Bilati (Orissa) Ltd

Your Directors submit herewith the Audited Accounts for the year ended 31st March, 2007 along with their report as follows:

FINANCIAL RESULTS

Your Directors regret that no substantial activity could be carried out during the year and there is loss incured by the Company for this year also and are unable to recommend any dividend.

PERFORMANCE

In spite of best efforts made, the Company could not secure need based working capital and for keeping the plant in good operating conditions, a marginal production of tomato paste of 285.413 MT was made during the year. The Company has also negotiated One Time Settlements with Orissa State Cooperative Bank (OSCB) and Keonjhar Central Co-operative Bank (KCCB) and are awaiting for their approval.

The Company is continuing as a Sick Industrial Company within the meaning of Section 3(1 )(0) of Sick Industrial Companies (Special Provisions) Act, 1985, and the accumulated losses of the Company as on 31st March, 2007 has exceeded the net worth of the Company as defined in Section 3(ga) of Sick Industrial Companies (Special Provisions) Act, 1985. The Company has registered itself as a sick company with the Board for Industrial and Financial Reconstruction (BIFR).

FUTURE PROSPECTS

Your Company has prepared a Revival Plan and is confident of securing need based working capital to run the unit after making arrangements by way of One Time Settlements with the present term lenders.

DIRECTORATE

Mr. S. Rath was nominated by Orissa Agro Industries Corporation Limited as Director on the Board w.e.f. 20.11.2006.

Dr. A. K. Padhee, IAS, was nominated by Orissa Agro Industries Corporation Limited as Director on the Board w.e.f. 11.05.2007.

Mr. G. K.Dhal, IAS, was nominated by Orissa Agro Industries Corporation Limited as Director on the Board w.e.f. 14.09.2007.

Mr. B. C. Mohapatra, IAS, was nominated by Orissa Agro Industries Corporation Limited as Director on the Board w.e.f. 12.10.2007.

Dr. G. C. Sahu, Director, retires by roation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Mr. G. K. Dhal, IAS, Dr. A. K. Padhee, IAS, and Mr. B. C. Mohapatra appointed as Additional Director under Section 260, retire at this Annual General Meeting and are eligible and offer themselves for re-appointment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

The information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 as amended are set out in Annexure 'A' which forms part of this Report.

AUDITORS

The Auditors M/s L. N. More & Co., Chartered Accountants, Cuttack retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

COMMENT ON AUDITORS' REPORT

The Report of the Auditors read together with the Notes on Accounts is self-explanatory and needs no further clarification.

PARTICULARS OF EMPLOYEES

There is no employee in terms of Section 217(2A) of the Companies Act, 1956.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed :

(i) That in the preparation of the accounts for the year ended 31st March, 2007 the applicable accounting standards have been followed along with proper explanation relating to material departures ;

(ii) That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review

(iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ;

(iv) That the Directors have prepared the accounts for the year ended 31 si March, 2007 on a "going concern" basis.

COMPLIANCE OF CLAUSE 49 OF THE LISTING AGREEMENT

Compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is applicable to the Company from the financial year later than 31 st March, 2003. Since the Company is in the process of implementing the conditions rquired for compliance of the statutory requirements of Corporate Governance, the certificate from the auditors regarding compliance of conditions of Corporate Governance is not attached.

ACKNOWLEDGEMENT

The Directors acknowledge with gratitude the co-operation extended by the Banks, State Government, Suppliers, Customers, Shareholders and solicit their continued support. The Directors also wish to place on record the dedicated services rendered by the Executives, Staff and Workers.

Bhubaneswar - 751 024

Dated : 23^rd November, 2007

ANNEXURE TO DIRECTORS' REPORT

Annexure - "A"

(a) Energy conservation measures taken :

The Company has installed evaporators in triple effect (4 stages) for minimizing energy usage.

(b) Impact of measures of (a) above for reduction of energy consumption and consequent impact on the cost of production of goods :

Cost of energy will be reduced with consequent increase in volume of production.

(c) Total energy consumption and energy consumption per unit of production in Form A :

(A) Power & Fuel Consumption :

B. TECHNOLOGY ABSORPTION :

Efforts made in Technology absorption in Form B :

(A) Research & Development :

1. Trials/Testing of Indian and imported varieties of tomato and papaya seeds, resulting it substantial increase in production per acre and Integrated pest management and virus production for biological control of paste to reduce cost of cultivation of farmer continued.

(B) Technology Absorption, Adaptation & Innovation :

In house filling system designed and produced for can filling.