 (Previous year 10,81,410) units of face value of Rs 10 each fully paid up of Kotak Global Emerging Market Fund

10.8 10.8

9,75,073 (Previous year 9,75,073) units of face value of Rs 10 each fully paid up of JM Small & Mid Cap Fund-Regular Dividend Plan

16.1 16.1

6,29,752 (Previous year 6,29,752) units of face value of Rs 10 each fully paid up of Fidelity Intl. Opportunities Fund - Growth

7.0 7.0

4,88,998 (Previous year 4,88,998) units of face value of Rs 10 each fully paid up of JM Contra Fund Dividend plan

5.0 5.0

5,83,470 (Previous year 5,83,470) units of face value of Rs10 each fully paid up of Principal Large Cap Fund

13.0 13.0

6,18,283 (Previous year 3,18,831) units of face value of Rs 10 each fully paid up of IDFC Premier Equity Fund -Growth** (2,99,452 units acquired during the year)

13.0 7.0 -

2,44,499 (Previous year 2,44,499) units of face value of Rs 10 each fully paid up of ICICI Prudential Indo Asia Equity Fund - Retail Growth

2.5 2.5

7,50,000 (Previous year 7,50,000) units of Rs 10 each fully paid up of SBI Infrastructure Fund - Growth

7.5 7.5

12,50,000 (Previous year 12,50,000) units of Rs 10 each fully paid up of SBI Infrastructure Fund - Dividend

12.5 12.5

37,217 (Previous year 37,217) units of face value of Rs 10 each fully paid up of DSP India Tiger Fund - Growth

2.0 2.0

20,00,000 (Previous year 20,00,000) units of Rs 10 each fully paid up of Sundaram BNP Paribas-Energy Opportunities Fund - Dividend

20.0 20.0

9,77,995 (Previous year 9,77,995) units of face value of Rs 10 each of Reliance Natural Resources Fund Dividend Payout

10.0 10.0

1,94,035 (Previous year 1,40,865) units of face value of Rs 10 each of Reliance Growth Fund - Dividend Plan ** (53,170 units acquired during the year)

13.0 10.0

1,50,127 ( Previous year 1,50,127) units of face value of Rs 10 each of Reliance Banking Fund

10.0 10.0

Repurchase price Rs 75.9 million (Previous year Rs 127.3 million) 152.4 142.7 Less: Diminution in value of investments 76.5 20.7

75.9 122.0 Debt based mutual funds

Nil (Previous year 1,09,771) units of face value of Rs 10 each of Reliance Liquid Plus - Institutional Option - Growth*

- 120.0

Nil (Previous year 29,79,663) units of face value of Rs 10 each of Grindlays Super Saver Income - ST Plan C Fortnightly Dividend*

- 30.0

Nil (Previous year 1,16,527) units of face value of Rs 10 each fully paid up of ICICI Prudential Liquid Plan Institutional Plus - Growth Option*

- 2.3

Nil (Previous year 2,53,896) units of face value of Rs 10 each fully paid up of IDFC Floating Rate Fund- Long Term Institutional Plan B*

- 3.2

Nil (Previous year 70,25,716) units of face value of Rs 10 each fully paid up of Magnum Insta Cash Liquid Floater-Growth*

- 98.2

3,46,35,779 (Previous year Nil) units of face value of Rs 10 each fully paid up of Magnum Insta Cash - Cash Option - Growth**

680.1 -

3,39,554 (Previous year Nil) units of face value of Rs 10 each fully paid up of Principal Income Fund - Dividend**

4.1 -

72,55,157 (Previous year Nil) units of face value of Rs 10 each fully paid up of Principal Floating Rate SMP - Growth**

100.0 -

Repurchase price Rs 784.5 million (Previous year Rs 253.8 million) 784.2 253.7







(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

SCHEDULE 8 - INVESTMENTS (Unquoted, at cost unless otherwise stated) (Contd.)Investment under portfolio management services#Kotak Securities Limited

30,09,103 (Previous year Nil) units in Kotak Floater Long Term (G)** 41.3 - Nil (Previous year 2,38,649) units in K Liquid- Institutional Dividend Plan* - 2.4

Repurchase price Rs 41.8 million (Previous year Rs 2.4 million) 41.3 2.4 Equity Shares- Quoted

Nil (Previous year 39,152) equity shares of face value of Re. 1 each fully paid up of Zee Entertainment Enterprises Limited*

- 9.4

Nil (Previous year 2,032) equity shares of face value of Rs 2 each fully paid up of Larsen & Toubro Limited*

- 6.2

30,455 (Previous year 18,449) equity shares of face value of Rs 10 each fully paid up of ICICI Bank Limited** (18,449 equity shares sold and 30,455 equity shares acquired during the year)

8.3 17.6

Nil (Previous year 37,697) equity shares of face value of Rs 10 each fully paid up of GTL Limited*

- 7.0

Nil (Previous year 12,133) equity shares of face value Rs 10 each fully paid up of Bharat Petroleum Corporation Limited*

- 4.9

Nil (Previous year 19,697) equity shares of face value of Rs 10 each fully paid up of Hindustan Petroleum Corporation Limited*

- 5.8

Nil (Previous year 75,988) equity shares of face value of Rs 10 each fully paid up of Mysore Cements Limited*

- 3.5

1,82,246 (Previous year 94,530) equity shares of face value of Re. 1 each fully paid up of Sun Pharma Advanced Research Company Limited** (87,716 equity shares acquired during the year)

11.9 7.2

Nil (Previous year 25,964) equity shares of face value of Rs 10 each fully paid up of ING Vysya Bank Limited*

- 8.0

Nil (Previous year 26,997) equity shares of face value of Rs 10 each fully paid up of Shree Precoated Steels Limited*

- 10.2

Nil (Previous year 17,949) equity shares of face value of Rs 10 each fully paid up of Tata Tea Limited*

- 14.4

Nil (Previous year 34,248) equity shares of face value of Rs 10 each fully paid up of Tata Communications Limited*

- 16.1

1,10,390 (Previous year 62,844) equity shares of face value of Rs 10 each fully paid up of IRB Infrastructure Developers Limited** (47,546 equity shares acquired during the year)

15.8 12.4

35,353 (Previous year Nil) equity shares of face value of Rs 10 each fully paid up of Cairn India Limited**

5.6 -

4,03,487 (Previous year Nil) equity shares of face value of Rs 10 each fully paid up of Gujarat State Petronet Limited**

11.7 -

Market value Rs 50.5 million (Previous year Rs 115.7 million) 53.3 122.7 Less: Provision for dimunition in value 9.2 12.1

44.1 110.6 Total 1,182.8 753.2 * Sold during the year** Acquired during the year.# Investments have been made under the Discretionay Portfolio Management Agreement entered into between the Company and Kotak Securities Limited (Portfolio Managers) and are being held in the name of the Porfolio Manager as envisaged in the aforesaid Agreement Repurchase price of current unquoted investments 902.2 383.5 Aggregate book value of unquoted investments 1,138.7 642.6

Aggregate book value of current quoted investments 44.1 110.6 Market value of current quoted investments 50.5 115.7



SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)

(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

SCHEDULE 9 - CURRENT ASSETS, LOANS AND ADVANCES

A Current assets

Inventories

Stock in trade *

- Raw Materials 1,025.8 1,353.3

- Finished Goods 507.3 510.5

- Work in Process 357.2 304.2

Stores and Spares ** 219.7 84.0

2,110.0 2,252.0

* At cost or net realizable value, whichever is lower

** At cost or under

Sundry debtors (Unsecured)

Debts outstanding for a period exceeding six months


- Considered doubtful 2.1 2.0

122.7 83.4

Less: Provision for doubtful debts 2.1 120.6 2.0 81.4

Others debts considered good 481.5 305.2

602.1 386.6

Cash and bank balances

Cash in hand 20.4 16.0

Balances with scheduled banks in :

- Current accounts 46.6 34.0

- Deposits accounts (including Rs 55.2 million held as margin with banks; Previous year Rs 101.0 million)

137.0 351.9

204.0 401.9

B. Loans and advances (Unsecured, considered good, unless otherwise stated)

Advances recoverable in cash or in kind or for value to be received (Note 12)


- Considered doubtful 16.7 -

970.9 861.2

Less: Provision for doubtful advances (16.7) 954.2 - 861.2

With customs, excise and port trust authorities 560.1 540.7

Security deposits 177.4 64.7

MAT credit entitlement 76.5 76.5

Share application money to others 31.5 -

1,799.7 1,543.1

4,715.8 4,583.6







(Rs million)

ParticularsAs at

March 31, 2009As at

March 31, 2008

SCHEDULE 10 - CURRENT LIABILITIES AND PROVISIONS

A Current labilities

Acceptances 500.7 488.5

Sundry creditors (Refer Note 7) 1,922.8 1,145.0

Trade deposits and advances 49.2 23.8

Interest accrued but not due on loans 3.1 3.8

Unclaimed dividend* 4.4 4.4

Other liabilities 45.8 43.9

2,526.0 1,709.4

* Will be credited to Investor Education and Protection Fund on the expiry of 7 years from the due date.

B. Provisions

Taxation :

- Current tax ( net of advance tax of Rs 431.7 million) 45.2 49.9

- Fringe benefit tax ( net of advance tax of Rs 29.8 million) 1.5 1.5

Earned leaves * (Refer Note 5) 43.8 40.0

Gratuity payable (Refer Note 5) 2.0 14.6

92.5 106.0

2,618.5 1,815.4

* Includes provision for short term compensated absences Rs 12.0 million (Previous year Rs 10.7 million).

SCHEDULE 11 - MISCELLANEOUS EXPENDITURE (TO THE EXTENT NOT WRITTEN OFF OR ADJUSTED)

Preliminary expenses 0.1 0.1

0.1 0.1



(Rs million)



March 31, 2008SCHEDULE 12 - OTHER INCOME

Insurance claims 5.9 23.0 Profit on sale of fixed assets 3.6 41.1 Loss on sale of fixed assets (2.4) 1.2 (8.3) 32.8 Profit on sale of current investments (non-trade) - 59.6 Less: Provision for dimunition in value of investments - (32.8)Less: Loss on sale of current investments (non-trade) - - (2.3) 24.5 Dividend from non-trade unquoted current investments 3.2 6.9 Interest received on fixed deposits and from customers (Tax deducted 35.9 38.0 Rs 4.2 million (Previous year Rs 5.7 million)Exchange gain 0.2 0.3 Miscellaneous receipts 28.1 13.5 Provisions no longer required written back 7.6 10.8

82.1 149.8 SCHEDULE 13 - MANUFACTURING EXPENSES

Purchase for resale 4.5 6.3 Stores and spares consumed 330.9 265.7 Power and fuel 1,032.9 953.3 Repair to plant and machinery 27.4 21.7 Packing material and charges 431.3 329.2 Job charges 10.5 1.8

1,837.5 1,578.0 SCHEDULE 14 - PERSONNEL EXPENSES

Salaries, wages, bonus and allowances 1,179.3 1,120.1 Contribution to provident and other funds 89.0 77.0 Workmen and staff welfare 17.7 33.2

1,286.0 1,230.3 SCHEDULE 15 - ADMINISTRATIVE AND OTHER EXPENSES

Rent 12.6 17.3 Rates and taxes 8.5 15.6 Insurance 40.0 41.9 Directors' sitting fees 1.2 1.2 Travelling and conveyance 41.8 45.2 Postage and telephone 20.2 17.6 Legal and professional 72.5 94.1 Buildings repairs 1.2 2.6 General repairs 13.6 19.8 Doubtful debts and advances written off 0.1 1.4 Provision for doubtful debts/advances 17.3 - Software maintenance expenses 16.4 17.4 Electricity and water charges 2.3 7.4 Provision for dimunition in value of investments 81.7 - Loss on sale of current investments (non-trade) 31.1 - Less : Profit on sale of current investments (non-trade) (8.9) 103.9 - -

Miscellaneous (Includes exchange loss of Rs 57.9 million; Previous year Rs 6.4 million)

88.0 35.7

Loss from Associate - 0.2

439.6 317.4







(Rs million)



March 31, 2008SCHEDULE 16 - SELLING EXPENSES

Commission 157.6 130.8

Freight, clearing and octroi charges 450.8 419.4

Rebates and discount 13.5 38.3

Advertisement 5.0 11.4

Business promotion 30.3 33.4

Others 59.5 41.9

716.7 675.2

SCHEDULE 17 - (INCREASE)/DECREASE IN WORK IN PROCESS AND FINISHED GOODS

Opening Stock

Work-in-process 304.2 369.6

Finished goods 510.5 814.7 437.8 807.4

Add: Stock on commissioning of new paper plant on 01.12.2008

Work-in-process 60.6 -

Finished goods 39.1 99.7 - -

Less : Closing Stock #

Work-in-process 339.3 304.2

Finished goods 493.2 832.5 510.5 814.7

(Increase)/decrease 81.9 (7.3)

# Excludes production of work in process of Rs 17.9 million (Previous yearRs. Nil) and finished goods of Rs 14.1 million (Previous year Rs. Nil) under trial run for which expense are included in project and pre-operative expense.

::

SCHEDULE 18 - FINANCIAL EXPENSES

Interest

- On loans for fixed period 479.8 272.2

- Others 305.4 175.7

Bank and other charges 48.0 25.3

833.2 473.2


SCHEDULE 19 - NOTES TO THE ACCOUNTS1. Significant Accounting Policies

A Accounting convention

The accounts are prepared on accrual basis under the Historical Cost Convention in accordance with the Accounting Standards referred

to in sub section (3C) of Section 211 of the Companies Act, 1956 and other relevant presentational requirements of the Companies Act,

1956.

B Basis of consolidation

The consolidated financial statements present the consolidated accounts of Abhishek Industries Limited with its following subsidiaries.

Name of Subsidiary Country of Incorporation Proportion of ownership interest as at

March 31, 2009 March 31, 2008

Abhishek Industries Inc USA 100% 100%

Abhishek Europe SA Switzerland 99.8% 99.8%

Abhishek Global Ventures Limited India 100% 100%





Name of Associate Country of Incorporation Proportion of ownership interest as at

March 31, 2009 March 31, 2008

Lotus Integrated Texpark Limited India 47.5% 47.5%

In preparing consolidated financial statements, the financial statements of parent and subsidiaries are combined on a line by line basis by

adding together the book value of assets, liabilities, income and expenses. The intra-group balances and transactions and unrealised profit

and losses are fully eliminated.

Investments in associate have been accounted as per equity method whereby the investment is initially recorded at cost. Identifying any

goodwill/capital reserve arising at the time of acquisition. The carrying amount of investment is adjusted thereafter for post acquisition

change in investor’s share of net assets of investee.

C Revenue recognition

The revenue in respect of sales is recognized as and when the risk and reward in the goods is transferred to the buyer.

The revenue in respect of DEPB benefit is recognized on post export basis at the rate at which the entitlement accrues and is included

in the turnover.

Insurance claims are recognized when there exists no significant uncertainty with regard to the amounts to be realized and the ultimate

collection thereof.

D Borrowing costs

Borrowing costs that are attributable to acquisition or construction of a qualifying asset are capitalized as part of cost of such assets

Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are

recognized as expenses in the period in which they are incurred.

E Government grants / subsidy

Government grant / subsidy related to revenue is deducted from the related expenses.

F Accounting for taxes on income

Provision for taxation for the year is ascertained on the basis of assessable profits computed in accordance with the provisions of the

Income-tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income

and accounting income that originates in one period and are capable of reversal in one or more subsequent periods. In respect of carry

forward of losses and unabsorbed depreciation, deferred tax assets are recognized based on virtual certainty that sufficient future taxable

income will be available against which such deferred tax asset can be realized.

G Employee benefits

The Company has various schemes of retirement benefits such as provident fund, gratuity and leave encashment, which is dealt with as

under:

(a) Contributions to provident fund are made in accordance with the provisions of Employee’s Provident Fund and Miscellaneous Provisions

Act, 1952 and are charged to revenue every year.

(b) The gratuity liability in respect of employees of the Company is covered through a policy taken by a trust from Life Insurance Corporation

of India. The Contributions towards the premium of the policy paid to the trust are charged to revenue every year. (Refer Note 5 also).

(c) Provision for leave encashment (including long term compensated absences) is made based on actuarial valuation.

Liability attributing to the long-term period of service, comprising mainly of bonus etc., is recognized on a straight-line basis to the period of

service to which it relates.

Liability on account of short term employee benefits, comprising mainly compensated absences and performance incentives, is

recognized on an undiscounted accrual basis during the period when the employee renders services/ vesting period of the benefit.








H Fixed assets

Fixed assets are stated at cost (net of CENVAT) less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and

other incidental expenses and interest on loan taken for the acquisition of qualifying assets up to the date of commissioning of assets.

In line with Notification No. G.S.R. 225(E) dated March 31, 2009 issued by The Ministry of Corporate Affairs, Government of India, the

exchange differences arising after April 1, 2007 on reporting of long term foreign currency monetary items at rates different from those at

which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition

of a depreciable capital asset, have been added to or deducted from the cost of the asset and shall be depreciated over the balance useful

life of the asset. (Refer Note 17)

I Depreciation/amortisation

(i) Depreciation on fixed assets [other than those referred to in (ii) to (v) below] is provided on straight line method in accordance with

Schedule XIV to the Companies Act, 1956, except in case of one of the Co-generation and Recovery Plants, in respect of which higher

depreciation is provided on the basis of technological evaluation of a Chartered Engineer and Management’s estimate of useful life of

these plants

(ii) Assets costing Rs 5,000 or less are fully depreciated in the year of purchase.

(iii) The depreciable amount of intangible asset is systematically allocated over its useful life. The software acquired for internal use is

amortized over a period of five years.

(iv) The leasehold land is amortized over the lease period.

(v) Capital Expenditure in respect of assets not owned by the Company are amortized over the period of five years.

J Investments

Long-term investments are carried at cost less provision, if any, for diminution in value which is other than temporary. Current investments

are carried at lower of cost and fair value.

K Inventories

Raw materials, finished goods and work in process are valued at cost or net realizable value, whichever is lower. Stores and spares are valued

at cost or under. The cost formulas adopted in respect of inventories are as under:

Stores and spares: weighted average cost

Raw materials: weighted average cost

Finished goods: cost of raw materials plus conversion cost, packing cost and excise duty.

Work in process: cost of raw materials plus conversion cost depending upon the stage of completion.

L Foreign currency transactions

(i) Foreign currency transactions are recorded at the exchange rate prevailing as at the date of transactions except export sales which are

recorded at a rate notified by the customs for invoice purposes. Such rate is notified in the last week of the month and is adopted for

recording export sales of the next month. The exchange fluctuation arising on billing through banker is accounted for as difference in

exchange rates. The amount of such differences in exchange rate is included under turnover.

(ii) Monetary items denominated in a foreign currency are reported at the closing rate as at the date of balance sheet. Non-monetary items,

which are carried at fair value denominated in a foreign currency, are reported at the exchange rate that existed when such values were

determined, otherwise on historical exchange rate that existed on the date of transaction.

(iii) The exchange difference arising on the settlement of monetary items or on reporting these items at rate different from the rates at

which these were initially recorded/reported in previous financial statements are recognized as income/expense in the period in which

they arise except that such exchange differences which relate to fixed assets acquired up to March 31,2004 and after April 1, 2007 are

capitalized in the carrying amount of these assets and those exchange difference which relate to fixed assets acquired from outside

India during April 1, 2004 to March 31, 2007 have been capitalized till March 31, 2007. Further, where foreign currency liabilities have

been incurred in connection with fixed assets where the exchange difference during the construction period are adjusted in the cost of

the concerned assets.

(iv) In case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortized as income or



expense over the life of the contract. Further exchange difference on such contracts i.e. difference between the exchange rate at the

reporting/settlement date and the exchange rate on the date of inception of contract/the last reporting date, is recognized as income/

expense for the period except that such exchange difference which relate to fixed assets acquired up to March 31, 2004 and after April

1, 2007 are capitalized in the carrying amount of these assets and those exchange differences which relate to fixed assets acquired

from outside India during April 1,2004 to March 31,2007 have been capitalized till March 31, 2007. Further where such contracts have

been entered in connection with fixed assets, the exchange differences arising during construction period are adjusted in the cost of

concerned assets.

(v) For the purpose of financial statements, the operations of subsidiary companies are treated as integral part to the operations of the

company. All revenue transactions of foreign subsidiaries are recorded, on initial recognition at exchange rate which is average yearly

rate since it is not practicable to determine the prevailing rate as at date of transaction. Such revenue transactions are insignificant

to the total revenue transactions of the group. Monetary items thereof reported at the closing rate as on the date of balance sheet.

Non-monetary items which are carried in terms of historical costs are reported using the exchange rate at the date of transaction. Non-

monetary items which are carried at fair value are reported using the exchange rate that existed when the values were determined.

(vi) The exchange differences arising on reporting of long term foreign currency monetary item related to other than acquisition of a

depreciable asset are accumulated in the “ Foreign Currency Monetary Item Translation Difference Account” and amortized over the life

of the monetary item but not beyond March 31, 2011.

M Impairment of assets

At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication

exists, an impairment loss, i.e., the amount by which the carrying amount of asset exceeds its recoverable amount is provided in the books

of account.

N Employee share-based payments

Intrinsic Value Method is used to account for share based payments to employees.


2 Contingent liabilities not provided for:

(Rs million)

ParticularsAs at

March 31, 2009

As at

March 31, 2008

Claims* (excluding claims by employees where amounts are not ascertainable) not

acknowledged as debt:- Sales tax 0.3 0.3- Service tax 0.7 -- Excise duty 3.7 5.0- Income tax 16.3 5.3- Others 7.7 2.4

* All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings when ultimately concluded

will not, in the opinion of the management, have a material effect on the results of operations or financial position of the Company.

- Bills discounted 801.2 630.8- Estimated amount of contracts remaining to be executed on capital account (Net of

advances)

458.5 1,286.7

- Guarantees given to bank on behalf of others - 300.0- Amount payable under agreement 26.2 92.9









3. Auditors’ remuneration:

(Rs million)


(12 months)

Previous year

(12 months)

As auditors (audit fee) # 3.1 2.5

In other capacities

- Others 1.7 1.7

Reimbursement of expenses 0.2 0.1

# includes remuneration of the auditors of the Company and its subsidiaries.

4. Managerial remuneration paid/payable to Managing Director and Whole Time Director

(Rs million)


(12 months)

Previous year

(12 months)

Salary 9.9 9.6

Contribution to provident and other funds 1.7 1.6

Allowances 13.2 12.7

Insurance premium 0.1 0.1

Commission - 4.6

Total 24.9 28.6

(Rs million)


(12 months)

Previous year

(12 months)

Company’s contribution to provident fund 71.1 55.7

Company’s contribution to employees’ state insurance scheme 20.2 16.0

Administrative charges on above 6.9 5.3

The remuneration of Mr. Rajinder Gupta, Managing Director had been approved by the Shareholders in its EGM held on March 18, 2006 . An

amount of Rs 24.0 million has been provided in the books of account in respect of the salary to the Managing Director, out of which Rs 4.8

million has been paid and Rs19.2 million has been withheld due to inadequacy of profits as computed under Section 349 of the Companies

Act, 1956, for which Management is confident of obtaining Central Government approval.

Provisions for incremental gratuity liability and leave encashment have not been considered, since the provision is based on actuarial basis for

the Company as a whole.

5. Employee Benefits

(a) Defined contribution plans

The Company makes contribution towards employees’ provident fund and employees’ state insurance plan scheme. Under the schemes,

the Company is required to contribute a specified percentage of payroll cost, as specified in the rules of the schemes, to these defined

contribution schemes. The Company recognized Rs 98.2 million (Previous year Rs 77.0 million) during the year as expense towards

contribution to these plans. Out of Rs 98.2 million, Rs 9.2 million is included under Fixed assets/ Capital work in progress.

(b) Defined benefit plans

Gratuity scheme

The Company has entered into an agreement with Smt. Maya Devi Trust for the discharge of the gratuity liability to the employees of

the Company, who have acquired membership of the said Trust. The said Trust has taken a policy under Group Gratuity Scheme of the

Life Insurance Corporation and the Company is contributing to the Trust towards the payment of premium for such policy. The accrued

liability of the Company in respect of Gratuity payable to employees is covered in the manner aforesaid.





Earned Leaves

Long term leaves includes earned leaves and sick leaves. These have been provided on accrual basis, based on year end actuarial

valuation.

As at

March 31, 2009

As at

March 31, 2008

Gratuity

Scheme

Earned leave

and sick leave

Gratuity

Scheme

Earned leave

and sick leave

A Expenses recognized in the statement of Profit and

Loss Account for the year ended March 31, 2009



Expected return on plan assets (4.9) - (3.4) -

Actuarial (gains)/ losses (2.9) (4.0) 18.5 5.1

Total expenses 16.3 6.1 35.3 13.6

B Net liabilities recognized in the balance sheet as at

March 31, 2009

Present value of defined benefit obligation as at March

31, 2009

78.0 31.8 62.3 29.3

Fair value of plan assets with LIC* (65.1) - (47.7) -

Funds with Employee Trust* (10.9) - - -

Net liability as at March 31, 2009 (unfunded) 2.0 31.8 14.6 29.3

C Change in the obligation during the year ended

March 31, 2009

Present value of defined benefit obligation at the

beginning of the year

62.3 29.3 31.7 18.7



Actuarial (gains)/losses (2.9) (4.0) 18.5 5.1

Benefits payments (5.5) (3.6) (8.1) (3.0)

Present value of defined benefit obligation at the

end of the year

78.0 31.8 62.3 29.3

D Change in assets during the year ended March 31, 2009

Plan Assets at the beginning of the year 47.7 - 27.6 -

Expected return on plan assets 4.9 - 3.4 -

Contribution by the Company 18.0 - 24.8 -

Actual benefits paid (5.5) - (8.1) -

Plan Assets at the end of the year 65.1 - 47.7 -

E Main actuarial assumptions

Discount rate 7.5% 7.5% 7.5% 7.5%

Rate of increase in compensation levels 7% 7% 7% 7%

Rate of return on plan assets 9.25% - 9.25% -

Mortality rate LIC(1994-96)

Ultimate

LIC(1994-96)

Ultimate

LIC(1994-96)

Ultimate

LIC(1994-96)

Ultimate

* The plan assets are maintained with Life Insurance Corporation of India/Trust. The details of the investment maintained by Life

Insurance Corporation of India/Trust are not available with the Company and have not been disclosed.






6. Deferred taxation:

(Rs million)


(12 months)

Previous year

(12 months)

Deferred tax liability (DTL) on account of accelerated depreciation 1,093.9 715.5

Less : Deferred tax asset (DTA) arising on

- expenses deductible on payment. (279.7) (70.9)

- unabsorbed depreciation (to the extent DTL) (485.2) -

Net deferred tax liability 329.0 644.6#

8. The earnings per share (EPS) disclosed in the profit and loss account have been calculated as under:

(Rs million)


(12 months)

Previous year

(12 months)

Profit/Loss attributable to equity shareholders (Rs million) (A) (533.2) 388.1

Weighted average number of equity shares (Nos) (B) 20,09,45,360 19,41,94,675

Potential dilutive equity shares on Employee Stock Options outstanding (Nos) (C) - 14,17,927

Potential dilutive equity shares on Share Warrants(Nos) (D) - 17,50,000

Weighted average number of equity shares in computing diluted earning per share

(E) = (B+C+D)

20,09,45,360 19,73,62,602

Basic Earnings per share (Rs per share) (face value of Rs 10 each) (A)/(B) (2.65) 2.00

Diluted Earnings per share (Rs per share) (face value of Rs 10 each) (A)/(E) (2.65) 1.97

9. Borrowing cost capitalized (including capital work in progress) during the year amounts to Rs 436.7 million (Previous year Rs 342.4

million).



The Company follows Accounting Standard (AS-22) “ Accounting for taxes on Income”, and in consideration of prudence and also considering

the favorable trend in the textile and paper business of the Company and potential orders for exports, the management is confident that

even after losses in the current year, the Company would be in a position to make adequate taxable profits in the foreseeable future.

Accordingly based on future projections, the management is of the view that sufficient future taxable income would be available to set off

unabsorbed depreciation and accordingly deferred tax assets of Rs 485.2 million would be realized.

# Net of deferred tax asset of Rs 4.9 million on adjustment on account of employee benefit, pursuant to adoption of Accounting Standard

(AS) 15 “Employee Benefits”.

7. Sundry Creditors includes Rs 5.6 million (Previous year Rs 0.1 million) being principal amount due to suppliers covered under “The Micro,

Small and Medium Enterprises Development Act, 2006” (MSMED Act) to the extent such parties have been identified from the available

information.





10. Project and pre operative expenses pending allocation includes:(Rs million)

Particulars As at As at

March 31 , 2009 March 31 , 2008

Opening Balance 753.5 239.1

Add: Expenses incurred during the year:

- Project & pre-operatives expenses

Loss on foreign exchange fluctuation 285.1 -

Interest expenses 167.3 342.4

Salary, wages and bonus etc. 74.4 102.2

Legal and professional 61.4 86.2

Electricity and water charges 7.4 11.2

Travelling and conveyance 6.6 4.5

Others 7.1 18.7

Bank charges 4.9 10.6

Stores and spares consumed 2.0 -

616.2 575.8

- Expenses incurred during Trial Run period

Raw material consumed 737.0 -

Steam consumed 377.8 -

Interest expenses 269.4 -

Electricity and water charges 246.6 -

Salary, wages and bonus etc. 154.8 -

Store & spares consumed 63.6 -

Rebates & discount 43.8 -

Freight,clearing and octroi charges 29.7 -

Other selling expenses 21.7 -

Commission 17.2 -

Legal and professional 5.0 -

Repair and maintenance 3.0 -

Travelling and conveyance 1.8 -

Others 16.0 -

(Increase) /decrease in work in progress and (131.7) -

finished goods

Increase /(decrease) in Excise duty 4.5 -

1,860.2 -

Less : Income earned during trial run period

Sales 1,377.8 -

Other incomes 0.3 -

1,378.1 482.1 - -

Grand Total 1,851.8 814.9

Less: Allocated to fixed assets and capital work in progress 1,551.8 61.4

Closing Balance 300.0 753.5








11. The related party disclosures as per Accounting Standard- 18 are as under: I) Enterprises where control exists a) Enterprise that controls the Company

- Madhuraj Foundation (directly or indirectly holds majority voting power)

II) Other related parties where transactions have taken place during the year:

a) Enterprises under the common control as the Company

- Trident Agritech Limited (Formerly known as Madhuraj Agrotech Limited)

- Madhuraj Foundation Limited

- Praneel Innovations Limited

- Rainbow Retail Limited (Formerly known as Abhishek Retail Limited)

b) Enterprise on which Company exercises significant influence

- Lotus Integrated Texpark Limited

c) Key management personnel

- Mr. Rajinder Gupta

- Mr. Raman Kumar

d ) Relative of key management personnel

- Mr. Abhishek Gupta

Disclosure of transactions between the Company and related parties during the year and outstanding balances as on March 31, 2009.(Rs million)

Particulars


Company

Enterprises that are under common





personnel

Current year

Previous year

Current year

Previous year

Current year

Previous year

Current year

Previous year

Current year

Previous year

Purchase of Goods/Services- Praneel Innovations Limited 22.8 28.8 - Madhuraj Foundation Limited. 0.3 - - Madhuraj Foundation 0.1 -- Lotus Integrated Texpark Limited. 2.3 - Sale of Goods/Services - Rainbow Retail Limited 1.2 - Rent received - Praneel Innovations Limited - 0.6 - Mr. Rajinder Gupta 0.6 0.6 - Lotus Integrated Texpark Limited 0.2 0.2 Rent paid 0.5 7.2 Security Deposit made - Madhuraj Foundation 62.5 3.6 Security Deposit received - Praneel Innovations Limited 0.2 - Remuneration paid/payable - Mr Rajinder Gupta (Also refer note 4) 24.0 28.6 - Mr. Raman Kumar 0.9 - - Mr. Abhishek Gupta 0.7 -Sale of assets: - Madhuraj Foundation. - 70.0 - Lotus Integrated Texpark Limited - 210.0 Investments made: - Lotus Integrated Texpark Limited - 100.0 Expenses incurred on behalf of: - Rainbow Retail Limited 16.2 - - Praneel Innovations Limited 0.3 - Loan and advances taken- Trident Agritech Limited 190.6 -- Asian Trading Corporation Limited. - 246.2Loans and advances given: - Madhuraj Foundation 2.7 3.6 - Trident Agritech Limited - 130.9 - Praneel Innovations Limited 14.1 36.9





Guarantees given on behalf of - Asian Trading Corporation Limited. - 300.0 Balances as at March 31, 2009: Share application money paid- Lotus Integrated Texpark Limited 1.0 -- Rainbow Retail Limited 30.0 - Guarantee outstanding - Asian Trading Corporation Limited. - 300.0 Amounts receivable - Trident Agritech Limited - 143.8 - Lotus Integrated Texpark Limited - 5.0 - Madhuraj Foundation 0.5 2.7 - Praneel Innovations Limited 30.0 30.0 - Rainbow Retail Limited (net of provision of Rs 10.0 million)

7.4 -

Amounts payable - Praneel Innovations Limited - 3.7 - Lotus Integrated Texpark Limited 0.8 - - Trident Agritech Limited 36.8 -- Mr. Rajinder Gupta 25.4 6.1 - Mr. Raman Kumar 0.1 - - Mr. Abhishek Gupta 0.1 -- Asian Trading Corporation Limited - 246.2

12. Loans and advances include amount given to Companies under the same management referred to in Section 370 (1B) of The Companies Act, 1956 of Rs Nil (Previous year Rs 143.8 million), Rs 30.0 million (Previous year Rs 30.0 million) and Rs Nil (Previous year Rs Nil), recoverable from Trident Agritech Limited (formerly known as Madhuraj Agrotech Limited), Praneel Innovations Limited and Madhuraj Foundation Limited respectively {maximum amount outstanding during the year Rs 152.5 million (Previous year Rs 112.4 million), Rs 45.3 million (Previous year Rs 30.0 million) and Rs 0.2 millions (Previous year Rs Nil) respectively}.

13. Segment information: I Segment Accounting Policies

a. The business segments comprise of the following: • Yarn : Yarn manufacturing • Towel : Towel, Dyed Yarn manufacturing • Paper and Chemical : Paper and Sulphuric Acid

b. Business segments have been identified based on the nature and class of products and services, their customers and assessment of differential risks and returns and financial reporting system within the Company

c. The geographical segments considered for disclosure are based on markets, broadly as under: • Sale in the USA • Sale in rest of the world

d. Segment accounting policies: In addition to the significant accounting policies, applicable to the business as set out in Note 1 of Schedule 19 “ Notes to the Accounts”; the accounting policies in relation to segment accounting are as under:

i. Segment assets and liabilities: Segment assets include all operating assets used by a segment and consist principally of cash, debtors, inventories and fixed assets

including capital work in progress, net of allowances and provisions, which are reported as direct offset in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities.

ii. Segment revenue and expenses: Joint revenue and expenses of segments are allocated amongst them on reasonable basis. All other segment revenue and

expenses are directly attributable to the segments. iii. Inter segment sales: Inter segment sales are accounted for at cost and are eliminated in consolidation.

Disclosure of transactions between the Company and related parties during the year and outstanding balances as on March 31, 2009 (Contd.)(Rs million)

Particulars


Company

Enterprises that are under common





personnel

Current year

Previous year

Current year

Previous year

Current year

Previous year

Current year

Previous year

Current year

Previous year






SCHEDULE 19 - NOTES TO THE ACCOUNTS (Contd.)II Details of primary business segments: -

(Rs million)

Particulars Yarn Towel Paper &Chemical Unallocable Eliminations Consolidated

TotalCurrent

yearPrevious

yearCurrent

yearPrevious

yearCurrent

yearPrevious

yearCurrent

yearPrevious

yearCurrent

yearPrevious

yearCurrent

yearPrevious

year

1 Segment Revenue - External sales 3,397.0 2,948.3 7,560.5 5,814.1 3,023.1 1,724.3 13,980.6 10,486.7 - Inter-segment sales 1,211.3 1,363.0 1.3 8.0 13.7 9.1 (1,226.3) (1,380.1) - -- Other Income 0.2 71.0 27.5 269.2 10.1 25.5 4.1 - (4.4) (0.1) 37.5 365.6 Total Revenue 4,608.5 4,382.3 7,589.3 6,091.3 3,046.9 1,758.9 4.1 - (1,230.7) (1,380.2) 14,018.1 10,852.3

2 Segment Results 58.4 334.6 (94.2) 578.4 326.3 222.0 290.5 1,135.0

Unallocated corporate expenses (net of unallocated income) (288.0) (192.1)

Profit before interest and tax 2.5 942.9 Interest expense (833.2) (473.2)Provision for taxation 297.5 (81.6)

3 Profit/(Loss) after tax (533.2) 388.1 4 Other Information

a) Segment assets 6,748.5 5,287.2 5,800.6 5,861.8 8,886.6 8,013.9 (852.6) (1,079.1) 20,583.1 18,083.8 Unallocated corporate assets 2,381.3 1,939.9 2,381.3 1,939.9 Total assets 6,748.5 5,287.2 5,800.6 5,861.8 8,886.6 8,013.9 2,381.3 1,939.9 (852.6) (1079.1) 22,964.4 20,023.7

b) Segment liabilities 640.8 164.6 786.9 664.1 1,635.3 1,941.2 (905.8) (1,025.7) 2,157.2 1,744.2 Unallocated corporate liabilities 20,807.2 18,279.5 20,807.2 18,279.5 Total liabilities 640.8 164.6 786.9 664.1 1,635.3 1,941.2 20,807.2 1,8279.5 (905.8) (1,025.7) 22,964.4 20,023.7 Capital Expenditure 1,775.1 389.1 371.6 792.9 1,354.2 3,283.8 14.1 287.7 3,515.0 4,753.5 Depreciation 275.8 307.7 520.6 466.0 337.0 58.8 26.0 31.4 1,159.4 863.9 Non-cash expenses other than depreciation 2..4 0.2 14.0 1.1 1.1 - 81.7 32.8 99.2 34.1





III Secondary segment – Geographical:-

(Rs million)

Particulars Current year Previous year

Sale in USA 5,150.7 4,126.8

India and other countries 8,829.9 6,359.9

Total Sales 13,980.6 10,486.7

Segment Assets in:

USA 8.2 38.2


Capital expenditure:

USA - -


14. The Company hedges its foreign currency fluctuation exposure by way of foreign currency derivative options. The Company has taken various USD/INR options from various banks and as at March 31, 2009, there are 9 open put options having a maturity period up to January 2013. These derivative options are proprietary products of banks, which do not have a ready market and as such are marked to a model, which is usually bank specific instead of being marked to market. Based on marked to a model concept the loss on valuation amounts to Rs 2,707.8 million. However, in the view of the management due to significant uncertainty associated with the above derivative options whose ultimate outcome depends on future events, the loss on such open derivative options cannot be determined at this stage.

15. During the Financial year 2008-09, the Company has allotted for cash 2,80,00,000 equity shares of Rs 10.00 each at a premium of Rs 11.30 per share on conversion of equivalent number of warrants issued on preferential basis. The proceeds received from this issue have been utilized towards meeting part of capital expenditure for Integrated Paper and Pulp project of the Company.

16. The Board of Directors of the Company has granted options to the employees pursuant to Abhishek Employees Stock Options Plan 2007 on July 9, 2007. These options were granted at Rs 17.55 per option, being the latest available closing market price prior to the date of grant of options in accordance with SEBI guidelines. The quoted price of share on grant and the exercise price of option is equal and therefore there is no impact on profit and loss account due to Employee Share-based options as the Company is following intrinsic value method.

17. The Company has exercised the option given vide notification No. G.S.R. 225(E) dated March 31, 2009 issued by the Ministry of Corporate Affairs, Government of India and in accordance therewith, the Company has capitalized the loss aggregating to Rs 78.1 million arisen on translation of long term foreign currency monetary liabilities relating to acquisition of fixed assets, out of which Rs 0.2 million has been amortized during the year and the unamortized balance as at March 31, 2009 is Rs 77.9 million.

Had the Company not exercised the option given under the aforesaid Notification, gross fixed assets would have been Rs 20,954.0 million (as against reported figure of Rs 21,032.1 million), depreciation would have been Rs 1,159.1 million (as against reported figure of Rs 1,159.3 million), net exchange loss would have been Rs 136.0 million (as against reported figure of Rs 57.9 million) and loss after tax for the year would have been Rs 608.3 million (as against reported figure of Rs 530.4 million).

18. During the Financial year 2008-09, the Company completed its Integrated Paper and Pulp project. After installing and completing the project, the Company had to further incur additional capital expenditure on debottlenecking of critical processes of newly installed paper & pulp machines and finally started the commercial production w.e.f. December 1, 2008 after achieving normal level of production. The expenditure incurred on the project has been capitalized in the books of accounts.

19. The figures of the previous year have been rearranged/ regrouped, wherever considered necessary to facilitate comparison.

20. Schedules 1 to 19 form an integral part of the accounts.


S K Tuteja Rajinder Gupta Chairman Managing Director

Place : New Delhi Pawan Jain Arun GoyalDate : May 15,2009 Company Secretary Chief Financial Officer







INFORMATION RELATED to subsidiaries for the year ended March 31, 2009

Figures in India Rupees*

Name of subsidiary Company Abhishek Industries Inc.

Abhishek Europe SA**

Abhishek Global Ventures Limited

Country of Incorporation USA Switzerland India

Financial year ended on March 31, 2009 March 31, 2009 March 31, 2009

No. of shares held in subsidiary Company 50,000 equity shares of USD 1 each

1,000 equity shares of CHF 100 each

50,000 equity shares of Rs 10 each

Extent of Holding Company’s interest (%) 100.00 99.80 100.00

Financials

a) Capital 25,36,750.00 44,35,854.00 5,00,000.00

b) Reserves (12,61,121.42) (28,72,810.01) (39,39,002.00)

c) Total Assets 13,72,025.08 20,17,077.11 6,56,64,806.00

d) Total Liabilities (excludes capital & reserves) 96,396.50 4,54,033.12 24,806.00

e) Details of Investments NIL NIL 4,75,000.00

f) Turnover NIL NIL 37,17,740.00

g) Profit before taxation 14,96,852.46 (5,07,196.96) (37,89,681.00)

h) Provision for Taxation (includes fringe benefit tax) NIL 20,806.90 29,056.00

i) Profit after taxation 14,96,852.46 (5,28,003.86) (38,18,737.00)

j) Proposed dividend NIL NIL NIL

*Exchange rate as on March 31, 2009

For Abhishek Industries Inc - 1 USD = Rs 50.735

For Abhishek Europe SA - 1 CHF = Rs 44.270

**The Company has disinvested its entire holding in Abhishek Europe SA. Accordingly Abhishek Europe SA has ceased to be a subsidiary of the

Company w.e.f. May 18, 2009.

Abhishek Industries Limited114

NOTES

115

NOTES

Abhishek Industries Limited116

NOTES

Notice is hereby given that the 19th Annual General Meeting of the Members of ABHISHEK INDUSTRIES LIMITED will be held on Thursday, the 27th day of August, 2009 at 10.30 A.M. at the Registered Offi ce of the Company at Trident Complex, Raikot Road, Barnala, Punjab to transact the following business:

ORDINARY BUSINESS1. To receive, consider and adopt the audited Balance Sheet of the

Company as at March 31, 2009; Profi t and Loss Account and Cash Flow Statement for the year ended on that date along with the Reports of the Auditors and Directors thereon.

2. To appoint a Director in place of Mr S K Tuteja, who retires and being eligible, offers himself for re-appointment.

3. To appoint a Director in place of Ms Pallavi Shroff, who retires and being eligible, offers herself for re-appointment.

4. To appoint a Director in place of Ms Ramni Nirula, who retires and being eligible, offers herself for re-appointment.

5. To appoint a Director in place of Mr Rajiv Dewan, who retires and being eligible, offers himself for re-appointment.

6. To appoint auditors to hold offi ce from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting and to fi x their remuneration and pass following resolution thereof:

“RESOLVED that M/s Deloitte Haskins & Sells, Chartered Accountants, New Delhi, be and are hereby re-appointed as statutory auditors of the Company to hold the offi ce from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company, on such remuneration including reimbursement of traveling and other out of pocket expenses as may be fi xed by the Managing Director of the Company.”

SPECIAL BUSINESS7. Appointment of Director

To consider and, if thought fi t, to pass with or without modifi cation(s), the following resolution as an Ordinary resolution:

“RESOLVED that Mr Karan Avtar Singh, who was appointed as an Additional Director of the Company by the Board of Directors pursuant to Section 260 of the Companies Act, 1956 and holds offi ce upto the date of this Annual General Meeting, be and is hereby appointed as a Director of the Company subject to annual retirement under the Articles of Association of the Company.”

8 Appointment of Mr. Raman Kumar as Whole Time Director & payment of remuneration thereof

To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as a Special Resolution:

“RESOLVED that pursuant to the provisions of Sections 198, 269, 309 read with Schedule XIII and all other applicable provisions of the Companies Act, 1956,subject to the approval of Central Government, if so required, the

consent of the Company be and is hereby accorded to the appointment of Mr. Raman Kumar as Whole Time Director of the Company for a period of three years with effect from September 24, 2008 on the following terms and conditions, including remuneration as approved by the Compensation Committee of the Company subject to a maximum of Rs. 1,40,000/-(Rupee One lac forty thousand) per month, as are set out in the Agreement entered into by the Company with Mr Raman Kumar, which agreement is placed before the meeting and is hereby specifi cally sanctioned with liberty to the Board of Directors to alter and vary the terms and conditions of the said appointment and/or remuneration and/or agreement as may be agreed to between the Board of Directors and Mr Raman Kumar or as may be varied in the General Meeting:

1. Basic Salary: Rs. 56,000/- (Rupees fi fty six thousand only) per month

2 Perquisites and allowances: 150% of the Basic Salary

3. Other Terms:

a) The Whole Time Director shall also be entitled to the benefi ts under other benefi ts, medical reimbursement schemes, privileges and amenities,amended salary structure, in accordance with the Company’s practice and Rules & Regulations in force from time to time.

b) Apart from the above remuneration the Whole Time Director shall also be provided with a car and chauffeur as per the Company’s policy.

c) Notwithstanding anything to the contrary herein contained, where in any fi nancial year, the Company has no profi ts or its profi ts are inadequate, the Company will pay the above remuneration as minimum remuneration to the Whole Time Director.

d) The Board of Directors may increase the remuneration and perquisites of Mr Raman Kumar, Whole Time Director from time to time within the limits prescribed under the Companies Act, 1956 and such other guidelines or ceiling fi xed by the Government from time to time.”

“RESOLVED FURTHER that Board of Directors of the Company be and is hereby authorized to do all such acts, deeds, matters and things as may be necessaryand expedient for giving effect to the above resolution.”

9. Increase in remuneration of Mr. Abhishek Gupta

To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as a Special Resolution:

“RESOLVED that pursuant to provisions of Section 314(1B) of the Companies Act, 1956 and all other applicable provisions, rules, regulations and subject to approval of Central Government, if so required, the remuneration of Mr. Abhishek Gupta, son of Mr Rajinder

NOTICE

Abhishek Industries LimitedRegistered Offi ce: Trident Complex, Raikot Road, Barnala – 148 101, Punjab

114-120.indd 114114-120.indd 114 8/3/09 5:51:34 PM8/3/09 5:51:34 PM

Gupta, Managing Director of the Company be and is hereby fi xed at Rs 1,50,000 (Rupees One lac fi fty thousand) w.e.f. April 1, 2009 as per the following structure:-

Basic Salary – Rs 60,000 per month

Perquisites & Allowances – 150% of the Basic salary”

“RESOLVED FURTHER that he will also be eligible for all facilities and schemes as given to other employees of the Company under same cadre.”

“RESOLVED FURTHER that the Board of Directors of the company be and is hereby authorized to do all such acts, deeds, matters and things as may be necessary and expedient for giving effect to the above resolution.”

10. Increase in Borrowing Powers

To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as an Ordinary Resolution:

“RESOLVED that in supersession of the resolution passed by the shareholders in the Extra-Ordinary General Meeting held on March 18, 2006, the consent of the Company be and is hereby accorded under the provisions of Section 293(1)(d) of the Companies Act, 1956 to the Board of Directors of the Company for borrowing monies, from time to time, at its discretion either from the Company’s bankers or any other bank(s), fi nancial institution(s), international lending agencies or any other lending institution(s), persons, fi rms, trusts or bodies corporates by way of deposits, advances or other loans, convertible/non-convertible debentures, whether unsecured or secured directly by mortgage, charge, hypothecation or pledge of any of the Company’s assets and properties, book debts or by collateral security thereon or on such terms and conditions as may be considered suitable by the Board of Directors, even though the monies to be borrowed together with monies already borrowed by the Company, apart from temporary loans obtained from Company’s Bankers in the ordinary course of business, exceeds the aggregate paid-up capital of the Company and its free reserves i.e. reserves not set apart for any specifi c purpose provided, however, that the total amount of such borrowings shall not exceed the amount of Rs 30,00,00,00,000/- (Rupees Three thousand crores only) at any time.”

“RESOLVED FURTHER that the Board of Directors of the company be and is hereby authorized to do all such acts, deeds, matters and things as may be necessary and expedient for giving effect to the above resolution”.

11. Employee Stock Options Scheme

To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as a Special Resolution:-

“RESOLVED that pursuant to the provisions of Section 81(1A), and all other applicable provisions, if any, of the Companies Act 1956, the Memorandum and Articles of Association of the Company and subject to such other approvals, permissions and sanctions as may be necessary and subject to such conditions and modifi cations as may be prescribed or imposed while granting such approvals, permissions and sanctions, the consent of the Company be and is hereby accorded to the Board of Directors of the Company (hereinafter referred to as “the Board” which term shall be deemed to include any Committee, including the Compensation Committee/any other Committee(s) which the Board may constitute to exercise its powers, including the powers, conferred by this resolution), in addition to existing ESOP scheme of the Company, to create, offer, issue and allot at any time to or to the benefi t of such person(s) who are in permanent employment of the company, including any Director, whether whole time or otherwise (except any director who is a promoter or belongs to the promoter group or otherwise, who holds, either by himself or through his relative,

or through any body corporate, directly or indirectly, more than 10%

of the outstanding equity Shares of the Company), of the Company,

whether in India or abroad, options exercisable into shares or securities

convertible into equity shares up to 5% of paid up share capital of the

Company as on March 31, 2009, i.e. upto 1,11,09,733 equity shares

[including the quantum of shares that may be bought by an Employee

Welfare Trust (hereinafter referred to as “the Trust” which term shall

be deemed to include any Employee Welfare Trust formed for this

purpose) through any of the recognised stock exchanges where the

company’s shares are traded], under one or more employee stock

option schemes (“the Schemes”), in one or more tranches, and on such

terms and conditions as may be fi xed or determined by the Board in

accordance with the provisions of the law or guidelines issued by the

relevant Authority; each option would be exercisable for one Equity

share of a face value of Rs. 10 each fully paid-up on payment of the

requisite exercise price to the Company”.

“RESOLVED FURTHER that the Board be and is hereby authorised to

issue and allot Equity shares upon exercise of options from time to

time in accordance with the employee stock option scheme(s) and such

Equity shares shall rank pari passu in all respects with the then existing

Equity Shares of the Company”.

“RESOLVED FURTHER that in case the equity shares of the Company

are either sub-divided or consolidated, then the number of shares to

be allotted and the price of acquisition of the shares by the aforesaid

option grantees under the schemes shall automatically stand

augmented or reduced, as the case may be, in the same proportion as

the present face value of Rs. 10 per equity share bears to the revised

face value of the equity shares of the Company after such sub-division

or consolidation, without affecting any other rights or obligations of

the said allottees”.

“RESOLVED FURTHER that the Board be and is hereby authorized

to make modifi cations, changes, variations, alterations or revisions in

the said schemes as it may deem fi t, from time to time in its sole and

absolute discretion in conformity with the provisions of the Companies

Act, 1956, the Memorandum and Articles of Association of the

Company, SEBI (Employee Stock Option Scheme) Guidelines and any

other applicable laws”.

“RESOLVED FURTHER that the Board be and is hereby authorized to

take such steps for listing of the securities allotted under the schemes

on the stock exchanges where the securities of the Company are listed

as per the provisions of the listing agreement(s) with the concerned

stock exchanges, the guidelines and any other applicable laws and

regulations”.

12. To take note of the result of postal ballot conducted for creation of Mortgage

To take note of the result to be submitted by the Scrutinizer for

the Ordinary Resolution proposed to be passed separately through

postal ballot pursuant to the provisions of Section 192A and all other

applicable provisions of the Companies Act, 1956 for creation of

Charge over moveable and immoveable properties of the Company for

securing term loans and working capital facilities under section 293(1)

(a) of the Companies Act, 1956.

By Order of the Board

For Abhishek Industries LimitedRegistered Offi ce:Trident Complex

Raikot Road

Barnala-148 101, Punjab Pawan Jain

Dated: July 23, 2009 Company Secretary

114-120.indd 115114-120.indd 115 8/3/09 5:51:34 PM8/3/09 5:51:34 PM

NOTES:

i. A Member entitled to attend and vote is entitled to appoint a

proxy to attend and vote on poll instead of himself/herself and the

proxy need not be a member. Proxy form in order to be effective

must be received by the Company not less than 48 hours before

the commencement of the Meeting. A proxy so appointed shall

not have any right to speak at the meeting. The blank proxy form

is enclosed.

ii. The Register of Members and Share Transfer Books of the Company

will remain closed from Friday, August 21, 2009 to Thursday, August

27, 2009 (both days inclusive) for the purpose of Annual General

Meeting.

iii. Documents referred to in the Notice and Explanatory Statement are

open for inspection at the Registered Offi ce of the Company on all

working days, except holidays, between 11.00 A.M. to 1.00 P.M. upto

the date of the Annual General Meeting.

iv. Explanatory Statements pursuant to Section 173(2) of the Companies

Act, 1956 in respect of Item No. 7 to 11 are annexed hereto and forms

part of this Notice.

v. Members desirous of getting any information on Accounts or other items

of Agenda are requested to forward his/her queries to the Company at

least ten working days prior to the date of Annual General Meeting so

as to enable the Management to keep the information ready.

vi. Corporate members intending to send their authorized representatives

are requested to send a duly certifi ed copy of the Board resolution

authorizing their representatives to attend and vote at the Annual

General Meeting.

vii. Members are requested to notify immediately the change in their

address, if any, to the Company or its Share Transfer Agent and in case

the shares are held in dematerialized form, this information should be

passed on to their respective Depository Participants without any

delay and should always quote their folio number or DP ID & Client ID,

as the case may be, in all correspondence.

viii. Members/Proxies attending the Meeting are requested to bring their

copy of Annual Report with them at the Meeting and deliver the

enclosed attendance slip at the entrance of the meeting hall.

ix. Reappointment of Directors

Pursuant to the provisions of Articles of Association, Mr. S K Tuteja,

Ms. Pallavi Shroff, Ms. Ramni Nirula and Mr. Rajiv Dewan, Directors are

retiring at the ensuing Annual General Meeting and being eligible, offer

themselves for reappointment. The brief resumes of all these directors

and other information as per Clause 49 of the Listing Agreement with

Stock Exchanges are provided elsewhere in the Annual Report.

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE

COMPANIES ACT, 1956

Item No. 7

Appointment of Director

Mr. Karan Avtar Singh was appointed as an Additional Director on the Board w.e.f.

January 3, 2009 in terms of Article 161 of the Articles of Association of the

Company. Pursuant to Section 260 of the Companies Act, 1956, he holds offi ce

upto the date of this Annual General Meeting and is eligible for appointment

as Director. The Company has received a notice in writing from a shareholder

under Section 257 of the Companies Act, 1956 proposing his name for the

appointment as Director of the Company. No equity share of the Company

is being held by Mr. Karan Avtar Singh. A brief profi le of Mr. Karan Avtar Singh

and other information as per clause 49 of the Listing Agreement with Stock

Exchanges are provided elsewhere in this Annual Report.

Your Directors consider that the Company would be benefi ted by the mature

advice of Mr. Karan Avtar Singh and recommend the acceptance of the

resolution.

None of the Directors is interested in the resolution except Mr. Karan Avtar

Singh, the proposed appointee.

Item No. 8

Appointment of Mr. Raman Kumar as Whole Time Director &

payment of remuneration thereof

Mr Raman Kumar was appointed as Director of the Company w.e.f. September

24, 2008 after obtaining shareholders approval in the Annual General

Meeting held on that day. The Board of Directors appointed Mr Raman Kumar

as Whole Time Director of the Company in their meeting held on September

24, 2008 for a period of three years w.e.f. September 24, 2008 and payment

of remuneration thereof as approved by the Compensation Committee of the

Company and on the terms and conditions as are set out in the resolution.

As per the provisions of the Companies Act, 1956, read with schedule XIII,

thereof, approval of shareholders is required for the purpose. Hence, the Board

recommends the resolution for your approval by way of special resolution.

The information as required under Schedule XIII of the Companies Act, 1956

is given hereunder:

I. GENERAL INFORMATION Nature of Industry

Abhishek Industries Limited is operating in three business segments

viz. Yarns, Terry Towels, Paper and Chemicals.

Commercial Production

As on March 31, 2009, the Company is having capacities for

manufacture and processing as hereunder:

SrNo

Particulars of Manufacturing/processing

Capacity

1. Yarn 1,76,352 Spindles

2. Processed Yarn 6,825 tpa

3. Open End Yarn 1,920 Rotors

4. Manufacture of Terry Towels 350 Looms

5. Writing & Printing Paper 1,75,000 tpa

6. Sulphuric Acid 1,00,000 tpa

7. Caustic Soda 110 tpd

8. Co generation of Power 50 MW

9. Steam 338 tph

The Company has recently completed its fi rst phase of Yarn expansion

project at Budni, successfully. As per fi rst phase of expansion, the

Company has set up 50,400 spindles at Budni, Madhya Pradesh which

increased the total Yarn capacity to 1,76,352 spindles & laid foundation

stone of second phase, comprising another 50,400 spindles. The Company

has started commercial production on its newly installed integrated state

of the art Paper modernisation cum expansion project. Post completion of

project, the paper manufacturing capacity of Company has increased to

1,75,000 tpa. The Terry Towel Expansion plan consists of addition of 82

looms and modernization cum balancing of textile facilities is successfully

completed & all looms were made operational during the year.

Financial performance

During the year under review, the Company has achieved a gross turnover

of Rs 15,456.1 million, Operational profi t (EBDITA) of Rs 2605.3 million.

However, due to volatility in foreign exchange the Company suffered a net

loss of Rs 530.4 million during the year under review.

Export performance and net foreign exchange

During the year ended March 31, 2009 the total exports of the

Company have been at Rs 6861.5 million and the Company has earned net foreign exchange of Rs 5398 million.

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Foreign Investments and collaborators

The Company has established wholly owned subsidiary in USA in 2003 in the name of Abhishek Industries Inc. The fi nancial details on liabilities and assets including investments in the subsidiary are provided elsewhere in the Annual Report.

The Company has not entered into any foreign collaboration as on date.

Il INFORMATION ABOUT THE APPOINTEE Background details

Mr Raman Kumar, aged 57 years, is masters in economics and post graduate in business management. He was associated with Smt Mayadevi Trust, which takes care of the social security and other welfare measures of more than 9000 employees of the Company. He has also worked with government sector in various capacities. He has rich and varied experience in administration, liasoining, legal and corporate affairs. Mr Raman Kumar can be briefl y characterized as a person with a vast working experience having an in depth legal knowledge and a good legal acumen, blended with sharp liasoining skills and a result-oriented attitude. Apart from holding directorship of the Company, Mr Raman Kumar also holds directorship in other bodies corporate.

Past Remuneration

Prior to appointment as Director and Whole time director of the Company, Mr Raman Kumar was employed with the Company at a monthly remuneration of Rs 80,000. Further, he is also entitled to the benefi ts as are granted to the to the other executives of the Company in accordance with the Company’s practice, rules and regulations in force from time to time.

Job profi le and his suitability

Mr. Raman Kumar, Whole Time Director, shall be responsible for all the legal affairs of the Company. He is also the occupier of the Company under the Factories Act, 1948. He will be responsible for the overall well being of the employees of the Company. He has been serving the Company since 1990. Mr Raman Kumar’s rigorous approach and legal knowledge & liasoining abilities will help the Company to achieve the greater heights of success.

Remuneration proposed

Keeping in view the responsibilities assigned to Mr. Raman Kumar and his role in the legal risk management of the Company, it is proposed to appoint Mr. Raman Kumar as Whole time director of the Company on the monthly basic salary of Rs. 56,000/-(Rupees Fifty Six thousand only) plus other allowances and perquisites as specifi ed in resolution. Further, the Board of Directors shall have right to increase the basic salary of Mr Raman Kumar, Whole time director of the Company, subject to approval of shareholders, government authorities, if required.

Further, he would be entitled to the benefi ts as are granted to the Senior executives of the Company in accordance with the Company’s practice and rules and regulations in force from time to time.

Comparative remuneration profi le with respect to industry, size of the Company, profi le of the position and person

The salary structure of the managerial personnel has undergone a major change in the industry in the recent past. Keeping in view the type of the industry, size of the Company, the responsibilities and capabilities of Mr. Raman Kumar, the proposed remuneration is competitive with remuneration paid by other companies to such similar positions.

Pecuniary relationship with the Company or relationship with the managerial personnel

Mr. Raman Kumar does not have any pecuniary relationship with the

Company or relationship with the managerial personnel.

III OTHER INFORMATION Keeping the overall scenario of the industry, the operational

performance of the Company is reasonably good and has been

expanding its capacities across the segment to gain the competitive

edge. The company is strengthening its focus on supply chain

management, quality control, captive production, Kaizen, strategic

market alliances and expansions.

The above may also be treated as an abstract under of terms of

contract/agreement entered into between the Company and Mr Raman

Kumar, Wholetime Director pursuant to Section 302 of the Companies

Act, 1956.

None of the Directors is interested in the above resolution except Mr.

Raman Kumar himself.

Item No. 9

Increase in remuneration of Mr. Abhishek Gupta

Mr Abhishek Gupta has been working with Company as Deputy Manager

w.e.f. July 18, 2008 and is being paid a monthly salary of Rs 1,00,000 (all

inclusive) w.e.f. September 24, 2008 after approval of shareholders in last

Annual General Meeting. The appointment and remuneration of Mr Abhishek

Gupta has also been approved by the Central Government under sub-section

(1B) of section 314 of the Companies Act, 1956. The Central Government

while conveying its approval has allowed one increment in a year may be

granted to Mr Abhishek Gupta.

Looking at the performance of Mr Abhishek Gupta in his job profi le and recent

development in the areas of Reward and Recognitions being carried out in

the organization, the Screening Committee and Board in their meeting held

on May 15, 2009 have approved increase in remuneration of Mr Abhishek

Gupta to Rs 1,50,000 per month w.e.f. April 1, 2009 as per the structure

mentioned in the resolution.

Since, the employment of Mr Abhishek Gupta, son of Mr Rajinder Gupta is

governed by the provisions of Section 314(1B) of the Companies Act, 1956,

it is necessary to obtain the prior approval of the Company by a special

resolution for increasing the remuneration of Mr Abhishek Gupta. Hence,

the Board recommends the resolution for your approval by way of special

resolution.

None of the Directors except, Mr Rajinder Gupta, Managing Director, who is

father of Mr Abhishek Gupta, shall be deemed to be interested in the above

resolution.

Item No. 10

Increase in Borrowing Powers

Presently the Board of Directors of the Company has been authorized to

borrow upto an amount of Rs 2000 crores (Rupees two thousand crores

only). With the implementation of the expansion projects in the Yarn

Division, Terry Towel Division and Paper Division and increase in operations

& productivity, the Company has to borrow funds from time to time. It is,

therefore, proposed to increase the borrowing power of the Company upto

Rs 3000 crores (Rupees three thousand crores only).

Under Section 293(1)(d) of the Companies Act, 1956 for borrowings of more

than paid up capital and free reserves requires approval of shareholders.

Hence, the Board recommends the resolution for your approval.

None of Directors is personally interested in the resolution.

Item No. 11

Employee Stock Options Scheme

The human resource plays a vital role in growth and success of a Company..

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The growth and development of any enterprise become a reality thanks

to the contribution of its people. Employees are ‘business partners’ in

the true sense of the word. To cover more and more employees under

the ESOP scheme and with the objectives of securing greater employee

participation; motivating the employees to contribute to the growth and

profi tability of the Company; enabling them to participate in the long-term

growth and fi nancial success of the organisation, and a common objective

of maximizing the shareholder value, it is proposed to grant employee stock

options to employees through one or more employee stock option schemes

in addition to the existing ESOP scheme of the Company. This would enable

the Company to reward performance, past loyalty and to develop a greater

sense of ownership with the organisation.

The main features of the employee stock option schemes are as under:

Total number of options to be granted

Options convertible into such number of equity shares not exceeding up to

5% of the paid up share capital of the Company as on March 31, 2009 ,

i.e. upto 1,11,09,733 equity shares [including the quantum of shares that

may be bought by an Employee Welfare Trust (hereinafter referred to as “the

Trust” which term shall be deemed to include any Employee Welfare Trust

formed for this purpose) through any of the Recognised stock exchanges

where the company’s shares are traded] will be available for being granted

to eligible employees of the Company under one or more employee stock

option Schemes. Each option (after it is vested) will be exercisable for one

Equity share of Rs. 10 each fully paid-up.

Vested options that lapse due to non-exercise or unvested options that

get cancelled due to resignation of the employees or otherwise would be

available for being re-granted at a future date.

Identifi cation of classes of employees entitled to participate in the

employee stock option schemes

All permanent employees of the company including Directors (excluding

promoters and any director who holds either by himself or through his

relative, or through any body corporate, directly or indirectly, more than 10%

of the outstanding equity Shares of the Company), whether working in India

or abroad, as may be decided by the Board (Which includes any committee

thereof), from time to time, would be entitled to participate in the employee

stock option schemes.

Employees may be granted Stock Options based on performance and such

other criteria as the Board may, in its absolute discretion decide. The options

granted to an employee will not be transferable to any person and shall

not be pledged, hypothecated, mortgaged or otherwise alienated in any

manner.

Requirements of vesting and period of vesting

The Options granted shall vest so long as the employee continues to be in

the employment of the Company. Vesting of the options shall take place

over a maximum period of 4years with a minimum vesting period of 1 year

from the date of grant. The Board would determine the exact proportion and

period in which the options would vest.

The Board may, in its discretion, lay down certain performance metrics on

the achievement of which the granted options would vest, the detailed

terms and conditions relating to such performance-based vesting, and the

proportion in which options granted under the schemes would vest (subject

to the minimum vesting period as specifi ed above).

Exercise Price

The exercise price shall not be less than the face value per share per option

and shall be decided by the Board at the time of grant(s).

Exercise Period and the process of Exercise

The Exercise period would commence from the date of vesting and will

expire on completion of fi ve years from the date of vesting of options.

The options will be exercisable by the Employees by a written application to

the Company to exercise the options in such manner, and on execution of

such documents, as may be prescribed by the Board from time to time. The

options will lapse if not exercised within the specifi ed exercise period.

Appraisal Process for determining the eligibility of the employees to

ESOP

The appraisal process for determining the eligibility of the employee will

be specifi ed by the Board, and will be based on criteria such as seniority

of employee, length of service, performance record, criticality, merit of the

employee, future potential contribution by the employee and/or such other

criteria that may be determined by the Board at its sole discretion.

Maximum number of options to be issued per employee and in

aggregate

The number of options that may be granted to employees under the Scheme

shall be determined by the Compensation Committee from time to time.

However, grant of options to identifi ed employees, during any one year shall

not be equal to or exceeding 1% of the issued capital (excluding outstanding

warrants and conversions) of the company at the time of grant of options.

Disclosure and Accounting Policies

The Company shall comply with the disclosure and the accounting policies

prescribed by concerned Authorities including SEBI.

Method of option valuation

The Company shall calculate the employee compensation cost using the

intrinsic value of the options.

If the Company calculates the employee compensation cost using

intrinsic value of the stock options, the difference between the employee

compensation cost that shall have been recognized if it had used the fair

value of the options, shall be disclosed in the Directors’ Report and also the

impact of this difference on profi ts and on EPS of the Company shall also be

disclosed in the Directors’ Report.

As the employee stock option schemes provide for issue of shares to be

offered to persons other than existing shareholders of the company, consent

of the members is sought pursuant to Section 81(1A) of the Companies Act,

1956.

None of the Directors of the Company are in any way, concerned or interested

in the resolution, except to the extent of the securities that may be offered

to them under the scheme.

By Order of the Board

For Abhishek Industries LimitedRegistered Offi ce:Trident Complex

Raikot Road

Barnala-148 101, Punjab Pawan JainDated: July 23, 2009 Company Secretary

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ATTENDANCE SLIP

Member’s Folio No. :…………………………………………………….……………………………………………………………………………….……………………………………………………………………………….………………………………………………….………

Client ID No. :…………………………………………………….……………………………………………………………………………….……………………………………………………………………………….………………………………………………….………

DP ID No. :…………………………………………………….……………………………………………………………………………….……………………………………………………………………………….………………………………………………….………

Name of the Member :…………………………………………………….……………………………………………………………………………….……………………………………………………………………………….………………………………………………….………

Name of Proxy holder :…………………………………………………….……………………………………………………………………………….……………………………………………………………………………….………………………………………………….………

No. of shares held :…………………………………………………….……………………………………………………………………………….……………………………………………………………………………….………………………………………………….………

I hereby record my presence at the 19th ANNUAL GENERAL MEETING of the Company held on Thursday, the 27th day of August, 2009 at 10.30 A.M. at

Trident Complex, Raikot Road, Barnala–148 101, Punjab.

____________________________

Signature of Member/Proxy

Notes :

1. Members/Proxy holders are requested to produce the attendance slip duly signed for admission to the meeting hall.

2. Members are requested to bring their copy of Annual Report.

PROXY FORM

Member’s Folio No/Client ID: ………...............................................……………………

I/We….………………………………………………....................………………….................................………...... of ...........….…………………………………………………………......................................................................................................... in the district of

…………………………………...................................….......... being a member/members of ABHISHEK INDUSTRIES LIMITED, hereby appoint……………..............................................................………………………

………………………….......................…………… of ……….......................………………………………… in the district of ………………………................……………… or failing him/her

……………………………………… of ……………………………………………… in the district of …………………………………………… as my/our proxy to vote for me/us on my/our behalf at the 19th ANNUAL

GENERAL MEETING of the Company to be held on Thursday, the 27th day of August, 2009 at 10.30 A.M. and at any adjournment thereof.

Signed this ……………………………… day of ……………………………………………… 2009.

Note :

If it is intended to appoint a proxy, the form of proxy should be completed and deposited at the Registered Offi ce of the Company at least 48 hours before

the commencement of the meeting

Affi x Re 1Revenue Stamp

here



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Board of DirectorsMr Rajinder Gupta

Mr S K Tuteja

Ms Pallavi Shroff

Ms Ramni Nirula

Mr Rajiv Dewan

Mr Karan Avtar Singh

Mr Raman Kumar

Chief Financial Offi cerMr Arun Goyal

Company SecretaryMr Pawan Jain

Statutory AuditorsDeloitte Haskins & Sells

Internal AuditorsKPMG

Cost AuditorsRamanath Iyer & Co.

Tax AuditorsS C Vasudeva & Co.

BankersState Bank of India

Canara Bank

Punjab National Bank

State Bank of Patiala

Corporation Bank

Registered Offi ceTrident Complex,

Raikot Road

Barnala – 148 101

Tel: +91-1679-244700-02

Fax: +91-1679-244708

Email: [email protected]

Corporate Offi ceE-212, Kitchlu Nagar

Ludhiana – 141 001

Tel: +91-161-5039999, 5038888

Fax: +91-161-5039900, 5038800

email: [email protected]

US SubsidiaryAbhishek Industries Inc

444 NE Ravenna Blvd

Ste 402, Seattle

WA 98115,

USA


Registrar & Transfer AgentAlankit Assignments Limited

(Unit: Abhishek Industries Limited)

2E/21 Jhandewalan Extension

New Delhi – 110 055

Tel: +91-11-23541234, 42541234

Fax: +91-11-42541967


www.tridentindia.com

CORPORATE INFORMATION

ABHISHEK INDUSTRIES LIMITEDE-212, Kitchlu Nagar, Ludhiana - 141 001

www.tridentindia.com, email: [email protected]

Abhishek Industries Annual Report 202008 9[1]

Documents

Transcript of Abhishek Industries Annual Report 202008 9[1]