MANAGING DIRECTOR’S MESSAGE...3. To appoint a Director in place of Mr. Rajesh Monga, who retires...

MANAGING DIRECTOR’S MESSAGE

Dear Fellow Shareholders,

(Anil Monga)

Managing Director

In our last letter, about an year ago, We hadmentioned that the need to attain momentum tospeed up over the year to move ahead and swimout of arguably the worst Economic crisis the worldhas ever seen was a priority for your company. TheEconomic scene of the past year made this a verychallenging time for all of us here at Emmsons. ButI am happy to share with you that, with increasingrecovery being witnessed in all relevant spheres forthe Industry and with the hard work of the entireteam at Emmsons, who stand committed tomaximise shareholder value, the tide has turnedand the company is well on its way to execute andgo a long way forward in our vision and ambition.

The addition of new products to the trading basket for the Indian set-up and setting up of another tradingsubsidiary in Dubai, Emmsons Gulf DMCC were amongst the highlights of the previous year. The new subsidiaryis fully functional now, after beginning its operations in the middle of the year. We draw immense satisfactionfrom the fact that Emmsons Gulf has been able to perform very well in the first year of operations. This, coupledwith bright prospects in agricultural Trading for our Swiss based subsidiary, Emmsons S.A, gives us plenty ofreasons to be cautiously optimistic that the future is not only bright, but one that will pave the way for thiscompany going forward.

We would like to be known as a Forward thinking organisation with a firm focus on creating value in the entirevalue chain forAgriculture and Energy Chain. Today's investment is Tomorrow's Opportunity, and keeping this inmind, the whole focus this year and the years to come would be to not only strengthen the existing TradingOperations, but also expanding in the other Strategic verticals such as Mining, Farming, Agricultural Processingand Storage. In addition, We are striving towards creating a strong, yet nimble organisations structure and thecoming year would see the company go all out in hiring the best talent available in the Industry world-wide tosupplement its current activities and grow the future Businesses.

We thank all of you for continually supporting the Company and look forward to sharing many more milestones tocome, at the same time, strengthening the core of our businesses.

Best Regards

Anil Monga, Managing Director

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CONTENTS

1. Company Information 1

2. Financial Highlights 2

3. Notice 3-9

4. Directors' Report 10-15

5. Report on Corporate Governance 16-23

6. Auditors' Certificate on Corporate Governance 24

7. CEO/CFO Certification 24

8. Auditors' Report 25-27

9. Balance Sheet 28

10. Profit & Loss Account 29

11. Cash Flow Statement 30

12. Schedules Forming part of Balance Sheet and Profit and Loss Account. 31-35

13. Significant Accounting Policies and Notes on Accounts 36-40

14. Balance Sheet Abstract and Company's General Business Profile 41

15. Balance Sheet of Group Companies in US$ 42

16. Profit and Loss Account of Group Companies in US$ 43

17. Statement pursuant to Section 212 of the Companies Act, 1956 44

18. Financial information of subsidiaries companies

– Emmsons SA 45-48

– Emmsons Gulf DMCC 49-61

19. Auditors' Report on Consolidated Financial Statements 62

20. Consolidated Balance Sheet 63

21. Consolidated Profit and Loss Account. 64

22. Consolidated Cash Flow Statement 65

23. Schedules Forming part of Consolidated Balance Sheet 66-70and Profit and Loss Account.

24. Significant Accounting Policies and Notes on Consolidated Accounts 71-74

25. Attendance Slip and Proxy Form 75

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COMPANY INFORMATIONBOARD OF DIRECTORSAnil Monga Managing DirectorRajesh Monga Whole Time DirectorShivaz Monga Executive DirectorVijay Kumar Kakkar Professional and Independent DirectorViresh Shankar Mathur Professional and Independent DirectorMohammad Tariq Raza Professional and Independent DirectorSatish Chandra Gupta Professional and Independent Director

KEY MANAGEMENT PERSONNELB.B. Gandhi President (Commercial)Varinder Machhral Vice President (Trading)Rakesh Kumar Singh Business Head (Trading)Hamant Paul G.M.( Finance )Shiraz Rehman D.G.M. ( Trading)

COMPANY SECRETARY & COMPLIANCE OFFICERSuvindra Kumar Company Secretary

BANKERSORIENTAL BANK OF COMMERCEOverseas Branch, M-33, Greater Kailash-II, New Delhi-110048

INDIAN OVERSEAS BANKA-19/22, Moolchand Shopping Complex, Defence Colony, New Delhi-110024

STANDARD CHARTERED BANK

7A, DLF Building, DLF Cyber City, Sector 24, 25 & 25A, Gurgaon, Haryana - 122 022

ALLAHABAD BANKInternational Branch, 3rd Floor, 17, Parliament Street, New Delhi - 110001

AUDITORSSURESH & ASSOCIATES3A Bigjo’s Tower, Netaji Subhash Place, Pitampura, Delhi-110034

OFFICESREGISTERED OFFICE2637, First Floor, Naya Bazar, Delhi-110006

ADMN. OFFICE101, South Delhi House, 12, Zamrudpur Community Centre, Kailash Colony, New Delhi-110048

FOREIGN OFFICESSWITZERLAND SUBSIDIARYEMMSONS S.A.Place du Marche 3, CP 156, 1860 Aigle, SwitzerlandDUBAI SUBSIDIARYEMMSONS GULF DMCC3406, 1- Lake Plaza Plot No. T2, Jumeirah Lakes Towers, Dubai, U.A.E.

SHARE REGISTRARLINK INTIME INDIA PVT LTDA-40, 2nd Floor, Naraina Industrial Area, Phase-II, Near Batra Banquet Hall, New Delhi-110028

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Emmsons International Ltd.

FINANCIAL HIGHLIGHTS(Rs. in lacs)

P A R T I C U L A R S 2009-10 2008-09 2007-08 2006-07 2005-06

1 Gross Turnover/Income 69322.86 65530.05 58422.06 37565.57 14605.00

2 Earnings Before Depreciation,Interest and Tax (EBDIT) 4147.22 2410.87 2534.60 1453.03 691.38

3 Depreciation 49.97 46.18 33.46 26.36 21.14

4 Profit before Tax 2013.15 1062.55 1517.98 724.27 319.29

5 Profit After Tax 1297.23 638.68 1008.09 638.88 303.16

6 Equity Dividend % 20.00 10.00 20.00 15.00 –

7 Dividend Payout 102.96 51.48 102.96 65.38 –

8 Equity Share Capital 514.80 514.80 514.80 435.89 435.89

9 Equity Share Warrants 0.00 195.00 197.50 – –Allotment / Application Money

10 Reserve and Surplus 6229.04 4852.70 4440.93 1561.64 999.25

11 Net Worth 6743.85 5562.50 5153.24 1997.53 1435.14

12 Gross Fixed Assets 1085.52 882.68 511.02 411.70 312.99

13 Net Fixed Assets 863.37 703.34 591.27 347.68 223.23

14 Total Assets 38218.94 30374.21 15934.62 18260.17 7397.70

15 Total Liabilities 31475.09 24811.70 10781.39 16262.64 5962.55

16 Market Capitalisation 4728.46 2059.21 7904.78 2231.77 1237.93

KEY INDICATORSP A R T I C U L A R S 2009-10 2008-09 2007-08 2006-07 2005-06

1 Earning Per Share (Basic) - Rs. 25.20 12.41 23.12 14.66 6.81

2 Turnover Per Share - Rs. 1346.59 1272.92 1134.85 861.81 335.06

3 Book Value Per Share - Rs. 131.00 104.26 96.26 45.83 32.92

4 Debt : Equity Ratio 2.47:1 2.45:1 1.47 :1 3.56 :1 3.43 : 1

5 EBDIT / Gross Turnover - % 5.98 3.68 4.34 3.87 4.73

6 Net Profit Margin - % 1.87 0.97 1.73 1.70 2.08

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NOTICENOTICE is hereby given that 17th Annual General Meeting of M/s Emmsons International Limited will be held onWednesday, the 29th Day of September, 2010 at 11.00 A.M. at Niryat Bhawan, Rao Tula Ram Marg, Opp. ArmyHospital Research & Referral, New Delhi -110057, to transact the following businesses :

ORDINARY BUSINESS

1. To receive, consider and adopt the audited Balance Sheet as at 31st March, 2010 and Profit & Loss Accountfor the year ended on that date together with Report of Board of Directors and Auditor's Report thereon.

2. To Declare a Dividend on Equity Shares for the financial year 2009-10.

3. To appoint a Director in place of Mr. Rajesh Monga, who retires by rotation and being eligible offers himselffor re-appointment.

4. To appoint a Director in place of Mr. Shivaz Monga, who retires by rotation and being eligible offers himselffor re-appointment.

5. To appoint M/s Suresh & Associates, Chartered Accountants, as Auditors of the company to hold office fromthe conclusion of this meeting until the conclusion of the next Annual General Meeting and to authorize theBoard of Directors to fix their remuneration.

SPECIAL BUSINESS

6. To consider and if thought fit, to pass with or without modifications, the following resolution as anOrdinary Resolution :

"RESOLVED THAT pursuant to the Provision of Section 198, 269, 309, 310 and Schedule XIII of theCompanies Act, 1956 and other applicable provisions, if any of the Companies Act, 1956 and subject to theapproval of the members of the Company at their ensuing General Meeting. Mr. Anil Monga be and ishereby re-appointed as the Managing Director of the Company for a further period of five years w.e.f. 1stSeptember, 2010 at a remuneration and perquisite as detailed below :

A. SALARY:

Rs.3,12,500- (Rupees Three lacs twelve thousand five hundred Only) per month in the grade Rs.3,12,500-42,500- 3,55,000 - 45,000 - 4,00,000-50,000-5,00,000-75,000-Rs. 8,00,000.

B. COMMISSION:

Such percentage of net profits as may be decided by the Board of Directors in each Financial Year.

C. PERQUISITES:

In addition to Salary and Commission, he will be entitled to Perquisites like furnished accommodation,gas, electricity, water and furnishings, medical reimbursement, leave travel concession, club feesincluding membership fee of two clubs, personal accident insurance etc. in accordance with therules of the Company, such perquisites being restricted to Rs. 10,00,000/- (Rupees Ten Lacs Only)per annum.

i) For the purpose of calculating the above ceiling, perquisites shall be evaluated as per IncomeTax Rules, wherever applicable, otherwise, at actual. Provisions for use of Company car forofficial duties and telephone at residence (including payment for local calls and long distanceofficial calls) shall not be included in the computation of Perquisites for the purpose of calculatingthe said ceiling.

ii) Company's contribution to Provident Fund and Superannuation Fund not exceeding twenty fivepercent of the remuneration shall not be included in the computation of limits for Perquisitesaforesaid.

iii) The total remuneration payable to him including Commission, value of Perquisites andCompany's contribution towards Provident Fund and Superannuation Fund shall not exceedthe limit set out in Section 309, 198 and Schedule XIII of the Companies Act, 1956.

D. OTHER TERMS:

i) The total remuneration including commission perquisites and company's contribution towardsprovident fund and superannuation fund payable to him shall not exceed five percent wherethere is only one Managing Director and ten percent where there are more than one ManagingDirector, of the profits calculated in accordance with section 198 and 309 of the Companies Act,1956.

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ii) The Managing Director shall be entitled to reimbursement of all actual expenses, including onentertainment and traveling, incurred in the course of the company's business.

iii) The Managing Director shall also be entitled to the benefits under other benefits, schemes,privileges and amenities such as hospitalization etc. as are granted to the senior executives ofthe company, in accordance with the company's practice, rules and regulations in force fromtime to time.

iv) The company or the Managing Director shall be entitled at any time to terminate this appointmentby giving three months written notice or by any shorter notice as may be mutually agreed to, byboth the parties.

v) In the event of loss or inadequacy of profits in any financial year, the Managing Director shall bepaid, subject to the compliance of schedule XIII of the Companies Act, 1956 in this regard,remuneration by way of salary and perquisites as specified above.

vi) The Managing Director, so long as he functions as Managing Director, shall not be paid anysitting fee for attending meeting of the Board of Directors or Committees thereof.”

"RESOLVED FRUTHER THAT the consent of the Board be and is hereby accorded that the aboveremuneration of Mr. Anil Monga, with all terms and conditions, shall be effective from 01.04.2010.”

"RESOLVED FURTHER THAT the Managing Director will be authorized to exercise such powers ofmanagement, as may be delegated to him by the company from time to time, subject however, to theoverall superintendence, control and supervision of the Board of Directors of the company."

"RESOLVED FURTHER THAT in the event (s) of any statutory amendment or modification or relaxationin the provisions relating to the payment of remuneration to the managerial persons or to ScheduleXIII to the Companies Act, 1956, the Board of Directors be and is hereby authorized to vary or increasethe remuneration including salary, commission, perquisites, etc. within such prescribed limits."

"RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised totake such steps expedient or desirable to give effect to this resolution."

7. To consider and, if thought fit, to pass, with or without modification(s), the following resolution asa Special Resolution:

"RESOLVED THAT in accordance with the provisions of 81(1A) and other applicable provisions, if any,of the Companies Act, 1956 (the Act) (including any amendments or re-enactments thereof) andsubject to enabling provisions of the Memorandum and Articles of Association of the company, thelisting agreements entered into by the Company with the Stock Exchanges where the company'sshares are listed, and in accordance with the applicable guidelines for Preferential issue SEBI(Issue of Capital and Disclosure Requirements), Regulations, 2009, issued by The Securities andExchange Board of India ("SEBI"), and any other relevant statutory/regulatory authorities and clarificationthereon issued from time to time, if any, and subject to all such approvals, permissions, and sanctionsof any authorities as may be necessary and subject to such conditions and modifications as may beprescribed or imposed by any of them while granting such approvals, permissions, and sanctionsand which may be agreed to by the Board of Directors of the company (hereinafter referred to as the'Board' which term shall include committee thereof), the consent of the company be and is herebyaccorded to the Board to offer, issue and allot in one or more trenches, to the persons and theirnominees other than the persons belonging to the category of promoters' as determined by theManaging Director or Whole Time Directors of the Company upon such terms and conditions asmay be deemed appropriate by them, upto 10,00,000 (Ten Lacs only) equity warrants convertible intoequity shares, equity shares or both, on preferential basis of the face value of the Rs. 10/- each. Theexercise price of equity share shall be as determined according to Regulation 76 of chapter VII ofSEBI (ICDR) Regulations, 2009. Such shares shall ranking pari passu in all respects, including asto dividend, with the existing equity shares of the Company. The "relevant date" for this purpose being30th August, 2010, and on such further terms and conditions, as may be finalized by the Board ofDirectors in accordance with guidelines/ rules applicable to Preferential allotment of equity warrantsconvertible into equity shares and equity shares or both, by Govt. of India, Securities and ExchangeBoard of India (SEBI) or any other authority(ies), as the case may be, and/or any modification thereofand subject to the following terms and conditions:

1. IN CASE OF ALLOTMENT OF EQUITY WARRANTS CONVERTIBLE INTO EQUITY SHARES :

a. A sum of 25% of the price of the equity warrants convertible into equity shares, determine inaccordance with Chapter VII of SEBI (Issue of Capital and Disclosure Requirements),Regulations, 2009 shall be payable by the Allotees at the time of allotment of the Equity Warrants.

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If the Allotees do not exercise the Equity Warrants during the conversion period, the price sopaid shall be forfeited by the Company. In case the Allotees exercise the Equity Warrants, theprice so paid shall be adjusted against the share application monies payable by the Alloteesand only the balance 75% shall be payable by them.

b. The Equity Warrants shall be allotted within a period of 15 (Fifteen) days of the passing of theresolution at the general meeting held to consider and approve the issue of Equity Warrants,provided that where the allotment in one or more lots on preferential basis is pending onaccount of pendency of any of the approval of such allotment by any regulatory authority or theCentral Government, the allotment shall be completed within 15 (Fifteen) days from the date ofsuch approval.

c. The Equity Warrants shall be exercisable at the option of the holder, in such number of optionsexercised by the holder, in one or more lots at the option of the holder of such Equity Warrantsat any time within the exercise period. The exercise period shall not exceed 18 months fromthe date of allotment of such warrants.

d. The terms relating to such Equity Warrants including the exercise period and relating to the EquityShares being allotted on their exercise may be decided in accordance with SEBI Guidelines andother provisions of law as may be applicable to the transaction, by the Board of Directors.

e. The Equity Shares so allotted on exercise and conversion of the Equity Warrants shall besubject to the provisions of the Memorandum and Articles of Association of the Company andshall rank pari passu in all respects with the then existing Equity Shares of the Company.

f. The Equity Warrants and the Equity Shares allotted on the conversion of such Equity Warrantsshall be locked in the manner specified, during the lock-in period so specified, in the SEBI(Issue if Capital and Disclosure Requirements), Regulations, 2009 except to the extent and inthe manner permitted there under.

g. The said Equity Warrants and the Equity Shares allotted on conversion of such Equity Warrantsshall be subject to such further terms and conditions, if any, as may be agreed to by and between,the Board of Directors, and the Regulatory Authorities, and Subscriber(s) of Equity Warrants.

2. IN CASE OF ALLOTMENT OF EQUITY SHARES :

a. Full consideration of equity shares issued in accordance with Chapter VII of SEBI (Issue ofCapital and Disclosure Requirements), Regulations, 2009 shall be payable by the Allotees atthe time of allotment of the such Equity Shares.

b. The Equity Shares shall be allotted within a period of 15 (Fifteen) days of the passing of theresolution at the general meeting held to consider and approve the issue of Equity shares,provided that where the allotment in one or more lots on preferential basis is pending onaccount of pendency of any of the approval of such allotment by any regulatory authority or theCentral Government, the allotment shall be completed within 15 (Fifteen) days from the date ofsuch approval.

c. The Equity Shares so allotted shall be subject to the provisions of the Memorandum andArticles of Association of the Company and shall rank pari passu in all respects with the thenexisting Equity Shares of the Company.

d. The Equity Shares allotted shall be locked in the manner specified, during the lock-in period sospecified, in the SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009except to the extent and in the manner permitted there under.

e. The said Equity Shares allotted shall be subject to such further terms and conditions, if any, asmay be agreed to by and between, the Board of Directors, and the Regulatory Authorities, andSubscriber(s) of Equity Shares.”

“RESOLVED FURTHER THAT:

1. the relevant date for the purpose of calculating the minimum price for issue of the equitywarrants convertible into equity shares, equity shares or both in accordance with Chapter VII ofSEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009 be fixed as 30th Dayof August, 2010, being the 30th day prior to 29th Day of September, 2010, the day of AnnualGeneral Meeting, in terms of Section 81(1A) of the Companies Act, 1956, to consider theproposed issue.

In view of the above, the price of per equity warrants convertible into equity shares or equityshare or both proposed to be issued on preferential basis shall be the price as determined inaccordance to the Regulation 76 of chapter VII of SEBI (ICDR), Regulations, 2009.

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2. the offer, issue and allotment of the aforesaid securities shall be made at such time or timesas the Board may in its absolute discretion decide, subject however to the compliance withapplicable guidelines, notifications, rules and regulations.

3. the issue of equity warrants convertible into equity shares under the Preferential issue, shallhave the option of conversion into equity shares within a period of 18 Months (Eighteen Months)from the date of its allotment and the allotment of equity shares, upon conversion of equitywarrants shall be locked-in for a period of one year.

In case of issue of equity shares under the Preferential issue, shall be locked in for period ofone year from the date of its allotment.

4. any of the securities issued above, that may remain unsubscribed for any reason whatsoever,may be offered and allotted by the Board in its absolute discretion to any other person/ entity/investor within the same category/class, on the same terms and conditions.

5. the Board be and is hereby authorized to accept any modification(s)/amendment to or to modifythe terms of issue of the said Preferential issue subject to the provisions of the Companies Act,1956 and SEBI Guidelines/Regulations, without being required to seek any further consent orapproval of the Company in general meeting.

6. the Board be and is hereby authorized to delegate all or any of the powers herein conferred bythis resolution to any director or directors or to any committee of directors or any other officer orofficers of the Company to give effect to the aforesaid resolution.

7. for the purpose of giving effect to this resolution the Board be and is hereby authorized to do allacts, deeds and things as the Board may in its absolute discretion consider necessary, proper,desirable or appropriate for making the said Preferential issue and to settle any question,difficulty or doubt that may arise in this regard including the power to allot over-subscribed/under-subscribed portion if any, in such manner and to such person(s) as the Board maydeem fit and proper in its absolute discretion to be most beneficial to the Company.

8. the Board be and is hereby authorized to accept such amendments, modifications, variationsand alterations as the Government of India, SEBI, Reserve Bank of India, Financial Institutions,or Stock Exchanges may stipulate in that behalf.

9. the Board be and is hereby authorized to take necessary steps for listing of the Equity Sharesso allotted and issued, on one or more recognized Stock Exchanges, in India or abroad, wherethe Company's shares are listed, as per the terms and conditions of the Listing Agreementwith the Stock Exchanges concerned, and in accordance with such other guidelines, rules andregulations as may be applicable with regard to such listing.”

For and on behalf of the Board

Sd/-Dated : 17.08.2010 (ANIL MONGA)Place : New Delhi Managing Director

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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/HERSELF, AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. THEINSTRUMENT OF APPOINTING PROXY SHOULD, HOWEVER, BE DEPOSITED AT THE REGISTEREDOFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THEMEETING. (Blank proxy form is enclosed).

2. Corporate members intending to send their authorised representative to attend the meeting are requestedto send a certified copy of the Board Resolution authorizing their representative to attend and vote on theirbehalf at the meeting.

3. The Register of Members and the Share Transfer Books of the company shall remain closed from Tuesday,the 21st Day of September 2010, to Wednesday, the 29th Day of September 2010 (both days inclusive) forthe purpose of Annual General Meeting and payment of dividend if approved/declared.

4. The Dividend on equity shares, if declared at the meeting, will be payable to those share holder, whosenames appear on the Companies Register of Members at the close of business hours on Monday 20thDay of September, 2010. In respect of shares held in dematerialized form, the dividend will be paid on thebasis of particulars of beneficial ownership furnished by the depositories as at the close of business hourson Monday 20th Day of September, 2010.

5. Members are requested to notify immediately the changes in their address, if any.

6. Members holding shares in identical order of names in more than one folio are requested to write to theCompany / Share registrar, enclosing their share certificates, to enable the Company to consolidate theirholding in one folio.

7. Members who hold shares in dematerialized form are requested to bring their client ID and DP ID numbersfor identification.

8. An explanatory statement pursuant to section 173(2) of the Companies Act, 1956, relating to SpecialBusiness to be transacted at Annual General Meeting is annexed herewith.

9. Members / Proxies are requested to hand over the enclosed Attendance Slip, duly signed in accordancewith their specimen signature registered with the company for admission to the meeting hall.

EXPLANATORY STATEMENT PURSUANT TO THE SECTION 173(2) OF THE COMPANIES ACT, 1956Item No. 6Mr. Anil Monga was appointed as Managing Director of the Company for a period of five years w.e.f. 1st September,2005 by the members of the Company at 12th Annual General Meeting held on 29th September, 2005.

The said terms of appointment of Mr. Anil Monga expired on 31st August, 2010. Considering his successful resultoriented track record and his experience in the field and his active involvement in the affairs of the Company, theRemuneration Committee at their meeting held on 26th April, 2010 approved the re-appointment and recommendedthe same to the Board of Directors. The Board of Directors of the Company at their meeting held on 26th April,2010 confirmed the re-appointment of Mr. Anil Monga as Managing Director. Board has decided to re-appoint himas a Managing Director for a further period of 5 years with effect from 1st September, 2010 subject to the approvalof the members of the Company.

Pursuant to the provisions of Section 269 read with schedule XIII of the Companies Act, 1956, approval of themembers is required for the appointment/ re-appointment of the Managing Director of the Company. Accordingly,Your Director recommends the passing of resolution no.6 of this notice as an Ordinary Resolution.

Mr. Anil Monga is a graduate and is associated with the company since its incorporation. He has to his credit vastrich and varied experience in the field of procurement and International trading of Agri Commodities. Due to theeffort of Mr. Anil Monga, the Company made good reputation in the national and international market.

The detailed terms and conditions stated in the resolution no.6 and in this explanatory notes may be consideredas an abstract of terms and conditions of this re-appointment.

Mr. Anil Monga, Mr. Rajesh Monga and Mr. Shivaz Monga may deem to be interested in this Resolution.

Item No. 7In terms of the provisions of Section 81(1A) of the Companies Act, 1956 read with the Guidelines for PreferentialIssue of SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009, the Company may with the

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consent of the shareholders of the Company accorded by way of Special Resolution in a general meeting mayissue/ sell/ allot upto 10,00,000 (Ten Lacs only) equity warrants convertible into equity shares, equity shares orboth of Rs.10/- each to the person other than the persons belonging to the Category of promoters' Group, and/ortheir nominees (the allotees), whether or not they are members of the Company.

The present resolution is proposed to be passed in order to enable the Board of Directors of the company toreceipt of requisite corporate and regulatory approvals, and fulfilment of conditions precedent mentioned therein.

The Requisite Disclosures under SEBI (ICDR), Regulations, 2009 are as under:

OBJECTS OF THE ISSUE THROUGH PREFERENTIAL OFFER:

a. To infuse further equity capital.

b. To raise funds for various corporate actions viz., Capital Expenditure, augmenting working capital, andgeneral corporate purposes.

PRICING OF THE PREFERENTIAL ISSUE:

The pricing of the equity warrants convertible into equity shares, equity shares or both to be allotted on preferentialbasis shall not be lower than the price as determined in accordance with the Chapter VII of the SEBI (Issue ofCapital and Disclosure Requirements), Regulations, 2009 provided that the issue of securities on a preferentialbasis can be made at a price not less than the higher of the following :

a. The average of the weekly high and low of the closing prices of the shares quoted on he stock exchangeduring the six months preceding the relevant date, or

b. The average of the weekly high and low of the closing prices of the shares quoted on the stock exchangeduring the two weeks preceding the relevant date.

The relevant date for the purpose of calculating the minimum price for equity warrants convertible into equityshares, equity shares or both under Chapter VII of SEBI (Issue of Capital and Disclosure Requirements),Regulations, 2009 is 30th August, 2010 (i.e. 30 days prior to the date on which the meeting of general body ofshareholders is held in terms of Section 81(1A) of the Companies Act, 1956, to consider this proposed issue).

The proposed price of above mentioned securities to be issued on preferential basis, shall be determined inaccordance of the SEBI (ICDR), Regulations, 2009, as decided by the Board of Directors of the Company in theirmeeting held on 17th August, 2010.

The Board proposes to issue equity warrants convertible into equity shares or equity shares or both on preferentialbasis for cash consideration, in terms of SEBI Guidelines as in force on the date of this notice and conditionsincluding as to premium, etc., as the Board may, in its absolute discretion, deem fit and in accordance with theArticles of Association of the Company. The securities proposed to be issued to the proposed allottees would beissued at a price determined as per Regulation 76 of Chapter VII of SEBI (Issue of Capital and DisclosureRequirements), Regulations, 2009.

The preferential issue and allotment of equity warrants convertible into equity shares, equity shares or both areproposed to be made at a price as determined in accordance to the Regulation 76 of Chapter VII of SEBI (Issueof Capital and Disclosure Requirements), Regulations, 2009, and as certified by the Company's Auditors. Theproposed preferential allotment to the category belonging to the persons other than promoters' Group and/ortheir nominees as aforesaid would not result in any change in the control over the Company.

The certificate from the Statutory Auditors, certifying that the issue of above mentioned securities on preferentialbasis is in accordance with the SEBI Guidelines as in force on the date of this Notice, will be placed before theAnnual General Meeting where this resolution pertaining to preferential allotment of securities is being considered.

INTENTION OF THE PERSON OTHER THAN PROMOTERS/DIRECTORS/KEY PERSONNEL TO SUBSCRIBE TOTHIS OFFER :

The Company proposes to issue the equity warrants convertible into equity shares, equity shares or both onpreferential basis to the persons belonging to the Category other than promoters' Group, and/or their nominees(the allotees), whether or not they are members of the Company. As such they intend to subscribe to the offer.

CONSEQUENTIAL CHANGES IN THE VOTING RIGHTS :

There will be no change in the Board of Directors and management of the company as a consequence to thepreferential issue of the above mentioned securities. The equity shares shall have the same voting right asavailable to the existing shareholders. Voting rights will change only in tandem with the post issue shareholdingpattern.

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WHETHER THERE WILL BE A CHANGE IN CONTROL OVER THE COMPANY:The preferential issue will not result in change in control of the company. The promoters who already have controlover the company will continue to have control over the company.SHAREHOLDING PATTERN BEFORE AND AFTER THE OFFER :The information on shareholding pattern before and after the offer is as follows:

Category Pre Issue Pre Issue Shareholding Post Issue ShareholdingShareholding After allotment of Equity After allotment of Equity

Shares against proposed shares or Equity Shares*900000 Equity Warrants against Equity Warrants to Promoter’s Group to the person Other

than Promoter’s Group

No. of Shares % of No. of Shares % of No. of Shares % of Held Shares Held Shares Held Shares

Promoter’s Group 2174652 42.24 3074652 50.84 3074652 43.62HoldingNon Promoter’s 2973368 57.76 2973368 49.16 3973368 56.38Group Holding

GRAND TOTAL 5148020 100.00 6048020 100.00 7048020 100.00*Company now proposed to issue 900000 equity warrants as the BSE has rejected the application of oneallottee, applied for 100000 equity warrants.

PROPOSED TIME WITHIN WHICH ALLOTMENT SHALL BE COMPLETED:The Board proposes to allot the above securities on preferential basis within a period of 15 days from the date ofpassing of the resolution provided that where this allotment on preferential basis is pending on account ofpendency of any approval of such allotment by any regulatory authority or the Central Government, the allotmentshall be completed within 15 days from the date of such approval.The consent of the members for this special resolution is required in terms of the provisions of Section 81(1A) ofthe Companies Act, 1956.Your Directors, therefore, recommend the said resolution for your approval.None of your Directors are interested in the said resolution as the Share Warrants convertible into equity shares,equity shares or both under preferential issue are proposed to be allotted to the persons belonging to theCategory other than promoters' group.



ADDITIONAL INFORMATION ON DIRECTOR SEEKING RE-APPOINTMENT AT THIS A.G.M.Mr. Rajesh Monga is a graduate and having vast, rich and varied experience of 25 years in the field of procurementand trading of Agri Commodities. Due to his effort, the Company has a good reputation of quality of productstraded in domestic as well as international market.He has successful result oriented track record and completely dedicated towards the work assigned to him, hisrich and varied experience in the field of procurement and trading of Agri -Commodities and his active involvementin the affairs of the Company has helped the Company in its immense growth. He does not hold any Directorshipin other companies apart from your company.He was appointed as a Director of the company since its incorporation and served the Company ever since.Mr. Shivaz Monga is a graduate from Swinburne University of Technology Melbourne and an MBA from CassBusiness School, London. He is associated with the company since 2006; he is responsible for trading of coalin the company, also responsible for the HR/ Admin. and the travel department of the company. Prior to Emmsonshe has worked with Emirates trading Agency LLC as export executive and KPMG as Analyst. He holds directorshipin Emmsons Gulf DMCC, Dubai and Emmsons SA. Switzerland, both are the subsidiaries of the EmmsonsInternational Ltd.He was appointed as a Director of the company in year 2008 and has served the company with distinction.

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DIRECTORS’ REPORT

Dear Members,The Directors of your company have pleasure in presenting the 17th Annual Report and the Audited Accounts ofthe company for the financial year ended 31st March, 2010.

1. FINANCIAL HIGHLIGHTSA summarized position of the sales turnover, profits and taxation for the year under review as compared tothe previous year is given below:

Particulars Amount (Rs. in Lacs) Amount (US$ in Million)2009-2010 2008-2009 2009-2010 2008-2009

Gross Sales and Income 69322.86 65530.05 154.41 145.96Profit before interest, 4147.23 2410.87 9.24 5.37Depreciation and taxationLess: Interest and financial Charges 2084.11 1302.15 4.64 2.90Depreciation 49.97 46.18 0.11 0.10Profit before taxation 2013.15 1062.54 4.49 2.37Less: Provision for taxation 716.51 407.55 1.60 0.91Provision for deferred (0.59) 16.31 0.00 0.04taxation/(tax effect of timingdifferences during year)Profit after taxation 1297.23 638.68 2.89 1.42Add : Balance brought forward 1819.35 1382.64 4.05 3.08 from the previous yearLess: Short/(Excess) Provision of Income Tax in Earlier Years (4.57) 41.74 (0.01) 0.09

Disposable Profits 3121.15 1978.58 6.95 4.41

2. DIVIDENDYour Directors are pleased to recommend dividend @ 20% on 5148020 Equity Shares of Rs.10 each (i.e.Rs. 2 per share) for the financial year ended 31st March, 2010, which if approved at the ensuing AnnualGeneral Meeting, will be paid to:

i. All those shareholders whose names appears in the Register of Members as on 20th September,2010 and ;

ii. All those whose names appears on the date, as mentioned above, as beneficial owners as furnishedby National Securities Depository Limited and Central Depository Services Limited.

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

a) Company SnapshotRecovering from the global meltdown, commodities again had a difficult year. With inflation in Indiaremaining at high levels, the Government continued to exercise tight control on almost all agriculturalcommodities. The major agri-commodities like non-basmati rice and wheat remained under exportban. Treading cautiously with positive approach, your company was able to deliver a satisfactoryperformance. This year can be summed up as a year of consolidation. Looking forward, the companyexpects to make further progress during the current year.

b) Future DirectionsWith export potential of all major agro-commodities remaining uncertain, the company has shifted itsfocus to imports and third country trade. The third country trade is set to drive your company's nextphase of growth. With trading subsidiaries in UAE & Switzerland and sourcing bases in Ukraine andIndonesia, besides other traditional centres, the company expects to grow on the back of importsand third country trade. On export front the company expects a major growth in basmati rice andmaize etc.

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c) Risk ManagementThe company has been hedging its Imports and Exports on the main Commodity exchanges whereverpossible. Company is also securing forward exchange contracts to minimize/ avoid the risk ofvariation in foreign currency rates. Risk Management techniques have been added at every level toensure that company is prepared to take the competition head on without making itself vulnerable tothe occasional bumps in the market.In event of unforeseen Risks, the company would rely on the experience and dedication of its Boardto tackle any issues that may affect its performance. The Management structure as well as Staffinghas also been shaken up to enhance the performance and make the board more accountable in thedecision-making processes.

d) Segment wise PerformanceAs the company's business activity falls within single primary business segment viz. trading ofcommodities, hence reporting of segment wise performance is not applicable.

e) Internal Control system and their adequacyYour company maintains adequate internal control system designed to provide reasonable assurancethat assets are safeguarded. Transactions are executed in accordance with management'sauthorization and are properly recorded and accounting records are adequate for preparation offinancial statements and financial information. Your company has well defined procedure to executethe financial transaction. Furthermore, the Audit Committee and the Board of Directors screen eachfinancial transaction.

f) Financial and Operational PerformanceDuring the year ended 31st March, 2010, the turnover of your company increased up to Rs. 693.23Crore as compared to Rs. 655.30 Crore and Rs. 584.22 Crore for the year 2008-09 and 2007-08respectively.

Increase in Sales over the last five years :

0

200

400

600

800

146.04 375.66 583.59 655.30 693.23

2005-06 2006-07 2007-08 2008-09 2009-10

Year wise Increase in sales

TURNOVER Turnover

146.04

375.66

583.59655.30 693.23

Turnover

Rs.

in C

rore

Company has also earned the profit after taxation Rs. 12.85 Crore during the year as Compared toProfit of Rs. 6.38 Crore and Rs. 10.08 Crore for the year 2008-09 and 2007-08 respectively.

The financial statements of the company for the year under review have been prepared in Compliancewith the requirements of the Companies Act, 1956 and Generally Accepted Accounting Principles inIndia. The management of the company accepts the responsibility for the integrity and objectivity ofthese financial statements.

g) Human Resources and No. of employees employed

Emmsons International Limited continues to focus on building the skills and capabilities of itshuman resources to enable them to perform effectively in a competitive market. Company constantly

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reviews its HR policies in order to keep pace with market changes and has embarked on a range ofinitiatives to create a positive work environment, ample opportunities for development and growthand high levels of motivation and engagement. The company has remained focus on strengtheninghuman capital through continuous training and development and by upgrading the skills of employeesto meet the company's objectives.

The Human Resources function of the Company continued its initiatives to develop and nurturetalent. Company offers ample avenues to its employees to not only contribute but also learn andgrow. During the year under review, the company conducted surveys across various categories ofemployees at all level to gauge the level of employee satisfaction. Based on the feedback, appropriateinitiatives were initiated. The Corporate Human Resources Department (HRD) of the Company iscommitted to improve employee satisfaction at all levels and create a motivated, responsive andaccountable organization.

The Company considers its human resources as one of its main assets and is constantly focusingon strengthening its organizational culture with a view to attract and retain best talent. Notable stepswere taken in respect of critical area of knowledge building by giving special thrust to peopledevelopment, learning, sharing of knowledge and best practices.

At Emmsons International Ltd. employees are encouraged to live the vision and values adopted bythe Company. Integrity and performance are recognized and rewarded.

The total number of employees working with the company as on the end of the year under review was 80and the company continued to enjoy a cordial and harmonious relation with its employees at all level.

4. INSURANCE

All assets of the company including its plant and machinery and stocks have been adequately insured.

5. FIXED DEPOSITS

The company had not accepted any deposit from public during the year ended 31st March, 2010, pursuantto the provisions of section 58-A of the Companies Act, 1956.

6. SUBSIDIARY COMPANIES

The Company's vision of a being a Global Commodity Trader warrants its presence outside India. As a firststep, the Company has established 2 Subsidiaries as mentioned below:

NAME : EMMSONS GULF DMCC, DUBAI

ACTIVITY : INTERNATIONAL TRADING

During the year under review, the company's trading subsidiary in Dubai, Emmsons Gulf DMCC startedoperations during the current year. In its first few months of operations during the current year, the companyregistered a turnover of over USD 22.41 million with net profit of USD 0.50 million approx. The company isexpected to stabilize its operations and grow substantially during the current year on the back of expandedproducts basket.

NAME : EMMSONS SA, SWITZERLAND

ACTIVITY : INTERNATIONAL TRADING & SHIPPING

With subdued export of agro commodities from India, the Swiss subsidiary could not make much headwayduring the year. However the company expects to record a complete turnaround during the current year.

7. INTERNATIONAL PROJECTS

PROJECT : COAL MINING

LOCATION : EAST KALIMANTAN, INDONESIA

The progress on coal mining project in Indonesia remained sluggish on account of financial global slowdown.The company was able to achieve financial closure for its share of funding in the project. The current yearis expected to see some major progress.

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PROJECT : FARMING, PROCESSING AND STORAGELOCATION : UKRAINE

During the year under review the company has been able to make major progress on the Ukraine projects.The acquisition of farming companies in Ukraine in nearing completion and is expected to be completedby Sep, 2010. The agro-processing project is also expected to be completed during the year.

Next year onward the Ukraine project is expected to start showing good results.

8. DIRECTORSMr. Rajesh Monga and Mr. Shivaz Monga, Directors of the company will retire by rotation at the forthcomingAnnual General Meeting and being eligible offer themselves for reappointment. Further, the Board ofDirectors of the Company in their meeting held on 26th April, 2010 after recommendation by theRemuneration Committee has approved the re-appointment of Mr. Anil Monga as Managing Director w.e.f.1st September, 2010, whose terms of appointment will be expired on 31st August, 2010 subject to approvalof the members in the forthcoming Annual General Meeting.

Your Directors recommend the reappointment of Mr. Rajesh Monga and Mr. Shivaz Monga as Directors andMr. Anil Monga as Managing Director of the company.

Further, pursuant to provisions of the clause 49 of the listing agreement, the brief resumes of the Directors,who are to be reappointed in this Annual General Meeting, are provided in the corporate governancesection, which is a part of the Annual Report of the company.

9. AUDITOR'S REPORTThe Auditors observations are self-explanatory and, therefore do not call for any further comments.

10. AUDITORSM/s Suresh & Associates, Chartered Accountants, the Auditors of the company retire at the ensuing AnnualGeneral Meeting and have expressed their willingness to continue in the office, if re-appointed. Membersare requested to re-appoint them and authorize the Board to fix their remuneration and pay out of pocketexpenses.

11. REPORT ON CORPORATE GOVERNANCEA detailed report on the procedures adopted by the company on the Corporate Governance along with thecertificate of Auditors of your company regarding compliance of the conditions of Corporate Governance asstipulated in clause 49 of the listing agreement with Stock Exchanges is enclosed and form part of thisAnnual Report.

12. LISTING OF SECURITIESThe Equity shares of the company are listed in The Bombay Stock Exchange, Phiroze Jeejeebhoy Towers,Dalal Street, Mumbai only. The scrip code for The Stock Exchange, Mumbai is 532038.

The company had duly paid the listing fee to the aforesaid Stock Exchange for the Financial Year 2010-2011.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOTUGOINGAs the company is not covered in schedule A of Companies (Disclosure of particulars in report of Board ofDirectors) Rules, 1988, provisions of Section 217(1) (e) of the Companies Act, 1956 are not applicable.

14. STATEMENT OF PARTICULARS OF EMPLOYEESInformation required as per section 217(2A) of the Companies Act, 1956 read with Companies (Particularsof Employees) Rules, 1975 and forming part of Director's Reports for the year ended 31st March, 2010 isgiven in the Annexure 'A'.

15. DIRECTORS' RESPONSINBILITY STATEMENTAs required under section 217(2AA) of the Companies Act, 1956, it is hereby stated that:

a) in the preparation of the Annual Accounts, the applicable accounting standards had been followedalong with proper explanation relating to material departures;

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b) the Directors had selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the company at the end of the financial year and of the profit or loss of the companyfor the period;

c) the Directors had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of the company andfor preventing and detecting fraud and other irregularities; and

d) the Directors had prepared the Annual Accounts on a going concern basis.

16. ACKNOWLEDGEMENTYour Directors wish to place on record their thanks and gratitude to various Central and State GovernmentAuthorities for their co-operation and providing different approvals, Bankers of the company for the financialfacilities and support extended, Overseas traders, customers, retailers and other associated with thecompany as its trading partners for their continued support & trust and the shareholders of the company fortheir confidence in the company.

The Directors also sincerely appreciate and thank the employees of the Company at all levels for theirvaluable contribution and dedicated efforts in steering the Company successfully to break the previousrecords of excellent performance and move forward to climb greater heights.



15

ANNEXURE `A’

Information required as per section 217(2A) of the Companies Act, 1956 read with Companies (Particulars ofEmployees) Rules, 1975 and forming part of Director's Reports for the year ended 31st March, 2010.

(A) Persons employed throughout the financial year, who were in receipt of remuneration for the year, which, inthe aggregate, was not less than Rs. 24.00 Lacs.

Name of Designation/ Remuneration Qualification Age Experience Date of ParticularsEmployee Nature of (in Rs.) (Yrs) Employment of last

duties Employment

Mr. B.B. President 27,42,021/- C.A. 48 27 01.01.2008 Director,Gandhi (Commercial) Years Gaura Texfab

Pvt. Ltd.

(B) Persons employed for a part of the financial year who were in receipt of remuneration for any part of the year,at a rate which, in the aggregate, was not less than Rs. 2.00 Lacs per month.

Nil

(C) Persons employed throughout the financial year or part thereof, was in receipt of remuneration in that yearwhich, in the aggregate, or as the case may be, at a rate which, in the aggregate is in excess of that drawnby the Managing Director or Whole-time Director or Manager and holds by himself or along with his spouseand dependent children, not less than two percent, of the equity shares of the company.

Nil

Notes :

1. Remuneration includes Salary, House Rent Allowance, Bonus, Contribution to Provident Fund, LeaveTravel Concession, Medical Assistance and other allowances paid in cash and taxable value of non cashperquisites.

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REPORT ON CORPORATE GOVERNANCE

COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE

At the top of hierarchy, in the case of a business enterprise is the Board of Directors. Boards of companies neednot be uniform with respect to their composition, thinking styles and functioning methodologies. Their strength,in fact, lies in their diversity. Rigidities in thinking styles and composition are likely to reduce the Boards to mereornamental organs. Such Boards fail to meet the multifaceted demands made on them by the emerging business-economic environment. Liberalization and Globalization initiatives have made it essential for Indian corporate tomake appropriate changes in their Boards as well as their governance practices. Globalization of the marketplacehas ushered in an era wherein the quality of corporate governance has become a crucial determinant of survivalof corporates. The compatibility of corporate governance practices with global standards has also become animportant constituent of corporate success. The practice of good corporate governance has therefore become anecessary pre-requisite for any Company to manage effectively in the globalized market. Objectives of CorporateGovernance Good governance are integral to the very existence of a company. It inspires and strengthensinvestors' confidence by ensuring company's commitment to higher growth and profits. It seeks to achievefollowing objectives:

(i) A properly structured Board capable of taking independent and objective decisions is in place at the helmof affairs;

(ii) The Board is balanced as regards the representation of adequate number of non - executive and independentdirectors who will take care of the interests and wellbeing of all the stakeholders;

(iii) The Board adopts transparent procedures and practices and arrives at decisions on the strength ofadequate information;

(iv) The Board has an effective machinery to sub serve the concerns of stakeholders;

(v) The Board keeps the shareholders informed of relevant developments impacting the company;

(vi) The Board effectively and regularly monitors the functioning of the management team; and

(vii) The Board remains in effective control of the affairs of the company at all times.

The overall endeavor of the Board should be to take the organization forward, to maximize long-term value andshareholders' wealth.

BOARD OF DIRECTORS

(I) COMPOSITION OF THE BOARD

The Board of Directors of the Company comprises of an optimum combination of Executive and Non-Executive Directors with more than fifty percent of independent Directors. None of the Non-Executive &Independent Directors of the company have any pecuniary relationship or transactions with the Company,promoters, and management, which may affect their judgement in any manner.

Your Company's Board comprises of a Managing Director, one Whole Time Director, one Executive Directorand four other Non-Executive and Independent Directors representing the optimum combination ofprofessionalism, knowledge and experience.

The break up of the total composition of Board of Directors is as follows:

Sl. Name Designation Executive/NonNo. Executive/Independent

1. Mr. Anil Monga Managing Director Executive2. Mr. Rajesh Monga Whole time Director Executive3. Mr. Shivaz Monga Executive Director Executive4. Mr. Vijay Kumar Kakkar Director Non Executive & Independent5. Mr. Viresh Shankar Mathur Director Non Executive & Independent6. Mr. Mohammad Tariq Raza Director Non Executive & Independent7. Mr. Satish Chandra Gupta Director Non Executive & Independent

17

(II) DETAILS OF DIRECTOR’S ATTENDANCE IN THE BOARD MEETINGS AND THE LAST AGM ALONGWITHTHEIR DIRECTORSHIP :

Sl. Name of Directors Attendance Directorship No. of Chairmanship/ AttendanceNo. at the of other Indian Membership of at the last

Company’s Companies other Board AGMMeetings Committees

1. Mr. Anil Monga 16 1 Nil Yes2. Mr. Rajesh Monga 17 Nil Nil Yes3. Mr. Vijay Kumar Kakkar 13 Nil Nil Yes4. Mr. Viresh Shankar Mathur 13 3 Nil No5. Mr. Mohhamad Tariq Raza 13 1 Nil No 6. Mr. Satish Chandra Gupta 14 10 Nil Yes7. Mr. Shivaz Monga 15 Nil Nil Yes

(III) NO. OF BOARD MEETINGS HELD DURING THE FINANCIAL YEAR 2009-10

During the year under review, The Board of Directors met Seventeen (17) times on the dates as givenherein below:

No. of Board Dates of No. of Board Dates ofMeetings Held Board Meeting Meetings Held Board Meeting

01 15.04.2009 10 28.08.200902 21.04.2009 11 14.09.200903 28.04.2009 12 23.10.200904 04.05.2009 13 17.11.200905 14.05.2009 14 24.12.200906 25.05.2009 15 07.01.201007 29.06.2009 16 05.02.201008 08.07.2009 17 26.02.201009 28.07.2009 – –

Remuneration paid to DirectorsDetails of Remuneration paid to Directors for the year 2009-10

The remuneration of Executive Directors is decided by the Board of Directors with due approval of the shareholdersof the company and is also approved by the Remuneration Committee of the company. The details of theremuneration paid to the Directors including Managing Director and Whole time Director during the financial year2009-2010 is as under:

Name Designation Tenure Salary Sitting Commission Provident Other Grossof (Amount Fees Fund Perquisite Remun-

appointment in Rs.) Contribution eration

Mr. Anil Monga Managing Five years 3375000 Nil 7480000 Nil 204119 11059119Director w.e.f. 01.09.05

Mr. Rajesh Monga Whole Time Five years 2700000 Nil 1250000 Nil Nil 3950000Director w.e.f. 01.01.09

Mr. Shivaz Monga Executive FiveYears 2025000 Nil 1250000 Nil 696075 3971075Director w.e.f.12.08.08

Mr.Vijay Kumar Independent – Nil 40,000 Nil Nil Nil 40,000Kakkar DirectorMr.Viresh Independent – Nil 60,000 Nil Nil Nil 60,000Shankar Mathur DirectorMr. Mohammad Independent – Nil 80,000 Nil Nil Nil 80,000Tariq Raza DirectorMr.S.C. Gupta Independent – Nil 80,000 Nil Nil Nil 80,000

Director

18


Availability of Information to the Board

The Board has unfettered and complete access to any information within the Company and to any employee ofthe Company. Among others, the information regularly supplied to the Board includes

Annual Operating plans and budgets, capital budgets, and any updates thereon,

Quarterly Unaudited/ Audited results of the Company,

Information on recruitment and removal of senior officers just below the Board level,

Declaration of Dividend (Interim/ Final),

Materially important litigation, show cause, demand, prosecution and penalty notices.

Details of Subsidiaries and its updates,

Details of any joint venture or collaboration agreement,

Quarterly details of foreign exchange exposure and the steps taken by management to limit the risk ofadverse exchange rate movements.

Minutes of meetings of audit committee and other committees of the Board.

Materially Significant related party transactions

Except for drawing remuneration, none of the Directors have any other materially significant related partytransactions, pecuniary or business relationship with the Company. Attention of Members is drawn to thedisclosures of transaction with related parties set out in Notes on Accounts in Schedule 21 to the annualaccounts.

BOARD COMMITTEES

Committees appointed by the Board focus on specific areas, and take decisions within the authority delegated tothem by the Board. The committees also make specific recommendations to the Board on various matters fromtime to time. All decisions and recommendations of the committees are placed before the Board for informationor approval. Emmsons International Limited has three Board level committees:

Audit Committee

Remuneration Committee

Shareholders/ Investors Grievances Committee

Audit Committee

The Audit Committee of the company is constituted as per the provisions of clause 49 of the listing agreementand section 292A of the Companies Act, 1956. The main terms of reference of the committee, inter alia, includesthe following functions:

1. Overview the company's financial reporting process and the disclosure of its financial information toensure that the financial statement is correct, sufficient and credible.

2. Recommending the appointment, re-appointment and, if required, the replacement or removal of thestatutory auditor's and the fixation of audit fees.

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

4. Reviewing, with the management, the annual financial statements before submission to the Board forapproval, with particular reference to the

Matters required to be included in the Director's Responsibility Statement to be included in theBoard's Report in terms of clause (2AA) of section 217 of the Companies Act, 1956.

Changes, if any, in accounting policies and practices and reasons for the same.

Major accounting entries involving estimates based on the exercise of judgment by management.

Significant adjustments made in the financial statements arising out of audit findings.

Compliance with listing and other legal requirements relating to financial statements.

Disclosure of any related party transactions.

Qualifications in the draft audit report.

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5. Reviewing, with the management, the quarterly financial statement before submission to the Board forapproval.

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

7. Reviewing the adequacy of internal audit function, if any, including the structure of the internal AuditDepartment, staffing and seniority of the official heading the department, reporting structure coverage andfrequency of internal audit.

8. Discussion with statutory auditors before the audit commences, about the nature and scope of audit aswell as post-audit discussion to ascertain any area of concern.

9. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

The Audit Committee comprises of Mr. Viresh Shankar Mathur, Mr. Vijay Kumar Kakkar and Mr. Mohd. Tariq Raza withMr. Anil Monga as the permanent invitee to all the meetings. Mr. Viresh Shankar Mathur is presently the Chairman ofthe committee.The minutes of each Audit Committee meeting are placed before and discussed in the Board.

During the year under review, the Committee met four times on 29.06.2009, 28.07.2009, 23.10.2009, and07.01.2010. The attendance details of each member are given as under:

Sl. Name of Member MeetingsNo. attended

1 Mr. Viresh Shankar Mathur 3

2 Mr. Vijay Kumar Kakkar 23 Mr. Mohammad Tariq Raza 4

Remuneration Committee

a) Constitution and Terms of Reference

The Remuneration Committee is constituted as per the provisions of schedule XIII of the Companies Act,1956 and clause 49 of the listing agreement entered by the company with the Stock Exchanges. TheRemuneration Committee consists of three members. The Chairman of the Committee is Mr. Vijay KumarKakkar, Mr. V.S Mathur and Mr. Mohd. Tariq Raza are the other members of the Committee.

The Broad terms of reference of the Remuneration Committee are to review the performance of theExecutive Directors, after considering the Company's performance and recommend to the Board,remuneration including salary, perquisites and commission to be paid to the Company's Executive Directorswithin the overall ceiling approved by the Shareholders and also keeping in view the overall remunerationstructure in the industry.

During the year under review, the remuneration committee met two times on 25.05.2009, and 05.02.2010.The attendance details of each member are given as under:

Sl. Name of Member MeetingsNo. attended

1 Mr. Vijay Kumar Kakkar 1

2 Mr. V. S. Mathur 2

3 Mr. Mohammad Tariq Raza 2

b) Remuneration Policy

The Company paid sitting fee of Rs. 20,000/- per meeting to the non-executive directors for attending the meetingof the Board. The Company pays remuneration by way of salary, perquisites and allowances and commission tothe executive directors. Salary is paid with in the range approved by the shareholders. The increments, as andwhen proposed are referred to the remuneration committee, which is later on recommended to the Board towhich Board give their due approval.

Shareholders/Investors Grievances Committee

The Shareholders/Investors Grievances Committee comprises Mr. Vijay Kumar Kakkar, Mr. Anil Monga and Mr.Rajesh Monga, Directors of the company.

Name and Designation of Compliance officer:

Mr. Suvindra Kumar, Company Secretary & Compliance officer.

e-mail id: [email protected]

20


The main areas and functions looked after by Share Transfer and Shareholders/Investors Grievances Committeeis as under:

1. Redressal of shareholders and investors complaints like transfer of shares, non-receipt of Annual Report,non-receipt of declared dividends etc.

2. Consolidation and sub-division of share certificates.

3. Approving the transfer(s), transmission(s) and issue of duplicate share certificates.

During the year under review, complaints received regarding non receipt of dividend, non receipt of Annual Report,and issue of fully paid stickers etc. from shareholders/investors, which have been duly resolved.

The details of grievances received from the shareholders during the year and their status on 31st March, 2010 isgiven below:

Complaints outstanding as on April 1, 2009 Nil

Complaints received during the year ended March 31,2010 5

Complaints resolved during the year ended March 31,2010 5

Complaints outstanding as on Mrach31, 2010 Nil

The Committee also looks after the performance of Registrar & Transfer Agents of the Company.

Management

A detailed report on the Management discussion and Analysis is given separately in the Director's Report and isa part of Annual Report.

Disclosure by Management

During the year 2009-10, there were no materially significant related party transactions, i.e., transaction of theCompany of material nature, with its promoters, the Directors or the management, their subsidiaries and relativesetc. that may have potential conflict with the interest of the Company at large. Though all details relating tofinancial and commercial transactions where directors may have a potential interest are provided to the Board,and interested directors neither participate in the discussion, nor do they vote on such matters.

Attention of Members is drawn to the disclosures of transactions with related parties set out in Notes on Accountsunder Accounting Standard (AS 18), - Schedule 20, forming part of the Annual Report.

Code of Business Conduct and Ethics for Directors and Senior Management

The Company has adopted the Code of Business Conduct ethics for all directors, officers and employees of theCompany ("the Code"). This Code is a comprehensive Code applicable to all Directors, Officers and employeesof the Company. The Code while laying down, in detail, the standard of business conduct, ethics and governance,centers around the following theme-

"All Directors, Officers and employees of the Company are committed to conducting its business in accordancewith the applicable laws, rules and regulations and with highest standards of business ethics. This code isintended to provide guidance and help in recognizing and dealing with ethical issues, provide mechanisms toreport unethical conduct, and to help foster a culture of honesty and accountability. Each Director, officer andemployee is expected to comply with the letter and spirit of this Code".

A copy of the code has been put on the Company's website www.emmsons.com

The Code has been circulated to all Directors, Officers and Employees of the Company and they have affirmedthe compliance of the same.

A declaration signed by the Managing Director is given below.

"I hereby confirm that:

The Company has obtained from all directors, officers and employees, affirmation that they have complied withthe Code of Business Conduct and Ethics for Directors and Senior Management in respect of the financial year2009-2010".



21

Information required under clause 49VI A of the listing agreement executed with the stock exchange inrespect to the reappointment of Directors.

Mr. Anil Monga is a graduate and is associated with the company since its incorporation. He has to his credit vastrich and varied experience in the field of procurement and International trading of Agri Commodities. Due to theeffort of Mr. Anil Monga, the Company made good reputation in the national and international market. He holdDirectorship in PHD Chamber of Commerce apart from your company.

Mr. Rajesh Monga has been associated with the company since its incorporation. He is a graduate and havingvast, rich and varied experience of 25 years in the field of procurement and trading of Agri Commodities. Due to hiseffort, the Company has a good reputation of quality of products traded in domestic as well as internationalmarket. He does not hold any Directorship in other companies apart from your company.

Mr. Shivaz Monga he is a graduate from Swinburne University of Technology Melbourne and an MBA from CassBusiness School, London. He is associated with the company since 2006; he is responsible for trading of coalin the company, also responsible for the HR/ Admin. and the travel department of the company. Prior to Emmsonshe has worked with Emirates trading Agency LLC as export executive and KPMG as Analyst. He holds directorshipin Emmsons Gulf DMCC, Dubai and Emmsons SA. Switzerland, both are the wholly owned subsidiary of theEmmsons International Ltd.

General Body MeetingsDetails of the Extra Ordinary General Meeting and Annual General Meetings held during the last three years areas under:

Sl. Date and Year of Time of EGM/AGM Venue of EGM/AGMNo. EGM/AGM

1. 28th August, 2009 11.00 A.M. Jaypee Vasant Continental, Vasant Vihar,New Delhi-110057

2. 11th August, 2008 11.00 A.M. Jaypee Vasant Continental, Vasant Vihar,New Delhi-110057

3. 28th January, 2008 (EGM) 11.00 A.M. Rockland Inn, B-207, C.R. Park (Near NehruPlace) , New Delhi-110019

4. 11th July, 2007 11.00 A.M. Rockland Inn, B-207, C.R. Park (Near NehruPlace) , New Delhi-110019

Resolutions are generally passed on a show of hands. No resolution was put through postal ballot in the 16thAnnual General Meeting held on 28th August, 2009.

Means of Communications

a) Communication to Shareholders

All vital Information relating to the Company and its performance, including quarterly results, Annual Results,Notices of the Meetings are submitted to the Stock Exchanges on which the shares of the company arelisted and are also published in Leading English and Hindi Dailies like Business Standard. The Companyhas also posted information relating to its financial results and shareholding pattern of electronic datainformation filing and retrieval system (EDIFAR) at www.sebiedifar.nic.in till December, 2009 quarter. Suchelectronic information from March, 2010 quarter are now available on www.corpfiling.co.in, pursuant to thedeletion of Clause 51 of the Listing Agreement for EDIFAR filing, by Securities and Exchange Board of Indiavide circular No. CIR/CFD/DCR/3/2010 dated 19.04.2010. Furthermore, the copy of Annual Report consistingof Annual Accounts, Directors Report's etc. is send to every shareholder of the company by post.

b) Investor Grievance:

As mentioned before, the Company has constituted Shareholders/Investors Grievances Committee tolook after into and redress Shareholders' and Investors' Complaints.

c) Share transferThe Company has outsourced its share transfer function to M/s. Link Intime India Pvt. Ltd. which is registeredwith SEBI as category 1 Registrar and Transfer Agent.

d) Details of Non- ComplianceThere has been no instance of the Company not complying with the matters related to capital markets.

General Shareholders Information

1. Registered office of the company is situated at 2637, 1st Floor, Naya Bazar, Delhi-110 006 and the Administrativeoffice is situated at 101/12, Zamrudpur Community Centre, Kailash Colony, New Delhi- 110 048.

22


2. Financial Calendar of the company is April 1st to March 31st.3. The 17th Annual General Meeting of the Company will be held on Wednesday the 29th Day of September,

2010 at 11.00 A.M. at Niryat Bhawan, Rao Tula Ram Marg, Opp. Army Hospital Research & Referral, NewDelhi -110057.

4. The Register of members and share transfer books of the company will remain closed from Tuesday the21st Day of September, 2010 to Wednesday the 29th Day of September, 2010 (both days inclusive).

5. The company's Equity Shares are listed in The Stock Exchange Mumbai, Phiroze Jeejeebhoy Towers, DalalStreet, Mumbai. (Scrip code 532038).

6. All inquires relating to shareholders accounting records, share transfers, transmission of shares, changeof address, non-receipt of dividend, loss of share certificates etc. should be addressed to the Registrar andTransfer agent (RTA) of the Company. The address for the correspondence is:M/s Link Intime India Pvt. Ltd.A-40, 2nd Floor, Naraina Industrial Area, Phase-II,Near Batra Banquet Hall, New Delhi-110028Tel: 011-41410592, 41410594Contact Person: Mr. Bharat Bhushan

7. The RTA processes shares sent for transfer, transmission etc. every 15-20 days from the data of receiptthereof. Transfer/transmissions that are complete in all respects are processed and the certificates inrespect thereof are returned to the lodger/shareholder within 30 days of lodgement.

8. Till 31st March 2010, 46,17, 376 Equity Shares (90 % of the equity capital of the company) were dematerialized.

DEMAT POSITION AS ON 31 .03 .2010

N S DL, 74.15 %

CDS L , 15 .5 4%

P HYS ICA L, 10.31 %

9. Details of Share Capital of the company as on 31st March, 2010 is as under :Authorized Capital : Rs. 15, 00, 00,000/-Issued and Subscribed Capital : Rs. 5, 14, 80,200/-Paid Up Capital : Rs. 5, 14, 80,200/-

10. Performance in comparison to Broad Based indices, Comparison with BSE Sensex :-

Month Share price (in Rs.) SensexHighest Lowest Highest Lowest

April 53.95 36.10 11492.10 9546.29May 59.25 37.25 14930.54 11621.30June 79.25 55.50 15600.30 14016.95July 70.40 44.30 15732.81 13219.99August 73.65 57.85 16002.46 14684.45September 93.90 71.20 17142.52 15356.72October 85.75 67.60 17493.17 15805.20November 76.45 60.00 17290.48 15330.56December 86.95 68.25 17530.94 16577.78January 104.00 79.00 17790.33 15982.08February 89.80 76.30 16669.25 15651.99March 95.00 70.00 17793.01 16438.45

23

11. Our Stock Performance:

S tock Pe rformance

20

30

40

50

60

70

80

90

100

110

Apr

May

June

July

Aug

Sep

Oct

Nov

Dec Ja

nFeb

Marc

h

F.Y 2009-10

Clo

sin

gS

toc

kP

ric

ein

Rs.

(at

BS

E)

High Low

12. Sensex Movement :

SENSEX

9,0 0 0

1 0,0 0 0

1 1,0 0 0

1 2,0 0 0

1 3,0 0 01 4,0 0 0

1 5,0 0 0

1 6,0 0 0

1 7,0 0 0

1 8,0 0 01 9,0 0 0

Apr

May

June

JulyAug

Sep

Oct

Nov

Dec Jan

Feb

Mar

ch

F.Y-2 00 9 -10

Se

ns

ex

Mo

ve

me

nt

H ig h L o w

13. Distribution of Shareholding as on 31st March, 2010 :

Range Folio SharesNo. of Shares Number % age Number % age

Up to 2500 1950 91.8080 626341 12.1667

2501-5000 63 2.9661 242980 4.7199

5001-10000 48 2.2599 371944 7.2250

10001-20000 21 0.9887 305453 5.9334

20001-30000 12 0.5650 311209 6.0452

30001-40000 9 0.4237 321996 6.2548

40001-50000 5 0.2354 233273 4.5313

50001-100000 13 0.6120 884544 17.1822

100001 and Above 3 0.1412 1850280 35.9415

Total 2124 100.0000 5148020 100.0000

24


AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCETo the Members ofEmmsons International Limited

We have examined the compliance of conditions of Corporate Governance by Emmsons International Ltd., for theyear ended on 31st March, 2010, as stipulated in Clause 49 of the Listing Agreement of the said Company withStock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examinationhas been limited to a review of the procedures and implementation thereof adopted by the company for ensuringcompliance with the conditions of the Corporate Governance as stipulated in the said Clause. It is neither anaudit nor an expression of opinion on the financial statement of the company.

In our opinion and to the best of our information and according to the explanations given to us, and based on therepresentations made by Directors and the Management, we certify that the company has complied with theconditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.

As required by the Guidance note issued by the Institute of Chartered Accountants of India we have to state that noinvestor grievances were pending for a period of one month against the Company as per the records maintainedby the shareholder/investor's Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the company nor of theefficiency or effectiveness with which the management has conducted the affairs of the company.

For SURESH & ASSOCIATES FRN: 003316N

Chartered Accountants

Sd/-Dated : 17.08.2010 (CA Narendra Arora)Place : New Delhi Partner

M. NO. 088256

CEO/CFO CERTIFICATIONToBoard of DirectorsEmmsons International Limited

(a) We have reviewed financial statements and the cash flow statement for the year and that to the best of ourknowledge and belief:

(i) These statements do not contain any materially untrue statement or omit any material facts orcontain statements that might be misleading;

(ii) These statements together present a true and fair view of the company's affairs and are in compliancewith existing accounting standards, applicable laws and regulations.

(b) There are, to the best of their knowledge and belief, no transactions entered into by the company during theyear which are fraudulent, illegal or violative of the company's code of conduct.

(c) We accept responsibility for establishing and maintaining internal controls and that we have evaluated theeffectiveness of the internal control systems of the company and we have disclosed to the auditors and theAudit Committee, deficiencies in the design or operation of internal controls, if any, of which we are awareand the steps we have taken or propose to take to rectify these deficiencies.

(d) We have indicated to the auditors and the Audit Committee:

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

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

(iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, ofthe management or an employee having a significant role in the company's internal control systemover financial reporting.

Sd/- Sd/-Date : 17.08.2010 ANIL MONGA HAMANT PAULPlace : New Delhi (Managing Director) G. M. (Finance)

25

AUDITOR’S REPORT

ToThe Members ofM/s. EMMSONS INTERNATIONAL LIMITED

1. We have audited the attached Balance Sheet of EMMSONS INTERNATIONAL LIMITED (the Company) as at31st March, 2010 and also related Profit and Loss Account and the Cash Flow Statement for the year ended onthat date annexed thereto. These financial statements are the responsibility of the Company's management.Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with the auditing standards generally accepted in India. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial 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 includesassessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor'sReport)(Amendment) Order 2004 (together the "Order") issued by the Central Government of India in termsof sub-section (4A) of section 227 of the Companies Act 1956 of India ("the Act") and on the basis of suchchecks of books and records of the Company as we considered appropriate and according to informationand explanations given to us, we enclose in the Annexure a statement on the matters specified inparagraphs 4 and 5 of the said Order.

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

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief werenecessary for the purpose of our audit ;

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

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement, dealt with by this report, are inagreement with the books of account ;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement, dealt with by thisreport, comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act;

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, the saidfinancial statements together with notes thereon and attached thereto, give the information required by theAct, in the manner so required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

(a) in the case of the balance Sheet, of the state of affairs of the Company as at 31st March, 2010

(b) in the case of the Profit and Loss Account, of the profit for the year ended on that date and

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

For SURESH & ASSOCIATESFRN: 003316NChartered Accountants

Sd/-(CA Narendra Arora)PartnerM. No. 088256Dated : 17.08.2010Place : New Delhi

26


ANNEXURE TO AUDITOR’S REPORTReferred to Paragraph 3 of our report of even date attached

I a) The Company is maintaining proper records showing full particulars, including quantitative detailsand situation of the assets.

b) According to information and explanation given to us, the fixed assets of the Company have beenphysically verified by the management at reasonable intervals during the year. No materialdiscrepancies have been noticed on such verification

c) In our opinion and according to the information and explanations given to us, there was no substantialdisposal of fixed assets by the Company during the year.

II a) As explained to us, the inventory has been physically verified by the management at reasonableintervals during the year. In our opinion, the frequency of such verification is reasonable consideringsize and nature of the business.

b) In our opinion and according to information and explanation given to us, the procedures of physicalverification of inventory, followed by the management, are reasonable and adequate.

c) On the basis of our examination of the inventory records, in our opinion, the Company is maintainingproper records of inventory and no material discrepancies as compared to book records werenoticed on physical verification.

III We are informed that the Company has not granted or taken unsecured loans from the entities covered inthe register maintained under Section 301 of the Act.

IV In our opinion and according to information and explanation given to us, there are adequate internal controlprocedures commensurate with the size of the Company and nature of its business for purchase ofinventory and fixed assets and sale of goods. Further, on the basis of our examination of the books andrecords of the Company, and according to information and explanations given to us, we have not observedany continuing failure to correct major weaknesses in the aforesaid internal control system.

V a) In our opinion and according to information and explanation given to us, the particulars of contractsor arrangements referred to in section 301 of the Act that need to be entered in the register requiredto be maintained under that section have been so entered.

b) In respect of the transactions made in pursuance of such contracts or arrangements and exceedingvalue Rupees Five Lacs in respect of any party during the year, because of the absence of thecomparable prices and variation in the quality of the goods involved, we are unable to commentwhether the transactions were made at prevailing market prices at the relevant time.

VI In our opinion and explanation given to us, the Company has not accepted any deposit from the publicwithin the meaning of sections 58A and 58AA of the Act and rules framed there under.

VII In our opinion, the Company has an internal audit system commensurate with the size and nature of itsbusiness.

VIII To the best of our knowledge and as explained, the maintenance of the cost records have not beenprescribed by the Central Government under section 209(1)(d) of the Act, for any of the products of theCompany.

IX a) According to the information and explanations given to us and the records of the Company examinedby us, in our opinion, the Company is regular in depositing the undisputed statutory dues includingprovident fund, employee's state insurance, Income Tax, VAT, Sales Tax, Wealth Tax, Service Tax,Custom Duty, Cess and other statutory dues as applicable with appropriate authorities.

b) There are no disputed liabilities in respect of PF, ESI, Income Tax, Sales Tax, Wealth Tax CustomDuty, Excise Duty, Cess and other statutory dues which are outstanding as at 31st March, 2010except following liabilities:

S. No. Period of demand Amount Involved Particulars of demand Appeal Pending Before

1 AY 2004-05 Rs. 1.67 lacs Demand under Income Tax Act CIT (Appeals)- , New Delhi 2 AY 2004-05 Rs. 6.92 lacs Demand under Income Tax Act CIT (Appeals)-, New Delhi

27

X There are no accumulated losses of the Company as at 31.03.2010. The Company has also not incurredany cash losses during the financial year ended on that date and in the immediately preceding financialyear.

XI As per explanation and information provided to us, the Company has not defaulted in repayment of dues toany financial institution and banks as at the balance sheet date.

XII According to the information and explanations given to us and based on the documents and recordsproduced to us, the Company has not granted loan and advances on basis of security by way of pledge ofshares, debentures, other securities.

XIII The provisions of clause (xiii) are not applicable to the Company.

XIV As per information given to us, Company is not dealing or trading in shares, securities, debentures andother investments.

XV In our opinion and according to the information and explanations given to us, the Company has givenguarantee for loans taken by others from banks or financial institutions and terms and conditions whereofare not prejudicial to the interest of Company.

XVI In our opinion and according to information given to us, term loan availed by Company were prima facieapplied by Company during the year for the purpose for which they were obtained.

XVII As per information and explanation given to us and overall examination of balance sheet of the Company,we report that funds raised on short term basis have prima facie not being used for long term investmentand vice versa.

XVIII As per information and explanation given to us the Company has not made any preferential allotment to theparties and companies covered in the register maintained under section 301 of the Companies Act.

XIX As per information and explanation given to us the Company has not issued any debentures and nosecurity has been created against the debentures.

XX As per the information and explanation given to us, the company has not raised money by public issueduring the year ending 31.03.2010

XXI Based upon the audit procedures performed for the purpose of reporting the true and fair view of thefinancial statements and as per information & explanation given to us by the management, we report thatno fraud on or by the company has been noticed or reported during the year.

For SURESH & ASSOCIATESFRN: 003316NChartered Accountants

Sd/-(CA Narendra Arora)PartnerM. No. 088256

Dated : 17.08.2010Place : New Delhi

28


BALANCE SHEET AS AT 31ST MARCH, 2010

P A R T I C U L A R S SCHEDULE As At As At31 March, 2010 31 March, 2009

Rs. Rs.

I. SOURCES OF FUNDSShareholders Funds(a) Share Capital 1 51480200 51480200(b) Equity Warrants 2

–Party Paid up Equity Warrants – 19500000(c) Reserves and Surplus 3 622904453 485270056Deferred Tax Liability 2482741 2542407Loan Funds(a) Secured Loans 4 1617434083 1312453276(b) Unsecured Loans 5 43413493 –

TOTAL 2337714971 1871245939

II. APPLICATION OF FUNDSFixed Assets 6(a) Gross Block 103676459 88267607(b) Less: Depreciation 22215531 17933677

Net Block 81460928 70333930

Capital Work in Progress 4875629 –Investments 7 64697524 35712834Current Assets, Loans & Advances(a) Inventories 8 1891444925 1201562294(b) Sundry Debtors 9 506734870 457738954(c) Cash and Bank balances 10 123214931 58571883(d) Loans and Advances 11 1149464886 1213500797

3670859612 2931373928

Less:Current Liabilities & Provisions(a) Current Liabilities 12 1410478028 1135518083(b) Provisions 13 73700695 30656670

1484178722 1166174753

Net Current Assets 2186680889 1765199175

TOTAL 2337714971 1871245939

SIGNIFICANT ACCOUNTING POLICIES ANDNOTES ON ACCOUNTS 21

As per our separate report of even date attached

For SURESH & ASSOCIATES For and on behalf of BoardFRN: 003316NChartered Accountants

Sd/- Sd/- Sd/- Sd/- Sd/-(CA NARENDRA ARORA) (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA)Partner GM - Finance Company Secretary Director Managing DirectorM. No. 088256Date : 17th August, 2010Place : New Delhi

29

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

P A R T I C U L A R S SCHEDULE As At As At31 March, 2010 31 March, 2009

Rs. Rs.

INCOMESales of Products and other income 14 6932285923 6553005344

TOTAL 6932285923 6553005344

EXPENDITURECost of Goods Sold 15 6065083884 5478252136Direct Expenses 16 343649285 740932466Office and Administrative Expenses 17 80920321 62519461Financial Charges 18 208410841 130214999Selling & Distribution Expenses 19 6781208 9028834Other Expenses 20 21128784 21185199

TOTAL 6725974323 6442133096

Profit before Depreciation 206311600 110872248Depreciation 4997021 4617645Profit before Taxation 201314579 106254603Provision For Taxation 71651028 39220004Provision for Fringe Benefit Tax – 1535316Provision for Deferred Income Tax Liability/(Asset) (59666) 1631384(Tax effect of timing differences during the year)Profit after Taxation 129723217 63867899Balance of Profit brought Forward from Previous Years 181935056 138264331Less/(Add): Short/ (Excess) Provision of Income Tax for earlier Years (457033) 4174248

Balance Available for Appropriation 312115305 197957982

APPROPRIATIONSTransfer to General Reserve 14000000 10000000Proposed Dividend 10296040 5148020Tax on Dividend 1749812 874906Surplus Carried Forward 286069453 181935056

312115305 197957982

EARNINGS PER SHARE (RS.)Basic 25.20 12.41Diluted 25.20 12.41





30


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010(Rs. In ̀ 000) (Rs. In ̀ 000)Year ended Year ended

31st March, 10 31st March, 09A. CASH FLOW FROM OPERATING ACTIVITIES :

Net Profit/(Loss) before taxation and extraordinary items 201315 106255Adjustment for :(Profit)/Loss on sale of fixed assets 648 350Depreciation 4997 4618Foreign exchange (Gain)/Loss 0 130150Discarding of assets 67 2FCTR Written off 0 (12494)(Profit)/Loss on sale of Investment 3768 1499Dividend income (88) (103)Interest Expenses 201611 124471OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 412319 354748Adjustment for :

(Increase)/Decrease in Sundry Debtors & other receivables 15040 (806157)(Increase)/Decrease in Inventories (689883) (663615)Increase/(Decrease) in Sundry Creditors & other payables 278181 826961

Cash generated from operations 15657 (288063)Direct Tax Paid 37394 (49396)Interest paid 0 (128744)

Cash flow before extraordinary items (21737) (466203)Extraordinary items 0 0

NET CASH FROM OPERATING ACTIVITIES (21737) (466203)B. CASH FLOW FROM INVESTING ACTIVITIES :

Purchase of fixed assets (19683) (16270)Sale of fixed assets 2843 93Investment in Others (20927) (25027)Capital WIP (4876) –Investment in Subsidiaries (37606) (2706)Sale of Investments 25780 15714Dividend received 88 103NET CASH USED IN INVESTING ACTIVITIES (54380) (28093)

C. CASH FLOW FROM FINANCING ACTIVITIES :Proceeds from Equity Share Warrants (Application Money) 0 (250)Net Proceeds from long term borrowings 304981 (33778)Net Proceeds from short term borrowings 43413 618707Interest Paid (201611) 4273Dividend paid (6023) (12046)NET CASH USED IN FINANCING ACTIVITIES 140760 576906Net increase in cash and cash equivalents 64643 82610Opening cash and cash equivalents balance (See Note) 58572 (24038)Closing cash and cash equivalents balance (See Note) 123215 58572

Note to the cash flow statementCash and Cash EquivalentsCash and cash equivalents included in the cash flow statementcomprise the following balance sheet amounts.- Cash in hand and balances with banks 76386 8015- Margin with Bank and Accrued Interest 46829 50557- Cash and cash equivalents as restated 123215 58572

For and on behalf of BoardSd/- Sd/- Sd/- Sd/-

(HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA)GM - Finance Company Secretary Director Managing Director

As per our separate report of even date attachedFOR SURESH & ASSOCIATESFRN: 003316NCHARTERED ACCOUNTANTSSd/-(CA NARENDRA ARORA)PartnerMembership No. 088256Date : 17.08.2010Place : New Delhi

31

SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010

P A R T I C U L A R S As At As At31 March, 2010 31 March, 2009

Rs. Rs.

SCHEDULE 1 : SHARE CAPITALAUTHORISED15000000 Equity Shares of Rs 10 each 150000000 150000000

(Previous Year 15000000 Equity Shares of Rs. 10/- each)ISSUED, SUBSCRIBED, CALLED AND PAID UP5148020 Equity shares of Rs 10 each 51480200 51480200

(Previous Year 5148020 Equity Shares of Rs. 10/- each)51480200 51480200

SCHEDULE 2 : EQUITY WARRANTSPartly Paid up Convertible Equity Warrants 19500000(Paid up Money @ Rs 25 per equity warrant against 780000equity warrants of Rs 10 each issued at premium of Rs 240/- eachConvertible in to equity share of Rs. 10/- each at a premium of Rs.240/-)

– 19500000SCHEDULE 3 : RESERVES AND SURPLUSGeneral Reserve 124000000 110000000Capital Reserve 23451000 3951000Security Premium Account 189384000 189384000Profit and Loss Account 286069453 181935056

622904453 485270056SCHEDULE 4 : SECURED LOANSa) Long Term Secured Loan

Vehicle Loans from ICICI Bank 2992513 7910567(Secured against hypothecation of Cars)

Vehicle Loans from Kotak Mahindra Prime Limited 2593293 –(Secured against hypothecation of Cars)

Vehicle Loans from Tata Capital Ltd. 554676 902406(Secured against hypothecation of Cars)

Working Capital Term Loan from Indian Overseas Bank – 10000000(Secured against the personal gurantees of Directors ,equitable mortgage of properties of the company andthe Directors of the Company)Sub Total (a) 6140482 18812972

b) Short Term Secured LoanPacking Credit with Oriental Bank of Commerce 614079856 423481278(Secured against hypothecation of Stocks and advances,equitable, mortgage of Properties and Personalguarantees of Directors)

Packing Credit with Indian Overseas Bank 262640008 182412929(Secured against hypothecation of Stocks and advances,equitable, mortgage of Properties and Personalguarantees of Directors)

Packing Credit with Canara Bank – 154324014(Secured against hypothecation of Stocks,equitableMortgage of Properties and Personal guarantees of Directors)

Packing Credit with Indian Bank – 79789083(Secured against hypothecation of Stocks,equitableMortgage of Properties and Personal guarantees of Directors)

Packing Credit with Allahabad Bank 216735049 –(Secured against hypothecation of current assets ,equitableMortgage of Properties and Personal guarantees of Directors )

PCFC with Standard Chartered Bank 444658500 453633000(Secured against hypothecation of current assets ,equitableMortgage of Properties and Personal guarantees of Directors )

Buyer's Credit from Oriental Bank of Commerce 38954958 –(Secured against hypothecation charge over the goods,equitable mortgage of Properties and Personal guaranteesof Directors )

Buyer's Credit from Indian Overseas Bank 34225230 –(Secured against hypothecation charge over the goods,equitable mortgage of Properties and Personalguarantees of Directors )

Sub Total (b) 1611293601 1293640304Total (a + b) 1617434083 1312453276

SCHEDULE 5 : UNSECURED LOANSPurchase Bill Finance from Standard Chartered Bank 43413493

43413493 –

32




Rs. Rs.

SCHEDULE 7 : INVESTMENTS

–Investment in Subsidiary 41070980 3464600 Emmsons SA (99999 equity Shares of CHF 10/- Each fully paid up)

(Previous year 9999 equity Shares pf CHF 10/- Each fully paid up) Emmsons Gulf DMCC (4 Shares of 2706064 2706064 AED 50000/- Each fully paid up)–Others Fully Paid up Quoted equity shares 12147480 20769170 Fully Paid up Unquoted equity shares 8773000 8773000

64697524 35712834

SCHEDULE 8 : INVENTORIES(As taken, Valued and Certified by the management)

Trade Stock 1826568703 1133370873Packing Material 19170718 30575665Goods in Transit 45705504 37615756

1891444925 1201562294

SCHEDUILE 6 : FIXED ASSETS

GROSS BLOCK DEPRICIATION NET BLOCKP A R T I C U L A R S As At Addi t ion Deduction/ As At As At For the Deduction/ As At As At As At

01.04.2009 During the Adjustments 31.03.2010 01.04.2009 Period Adjustments 31.03.2010 31.03.2010 31.03.2009Period

Land 8697900 – 2387672 6310228 – – – – 6310228 8697900

Building 25515262 14802631 – 40317893 1126757 554125 – 1680882 38637011 24388505

Plant & Machinery 755381 39565 – 794946 327935 36522 – 364457 430489 427446

Furniture & Fixture 5282739 397521 – 5680260 1798490 340079 – 2138569 3541691 3484249

Vehicles 33761514 3475029 1886071 35350472 8615102 3188048 715167 11087983 24262489 25146412

Computers 4607094 599570 – 5206664 4365638 373846 – 4739484 467180 241456

Office Equipments& Fittings 8511569 368279 – 8879848 1583116 442202 – 2025318 6854530 6928453

Generator 978848 – – 978848 59920 46496 – 106416 872432 918928

WebsiteDevelopment Charges 151900 – – 151900 55052 15190 – 70242 81658 96848

Trade Mark 5400 – – 5400 1667 513 – 2180 3220 3733

TOTAL (Current Year) 88267607 19682595 4273743 103676459 17933677 4997021 715167 22215531 81460928 70333930

TOTAL(Previous Year) 51102480 38092523 927396 88267607 13797928 4617645 481896 17933677 70333930 37304552

33



Rs. Rs.

SCHEDULE 9 : SUNDRY DEBTORS

Considered goodOutstanding for a period exceeding six months 52970234 86475194

Other Debts 446097059 364968878

Considered doubtful 7667577 6294881

506734870 457738954

SCHEDULE 10 : CASH AND BANK BALANCES

Cash in Hand 1247779 1933134Balances with Schedule Banks

-Current accounts 74575163 5442595

-EEFC accounts 563091 639035

-Margin Money deposits 46196259 49101715

-Accrued Interest on deposits 632639 1455404

123214931 58571883

SCHEDULE 11 : LOANS AND ADVANCESAdvances recoverable in cash or inKind or for Value to be received 1130672727 1199755854

Security Deposits 18792158 13744943

1149464886 1213500797

SCHEDULE 12 : CURRENT LIABILITIES

Sundry Creditors 1365372985 857614474

Other Liabilities 45105043 277903609

1410478028 1135518083

SCHEDULE 13 : PROVISIONS

Provision for Income Tax 52688058 18500000

Provision for Wealth Tax 151028 148429

Provision for Gratuity 5976378 5594999

Provision for Leave Encashment 2839379 –

Provision for FBT – 390316

Provision for Proposed Dividend 10296040 5148020

Provision for Dividend Distribution Tax 1749812 874906

73700695 30656670

34




Rs. Rs.

SCHEDULE 14 : SALES AND OTHER INCOME

Sale of Products

Domestic 2888590997 1753040865

Exports 3498236222 4999081733

6386827219 6752122598Difference in Exchange 119664731 (30340925)

Export Incentives received 89054989 337536435

Discount Received 18675739 17726374

Other Incomes 153485 12453410

Forward Contract Forex Gain/ (Loss) 315843411 (538446009)

Receipt from Hotel Booking 2066349 1953462

6932285923 6553005344

SCHEDULE 15 : COST OF GOODS SOLD

Opening Stock 1201562294 537946918

Add: Purchases 6754966515 6141867512

Less: Closing Stock 1891444925 1201562294

6065083884 5478252136

SCHEDULE 16 : DIRECT EXPENSES

Brokerage and Commission 9999377 9153829

Detention, Demurrage & Claim 12572957 3470711

Forward Contract Commodity loss 6125666 6538263

Contract Settlements 15962201 4194192

Corporation / Export Cess 586501 2015920

Final Discharge Shortage – 13507786

Freight & Cartage 216738208 629110202

Fumigation & Phyto Expenses 7717664 7006454

Godown,Ground Rent & Storage 43168463 25670721

Inspection Charges 6811847 5615197

Packing Charges 2714991 8250160

Insurance 11380598 9270479

Port Charges 7623916 14103806

Processing/Sotex Charges 147736 1598653

Survey Fees 232322 45191

Hotel Booking Charges 1866839 1380903

343649285 740932466

35



Rs. Rs.

SCHEDULE 17 : OFFICE & ADMINISTRATIVE EXPENSESElectricity & Water Expenses 1194878 956661Gratuity 381379 (503152)Managerial Remuneration 18358294 11396558Postage and Telegram 565335 363048Printing,Stationery, Periodicals & Books 1113374 1097538Rent & Taxes 1523347 1092434Repairs and Maintenance 3178226 1763871Retainership & Consultancy Charges 793125 822500Salary and other amenities 30688079 23435867Telephone Expenses 3762743 2836458Travelling Expenses(including Foreign Travel) - Directors 5765042 5546999 - Others 11436083 11575325Vehicle Repair & Maintenance Expenses 2160415 2135354

80920321 62519461

SCHEDULE 18 : FINANCIAL CHARGESBank Charges & Interest 207602990 135980229ECGC Premium Indirect 6799642 5744385Other Interest 751535 1129028

215154167 142853641Less: Interest received 6743327 12638642

208410841 130214999

SCHEDULE 19 : SELLING & DISTRIBUTION EXPENSESAdvertisement and Publicity 752598 1016702Business Promotion 3179376 1636838Documentation Charges 308735 434118Discount Allowed 2476194 2506546Balance Written off 64304 3434630

6781208 9028834

SCHEDULE 20 : OTHER EXPENSESAuditor Remuneration 551500 468775Festival Celebration 901877 2600Insurance Claim Written off 5903912 –Stamping & Filling Fees 481143 983089Legal and Professional Charges 6961999 16643128Licence & Registration Fees 1672291 332766Loss on Sale of Fixed Assets 647909 350047Meeting & Seminar Expenses 384332 400061Membership Fees and Subscriptions 1880006 530417Miscellanious Expenses 1244093 1238210Security Transaction Tax 239723 56105Sitting Fee 260000 180000

21128784 21185199

36


SCHEDULE 21 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

I. SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF ACCOUNTINGThe Financial Statements have been prepared to comply with the Mandatory Accounting Standards issued by TheInstitute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956. The FinancialStatements have been prepared under the historical cost convention on accrual basis. The Accounting Policieshave been consistently applied by the Company unless otherwise stated.

2. REVENUE RECOGNITIONThe accrual basis of accounting has been followed in respect of income and expenditure. Sales figures are net ofsales tax. The Export Sale is recognized at the time of issuance of Bill of Lading.

3. ACCOUNTING FOR TAXES ON INCOMEThe Deferred tax expense or benefit is recognized on timing differences being the difference between taxableincomes and accounting incomes that originate in one period and are capable of reversal in one or more subsequentperiods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enactedor substantively enacted by the balance sheet date.

4. FOREIGN CURRENCY TRANSACTIONS

(i) Foreign Currency transactions during the year are recorded at the rate of exchange prevailing on the date oftransaction. Foreign Currency monetary assets and liabilities are translated into Rupees at the rate of exchangeprevailing on the date of the Balance Sheet except investment in shares of subsidiary company which hasbeen carried at historic cost. All Exchange differences are dealt with in the Profit and Loss Account except forinvestment in overseas subsidiary. Foreign Currency monetary items are reported using the closing rate.

(ii) Where the company has entered into forward exchange contracts, the difference between the forward rateand spot rate at the date of the contract is recognized in the statement of the profit and loss over the life of thecontract and difference between the spot rate at the date of contract and the exchange rate prevailing on thebalance Sheet date is recognized as per Accounting Standard (AS) -11 (Revised) issued by the Institute ofChartered Accountants of India. Any Profit or Loss arising on cancellation or renewal of forward exchangecontract is recognized as Income or as expenses for the year.

5. FIXED ASSETSFixed Assets are stated at cost less accumulated depreciation. The company has capitalized all costs relating toacquisition and installation of fixed assets.

6. DEPRECIATIONDepreciation on fixed assets is provided using straight-line method at the rates and in the manner prescribed inSchedule XIV of the Companies Act, 1956, except on intangible assets, which are not specified in the aboveschedule. Depreciation on intangible assets has been provided in compliance of Accounting Standard AS-26.

7. INVENTORIESItems of Inventories are valued at cost or net realizable value, whichever is lower.

8. RETIREMENT BENEFITSLiability of Gratuity at retirement/cessation and Leave Encashment is provided for based on valuations, as at theBalance Sheet date, made by independent actuaries as per Accounting Standard (AS)-15 (Revised) issued by theInstitute of Chartered Accountants of India.

9. EXPORT BENEFITS/ INCENTIVES Export Entitlements in respect of the exports made under various scheme are recognized in the Profit and Loss

Account when the right to receive credit as per the terms of the Schemes are established.

10. EARNINGS PER SHAREBasic Earnings per share are calculated by dividing the net profit or loss for the period attributable to equityshareholders by the weighted average number of equity shares outstanding during the period. Diluted Earnings pershare are not different from basic earning per share.

11. RECOGNITION OF PRIOR PERIOD ITEMSPrior period expenses and incomes below Rs.15000/- are treated as current year's expenses / incomes.

37

II. NOTES ON ACCOUNTS

1. Previous year's figures have been regrouped, rearranged, reworked and reclassified wherever necessary tomake them comparable with corresponding figures of current year .

2. Figures have been rounded off to the nearest rupee. Figures in bracket indicate negative balances.3. The loans and advances include the following :-

CURRENT YEAR PREVIOUS YEAR(Rs. in Lacs) (Rs. in Lacs)

a) Amount due by firms and companies, in whichdirectors are interested :Due at the end of the year NIL NILMax. Outstanding during the year NIL NIL

b) Amount due from Subsidiary at the end of the year 3256 2812Max. Outstanding during the year 3734 2812

c) Dues from Directors :Due at the end of the year NIL NILMax. Outstanding during the year NIL 400

4. FORFEITER OF EQUITY WARRANTS :During the Financial Year 2008-09, the company had allotted to the promoter's group on preferential basis 780000Equity warrants at the rate of Rs. 250/- per equity warrant convertible into 780000 Equity Shares of Rs. 10/- eachat a premium of Rs. 240/- per share against payment of Rs. 25/- per warrant in terms of approval received from TheBombay Stock Exchange Limited. For non receipt of balance amount Company has forfeited all 780000 EquityWarrants during the year and amount of Rs.19500000/- received alongwith application has been transferred toCapital Reserve Account.

5. CALCULATION OF DEFERRED TAX :PARTICULARS Amount in Rs.WDV of Fixed Assets As per Books 81460928WDV of Fixed assets As per Depreciation Chart under Income Tax Act 65340843Difference in the value of fixed assets due to higher allowance of depreciationUnder Income Tax Act. 16120085Provision made for Gratuity 5976378Provision for Leave Encashment 2839379Disallowance of late payment of TDS u/s 40(a)(i) –Net amount of income on which deferred tax is provided 7304328Tax @ 30% 2191298Add: Surcharge 219130Education Cess 72313Total Deferred Tax Liability 2482741Less: Deferred Tax Liability created in earlier years 2542407NET Deferred Tax Assets provided during the year -59666

6. WEALTH TAX :The provision of taxable wealth has been made as per the provisions of the Wealth Tax Act, 1957.

7. INCOME TAX :Provision for Income Tax has been made as per the provisions of Income Tax Act, 1961.

8. Balances of Debtors, Creditors, Loans and advances are subject to Confirmation. The debtors include an amountof Rs. 43.19 Lacs (Previous year: Rs. 43.19 Lacs), for which the company had obtained a decree against StateBank of India and Unialchem Fertilizer Limited. The execution of Decree is in abeyance as the State bank of India hasfiled an appeal in the Supreme Court of India .The management is confident of recovering the amount after thedisposal of at the appeal and the amount is considered good for recovery.

9. A sum of Rs. 580.39 Lacs (Previous Year Rs. 580.39 lacs) paid by the company to Food Corporation of India andothers against purchases of rice and wheat on account of arbitrary price increase by FCI in violation of itscontractual obligation with the company, has not been treated as part of purchase cost for the concerned financialyear and the same is shown under Loans and advances. Company is taking all remedies for recovery for saidamount in accordance with legal opinion obtained by the company.

38


10. The Company has entered into agreement of purchase of semi finished flat and has spent Rs. 48.75 lacs onconstruction and shown under the head Capital work in progress. Future expenses to be incurred on said flat areestimated at Rs. 25 lacs.

11. SUITS FILED AGAINST THE COMPANY :

(I) Legal suit filed by owner of vessel hired by the company which received minor damage on transportation ofgoods has been finally settled. A sum of Rs. 47.00 lacs was provided in earlier year and rest of the amount hasbeen charged to Profit & Loss Account.

(II) The company has entered an arbitration suit against the Punjab State Warehousing Corporation. The arbitrationtribunal has issued its award. However, both the parties have filed separate applications in the court withrequests for setting aside the award. The case is still in progress and as such quantification of any liability orrecovery, if any, is not possible, hence no provision for the same has been made. However, the company isfairly confident of its position and expects to get a favorable judgment in the case.

(III) The company has entered an arbitration suits against the Mawana Sugar Ltd for not lifting of Sugar on accountof Government ban on sugar. Claims and counter claims have been filed by both the parties before thearbitrators. The company expects to settle the dispute soon.

(IV) The Olympia Spinning & Weaving Mills Ltd. Pakistan has commenced arbitration proceeding against Companyfor recovery of alleged claim on account of non supply of cotton. The company has contested the claim thatthe contract was cancelled as a result of default of Olympia. The company has filed the appeal, the same is stillin progress and as such quantification of any liability or recovery, if any, is not possible, hence no provision forthe same has been made. However, the company is fairly confident of its position in the case and expects toget a favorable award in the case.

12. MANAGERIAL REMUNERATION

CURRENT YEAR PREVIOUS YEARRs. Rs.

a) Remuneration to Managing DirectorSalary 3000000 3000000Bonus 375000 750000Perquisites 204119 29629Commission 7480000 2000000

11059119 5779629

b) Remuneration to Whole time DirectorSalary 2400000 2400000Bonus 300000 600000Perquisites Nil NilCommission 1250000 1000000

3950000 4000000

c) Remuneration to Executive DirectorSalary 1800000 1146774Bonus 225000 450000Perquisites 696075 428007Commission 1250000 Nil

3971075 2024781

Total Managerial Remuneration 18980194 11804410

Computation of Net Profit u/s 198 read with Section 349of the Companies Act, 1956 for calculation of commissionPayable to Directors

Net Profit 201314579Add : a) Director’s Remuneration 18980194

b) Sitting Fees 260000c) Loss on Sale of fixed assets 647909

Adjusted Net Profit as per section 349 of the Companies Act, 1956 221202682

Permissible Remuneration to Whole Time Directors 22120268Permissible Remuneration to Managing Director 11060134

39

13. AUDITOR’S REMUNERATION :CURRENT YEAR PREVIOUS YEAR

As Statutory Auditors 330900 248175Taxation Matters 110300 110300Tax Audit Fee 66180 66180Limited Review Audit 44120 44120Company Law matters – –

Total 551500 468775

14. SEGMENT REPORTING :Segment reporting as per AS-17 is not applicable to the company as it does not have any reportable segment.

15. Disclosure of Sundry Creditors under current Liabilities is based on the information available with the Companyregarding the status of the suppliers as defined under the Micro, Small and Medium Enterprises Development Act,2006. Amounts due as on 31st March, 2010 to Micro, Small and Medium Enterprises on account of principal amounttogether with Interest, aggregate to Rs. Nil. (Previous Year: Rs. NIL).

16. Contingent Liabilities not provided for : (Amounts Rs. In Lacs)a) Guarantees to sales tax authorities : 5.90 (Previous year 5.90)b) Corporate Guarantees for Credit facilities to subsidiary : 2893.50 (Previous year Nil)c) Letter of Credit issued for purchases : 862.50 (Previous year 21.23)d) Other Guarantees : 827.43 (Previous year 160.26)e) The Entry Tax demands Rs. 11.43 lacs raised by the authorities have been protested by the company and final

determination is yet to be made by the appellate authorities. The company has however made the paymentagainst these demands under protest and the same is included in the list of Loans and advances. In the eventcase is finally decided against the Company the said amount of Rs. 11.43 Lacs shall be required to be chargedas an expense to Profit & Loss account.

f) Tax Demands totaling Rs. 8.60 Lacs raised by the Income Tax Department is being contested by the Companyin appeal. No provision has been made for the liability in the accounts under report.

17. RELATED PARTIES DISCLOSURES:As required by Accounting Standard-18, “Related Party Disclosures” issued by the Institute of Chartered Accountantsof India, relevant information is provided here below:Related parties with whom transactions have taken place during the year :S.NO. NAMES RELATIONSHIP

A Mr. Anil Monga Key Managerial PersonnelB Mr. Rajesh Monga Key Managerial PersonnelC Mr. Shivaz Monga Key Managerial PersonnelD Mr. Vijay Kumar Kakkar Key Managerial PersonnelE Mr. Viresh Shankar Mathur Key Managerial PersonnelF Mr. Mohd. Tariq Raza Key Managerial PersonnelG Mr. Satish Chandra Gupta Key Managerial PersonnelH Ms. Manya Kumar Key Managerial Personnel's relativeI M/s Emmsons S.A. Subsidiary (Control Exists)J M/s Emmsons Gulf DMCC Subsidiary (Control Exists)

Following are the details of the transactions with the related parties :

Nature of Transactions Related Parties Amount(Rs. in Lacs)

Salaries, Allowances & Perquisites Key Managerial Personnel's 189.80Salaries, Allowances & Perquisites Key Managerial Personnel's Relatives 2.58Sitting Fee Key Managerial Personnel's 2.60Rent Key Managerial Personnel's 3.00Investment in Shares Subsidiaries 376.06Advances to Subsidiaries Subsidiaries 444.52Sales to Subsidiaries Subsidiaries 676.29

18. EARNINGS PER SHARE :Basic and diluted earnings per share are calculated by dividing the net profit or loss for the year attributable toequity shareholders by the weighted average number of equity shares outstanding during the year. The companyhas not issued any potential equity share, accordingly, basic and diluted earnings per share are the same.

S.N PARTICULARS CURRENT YEAR PREVIOUS YEAR

a Profit after taxation and exceptional items (Rs.) 129723217 63867899b Weighted average number of shares outstanding during

the year 5148020 5148020c Nominal Value Per Share (Rs.) 10 10d Basic and diluted earning per share (In Rs.) d = (a/b) 25.20 12.41

40

Emmsons International Ltd.III. ADDITIONAL INFORMATION PURSUANT TO PART II OF SCHEDULE VI TO THE COMPANIES ACT, 1956 :

A) Particulars of Capacity and Production are not applicable.B) Purchase, Sales and Stocks.

OPENING STOCK PURCHASES SALES CLOSING STOCKQTY/MT (RS.IN’000) QTY/MT (RS.IN’000) QTY/MT (RS.IN’000) QTY/MT (RS.IN’000)

1 SULPHUR 4116.282 34206 100.000 1056 4215.500 10017 0.000 0(PREVIOUS YEAR)* (645.837) (5153) (13307.132) (282625) (9638.210) (230932) (4116.282) (34206)

2 COAL 16896.895 103978 59287.000 141250 72566.000 190728 3556.175 13676(PREVIOUS YEAR)* (4154.595) (15627) (48779.000) (246352) (36036.700) (232110) (16896.895) (103978)

3 PALM 0.000 0 0.000 0 0.000 0 0.000 0(PREVIOUS YEAR)* 0.000 0 (985.000) (25018) (985.000) (27285) 0.000 0

4 WHEAT 0.000 0 3926.780 53886 2273.770 32720 1653.010 24532(PREVIOUS YEAR)* 0.000 0 0.000 0 0.000 0 0.000 0

5 RICE 14034.556 498859 56001.814 1873338 61638.763 2113303 8125.287 512766(PREVIOUS YEAR)* (20662.571) (357979) (186619.754) (2821452) (192514.106) (3708975) (14034.556) (498859)

6 SUGAR 1139.450 24635 78500.000 2399745 42892.081 1315628 36670.440 1246795(PREVIOUS YEAR)* (3471.000) (37546) (27313.700) (406317) (29629.750) (491752) (1139.450) (24635)

7 SOYABEAN 847.375 17874 9272.380 205538 9373.240 183049 0.000 0(PREVIOUS YEAR)* 0.000 0 (31192.375) (538934) (30345.000) (504328) (847.375) (17874)

8 SORGHUM 0.000 0 0.000 0 0.000 0 0.000 0(PREVIOUS YEAR)* 0.000 0 (11210.575) (127875) (11000.000) (152610) 0.000 0

9 BARLEY 0.000 0 2634.275 23418 900.010 8033 1734.265 15375(PREVIOUS YEAR)* (1448.840) (17144) (26678.666) (316984) (27589.000) (353330) 0.000 0

10 MAIZE 17181.880 150191 139460.522 1280415 152190.006 1484399 1582.675 14433(PREVIOUS YEAR)* (9837.820) (78865) (56666.380) (570135) (48196.930) (578540) (17181.880) (150191)

11 RAPESEED 230.445 2327 13881.375 154538 13735.055 146534 0.000 0(PREVIOUS YEAR)* 0.000 0 (4285.645) (42326) (4055.200) (34222) (230.445) (2327)

12 CHICK PEAS 1381.476 30788 2436.340 59102 3813.106 93036 0.000 0(PREVIOUS YEAR)* 0.000 0 (1381.476) (30788) 0.000 0 (1381.476) (30788)

13 YELLOW PEAS 20882.155 301300 27648.909 424327 45678.235 686957 2771.215 40761(PREVIOUS YEAR)* 0.000 0 (43800.000) (594877) (22917.845) (351373) (20882.155) (301300)

14 TOOR WHOLE 239.197 6827 0.000 0 239.020 9333 0.000 0(PREVIOUS YEAR)* 0.000 0 (239.197) (6827) 0.000 0 (239.197) (6827)

15 LENTILS 0.000 0 558.898 19999 553.626 21768 5.260 178(PREVIOUS YEAR)* 0.000 0 0.000 0 0.000 0 0.000 0

16 PIGEON PEAS 0.000 0 80.000 3704 0.000 0 80.000 3759(PREVIOUS YEAR)* 0.000 0 0.000 0 0.000 0 0.000 0

17 BAGS (In No.) 2377366.000 30576 3893618.000 51709 2985300.000 25002 1354303.000 19171(USED / NEW)(PREVIOUS YEAR)** (1902236.000) (25633) (5398411.000) (59977) (735130.000) (12230) (2377366.000) (30576)

NOTES :* The Opening and Closing stocks Includes the stocks in Transit.** Rice and Wheat is purchased in jute bags and purchase of rice and wheat includes the cost of jute bags. Bags

quantities are in numbers.

CURRENT YEAR PREVIOUS YEAR(Rs. in Lacs) (Rs. in Lacs)

C) Earnings in Foreign CurrencyExport of Goods calculated on FOB value 30544 46359Service Charges Received – –

D) CIF Value of Import (including Highseas Purchases) 26651 12679E) Expenditure in Foreign Currency

Professional Fees 34 98Other Matters 473 2345Dividend Paid 1109 2218


Sd/- Sd/- Sd/- Sd/- Sd/-(CA NARENDRA ARORA) (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA)Partner GM - Finance Company Secretary Director Managing DirectorM. No. 088256Date : 17.08.2010Place : New Delhi

41

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILS :Registration No. 053060State Code 55Balance Sheet Date 31st March, 2010

II. CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. THOUSANDS)Public Issue NILRights Issue NILEmployees Stock Options NILBonus Issue NILPrivate Placement NIL

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS(AMOUNT IN RS. THOUSANDS)Total Liabilities 2337715Total Assets 2337715

SOURCES OF FUNDSPaid-Up-Capital 51480Reserves & Surplus 622904Unsecured Loans 43414Secured Loans 1617434Deferred tax liability 2483

APPLICATION OF FUNDSNet Fixed Assets 86337Investments 64697Net Current Assets 2186681Misc. Expenditure NILAccumulated Losses NIL

IV. PERFORMANCE OF COMPANY (AMOUNT IN RS. THOUSANDS)Turnover 6932285Total Expenditure 6730970Profit/Loss before Tax 201315Profit/Loss after tax 129723Earning Per Share (Rs.) 25.20Dividend Rate (%) 20%

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS OF THE COMPANYItem Code No. 10060Product Description RiceItem Code No. 170100Product Description SugarItem Code No. 27011920Product Description Coal


Sd/- Sd/- Sd/- Sd/- Sd/-(CA NARENDRA ARORA) (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA)Partner GM - Finance Company Secretary Director Managing DirectorM. No. 088256

Date : 17.08.2010Place : New Delhi

42


BALANCE SHEET AS AT 31ST MARCH, 2010 (US$)(Fig. in Millions)

P A R T I C U L A R S EMMSONS EMMSONS SA EMMSONS CONSOLIDATEDINTERNATIONAL SWITZERLAND GULF DMCCLIMITED INDIA DUBAI

l. SOURCES OF FUNDSShareholders Funds

(a) Share Capital 1.15 0.93 0.05 1.15

(b) Reserves and Surplus 13.87 (0.12) 0.49 14.22

Deferred Tax Liabitity 0.06 0.00 0.00 0.03Loan Funds

(a) Secured Loans 36.03 0.00 7.19 43.21

(b) Unsecured Loans 0.97 0.00 0.62 0.97

Minority Interest 0.00 0.00 0.00 0.00

TOTAL 52.07 0.81 8.35 59.58

ll. APPLICATION OF FUNDSFixed Assets

(a) Gross Block 2.31 0.02 0.65 2.92

(b) Less: Depreciation 0.49 0.02 0.01 0.52

Net Block 1.81 0.00 0.64 2.40

Capital Work in Progress 0.11 0.00 0.00 0.11

Investments 1.44 0.00 0.00 0.47

Current Assets, Loans & Advances

(a) Inventories 42.13 0.00 0.00 42.13

(b) Sundry Debtors 11.29 0.07 6.65 18.01

(c) Cash and Bank balances 2.74 0.05 1.68 4.47

(d) Loans and Advances 25.60 8.19 4.63 30.02

81.77 8.32 12.96 94.64

Less:Current Liabilities & Provisions

(a) Current Liabilities 31.42 7.52 5.25 36.40

(b) Provisions 1.64 0.00 0.00 1.64

33.06 7.52 5.25 38.04

Net Current Assets 48.71 0.80 7.71 56.60

Miscellaneous Expenditure 0.00 0.00 0.00 0.00(To the extent not written off)

TOTAL 52.07 0.81 8.35 59.58

Conversion Rate to INR to US$ as per closing price as on 31.03.2010

43

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 (US$)(Fig. in Millions)

P A R T I C U L A R S EMMSONS EMMSONS SA EMMSONS CONSOLIDATEDINTERNATIONAL SWITZERLAND GULF DMCCLIMITED INDIA DUBAI

INCOME

Sales of Products and other income 154.41 1.15 22.35 176.41

TOTAL 154.41 1.15 22.35 176.41

EXPENDITURE

Cost of Goods Sold 135.09 0.67 21.21 155.46

Direct Expenses 7.65 0.00 0.41 8.07

Office and Administrative Expenses 1.80 0.47 0.07 2.34

Financial Charges 4.64 0.02 0.06 4.72

Selling & Distribution Expenses 0.15 0.00 0.00 0.15

Other Expenses 0.47 (0.03) 0.10 0.60

TOTAL 149.82 1.12 21.86 171.35

Profit before Depreciation 4.60 0.03 0.50 5.06

Depreciation 0.11 0.00 0.01 0.12

Profit before Taxation 4.48 0.02 0.49 4.94

Provision For Taxation 1.60 0.00 0.00 1.60

Provision for Deferred Income Tax (0.00) 0.00 0.00 (0.03)Liability /(Asset)

Profit after Taxation 2.89 0.02 0.49 3.37

Balance of Profit brought Forward 4.05 (0.14) 0.00 3.91from Previous Years

Less/ (Add): Short/ (Excess) (0.01) 0.00 0.00 (0.01)Provision of Income Tax for earliar Years

Less: Minority Interest 0.00 0.00 0.00 (0.00)

Balance Available for Appropriation 6.95 (0.12) 0.49 7.29

APPROPRIATIONS

Transfer to General Reserve 0.31 0.00 0.00 0.31

Proposed Dividend 0.23 0.00 0.00 0.23

Tax on Dividend 0.04 0.00 0.00 0.04

Surplus Carried Forward 6.37 (0.12) 0.49 6.71

6.95 (0.12) 0.49 7.29

EARNINGS PER SHARE (Fig. in Cents)

Basic 0.56 0.00 0.10 0.65

Diluted 0.56 0.00 0.10 0.65

Conversion Rate to INR to US$ as per closing price as on 31.03.2010

44


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

NAME OF THE SUBSIDIARY Emmsons SA Emmsons Gulf DMCC

1. Financial year of theSubsidiary ended on 31.03.2010 31.03.2010

2. Date from which theybecome subsidiary 03.09.2007 01.02.2009

3. Share of the subsidiary held by thecompany as on 31st March, 2010.

a) Number & face value 99,999 equity shares of 4 Shares of AED 50,000/-CHF 10/- each fully paid up Each

b) Extent of holding 99.99% 100%

4. The net aggregate amount of thesubsidiary Companies Profit/(Loss)so far as it concerns the memberof the holding Company

a) Not dealt with in the holdingCompany’s accounts

i) For the financial year Rs. 9,84,536.42 Rs. 2,21,91,294.20ended 31st March, 2010

ii) upto the previous financial year Net Loss of Company had obtained theof the subsdiary company Rs. 63,03,326.19 trading license on 13th April,

2009, hence no business wascommenced till 31st March,

2009, therefore no profit/losswas earned for the period

b) Dealt with in the holdingCompany’s accounts

i) For the financial year Nil Nilended 31st March, 2010

ii) For the previous financial year of Nil Nilthe subsidiary company sincethey become the holdingCompany’s subsidiaries

Sd/- Sd/- Sd/- Sd/-(HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA)

GM - Finance Company Secretary Director Managing Director

45

FINANCIAL INFORMATION OF SUBSIDIARY COMPANIES

EMMSONS S.A

Report of the Statutory Auditory on the Limited Statutory Examination

As statutory auditors, we have examined the financial statements (balance sheet, income statement and notes) of EmmsonsSA for the year ended 31 March 2010.

These financial statements are the responsibility of the board of directories. Our responsibility is to perform a limited statutoryexamination on these financial statements. We confirm that we meet the licensing and independence requirements asstipulated by Swiss Law.

We conducted our examination in accordance with the Swiss Standard on the Limited Statutory Examination. This standardrequires that we plan and perform a limited statutory examination to identify material misstatements in the financial statements.A limited statutory examination consists primarily of inquiries of company personnel and analytical procedures as well asdetailed tests of company documents as considered necessary in the circumstances. However, the testing of operation alprocesses and the internal control system, as well as inquiries and further testing procedures to detect fraud or other legalviolations, are not within the scope of this examination.

Based on our limited statutory examination, nothing has come to our attention that causes us to believe that the financialstatements and the proposed appropriation of available earnings do not comply with Swiss law and the company's articlesof incorporation.

Aigle, 7th June 2010Baker & NortonFiduciaire SA

S/d-Regis DevenesExpert-reviseur

Enclosures : – Financial statements consisting of :– Balance Sheet– Income Statement– Notes to Financial Statement– Result Sharing– Rating

46


EMMSONS S.A. - AIGLE2. BALANCE SHEET AT 31 MARCH, 2010

31.03.2010 31.03.2009 31.03.2010 31.03.2009(In CHF) (In CHF) (In INR) (In INR)

ASSETSCurrent AssetsBNP Paribas 86070/1C 1772.67 1926.10 73770.88 86111.12BNP Paribas 86070/3E EUR 1518.73 750.98 63202.99 33574.44BNP Paribas 86070/2D USD 54760.12 14702.63 2278879.98 657317.83BNP Paribas 86070/4F GBP 694.25 78052.45 28891.69 3489529.91Debtors 76919.35 2206729.35 3201051.55 98657352.42Advances Recoverable 8810528.40 6475189.97 366656187.09 289489555.58Prepaid assets 14605.85 – 607832.47 –VAT receivable 13160.50 33358.15 547683.24 1491359.49

8973959.87 8810709.63 373457499.89 393904800.78

Fixed AssetsDeposit 0.00 11500.00 0.00 514136.25Set up costs 2860.00 4280.00 119020.86 191348.10Computers 3900.00 1360.00 162301.18 60802.20Apartment 0.00 568700.00 0.00 25425155.25

6760.00 585840.00 281322.04 26191441.80

TOTAL ASSETS 8980719.87 9396549.63 373738821.93 420096242.58

LIABILITIESCurrent LiabilitiesOthers Payables 7820658.00 7894334.00 325462050.92 352935937.31Creditors 281068.20 1544330.78 11696846.07 69043168.35Expenses payable 6801.00 9350.00 283028.28 418015.13

8108527.20 9448014.78 337441925.28 422397120.78

EquityShareholder’s capital 1000000.00 100000.00 41615686.42 4470750.00

1000000.00 100000.00 41615686.42 4470750.00

ResultPrevious year result -151465.15 -176457.24 -6303326.19 -7888962.06Net profit exercise 23657.82 24992.09 984536.42 1117333.86

-127807.33 -151465.15 -5318789.77 -6771628.19

TOTAL LIABILITIES 8980719.87 9396549.63 373738821.93 420096242.58

47

EMMSONS S.A. - AIGLE3. INCOME STATEMENT 2009/2010

(As 1st April, 2009 at 31st March, 2010)

01.04.2009 - 01.04.2008- 01.04.2009 - 01.04.2008-31.03.2010 31.03.2009 31.03.2010 31.03.2009

(In CHF) (In CHF) (In INR) (In INR)

INCOME 1245498.31 12578399.73 51832267.11 562348805.93PURCHASES 719096.17 11721920.87 29925680.72 524057777.30

GROSS MRGIN 1 526402.14 856478.86 21906586.39 38291028.63

Salary and personnel costs 40012.55 0.00 1665149.73 0.00Rent 525.00 0.00 21848.24 0.00Administrative expenses 6983.75 14847.56 290633.55 663797.29Auditing and accounting fees 19222.80 20619.14 799970.02 921830.20Publicity 0.00 23512.48 0.00 1051184.20Consulting Fees 368282.00 544053.69 15326308.23 24323280.35Expenses Ukraine 88057.50 0.00 3664573.31 0.00Other charges 11477.18 956.99 477630.72 42784.63OTHER OPERATING CHARGES 534560.78 603989.86 22246113.79 27002876.67

OPERATING PROFIT 1 -8158.64 252489.00 -339527.40 11288151.96(before financial result)Financial costs -21307.52 -26091.97 -886727.07 -1166506.75Interest 1610.00 0.00 67001.26 0.00Exchange rate differential -35023.23 -180894.43 -1457515.76 -8087337.73Loan Exchange rate differential 28330.76 0.00 1179004.02 0.00FINANCIAL RESULT -26389.99 -206986.40 -1098237.55 -9253844.48

OPERATING PROFIT 2- cash flow -34548.63 45502.60 -1437764.95 2034307.48(before depreciation)Depreciation -3927.75 -19847.11 -163456.01 -887314.67RESULT BEFORE EXCEPTIONAL PRODUCTS -38476.38 25655.49 -1601220.96 1146992.81Benefit on sale appartment 63800.00 0.00 2655080.79 0.00RESULT 25323.62 25655.49 1053859.83 1146992.81(before tax)Tax -1665.80 -663.40 -69323.41 -29658.96

NET PROFIT EXERCISE 23657.82 24992.09 984536.42 1117333.85

4. NOTES TO FINANCIAL STATEMENT ART . 663B CO2010 2009

4.01 Global amount of the guarantees, obligation of guarantees and constitution ofpledges in favour of third NONE NONE

4.02 Global amount of the credits pawned or to yield to guarantees properengagements and credits subject to property NONE NONE

4.03 Amount of the debts rising contracts of leasing not carried to the assessment NONE NONE4.04 Value of the insurance fire of the body immobilization NONE NONE4.05 Amount debts towards the institutions of precaution in favour of the personnel NONE NONE4.06 Amount, rate of interest and expiries of the loans debenture holder emitted by the company NONE NONE4.07 Essential participations NONE NONE4.08 Global amount coming from the dissolution of the reserves of replacement or

the latent reserves NONE NONE4.09 Indications on the object and the amount of the revaluations NONE NONE4.10 Clean actions held by the company NONE NONE4.11 Amount of the authorized increase and the conditional increase of capital NONE NONE4.12 Realization of an evaluation of the risk NONE NONE4.13 Motives which led to the resignation of the organ of revision NONE NONE4.14 Other indications envisaged by the law. NONE NONE

48


EMMSONS S.A. - AIGLE

5. RESULT SHARING

Your Board of Directors propose to report, an opening balance, the previous year result to 31st March 2010 from Fr.127807.33 (Rs. 5318789.77) of the following manner :

Previous year result Fr -151465.15 Rs. -6303326.19Net Profit exercise 01.04.09 - 31.03.10 “ 23657.82 “ 984536.42

ACCUMLATED LOSS BALANCE Fr -127807.33 Rs. -5318789.77

6. RATING

6.01 Fixed Assets

Particulars Book value at Purchase Depreciation/ Sale Book Value01.04.09 2009-2010 2009-2010 31.03.10

Fr.(CHF) (In INR) Fr.(CHF) (In INR) Fr.(CHF) (In INR) Fr.(CHF) (In INR)

First etablishment 4280.00 178115.14 0.00 0.00 1420.00 59094.27 2860.00 119020.86expensesComputers 1360.00 55349.23 5047.75 210065.58 2507.75 104361.74 3900.00 161053.07Apartment 568700.00 25425155.25 0.00 0.00 568700.00 25425155.25 0.00 0.00

Total 574340.00 25658619.62 5047.75 210065.58 572627.75 25588611.26 6760.00 280073.93

31.03.2010 31.03.2010(In CHF) (In INR)

6.02 Advances RecoverableEmmsons Grains Ltd 1116558.00 46466327.60Emmsons Grains Ltd 130419.00 5427476.21Emmsons Gulf DMCC 1240620.00 51629252.89LLC Krinichkaskoe 5819047.00 242163635.21Advances to supplier 503884.40 20969495.18

8810528.40 366656187.09

6.03 Others PayablesCentral Pacific Ltd 449218.00 18694515.42Starcom Resource Singapore 215760.00 8979000.50Emmsons International Ltd 7155680.00 297788535.00

7820658.00 325462050.92

6.04 Expenses payableProvision accounting fees 2009/2010 4375.00 182068.63Provision Retraites populaires february and march 2010 426.00 17728.28Provision tax 2009/2010 2000.00 83231.37

6801.00 283028.28

49

INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDER OF

EMMSONS GULF DMCC

Report on the financial statements

We have audited the accompanying financial statements of EMMSONS GULF DMCC, which comprise the statementof financial position as at 31 March 2010, and the statement of comprehensive income, statement of changes inequity and statement of cash flows for the period then ended, and a summary of significant accounting policiesand other explanatory notes set out on pages 3 to 18.

Management's responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordancewith International Financial Reporting Standards. This responsibility includes: designing, implementing andmaintaining internal control relevant to the preparation and fair presentation of financial statements that are freefrom material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies;and making accounting estimates that are reasonable in the circumstances.

Auditor's responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted ouraudit in accordance with International Standards on Auditing. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance whether the financial statementsare free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor's judgment, including the assessment ofthe risks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accounting estimatesmade by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of EMMSONS GULFDMCC as of 31 March 2010, and of its financial performance and its cash flows for the period then ended inaccordance with International Financial Reporting Standards.

Emphasis of matter

Without qualifying our opinion, we draw attention to Note '11', which states that bank borrowings and loans aresubject to certain financial covenants.

Report on other legal and regulatory requirements

We further confirm that the financial statements comply with provisions of Implementing Regulation No. 1/03issued by the Dubai Multi Commodity Centre Authority.

Sd/-PKFDubaiUnited Arab Emirates23 June 2010

50


EMMSONS GULF DMCCSTATEMENT OF FINANCIAL POSITION

31 MARCH 201031.03.2010 31.03.2010

AED INR

NON-CURRENT ASSETSProperty, plant and equipment 6 2367571 28824111CURRENT ASSETS

Trade and other receivables 7 39040920 475305617Amount due from a related party 8 2562840 31201423Cash and cash equivalents 9 1800231 21917002Other current financial assets 10 4379220 53315031

47783211 581739072

TOTAL ASSETS 50150782 610563183

CURRENT LIABILITIESBank borrowings 11 26495949 322576245Trade and other payables 12 15102410 183865040

41598359 506441285NON-CURRENT LIABILITIESProvision for staff end of service gratuity 13 3461 42136Long term loan from a related party 14 4241200 51634700

4244661 51676836SHAREHOLDER'S FUNDSShare capital 15 200000 2434910Retained earnings 1822761 22191294Equity funds 2022761 24626204Loan from the shareholder 16 2285001 27818858

4307762 52445062

TOTAL EQUITY AND LIABILITIES 50150782 610563183

The accompanying notes form an integral part of these financial statements.The report of the independent auditor is enclosed herewith.We confirm that we are responsible for these financial statements, including selecting the accounting policies andmaking the judgments underlying them. We confirm that we have made available all relevant accounting records andinformation for their compilation.Authorised for issue by the board of directors on 17 June 2010.

For EMMSONS GULF DMCC

Sd/-DIRECTORS

51

EMMSONS GULF DMCC

STATEMENT OF COMPREHENSIVE INCOMEPERIOD ENDED 31 MARCH 2010

01.02.2009- 01.02.2009-31.03.2010 31.03.2010

AED INR

REVENUE 82374111 1002867700Cost of sales 18 (78243682) (952581587)

GROSS PROFIT 4130429 50286113

Other operating income 19 61798 752363Staff costs 20 (93864) (1142752)Depreciation 21 (18942) (230610)Other operating expenses 22 (2019413) (24585444)

PROFIT FROM OPERATING ACTIVITIES 2060008 25079670

Interest income 23 23822 290022Finance costs 24 (261069) (3178397)

PROFIT FOR THE PERIOD 1822761 22191294

Other comprehensive income – –

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 1822761 22191294

The accompanying notes form an integral part of thesefinancial statements.The report of the independent auditor is enclosed herewith.

STATEMENT OF CHANGES IN EQUITYPERIOD ENDED 31 MARCH 2010

Share Share Retained Retained Total Totalcapital capital earnings earnings

AED INR AED INR AED INR

Issue of share capital 200000 2434910 - - 200000 2434910Total comprehensiveincome for the period - - 1822761 22191294 1822761 22191294As at 31.03.2010 200000 2434910 1822761 22191294 2022761 24626204

The accompanying notes form an integral part of these financial statements.The report of the independent auditor is enclosed herewith.


S/DDIRECTORS

52


EMMSONS GULF DMCCSTATEMENT OF CASH FLOWS

PERIOD ENDED 31 MARCH 201001.02.2009- 01.02.2009-31.03.2010 31.03.2010

AED INR

Cash used in operationsCash used in operations 25 (21856099) (266088161)Interest paid (261069) (3178397)

Net cash used in operating activities (22117168) (269266559)

Cash flows from investing activitiesPurchase of property, plant and equipment (2386513) (29054721)Increase in current financial asset (4379220) (53315031)Increase in amount due from a related party (2562840) (31201423)Interest received 23822 290022

Net cash used in investing activities (9304751) -113281153

Cash flows from financing activitiesIssue of share capital 200000 2434910Proceeds from trust receipts (net) 23056308 280700165Receipt of long term loan from a related party 4241200 51634700Receipt of loan from the shareholder 2285001 27818858Receipts from bank overdraft (net) 3439641 41876080

Net cash from financing activities 33222150 404464713

Net increase in cash and cash equivalents 1800231 21917002Cash and cash equivalents at beginning of period - -

Cash and cash equivalents at end of period 9 1800231 21917002

The accompanying notes form an integral part of these financial statements.The report of the independent auditor is enclosed herewith.

53

EMMSONS GULF DMCC

NOTES TO FINANCIAL STATEMENTSPEREIOD ENDED 31 MARCH 2010

1. LEGAL STATUS AND BUSINESS ACTIVITY

a) EMMSONS GULF DMCC is a limited liability company registered in Dubai Multi Commodity Centre,Dubai, United Arab Emirates in accordance with laws and regulations issued by Dubai Multi CommoditiesCentre Authority. The registered office is P. O. Box 486125, Dubai, UAE. The company was registered on1 February 2009 and commenced operations on 13 April 2009.

b) The company is engaged in the business of trading in agricultural commodities.

c) The company is a wholly owned subsidiary of Emmsons International Limited which is consider to bethe ultimate parent company.

2. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted, and which have been consistently applied, are as follows:

a) Basis of preparation

The financial statements are presented in UAE Dirhams and prepared using historical cost, and inaccordance with International Financial Reporting Standards issued or adopted by the InternationalAccounting Standards Board (IASB) and which are effective for accounting periods beginning on or after1 January 2009, and the requirement of the laws and regulations of Dubai Multi Commodity CentreAuthority.

b) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.The cost less estimated residual value, where material, is depreciated from the date the asset isavailable for use until it is derecognised, using the straight-line method over the estimated useful livesof the assets as follows:

Freehold property 60 years

Furniture, fixtures and office equipment 6 - 16 years

An assessment of residual values is undertaken at each reporting date and, where material, if there isa change in estimate, an appropriate adjustment is made to the depreciation charge.

c) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is arrived at using the specificidentification method and comprises invoice value plus applicable landing charges less discounts. Netrealizable value is based on estimated selling price less any estimated cost of completion and disposal.

d) Staff end-of-service gratuity

Provision is made for end-of-service gratuity payable to the staff at the reporting date in accordance withthe local labour laws.

e) Revenue

Revenue represents the amount invoiced, net of discounts and returns, for goods delivered during theperiod. The company's sales are in the form of Merchanting Trade or Third Country Trade. The companysells the goods to its customers on the basis of transfer of documents received from suppliers. Revenueis recognised when significant risks and rewards relating to the ownership of goods concerned are

54


transferred to customer and is based on amount invoiced to customers for trans-shipment made duringthe period.

f) Leases

Leases under which substantially all the risks and rewards of ownership of the related asset remainwith the lessor are classified as operating leases and the lease payments are charged to profit or losson a straight-line basis over the period of the lease.

g) Foreign currency transactions

Transactions in foreign currencies are translated into UAE Dirhams at the rate of exchange ruling on thedate of the transactions.

Monetary assets and liabilities expressed in foreign currencies are translated into UAE Dirhams at therate of exchange ruling at the reporting date.

Gains or losses resulting from foreign currency transactions are taken to profit or loss.

h) Cash and cash equivalents

Cash and cash equivalents comprise cash, bank current accounts, bank deposits free of encumbrancewith a maturity date of three months or less from the date of deposit and highly liquid investments witha maturity date of three months or less from the date of investment.

i) Financial instruments

Financial assets and financial liabilities are recognised when, and only when, the company becomes aparty to the contractual provisions of the instrument.

Financial assets are de-recognised when, and only when, the contractual rights to receive cash flowsexpire or when substantially all the risks and rewards of ownership have been transferred.

Financial liabilities are de-recognised when, and only when, they are extinguished, cancelled or expired.

Current financial assets that have fixed or determinable payments and for which there is no activemarket, which comprise trade and other receivables and related party receivables, are classified asloans and receivables and stated at cost or, if the impact is material, at amortised cost using the effectiveinterest method, less any write down for impairment losses plus reversals of impairment losses.Impairment losses and reversals thereof are recognised in profit or loss.

Current and non-current financial liabilities, which comprise current bank borrowings, trade and otherpayables and related party payables and loan from the shareholder are measured at the cost or, if theimpact is material, at amortised cost using the effective interest method.

3. SIGNIFICANT JUDGMENTS EMPLOYED IN APPLYING ACCOUNTING POLICIES

The significant judgments made in applying accounting policies that have the most significant effect on theamounts recognised in the financial statements are as follows:

Impairment

At each reporting date, management conducts an assessment of property, plant and equipment, and allfinancial assets to determine whether there are any indications that they may be impaired. In the absence ofsuch indications, no further action is taken. If such indications do exist, an analysis of each asset is undertakento determine its net recoverable amount and, if this is below its carrying amount, a provision is made. In thecase of loans and receivables, if an amount is deemed irrecoverable, it is written off to profit or loss or, ifpreviously a provision was made, it is written off against the provision. Reversals of provisions against loansand receivables are made to the extent of the related amounts being recovered.

4. KEY SOURCES OF ESTIMATION UNCERTAINTY

Key assumptions made concerning the future and other key sources of estimation uncertainty at the reportingdate that have a significant risk of causing a material adjustment to the carrying amounts of assets andliabilities within the next financial year, are as follows:

55

Carrying values of property, plant and equipment

Residual values are assumed to be zero unless a reliable estimate of the current value can be obtained forsimilar assets of ages and conditions that are reasonably expected to exist at the end of the assets' estimateduseful lives.

Doubtful debt provisions

Management regularly undertakes a review of the amounts of loans and receivables owed to thecompany either from third parties, (see Note 7) or from related parties (see Note 8) and assesses thelikelihood of non-recovery. Such assessment is based upon the age of the debts, historic recoveryrates and assessed creditworthiness of the debtor. Based on the assessment assumptions aremade as to the level of provisioning required.

Impairment

Assessments of net recoverable amounts of property, plant, equipment and all financial assets other thanloans and receivables (see above) are based on assumptions regarding future cash flows expected to bereceived from the related assets.

Staff end-of-service gratuity

The company computes the provision for the liability to staff end-of-service gratuity stated at AED 3,641assuming that all employees were to leave as of the reporting date. The management is of the opinion thatno significant difference would have arisen had the liability been calculated on an actuarial basis as salaryinflation and discount rates are likely to have approximately equal and opposite effects.

5. ADOPTION OF NEW INTERNATIONAL FINANCIAL REPORTING STANDARDS

The following International Financial Reporting Standards, amendments thereto and Interpretations thatbecame effective for the current reporting period and which are applicable to the company are as follows.Their adoption has resulted in presentation and disclosure changes only:

Amendment to IAS 1: Presentation of Financial Statements

Amendment to IAS 16: Property, Plant and Equipment

Amendment to IAS 23: Borrowing Costs

Amendment to IAS 32: Financial Instruments: Presentation

Amendment to IAS 36: Impairment of Assets

Amendment to IAS 39: Financial Instruments: Recognition and Measurement

Reclassification of Financial Assets - Amendments to IAS39: Financial Instruments: Recognition andMeasurement and IFRS7: Financial Instruments: Disclosures

Reclassification of Financial Assets - Effective Date and Transition - Amendments to IAS39: FinancialInstruments: Recognition and Measurement and IFRS7: Financial Instruments: Disclosures

Improving Disclosures about Financial Instruments - Amendments to IFRS7

The following International Financial Reporting Standards, amendments thereto and Interpretations that areassessed by management as likely to have an impact on the financial statements have been issued by theIASB prior to the date the financial statements were authorised for issue but have not been applied in thesefinancial statements as their effective dates of adoption are for future accounting periods. It is anticipated thattheir adoption in the relevant accounting periods will have an impact only on presentation and disclosureswithin the financial statements:

56


Improvements to IFRS

• IAS1: Presentation of Financial Statements (1 January 2010)

• IAS7: Statement of Cash Flows (1 January 2010)

• IAS17: Leases (1 January 2010)

• IAS18: Revenue (1 January 2010)

• IAS36: Impairment of Assets (1 January 2010)

• IAS39: Financial Instruments: Recognition and Measurement (1 January 2010)

IAS 24: Related Party Disclosures ( 1 January 2011)

IFRS 9: Financial Instruments ( 1 January 2013)

6. PROPERTY, PLANT AND EQUIPMENT

Freehold Property Furniture, fixtures Totaland office equipment

AED INR AED INR AED INRCostAdditions 2094367 25497975 292146 3556746 2386513 29054721

As at 31 March 2010 2094367 25497975 292146 3556746 2386513 29054721

Accumulated depreciationDepreciation 11686 142272 7256 88339 18942 230610

As at 31 March 2010 11686 142272 7256 88339 18942 230610

Net book values As at 2082681 25355703 284890 3468407 2367571 2882411131 March 2010

Note:

Freehold property with net book value of AED 2,082,681 representing Unit No. 3406 at Lake Plaza Building,Emirates Hills Community, Dubai is mortgaged with Bank of Baroda against facilities granted.

7. TRADE AND OTHER RECEIVABLES

2010 2010

AED INR

Trade receivables 24537269 298730198

Advances 12206891 148613400

Prepayments 46874 570670

Other receivables 2249886 27391349

39040920 475305617

An age analysis of trade receivables that are past due but not impaired is as follows:

60 - 120 days 12405825 151035332

Trade receivables not past due and not impaired 12131444 147694867

57

As at the period end, there are no trade receivables considered to be impaired due to non-recovery or perceiveddifficulty in recovery.

The company holds post-dated cheques amounting to AED 21,781,285 (INR 26,51,77,410) as security againsttrade receivables.

8. RELATED PARTIES

The company enters into transactions with entities that fall within the definition of a related party as containedin International Accounting Standard 24. The management considers such transactions to be in the normalcourse of business and at prices determined by the management.

Related parties comprise the parent company, companies under common ownership/ management controland directors.

At the reporting date significant balances with related parties were as follows:

Parent company Directors Companies under Totalcommon ownership/ 2010

managementcontrol

AED INR AED INR AED INR AED INR

Trade and other – – 1872130 22792340 – – 1872130 22792340receivablesTrade and other 1603174 19517921 – – – – 1603174 19517921payablesLong term loan – – – – 4241200 51634700 4241200 51634700from a related partyLoan from the 2285001 27818858 – – – – 2285001 27818858shareholderDue from a – – – – 2562840 31201423 2562840 31201423related party

All balances are unsecured and are expected to be settled in cash. Repayment and other terms are set out inNote 14,16 and 26.Significant transactions with related parties during the period were as follows:

Parent company Companies under Directors Totalcommon 01.02.2009

Management to 31.03.2010control

AED INR AED INR AED INR AED INR

Purchases 5405409 65808420 – – – – 5405409 65808420Managementremuneration – – – – 160000 1947928 160000 1947928Purchase of property,plant and equipment – – 2028400 24694856 – – 2028400 24694856

The parent company has provided corporate guarantee of USD 1 million to bank on behalf of the company.The company also provides fund to/receives fund from related parties as working capital facilities free of interest/fixed rate of interest.

2010 2010AED INR

9 CASH AND CASH EQUIVALENTS

Cash on hand 67563 822549

Bank balances in current accounts 1732668 210944521800231 21917002

58

Emmsons International Ltd.10 OTHER CURRENT FINANCIAL ASSETS

Fixed deposits 4379220 533150314379220 53315031

11 BANK BORROWINGSOverdrafts 23489292 285971550Trust Receippts 3006657 36604695

26495949 322576245

An analysis by bank of amounts outstanding is as follows:Bank of Baroda 23489292 285971550Standard Chartered Bank 3006657 36604695

26495949 322576245

Bank facilities are secured against:Lien over fixed deposits.Assignment of leasehold rights and mortgage of office building located on Plot No. JLT-PH2 T2 Jumeirahlake Towers.Assignment of leasehold rights and mortgage of residential flat registered in the name of Mr. KanishkMonga, Director.Continuing corporate guarantee for USD 1,000,000 signed by Emmsons International Limited.Promissory note of USD 1,000,000.Personal guarantee of the directors.Corporate guarantee of M/s. Emmsons International Limited.The bank borrowings and loans are subject to certain financial covenants including debt/equity ratio not toexceed 3:1 and current asset/current liability ratio to be maintained above 1.33.

A maturity analysis of total bank borrowings is as follows:2010 2010AED INR

0 - 3 months 23056308 280700165Overdraft 3439641 41876080

26495949 322576245

12 TRADE AND OTHER PAYABLES 2010 2010AED INR

Trade payables 14751292 179590336Accruals 242080 2947215Advance received from customers 109038 1327489

15102410 18386504013 PROVISION FOR STAFF END-OF-SERVICE GRATUITY

Opening Stock – –Provision for the period 3461 42136

Closing Stock 3461 42136

14. LONG TERM LOAN FROM RELATED PARTYThis represents long term from a related party, free of interest upto 31 March 2012. Further loan is subject to5% interest, payable from 31 March 2012. The loan is repayable by 31 March 2015 with a put option to thecompany to repay at any time during the tenure without any prepayment charges or penalty.

15 SHARE CAPITAL 2010 2010AED INR

Issued and paid up:4 shares of AED 50,000 each 200,000 2434910

59

16. LOAN FROM THE SHAREHOLDER

This represents interest free long term loan with no fixed repayment schedule.

17. MANAGEMENT OF CAPITAL

The company's objectives when managing capital are to ensure that the company continues as a goingconcern and to provide the shareholder with a rate of return on their investment commensurate with the levelof risk assumed.Capital comprises equity funds as presented in the statement of financial position together with amountsdue to/from related parties and loan from the shareholder. Debt comprises total amounts owing to thirdparties, net of cash and cash equivalents.

Funds generated from internal accruals together with funds received from related parties are retained in thebusiness, net of dividend declared, to limit bank borrowings within covenants and according to the businessrequirements and maintain capital at desired levels. The nature of such covenants is set out in Note 11.

01.02.2009 01.02.2009to to

31.03.2010 31.03.2010AED INR

18 COST OF SALESPurchases (net of discount) 78210089 952172607Other direct expenses 33593 408980

78243682 952581587

19 OTHER OPERATING INCOME

Commission income 55320 673496

Miscellaneous income 6478 78867

61798 752363

20 STAFF COSTS

Staff salaries and benefits 90403 1100616

Staff end-of-service gratuity 3461 42136

93864 1142752

21 DEPRECIATIONDepreciation of property, plant and equipment 18942 230610

22 OTHER OPERATING EXPENSESManagement remuneration 160000 1947928Contract cancellation charges 1494616 18196277Other expenses 364797 4441239

2019413 24585444

23 INTEREST INCOMEOn bank deposits 23822 290022

24 FINANCE COSTSOn bank loans and overdrafts 261069 3178397

60


25 CASH GENERATED FROM OPERATIONSProfit for the period 1822761 22191294Adjustments for:Depreciation of property, plant and equipment 18942 230610Finance costs 261069 3178397Interest income (23822) (290022)

Operating profit before changes in operatingassets and liabilities 2078950 25310280

Increase in trade and other receivables (39040920) (475305617)

Increase in trade and other payables 15102410 183865040

Increase in staff gratuity provision 3461 42136

(21856099) (266088161)

26. FINANCIAL INSTRUMENTS

The net carrying amounts as at the reporting date of financial assets and financial liabilities are as follows:

Loans and receivables Financial liabilities

2010 2010 2010 2010AED INR AED INR

Trade and other receivables 28748521 350000295 – –Amount due from a related party 2562840 31201423 – –Cash and cash equivalents 1800231 21917002 – –Other current financial assets 4379220 53315031 – –Bank borrowings – – 26495949 322576245Trade and other payables – – 14875872 181107041Long term loan from a related party – – 4241200 51634700Loan from the shareholder – – 2285001 27818858

37490812 456433750 47898022 583136844

Management of risk

The management conducts and operates the business in a prudent manner, taking into account the significantrisks to which the business is or could be exposed.The primary risks to which the business is exposed, comprise credit, exchange, liquidity and cash flowinterest rate risks.Credit risk is managed by assessing the creditworthiness of potential customers and the potential forexposure to the market in which they operate, combined with regular monitoring and follow-up. As part of thecompany's credit risk management, where it is considered necessary, such receivables are covered byletters of credit or bank guarantees in favour of the company, issued by high credit quality financial institutions.The company buys and sells goods and services in foreign currencies. Exposure is minimised wherepossible by denominating such transactions in US dollars to which the UAE Dirham is pegged.Management continuously monitors its cash flows to determine its cash requirements and makes comparisonwith its funded and un-funded facilities with banks in order to manage exposure to liquidity risk.Borrowing facilities are regularly reviewed to ensure that the company obtains the best available pricing,terms and conditions on it borrowings.Exposures to the aforementioned risks are detailed below:

Credit risk

Financial assets that potentially expose the company to concentrations of credit risk comprise principallybank accounts, trade and other receivables and amounts due from related parties.The company's bank accounts are placed with high credit quality financial institutions.

61

Amounts due from related parties, trade and other receivables are stated net of the allowance for doubtfulrecoveries. At the reporting date, the company's maximum exposure to credit risk from such receivablessituated outside the UAE is as follows:

Trade receivable Advances Other receivables 2010 2010 2010

AED INR AED INR AED INR

GCC countries 2255311 27457396 126524 1540373 – –

India – – 10119000 123194267 2013854 24517765

Thailand – – – – 236032 2873583

2255311 27457396 10245524 124734640 2249886 27391349

At the reporting date 50% of trade receivables were due from three customers, 98% of advances were duefrom three parties (including director) and 100% of other receivables were due from three parties.

There is no significant concentration of credit risk from customers outside the industry in which the companyoperates.

Interest rate risk

Fixed deposit accounts and loan from the shareholder are subject to fixed interest rates at levels generallyobtained in the UAE and are therefore exposed to fair value interest rate risk. All other loans receivable andborrowings are subject to floating interest rates at levels generally obtained in the UAE or are linked to LIBORand are therefore exposed to cash flow interest rate risk.

Reasonably possible changes to interest rates at the reporting date are unlikely to have had a significantimpact on profit or equity.

Exchange rate risk

There are no significant exchange rate risks as substantially all financial assets and financial liabilities aredenominated in UAE Dirhams or US Dollars to which the Dirham is fixed.

Reasonably possible changes to exchange rates at the reporting date are unlikely to have had a significantimpact on profit or equity

Fair values

The fair value of a financial instrument is the amount for which an asset could be exchanged, or a liabilitysettled, between knowledgeable, willing parties in an arm's length transaction. The fair values of the financialassets and financial liabilities which are required to be carried at cost or at amortised cost approximate totheir carrying value except from long term loan from a related party which due to its terms and nature, wouldhave fair value below its carrying value.

2010 2010

27. CONTINGENT LIABILITIES AED INR

Letters of guarantee 62,450 760301

28. COMPARATIVE FIGURES

These are the first set of financial statements for the company since the date of its incorporation and,accordingly, no comparative information is presented.


Sd/-DIRECTORS

62


AUDITOR’S REPORT TO THE BOARD OF DIRECTORSOF EMMSONS INTERNATIONAL LIMITED ON THE CONSOLIDATEDFINANCIAL STATEMENTS OF EMMSONS INTERNATIONAL LIMITED

We have examined the attached Consolidated Balance Sheet of Emmsons International Limited and itssubsidiaries as at March 31, 2010 and the consolidated Profit and Loss account for the period then ended.

These Financial Statements are the responsibility of the group's Management. Our responsibility is to expressan opinion on these Financial Statements based on our audit. We conducted our audit in accordance withgenerally accepted auditing standards of India. These Standards require that we plan and perform the audit toobtain reasonable assurance whether the Financial Statements are prepared, in all material respects, inaccordance with an identified financial reporting framework and are free of material misstatements. An auditincludes examining on a test basis, evidence supporting the amounts and disclosures in the Financial Statements.An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall Financial Statements. We believe that our audit provides a reasonable basis forour opinion.

We did not audit the Financial Statements of subsidiaries, Financial Statements of subsidiaries reflect thefollowing total assets as at 31st March 2010 and Revenue for the period then ended.

(INR in lacs)

S.No Name of the Subsidiary Total Assets Total Revenue

1 Emmsons S.A. 3737.39 518.32

2 Emmsons Gulf DMCC 6105.63 10028.68

These Financial Statements have been audited by other auditors, whose reports have been furnished to us, andour opinion, insofar as it relates to the amounts included in respect of the subsidiaries, is based solely on thereport of the other auditors.

We Report that the Consolidated Financial Statements have been prepared by the Company in accordance withthe requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, issued by the Institute ofChartered Accountants of India and on the basis of the separate audited Financial Statements of EmmsonsInternational Limited and its subsidiaries included in the Consolidated Financial Statements.

On the basis of the information and explanation given to us and on the consideration of the separate audit reportson individual audited Financial Statements of Emmsons International Limited and its aforesaid subsidiaries, weare of the opinion that :

1. The Consolidated Balance sheet gives a true and fair view of the Consolidated state of affairs of EmmsonsInternational Limited and its subsidiaries as at March 31, 2010 and

2. The Consolidated Profit and Loss Account gives a true and fair view of the Consolidated results of operationsof Emmsons International Limited and its subsidiaries for the period then ended

3. The Consolidated Cash flow statement gives a true and fair view of the Consolidated cash flow of EmmsonsInternational Limited and its subsidiaries for the year then ended.

For SURESH & ASSOCIATESFRN : 003316NChartered Accountants

Sd/-(CA Narendra Arora)PartnerM. No. 088256Date : 17.08.2010Place : New Delhi

63

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2010

P A R T I C U L A R S SCHEDULE As At As At31st March, 2010 31st March, 2009

Rs. Rs.

I. SOURCES OF FUNDSShareholders Funds(a) Share Capital 1 51480200 51480200(b) Equity Warrants 2

–Party Paid up Equity Warrants – 19500000(c) Reserves and Surplus 3 638495844 477979965Deferred Tax Liability 1386177 849669Loan Funds(a) Secured Loans 4 1940010328 1312453276(b) Unsecured Loans 5 43413493 –Minority Interest 347 –

TOTAL 2674786390 1862263110

II. APPLICATION OF FUNDSFixed Assets 6(a) Gross Block 131195393 114601991(b) Less: Depreciation 23404382 18787557

Net Block 107791011 95814434

Capital Work in Progress 4875629 –Investments 7 20920480 29542170Minority Interest _ 230Current Assets, Loans & Advances(a) Inventories 8 1891444925 1201562294(b) Sundry Debtors 9 808666120 556396306(c) Cash and Bank balances 10 200891709 65647744(d) Loans and Advances 11 1347816783 1224524358

4248819537 3048130703

Less:Current Liabilities & Provisions(a) Current Liabilities 12 1633996457 1281134310(b) Provisions 13 73742831 30656670

1707739288 1311790980

Net Current Assets 2541080249 1736339723Miscelaneous Expenditure 119021 566553(To the extent not written off)

TOTAL 2674786390 1862263110



For SURESH & ASSOCIATESFRN: 003316N For and on behalf of BoardChartered Accountants


64


CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEARENDED 31ST MARCH, 2010

P A R T I C U L A R S SCHEDULE As At As At31st March, 2010 31st March, 2009

Rs. Rs.

INCOMESales of Products and other income 14 7919836412 6885518163

TOTAL 7919836412 6885518163

EXPENDITURECost of Goods Sold 15 6979553397 5780561264Direct Expenses 16 362254542 740932466Office and Administrative Expenses 17 105038609 87570023Financial Charges 18 212118942 131381506Selling & Distribution Expenses 19 6781208 10080019Other Expenses 20 26847624 22149814

TOTAL 7692594321 6772675092

Profit before Depreciation 227242091 112843071Depreciation 5331993 5441475Profit before Taxation 221910098 107401596Provision For Taxation 71720351 39249663Provision for Fringe Benefit Tax – 1535316Provision for Deferred Income Tax Liability/(Asset) (1156230) (61354)(Tax effect of timing differences during the year)Profit after Taxation 151345976 66677971Balance of Profit brought Forward from Previous Years 175631729 130375369Less/(Add): Short/(Excess) Provision of Income Tax for earlier Years (457033) 4174248Less: Minority Interest (69) (677)

Balance Available for Appropriation 327434808 192879769

APPROPRIATIONSTransfer to General Reserve 14000000 10000000Proposed Dividend 10296040 5148020Tax on Dividend 1749812 874906Surplus Carried Forward 301388956 176856843

327434808 192879769

EARNINGS PER SHARE (RS.)Basic 29.40 12.95Diluted 29.40 12.95





65

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

P A R T I C U L A R S (Rs. in ‘000) (Rs. in ‘000)Year ended Year ended

31st March, 2010 31st March, 2009

A. CASH FLOW FROM OPERATING ACTIVITIES :Net Profit/(Loss) before taxation and extraordinary items 221910 107402Adjustment for : Misc. Expenditure Written Off 448 – (Profit)/Loss on sale of fixed assets 648 350 Depreciation 5332 5441 Transfer To Capital Reserve On Consolidation 0 Discarding of assets – 2 Transfer To FCTR 2484 – FCTR Written off – (15215) (Profit)/Loss on sale of Investment – 1499 Dividend income (88) (103) Interest Expenses 205319 125637OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 436053 225013Adjustment for : (Increase)/Decrease in Sundry Debtors (252270) (923055) (Increase)/Decrease in Inventories (689883) (663615) (Increase)/Decrease in other receivables (123292) – Increase/(Decrease) in Sundry Creditors & other payables 352862 971620 Increase/(Decrease) in Provisions 3263 –Cash generated from operations (273267) (390038) Income Tax Paid (37075) (49305) Wealth Tax Paid 3 (91) FBT Paid (390) – Interest paid – (125637)Cash flow before extraordinary items (310730) (565071) Extraordinary items – –NET CASH FROM OPERATING ACTIVITIES (310730) (565071)

B. CASH FLOW FROM INVESTING ACTIVITIES :Purchase of fixed assets (45825) (42530)Capital WIP (4876) –Sale of fixed assets 28336 93Purchase of Investments – (25027)Sale of Investments 8622 15714Dividend received 88 103NET CASH USED IN INVESTING ACTIVITIES (13655) (51647)

C. CASH FLOW FROM FINANCING ACTIVITIES :Minority Interest 1 –Proceeds from Equity Share Warrants (Application Money) – (250)Net Proceeds from long term borrowings (12672) (33778)Net Proceeds from short term borrowings 640230 618707Proceeds From Unsecured Loans 43413 –Miscellaneous Expenditure – (375)Interest Paid (205319) –Dividend paid (6023) (12046)NET CASH USED IN FINANCING ACTIVITIES 459629 572258Net increase in cash and cash equivalents 135244 (44459)Opening cash and cash equivalents balance (See Note) 65648 110107Closing cash and cash equivalents balance (See Note) 200892 65648

Note to the cash flow statementCash and Cash EquivalentsCash and cash equivalents included in the cash flow statementcomprise the following balance sheet amounts. - Cash in hand and balances with banks 100748 15091 - Margin with Bank and Accrued Interest 100144 50557 - Cash and cash equivalents as restated 200892 65648

As per our separate report of even date attachedFor SURESH & ASSOCIATESFRN: 003316N For and on behalf of BoardChartered Accountants


66


SCHEDULES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31ST MARCH, 2010

P A R T I C U L A R S As At As At31st March, 2010 31st March, 2009

Rs. Rs.

SCHEDULE 1 : SHARE CAPITALAUTHORISED15000000 Equity Shares of Rs 10 each 150000000 150000000

(Previous Year 15000000 Equity Shares of Rs. 10/- each)ISSUED, SUBSCRIBED, CALLED AND PAID UP5148020 Equity shares of Rs 10 each 51480200 51480200

(Previous Year 5148020 Equity Shares of Rs. 10/- each)51480200 51480200

SCHEDULE 2 : EQUITY WARRANTSPartly Paid up Convertible Equity Warrants – 19500000(Paid up Money @ Rs 25 per equity warrant against 780000 equitywarrants of Rs 10 each issued at premium of Rs 240/- each Convertiblein to equity share of Rs. 10/- each at a premium of Rs.240/-)

– 19500000SCHEDULE 3 : RESERVES AND SURPLUSGeneral Reserve 124000000 110000000Capital Reserve 23451000 3951000Capital reserve on Consolidation (416) (447)Security Premium Account 189384000 189384000Foreign Currency Translation Reserve 272304 (2211430)Profit and Loss Account 301388956 176856843

638495844 477979965SCHEDULE 4 : SECURED LOANSa) Long Term Secured Loan

Vehicle Loans from ICICI Bank 2992513 7910567(Secured against hypothecation of Cars)

Vehicle Loans from Kotak Mahindra Prime Limited 2593293 –(Secured against hypothecation of Cars)

Vehicle Loans from Tata Capital Ltd. 554676 902406(Secured against hypothecation of Cars)

Working Capital Term Loan from Indian Overseas Bank – 10000000(Secured against the personal gurantees of Directors,equitable mortgage of properties of the company andthe Directors of the Company)Sub Total (a) 6140482 18812972

b) Short Term Secured LoanPacking Credit with Oriental Bank of Commerce 614079856 423481278

(Secured against hypothecation of Stocks and advances, equitable,mortgage of Properties and Personal guarantees of Directors)

Packing Credit with Indian Overseas Bank 262640008 182412929(Secured against hypothecation of Stocks and advances,equitable,mortgage of Properties and Personal guarantees of Directors)

Packing Credit with Canara Bank – 154324014(Secured against hypothecation of Stocks,equitableMortgage of Properties and Personal guarantees of Directors)

Packing Credit with Indian Bank – 79789083(Secured against hypothecation of Stocks,equitableMortgage of Properties and Personal guarantees of Directors)

Packing Credit with Allahabad Bank 216735049 –(Secured against hypothecation of current assets ,equitableMortgage of Properties and Personal guarantees of Directors)

PCFC with Standard Chartered Bank 444658500 453633000(Secured against hypothecation of current assets ,equitableMortgage of Properties and Personal guarantees of Directors)

Buyer's Credit from Oriental Bank of Commerce 38954958 –(Secured against hypothecation charge over the goods, equitable mortgage of Properties and Personal guarantees of Directors)

Buyer's Credit from Indian Overseas Bank 34225230 –(Secured against hypothecation charge over the goods, equitablemortgage of Properties and Personal guarantees of Directors)

Bank of Baroda-Overdrafts/Trust Receipts 285971550 –Standard Chartered Bank-Overdrafts/Trust Receipts 36604695 –

Sub Total (b) 1933869846 1293640304

Total (a + b) 1940010328 1312453276SCHEDULE 5 : UNSECURED LOANS

Purchase Bill Finance from Standard Chartered Bank 43413493 –43413493 0

67



Rs. Rs.

SCHEDULE 7 : INVESTMENTS

Fully Paid up Quoted equity shares 12147480 20769170Fully Paid up Unquoted equity shares 8773000 8773000

20920480 29542170

SCHEDULE 8 : INVENTORIES(As taken, Valued and Certified by the management)

Trade Stock 1826568703 1133370873Packing Material 19170718 30575665Goods in Transit 45705504 37615756

1891444925 1201562294

SCHEDUILE 6 : FIXED ASSETS

GROSS BLOCK DEPRICIATION NET BLOCK

PARTICULARS As At Addition Deduction/ As At As At For the Deduction/ As At As At As At01.04.2009 During the Adjustments 31.03.2010 01.04.2009 Year Adjustments 31.03.2010 31.03.2009 31.03.2010

Year

Land 8697900 – 2387672 6310228 – – – – 6310228 8697900

Building 51723766 37645525 25425155 63944137 1910107 696397 – 2606503 61337633 49813660

Plant & Machinery 755381 39565 794946 327935 36522 – 364457 430489 427446

Furniture & Fixture 5282739 3954267 9237006 1798490 428418 – 2226908 7010098 3484249

Vehicles 33761514 3475029 1886071 35350472 8615102 3188048 715167 11087983 24262488 25146411

Computers 4732973 809636 – 5542609 4436168 478208 – 4914375 628233 296806

Office Equipments 8511569 368279 8879848 1583116 442202 – 2025318 6854530 6928453& Fittings

Generator 978848 – 978848 59920 46496 – 106416 872432 918928

Website Development 151900 – 151900 55052 15190 – 70242 81658 96848Charges

Trade Mark 5400 – 5400 1667 513 – 2180 3221 3733

TOTAL (Current Year) 114601991 46292301 29698898 131195393 18787557 5331993 715167 23404382 107791011 95814434

TOTAL (Previous Year) 51176254 64353132 927396 114601991 13827978 5441475 481896 18787557 95814434 37348277

68




Rs. Rs.

SCHEDULE 9 : SUNDRY DEBTORS

Considered goodOutstanding for a period exceeding six months 52970234 86475194

Other Debts 748028309 463626231

Considered doubtful 7667577 6294881

808666120 556396306

SCHEDULE 10 : CASH AND BANK BALANCES

Cash in Hand 2070328 1933134

Balances wih Schedule Banks

-Current accounts 98114361 12518456

-EEFC accounts 563091 639035

-Margin Money deposits 99511290 49101715

-Accrued Interest on deposits 632639 1455404

200891709 65647744

SCHEDULE 11 : LOANS AND ADVANCESAdvances recoverable in cash or inKind or for Value to be received 1329024624 1210265280

Security Deposits 18792158 14259079

1347816783 1224524358

SCHEDULE 12 : CURRENT LIABILITIES

Sundry Creditors 1556660167 926657642

Other Liabilities 77336291 354476667

1633996457 1281134310

SCHEDULE 13 : PROVISIONS

Provision for Income Tax 52688058 18500000

Provision for Wealth Tax 151028 148429

Provision for Gratuity 6018514 5594999

Provision for Leave Encashment 2839379 –

Provision for FBT – 390316

Provision for Proposed Dividend 10296040 5148020

Provision for Dividend Distribution Tax 1749812 874906

73742831 30656670

69



Rs. Rs.

SCHEDULE 14 : SALES AND OTHER INCOME

Sale of Products

Domestic 2888590997 1753040865

Exports 4485307414 5339681890

7373898411 7092722755Difference in Exchange 119391665 (38428263)Export Incentives received 89054989 337536435Discount Received 18675739 17726374Other Incomes 905847 12453410Forward Contract Forex Gain/ (loss) 315843411 (538446009)Receipt from Hotel Booking 2066349 1953462

7919836412 6885518163

SCHEDULE 15 : COST OF GOODS SOLD

Opening Stock 1201562294 537946918

Add: Purchases 7669436028 6444176640

Less: Closing Stock 1891444925 1201562294

6979553397 5780561264

SCHEDULE 16 : DIRECT EXPENSES

Brokerage and Commission 9999377 9153829

Detention, Demurrage & Claim 12572957 3470711

Forward Contract Commodity loss 6125666 6538263

Contract Settlements 34158478 4194192

Corporation / Export Cess 586501 2015920

Final Discharge Shortage – 13507786

Freight & Cartage 217147187 629110202

Fumigation & Phyto Expenses 7717664 7006454

Godown,Ground Rent & Storage 43168463 25670721

Inspection Charges 6811847 5615197

Packing Charges 2714991 8250160

Insurance 11380598 9270479

Port Charges 7623916 14103806

Processing/Sotex Charges 147736 1598653

Survey Fees 232322 45191

Hotel Booking Charges 1866839 1380903

362254542 740932466

70




Rs. Rs.

SCHEDULE 17 : OFFICE & ADMINISTRATIVE EXPENSESElectricity & Water Expenses 1194878 956661Gratuity 423515 (503152)Managerial Remuneration 20306222 11396558Postage and Telegram 565335 363048Printing,Stationery, Periodicals & Books 1113374 1097538Rent & Taxes 1545195 1092434Repairs and Maintenance 7133433 2427669Retainership & Consultancy Charges 793125 822500Salary and other amenities 48780153 47759147Telephone Expenses 3762743 2836458Travelling Expenses(including Foreign Travel)-Directors 5765042 5546999-Others 11436083 11575325Vehicle Repair & Maintenance Expenses 2160415 2135354Miscelleneous Expenditure written off 59094 63485

105038608 87570023

SCHEDULE 18 : FINANCIAL CHARGESBank Charges & Interest 211668115 137146735ECGC Premium Indirect 6799642 5744385Other Interest 751535 1129028

219219292 144020148Less: Interest received 7100350 12638642

212118942 131381506

SCHEDULE 19 : SELLING & DISTRIBUTION EXPENSESAdvertisement and Publicity 752598 2067886Business Promotion 3179376 1636838Documentation Charges 308735 434118Discount Allowed 2476194 2506546Balances Written off 64304 3434630

6781208 10080019

SCHEDULE 20 : OTHER EXPENSESAuditor's Remuneration 1351470 1390605Festival Celebration 901877 2600Insurance Claim Written off 5903912 –Stamping & Filling Fees 481143 983089Legal and Professional Charges 6961999 16643128Licence & Registration Fees 1672291 332766Loss on Sale of Fixed Assets 647909 350047Meeting & Seminar Expenses 384332 400061Membership Fees and Subscriptions 1880006 530417Miscellanious Expenses 6162963 1280995Security Tansaction Tax 239723 56105Sitting Fee 260000 180000

26847624 22149814

71

SCHEDULE 21: SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTING TO THE CONSOLIDATED BALANCESHEET AND PROFIT AND LOSS ACCOUNT AS AT 31ST MARCH 2010.

A SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF ACCOUNTINGThe Financial Statements have been prepared under the historical cost convention on accrual basis, in accordancewith the generally accepted accounting principles in respective country of establishment. The Accounting Policieshave been consistently applied by the Company unless otherwise stated.

2. USE OF ESTIMATESThe preparation of financial statements is in conformity with generally accepted accounting principals requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent liabilities at the date of financial statements and the results of operations during thereporting period end. Although these estimates are based upon management's best knowledge of current eventsand actions, actual results could differ from these estimates.

3. REVENUE RECOGNITIONThe accrual basis of accounting has been followed in respect of income and expenditure. Sales figures are net ofsales tax. The Export Sale is recognized at the time of issuance of Bill of Lading.

4. ACCOUNTING FOR TAXES ON INCOMETax expense comprises of current tax and deferred tax. Provision for current income tax is made on the taxableincome at the applicable tax rates.

The Deferred tax expense or benefit is recognized on timing differences being the difference between taxableincomes and accounting incomes that originate in one period and are capable of reversal in one or moresubsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws thathave been enacted or substantively enacted by the balance sheet date.

5. FOREIGN CURRENCY TRANSACTIONS(i) Foreign Currency transactions during the year are recorded at the rate of exchange prevailing on the date of

transaction. Foreign Currency monetary assets and liabilities are translated into Rupees at the rate of exchangeprevailing on the date of the Balance Sheet except investment in shares of subsidiary company which hasbeen carried at historic cost. All Exchange differences are dealt with in the Profit and Loss Account except forinvestment in overseas subsidiary. Foreign Currency monetary items are reported using the closing rate.

(ii) Where the company has entered into forward exchange contracts, the difference between the forward rateand spot rate at the date of the contract is recognized in the statement of the profit and loss over the life of thecontract and difference between the spot rate at the date of contract and the exchange rate prevailing on thebalance Sheet date is recognized as per Accounting Standard (AS) -11 (Revised) issued by the Institute ofChartered Accountants of India. Any Profit or Loss arising on cancellation or renewal of forward exchangecontract is recognized as Income or as expenses for the year.

6. FIXED ASSETSFixed Assets are stated at cost less accumulated depreciation. The company has capitalized all costs relating toacquisition and installation of fixed assets.

7. INVENTORIESItems of Inventories are valued at cost or net realizable value, whichever is lower.

8. RETIREMENT BENEFITSRetirement and other employee benefits to employees comprise payment of gratuity, leave encashment and providentfund under the scheme of the company in respect of employee in India, due provisions has been made for gratuityand leave encashment based on actuarial valuation as prescribed in AS 15 issued by ICAI . In respect of employeesoutside India provisions for Liability on retirement and other benefits have been made in accordance with applicablelaws of concerned countries.

9. EXPORT BENEFITS/ INCENTIVESExport Entitlements in respect of the exports made under various scheme are recognized in the Profit and LossAccount when the right to receive credit as per the terms of the Schemes are established.

10. EARNINGS PER SHAREBasic Earnings per share are calculated by dividing the net profit or loss for the period attributable to equityshareholders by the weighted average number of equity shares outstanding during the period. Diluted Earnings pershare are not different from basic earning per share.

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11. INVESTMENTSInvestments other than in subsidiary have been accounted as per Accounting Standard (AS) 13 on Accounting forInvestment.

B NOTES ON ACCOUNTS TO THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT1. PRINCIPLE OF CONSOLIDATION

The consolidated financial statements relate to Emmsons International Limited (the Company) and its subsidiariescompanies, Emmsons SA & Emmsons Gulf DMCC. The consolidated financial statements have been prepared on thefollowing basis:(a) The financial statements of the Company and its subsidiaries companies are combined on a line-by-line basis by

adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealized profit or losses in accordance with AccountingStandard (AS)-21 - "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India.

(b) Minority Interest's Share of the net profit of consolidated subsidiaries for the year is identified and adjusted againstthe income/ loss of the group in order to arrive at the net income attributed to shareholders of the Company.

(c) Since the company holds 99.99% stake in the subsidiary company therefore, Minority Interest's Share of the netassets of consolidated subsidiary is identified and presented in the consolidated balance sheet under the headReserve & Surplus together with other reserves of the group company.

(d) Accounts of subsidiaries companies have been drawn up in accordance with accounting principles followed incountry where subsidiaries companies has been incorporated. While consolidating results of subsidiaries companiessome of the items have been re-classified so that consolidated financial statements are prepared in a manner soas to comply with accounting policies followed in India.

2. THE SUBSIDIARIES COMPANIES CONSIDERED IN THE CONSOLIDATED FINANCIAL STATEMENTS :

Name of the Subsidiaries Country of Proportion ofIncorporation ownership interest

1. Emmsons S.A. Switzerland 99.99%

2. Emmsons Gulf DMCC Dubai 100.00%

3. RELATED PARTIES DISCLOSURES :As required by Accounting Standard-18, "Related Party Disclosures" issued by the Institute of Chartered Accountants ofIndia, relevant information is provided here below:

Related parties with whom transactions have taken place during the year:

S.NO. NAMES RELATIONSHIP

A Mr. Anil Monga Key Managerial Personnel

B Mr. Rajesh Monga Key Managerial Personnel

C Mr. Shivaz Monga Key Managerial Personnel

D Mr. Vijay Kumar Kakkar Key Managerial Personnel

E Mr. Viresh Shankar Mathur Key Managerial Personnel

F Mr. Mohd. Tariq Raza Key Managerial Personnel

G Mr. Satish Chandra Gupta Key Managerial Personnel

H Mr. Jonathan Grange Key Managerial Personnel

I Mr. Kanishk Monga Key Managerial Personnel

J Mrs. Manya Kumar Key Managerial Personnel’s relative

K M/s Emmsons S.A. Subsidiary (Control Exists)

L M/s Emmsons Gulf DMCC Subsidiary (Control Exists)

M M/s Star Emmsons International Ltd. Associate Concern

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Following are the details of the transactions with the related parties :

Nature of Transactions Related Parties Amount(Rs. in Lacs)

Salaries, Allowances & Perquisites Key Managerial Personnel's 340.59Salaries, Allowances & Perquisites Key Managerial Personnel's Relatives 2.58Sitting Fee Key Managerial Personnel's 2.60Rent Key Managerial Personnel's 3.00Advances by Subsidiaries Key Managerial Personnel's 227.92Advances by Subsidiaries Associate Concern 312.01

4. ACCOUNTING FOR TAXATION OF INCOME AS PER AS - 22

As per the mandatory Accounting Standard - 22 on "Accounting for Taxes on Income" issued by the ICAI, the companyhas recorded the cumulative Deferred Tax Liability (Net) in respect of timing differences as at 31st March 2010.

Consolidated Deferred Tax Asset/ Liability Amounts (In Rs)Deferred tax Liability Emmsons International Ltd 2482741

Losses of Emmsons SA available for set off for Tax Benefit (5211857)

Tax Asset computed @ 21.4% of losses available for set off (1096574)

Company's Stake @99.99% (1096564)

Deferred Tax Liability as on 31.03.2010 1386177

5. SEGMENT REPORTING AS PER AS -17:

Company is primarily engaged in business of trading accordingly company is single business segment company Thegeographic segments have been identified as below :

(Rs. In Lacs)

Current Year Previous YearIndia Outside India Outside

India India

Total Revenue 69322.86 10551.79 65530.05 5542.61

Less : Inter Segment 676.29 – 2217.18 –

External Revenue 68646.57 10551.79 63312.87 5542.61

Segment results before interest and Tax 4097.25 243.04 2364.70 23.13

Less: Interest Expense 2084.11 37.08 1302.15 11.66

Profit before Tax 2013.14 205.96 1062.55 11.47

Less: Current Tax 716.51 0.69 392.20 0.30

Fringe benefit Tax – – 15.35 –

Deferred Tax (0.60) (10.96) 16.31 (16.93)

Net Profit after Tax 1297.23 216.23 638.69 28.10

Segment assets 34525.09 9300.17 27500.95 4239.59

Segment Liabilities 31475.09 5450.41 24811.70 40741.08

Capital Expenditure 148.07 11.12 162.70 262.60

Depreciation 49.97 3.35 46.18 8.23

6. EARNINGS PER SHARE

Basic and diluted earnings per share are calculated by dividing the net profit or loss for the year attributable to equityshareholders by the weighted average number of equity shares outstanding during the year. The company has notissued any potential equity share, accordingly, basic and diluted earnings per share are the same.

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S.No Particulars Current Year Previous Yeara Profit after taxation and exceptional items (Rs.) 151345976 66677294

b Weighted average number of shares outstanding during the year 5148020 5148020

c Nominal Value Per Share (Rs.) 10 10

d Basic and diluted earning per share (In Rs.) d = (a/b) 29.40 12.95

7. Contingent Liabilities not provided for

(Amounts Rs. In Lacs)a) Guarantees to sales tax authorities : Rs. 5.90 (Previous year Rs.5.90)

b) Corporate Guarantees for Credit facilities to subsidiary : Rs. 2893.50 (Previous year Nil)

c) Letter of Credit issued for purchases : Rs. 870.10 (Previous year 21.23)

d) Other Guarantees : Rs. 827.43 (Previous year Rs. 160.26)e) The Entry Tax demands Rs. 11.43 lacs raised by the authorities have been protested by the company and final

determination is yet to be made by the appellate authorities. The company has however made the payment againstthese demands under protest and the same is included in the list of Loans and advances. In the event case is finallydecided against the Company the said amount of Rs. 11.43 Lacs shall be required to be charged as an expense toProfit & Loss account.

f) Tax Demands totaling Rs. 8.60 Lacs raised by the Income Tax Department is being contested by the Company inappeal. No provision has been made for the liability in the accounts under report.

8. The Company has entered into agreement of purchase of semi finished flat and has spent Rs. 48.75 lacs on constructionand shown under the head Capital work in progress. Future expenses to be incurred on said flat are estimated at Rs. 25lacs.

9. The Previous year Figures have been re-arranged and re grouped wherever necessary to make them comparable withthose of current year.

10. Schedule No. 1 to 20 form integral part of the consolidated Balance Sheet and profit & Loss Account ended on 31stMarch, 2010.


Sd/- Sd/- Sd/- Sd/- Sd/-(CA NARENDRA ARORA) (HAMANT PAUL) (SUVINDRA KUMAR) (RAJESH MONGA) (ANIL MONGA)Partner GM - Finance Company Secretary Director Managing DirectorM. No. 088256

Date : 17th August, 2010Place : New Delhi

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EMMSONS INTERNATIONAL LIMITED2637, FIRST FLOOR, NAYA BAZAR, DELHI-110 006

PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL

NAME AND ADDRESS OF THE SHAREHOLDER

____________________________________

____________________________________

____________________________________

No. of Shares held :

I/We hereby record my/our presence at the 17th ANNUAL GENERAL MEETING of the Company held on Wednesday,the 29th day of September, 2010 at 11.00 A.M. at Niryat Bhawan, Rao Tula Ram Marg, Opp. Army HospitalResearch & Referral, New Delhi -110057

( ) ( )NAME OF THE SHAREHOLDER OR PROXY Signature of the Shareholder or Proxy

(In Block Letters)

EMMSONS INTERNATIONAL LIMITED2637, FIRST FLOOR, NAYA BAZAR, DELHI-110 006

I/We __________________________________________________________________________________of __________________________________________________________________________________being a member/members of EMMSONS INTERNATIONAL LIMITED appoint __________________________of _______________________________ or falling him/her ______________________________________of ___________________________ as my/our proxy to attend and vote for me/us and on my/our behalf at the17th ANNUAL GENERAL MEETING of the Company held on Wednesday, the 29th day of September, 2010 at11.00 A.M. at Niryat Bhawan, Rao Tula Ram Marg, Opp. Army Hospital Research & Referral, New Delhi -110057and at any adjournment thereof.

Signed this__________________day of__________________2010.

Note : This Proxy in order to be effective should be duly stamped, completed and signed and must be depositedat the Registered Office of the Company not less than 48 hours before the time for holding the aforesaidmeeting. The proxy need not be a member of the Company.

NO GIFTS WILL BE GIVEN AT THE ANNUAL GENERAL MEETING.

ATTENDANCE SLIP

Master Folio No.

PROXY FORM

Affix aRupee OneRevenue

Stamp

MANAGING DIRECTOR’S MESSAGE...3. To appoint a Director in place of Mr. Rajesh Monga, who retires...

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