Petron Engineering Construction Ltd

PETRON ENGINEERING CONSTRUCTION LIMITED

The Directors of Petron Engineering Construction Limited have pleasure in presentingthe Thirty-fifth Annual Report and the Audited Financial Statements of your Company forthe year ended 31st March, 2011.

A) FINANCIAL RESULTS

During the year under review, though the total revenue has declined to 50143 Lacs from-E53376 Lacs in the previous year (down by 6.06%). the profit has increased to 6089 Lacsbefore interest, depreciation, tax and transfer from revaluation reserve as compared toRs.5165 Lacs in the previous year (increased by 17.89%). The interest has declined toRs.381 Lacs (Previous Year Rs.675 Lacs) (Lower by 43.56%) and depreciation has increasedto Rs.1093 Lacs (previous year Rs.903 Lacs) (Higher by 21.04%).

The improvement in the operational efficiency and reduction in interest cost hasresulted into higher profit of Rs.4615 Lacs as compared to Rs.3587 Lacs in the previousyear before providing for tax. The Net Profit for the year is higher at Rs.3095 Lacs ascompared to Rs.2388 Lacs in the previous year.

B) DIVIDEND

Your Directors are pleased to recommend a Dividend of *2 (20%) per Equity Share ofRs.10 each for the year ended 31st March, 2011 for declaration by the Shareholders at theThirty-fifth Annual General Meeting. The Dividend will absorb Rs.15.076,800 and CorporateDividend Tax thereon will be Rs.2,445.834, aggregating to Rs.17.522,634.

C) MANAGEMENT DISCUSSION AND ANALYSIS

1) Industry Trends and Developments

You are aware that infrastructure companies in the last two years took a beating due tothe global economic slowdown. Even FY11 did not give good news for the sector with delaysin land acquisition, project clearances, high interest rates, swings in currency rates andslower project execution. Despite these in long run the infrastructure industry is goingto witness a good growth on back of growing infrastructure activities. The concept ofengineering, procurement & construction (EPC) has been gaining importance in Indiasince the last decade as the companies prefer awarding contracts to specialized companieshaving complete experience of handling such projects. It has got a very good potentialconsidering the size and complexity of projects being set up in India in the industrieslike oil & gas, power, steel, fertilizers, cement etc. India is set to see a massiveinfrastructure capex cycle over the next decade as the existing infrastructure fails tosupport India's population. The infrastructure companies will benefit hugely from thiscapex cycle.

The infrastructure companies will benefit hugely from this capex cycle.

2)Division Wise Performance Engineering & Construction

During the year, the Division has successfully executed the following contracts:

a) Equipment and piping installation works for DHDT & HGU units at Indian OilCorporation Limited, Vadodara. Gujarat.

b) Erection of boiler Proper (2 x 300MW) (Phase 1) of Utility Energytech andEngineering Private Limited at Rosa Thermal Power Project. Rosa, Uttar Pradesh.

c) Power plant erection work for 2 x 300MW boilers (Phase 2) for Sichuan FortuneProject Management Co. Limited at Adani Power Limited. Mundra. Gujarat.

d) Mechanical and piping works of HCU/DHT Heaters for Bharat Oman Refinery Limited atBina. Madhya Pradesh.

e) Composite Mechanical Works for Implementation of Euro-IV Project of ChennaiPetroleum Corporation Limited at Chennai.

f) Lump sum turnkey project of CDU/VDU Heaters for HPCL-Mittal Energy Limited atBathinda. Punjab.

g) Lump sum turnkey project of DHDT Heaters for HPCL-Mittal Energy Limited at Bathinda.Punjab.

h) Lump sum turnkey project of NHT/CCR Heaters for HPCL-Mittal Energy Limited atBathinda, Punjab.

The work on the following projects substantially progressed during the year:

a) Erection and Associated works of Boiler and Auxiliaries and TG Auxiliaries of UnitNo.01 and 03 for 3x660 MW Tiroda Thermal Power Project of Adani Power Maharashtra Limitedat Tiroda, Dist. Gondia, Maharashtra

b) Mechanical Fabrication & Erection works for 5000 TPD Ariyalur Line -II of MadrasCements Limited.

c) Erection of Boiler proper for 2x300 MW Rosa Phase -II Thermal Power Project Rosa forUtility Energytech and Engineer's Private Limited.

d) Engineering, Procurement, Construction and Commissioning Assistance (EPCC) of FiredHeaters for VGO-HDT unit of Paradip Refinery Project. Orissa for Indian Oil CorporationLimited.

e) Supply of two Nos. Cooker Feed (DCU) Heater package including Residual Engineering.Thermal Design Revalidation, fabrication and delivery as per the technical specificationfor Nagarjuna Oil Corporation Limited, Cuddalore.

f) Supply of Hydrotreater reactor Feed Heater (DHU) Heater package including ResidualEngineering, Thermal Design Revalidation, shop fabrication and supply as per the technicalspecification for Nagarjuna Oil Corporation Limited at Cuddalore.

g) Engineering, Procurement. Construction and Commissioning Assistance (EPCC) of AVUFired Heaters for Paradip Refinery Project at Paradip, Orissa for Indian Oil CorporationLimited,

h) Engineering. Procurement. Construction and Commissioning Assistance (EPCC) ofNHT/CCR Fired Heaters for Paradip Refinery Project at Paradip, Orissa for Indian OilCorporation Limited. Paradip.

I) Construction Contract (V2) for A10/A17 viz. FCC Unit. LPG, Jet Fuel and GasolineMerox, FGD and Caustic Storage areas in ISBL for Cuddalore Refinery Project at Cuddalore.

j) Erection, testing. Commissioning, trial operations and handing over 2X600 M Wboilers at Raghunathpur.

Petron Mechanical Industries

During the year, the Division has successfully executed the following contracts:

a) Erection & Commissioning of 33 Nos. of EOT Cranes and 23 Nos. of Electric Hoistsfor Vedanta Aluminium Limited. SEZ Unit, Smelter Expansion Project at Jharsuguda, Orissa.

b) Design, Engineering. Manufacturing & Supply of 25 Nos. of Electric Winches ofdifferent capacities for Gammon India Limited, Mumbai.

c) Installation & Commissioning for Rodding Shop Project of Vedanta AluminiumLimited, SEZ Unit, Jharsuguda, Orissa.

d) Design. Engineering, Manufacturing Supply & Commissioning of 02 Nos. of 40TCapacity Gantry Cranes for Adani Power Maharashtra Limited for their Power Plant atTiroda.

e) Manufacturing & Supply of EOT Crane Spares for Vedanta Aluminium Limited, SEZUnit, Smelter Expansion Project at Jharsuguda. Orissa.

Electrical & Instrumentation

During the year, this Division has successfully executed the following orders:

a) Erection, Testing & Commissioning of Electrical & Instrumentation equipmentfor Madras Cements Limited. Ariyalur

b) Erection, Calibration. Testing and commissioning for complete C&l Systems for2x330MW (Unit-3 & 4) at Adani Power Limited. Mundra Thermal Power Project. Mundra

c) Supply of Electrical Equipment Package (Part-I Cabling. Earthing & LightningProtection. Part - II Electrical Safety Equipment and Part - III Illumination System), for366 MW Combined Cycle Power Plant - Stage II at Lanco Infratech Limited. Kondapalli IDA,Dist. Krishna, A.P.

d) Supply and Delivery at site with all the accessories for electrical items for2x300MW Rosa Thermal Power Project, for Utility Energytech and Engineers Pvt. Ltd

e) Electrical Erection work for Rosa Thermal Power Plant for Utility Energytech andEngineers Pvt. Ltd

f) Supply of materials for Balance of Plant (BOP) for 2 x 250MW Parichha Thermal PowerProject. Extension-ll. Unit 5 & 6 at Parichha. U.P for Reliance Infrastructure Limited

g) Erection. Testing and Commissioning of Electrical system for Balance of Plant (BOP)for 2 x 250 MW Parichha Thermal Power Project, Extension-ll. Unit 5 & 6 at Parichha.U.P. for Reliance Infrastructure Limited

h) Electrical works at CPP for Boiler 2 & Boiler -3 at Bharat Oman Refinery Limitedat Bina, Madhya Pradesh.

Presently, the following Orders of the Division are under execution:

a) Erection, Testing and Commissioning of Electrical and Lighting equipments &Instrumentation equipment at Ariyalur Line - 2 project of Madras Cements Limited.

b) Contract for Supply of Electrical Equipment . Installation, testing. Commissioningand conducting Guarantee tests for Vindyachal Super Thermal Power Project. Stage IV (2x500) MW for National Thermal Power Corporation Limited.

c) Contract for Supply of Electrical Equipment. Installation, testing. Commissioningand conducting Guarantee tests for Rihand Super Thermal Power Project, Stage III (2x500MW) for National Thermal Power Corporation Limited.

d) Supply of electrical equipment package (Part - I - cabling, earthing and lightingprotection. Part II - Electrical Equipment and Part III - Illumination system ) for 2 X371 MW combined cycle power plant - Stage III at Lanco Infratech Limited, Kondapalli IDA.Dist Krishna A.P.

e) Erection, testing and commissioning of electrical erection package (Part I -Cabling,Earthing and lighting protection. Part II - Electrical Equipment and Part III -Illumination System) for 2 X 371 MW combined cycle power plant -Stage III at LancoInfratech Limited,Kondapalli IDA, Dist Krishna A.P.

Rockwool Insulation & Refractory

During the year, the Division has successfully executed the following contracts

a) Refractory & Insulation Works for 125 MW CFBC Boilers for Larsen & ToubroLimited A/c JSW Energy Ltd.

b) Refractory Erection work for New Wadi Expansion Project 14000 TPD for ACC Limited.

c) Insulation work at HDPE, PP & LLDPR Supermax Expansion Project for HaldiaPetrochemicals Limited. Haldia.

d) Application of Insulation Work for 330 MW X 2 for Adani Power Pvt. Ltd., Mundra.

e) Heaters Refractory, Insulation & fireproofing Work (Petron Project) for BharatOman Refinery Limited. Bina. Madhya Pradesh.

f) CDU, NHT, CCR. DHDT Heaters Refractory & Insulation Work (Petron Project) forGuru Gobind Singh Refinery of HPCL Mittal Energy Limited at Bathinda, Punjab.

g) Refractory & insulation maintenance Jobs at Reliance Industries Ltd., Jamnagar

h) Refractory & insulation maintenance Jobs at Essar Oil Ltd.. Jamnagar

I) Refractory & insulation maintenance Jobs at Essar Power Ltd.. Jamnagar

Presently, the following Orders of the Division are under execution:

a) Refractory Application works for Essar Palletizing plant for Essar Steel Orissa Ltd

b) Refractory Job for DCU & VGO Heaters at Essar Oil Limited. Jamnagar for EssarProjects India Ltd.

c) Application of Refractory in 3 Nos. of 60 MT Aluminium melting & holdingfurnaces for Vedanta Aluminium Ltd., Jharsuguda.

d) Installation of Refractory materials for 10000 TPD Cement Plant at Thumdi. Kutch forABG Cement Ltd.

e) DHDT/NHT Heater Insulation work for Chennai Petroleum Corporation Limited. Chennai.

f) VGO, AVU. NHT & CCR Heater Refractory & Insulation Work (Petron Project) forIndian Oil Corporation Limited at Paradip, Orissa.

g) DCU & DHU Heater Refractory & Insulation Work (Petron Project) for NagarjunaOil Corporation Limited at Cuddalore. Tamil Nadu.

Petrofab Division

Successfully completed the below mentioned projects during 2010-2011

a) Fired heaters for DHDT heaters of MRPL Mangalore for Petrochem Development (I) Pvt.Ltd., Pune.

b) Fabrication Convection Modules (3Nos) and 1 No FG Boiler for Essar. Vadinar throughHeurtey Petrochem. Mumbai.

c) Fabrication of Incinerators (3 Nos) for Combustion Systems.

d) Fabrication and Assembly of Piping. Structures, Meter runs. Metering skid.Filtration Skids and Pressure Reduction Skids for Daniel Measurement Solutions (P) Ltd.Vadodara.

Jobs Presently under Execution

a) Fabrication of DCU Heaters (720 MT & Associated Piping) for Nagarjuna OilCorporation Limited, Cuddalore

b) Fabrication of DHU Heaters (85 MT & Associated Piping) for Nagarjuna OilCorporation Limited. Cuddalore.

c) Fabrication of Pressure Vessel (22 MT) for Combustion Systems

d) Reformer Structure (550 MT) for UHDE for Praxair for their Hydrogen plant at IndianOil Corporation Limited, Paradip, Orissa.

e) Fabrication of CA Ducts (CS & AS) - (100 MT) for UHDE for Praxair for theirHydrogen plant at Indian Oil Corporation Limited, Paradip. Orissa.

0 Fabrication of Heater Structures (390 MT) for Indian Oil Corporation Limited for JNKIndia Pvt Ltd,

g) Fabrication of Heaters for OMPL Mangalore (590 MT) for JNK India Pvt Ltd.

h) Fabrication of FG Stack (270 MT) for Larsen & Toubro Limited for Indian OilCorporation Limited at Paradip .Orissa.

I) Fabrication and Assembly of Piping, Structures, Meter runs, Metering skid.Filtration Skids and Pressure Reduction Skids for Daniel Measurement Solutions (P) Ltd,Vadodara.

3) ACHIEVEMENTS

a) We are pleased to inform you that your company achieved many feats in safe man-hourswithout Lost time incidents, major being Indian Oil Corporation Ltd., Gujarat DHDT-HGUproject in which record 7.6 Million man-hours were achieved without the lost timeincident.

b) Continuation in Certification of ISO 9001:2008 for quality system management duringsurveillance audit conducted recently.

c) Continuation in OHSAS 18001:2007 for Health and Safety Management system and ISO14001:2004 for environmental management system.

4)OUTLOOK

Your Company had booked large orders aggregating to Rs.874 crores during 2010-11 ascompared to Rs.692 crores achieved during 2009-10. The Company has accumulated orders ofabout Rs.1.200 crores of which EPC orders contributes over 40%. This augurs well forCompany's long term strategic business. Thus, order backlog represents increase of 18%over the pending order backlog of Rs.1020 crores in the previous year

The major orders received are given below:

The outlook is encouraging and your Company can look forward to continuous improvementin its performance in the coming year/s.

The sectors in which Petron Engineering Construction Limited is active is oil &gas, power, cement and metallurgical industries.

Out of these, the power seems to be a promising sector in the year 2011-12. India hasachieved the highest ever capacity addition in the power sector at a record 15.795 MWduring 2010-11. The number of power plants will increase in the years to come with StateGovernments such as Gujarat. Maharashtra, Orissa and so on inviting private players toinvest in the power sector. Coal based power will remain the dominant source for energy inIndia. The next five years should ramp up the markets even with a slew of high endinvestments and high end IPOs.

According to the Mid-term appraisal by the Planning Commission (2010) the resourcecrunch in the availability of indigenous coal will be much more intense in the twelfthplan when the projected gap between demand and supply is likely to go up by 200 MT. Hence,acquiring coal mines in other countries has become common practice to de-risk the rawmaterial supply for coal based power plant s which are the dominant source of energy inIndia.

Since there is no credible answer to the chronic energy shortfall, there would be athrust in Nuclear energy albeit with increased safety features. Your company is activelyconsidering entering into this segment in near future.

There are major fertilizer projects being implemented in India in next few years. Yourcompany sees this as opportunity to undertake EPC and construction jobs in this revivingsector which witnessed sluggishness for nearly one and half decade.

Another important sector that will continue to witness some growth is the oil and gassector. With major refinery at such as Paradip being at an advanced stage of constructionand other at Bina and Bathinda already in place , there would be lesser activity in thissector in 2011-12. Still some old refineries would implement projects forrevamp/modernization with which it is possible to get some good business out of thissector.

The fabrication industry for oil and gas, petrochemicals and fertilizers Industry wouldwitness a good inflow of enquiries. Your company is having a very good manufacturingworkshop near Vadodara to take care of this industry.

Cement industry has witnessed a change in the mode of execution of cement plants fromconventional equipment wise ordering to executing on EPC basis. Currently the installedcement production capacity in India is 300 MTPA and there is always a good demand forcement and consequently there is a scope for putting up new cement plants.

Beside Indian cement companies who are implementing cement expansion projects, thereare a number of foreign companies active in India who is also implementing new cementplant of around 7000 TPD capacity at several places in India including grinding units.Given the rapid pace of infrastructure development in India, cement will continue to be anattractive segment for your company and it is planning to participate with a bigger rolein the EPC mode.

5) OPPORTUNITIES

Your Company is into engineering, fabrication, erection, installation of plant,machinery & equipment for a number of business sectors in oil 8< gas.petrochemicals, power, steel, cement, minerals & metals, chemical & fertilizersetc. This spread both in reach and business sectors substantially derisk your Company fromeconomic volatility.

Oil accounts for 31% of India's total energy consumption and there is unlikely to beany significant scaling down of dependence on these fuels in the next 5-10 years. India isaccounting for about 10.8% of Asia Pacific regional oil demand by 2010. while providing10.2% of supply. Currently, of the six core industries identified in India, the oil &gas sector has propelled the growth of Indian economy most and the Government is lookingfor more investors in the sector. India is currently world's fifth biggest energy consumerand the need is continuously growing.

The Indian petrochemical capacity growth rate - which has been 3-4% over the past fiveyears - is expected to increase four times and range between 12%-15% in the next 5-7years. India's petrochemical industry is worth about US$40 billion which is 3% of the GDP.Further the approved proposals for setting up Petroleum. Chemicals and PetrochemicalsInvestment Region (PCPIR) in Andhra Pradesh. South Gujarat & West Bengal is likely toattract over Rs.485,000 crores investment over the next few years.

As the Indian economy continues to surge ahead, its power sector has been expandingconcurrently to support the growth rate. The demand for power is growing exponentially andthe scope for the growth of this sector is immense. India is currently the 5th largestproducer in 2010 and recorded a growth of 11.3% as compared to 2009.

With new global acquisitions by Indian steel giants, setting up of new state-of-the-artsteel mills, modernisation of existing plants, improving energy efficiency, backwardintegration into global raw material sources and nearly 222 memorandums of understandings(MoUs) signed between the investors & Governments for planned capacity of around 276MT, India is now on the centre of the global steel map. Consumption of steel in theengineering industries, construction sector, industrial applications, fertlisers andtransport sectors has been on the rise.

The Indian Fertilizer Industry is one of the allied sectors of the agricultural sphere.India has emerged as the third largest producer of nitrogenous fertilizers. The adoptionof back to back Five Year plans has paved the way for self sufficiency in the productionof food grains. The Government of India has been taking steps which inter alia includeintroduction of National Mineral Policy (NMP) & New Pricing Scheme (NPS) to supportthe fertilizer sector.

India is the second largest cement producer in the world, with an installed capacity ofabout 236 million tonnes (MT) in FY10. The sector is expected to add an additionalcapacity of 92.3 MT in FY13. Cement & gypsum products have received cumulative foreigndirect investment (FDI) of US$2,315.58 million between April 2000 and January 2011,according to the Department of Industrial Policy and Promotion (DIPP). The Ministry ofRoad Transport and Highways has planned to invest US$354 billion in road infrastructure by2012. Housing, infrastructure projects and the nascent trend of concrete roads wouldcontinue to accelerate the consumption of cement. Our Finance Minister Mr. PranabMukherjee has proposed to earmark US$47 billion for infrastructure development duringFY12.

6) RISKS & CHALLENGES

India's construction companies face challenges of operating in an unorganized sector.Unpredictable market conditions, major swings in the materials prices and fluctuations incurrency rates have resulted in cut-throat competition and decline in profit margins.Also, as the EPC projects are getting more complex, awarding projects is getting delayed.With the emerging trend of shorter project durations, indeterminate specifications andrising client expectations; an organized coordination is required between the contractors,consultants and the vendors. Some owners even prefer breaking a large project into moremanageable and defined pieces to reduce costs. A well-defined EPC contract is the one ofthe best ways to address the above concerns and to reduce the cost & time overruns inreal time. EPC industry is already a multi billion-dollar industry and contractors arefinding more innovative ways to mitigate these risks.

7) INTERNAL CONTROLS

Your Company has a proper and adequate system of internal controls to ensure the timelyand accurate recording of financial transactions and adherence to applicable accountingstandards; optimum utilization & safety of assets; compliance with applicable laws,regulations, listing agreements and management policies; and an effective managementinformation system.

There are well defined and documented procedures, policies and authority guidelines foreach function in the Company. Your Company has already engaged three independent firms ofChartered Accountants apart from the in-house internal audit team who conduct auditsacross all locations, project sites and business units of the Company throughout the yearto test check the internal control system.

The Board of directors has an Audit Committee whose Chairman is an independentdirector. The Committee meets periodically with the management, internal audit team andrepresentatives of the statutory auditors to review your Company's program of internalaudits, findings & recommendations made in the auditors' (both internal &statutory) reports and the follow-up & compliance status of its earlier observations.

8) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The Company is primarily engaged in undertaking engineering & constructionprojects, the disclosure of particulars under Section 217(1)(e) of the Act (hereinafterreferred to as the Act), in so far as it relates to the conservation of energy andtechnology absorption is not applicable. Particulars with regard to foreign exchangeearnings and outgo are given below:

Total Foreign Exchange used and earned:

9) RESTRUCTURING AND CHANGE IN CONTROL

Petron Engineering Construction Limited is a subsidiary of Petron Investments PrivateLimited ("PIPL"). (PIPL is owned by Amritha Sharanya Leasing & InvestmentsPvt. Ltd. ("ASLI"). SRA Finance & Investments Pvt. Ltd. ("SRA")and KazStroyService Hungary Kft. in the ratio 40:40:20.

Fraseli Investments S.a.r.l. ("Fl") acquired 33.34% of the issued and fullypaid-up 'A' ordinary share capital of KazStroyService Global B.V. ("KSS Global")from KazStroyService Holding B.VC'KSS Holding") and KazStroyService InfrastructureB.V. ("KSS Infra") pursuant to a share purchase agreement dated March 2. 2011.Consequent to the acquisition, there was a restructuring within the KazStroyService groupwhereby KSS Global acquired ASLI, SRA, PIPL and KazStroy Engineering (UK) Ltd. KSS Globalthereby indirectly acquired the legal ownership of 52.47% of Petron EngineeringConstruction Limited.

Pursuant to the investment by Fl in KSS Global and the restructuring, the followingconstitute the group of Petron Engineering Construction Limited for purposes of the SEBI(Substantial Acquisition of Shares and Takeovers) Regulations. 1997:

In terms of the requirements of Regulations 10 & 12 of Securities & ExchangeBoard of India (Substantial Acquisition of Shares & Takeovers) Regulation 1997, KSSGlobal along with persons acting in concert with it has appointed Citigroup Global MarketsIndia Pvt. Ltd.. Bakhtawar. 8/12th Floor, Nariman Point, Mumbai 400 021 as its MerchantBanker and made a public announcement on 23rd May, 2011 of an open offer to the publicshareholders of Petron Engineering Construction Limited to acquire up to 20% of thepaid-up share capital of the company.

10)DIRECTORS

Mr. Arvind Dabar was appointed as an Additional Director on 29th October. 2010. He hasresigned from the Board with effect from 17th May. 2011.

Mr. D. K. Khare has resigned with effect from 12th October. 2010.

In terms of Article 127 of the Articles of Association of the Company, Mr. R. Sankaran.Director of the Company, retires by rotation and being eligible offers himself forre-appointment at the ensuing Annual General Meeting.

11) AUDITORS

M/s. Lodha & Co., Chartered Accountants. New Delhi - the statutory auditors of theCompany - holds office until the conclusion of the ensuing Annual General Meeting and iseligible for re-appointment. The Company has received a letter from them, to the effectthat their appointment, if made, will be in accordance with the limits prescribed underSection 224(1B) of the Act and that, they are not disqualified for such re-appointmentwithin the meaning of Section 226 of the Act.

12) PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the Act read with the Companies (Particulars ofEmployees) Rules 1975 forms part of this Report. As per provisions of Section219(l)(b)(iv) of the Act, the Report and Accounts are being sent to the Shareholders ofthe Company, excluding the statement of particulars of the employee under Section 217(2A)of the Act. Any shareholder interested in obtaining a copy of the statement may write tothe Company Secretary at the Registered Office of the Company.

13) DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

a) that in the preparation of annual accounts, the applicable accounting standards havebeen followed and there has been no material departure;

b) that the selected accounting policies were applied consistently and the directorsmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31. 2011 and of the profit of theCompany for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) that the annual accounts have been prepared on a going concern basis.

14) TRANSFER OF UNPAID DIVIDEND TO INVESTOR EDUCATION PROTECTION FUND

Pursuant to the provisions of Section 205A(5) of the Act. the declared dividend whichremained unpaid or unclaimed for a period of 7 years has been transferred by the Companyto the Investor Education and Protection Fund (1EPF) established by the Central Governmentpursuant to Section 205C of the Act.

15) CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Report onCorporate Governance and Certificate from the Practicing Company Secretary thereon aregiven in the Annexure which forms part of Directors' Report.

16) ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the contribution fromemployees at all levels in sustaining the Company's performance.

The Company takes this opportunity to offer its sincere thanks to the Company's bankersfor their unstinted support and continued confidence in the Company and also places onrecord its sincere thanks to all clients for their co-operation.

17) CAUTIONARY STATEMENTS

Statements in this report on management discussion and analysis, describing theCompany's objectives or outlook, opportunities, expectations and estimates may beforward-looking statements within the meaning of applicable laws or regulations, actualresults could, however, differ materially from those expressed or implied.