Annual Report 2008 - Responsive...Annual Report 2008 REGISTERED OFFICE Village Betegaon, Mahagaon...

Annual Report 2007-08

CONTENTS

Corporate Information 01 Notice of AGM 02 Directors’ Report 09 Management Discussion & Analysis 14 Report on Corporate Governance 17 Auditors’ Report 27 Standalone Financials

Balance Sheet 32 Profit & Loss Account 33 Cash Flow Statement 34 Schedules 36 Accounting Policies 43 Notes to Accounts 45 Balance Sheet Abstract 51

Statement under Section 212 52 Auditors’ Report on Consolidated Financials 53 Consolidated Financials

Consolidated Balance Sheet 54 Consolidated Profit & Loss Account 55 Consolidated Cash Flow Statement 56 Consolidated Schedules 58 Consolidated Accounting Policies 64 Consolidated Notes to Accounts 65

Financials of Axiom Impex International Limited 69 Attendance Slip & Proxy Form 97

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CORPORATE INFORMATION

BOARD OF DIRECTORS

Mr.Santosh Shinde Executive Director

Mr. Ashok Jha Executive Director

Mr. Rajesh Pandey Executive Director

Mrs. Vaishali Shinde Independent Non-Executive Director

Mr. Ramesh Mistry Independent Non–Executive Director COMPANY SECRETARY Rajesh Kedia

AUDITORS:

Singrodia Goyal & Co. Chartered Accountants A-201, Rajeshri Accord Telly Cross Lane, Off. S.N.Road Andheri (E), Mumbai-400069 BANKERS HDFC Bank Ltd SOLICITORS Little & Co. REGISTERED OFFICE Village Betegaon, Boisar (East), Mahagaon Road, Taluka Palghar, Dist. Thane – 401 501 REGISTRARS, SHARE TRANSFER AGENTS Intime Spectrum Registry Limited C-13 ,Pannalal Silk Mills Compound, L. B . S. Marg, Bhandup (W), Mumbai 400 078

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NOTICE NOTICE is hereby given that the Twenty- sixth Annual General Meeting of the Members of RESPONSIVE INDUSTRIES LIMITED will be held on Wednesday 20th August, 2008 at 11.00 a.m. at the Registered Office of the Company to transact the following businesses: ORDINARY BUSINESS 1. To receive, consider and approve the Balance Sheet as at 31st March 2008 and the

Profit & Loss Account for the Period ended on that date together with the Directors’ Report and the Auditors’ Report thereon.

2. To appoint a Director in place of Mr. Ramesh Mistry who retires by rotation and

being eligible offers himself for re-appointment. 3. To declare dividend on equity shares.

SPECIAL BUSINESS 4. Appointment of Auditors

To consider and if thought fit to pass with or without modification the following Ordinary Resolution : “RESOLVED that subject to the provisions of Sections 224,225 and other applicable provisions , if any , of Companies Act, 1956, M/s Haribhakti & Co.Chartered Accountants, be and are hereby appointed as Auditors of the Company to hold office from the conclusion of this Annual General Meeting upto the conclusion of the next Annual General Meeting of the Company , in place of the retiring Auditors M/s Singrodia Goyal & Co. Chartered Accountants , to examine and audit the accounts of the Company for the financial year 2008-09 , at such remuneration as may be mutually agreed between the Board of Directors of the Company and Auditors ,plus service Tax ,out-of-pocket , traveling and living expenses,etc.”

5. Appointment of Chairman and/or/cum Managing Director of the Company

To consider and if thought fit, to pass with or without modification the following resolution as a Special Resolution: “RESOLVED THAT pursuant to section 269 and other applicable provisions , if any , of the Companies Act ,1956, read with Schedule XIII of the said Act , subject to requisite permission from the Central Government , approval be and is hereby granted to the appointment of, Chairman and/or/cum Managing Director of the Company, with effect from 45 days from the AGM for a period of 5 years on the following terms and conditions subject to ceiling laid in schedule XIII of the Companies Act, 1956.” I. The Chairman and/or/cum Managing Director shall exercise and perform such

power and duties as the Board of the Directors of the Company (hereinafter called “the Board”) shall, from time, determine , and subject to any directions

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and restrictions , from time to time , given and imposed by the Board and further subject to the superintendence , control and direction of the Board , he shall have the general control, management and superintendence of the business of the Company in the ordinary course of business and to do and perform all other acts ,.deeds and things , which in ordinary course of business, he may consider necessary, proper and in the interest of the Company.

II. The Chairman and/or/cum Managing Director shall throughout the said term,

devote his entire time, attention and abilities to the business of the Company and shall obey the Orders, from time to time of the Board of Directors and in all respects confirm to and comply with the directions and regulations made by the Board, shall faithfully serve the Company and use his utmost endeavors to promote the interest of the Company.

II. The Company shall entrust the powers to the Board of Directors to decide to

pay Chairman and/or/cum Managing Director during his tenure in consideration of the performance of his duties with effect from October 1, 2008:

a. Monthly Remuneration to be decided by the Board of Directors. b. The Board of Directors may, at their discretion based upon a review of the performance and contribution of the Chairman and/or/cum Managing Director, grant such increments, as may be considered appropriate by the Board from time to time.

c. In addition to above remuneration , the Chairman and/or/cum Managing Director will be entitled for telephone expenses reimbursement, medical expenses reimbursement , Company maintained car with driver , Provident Fund , Gratuity , Club Membership , Leave encashment , Retirement Benefits and other facilities, benefits and incentives as admissible to his cadre as per the Rules of the Company. d. If, in any financial year during the currency of his tenure, the Company has no profits or profits are inadequate to pay the above said remuneration, the remuneration payable to the Chairman and/or/cum Managing Director shall nor exceed the limit prescribed in section II of Part II of Schedule XIII of the Companies Act, 1956, which shall be payable to him as minimum remuneration for that year.

6. To consider and if deem fit to pass the following resolution with or without

modification as an ordinary resolution :

“RESOLVED THAT consent of the company be and is hereby accorded under Section 293(1) (a) and other applicable provisions if any , of the Companies Act ,1956 to the Board of Directors of company (hereinafter referred to as “ the Board”) to Mortgage and/or Charging only on such conditions as they may deem fit , all or part of the movable and/or immovable property of the company where so ever situate , both present and future , and in such manner as the Board may direct of the company

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in certain events in favor of Lender(s)/ Agents(s)/ Trustee(s)/ Financial Institutions/Bank(s) and other investing agencies to secure Rupee/Foreign Currency Loans , bonds, securities (Comprising fully/partly Convertible Debentures with or without detachable or non detachable warrants and/or secured premium notes and/or floating rate notes/bonds) or other debt instruments of an equivalent aggregate not exceeding Rs.1500 Million (Rupees Fifteen hundred Million Only) together with interest at the agreed rates and compound/additional interest , commitment charges , premium on prepayment or on redemption , costs , charges , expenses including any increase as a result of of devaluation/revaluation/fluctuation in the rates of exchange and all other money payable by the company to the Lender(s)/ Agent(s)/ Trustee(s) /Financial Institutions /Banks/other investing agencies under the arrangements entered into/to be entered by the company in respect of said loans, bonds, securities or other instruments.”

7. To consider and if deem fit to pass the following resolution with or without

modification as an ordinary resolution: “RESOLVED THAT pursuant to the provisions of Section 293 (1)(d) and all other

applicable provisions , if any , of the Companies Act , 1956 and the Articles of Association of the company, consent of the company be and is hereby accorded to the Board of Directors of the company (herein-after referred to as “the Board”) to borrow any sum or sums of money , from time to time , were the moneys to be borrowed , together with the money already borrowed by the company(apart from temporary loans obtained from the company’s Bankers in the ordinary course of business) may exceed , at any time , the aggregate of paid up capital of the company and its free reserves (that is to say reserves not set apart for nay specific purpose) , provided that the total amount so borrowed shall not at any time exceed Rs.1500 million (Rupees Fifteen hundred Million Only) and that the Board be and is hereby empowered and authorized to arrange or fix the terms and conditions of all such moneys o be borrowed , from time to time interest, repayment ,security or otherwise however as it may deem fit , as also to execute all such deeds and documents as may be necessary or required for this purpose.”

“RESOLVED FURTHER THAT Board be and is hereby authorized to finalize with

such Banks/Financial Institutions/Trustee of Debenture holders or any other person the documents for creating mortgage , deeds and things as may be necessary or usual for giving to this resolution.”

8. Further Issuance of Securities

To consider and if thought fit , to pass with or without modification, the following as a Special Resolution :

RESOLVED THAT pursuant to the provisions of Section 81(1A) and other applicable provisions of the Companies Act,1956 (including any amendment thereto or re-enactment thereof), and in accordance with the provisions of the Memorandum and Articles of the Company, Foreign Exchange Management Act , 2000 (FEMA) , Foreign Exchange Management (Transfer or issue of security by a person resident outside India ) Regulations , 2000 and Issue of Foreign Currency Convertible bonds and Ordinary Shares (through Depository Receipt Mechanism) scheme 1993 and the

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regulations /guidelines , if any , prescribed by the Securities and Exchange Board of India , Reserve Bank of India , or any other relevant authority from time to time , to the extent applicable and subject to such approvals, consents, permissions and sanctions as might be required and subject to such conditions as may be prescribed while granting such approvals , consents, permissions and sanctions , which the Board of Directors of the Company (hereinafter referred to as the “Board” which term shall be deemed to include any Committee(s) constituted/to be constituted by the Board to exercise its powers including the powers conferred by this resolution) is hereby authorised to accept, the Board be and is hereby authorised on behalf of the Company to create , issue , offer and allot , (including with provisions for reservation on firm and /or competitive basis of such part of issue and for such categories of persons as may be permitted) , in the course of one or more public or private offerings in domestic and and/or international market(s), Ordinary Shares and/or Ordinary Shares through depository receipts (whether GDRs or ADRs or any other form of Depository Receipts) and/or convertible bonds or debentures including Foreign Currency Convertible Bonds (FCCBs) )/ External Commercial Borrowing (ECB) and / or Qualified Institutional Placements (QIP) and / or any other securities as may be decided whether expressed in Foreign currency or Indian Rupees (“Securities”) as the Board may consider appropriate.

RESOLVED FURTHER THAT the Board of Directors of the Company ,whether

acting at a meeting including through an Offering Committee or any other Committee be and are hereby authorised subject to applicable laws and regulations to issue the

aforesaid securities to investors (including but not limited to NRIs,FIIs,Qualified Institutional Buyers (QIBs) whether or not such investors are members of the Company) through a prospectus and/or offering memorandum and /or offering circular and/or placement document including on a private / preferential basis , in such manner as they deem appropriate in their absolute discretion and if necessary in consultation with the Lead managers and /or underwriters and/or advisors of the Company concerned, on such terms and conditions as the Board , may, in its absolute discretion , decide at the time of issue of securities; provided that the aggregate issue price of the securities to be issued does not exceed US $ 100 million (U.S.Dollar One Hundred million) or an equivalent amount in Indian Rupees, including premium if any.

BY ORDER OF THE BOARD, Place : Betegaon Date : 25/07/2008 RAJESH KEDIA

COMPANY SECRETARY

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NOTES 1. A Member entitled to attend and vote is entitled to appoint a proxy to attend and vote

instead of himself and the proxy need not be a member of the Company. 2. The instrument appointing a proxy should, however, be deposited at the registered

office of the Company not later than 48 hours before the time of commencement of meeting.

3. The register of members and the Share Transfer Book of the Company will be closed

from 16/08/2008 to 20/08/2008 ( Both days inclusive). 4. Members are requested to intimate any change in their address at the Registered

Office of the Company. 5. Corporate Members are requested to send a duly certified copy of the Board

resolution/Power of Attorney authorizing their representative to attend and vote at the Annual General Meeting.

6. Members/Proxies are requested to bring their admission slips along with the copies of

the Annual Report to the Meeting. 7. Members having any queries in relation to the accounts are requested to send them

atleast ten days in advance to enable the Company to collect the relevant information. 8. Members may note that no gifts/gift coupons shall be distributed at the meeting.


COMPANY SECRETARY

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Explanatory Statement

Pursuant to Section 173 (2) of the Companies Act, 1956 As required by Section 173 of the Companies Act,1956 (“Act”), the following explanatory statement set out all material facts relating to the business mentioned under Item Nos. 4 to 8 of the accompanying Notice dated 25th July 2008. 1. Item No.4 : Presently the Company’s accounts are being audited by Messers Singrodia Goyal & Co.Chartered Accountants .SGCO have informed the Company that they do not wish to seek reappointment as statutory auditors of the Company for the financial year 2008-09. In view of the above, and based on the recommendations of the Audit Committee, the Board of Directors, has at its meeting held on 25th July 2008 proposed the appointment of Haribhakti & Co., Chartered Accountants as the Statutory auditors in place of SGCO for the financial year 2008-09. The Company has received a special notice from a member of the company,in terms of the provisions of the Act, signifying its intention to propose the appointment of Haribhakti & Co as the Auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company .Haribhakti & Co.expressed their willingness to act as Auditors of the Company, is appointed , and have further confirmed that the said appointment would be in conformity with the provisions of Section 224(1B) of the Act. The Members’approval is being sought for the appointment of Haribhakti & Co. as the Statutory Auditors and to authorise the Directors, on the recommendation of the Audit Committee, to determine the remuneration payable to the Auditors. The Directors commend the Resolution at item No.4 for approval by the Members. None of the Directors is concerned or interested at Item No 4 of the Notice. 2. ITEM No.6 & 7 : Section 293(1) (d) of the Companies Act,1956, stipulates that Board of Directors of the Company cannot, except with the consent of the members in General Meeting , borrow moneys, apart from the temporary loans obtained from the Company’s bankers in the ordinary course of business , in excess of paid up capital and free reserves of the company i.e. to say , reserves not set apart for any specific purpose. The consent of the shareholders is therefore sought in accordance with the provisions of Section 293(1) (d) of the Act to enable the Directors of the Company to borrow moneys to the extent of Rs.1500 Million (Rupees Fifteen Hundred Million only).The resolution under item No.7 is to obtain the consent of the shareholders for this purpose.

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The proposed borrowings of the Company may, if necessary , be secured by way of Charge/Mortgage/Hypothecation on the Company’s assets in favor of the lenders. As the documents to be executed between the proposed lenders and the Company may contain power to take over the management of the company in certain events , it is necessary to pass a resolution under Section 293(1)(a) of the Act, for creation of charge/Mortgage/Hypothecation for an amount not exceeding the borrowing limit of Rs.1500 Milion (Rupees Fifteen Hundred Million Only). The proposed offers are in the interest of the Company and your directors recommend the resolutions at item No.5 & 6 of the accompanying notice for acceptance of the members. None of the Directors of the Company or interested in the resolutions set out at the aforesaid items of the Notice. Your Directors recommend passing of the resolutions set out in the Notice. 3 ITEM NO.8 : As stated above, it is proposed to raise additional funds through the issue of securities in the domestic/international markets for an amount not exceeding US $ 100 million or an amount equivalent in Indian Rupees , in one or more tranches , in such form , on such terms , in such manner at such price or prices and at such time as may be considered appropriate by the Board to the investors in the domestic/international markets , as set out in the Resolution at Item No.8 of the Notice. The Board commends the Resolution at Item No.8 of the Notice for approval by the Members. The Directors of the company may be deemed to be concerned or interested in the Resolution at Item No.8 of the Notice to the extent of the Securities that may be subscribed by the companies /institutions of which they are directors or members.


COMPANY SECRETARY

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DIRECTORS’ REPORT To the Members of RESPONSIVE INDUSTRIES LIMITED Your Directors have pleasure in presenting herewith their 26th Annual General Report together with the Audited accounts for the period ended on 31st March, 2008. FINANCIALS Financial Results Year ended

31.03.2008 Amt (Rs.in Lacs)

Year ended31.03.2007

Amt (Rs.in Lacs)Net Sales 37177.61 22148.44

6513.9433.22

4524.5620.85

Profit before Interest and Depreciation Less : Interest Profit Before Depreciation Less: Depreciation

6480.721860.42

4503.711343.89

Profit before Tax 4620.30 3159.82Less: Provision for Taxation Current Tax Deferred Tax Fringe Benefit Tax

562.84 258.11 11.51

357.61 309.40 7.33

Net Profit for the year after Tax Add: Profit brought forward from Previous Period

3787.84 3949.58

2485.48

1611.46

Amount available for appropriation 7737.42 4096.94Proposed Dividend 167.94 125.95Corporate Dividend Tax 28.54 21.41 Transferred to General Reserve - -Balance carried forward to Balance Sheet 7540.94 3949.58 OPERATIONS The total turnover of the Company during the period stood at Rs.37862.67 Lakhs with Profit after Tax amounting to Rs. 3787.84 lakhs. Yours directors are confident that the company’s performance is outstanding as per the general industrial scenario. During the current year the company shall endeavor to perform better. DIVIDEND Your Directors are pleased to recommend for approval of the Shareholders a Dividend @ 8% (Rs.0.80 paise per Share) on the paid-up equity share capital of the company in respect of the period 2007-2008 an amounting to Rs.167.94 Lacs. CHANGES IN EQUITY CAPITAL During the year , the Company allotted 1,57,44,000 Bonus shares in the ratio of 3:1 as per the resolution passed at the Extraordinary General Meeting of the Company held on 2nd March , 2007

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SUBSIDIARY COMPANIES Your Company has one subsidiary company i.e. Axiom Impex International Limited. CONSOLIDATED FINACIAL STATEMENTS In Compliance with Clause 32 and Clause 50 of the Listing Agreements with the Stock Exchanges , as per the Accounting Standard on Consolidated Financial Statements (AS 21) issued by the Institute of Chartered Accountants of India , the Audited Consolidated Financial Statements along with the Auditors’ Report have been annexed with this report. DIRECTORS In accordance with the Section 255 & 256 of the Companies Act, 1956 read with the Article of Articles of Association of the Company, Mr. Ramesh Mistry , Director of the company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. DIRECTORS’ RESPONSIBILITY STATEMENT As required by section 217(2AA) of the Companies Act, 1956, your Directors state: • that in preparation of the annual accounts, the accounting standards have been followed, to

the extent applicable. • that the Directors had selected such accounting policies and policies and applied them

consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of financial year and of the profit of the company for the year under review.

• that the Directors had taken proper and sufficient care for the maintenance of adequate

accounting records in accordance with the provisions of this act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

• that the Directors had prepared the annual accounts on a going concern basis. CORPORATE GOVERNANCE Pursuant to Clause 49 of the Listing Agreement a separate report on Corporate Governance and a certificate from the Mr.Pradip C. Shah, FCS, Practising Company Secretary regarding compliance of the conditions of Corporate Governance are annexed to the Directors Report. PARTICULARS OF EMPLOYEES There was no employee drawing remuneration exceeding the specified limit, during the year under consideration, hence details prescribed under section 217(2A) of the Companies Act, 1956, read with Companies (particulars of employees) Rules, 1975 are not applicable. PUBLIC DEPOSITS The Company has not accepted any public deposits during the year.

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AUDITORS M/s Singrodia Goyal & Co.Chartered Accountants , who are the Statutory Auditors of the Company hold office , in accordance with the provisions of the Companies Act 1956 , upto the conclusion of the forthcoming Annual General Meeting. M/s Singrodia Goyal & Co.Chartered Accountants have communicated that the are not seeking reappointment at the ensuing Annual General Meeting .The company has received a special notice from a Member of the Company , in terms of provisions of the Companies Act , signifying the intention to propose the appointment of M/s Haribhakti & Co. Chartered Accountants, as the Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting. M/s Haribhakti & Co.Chartered Accountants have also expressed their willingness to act as Auditors of the Company , if appointed, and have confirmed their eligibility. In this regard , attention of the members is invited to Item No.4 of the Notice convening the forthcoming Annual General Meeting. AUDITORS’ REPORT The notes on account referred to in the Auditors’ Report are self-explanatory and therefore do not call for any further explanation under section 217(3) of the Companies Act, 1956. MANAGEMENT DISCUSSION AND ANALYSIS Report on Management Discussion & Analysis is included as a part of this Annual Report CONSERVATION OF ENERGY, TECHNOLOGICAL ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO In accordance with the provisions of section 217 (1)(e) of the Companies Act, 1956, the required information relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo forms part of this report ( As given in Annexure to Director’s Report) ACKNOWLEDGEMENTS Directors would also like to thank the shareholders, customers, bankers and all other business associates for the continuous support given by them to the company and their confidence in its management.

For AND ON BEHALF OF THE BOARD OF DIRECTORS FOR RESPONSIVE INDUSTRIES LIMITED DIRECTOR. Date : 25/07/2008 Place: Betegaon

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ANNEXURE FORMING PART OF THE DIRECTORS’ REPORT A) CONSERVATION OF ENERGY: a) Energy conservation measures taken N.A. b) Additional investments proposal, if any being implemented for reduction of consumption

of energy N.A. c) Impact of the measures at (a) and (b) above for reduction of energy consumption and

consequent impact on the cost of production of goods N.A. d) Total energy consumption

Power & Fuel Consumption Current

Year 2007-08

Previous Year 2006-07

1 Electricity (a) Purchased Units 16079920 11256360 Total amount (Rs. in Lac) 646.71 546.44 Rate / Unit (Rs.) 4.02 4.85

(b) Own Generation (i) Through Diesel Generation Units NIL NIL Units per Liter of Diesel Oil NIL NIL Cost/Units NIL NIL (ii) Through Steam Turbine/Generator Units NIL NIL Units per Liter of Diesel Oil NIL NIL Cost/Units NIL NIL 2 Coal (Specify quantity and where used) Quantity (Tonnes) NIL NIL Average Rate NIL NIL 3 Furnace Oil Quantity (Liters) 2221750 1455240 Total Amount (Rs. In Lacs) 542.69 221.55 Average Rate (Rs.) 24.43 15.22 4 Other/Internal Generation (Please give

details)

Quantity NIL NIL Total Cost NIL NIL Rate/Unit NIL NIL

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B) TECHNOLOGY ABSORPTION:

Efforts made in technology absorption NIL NIL C) FOREIGN EXCHANGE EARNINGS & OUTGO:

Total Exchange Earned (Rs. in Lacs) 21551.40 11290.92 Total Outgo (Rs. in Lacs) 11967.50 3271.01 By Order of the Board of Directors For RESPONSIVE INDUSTRIES LIMITED

DIRECTOR Date : 25/07/2008 Place : Betegaon

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Management Discussion and Analysis Introduction: The company is engaged in manufacturing of PVC product which widely used both for household and commercial purpose. The year under review has been one of the positive fortunes for your company; the expansion of manufacturing capacity has been completed during the year and your company is set to take advantage of the surge in demand of PVC products. Financial Review: The year starts on a very positive note for your company. The net profit before tax for the year increased to Rs.462.03 millions as compared to previous Year Rs.315.98 millions (9 months). This robust increase in profit is on account of increase in margin and demand of PVC products. Your company has provided for income tax of Rs. 56.28 millions and differed tax of Rs.25.81 millions during the current year The volumes and margins for the PVC products business have been improved during the year under review and this bodes well for the long term prospects of the company. Indian Economy and Effect on the Company: India’s GDP growth for the financial year 2007-08 is at 8.7 per cent as against 9.4 percent during the previous year 2006-07. With this backdrop, the PVC Product industries maintained a good growth momentum. The company’s PVC Products production registered an increase of about 21 percent (approx.), from 30166.29 MT for the year 2006-07 to 36632.16 MT for the year 2007-08. In term of geographical markets performance are as follows. (Rs. In Millions) Sales 31st March 2008 31st March 2007 India 1537.29 1059.21 Export 2180.47 1155.63 Total 3717.76 2214.84

Product wise Performance: 1. PVC Leather Cloth

The Production during the year is increased from 15049.33 MT (9 months) for the year 2006-07 to 20282.39 MT for the year 2007-08 and sales is increased from Rs. 813.90 millions (9 months) for the year 2006-07 to Rs. 1129.57 millions for the year 2007-08.

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2. PVC Flooring The Production during the year is increased from 6783.71 MT (9 months) for the year 2006-07 to 9948.14 MT for the year 2007-08 and sales is increased from Rs. 1014.70 millions (9 months) for the year 2006-07 to Rs. 2159.58 millions for the year 2007-08.

3. PVC Rigid The Production during the year is increased from 2433.99 MT (9 months) for the year 2006-07 to 2763.86 MT for the year 2007-08 and sales is increased from Rs.188.75 millions (9 months) for the year 2006-07 to Rs. 215.08 millions for the year 2007-08.

4. Other

Other sale during the year is Rs.77.95 millions.

Risk and Concerns: Your company has a clearly documented risk management policy. The management team of the company regularly identifies, reviews and assesses such risk and decides appropriate guideline for mitigating the same. Transparency in Sharing Information: Transparency refers to sharing information and acting in an open manner. Processes and information are directly accessible to those concerned with them, and enough information is provided to understand and monitor them. Your company believes in total transparency in sharing information about its business operations with all its stakeholders. Your company strives to provide maximum possible information in this report to keep the stakeholders updated about the business performance. As an open channel of communication between stakeholders and officials and to make a wide range of information accessible, your company holds regular meeting with institutional investors. Internal Control System: The company has instituted adequate internal control procedure commensurate with the nature of its business and the size of its operations for the smooth conduct of its business. Internal audit is conducted at regular intervals at the plants and covers the key areas of operations. It is an independent objective and assurance function responsible for evaluating and improving the effectiveness of risk management control, and governance processes. An audit committee consisting of three Directors out of which two Directors are independent Directors. The audit committee monitors performance of internal audit on a periodic basis through review of audit plans, audit finding & promptness of issues resolution through follow ups.

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Human Resources: Your company’s industrial relation continued to be harmonious during the year review. Your company conducts regular in house training program for employee at all level. Cautionary Statement: Estimates and expectation sated in this management discussion and Analysis may be ‘forward looking statement’ within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed and implied. Important factors that could make a difference to your company operation’s include economic condition affecting demand/supply and price condition in the domestic and international markets, changes in government regulations, tax laws and other statutory and other incidental factors.

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Report on Corporate Governance

Company’s philosophy on Corporate Governance: The Company’s philosophy of Corporate governance aims at providing transparent working and assisting stakeholders to judge and understand the performance of the Company in an appropriate manner. It includes not only application and adaptation of statutory rules/ procedures and guidelines, but also includes application and adoption of good corporate practices so as to keep the stakeholders and Authorities well informed on the Company.

Clause 49 of the Listing Agreement with Stock Exchange sets norms and disclosures that are to be met by the Company on Corporate Governance front. We confirm our compliance with Corporate Governance criteria, as required under the said clause, vide this report. Board of Directors: Composition The Board composition is in conformity with the provisions of the Companies Act, 1956 and the Listing Agreement. The strength of the Board as on 31st March ,2008 is 5 Directors comprising 3 Executive Directors (ED) and 2 other Directors (D). The composition of the Board as on 31st March 2008 was as follows.

Name of Director Category of Directorship No. of other Directorships

No. of Committee

MembershipsMr. Santosh Shinde Executive Director

1 2

Mrs. Vaishali Shinde Independent Non -Executive Director

1 2

Mr. Ramesh Mistry Independent Non -Executive Director

NIL 2

Mr. Ashok Jha Executive Director

1 -

Mr. Rajesh Pandey Executive Director

1 -

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Number and dates of Board Meetings held:

Fourteen Board Meetings were held during the Period i.e on 3rd April 2007 ,5th April 2007, 30th April 2007 , 27th June 2007 ,10th July 2007, 30th July 2007, 13th August 2007, 30th August 2007, 1st October 2007,9th October, 2007 ,30th October 2007 , 30th November 2007, 30th January 2008 and 10th March 2008.

Name of Director No. of Board meetings Attended

Attendance at the last AGM

Mr. Santosh Shinde 14 Yes Mrs. Vaishali Shinde 1 N.A. Mr. Ramesh Mistry 14 Yes Mr. Ashok Jha 1 Yes Mr. Rajesh Pandey 14 Yes

Board Committees The Board has constituted certain Committees of Directors to monitor the activities and to deal with matters within the terms of reference of the respective Committees.

(a) Audit Committee : The Audit Committee was constituted in the financial year 2001-02.

The members of the Audit Committee are Non Executive Directors, with majority of them being Independent. The Chairman of the Committee is an Independent Director. The members have vast experience in the field of Banking, Finance and Accounts.

The Terms of reference and powers of the Auit Committee are as per Clause 49 of the Listing Agreement and also as per section 292A of the Companies Act, 1956. The functions of the Audit Committee are as per Company Law and Listing Agreement with the Stock Exchanges.

These include the Review of accounting and financial policies and procedures, Review of financial reporting system, Internal control system and Procedures and ensuring compliance of statutory requirements.

The Audit Committee reviews the financial statements with the Statutory Auditors and the Management with reference to the accounting policies and practices before commending the same to the Board for its approval.

The committee met 5 times during the period under review on 30th April 2007 , 27th

June, 2007,30th July 2007, 30th October 2007 and 30th January 2008.

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Composition of Audit Committee and details of the meetings attended:

Name Category No. of Committee

meetings attended Mr. Ramesh Mistry Chairman (Independent

Non-Executive Director) 5

Mr. Santosh Shinde Member (Executive Director ) 5 Mrs. Vaishali Shinde Member (Independent


Broad terms of reference of the Audit Committee are as follows:

• Approving and implementing the audit procedures and techniques. • Reviewing audit reports of both statutory and internal auditors with the

auditors and management. • Reviewing financial reporting systems, internal control systems and control

procedures. • Ensuring compliance with regulatory guidelines. • 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.

• Approval of payment to statutory auditors for any other services rendered by the statutory auditors.

• Reviewing, with the management, the quarterly financial statements before submission to the board for approval.

• Reviewing, with management, performance of statutory and internal auditors and adequacy of the internal control systems.

• Reviewing the finding 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.

• Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any areas of concern.

• Approval of Related party Transactions. • Reviewing accounting treatment and confirmation of the fact that financial

statements are giving a true and fair view.

- 19 -


(b) Remuneration Committee The company does not have a remuneration committee. However the Board determines and recommend the remuneration package.

Remuneration of Directors : Nil

Details of sitting fees paid to the Directors : Nil

(c) Shareholders/Investors Grievance Committee The Shareholders/Investors Grievance Committee was constituted in the financial year 2005-2006. The role and function of the Shareholders/Investors Grievance Committee is to effectively redress the complaints received from the shareholders relating to dematerialization, transfer of shares, non-receipt of the balance sheet, dividends etc. The Committee overviews the steps to be taken for improving further the quality of se to the investors. rvice

Four meetings of the Shareholders/Investors Grievance Committee were held during the year on 30th April 2007 , 30th July 2007 , 30th October 2007 and 30th January 2008. Composition of Shareholders/Investors Grievance Committee and details of meetings attended:

Name of Director Category No. of Committee meetings attended

Mr. Ramesh Mistry Chairman (Independent Non-Executive Director)

4

Mr. Santosh Shinde Member (Executive Director ) 4 Mrs. Vaishali Shinde Member (Independent


To expedite the process of share transfer the Board has delegated necessary process to the Registrar and Share Transfer Agents viz; Intime Spectrum Registry Ltd., C-13, Pannalal Silk Mills Compund, LBS Marg, Bhandup (W), Mumbai, 400078.

During the year under report the company not received any complaint from investors.

Mr. Santosh Shinde, the Executive Director is the Compliance Officer of the Company.

Status of Complaints Received and Pending

Number of Complaints From 01.04.2007 to 31.03.2008 Pending as on 01.04.2007

Received Redressed Pending as on 31.03.2008

Nil Nil Nil Nil

- 20 -


General Body Meetings: Details of last three Annual General Meetings are given below: Financial Year

Date Time Venue

2006-07 28.09.2007 11.00 a.m. Registered Office, Betegaon, Boisar 2005-06 30.10.2006 11.00 a.m. Registered Office, Betegaon, Boisar 2004-05 28.09.2005 11.00 a.m. Registered Office, Mumbai

Postal Ballot : At the ensuing Annual General Meeting there is no resolution which is proposed to be passed by postal ballot. Disclosures:

Materially significant Related Party Transactions There are no materially significant transactions made by the Company with its Promoters, Directors or Management, their subsidiaries or relatives, etc that may have potential conflict with the interest of Company at large.

Details of transactions effected with related parties have been reported separately in the Accounts printed elsewhere in the Annual Report, in accordance with the requirement of Accounting Standard - 18 issued by The Institute of Chartered Accountants of India. Statutory Compliance

The Company has complied with the requisite regulations relating to capital markets. There were no penalties/strictures imposed on the Company by the Stock Exchange or SEBI or any other statutory authority on any matter related to capital markets during the last 3 years. Means of Communication: Quarterly results are taken on record by the Board of Directors and submitted to the Stock Exchange in terms of the requirement of clause 41 of the Listing Agreement.

The Company publishes its quarterly/annual results as well as any official news in two newspapers i. e. Free Press Journal and Navshakti.

The results are also displayed on the Company’s website “www.responsiveindustries.com” Management Discussion & Analysis Management discussion & Analysis Report is attached herewith and forms part of the Annual Report

- 21 -


General Shareholders Information:

Annual General Meeting Day, Date, Time and Venue

: On Wednesday, 20th August 2008 at 11.00 a. m. at the Registered office of the Company at Village Betegaon, Mahagaon Road, Boisar (E), Tal. Palghar, Dist. Thane-401501

Date of Book Closure : From 16/08/2008 to 20/08/2008

(Both days inclusive) Dividend payment date : On or after 20th August 2008 Financial Year/Calendar 2008-09 (Tentative)

Results for first quarter ending June 30, 2008

: End of July 2008

Results for second quarter ending September 30, 2008

: End October 2008

Results for third quarter ending December 31, 2008

: End of January 2009

Results for financial year ending March 31, 2009

: On or before 30th June 2009

Registered Office & Plant Location : Village Betegaon, Mahagaon Road, Boisar

(E), Tal. Palghar, Dist. Thane-401501 Registrar and Share Transfer Agents

: Intime Spectrum Registry Ltd., C-13, Pannalal Silk Mills Compund, LBS Marg, Bhandup (W), Mumbai, 400078.

Intime Spectrum Registry Ltd is a SEBI authorised Registrar and Share Transfer Agent and is authorised for both physical and electronic transfers and dematerialization of shares and all matters related to shareholders records. Share Transfer System : Physical transfer of shares are processed by

the Share Transfer Agents and approved by the Shareholders/Investors Grievance Committee. Transfer of shares is affected and share certificates are sent to the transferee within 30 days from the date of receipt, provided the relevant documents are complete in all respects. The demat requests are processed and completed within an average period of 15 days from the date of receipt , provided they are otherwise in order.

- 22 -


Listing on Stock Exchanges : Bombay Stock Exchange Limited Stock Code : 505509 Demat ISIN Number in CDSL & NSDL : INE6888D01018 Market price data : The shares of the Company were thinly

traded during the year. Accordingly, the market price data of the Company are as given below:

Period 2007-08 High Low Month April 2007 3.42 1.78 May 2007 8.88 3.59 June 2007 15.12 9.32 July 2007 24.40 15.85 August 2007 24.40 15.85 September 2007 25.60 25.60 October 2007 25.60 25.60 November 2007 32.55 26.85 December 2007 73.95 34.15 January 2008 177.15 77.60 February 2008 237.95 186.00 March 2008 249.20 249.20

Distribution of shareholding as on 31st March, 2008:

Shareholding Class No. of Shareholders No. of Shares held Shareholding %

1 to 50 8 400 --- 51 to 100 6 600 --- 101 to 250 40 8700 0.0004 251 to 500 1 300 0.00 501 to 1000 1 800 0.00 1001 to 5000 1 3000 ---

5001 and above 13 20978200 99.93 Total 70 20992000 100.00

- 23 -


Shareholding Pattern as on 31st March 2008

Category No. of Shares held Shareholding %

Promoters 12611700 60.08 Financial Institutions -- -- Mutual Funds -- -- Insurance Companies -- -- Nationalised Banks -- -- Foreign Institutional Investors/Foreign Corporates

8000000 38.11

Bodies Corporate/Others 380300 1.81 Non Resident Indians ---- --

Total 20992000 100.00

Dematerialization of Shares and liquidity:

As per the notification issued by SEBI, the shares of the company are traded compulsorily in dematerialized form by all investors with effect from 8th May, 2000.

As on 31st March, 2008, 1.18% of the Company’s Equity Capital representing 2,47,800 Equity shares are held on dematerialized mode and the balance were in paper form.

The Company has not issued either ESOP or any GDRs/ADRs/Warrants/Convertible Instruments. Address for correspondence: Shareholders should address correspondence to the Company’s Registrars and Share Transfer Agents at the address mentioned above. Shareholders could also contact at the Registered Office of the Company at the address mentioned above.

Compliance Certificate: As required under clause 49 of the Listing Agreement, P.P. SHAH & Co, Practicing Company Secretary have verified the compliance of the Corporate Governance norms by the Company. Their report is annexed hereto.

- 24 -


DECLARATION

This is to confirm that the Company has adopted a Code of Conduct for its Directors and its

senior management and employees .Both these Codes available on the Company’s web site.

As per under Clause 49 of the Listing Agreement with the Stock Exchanges , all the directors

and the designated personnel in the senior management of the Company have affirmed

compliance with their respective Codes for the Financial year ended, March 31 2008.

For RESPONSIVE INDUSTRIES LIMITED

Santosh Shinde

Executive Director

Place : Betegaon

Date : July 25,2008

- 25 -


Certificate on Corporate Governance To, THE MEMBERS OF RESPONSIVE INDUSTRIES LIMITED We have reviewed the implementation of Corporate Governance procedures by the Company during the period ended March, 31, 2008 with the relevant records and documents maintained by the Company, furnished to us for our review and the report on Corporate Governance as approved by the Board of Directors. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination is neither an audit nor an expression of opinion on the financial statements of the Company. On the basis of the above and according to the information and explanations given to us, in our opinion, the Company has complied in all material respects with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchange. We further state that our examination of such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. For P.P. SHAH & Co. Practicing Company Secretary

P.C. SHAH Partner Mumbai, 25/07/2008 FCS –1483 COP- 436

- 26 -

- 27 -


Auditors' Report

To, The Members of Responsive Industries Limited, We have audited the attached Balance Sheet of Responsive Industries Limited as on 31st March, 2008 , the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. 1 We conducted our audit in accordance with the auditing standards generally accepted

in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by

the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in the paragraphs 4 and 5 of the said Order, to the extent applicable to the Company.

3. Further to our comments in the Annexure referred to in paragraph 2 above, we report that:

a) We have obtained all the information and explanations, which to the best of our

knowledge and belief were necessary for the purpose of our audit. b) In our opinion, proper books of accounts as required by law have been kept by the

Company as it appears from our examination of those books. c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by

this report are in agreement with the books of accounts.

- 28 -


d) On the basis of written representations received from the directors as on 31st

March, 2008 and taken on record by the Board, we report that none of the directors is prima facie disqualified as on 31st March, 2008 from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956.

e) In our opinion and read with Note No. 7 of Schedule “S“regarding accounting for

foreign currency exchange differences on deferred credit facility for acquisition of fixed assets, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 except, Accounting Standard 15 (AS -15) relating to Accounting of Retirement Benefits of Employees.

f) In our opinion and to the best of our information and according to the explanations

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

i) In the case of the Balance Sheet, of the state of affairs of the Company

as at 31 March 2008, and ii) In the case of the Profit and Loss Account, of the Profit of the

Company for the year ended on that date.

iii) In case of Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

For Singrodia Goyal & co. Chartered Accountants

Place: Mumbai (Narayan Pasari) Date : 30th June,2008 Partner Mem. No.: 38095

- 29 -


Annexure to Auditors Report Annexure referred to in Paragraph 2 of the Auditors Report for the year ended 31st March, 2008. As required by the Companies (Auditors Report) Order, 2003 (as amended) and according to the information and explanations given to us during the course of the audit and on the basis of such checks of the books and records as were considered appropriate we report that:

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

quantitative details and situation of fixed assets. b) We are informed that physical verification of major fixed assets was conducted by the

management during the year, which in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c) During the year, there is no substantial disposal of fixed assets by the Company.

(ii) a) The inventories have been physically verified by the management during the year at reasonable intervals.

b) The procedures of physical verification of the inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) The Company has maintained proper records of inventories and discrepancies noticed on physical verification of inventories as compared to book records were not material and the same have been properly dealt with in the books of accounts.

(iii) a) The company has not granted any secured or unsecured loan to the parties covered in the

register maintained under Section 301 of the Companies Act, 1956. b) In view of our comments in para (iii) (a) above, clause 4 (iii) (b), (c) and (d) of the said

Order is not applicable to the Company. c) The company has taken unsecured from the Subsidiary Company covered in the register

maintained under Section 301 of the Companies Act, 1956 on call basis. The maximum amount involved during the year was Rs. 251.77 millions and year end balance of such loan was Rs.251.77 Millions.

d) The said loan is interest free. Other terms and conditions on which the loan is taken are prima facie, not prejudicial to the interest of the Company.

e) In view of our comments in para (iii) (c) & (d) above, clause 4 (iii) (g) of the said Order is not applicable to the Company.

- 30 -


(iv) There are adequate internal control systems commensurate with the size of the Company and

the nature of its business with regard to purchase of inventories, fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in such internal controls.

(v) (i) In our opinion and according to the explanation and information given to us and based

on the audit procedures performed by us, the particulars of contracts or arrangement referred to section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(ii) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) The Company has a formal internal audit system commensurate with its size and nature of its

business.

(viii) As per the explanations and information given to us by the management, the Central Government has not prescribed for maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 for the Company.

ix) a) According to the records of the Company, the undisputed statutory dues including

Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess have regularly deposited with the appropriate authorities. There are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March, 2008 for a period more than six months from the date they became payable.

b) There are no amounts in respect of any disputed income tax, sales tax, wealth tax, service

tax, custom duty, excise duty and cess.

(x) The Company has neither accumulated losses at the end of financial year nor has incurred cash losses during the current year and immediately preceding financial year.

(xi) The Company has not defaulted in repayment of dues to banks and financial institutions.

(xii) The Company has not granted any loans or advances on the basis of security by way of pledge

of shares, debentures or other securities.

- 31 -


(xiii) The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/ Societies are not applicable to the Company.

(xiv) Based on our audit procedures and according to the information and explanation provided to us

by the management, we are of the opinion that the Company has maintained proper records in respect of the trading transactions and contracts of shares, securities, debentures and other investments. Also, the Company has accounted such transaction on date of transactions. Further, the investments have been held by the Company in its own name.

(xv) According to the information and explanations given to us, the Company has not given any

guarantee for loans taken by others from banks and financial institutions.

(xvi) The Company has not obtained any term loans during the year.

(xvii) According to the information and explanations given to us, on an overall examination of the balance sheet of the Company, we report that funds raised on short-term basis have not been used for long term investments.

(xviii) The Company has not made any preferential allotment of shares to parties and companies

covered in the register maintained under Section 301 of the Act.

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

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

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year.

For Singrodia Goyal & Co. Chartered Accountants

(Narayan Pasari) Partner Mem. No : 38095 Place : Mumbai Dated : 30th June 2008.


As at As at31.03.2008 31.03.2007

Amount (Rs.) Amount (Rs.)

SOURCES OF FUNDS Shareholder's FundsShare Capital A 402,852,000 245,412,000 Reserves & Surplus B 596,754,122 395,058,181

999,606,122 640,470,181 Loan FundsSecured Loans C 17,439,175 11,016,217

Unsecured Loans D 775,432,347 917,053,252

Deferred Tax Liabilities (Net) 71,315,211 45,504,208

Total 1,863,792,855 1,614,043,858

APPLICATION OF FUNDS

Fixed Assets EGross Block 2,190,253,497 1,878,243,038 Less: Depreciation 361,233,869 175,467,802 Net Block 1,829,019,629 1,702,775,236

Investments F 49,923,504 16,563,625

Current Assets, Loans & AdvancesInventories G 189,433,165 197,916,546 Sundry Debtors H 159,826,481 127,223,383 Cash & Bank Balances I 53,282,071 25,030,550 Loans & Advances J 309,799,425 81,856,752

712,341,142 432,027,230 Less: Current Liabilities & ProvisionsCurrent Liabilities & Provisions K 727,491,420 537,322,233 Net Current Assets (15,150,278) (105,295,003)

Total 1,863,792,855 1,614,043,858

Significant Accounting Polices & SNotes forming part of the AccountsAs per our report of even date For and on behalf of the Board For Singrodia Goyal & Co.Chartered Accountants

Director Director

(Narayan Pasari)Partner Company SecretaryMem No. 38095Place: MumbaiDate : 30th June, 2008.

Particulars

Responsive Industries LimitedBalance Sheet as at 31st March 2008

Schedules

- 32 -


Year Ended Period EndedSchedules 31.03.2008 31.03.2007

(12 Months) (9 Months)Amount (Rs.) Amount (Rs.)

INCOMESales & Other Income L 3,786,267,270 2,251,734,468 Increase/(Decrease) in Stocks M (6,448,460) (5,518,420)

3,779,818,810 2,246,216,048

EXPENDITUREManufacturing & Other Expenses N 2,742,860,560 1,683,835,460 Personnel Costs O 59,573,654 35,286,158 Administrative & Other Expenses P 260,829,471 29,661,693 Selling & Marketing Expenses Q 65,161,467 44,976,099 Interest & Finance Charges R 3,321,642 2,085,144 Depreciation 186,042,226 134,389,316

3,317,789,020 1,930,233,870

Profit Before Tax 462,029,790 315,982,178 Less: Provision for taxCurrent Tax 56,284,417 35,761,395 Deferred Tax Liability/(Assets) 25,811,003 30,940,093 Fringe Benefit Tax 1,150,757 733,113 Profit After Tax 378,783,613 248,547,577

Add: Balance as per the last year 394,958,181 161,146,358 773,741,794 409,693,935

AppropriationsProposed Dividend 16,793,600 12,595,200 Tax On Dividend 2,854,072 2,140,554 Balance carried to Balance Sheet 754,094,122 394,958,181

Earning Per Share ( in Rs.)Basic 18.04 11.84

Significant Accounting Polices & SNotes forming part of the AccountsAs per our report of even dateFor Singrodia Goyal & Co. For and on behalf of the Board Chartered Accountants

Director Director (Narayan Pasari)PartnerMem No. 38095 Company SecretaryPlace: MumbaiDate : 30th June 2008

Responsive Industries LimitedProfit and Loss Account for the Year ended 31st March 2008

Particulars

- 33 -


Sr. Particulars Year ended Period endedNo. 31.03.2008 31.03.2007

Amount (Rs.) Amount (Rs.)(12 Months) (9 Months)

A. Cash Flow from Operating Activities:Net Profit/(Loss) Before Tax and Extraordinary Items 462,029,790 315,982,178 Adjustments For :Depreciation 186,042,226 134,389,316 Preliminary expenses written off - 2,985,000 Loss on Sale/Discard of Fixed Assets 356,288 - Interest paid 3,321,642 2,085,144 Interest Income (242,435) (221,402) Dividend Income (2,005,501) (1,703,218) Loss on Sale of Investment 5,893,368 260,479 Loss on Trading in Equity Derivative Instruments (Net) 210,138,329 8,947 Unrealised Gain on Foreign Exchange (5,627,184) (5,079,202) Operating Profit Before Working Capital Changes 859,906,523 448,707,242 Adjustment For : Inventories 8,483,381 (88,502,692) Trade & Other Receivables (32,603,098) (15,584,613) Loans and Advances (192,791,331) (14,828,863) Trade Payables 127,819,694 (1,476,841,819) Cash Generated From Operations 770,815,169 (1,147,050,744) Income tax paid (35,151,342) (5,113,699) Net Cash From Operating Activities 735,663,827 (1,152,164,443)

B Cash Flow from Investing Activities:Purchase of Fixed Assets (330,565,121) (135,844,823) Sale/Discard of Fixed Assets 4,374,215 - Interest received 242,435 221,402 Dividend Income 2,005,501 1,703,218 Loss on Trading in Equity Derivative Instruments (Net) (210,138,329) (8,947) Purchase of Investments (161,567,098) (4,123,657) Sale of Investments 122,313,851 2,532,970 Net Cash Used in Investing Activities (573,334,547) (135,519,837)

C Cash Flow from Financing ActivitiesPreliminary expenses - (2,985,000) Interest Paid (3,321,642) (2,085,144) Deferred Suppliers Credit & Proceeds from Borrowing (121,649,946) 1,050,457,336 Dividend Paid ( Including Dividend Distribution Tax ) (14,733,354) - Issue of shares - 242,932,000 Net Cash Used in Financing Activities (139,704,943) 1,288,319,193

Net Increase/(Decrease) in Cash and Cash Equivalents 22,624,338 634,913

Add:Unrealised Gain on Foreign Exchange Fluctuation 5,627,184 5,079,202

Cash & Cash Equivalents (Opening Balance) 25,030,550 19,316,435

Cash & Cash Equivalents (Closing Balance) 53,282,071 25,030,550

Responsive Industries LimitedCash Flow Statement for the Year ended 31st March 2008

- 34 -


NOTES:1

2 Cash and Cash Equivalents at the year end consist of Cash in Hand and Balances with Banks as follows:As at 31.03.2008 As at 31.03.2007

Cash in hand 816,028 1,719,298 Balances with Banks 52,466,043 23,311,252

53,282,071 25,030,550

3 Figures in brackets represents outflows.4 Previous Year figures have been recast/restated wherever necessary.

As per our report of even date attached

For Singrodia Goyal & Co. For and on behalf of the BoardChartered Accountants

(Narayan Pasari)Partner Director DirectorMem. No. 38095Place: MumbaiDate: 30th June 2008 Company Secretary

The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in the Accounting Standard-3 on Cash Flow Statement issued by the Institute of Chartered Accountants of India.

- 35 -


As at As at31.03.2008 31.03.2007


Schedule ''A" : Share CapitalAuthorised2,20,00,000 Equity Shares of Rs. 10/- each 220,000,000 220,000,000 2,00,00,000 Preference Shares of Rs. 10/- each 200,000,000 200,000,000

420,000,000 420,000,000

Issued, Subscribed & Paid-up2,09,92,000 (P.Y. 52,48,000) Equity Shares of Rs. 10/- eachfully paid up. 209,920,000 52,480,000 [ Of the above 1,57,44,000 Equity Shares of Rs. 10/- eachhave been alloted as Bonus Shares by capitalisation ofreserves during the year- Refer Note 4 of Schedule "S"][Of the above 1,26,11,700 (P.Y. 31,52,925) Equity Shares ofRs. 10/- each are held by the holding company ( WellknownBusiness Ventures Private Limited.)]

1,92,93,200 ( P.Y. 1,92,93,200 ) 0% Redeemable Non -Convertible Preference Shares of Rs. 10/- each fully paidup.(Refer note 5 of Schedule "S") 192,932,000 192,932,000

402,852,000 245,412,000

Schedule "B" : Reserves and Surplus

General Reserve - Opening Balance 100,000 100,000

Profit & Loss Account (as per account annexed) 754,094,122 394,958,181 Less: Capitalisation for allotment of Bonus Shares during the year 157,440,000 -

596,654,122 394,958,181 596,754,122 395,058,181

Schedule "C" : Secured LoansVehicle Loans 17,439,175 11,016,217 (Secured against mortgage of respective vehicles)

17,439,175 11,016,217

Schedule "D" : Unsecured LoansDeferred Supplier's Credit (Payable in Foreign Currency ) 523,658,552 917,053,252 Due to Subsidiary Company 251,773,795 -

775,432,347 917,053,252

Schedule "F" : Investments(As per Annexure "1") 49,923,504 16,563,625

49,923,504 16,563,625

Responsive Industries LimitedSchedules Forming Part of the Balance Sheet as at 31st March, 2008

Particulars

- 36 -


As at As at31.03.2008 31.03.2007


Responsive Industries LimitedSchedules Forming Part of the Balance Sheet as at 31st March, 2008

Particulars

Schedule "G" Inventories (As Taken, Valued and Certified by the Management)Raw Materials 182,529,777 184,440,665 Stock in Process 1,891,740 8,340,200 Packing Materials 1,356,838 1,081,371 Stores and Spares 3,654,810 4,054,310

189,433,165 197,916,546

Schedule "H" : Sundry Debtors(Unsecured, Considered Good)Outstanding for a period exceeding six months 15,065,112 3,839,961 Other Debts 144,761,369 123,383,422

159,826,481 127,223,383

Schedule "I" : Cash and Bank BalancesCash-in-hand 816,028 1,719,297 Balance with Scheduled Banks In Current Accounts 49,202,857 23,199,918 In Fixed Deposit Accounts 3,263,186 111,335

53,282,071 25,030,550

Schedule "J" : Loans and Advances(Unsecured, considered good)Deposits 5,868,664 3,920,620 Advances recoverable in cash or in kind 263,601,238 72,757,951 Advance Tax & TDS 40,329,523 5,178,181

309,799,425 81,856,752

Schedule "K" : Current Liabilities and ProvisionsCurrent LiabilitiesSundry Creditors- Due to Micro, Small and Medium Enterprises ( Refer Note 16 of Schedule "S") - - - Due to Others 256,133,278 293,159,176 Advance received from Customers 334,730,150 165,135,233 Other Current Liabilities 18,536,763 23,283,688

Provisions Provision for Tax 96,387,294 40,102,877 Fringe Benefit Tax 2,056,262 905,505 Proposed Dividend 16,793,600 12,595,200 Provision for Dividend Distribution Tax 2,854,072 2,140,554

727,491,420 537,322,233

- 37 -

Sche

dule

"E" :

Fixe

d As

sets

(At C

ost L

ess D

epre

ciatio

n)

Amou

nt (

Rs)

Add

ition

s D

educ

tions

Land

78,09

9,140

-

-

78,09

9,140

-

-

-

-

78

,099,1

40

78,09

9,140

Facto

ry Bu

ilding

s12

5,652

,492

13,36

0,680

-

139,0

13,17

2

4,0

93,29

0

4,3

13,24

9

-

8,4

06,53

9

13

0,606

,633

121,5

59,20

2

Plan

t & M

achin

ery

1,634

,267,0

11

285,3

53,47

6

4,6

55,04

7

1,9

14,96

5,440

16

8,657

,826

17

7,495

,262

22

2,929

34

5,930

,159

1,5

69,03

5,281

1,465

,609,1

85

-

El

ectric

Insta

llatio

ns15

,080,0

15

2,0

37,04

2

-

17

,117,0

57

630,3

56

760,6

69

-

1,391

,025

15,72

6,032

14

,449,6

59

Comp

uters

3,361

,510

53

4,246

-

3,8

95,75

6

370,6

83

565,8

67

-

936,5

50

2,959

,206

2,9

90,82

7

Furn

iture

& F

ixtur

es37

7,824

248,8

89

-

626,7

13

11

,518

37

,349

-

48,86

7

57

7,846

366,3

06

Offic

e Equ

ipmen

ts97

0,209

1,525

,004

-

2,495

,213

31

,539

82

,032

-

113,5

72

2,381

,641

93

8,670

Weig

hing S

cale

183,5

27

-

-

18

3,527

7,547

8,718

-

16,26

5

16

7,262

175,9

80

Motor

Car

s8,3

27,96

8

4,196

,192

35

1,615

12,17

2,545

59

8,710

1,0

12,10

4

53

,230

1,5

57,58

3

10

,614,9

62

7,729

,259

Motor

Tru

cks

11,92

3,342

9,761

,593

-

21,68

4,935

1,0

66,33

3

1,7

66,97

7

-

2,8

33,30

9

18

,851,6

26

10,85

7,010

TOTA

L1,8

78,24

3,038

31

7,017

,121

5,006

,662

2,1

90,25

3,497

17

5,467

,802

18

6,042

,226

27

6,159

36

1,233

,869

1,8

29,01

9,629

1,7

02,77

5,236

Pr

evio

us Y

ear

-

1,8

78,24

3,038

-

1,878

,243,0

38

41,07

8,485

13

4,389

,317

-

17

5,467

,802

1,7

02,77

5,236

-

As A

t 31

.03.20

07

Durin

g th

e yea

r

Up

to

31.03

.2007

F

or th

e Yea

r Ad

just

men

ts U

p to

31

.03.20

08

Resp

onsiv

e Ind

ustri

es L

imite

dSc

hedu

le fo

rmin

g pa

rt of

Bala

nce S

heet

as at

31st

Mar

ch 20

08

DESC

RIPT

ION

G R

O S

S B

L O

C K

D E

P R

E C

I A T

I O N

N E

T B

L O

C K

As A

t 01

.04.20

07

As A

t 31

.03.20

08

As a

t 31

.03.20

08


Year Ended Period Ended31.03.2008 31.03.2007


Schedule "L" : Sales and Other Income

Sales 3,717,761,236 2,214,844,121 Excise Duty Refund 46,503,168 24,382,221 Gain on Exchange Fluctuations (Net) 18,151,354 9,039,149 Dividends 2,005,501 1,703,218 Interest [Tax deducted at source Rs.30,187 (P.Y. Rs.1675/-)] 242,435 221,402 Other Income 1,603,577 1,544,357

3,786,267,270 2,251,734,468

Schedule "M" : Increase / (Decrease ) in StocksClosing StocksStock-in-Process 1,891,740 8,340,200 Finished Goods - -

1,891,740 8,340,200 Less : Opening StocksStock-in-Process 8,340,200 5,880,000 Finished Goods - 7,978,620

8,340,200 13,858,620 (6,448,460) (5,518,420)

Schedule "N" : Manufacturing & Other ExpensesRaw Material ConsumedOpening Stock 184,440,665 90,383,595 Purchases 2,524,961,242 1,629,009,165 Less: Closing Stock 182,529,777 184,440,665

2,526,872,129 1,534,952,095

Packing Material Consumed 29,570,974 23,471,839 Stores and Spares Consumed 31,658,893 18,466,912 Loading and Unloading Charges 26,767,360 12,181,715 Freight Inward 4,710,700 3,566,520 Power & Fuel Charges 104,937,940 76,840,927 Repair & Maintenance (Machinery) 15,942,165 12,580,338 Repair & Maintenance (Buildings) 2,400,398 1,775,114

2,742,860,560 1,683,835,460

Schedule "O" : Personnel CostsSalaries, Wages & Bonus 52,114,270 30,142,823 Workmen & Staff Welfare Expenses 5,598,789 3,992,889 Contribution to Provident Fund & Other Funds 1,860,595 1,150,446

59,573,654 35,286,158

Responsive Industries LimitedSchedules Forming Part of Profit & Loss Account For the year ended 31st March 2008

Particulars

- 39 -


Year Ended Period Ended31.03.2008 31.03.2007


Responsive Industries LimitedSchedules Forming Part of Profit & Loss Account For the year ended 31st March 2008

Particulars

Schedule "P" : Administration & Other ExpensesRent, Rates and Taxes 7,694,949 2,192,720 Insurance 2,462,175 1,260,648 Communication Costs 4,616,974 3,810,835 Printing & Stationery 2,943,039 3,631,555 Travelling, Conveyance & Motor Car Expenses 12,684,093 7,984,267 Legal & Professional Charges 4,084,139 420,043 Repair & Maintenance (Others) 1,707,496 1,807,842 Auditors Remuneration 200,000 200,000 Loss on Sale of Investments 5,893,368 260,479 Security Transaction Tax 1,819,126 8,947 Loss on Trading in Equity Derivative Instruments (Net) 208,319,203 - Preliminary Expenses written off - 2,985,000 Loss on Sale/Discard of Fixed Assets 356,288 - Miscellaneous & General Expenses 8,048,621 5,099,357

260,829,471 29,661,693

Schedule "Q" : Selling and Marketing ExpensesBusiness Promotion Expenses 4,325,544 1,475,959 Brokerages, Commissions & Discount 12,025,331 11,966,374 Freight, Clearing & Forwarding Charges 46,991,418 24,088,849 Exhibition Expenses 1,819,174 7,444,917

65,161,467 44,976,099

Schedule "R" : Interest and Finance ChargesInterest on Vehicle Loans 1,281,801 769,681 Other Interest 901,723 592,763 Bank Charges 1,138,118 722,700

3,321,642 2,085,144

- 40 -


Annexure "1" : InvestmentsAs at As at

31st March, 2008 31st March, 2007Rs. Rs.

(A) Long Term InvestmentsNon Trade, QuotedKotak Mahindra Bank Limited 1,687,128 - [2,500 ( P.Y. Nil ) Equity Shares of Rs.10 each fully paid up]Energy Development Company Limited 1,313,780 - [13,000 ( P.Y. Nil ) Equity Shares of Rs.10 each fully paid up]Jai Corp Limited 1,172,853 - [1,000 ( P.Y. Nil )Equity Shares of Rs. 10 each fully paid up]Syschem India Limited 274,321 [1,38,000 ( P.Y. Nil ) Equity Shares of Rs.1 each fully paid up]Reliance Industrial Infrastructure Limited 26,419,205 - [20,600 ( P.Y. Nil ) Equity Shares of Rs.10 each fully paid up]Krishna Filaments Limited 274,410 [5,000 ( P.Y. Nil ) Equity Shares of Rs.10 each fully paid up]Reliance Capital Limited 3,281,807 - [1,790 ( P.Y. Nil ) Equity Shares of Rs.10 each fully paid up]

UnquotedInvestment in SubsidiaryAxiom Impex International Limited 6,000,000 - [1,64,00,000 (-) Equity Shares of Rs.10 each fully paid up]

(B) Current InvestmentsInvestments in Mutual FundJM Contra fund - Dividend Plan of Rs. 10 per unit 5,000,000 - (4,88997.55/- Units ( P.Y. Nil )Reliance Equity Fund of Rs.10 per unit 2,500,000 2,500,000 (2,50,000 Units ( P.Y. 2,50,000 )Prudential ICICI Discovery Fund - 5,467,290 (Nil - Units ( P.Y. 2,89,001 )Prudential ICICI Emerging star fund (Unit I) - 6,115,363 (Nil - Units ( P.Y. 2,70,986 )Investment in HDFC Amc - 2,480,972 (Nil - Units ( P.Y. )DSP Merrill Lynch Capital Limited of Rs.10 per unit 2,000,000 - (20000 - Units ( P.Y. Nil )Total 49,923,504 16,563,625 Aggregate of Unquoted Investments ( At Cost ) 15,500,000 16,563,625 Aggregate of Quoted Investments ( At Cost ) 34,423,504 -

(At Market Value) 24,295,020 -

Responsive Industries LimitedAnnexure Forming Part of the Schedule to the Balance Sheet as at 31st March 2008

Particulars

- 41 -

Anne

xure

"2"

Detai

ls of

Purch

ase /

Sales

/Clos

ing S

tock o

f Inve

stmen

ts

No. o

f Uni

tsAm

ount

sNo

. of U

nits

Amou

nts

No. o

f Uni

tsAm

ount

sNo

. of U

nits

Amou

nts

Shar

es In

vest

men

tsBa

jaj H

olding

& In

vestm

ent L

td.-

-

2,000

1,543

,834

2,000

1,5

43,83

4

-

-

Ener

gy D

evelo

pmen

t-

-

13,00

0

1,3

13,78

0

-

-

13

,000

1,3

13,78

0

Hotel

Leela

Ven

ture L

td.-

-

10,00

0

49

3,743

10

,000

49

3,743

-

-

Icici

Bank

Ltd.

(Inv.)

-

-

5,0

00

6,0

01,80

0

5,0

00

6,001

,800

-

-

Ifc

i Ltd.

-

-

25

,000

1,675

,878

25,00

0

1,675

,878

-

-

Ja

i. Cor

p Ltd.

- Inv

-

-

1,0

00

1,1

72,85

3

-

-

1,0

00

1,172

,853

Ja

i Pra

kash

Ass

ociat

es Lt

d.-

-

5,000

1,412

,447

5,000

1,4

12,44

7

-

-

Kotak

Mah

indra

Ban

k Ltd.

- Inv

.-

-

2,500

1,687

,128

-

-

2,500

1,6

87,12

8

Krish

na F

ilame

nts Lt

d. (In

v.)-

-

5,000

274,4

10

-

-

5,000

27

4,410

Mahin

dra &

Mah

indra

Ltd.

-

-

10

,068

6,410

,229

10,06

8

6,410

,229

-

-

Re

lianc

e Cap

ital L

td.-

-

7,440

13,40

9,393

5,6

50

10,12

7,586

1,7

90

3,281

,807

Re

lianc

e Ene

ry Ltd

. - In

v.-

-

1,000

1,279

,395

1,000

1,2

79,39

5

-

Re

lianc

e Ind

ustria

l Infra

struc

ture L

td-

-

22,00

0

28

,388,5

59

1,400

1,9

69,35

3

20,60

0

26,41

9,205

Re

lianc

e Ind

ustrie

s Ltd.

( Inv

.)-

-

5,000

12,61

9,872

5,0

00

12,61

9,872

-

Axiom

Impe

x Inte

rnati

nal L

td.-

-

400,0

00

6,000

,000

-

-

400,0

00

6,0

00,00

0

Spice

Com

munic

ation

Ltd.

-

-

25

,000

938,2

35

25,00

0

938,2

35

-

Sysc

hem

India

Ltd. -

Inv.

-

-

13

8,000

27

4,321

-

-

13

8,000

274,3

21

Ta

ta Co

mmun

icatio

n Ltd.

-

-

3,0

00

1,5

54,80

8

3,0

00

1,554

,808

-

Utv S

oftwa

re C

ommu

nicati

on Lt

d.-

-

250

20

4,661

25

0

20

4,661

-

Vi

deoc

on In

dusti

res L

td.-

-

41,14

4

25

,258,7

31

41,14

4

25,25

8,731

-

Woc

khar

dt Ltd

.-

-

100,0

00

41,40

0,125

10

0,000

41,40

0,125

-

Mutu

al Fu

nd In

vest

men

t-

Relia

nce E

quity

Fun

d25

0,000

2,500

,000

-

-

-

-

25

0,000

2,500

,000

Pr

uden

tial IC

ICI D

iscov

ery F

und

258,6

60

5,4

67,29

0

30

,341

517,3

21

289,0

01

5,9

84,61

1

--

Prud

entia

l ICIC

I Eme

rging

Star

Fund

243,3

80

6,1

15,36

4

27

,606

608,4

50

270,9

86

6,7

23,81

4

-

-

J M C

ontra

Fun

d -Di

viden

d Plan

488,9

98

5,000

,000

-

-

488,9

98

5,0

00,00

0

D S

P Me

rril L

ynch

Cap

ital L

td20

,000

2,000

,000

-

-

20,00

0

2,000

,000

In

vest

men

t in

HDFC

AMC

N.A

2,480

,972

-

39,95

3

N.A

2,520

,925

-

-

Tota

l75

2,040

16,56

3,626

1,388

,347

16

1,479

,925

79

9,499

128,1

20,04

7

1,3

40,88

8

49,92

3,504

Resp

onsiv

e Ind

ustri

es L

imite

d

Balan

ce A

s on

31.03

.2008

Parti

cular

sBa

lance

as o

n 01

.04.20

07Pu

rcha

se d

urin

g th

e Yea

rSo

ld D

urin

g th

e Yea

r


Schedule Forming Part of the Accounts for the year ended 31st March 2008. Schedule: “S” I. Significant Accounting Policies

a) Basis of Accounting:

The Financial Statements have been prepared under the historical cost convention on an accrual basis and in accordance with the applicable accounting standards issued by The Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956

b) Use of Estimates

The Preparation of Financial Statements is in conformity with generally accepted accounting principles (GAAP) in India, which requires management to make estimates and assumption that affect, reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements.

c) Fixed Assets:

Fixed Assets are stated at actual cost net of Cenvat availed, less accumulated depreciation and impairment loss, if any. All cost, including financing cost till commencement of commercial production, net charges of foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

d) Depreciation:

Depreciation on fixed assets provided on Straight-line basis (SLM), at the rates specified in Schedule XIV to the Companies Act, 1956. Depreciation on additions to/deletions from fixed assets is provided on pro-rata basis from/ up to the date of such addition/deletion as the case may be.

e) Investments:

Investments that are intended to be used for more than a year from the date of acquisition are classified as long term Investment and are carried at cost less any provision for permanent diminution in value. Investments other than long-term investments being current investments are valued at cost or fair value whichever is lower.

f) Inventories:

Inventories are valued as follows:

i) Finished goods are valued at lower of cost or net realisable value. ii) Stores & Spares, Packing Material, Raw Materials and Work-in-Process are

valued at cost.

- 43 -


Schedule Forming Part of the Accounts for the year ended 31st March 2008.

g) Treatment of Contingent Liabilities:

Contingent Liabilities in respect of show cause notices received are considered only when they are converted into demands. Payments in respect of such demands, if any are shown as advances.

Contingent Liabilities under various fiscal laws includes those in respect of which the company/department is in appeal.

Contingent Liabilities are disclosed by way of notes.

h) Accounting For Taxation on Income:

Current Taxes Provision for current income-tax is recognized in accordance with the provisions of Indian Income- tax Act, 1961 and is made annually based on the tax liability after taking credit for tax allowances and exemptions. Deferred Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantially enacted at the balance sheet date. The effect of a change in tax rates on deferred tax and assets or liabilities are recognized in the period that includes the enactment date. Deferred tax Assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future. Deferred Tax Assets are reviewed as at each Balance Sheet date. Fringe Benefits Provisions for Fringe Benefits Tax (FBT) have been recognized on the basis of harmonious contextual interpretation of the provision of the Income Tax Act, 1961.

i) Foreign Currency Transactions:

i) The transactions in foreign currencies on revenue accounts are stated at the rate of exchange prevailing on the date of transaction.

ii) The difference on account of fluctuation in the rate of exchange prevailing on

the date of transaction and the date of realisation is charged to Profit and Loss Account

iii) Differences on translation of Current Assets and Current Liabilities remaining

unsettled at the year-end are recognised in the Profit and Loss account. (Except those relating to acquisition of fixed assets which are adjusted in the cost of the assets.)

- 44 -



j) Retirement Benefits:

Company’s contributions to provident fund are charged to Profit and Loss Account. Gratuity is accounted for in the year of payment.

k) Revenue Recognition:

i) Sales are recognised on despatch of goods to the customers. ii) Export Sales are accounted on the basis of despatch of goods for exports.

II. Notes to Accounts

1. The Schedules referred to in the Balance Sheet & Profit & Loss Account form an integral part of the accounts.

2. In the opinion of the Board the Current Assets, Loans & Advances are approximately of the

value stated and are realisable in the ordinary course of business. The provision for all known liabilities is adequate.

Sundry debtors, sundry creditors, loans and advances are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment.

3. Current liabilities includes unpaid dividend of Rs. 3870/- (P.Y. 1470/-). 4. During the year the Company has allotted 1, 57, 44,000 Bonus shares in the ratio of 3:1 as

per the resolution passed at the Extraordinary General Meeting of the Company held on 2nd day of March 2007. These shares are in the process of being listed on the Bombay Stock Exchange.

5. i. The Company had issued 1,92,93,200, 0% Redeemable Non-Convertible Preference

shares of Rs. 10 each fully paid up on 30th October 2006. ii. The said Preference shares are redeemable as follows:

a) 30% of the total number of shares to be redeemed at the end of the 5th year @ Rs.14.70 per share

b) 30% to be redeemed at the end of the 6th year @ Rs. 15.87 per share and c) Balance 40% to be redeemed at the end of the 7th year @ Rs.17.14 per share.

6. During the year, on 1st January, 2008 , the Company acquired 4,00,000 Equity Shares of

Rs. 10/- each of Axiom Impex International Limited (AIIL) to make it a Subsidiary. Later on during the year AIIL allotted 1,60,00,000 Equity shares of Rs. 10/- each as bonus shares on the said holding.

- 45 -


Schedule Forming Part of the Accounts for the year ended 31st March 2008. 7. The Company has continued to adjust the foreign currency exchange differences on

amount due to the foreign suppliers of fixed assets to the carrying cost of fixed assets in compliance with Schedule VI to the Companies Act, 1956 which is at variance to the treatment prescribed in accounting Standard (AS -11) on “Effects of Changes in Foreign Exchange Rates “notified in the Companies (Accounting Standards) Rules 2006. Had the treatment as per AS -11 been followed , the net profit before tax for the year would have been higher by Rs.63.78 Millions.

8. Auditor’s Remuneration Includes (excluding service tax) : (Rs. in Millions)

For the year ended 31.03.2008

For the period ended 31.03.2007

Audit Fees 0.19 0.19 Tax Audit Fees 0.01 0.01 0.20 0.20

9. Taxes on Income

a. Provision for taxation for the accounting year has been made in accordance with the provisions of the Income Tax Act, 1961.

b. In terms of Accounting Standard on “Accounting for Taxes on Income” (AS 22) the Company has recognized Deferred Tax Liability amounting to Rs. 25.81 Millions for the year ended 31st March 2008 in the Profit & Loss Account.

The accumulated balance in Net Deferred Tax Liability / (Assets) as on 31st March 2008 comprises of:

(Rs. in Millions) Sr. No.

Particulars Year ended 31.03.2008

Year ended 31.03.2007

1 Depreciation 71.44 45.50 2 Disallowance u/s 40(a)(ia) (0.12) Nil

Deferred Tax Liability / (Assets) 71.32 45.50

10. Earning Per Share (As per AS – 20) (Rs. in Millions) Year ended

31.03.2008 Year ended 31.03.2007

A Net Profit after tax available for equity shareholders used as Numerator

378.78 248.55

B Weighted Average number of Equity Shares used as Denominator

20,992,000

20,99,2000

C Basic and diluted income per share (In rupees) 18.04 11.84

11. Related Party Disclosures (a) Key Management Personnel

Mr. Santosh Shinde Director Mr. Ashok Jha Director Mr. Rajesh Pandey Director

(b) Subsidiary and Fellow Subsidiary Axiom Impex International Limited (Subsidiary) w.e.f. 1st January, 2008. Sun Plastochem Limited (Fellow Subsidiary) Responsive Polymers International Limited (Fellow Subsidiary)

- 46 -



(c) Holding Company Welknown Business Ventures Private Limited

There are no transactions during the current year as well as in the previous period with the related parties mentioned in (a) (i), (a) (ii) and (a) (iii) above.

Following are the transactions with the related parties mentioned in (b) and (c) above (Rs.in Millions) Nature of Transactions

In relation to (b) (i) above

In relation to (b) (ii) above

In relation to (b) (iii) above

In relation to (c) above

Current Year

Previous Period

Current Year

Previous Period

Current Year

Previous Period

Current Year

Previous Period

Fixed Assets Purchased

Nil Nil Nil Nil Nil 1.66 Nil Nil

Loans & Advances Received

411.98 Nil Nil Nil Nil Nil Nil Nil

Loans and Advance Repaid

216.27 Nil Nil Nil Nil Nil Nil Nil

Amount Received Nil Nil Nil Nil 1.16 Nil Nil Nil Issue of Preference Shares

Nil Nil Nil Nil Nil 192.93 Nil Nil

Loan received Nil Nil Nil Nil Nil Nil Nil 0.88 Amount Outstanding at the end of the year Amount Payable 251.77 Nil 5.00 5.00 Nil Nil Nil Nil Other Receivable Nil Nil Nil Nil 8.16 9.32 Nil Nil Note: Related Parties as disclosed by Management and relied upon by auditors.

12. Additional Information Pursuant to the Provision of Part II of the Schedule VI of the

Companies Act 1956. A. Quantitative Information:

i) Installed Capacity N.A. ii) Purchase/Production, Consumption/Sales/Stock:

Stocks, Productions/Purchases & Sales of Finished Goods (Rs. in Millions) Opening Stocks Production Sales Closing Stocks Products Units Qty (MT) Amount Qty (MT) Qty (MT) Amount

Qty (MT)

Amount

Nil Nil 20282.39 20282.39 1129.57 Nil Nil PVC Leather Cloth

(37.06) (2.22) (15049.33) (15086.39) (813.90) (Nil) (Nil) PVC Flooring Nil Nil 9948.14 9948.14 2159.58 Nil Nil (102.02) (5.75) (6783.71) (6885.73) (1014.70) (Nil) (Nil) PVC Sheeting Nil Nil 3637.77 3637.77 135.57 Nil Nil (Nil) (Nil) (5899.26) (5899.26) (192.77) (Nil) (Nil) PVC Rigid

Sq. Mtrs / Sq.

Yards.

Nil Nil 2763.86 2763.86 215.08 Nil Nil (Nil) (Nil) (2433.99) (2433.99) (188.75) (Nil) (Nil) Others Nil Nil -- -- 77.95 Nil Nil (Nil) (Nil) (Nil) (Nil) (4.72) (Nil) (Nil)

Figures in brackets indicates previous period figure

- 47 -


Schedule Forming Part of the Accounts for the year ended 31st March 2008. Raw Materials Consumed (Rs. in Millions)

Current Year Previous Year Product Qty (MT) Amount Qty (MT) Amount

Resin 36516.42 1600.68 24129.43 952.30 Plastisizers 9785.73 605.38 5390.57 362.66 Others - 320.81 - 219.99 TOTAL - 2526.87 - 1534.95

B. Value of Imported and Indigenous Raw Materials, Stores & Spares consumed during the year. Raw Materials (Rs. in Millions)

Sr. No. Description Current Year Previous Year Percentage Amount Percentage Amount i. Imported 51 1295.56 17 260.38 Ii Indigenious 49 1231.31 83 1274.57 100 2526.87 100.00 1534.95

Stores & Spares (Rs. in Millions)

Sr. No. Description Current Year Previous Year Percentage Amount Percentage Amount i. Imported 10 2.84 0.44 0.08 Ii Indigenious 90 28.82 99.56 18.38

100 31.66 100.00 18.46 C. C.I.F. Value of Imports, Expenditure and Earnings in Foreign Currencies (Rs. in Million)

Sr. No. Particulars Year ended 31.03.2008

Period ended 31.03.2007

i) Expenditure in Foreign Currency a) C.I.F. value of Purchases 847.76 281.64 b) C.I.F. value of Capital Goods 345.26 31.54 c) Foreign Travelling expenses 1.76 Nil d) Freight – Exports 20.17 8.29 e) Exhibition expenses 1.82 5.62

f) Testing charges 0.15 Nil

ii) Earnings in Foreign Currencies a) Export Sales – FOB 2155.14 1129.09

13. The company had changed its name from Responsive Polymers Limited to Responsive Industries Limited in the financial year 2006-2007 and fresh certificate of incorporation dated 4th January 2007 has been received from the Registrar of Companies, Mumbai.

- 48 -


Schedule Forming Part of the Accounts for the year ended 31st March 2008. 14. The Board of Directors, in their meeting held on 10th January 2007, had approved the

amalgamation of Responsive Polymer International Limited with the Company with effect from 1st July 2006 being the appointed date. The Company has since received the in- principal approval under clause 24 (f) of the Listing Agreement for the said amalgamation from the Bombay Stock Exchange Limited on 17th March 2008. The Company is taking up necessary process for the said amalgamation.

15. Segmental Information

i) Primary (Business) Segment

As the company ‘s business consists of one reportable business segment of Manufacturing and Selling of PVC products, hence no separate disclosures pertaining to attributable Revenues, Profits, Assets, Liabilities Capital Employed are given.

ii) Secondary (Geographical) Segment Secondary segment reporting is performed on the basis of geographical location of the customers. The operation of the Company comprises local sales and export sales. The Management views the Indian market and export market as distinct geographical segments. The following is the distribution of the Company’s sale by geographical markets: (Rs in Millions)

Sales Period Ended 31.03.2008

Period Ended 31.03.2007

India 1537.29 1059.21 Export 2180.47 1155.63 Total 3717.76 2214.84

The following is the carrying amount of segment assets by geographical are in which the assets are located. (Rs. in Millions) Carrying Amount of Segment Assets as at 31.03.2008 31.03.2007 India 2587.54 2125.66 Outside India* 3.74 25.71 Total 2591.28 2151.37

* Carrying amount of segment assets outside India represents receivable from export

Sales.

16. The names of the Micro, Small and Medium Enterprises suppliers defined under “The Micro Small and Medium Enterprises Development Act 2006” could not be identified, as the necessary evidence is not in the possession of the Company.

- 49 -



17. Net dividend remitted in foreign currency: (Rs. in Milllions)

2007-2008 2006-2007 Particulars

No. of Non-Resident

Shareholders

No. of Equity

Shares held

Dividend remitted

No. of Non-Resident Shareholders

No.of Equity

Shares held

Dividend remitted

Final Dividend 2006-2007

3 8000000 4.80 3 2000000 Nil

18. The details of Purchase, Sales and Closing stock of Investments during the year are as per Annexure “2” attached.

19. Current year figures are for the year i.e. from 1st April 2007 to 31st March 2008 (12 Months)

whereas previous period figures are from 1st July 2006 to 31st March 2007 (9 months) and hence are not comparable. Figures of the previous period have been re-grouped, reclassified and/or rearranged wherever necessary.

20. Figures less than Rs. 5000/- have been shown at actuals wherever statutory required to be

disclosed since figures stated have been presented in Rs. in million.

For Singrodia Goyal & Co. For and on behalf of the Board

Chartered Accountants

Narayan Pasari Partner Director Director Mem. No. 38095 Place: Mumbai Date: 30th June 2008 Company Secretary

- 50 -


I Registration Details State Code 11Balance Sheet Date 31.03.2008

IIPublic Issue Nil Right Issue NilBonus Issue 157,440 Private Palcement Nil

IIITotal Liabilities 1,863,793 Total Assets 1,863,793

Sources of FundsPaid up Capital 402,852 Reserves & Surplus 596,754

Secured Loans 17,439 Unsecured Loans 775,432

Deferred Tax Liabilities 71,315Application of FundsNet Fixed Assets 1,829,020 Investments 49,924

Net Current Assets (15,150) Misc. Expenditure -

IV Performance of CompanyTurnover 3,717,761 Total Expenditure 3,317,789

Profit/(Loss) before Tax 462,030 Profit/(Loss) After Tax 378,784

Earning per Share In Rs. 18.04 Dividend Rate (%) 8.00

V Generic Names of One Principal Product/Services of the Company (As per Monetary terms)

Item Code No. N.A. Product Description N.A.

For Singrodia Goyal & Co For and on behalf of the BoardChartered Accountants

(Narayan Pasari)PartnerMem. No.38095Place : MumbaiDate : 30th June 2008

Responsive Industries Limited

Director Director

L99999MH1982PLC027797

BALANCE SHEET ABSTRACT AND COMPANY'S BUSINESS PROFILE

Capital raised during the year (Amount in Rupees Thousands )

Position of Mobilisation and Development of funds:(Amount in Rupees Thousands)

Additional Information as required under Part IV of Schedule VI to the Companies Act '1956

Company Secretary

- 51 -


STATEMENT PURSUANT TO SECTION 212 (1) (e) OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANY Name of Subsidiary Company Axiom Impex

International Limited

(A) The Financial year of the Subsidiary Company (B) Shares of the subsidiary held by the Company on the above

date:

(a) Number of Shares

(b) Extent of Holding (C) The net aggregate of Profit/(Loss) of the subsidiary company

so far as its concerns the members of the Company

(a) Not dealt within the account of the Company for the year ended 31st March, 2008 amounted to:- (I) for the financial years ended as in (A) above; (II) for the previous financial year of subsidiary since

they became the subsidiary of the Company

(b) Dealt within the account of the Company for the year ended 31st March, 2008 amounted to:- (I) for the financial years ended as in (A) above; (II) for the previous financial year of subsidiary since

they became the subsidiary of the Company (D) As the financial year of the Company coincide with the

financial year of the holding company, section 212 (5) of the Companies Act, 1956

31st March 2008 16400000 Equity Shares of Rs.10/- each. 86% 20,697,939 NIL NIL NIL N.A.

For and on behalf of the Board Director Director Company Secretary Place : Boisar Date : 25th July, 2008

- 52 -


Auditor’s Report on Consolidated Financial Statements

Auditor’s Report to the Board of Directors of Responsive Industries Limited on the Consolidated Financial Statements of Responsive Industries Limited and its Subsidiary. We have audited the attached Consolidated Balance Sheet of Responsive Industries Limited (hereinafter referred as “the Company”), the holding company and its subsidiary (hereinafter referred as “the Group” as at 31st March, 2008, the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended on that date prepared in accordance with the accounting principles generally accepted in India. 1. These financial statements are the responsibility of the management of the Company.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. We report that the consolidated financial statements have been prepared by the

Company in accordance with the requirements of Accounting Standard AS 21, “Consolidated Financial Statements” issued by the Institute of Chartered Accountant of India and on basis of the separate audited financial statements of the Company and its subsidiary as included in the consolidated financial statements.

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 the Company and its subsidiary, we are of the opinion that the consolidated financial statements give a true and fair view:

(a) In case of the Consolidated Balance Sheet, of the consolidated state of affairs

of the Group as at 31st March, 2008 ; (b) In case of the Consolidated Profit and Loss Account, of the consolidated

results of operations of the Group for the year then ended; and

(c) In case of the consolidated Cash Flow Statement, of the consolidated cash flows of the Group for the year ended on that date.

For Singrodia Goyal & Co. Chartered Accountants Narayan Pasari Partner

Place : Mumbai Mem.No. 38095 Date : 30th June 2008

- 53 -


As at31.03.2008

Amount (Rs.)

SOURCES OF FUNDS Shareholder's FundsShare Capital A 402,387,000 Share Application Money 57,792,530 Reserves & Surplus B 978,153,823

1,438,333,353 Minority Interest 62,804,518

Loan FundsSecured Loans C 17,439,175

Unsecured Loans D 712,946,052

Deferred Tax Liabilities(Net) 101,953,535 Total 2,333,476,633

APPLICATION OF FUNDSFixed Assets EGross Block 2,620,955,618 Less: Depreciation 399,806,183 Net Block 2,221,149,435 Investments F 113,835,705 Current Assets, Loans & AdvancesInventories G 238,159,117 Sundry Debtors H 172,636,601 Cash & Bank Balances I 78,805,159 Loans & Advances J 455,287,439

944,888,316 Less: Current Liabilities & ProvisionsCurrent Liabilities & Provisions K 946,396,823 Net Current Assets (1,508,507)

Total 2,333,476,633 Significant Accounting Polices & SNotes forming part of the AccountsAs per our report of even date For and on behalf of the Board For Singrodia Goyal & Co.Chartered Accountants

Narayan Pasari Director Director PartnerMem No. 38095Place: MumbaiDate : 30th June 2008

Responsive Industries LimitedConsolidated Balance Sheet as at 31st March 2008

Company Secretary

SchedulesParticulars

- 54 -


Schedules Year ended31.03.2008

Amount (Rs.)

IncomeSales & Other Income L 4,143,073,127 Increase/(Decrease) in Stocks M 7,042,099

4,150,115,226

ExpenditureManufacturing & Other Expenses N 3,062,149,706 Personnel Costs O 60,766,737 Administrative & Other Expenses P 262,305,624 Selling & Marketing Expenses Q 71,741,415 Interest & Finance Charges R 3,556,073 Depreciation 195,593,600

3,656,113,155

Profit Before Tax 494,002,071 Less: Provision for taxCurrent Tax 64,728,874 Deferred Tax 28,535,396 Fringe Benefit Tax 1,256,257 Profit After Tax 399,481,544 Less: Minority Interest 2,876,397 Add: Balance as per the last year 392,803,894

789,409,041 AppropriationProposed Dividend 16,793,600 Dividend Distribution Tax 2,854,072

Balance carried to Balance Sheet 769,761,369 Earning Per Share (in Rs.)Basic 19.07

Notes forming part of the Accounts SAs per our report of even dateFor Singrodia Goyal & Co.Chartered Accountants

Narayan Pasari Director Director PartnerMem No. 38095Place: MumbaiDate : 30th June 2008

Company Secretary

For and on behalf of the Board

Responsive Industries LimitedConsolidated Profit and Loss Account for the Year ended 31st March 2008

Particulars

- 55 -


Sr. Particulars Year endedNo. 31.03.2008

(Rs.)

A. Cash Flow from Operating Activities:Net Profit/(Loss) Before Tax and Extraordinary Items 494,002,073 Adjustments For :Depreciation 195,593,598 Preliminary expenses written off 49,364 Loss on Sale/Discard of Fixed Assets 356,288 Interest paid 3,556,073 Interest Income (352,481) Dividend Income (2,005,501) Loss on Sale of Investments 1,885,968 Loss in Trading in Equity Derivative Instruments (Net) 210,138,329 Unrealised Gain on Foreign Exchange (9,016,690) Operating Profit Before Working Capital Changes 894,207,020 Adjustment For : Inventories 294,184 Trade & Other Receivables 13,125,700 Loans and Advances (89,474,812) Trade Payables 52,580,131 Cash Generated From Operations 870,732,224 Income tax paid (35,157,374) Net Cash From Operating Activities 835,574,850

B Cash Flow from Investing Activities:Purchase of fixed Assets (501,304,047) Sale/Discard of Fixed Assets 4,374,215 Interest received 352,481 Dividend Income 2,005,501 Loss in Trading in Equity Derivative Instruments (Net) (210,138,329) Investments Purchased (161,567,098) Investments Sold 171,927,709 Net Cash Used in Investing Activities (694,349,568)

C Cash Flow from Financing ActivitiesInterest Paid (3,556,073) Deferred Suppliers Credit and Proceeds from Borrowings (184,136,241) Dividend Paid ( Including Dividend Distribution Tax ) (14,733,354) Proceed from Share Application Money 57,774,530

Net Cash Used in Financing Activities (144,651,138)

Net Increase/(Decrease) in Cash and Cash Equivalents (3,425,856) Add:Unrealised Gain on Foreign Exchange Fluctuation 9,016,690 Cash & Cash Equivalents (Opening Balance) 73,214,325

Cash & Cash Equivalents (Closing Balance) 78,805,159

Responsive Industries LimitedConsolidated Cash Flow Statement for the Year ended 31st March 2008

- 56 -


NOTES:1

2 Cash and Cash Equivalents at the year end consist of Cash in Hand and Balances with Banks as follows:As at 31.03.2008

Cash in hand 1,828,118 Balances with Banks 76,977,041

78,805,159


As per our report of even date attached

For Singrodia Goyal & Co.Chartered Accountants

Narayan PasariPartner Director DirectorMem. No. 38095Place: MumbaiDate: 30th June 2008 Company Secretary

For and on behalf of the board


- 57 -


As at31.03.2008

Amount (Rs.)

Schedule ''A" : Share CapitalAuthorised2,20,00,000 Equity Shares of Rs. 10/- each 220,000,000 2,00,00,000 Preference Shares of Rs. 10/- each 200,000,000

420,000,000 Issued, Subscribed & Paid-up2,09,45,500 Equity Shares of Rs. 10/- each fully paid up. 209,455,000 [ Of the above 1,57,09,125 Equity Shares of Rs. 10/- each have been alloted asbonus shares by capitalisation of reserves.]19,29,3200 0% Redeemable Non - Convertible Preference Shares of Rs. 10/-each fully paid up. 192,932,000

402,387,000

Schedule "B" : Reserves and SurplusGeneral Reserve - Opening Balance 100,000 Capital Reserve ( on Consolidation) 365,732,452 Profit & Loss Account (As Annexed) 769,761,371Less: Capitalisation for allotment of Bonus Shares 157,440,000 612,321,371

978,153,823

Schedule "C" : Secured LoansVehicle Loans 17,439,175 (Secured against mortgage of respective vehicles)

17,439,175

Schedule "D" : Unsecured LoansDeferred Suppliers Credit (Payable in Foreign Currency ) 712,946,052

712,946,052

Schedule "F" : Investments(As per Annexure "1") 113,835,705

113,835,705

Schedule "G" Inventories (As Taken, Valued and Certified by the Management)Raw Materials 199,825,499 Stock in Process 22,821,772 Finished Goods 9,171,968 Packing Materials 1,462,226 Stores and Spares 4,877,652

238,159,117

Responsive Industries LimitedSchedules Forming Part of the Consolidated Balance Sheet as at 31st March 2008

Particulars

- 58 -


As at31.03.2008

Amount (Rs.)

Responsive Industries LimitedSchedules Forming Part of the Consolidated Balance Sheet as at 31st March 2008

Particulars

Schedule "H" : Sundry Debtors(Unsecured, Considered Good)Debt over six months 15,065,112 Other Debts 157,571,489

172,636,601

Schedule "I" : Cash and Bank BalancesCash-in-hand 1,828,118 Balance with Scheduled BanksCurrent Accounts 70,545,541 Fixed Deposit Accounts 6,431,500

78,805,159

Schedule "J" : Loans and Advances(Unsecured, considered good)Deposits 9,333,264 Advances recoverable in cash or in kind 387,745,805 Advance Tax & TDS 58,208,370

455,287,439

Schedule "K" : Current Liabilities and ProvisionsCurrent LiabilitiesSundry Creditors :- - Due to Micro, Small and Medium Enterprises - - Due to Others 306,919,272 Advance received from Customers 418,984,162 Other Current Liabilities 59,225,765 ProvisionsProvision for Tax 138,937,530 Fringe Benefit Tax 2,682,422 Proposed Dividend 16,793,600 Dividend Distribution Tax 2,854,072

946,396,823

- 59 -

Sche

dule

"E" :

Fixe

d As

sets

(At C

ost L

ess D

epre

ciatio

n)`

Net B

lock

Add

ition

on

Cons

olid

atio

n

Land

78,09

9,140

-

-

-

78

,099,1

40

-

-

-

-

-

78

,099,1

40

-

-

-

-

Fa

ctory

Build

ing12

5,652

,492

322,2

15

22

,282,0

29

-

14

8,256

,736

4,0

93,29

0

87,89

4

4,320

,669

-

8,501

,853

13

9,754

,883

-

-

-

-

Pl

ant &

Mac

hiner

y1,6

34,26

7,011

25

2,622

,413

447,1

50,96

7

4,6

55,04

7

2,3

29,38

5,344

168,6

57,82

6

26

,156,3

80

186,8

55,01

1

222,9

29

381,4

46,28

8

1,9

47,93

9,056

-

-

-

-

Elec

tric In

stalla

tions

15,08

0,015

2,433

,914

2,0

37,04

2

-

19,55

0,971

63

0,356

761,1

20

78

9,493

-

2,1

80,96

9

17,37

0,002

-

-

-

Comp

uters

3,361

,510

50

,806

55

4,331

-

3,966

,647

370,6

83

19

,715

56

8,338

-

95

8,736

3,007

,911

-

-

-

Furn

iture

& F

ixtur

es37

7,824

197,5

90

24

8,889

-

824,3

03

11

,518

70,49

5

40,46

8

-

122,4

81

70

1,822

-

-

-

Of

fice E

quipm

ents

970,2

09

62

8,803

1,525

,004

-

3,1

24,01

6

31

,539

150,8

61

89

,479

-

27

1,880

2,852

,136

-

-

-

Weig

hing S

cale

183,5

27

-

-

-

183,5

27

7,5

47

-

8,7

18

-

16

,265

16

7,262

-

-

-

Mo

tor C

ars

8,327

,968

1,1

70,35

7

4,196

,192

35

1,615

13

,342,9

02

598,7

10

55

0,837

1,082

,908

53,23

0

2,179

,224

11

,163,6

78

-

-

-

Mo

tor T

ruck

s11

,923,3

42

2,5

37,09

7

9,761

,593

-

24

,222,0

32

1,066

,333

1,2

23,63

9

1,838

,517

-

4,128

,488

20

,093,5

44

TOTA

L1,8

78,24

3,038

25

9,963

,195

487,7

56,04

7

5,0

06,66

2

2,6

20,95

5,618

175,4

67,80

2

29

,020,9

41

19

5,593

,600

27

6,159

39

9,806

,183

2,221

,149,4

35

Resp

onsiv

e Ind

ustri

es L

imite

dSc

hedu

le Fo

rmin

g Pa

rt of

the B

alanc

e She

et Y

ear e

nded

as at

31st

Mar

ch, 2

008

DESC

RIPT

ION

G R

O S

S B

L O

C K

D E

P R

E C

I A T

I O N

As A

t 01

.04.20

07

As A

t 31.0

3.200

8 U

p to

31

.03.20

07

For

the Y

ear

Adju

stm

ents

Up

to

31.03

.2008

A

s at 3

1.03.2

008

Add

ition

on

Cons

olid

atio

n A

dditi

ons

durin

g th

e yea

r

Ded

uctio

n du

ring

the

year


Year endedParticulars 31.03.2008

(Rs.)Schedule "L" : Sales and Other IncomeSales 4,072,136,262 Excise Duty Refund 46,503,168 Gain on Exchange Fluctuations (Net) 19,521,920 Dividend income 2,005,501 Interest (Tax deducted at source Rs.36219) 352,480 Other Income 2,553,796

4,143,073,127

Schedule "M" : Increase / (Decrease ) in StocksClosing StocksStock-in-Process 22,821,772 Finished Goods 9,171,968

31,993,740 Less : Opening StocksStock-in-Process 20,863,880 Finished Goods 4,087,761

24,951,641 7,042,099

Schedule "N" : Manufacturing & Other ExpensesRaw Material ConsumedOpening Stock 202,867,040 Purchases 2,826,403,544

3,029,270,583 Less: Closing Stock 199,825,499

2,829,445,084

Packing Material Consumed 29,570,974 Stores and Spares Consumed 37,805,498 Loading and Unloading Charges 31,733,416 Freight Inward 4,720,081 Power & Fuel Charges 109,809,832 Repair & Maintenance (Machineries) 16,148,785 Repair & Maintenance (Buildings) 2,486,845 Other Manufacturing Expenses 429,190

3,062,149,706


Schedules Forming Part of Consolidated Profit & Loss Accounts For the year ended 31st March 2008

- 61 -


Year endedParticulars 31.03.2008

(Rs.)


Schedules Forming Part of Consolidated Profit & Loss Accounts For the year ended 31st March 2008

Schedule "O" : Personnel CostsSalaries, Wages & Bonus 53,180,065 Workmen & Staff Welfare Expenses 5,683,181 Contribution to Provident Fund & Other Funds 1,903,491

60,766,737

Schedule "P" : Administration ExpensesRent, Rates and Taxes 7,967,678 Insurance 2,693,010 Communication Costs 5,060,765 Printing & Stationery 2,975,665 Travelling, Conveyance & Motor Car Expenses 12,704,011 Legal & Professional Charges 6,376,374 Repair & Maintenance (Others) 1,772,959 Auditors Remuneration 325,000 Loss on Sale of Investments 1,885,968 Loss on Trading in equity derivative instruments (Net) 208,319,203 Preliminary Expenses written off 49,364 Security Transaction Tax 1,819,126 Loss on Sale/Discard of Fixed Assets 356,288 Miscellaneous & General Expenses 10,000,213

262,305,624

Schedule "Q" : Selling and Marketing ExpensesBusiness Promotion Expenses 4,325,544 Brokerages, Commissions & Discount 12,523,716 Freight, Clearing & Forwarding Charges 53,072,981 Exhibition Expenses 1,819,174

71,741,415

Schedule "R" : Interest and Finance ChargesInterest on Vehicle Loan 1,281,801 Other Interest 901,723 Bank Charges 1,372,549

3,556,073

- 62 -


Annexure "1" : Investments

As at31st March, 2008

Rs.

(A) Long Term InvestmentsNon Trade, Quoted

Kotak Mahindra Bank Limited 1,687,127.92 [2,500 Equity Shares of Rs.10 each fully paid up]Energy Development Company Limited 1,313,780.28 [13,000 Equity Shares of Rs.10 each fully paid up]Jai Corp Limited 1,172,853.22 [1,000 Equity Shares of Rs. 10 each fully paid up]Syschem India Limited 274,320.62 [1,38,000 Equity Shares of Rs.1 each fully paid up]Reliance Industrial Infrastructure Limited 26,419,205.34 [20,600 Equity Shares of Rs.10 each fully paid up]Krishna Filaments Limited 274,409.51 [5,000 Equity Shares of Rs.10 each fully paid up]Reliance Capital Limited 3,281,807.26 [1,790 Equity Shares of Rs.10 each fully paid up] Creative Eyes Limited 270,159.92 [ 10,000 Equity share of Rs. 10 each fully paid up ] Energy Development Limited 506,784.44 [ 5,000 Equity share of Rs. 10 each fully paid up ] Power Grid Corporation Limited 75,732.94 [500 Equity share of Rs. 10 each fully paid up ] Reliance Industrial Infrastruure Limited 2,643,524.03 [1,000 Equity share of Rs. 10 each fully paid up ]

Non Trade , Unquoted Responsive Polymers International Limited 66,416,000.00 [6,50,000 Equity share of Rs. 10 each fully paid up ]

(B) Current InvestmentsInvestments in Mutual FundJM Contra fund - Dividend Plan of Rs. 10 per unit 5,000,000.00 (4,88997.55/- Units Reliance Equity Fund of Rs.10 per unit 2,500,000.00 (2,50,000 Units DSP Merrill Lynch Capital Limited of Rs.10 per unit 2,000,000.00 (20000 - Units Total 113,835,705.48 Aggregate of Unquoted Investments ( At Cost ) 75,916,000.00 Aggregate of Quoted Investments ( At Cost ) 37,919,705.48

(At Market Value) 25,853,495.00

Responsive Industries LimitedAnnexure Forming Part of the Schedule to the Balance Sheet as at 31st March 2008

Particulars

- 63 -


Notes on Consolidated Financial Statements

Schedule: “S” Significant Accounting Policies and Notes forming part of Consolidated Financial Statements Accounts for the year ended 31st March 2008 1 Significant Accounting Policies: -

a) Basis of preparation :

The financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting to comply with the accounting standards prescribed and with the relevant provisions of the Companies Act, 1956.

b) Use of Estimates :

The preparation of financial Statements in conformity with generally accepted

accounting principles (GAAP) in India requires management to make estimates and assumption that affect reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements.

c) Principles of Consolidation :

The Consolidated Financial results comprise of the results of Responsive Industries

Limited and its Subsidiary Axiom Impex International Limited, which are consolidated in accordance with the Accounting Standard 21 on “Consolidated Financial Statements” issued by the Institute of Chartered Accountants of India (ICAI) and have been prepared on the following basis :

i) The financial statements of a the Company and its Subsidiary have been combined on a

line-by-line basis by adding together the balances of like items of assets , liabilities, income and expenditure after fully eliminating the intra-group balances and intra-group transactions resulting in unrealized profit or loss.

ii) The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Company ‘s separate financial statements.

iii) The excess of cost to the Company of its investments in the subsidiaries over it’s portion of equity of subsidiaries at the dates they become subsidiaries is recognised in the financial statements as goodwill.

iv) The excess Company‘s portion of equity of subsidiary over the cost to the Company of its investments at the dates it become subsidiary is recognised in the financial statements as capital reserves.

- 64 -


d) Other Significant Accounting Policies : These are set out in the notes to accounts under significant accounting policies for

financial statements of respective companies – Responsive Industries limited and Axiom Impex International Limited.

2. Company considered in the consolidated financial statement is :

Name of the Company Country of Incorporation

% voting power held As on 31.03.2008

Axiom Impex International Limited India 86.10

3. Auditors Remuneration (Rs. in Millions) Particulars 31.03.2008 Audit Fees 0.29 Tax Audit Fees 0.04 Total 0.33

4. Related Party Disclosure

(a) Key Management Personnel i) Mr. Ashok Bijendranath Jha ii) Mr. Rajesh Pandey iii) Mr. Santosh Shinde (b) Fellow Subsidiaries i) Sun Plastochem Limited ii) Responsive Polymers International Limited (c) Holding Company i) Welknown Business Ventures Private Limited

There are no transactions during the current year with the related parties mentioned in

(a) (i), (ii) & (iii) and c (i) above. Following are the transactions with the related parties mentioned in (b) above

(Rs. in Millions) Nature of Transactions In relation to (b) (i) above In relation to (b) (ii) above Current Year Current Year Fixed Assets Purchased Nil Nil Advance Received during the

year Nil Nil

Amount Repaid Nil Nil Amount Received Nil 1.16 Issue of Preference Shares Nil Nil Loan received Nil Nil Amount Outstanding at the end of the year Advance Against Supplies 5.00 Nil

Other Receivable Nil 8.16

Note : Related Parties are as disclosed by the Management and relied upon by the auditors.

- 65 -


5. This being the first year of consolidation, previous years figures are not given.

6. Segmental Information

i) Primary (Business) Segment As the Groups business consists of one reportable business segment of Manufacturing

and Selling of PVC products, hence no separate disclosures pertaining to attributable Revenues, Profits, Assets, Liabilities Capital Employed are given.

ii) Secondary (Geographical) Segment Secondary segment reporting is performed on the basis of geographical location of the

customers. The operation of the Company comprises local sales and export sales. The Management views the Indian market and export market as distinct geographical segments. The following is the distribution of the Company’s sale by geographical markets.

(Rs in Millions) Sales Period ended 31.03.2008 India 1698.05 Export 2374.08 Total 4072.13 The following is the carrying amount of segment assets by geographical area in which

the assets are located. (Rs in Millions) Carrying amount of segment assets as at 31.03.2008 India 3267.97 Outside India* 11.90 Total 3279.87 *Carrying amount of segment assets outside India represents receivables from export

sales.

7. Earning Per Share

Particulars 31.03.2008 Weighted average number of Equity Shares of

Rs.10/- each

i) Number of Shares at the beginning of the year 5,236,900 ii) Number of Shares at the end of the year 20,945,500

A

iii) Weighted average number of shares outstanding during the year

20,945,500

B Net Profit after tax available for equity shareholders

399.47

C Basic and diluted income per share (in Rs.) 19.07

- 66 -


8 Deferred Tax Liability

i) Provision for taxation for the accounting year has been made in accordance with the provisions of the Income Tax Act, 1961.

ii) In terms of Accounting Standard on “Accounting for Taxes on Income” (AS 22) the

Company has recognized Deferred Tax Liability amounting to Rs. 28.54 Millions for the year ended 31st March 2008 in the Profit & Loss Account.

The Accumulated balance in Net Deferred Tax Liability as on 31st March 2008

comprises of :

Particulars 31.03.2008 Depreciation 102.17 Disallowance u/s 40(a)(ia) (0.12) Carried Forward Losses (0.10) Deferred Tax Liability / (Assets) 101.95

9 Figures less than Rs. 5000/- have been shown at actuals wherever statutory required to

be disclosed since figures stated have been presented in Rs. in Millions.

For Singrodia Goyal & Co. For and on behalf of the Board Chartered Accountants

Narayan Pasari Partner Director Director Mem. No. 38095 Place : Mumbai Date : 30th June 2008 Company Secretary

- 67 -


- 68 -


AXIOM IMPEX INTERNATIONAL LIMITED Regd. Off.: Gat No. 114B & 120C Betegaon Village, Boisar (E), Taluka-Palghar, Dist. Thane–401 501.

DIRECTORS’ REPORT To, The Members, Your Directors have pleasure in presenting the Ninth Annual Report together with Audited Accounts of the Company for the Financial Year ended on 31st March 2008. 1. FINANCIAL RESULTS

Rs. in Lakhs Description Financial Year

2007-08Financial Year

2006-07Net Sales 12852.11 8967.24

1867.958.65

479.3710.37

Profit before Interest and Depreciation Less : Interest Profit Before Depreciation Less : Depreciation

1859.30243.33

469.0083.25

Net Profit Before Tax Less: Provision for Taxation Current Tax Deferred Tax Fringe Benefit Tax Less : Earlier Year Taxes

1615.97 250.20 113.89 4.26 0.00

385.75

48.50 138.40 2.00 1.34

Net Profit after Taxation Add: Profit brought forward from Previous Period

1247.63

2811.91

195.51

2616.40

Balance carried forward to Balance Sheet 4059.54 2811.91 2. DIVIDEND

In view of the plough back of the surplus occurred during the year, your Directors do not recommend any Dividend for the year under consideration

3. OPERATIONS

The Company has set up 100% Export Oriented Unit (E.O.U.) and it has commenced the operations.

4. DIRECTORS

Mr. Bharat Mahalik, Director of the Company retires by rotation at the forth coming Annual General Meeting of the Company and being eligible, offers himself for reappointment.

- 69 -


5. CHANGES IN EQUITY CAPITAL During the year , the following changes were effected in the capital of the Company :

a) The authorised share capital of the Company was increased from Rs.5.1 Millions to Rs.200 Millions , pursuant to the approval of shareholders in the Extra Ordinary General Meeting of the Company held on 29th December 2007.

b) During the year, the company allotted 1,85,82,400 equity shares as Bonus shares in

the ratio of 40:1 on 24th January 2008 pursuant to the resolution passed at the extraordinary general meeting of the company held on 29th December 2007.

6. PUBLIC DEPOSITS

The Company has not accepted any deposits from public during the year. Hence Companies (Acceptance of Deposits) Rules, 1975 are not applicable to the Company.

7. PARTICULARS OF EMPLOYEES None of the employees were in receipt of the remuneration in excess of that specified under provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

8. AUDITORS

M/s Singrodia Goyal & Co.Chartered Accountants , who are the Statutory Auditors of the Company hold office , in accordance with the provisions of the Companies Act 1956 , upto the conclusion of the forthcoming Annual General Meeting. M/s Singrodia Goyal & Co.Chartered Accountants have communicated that the are not seeking reappointment at the ensuing Annual General Meeting .The company has received a special notice from a Member of the Company , in terms of provisions of the Companies Act , signifying the intention to propose the appointment of M/s Haribhakti & Co. Chartered Accountants, as the Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting. M/s Haribhakti & Co.Chartered Accountants have also expressed their willingness to act as Auditors of the Company , if appointed, and have confirmed their eligibility. In this regard , attention of the members is invited to Item No.4 of the Notice convening the forthcoming Annual General Meeting.

9. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo required to be given pursuant to Section 217(1)(e) of the Companies Act, 1956 read together with the companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this Report.

- 70 -


10. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement Under Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that: (i) in the preparation of the annual accounts, the applicable Accounting Standards

have been followed; (ii) appropriate accounting policies have been selected and applied constantly and

judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2007 and of the Profit of the Company for the year ended 31st March, 2007;

(iii) proper and sufficient care have been taken for the maintenance of adequate

accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

11. AUDITORS’ REPORT

The observations of Auditors do not require any explanation as the same has been dealt in Notes forming part of Accounts.

12. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation to the Banks for their continued support and cooperation. The Board of Directors also takes the opportunity to acknowledge the dedicated efforts by the staff and officers and their contribution to the success achieved by the Company.

BY ORDER OF THE BOARD OF DIRECTORS

FOR AXIOM IMPEX INTERNATIONAL LTD.

Place : Boisar Date : 30th June, 2008 DIRECTOR.

- 71 -


ANNEXURE FORMING PART OF THE DIRECTORS’ REPORT A) CONSERVATION OF ENERGY:

a) Energy conservation measures taken N.A. b) Additional investments proposal, if any being implemented for reduction of consumption of

energy N.A. c) Impact of the measures at (a) and (b) above for reduction of energy consumption and

consequent impact on the cost of production of goods N.A. d) Total energy consumption

Power & Fuel Consumption Financial Year 2007-08

Financial Year 2006-07

1 Electricity (a) Purchased Units 5417201 5119458 Total amount (Rs. in Lacs) 200.46 223.28 Rate / Unit (Rs.) 3.70 4.36 (b) Own Generation (i) Through Diesel Generation Units NIL NIL Units per Liter of Diesel Oil NIL NIL Cost/Units NIL NIL (ii) Through Steam Turbine/Generator Units NIL NIL Units per Liter of Diesel Oil NIL NIL Cost/Units NIL NIL 2 Coal (Specify quantity and where used) Quantity (Tonnes) NIL NIL Average Rate NIL NIL 3 Furnace Oil Quantity (Liters) NIL NIL Total Amount (Rs. in Lacs) NIL NIL Average Rate (Rs.) NIL NIL 4 Other/Internal Generation (Please give details) Quantity NIL NIL Total Cost NIL NIL Rate/Unit NIL NIL

B. TECHNOLOGY ABSORPTION: Efforts made in technology absorption NIL NIL

C. FOREIGN EXCHANGE EARNING & OUTGO: Total Exchange Earned (Rs. in Lacs) 7160.1 5654.56 Total Outgo (Rs. in Lacs) 3526.0 1929.34

By Order of the Board of Directors

For AXIOM IMPEX INTERNATIONAL LIMITED

Date : 30th June , 2008. Place : Boisar DIRECTOR

- 72 -


AUDITORS' REPORT

To,

The Members of

Axiom Impex International Limited,

Mumbai.

We have audited the attached Balance Sheet of Axiom Impex International Limited, as at

31st March 2008 and the Profit and Loss Account and Cash Flow Statement for the year

ended on that date, annexed thereto. These financial statements are the responsibility of the

Company’s management. Our responsibility is to express an opinion on these financial

statements based on our audit.

1 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.

2. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by

the Central Government of India in terms of Section 227(4A) of the Companies Act,

1956, we annex hereto a statement on the matters specified in the paragraphs 4 and 5 of

the said Order, to the extent applicable to the Company.

3. Further to our comments in the Annexure referred to in paragraph 2 above, we report

that:

a) We have obtained all the information and explanations, which to the best of our

knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of accounts as required by law have been kept by the

Company as it appears from our examination of those books.

- 73 -


c) The said Balance Sheet and Profit & Loss Account and Cash Flow statement dealt

with by this report are in agreement with the books of accounts.

d) In our opinion and read with Note No.7 of Schedule “U” regarding accounting for

foreign currency exchange differences on deferred credit facility for acquisition of

fixed assets, the Balance Sheet, Profit and Loss Account and Cash Flow Statement

dealt with by this report are in compliance with the Accounting Standards referred

to in sub-section (3C) if section 211 if the Companies Act, 1956 except,

Accounting Standard 15 (AS 15) relating to Retirement Benefits of Employees.

e) On the basis of written representations received from the directors as on 31st

March, 2008 and taken on record by the Board, we report that none of the

directors is disqualified as on 31st March, 2008 from being appointed as a director

in terms of clause (g) of subsection (1) of section 274 of the Companies Act,

1956.

f) In our opinion and to the best of our information and according to the explanations

given to us, the said accounts, read together with notes appearing thereon, give the

information required by the Companies Act, 1956 in the manner so required and

give a true and fair view in conformity with the accounting principles generally

accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company

as at 31st March, 2008, and

ii) In the case of the Profit and Loss Account, of the Profit of the

Company for the year ended on that date, and

iii) In case of Cash Flow Statement, of the cash flows of the Company for

the year ended on that date.

For Singrodia Goyal & co. Chartered Accountants

Place: Mumbai Narayan Pasari Date : 30th June 2008 Partner Mem. No. 38095

- 74 -


ANNEXURE TO AUDITORS’ REPORT Annexure referred to in Paragraph 2 of the Auditors Report for the year ended 31st March 2008. As required by the Companies (Auditors Report) Order, 2003 (as amended) and according to the information and explanations given to us during the course of the audit and on the basis of such checks of the books and records as were considered appropriate we report that:

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

quantitative details and situation of fixed assets. b) Physical verification of major fixed assets was conducted by the management

during the year, which in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c) During the year, there is no substantial disposal of fixed assets so as to affect is

going concern.

(ii) a) The inventories have been physically verified by the management during the year at reasonable intervals.

b) The procedures of physical verification of the inventories followed by the

management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) The Company has maintained proper records of inventories and discrepancies

noticed on physical verification of inventories as compared to book records were not material.

(iii) a) The company has granted unsecured loan to the holding company covered in the

register maintained under Section 301 of the Companies Act, 1956 on call basis. The maximum amount involved during the year was Rs. 251.77 millions and year end balance of such loan was Rs.251.77 Millions.

b) The said loan is interest free. Other terms and conditions on which the loan has been granted are prima facie, not prejudicial to the interest of the Company;

c) In view of our comments in para (iii) (a) & (b) above, clause 4 (iii) (c) and (d) of the said order is not applicable to the Company.

d) The company has 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.

e) In view of our comments in para (iii) (d) above, clause 4 (iii) (e), (f) and (g) of

the said order is not applicable to the Company.

- 75 -


(iv) There are adequate internal control systems commensurate with the size of the Company

and the nature of its business with regard to purchase of inventories, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness in the internal controls.

(v) (a) The transactions that need to be entered into the register maintained under section

301 of the Companies Act, 1956 have been so entered. (b) The transactions made in pursuance of such contracts or arrangements have been

made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the Public.

(vii) The Company has an adequate internal audit system commensurate with its size and

nature of its business.

(viii) As per the explanations and information given to us by the management, the Central Government has not prescribed for maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 for the Company.

(ix) a) According to the records of the Company, the undisputed statutory dues

including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and Excise Duty, Cess have regularly deposited with the appropriate authorities. There are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March, 2008 for a period more than six months from the date they became payable.

b) There are no amounts in respect of any disputed income tax, sales tax, wealth

tax, service tax, custom duty, excise duty and cess.

(x) The company has neither accumulated losses at the end of financial year nor has incurred cash losses during the current year and immediately preceding financial year.

(xi) The company has not defaulted in repayment of dues to banks.

(xii) The company has not granted any loans or advances on the basis of security by way of

pledge of shares, debentures or other securities.

(xiii) The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/ Societies are not applicable to the company.

(xiv) In our opinion and according to the information and explanations given to us, the

company is not dealing or trading in shares, securities, debentures and other investments during the year.

(xv) According to the information and explanations given to us, the company has not given

any guarantee for loans taken by others from banks and financial institutions.

- 76 -


(xvi) The company has not obtained any term loans during the year.

(xvii) According to the information and explanations given to us, on an overall examination of

the balance sheet of the Company, we report that funds raised on short-term basis have not been used for long term investments.

(xviii) The company has not made any preferential allotment of shares to parties and companies

covered in the register maintained under Section 301 of the Act.

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

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

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in (India), we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year.

For Singrodia Goyal & Co. Chartered Accountants

Narayan Pasari Partner

M. No : 38095 Place : Mumbai. Date : 30th June 2008

- 77 -


(Rs.) (Rs.) Schedules As at As at

31.03.2008 31.03.2007SOURCES OF FUNDSShareholders' FundsShare Capital A 192,984,200 7,160,200 Share Application Money 57,792,530 18,000 Reserves & Surplus B 256,670,545 317,731,798

507,447,275 324,909,998 Loan FundsSecured Loans C - 712,026 Unsecured Loans D 189,287,500 67,717,650

Deferred Tax Liabilities ( Net ) 30,638,324 19,249,332

Total 727,373,099 412,589,006 APPLICATION OF FUNDS

Fixed Assets EGross Block 430,702,120 186,191,816 Less: Depreciation 38,572,313 14,906,347 Net Block 392,129,807 171,285,469

Investments F 69,946,611 66,452,580

Current Assets, Loans & AdvancesInventories G 48,725,952 22,358,088 Sundry Debtors H 12,810,120 40,628,180 Cash & Bank Balances I 25,523,087 11,054,607 Loans & Advances J 397,261,809 229,079,840

484,320,968 303,120,715 Less : Current Liabilities & Provisions Current Liabilities & Provisions K 219,024,287 128,319,122 Net Current Assets 265,296,681 174,801,593

Miscellaneous Expenditure L(To the extent not written off or adjusted)Preliminary Expenses - 49,364

Total 727,373,099 412,589,006 Significant Accounting Polices & UNotes forming part of the Accounts

As per our report of even date attachedFor Singrodia Goyal & Co. For and on behalf of the BoardChartered Accountants

Narayan Pasari DirectorPartnerMem. No. 38095Place : MumbaiDate : 30th June, 2008

Axiom Impex International LimitedBalance Sheet as at 31st March 2008

Particulars

Director

- 78 -


(Rs.) (Rs.)Particulars Schedules Year ended Year ended

31.03.2008 31.03.2007IncomeGross Sales 2,216,149,962 1,641,112,492

Less: Inter division transfer 930,939,112 744,388,141 Net Sales 1,285,210,850 896,724,351 Other Income M 12,542,688 4,396,378 Increase/(Decrease) in Stocks N 17,159,488 8,647,201

1,314,913,026 909,767,930

ExpenditureCost of Materials Consumed O 1,031,416,767 792,043,177 Manufacturing & Other Expenses P 49,088,180 38,368,697 Personnel Costs Q 4,510,204 3,600,156 Administrative & Other Expenses R 20,452,728 6,263,063 Selling & Marketing Expenses S 22,651,029 21,556,724 Interest & Finance Charges T 864,768 1,036,722 Depreciation 24,332,601 8,324,652

1,153,316,277 871,193,191

Profit before Taxation 161,596,749 38,574,738 Less: Provision for TaxationCurrent Tax 25,019,510 4,849,610 Deferred Tax 11,388,993 13,839,477 Fringe Benefit Tax 425,500 200,660 Less:Earlier year taxes - 134,179 Profit after Taxation 124,762,747 19,550,812

Add: Balance as per last Balance Sheet 281,191,298 261,640,486

Balance carried to Balance Sheet 405,954,045 281,191,298

Earning Per Share - in Rs.Basic 6.55 1.05

Significant Accounting Polices & UNotes forming part of the Accounts

As per our report of even date attachedFor Singrodia Goyal & Co.Chartered Accountants

Narayan PasariPartner DirectorMem. No. 38095Place : MumbaiDate :30th June, 2008.

Profit and Loss Account for the year ended 31st March 2008Axiom Impex International Limited

Director


- 79 -


Year ended Year ended31.03.2008 31.03.2007

(Rs.) (Rs.)

A. Cash Flow from Operating Activities:Net Profit/(Loss) before tax and extraordinary Items 161,596,749 38,574,738 Adjustments for :Depreciation 24,332,601 8,324,652 Preliminary expenses written off 49,364 12,658 Loss on sale of fixed Assets 544,415 - Interest income (129,108) (60,617) Interest Paid 31,496 85,414 Dividend income (28,320) (7,080) Profit in trading in Securities (5,727,326) - Unrealised Gain on Foreign Exchange Fluctuation (3,389,506) (3,278,974) Loss on sale of Investments 10,777,433 - Operating profit before working capital changes 188,057,799 43,650,791 Adjustments for : Inventories (26,367,864) (16,415,940) Trade and other receivables 27,818,060 63,499,406 Loans and Advances (163,125,667) (18,646,751) Trade Payables 65,260,155 (26,786,131) Cash Generated From Operations 91,642,484 45,301,376 Direct Tax Paid (5,056,302) (12,306,515) Net Cash From Operating Activities 86,586,182 32,994,861

B. Cash Flow from Investing Activities:Purchase of Fixed Assets (245,924,355) (125,074,661) Sale of Fixed Assets 608,000 - Purchase of Investments (122,265,751) - Profit in trading on Securities 5,727,326 - Sale of Investments 107,994,287 - Interest received 129,108 60,617 Dividend Received 28,320 7,080 Net Cash used in Investing Activities (253,703,066) (125,006,964)

C. Cash Flow from Financing Activities:Repayment of Secured Loan (712,026) (805,021) Deferred Credit from Suppliers 121,164,850 71,152,410 Share application money received 57,774,530 (1,100,000) Interest Paid (31,496) (85,414) Net Cash From Financing Activities 178,195,858 69,161,974

Net Increase/(Decrease) in Cash and Cash Equivalents 11,078,974 (22,850,129)

Add: Unrealised Gain on Foreign Exchange Fluctuation 3,389,506 3,278,974

Cash & Cash Equivalents (Opening) 11,054,607 30,625,762

Cash & Cash Equivalents (Closing) 25,523,087 11,054,607

Axiom Impex International LimitedCash Flow Statement for the year ended 31st March 2008.

- 80 -


NOTES:1

2 Cash and Cash Equivalents at the year end consist of Cash in Hand and Balances with Banks as follows:

As at 31.03.2008 As at 31.03.2007 1,012,090 393,215

24,510,997 10,661,392 25,523,087 11,054,607


For Singrodia Goyal & Co. For and on behalf of the BoardChartered Accountants

Narayan PasariPartner Director DirectorMem No. 38095Place : MumbaiDate : 30th June 2008

Cash in handBalances with Banks


Particulars

- 81 -


(Rs) (Rs)As at As at

31.03.2008 31.03.2007

Schedule "A" : Share Capital Authorised 2,00,00,000 (P.Y. 5,10,000 ) Equity shares of Rs. 10/- each 200,000,000 5,100,000

200,000,000 5,100,000 Issued Subscribed & Paid Up 1,90,46,960( P.Y.4,64,560 )Equity Shares of Rs.10/- each fully paid-up 190,469,600 4,645,600 [ Of the above 1,85,82,400 (P.Y. Nil) Equity Shares of Rs. 10/- each havebeen alloted as Bonus Shares by capitalisation of reserves during the year](Of the above 1,64,00,000 (P.Y. Nil) Equity Shares of Rs. 10/- each are heldby holding company M/s. Responsive Industries Limited.)

Share Forfeiture Account 2,514,600 2,514,600 192,984,200 7,160,200

Schedule "B" : Reserves & Surplus Securities Premium Account Balance as per last year 36,540,500 36,540,500

Profit & Loss Account Profit & Loss Account as per account annexed 405,954,045 281,191,298 Less: Capitalisation for allotment of Bonus Shares 185,824,000 -

220,130,045 281,191,298 256,670,545 317,731,798

Schedule "C" : Secured Loans From ICICI Bank Vehicle Loans - 712,026 (Secured against mortgage of respective Vehicles) - 712,026

Schedule "D" : Unsecured Loans Deferred Suppliers Credit (Payable in Foreign Currency ) 189,287,500 67,717,650

189,287,500 67,717,650

Schedule "F" : Investments (As Per Annexure "1") 69,946,611 66,452,580

69,946,611 66,452,580 Schedule "G" : Inventories (As valued and certified by the management) Raw Materials 17,295,722 6,772,189 Stock in Process 20,930,032 11,900,550 Finished Goods 9,171,968 1,041,962 Packing Materials 105,388 136,458 Stores & Spares 1,222,842 2,506,929

48,725,952 22,358,088

Axiom Impex International LimitedSchedules Forming Part of the Accounts for the year ended 31st March 2008

Particulars

- 82 -


(Rs) (Rs)As at As at

31.03.2008 31.03.2007


Particulars

Schedule "H" : Sundry Debtors (Unsecured Considered Good) Debts outstandings for more than six months 2,402,633 2,326,632 Other Debts 10,407,487 38,301,548

12,810,120 40,628,180

Schedule "I" : Cash & Bank Balances Cash on hand 1,012,090 393,215 Balance with Scheduled Banks: In Current Accounts 21,342,683 10,656,392 In Fixed Deposit Account 3,168,314 5,000

25,523,087 11,054,607 Schedule "J" : Loans & Advances (Unsecured Considered Good) Advances recoverable in cash or in kind 375,918,362 214,282,095 Advance Tax / TDS 17,878,847 12,822,545 Deposits 3,464,600 1,975,200

397,261,809 229,079,840 Schedule "K" : Current Liabilities & Provisions Current Liabilities Sundry Creditors - Due to Micro, Small and Medium Enterprises (Refer Note13 of Schedule" U") - - - Others 50,785,994 16,945,047 Advance Received from Customers 84,254,012 49,672,821 Other Liabilities 40,689,001 43,850,984

175,729,007 110,468,852 Provisions Provision For Taxation 42,669,120 17,649,610 Provision For Fringe Benefit Tax 626,160 200,660

43,295,280 17,850,270 219,024,287 128,319,122

Schedule "L" : Miscellaneous Expenditure (To the extent not written off or Adjusted)

Opening Balance 49,364 62,022 Less : Written off during the year 49,364 12,658

- 49,364

- 83 -

Sche

dule

"E"

FIXE

D AS

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(At C

ost l

ess D

epre

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As at

Addit

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Dedu

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sAs

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Upto

As at

As A

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-Apr

-07

durin

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year

durin

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year

31-M

ar-0

801

-Apr

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Year

31-M

ar-0

831

-Mar

-08

31-M

ar-0

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Facto

ry Bu

ilding

s32

2,215

8,9

21,34

9

-

9,243

,564

79,78

6

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8

-

95

,314

9,148

,250

242,4

29

Plan

t & M

achin

ery

177,0

31,98

3

237,3

87,92

1

-

41

4,419

,904

11

,909,7

75

23,60

6,354

-

35,51

6,129

37

8,903

,775

16

5,122

,208

Elec

trical

Instal

lation

s2,4

33,91

4

-

-

2,433

,914

674,0

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115,9

28

-

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1,6

43,97

0

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59,89

8

Furn

iture

& F

ixtur

es19

7,590

-

-

197,5

90

61,07

1

12,54

2

-

73

,613

123,9

77

13

6,519

Offic

e Equ

ipmen

ts62

8,803

-

-

628,8

03

128,3

58

29,95

0

-

15

8,307

470,4

96

50

0,445

Comp

uter

50,80

6

20,08

5

-

70

,891

13

,510

8,6

76

-

22,18

7

48

,704

37

,296

Motor

Car

s2,9

89,40

8

-

1,8

19,05

1

1,170

,357

1,032

,384

255,8

92

66

6,635

621,6

41

54

8,716

1,957

,024

Motor

Tru

cks

2,537

,097

-

-

2,5

37,09

7

1,0

07,44

7

28

7,732

-

1,2

95,17

8

1,241

,919

1,529

,650

Tota

l Cur

rent

Yea

r18

6,191

,816

24

6,329

,355

1,8

19,05

1

430,7

02,12

0

14,90

6,347

24

,332,6

01

666,6

35

38

,572,3

13

392,1

29,80

7

171,2

85,46

9

Total

Pre

vious

Yea

r64

,551,9

15

121,6

39,90

1

-

18

6,191

,816

6,5

81,69

5

8,3

24,65

2

-

14,90

6,347

17

1,285

,469

-

Axio

m Im

pex I

nter

natio

nal L

imite

d

DESC

RIPT

ION

N E

T B

L O

C K

G R

O S

S B

L O

C K

D E

P R

E C

I A T

I O N

(Am

ount

in R

s.)

Sche

dule

Form

ing

Part

of th

e Bala

nce S

heet

as o

n 31

st M

arch

, 200

8.



Rs. Rs.

Schedule "M" : Other IncomeInsurance Claim - 286,861 Interest Income {Tax Deducted at source Rs.6032/- (PY Nil)} 129,108 60,617 Dividends 28,320 7,080 Profit on Trading in Securities 5,727,326 - Sundry Balance Written Back 1,062,469 25,006 Profit on Exchange Rate Fluctuation 5,595,465 4,016,814

12,542,688 4,396,378

Schedule "N" : Increase/ (Decrease) in StocksClosing Stocks:Finished Goods 9,171,968 1,041,962 Stock in process 20,930,032 11,900,550

30,102,000 12,942,512 Less: Opening StocksFinished Goods 1,041,962 3,613,407 Stock in process 11,900,550 681,904

12,942,512 4,295,311 17,159,488 8,647,201

Schedule "O" : Cost of Raw Materials ConsumedOpening Stock 6,772,189 1,646,837 Add: Purchases 1,041,940,301 797,168,529

1,048,712,490 798,815,366 Less: Closing Stocks 17,295,722 6,772,189

1,031,416,767 792,043,177 1,031,416,767 792,043,177

Schedule "P" : Manufacturing & Other ExpensesPower & Fuel 20,131,952 22,327,702 Loading & Unloading Charges 17,812,076 8,934,453 Freight Inward 36,964 137,801 Stores, Spares & Packing Material Consumed 8,080,724 4,367,085 Repairs & Maintenance (Machinery) 1,117,684 965,833 Repairs & Maintenance (Buildings ) 325,880 165,029 Other Manufacturing Expenses 1,582,899 1,470,794

49,088,180 38,368,697


Particulars

- 85 -



Rs. Rs.


Particulars

Schedule "Q" : Personnel CostsSalaries Wages Bonus & Allowances 4,012,897 3,078,876 Contribution to Provident & other Funds 183,682 222,579 Workmen & Staff Welfare Expenses 313,625 298,701

4,510,204 3,600,156

Schedule "R" : Administrative & Other ExpensesRent Rates & Taxes 783,541 760,660 Insurance 353,026 487,924 Communication Costs 1,677,343 1,469,005 Printing & Stationery 82,082 112,156 Travelling & Conveyance 124,383 196,132 Professional Charges 2,733,508 1,174,737 Vehicle Expenses 328,290 857,250 Miscellaneous Expenses 2,612,986 1,067,541 Loss on Sale of Investments 10,777,433 - Security Transaction Tax 261,357 - Loss on Sale of Fixed Assets 544,415 - Preliminary Expenses written off 49,364 12,658 Auditor's Remuneration 125,000 125,000

20,452,728 6,263,063

Schedule "S" : Sales & Distribution ExpensesFreight & Forwarding Charges 20,527,188 18,768,227 Brokerage Commission & Discount 2,123,840 2,788,497

22,651,029 21,556,724

Schedule "T" : Interest & Finance ChargesInterest on Car Loans 31,496 85,823 Bank Charges 833,271 950,898

864,768 1,036,722

- 86 -


Annexure "1"As at As at

31.03.2008 31.03.2007(Rs ) (Rs )

Investments Long Term , Non Trade Quoted Responsive Industries Limited 34,410 36,580 [(46,500 ( 11,800) Equity Shares of Rs. 10 each fully paid up ] Creative Eyes Limited 270,160 - [ 10,000 ( - ) Equity share of Rs. 10 each fully paid up ] Energy Development Limited 506,784 - [ 5,000 ( - ) Equity share of Rs. 10 each fully paid up ] Power Grid Corporation Limited 75,733 - [500 ( - ) Equity share of Rs. 10 each fully paid up ] Reliance Industrial Infrastructure Limited 2,643,524 - [1,000 ( - ) Equity share of Rs. 10 each fully paid up ]

Unquoted Responsive Polymers International Limited 66,416,000 66,416,000 [6,50,000 (6,50,000 ) Equity share of Rs. 10 each fully paid up ]

69,946,611 66,452,580

Aggregate of Unquoted Investments ( At Cost) 66,416,000 66,416,000 Aggregate of Quoted Investments ( At Cost) 3,530,611 36,580 Aggregate of Quoted Investments ( At Market Value) 13,146,275 21,004

Axiom Impex International Limited

Annexure to the Schedules Forming Part of the Accounts for the year ended 31st March 2008

Particulars

- 87 -

Anne

xure

"2"

Detai

ls of

Purch

ase /

Sales

/Clos

ing S

tock o

f Inve

stmen

ts

No. o

f Uni

tsAm

ount

sNo

. of U

nits

Amou

nts

No. o

f Uni

tsAm

ount

sNo

. of U

nits

Amou

nts

Shar

es In

vest

men

t C

reati

ve E

ye Li

mited

-

-

10,00

0

270,1

60

-

-

10

,000

270,1

60

Ene

rgy D

evlop

ment

Limite

d -

-

5,000

506,7

84

-

-

5,0

00

506,7

84

Pow

er G

rid C

orpo

ratio

n Lim

ited

-

-

50

0

75

,733

-

-

500

75,73

3

Reli

ance

Indu

strial

Infra

strutu

re Li

mited

-

-

1,740

4,625

,884

74

0

1,9

82,36

0

1,000

2,6

43,52

4

R

espo

nsive

Indu

stries

Limi

ted

11

,800

36,5

80

-

-

700

2,170

11

,100

34,41

0

Res

pons

ive P

olyme

rs Int

erna

tiona

l Lim

ited.

650

,000

66,4

16,00

0 -

-

-

-

65

0,000

66,41

6,000

Bioc

on Lt

d. -

-

1,000

7,044

1,0

00

7,044

-

-

Glor

y Ploy

films L

imite

d. -

-

945,9

71

71

,415,3

70

945,9

71

71

,415,3

70

-

-

Ispa

t Indu

stries

Limi

ted.

-

-

20

,000

46

1,309

20,00

0

46

1,309

-

-

Ja

yasw

alnec

o Ind

ustrie

s Lim

ited

-

-

40

,000

1,4

05,67

6.89

40,00

0

1,4

05,67

7

-

-

M

agnu

m Ve

nture

s Lim

ited

-

-

76

2,087

39,94

5,042

76

2,087

39,94

5,042

-

-

Ra

dico k

haita

n Ltd.

(Rad

icokh

ait)

-

-

5,0

00

96

8,826

5,000

96

8,826

-

-

Re

lianc

e Natu

ral R

esou

rces L

td.-

-

5,000

232,9

31

5,0

00

232,9

31

-

-

Tech

Mah

indra

Ltd.

-

-

31

9

39

3,525

319

393,5

25

-

-

Vijay

Sha

nti B

uilde

rs Ltd

. -

-

10,00

0

1,957

,465

10

,000

1,957

,465

-

-

Total

661,8

00

66,45

2,580

1,8

06,61

7

12

2,265

,751

1,790

,817

11

8,771

,720

677,6

00

69

,946,6

11

Axio

m Im

pex I

nter

natio

nal L

imite

d

Balan

ce A

s on

31.03

.2008

Parti

cular

sBa

lance

as o

n 01

.04.20

07Pu

rcha

se d

urin

g th

e Yea

rSo

ld D

urin

g th

e Yea

r


Schedule Forming Part of the Accounts for the year ended 31st March 2008. Schedule: “U” I. Significant Accounting Policies

a) Basis of Accounting:

The Financial Statements have been prepared under the historical cost convention on an accrual basis and in accordance with the applicable accounting standards issued by The Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956.

b) Use of Estimates:

The Preparation of Financial Statements is in conformity with generally accepted accounting principles (GAAP) in India which requires management to make estimates and assumption that affect reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements.

c) Fixed Assets:

Fixed Assets are stated at actual cost net of Cenvat availed, less accumulated depreciation and impairment loss, if any. All cost, including financing cost till commencement of commercial production, net charges of foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

d) Depreciation:

Depreciation on fixed assets provided on Straight-line basis, at the rates specified in Schedule XIV to the Companies Act, 1956. Depreciation on additions to/ deletions from fixed assets is provided on pro-rata basis from/ up to the date of such additions/deletions as the case may be.

e) Investments:

Investments that are intended to be used for more than a year from the date of acquisition are classified as long term Investment and are carried at cost less any provision for permanent diminution in value. Investments other than long term investments being current investments are valued at cost or fair value whichever is lower.

f) Inventories:

Inventories are valued as follows:

i) Finished goods are valued at lower of cost or net realisable value. ii) Stores & Spares, Packing Material, Raw Materials and Work-

in-Process are valued at cost.

- 89 -


g) Treatment of Contingent Liabilities:

Contingent Liabilities in respect of show cause notices received are considered only when they are converted into demands. Payments in respect of such demands, if any are shown as advances.

Contingent Liabilities under various fiscal laws includes those in respect of which the company/department is in appeal.

Contingent Liabilities are disclosed by way of notes.

h) Accounting For Taxation on Income

Tax expenses comprises of current, deferred and fringe benefit taxes. Current income tax and fringe benefit tax is measured at the amount to be paid to the tax authorities in accordance with the Indian Income Tax Laws. Deferred taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing difference of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date.

i) Foreign Currency Transactions

i) The transactions in foreign currencies on revenue accounts are stated at

the rate of exchange prevailing on the date of transaction.

ii) The difference on account of fluctuation in the rate of exchange prevailing on the date of transaction and the date of realisation is charged to Profit and Loss Account

iii) Differences on translation of Current Assets and Current Liabilities

remaining unsettled at the year-end are recognised in the Profit and Loss account. (Except those relating to acquisition of fixed assets which are adjusted in the cost of the assets.)

j) Retirement Benefits:

Company’s contributions to provident fund are charged to Profit and Loss Account. Gratuity is accounted for in the year of payment.

k) Revenue Recognition :

i) Sales are recognised on dispatch of goods to the customers. ii) Export Sales are accounted on the basis of dispatch of goods for exports.

l) Miscellaneous Expenditure :

Preliminary expenses are being charged to revenue account in the year in which it is incurred.

- 90 -


II. Notes to Accounts

1) The Schedules referred to in the Balance Sheet & Profit & Loss Account form an integral part of the accounts.

2) In the opinion of the Board the Current Assets, Loans & Advances are

approximately of the value stated and are realisable in the ordinary course of business. The provision for all known liabilities is adequate.

Sundry debtors, Sundry creditors, Loans and advances are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment.

3) The Authorised Share Capital of the Company has been increased from Rs. 5.1

Millions to Rs. 200 Millions vide Resolution passed in the Extraordinary General Meeting of the Company held on 29th December, 2007.

4) During the year the Company has allotted 1,85,82,400 equity shares as bonus

shares in the ratio of 40:1 as per the resolution passed at the Extraordinary General Meeting of the Company held on 29th day of December, 2007.

5) The Company has continued to adjust the foreign currency exchange differences

on amount due to the foreign suppliers of fixed assets to the carrying cost of fixed assets in compliance with Schedule VI to the Companies Act, 1956 which is at variance to the treatment prescribed in accounting Standard (AS -11) on “Effects of Changes in Foreign Exchange Rates “notified in the Companies (Accounting Standards) Rules 2006. Had the treatment as per AS -11 been followed, the net profit before tax for the year would have been higher by Rs.4.11 Millions.

6) Advances receivable in cash or in kind includes Rs. 251.77 Millions amount

due from Holding Company (Responsive Industries Limited) and Maximum Outstanding during the year is Rs. 251.77 Millions.

7) Auditor’s Remuneration Includes (excluding Service Tax)

(Rs. in Million) For the year ended

31.03.2008 For the year ended

31.03.2007 Audit Fees 0.100 0.100 Tax Audit Fees 0.025 0.025 0.125 0.125

8) Taxes on Income

a. Provision for taxation for the accounting year has been made in

accordance with the provisions of the Income Tax Act, 1961.

b. In terms of Accounting Standard on “Accounting for Taxes on Income” (AS 22) the company has recognized Deferred Tax Liability amounting to Rs. 11.39 Millions for the year ended 31st March 2008 in the Profit & Loss Account.

- 91 -


The accumulated balance in Net Deferred Tax Liability / (Assets) as on 31st March 2008 comprises of:




1 Depreciation 30.74 19.35 2 Short Term Capital Loss (0.10) (0.10) Deferred Tax Liability / (Assets) 30.64 19.25

9) Earning Per Share (As per AS – 20)


Particulars Year Ended 31.03.2008

Year Ended 31.03.2007

A Net Profit after tax available for equity shareholders (Rupees) used as Numerator

124.88 19.55

B Weighted Average number of Equity Shares used as Denominator

1,90,46,960

1,90,46,960

C Basic and diluted income per share (In rupees) 6.56 1.03

10) Related Party Disclosure a) Key Management Personnel

Mr. Ashok Bijendranath Jha Director Mr. Bharat Bhaskar Mahalik Director Mr. Rajesh Pandey Director

b) Holding Company and Parent Company

(i) Responsive Industries Limited Holding Company (ii) Well Known Business Ventures Private Limited Parent Company

(Rs. in Millions) In relation to (a)

above In relation to (b) (i)

above In relation to (b) (ii)

above Nature of Transactions

Current year

Previous year

Current year

Previous year

Current year

Previous year

Loan and Advances Given

Nil Nil 411.98 Nil Nil Nil

Loan and Advances Received Back

Nil Nil 216.27 Nil Nil Nil

Remuneration 0.42 0.29 Nil Nil Nil Nil Amount Outstanding at the end of the year Receivables Nil Nil 251.77 Nil Nil Nil

11) Additional Information Pursuant to the Provision of Part II of the Schedule

VI of the Companies Act 1956.

A) Quantitative Information: i) Installed Capacity N.A. ii) Purchase/Production, Consumption/Sales/Stock:

- 92 -


(a) Actual Production (In Tonnes)

Products Actual Production

2007-2008 2006-2007 HDPE/PP ROPES / HDPE/PP YARN 17,653 13,543

(b) Stock, Purchase & Sales (Rs. in Millions)

Unit Opening Stocks Purchases / Production Sales / Consumption Closing Stock Products Qty. Amount Qty. Amount Qty. Amount Qty. Amount

HDPE/PP Ropes/PVC Products

Kgs.

10825

(73410)

1.04

(3.61)

17653734 (13542822)

-

(-)

17542902 (13605407)

1285.21 (896.72)

121657.27

(10825)

9.17

(1.04)

(Figures in the bracket represent previous year figures)

(c) Raw Material Consumed (Rs. in Millions) 2007-2008 2006-2007

Product Kgs. Amount Kgs. Amount

PE/PP 178,09,975 1031.42 1,36,89,710 792.04

(d) Value of Raw Material Consumed (Rs. in Millions) 2007-2008 2006-2007

Particulars Amount % of Total

Consumption Amount % of Total

Consumption Imported 111.14 11 62.02 7.82 Indigenous 920.28 89 730.03 92.18 1031.42 100 792.04 100

(e) Value of Stores, Spares and Packing Material Consumed (Rs. in Millions) Particulars 2007-2008 2006-2007 Amount % of Total

Consumption Amount % of Total

Consumption Imported 0.16 2 0.85 19.46 Indigenous 7.92 98 3.52 80.54 8.08 100 4.37 100

B) C.I.F. Value of Imports, Expenditure and Earnings in Foreign Currencies




i) Expenditure in Foreign Currency a) C.I.F. value of purchase 109.66 65..04 b) C.I.F. value of Capital Goods 240.69 124.70 c) Freight – Exports 14.84 13.25 d) Bank Charges (Overseas) 0.34 0.47 e) Export Commission 1.91 2.72 ii) Earnings in Foreign Currencies a) Export Sales – FOB 716.01 565.46

- 93 -


12) Segmental Information : Primary (Business) Segment :

As the Company’s business consists of one reportable business segment of Manufacturing and Selling of PVC products, hence no separate discloser pertaining to attributable Revenues, Profits, Assets, Liabilities and Capital employed are given. Secondary (Geographical) Segment : Secondary segment reporting is performed on the basis of geographical location of the customers. The operation of the Company comprises local sales and export sales. The management views the Indian market and export market as distinct geographical segments. The following is the distribution of the company’s sales by geographical markets : (Rs. in Millions) Sales For the period ended on

31.03.2008 For the period ended on

31.03.2007 India 552.36 315.83 Export 732.85 580.89 Total 1,285.21 896.72

13) The Company has not received information from vendors regarding their status under

the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act has not been given.

14) The name of the Small Scale Undertakings to whom the Company owe a sum

exceeding Rs. 100000 which is outstanding for more than 30 days could not be identified, as the necessary information is not in the possession of the Company.

15) The details of Purchase, Sales and Closing stock of Investments during the year is as

per Annexure “2” attached. 16) Figures of the previous year have been regrouped, reclassified and/or rearranged

wherever considered necessary to correspond with the figures of current year. 17) Figures less than Rs. 5000/- have been shown at actuals wherever statutory required to

be disclosed since figures stated have been presented in Rs. in Millions. For Singrodia Goyal & Co. For and on behalf of the Board Chartered Accountants

Narayan Pasari Partner Director Director Mem. No. 38095 Place: Mumbai Date: 30th June 2008

- 94 -


Additional Information as required under Part IV of Schedule VI to the Companies Act '1956

I Registration Details State Code 11Balance Sheet Date 31.03.2008

IIPublic Issue Nil Right Issue NilBonus Issue 185,824 Private Palcement Nil

IIITotal Liabilities 727,373 Total Assets 727,373

Sources of FundsPaid up Capital 192,984 Reserves & Surplus 256,671

Secured Loans - Unsecured Loans 189,288

Deferred Tax Liabilities 30,638Application of FundsNet Fixed Assets 392,130 Investments 69,947

Net Current Assets 265,297 Misc. Expenditure -

IV Performance of CompanyTurnover 1,285,211 Total Expenditure 1,153,316

Profit/(Loss) before Tax 161,597 Profit/(Loss) After Tax 124,763

Earning per Share In Rs. 6.55 Dividend Rate (%) Nil

V Generic Names of One Principal Product/Services of the Company (As per Monetary terms)

Item Code No. 3 1 3 1 Product Description HDPE/PP ROPES

For Singrodia Goyal & CoChartered Accountants

Narayan Pasari Director DirectorPartnerMem. No.38095Place : MumbaiDate : 30th June 2008

Axiom Impex International Limited


U25209MH1999PLC119427

BALANCE SHEET ABSTRACT AND COMPANY'S BUSINESS PROFILE

Capital raised during the year (Amount in Rupees Thousands )

Position of Mobilisation and Development of funds:(Amount in Rupees Thousands)

- 95 -


- 96 -


ATTENDANCE SLIP

RESPONSIVE INDUSTRIES LIMITED

Regd. Office: Betegaon, Boisar (East), Mahagaon Road, Tal Palghar, Dist. Thane – 401 501

DP Id* Client Id*

NAME AND ADDRESS OF THE REGISTERED SHAREHOLDER

Regd.Folio No. No of Shares held

*Applicable if shares are held in electronic form I certify that I am a registered shareholder/proxy for the registered shareholder of the Company I hereby record my presence at the TWENTY SIXTH ANNUAL GENERAL MEETING of the Company

at Regd. Office: Betegaon, Boisar (East), Mahagaon Road, Tal Palghar, Dist. Thane – 401 501 on Wednesday 20th August 2008 at 11.00 a.m.

_______________________________________________

Member’s/ Proxy’s Signature.

PROXY FORM

RESPONSIVE INDUSTRIES LIMITED

Regd. Office: Betegaon, Boisar (East), Mahagaon Road, Tal Palghar, Dist. Thane – 401 501 I/We ……………………………………………. of …………………………………………in the district

of ……………………………………………. Being a Member/ Members of RESPONSIVE INDUSTRIES LIMITED hereby appoint ………………………………………………….…………………of …in the district of ……………………………………(or failing him) ………………………………… of ………………….………………… in the district of ………………….………………………………………as my/our Proxy to vote for me/us on my/our behalf at the TWENTY SIXTH ANNUAL GENERAL MEETING of the Company to be held on Wednesday , 20th August 2008 at 11.00 a.m. and at any adjournment thereof.

Signed this ………………….…….. day of ………..……………. 2008. DP Id* Affix Client Id* Re.1 Revenue Regd. Folio No. Stamp *Applicable if shares are held in electronic form

_______________________Signature of the Member(s)

NOTE: This Form is to be effective should be duly stamped, completed and signed and must be deposited at the Registered Office of the company less than 48 hours before the Meeting.

- 97 -


- 98 -

Annual Report 2008 - Responsive...Annual Report 2008 REGISTERED OFFICE Village Betegaon, Mahagaon...

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