Madhusudan Industries Ltd

To

The Members,

The Directors have pleasure in submitting the Annual Report together with the Statementof Accounts of your Company for the year ended 31st March, 2010.

Performance

The summary of your Company's financial performance is given below:

Review of Company's Performance

The Company continued consolidation in the field of Horticulture by bringing additional7200 sq. mtrs. of land under Net house cultivation, wherein soilless cultivation of colourCapsicum in growbags was undertaken. The Company brought additional area of nearly 3000sq. mtrs. under open cultivation of Tube Rose. Further, Golden Rod plantation was carriedout in 5600 sq. mtrs. on erstwhile waste land. With all these efforts the Company's incomefrom Horticulture increased compared to the first year of operation. The Company hasrented part of the premises and godowns which are not put to horticulture operations.Management Discussion and Analysis Report

a) Industry structure and development

The Company has reasons to be satisfied with its performance in the field ofHorticulture, especially as the venture has been undertaken in erstwhile industrial land,overcoming the inherent drawback of poor quality soil. The Company is focusing more andmore on soilless cultivation and hydroponics. Hydroponics and soilless cultivation areespecially suitable for growing medicinal plants as well as other crops free from anyheavy metallic impurities. The Company is going to focus on growing vegetables in the daysto come to generate more revenues.

b) Opportunities and threat

The future of agro industries and herified remains bright. The Company would graduallymove towards growing vegetables and medicinal plants to earn higher revenues. The readyavailability of infrastructure would permit the Company to get into processing and packingof agricultural products. However, the extreme weather conditions and poor quality ofwater continue to pose a threat, which has to be countered by use of R.O. Plant withresultant significant cost additions.

c) Segment-wise/Product-wise performance

The Company has performed satisfactorily in the Horticulture in its second year ofoperations. The turnover is Rs,41.21 lacs as against Rs.8.85 lacs last year.

d) Outlook

The future of the Company is bright. The Company is considering plans todiversify into medicinal plants and vegetables to earn higher revenues. The Company is onthe look out to diversify into newer areas to capitalise on its past track record andperformance.

e) Risks and concerns

The marketing of horticulture products is a challenging task, as apart from being aperishable commodity, the market is very volatile. The Company is leveraging on its pastmarketing experience to overcome these problems by exploring possibility of tying up withdedicated vendors and long term contracts.

f) Internal control system and their adequacy

The Company has computerised its accounting system since many years which has provedversatile. The system of internal control of the Company is commensurate with the size andcomplexity of the Company's business, in addition, the operations are subject to periodicinternal audit by independent Auditors.

g) Financial performance with respect to Operational Performance is discussed in themain part of the report

h) Material development in Human Resources / Industrial Relations

The company values and nurtures its human resources and Company would continue to adoptand implement the best HRD practices in future.

Corporate Governance

Pursuant to clause 49 of the Listing Agreement with the Stock Exchange, Report onCorporate Governance has been included in this Annual Report as a separate section.

Directors' Responsibility Statement

In compliance of Section 217 (2AA) of the Companies Act, 1956, Directors of yourCompany confirm:

• that the applicable accounting standards have been followed in the preparationof final accounts and that there are no material departures;

• that such accounting policies have been selected and applied consistently andsuch judgements and estimates made are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31, 2010 and of the profit ofthe Company for the year ended on that date;

• that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; that the annual accounts have been prepared on a going concern basis.

Dividend

Your Directors have not recommended any dividend as consolidation and restructuringprocess is underway. Energy Conservation, Technology Absorption and Foreign ExchangeEarnings & Outgo

The details required under the Companies (Disclosure of particulars in the Report ofBoard of Directors) Rules, 1988 are annexed to this report.

Exchequer

The Company has contributed Rs.5.84 lacs to the exchequer by way of Excise Duty,Customs duty, Income tax, VAT and other fiscal levies.

Fixed Deposits

Fixed Deposits from the Public, outstanding as on 31st March 2010 was Rs.232.84 lacs.There are Forty Four Fixed Deposit holders with Rs.19.43 lacs of unclaimed / unreneweddeposits as on 31st March 2010. The Company on the basis of the working results during theyear under review, can accept deposits from the Public as well as from the shareholders tothe extent of Rs.387.32 lacs.

Subsidiary Company

The particulars required Under Section 212 of the Companies Act, 1956 in respect of theSubsidiary Company viz. Madhusudan Fiscal Limited is appended.

Finance

The Company has Obtained credit facilities from Bank of Baroda.

Employees

The Company has no employee as specified under Section 217(2A) of the Companies Act,1956, hence, there is no information required to be provided in this regard.

Directors

Shri Sanwarmal Agarwai and Shri Rajesh B Shah, directors are due to retire at the endof ensuing Annual General Meeting and being eligible offer themselves for re-appointment.The brief resumes of Shri Sanwarmal Agarwal and Shri Rajesh B. Shah, directors as requiredby clause 49 of the Listing Agreement with Stock Exchange, are provided the noticeconvening the Annual General Meeting of the Company.

Auditors

M/s H.V.Vasa & Co. Statutory Auditors of the Company retire at the end offorthcoming Annua Meeting and being eligible offer themselves for reappointment. The Boardrecommends their re-appointment at the ensuing Annual General Meeting.

Insurance

The Company has adequately insured all its assets.

Industrial Relations

-The company's relations win, its employees remained cordial during the year. TheCompany has taken adequate steps for the health and safety of its employees.

Appreciation

Your Directors would like to place on record their gratitude for the co-operation andassistance given by Bank of Baroda and various departments of both State and CentralGovernments.

Annexure to the Directors' Report

Disclosure of particulars with respect to Conservation of Energy, TechnologyAbsorption, Foreign Exchange Earnings and Outgo as required under the Companies(Disclosure of particulars in the Report of Board of Directors) Rules, 1988 and formingpart of the Report of the Board of Directors for the year ended 31st March 2010.

Conservation of Energy

Annexure to the Directors' Report Statement of Holding Company's Interest inSubsidiary Company Statement pursuant to Section 212 of the Companies Act, 1956