Directors Report of Bagalkot Udyog Ltd.

Mar 31, 2012

The Directors hereby present the 62nd Annual Report and Audited Accounts of the Company for the year ended 31 st March, 2012.

(Rs. in lacs)

FINANCIAL RESULTS Current Year Previous Year (12 Months) (12 Months)

After meeting all operating and administrative expenses, the working of the year shows a deficit of (3.64) (5.37)

Add:

Depreciation 0.66 0.66

Profit / (Loss) for the year (4.30) (6.03)

Profit I (Loss) brought forward from the previous year (186.42) (180.39)

Balance Carried to Balance Sheet (Reserve Surplus) (190.72) (186.42)

PERFORMANCE

Your Company is an investment, leasing, finance and miscellaneous services Company.

REHABILITATION SCHEME

Your Company has fully implemented the sanctioned Scheme.

The application is made to the Bombay Stock Exchange for re-listing of the new Equity Shares issued to the existing Shareholders, is still pending for approval.

AUDIT COMMITTEE

As per the requirement of Section 292A of the Companies Act, 1956, and also the Listing Agreements with Bombay Stock Exchange Limited, Mumbai, an Audit Committee of the Board of Directors is already in place. During the year, the Committee held four meetings.

CORPORATE GOVERNANCE

Pursuant to Clause 49 (VI) of the Listing Agreement, a report on Corporate Governance and Certificate from the Company's Auditors confirming compliance is annexed hereto.

DIRECTORS

S/Shri M.S. Sanganeria, Suresh Sharma and Pramod Sharma retire by rotation and, being eligible, offer themselves for reappointment.

DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors of the Company state:

(i) that in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith 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 are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

(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 annual accounts as on 31 st March, 2012, on a going concern basis.

DEPOSITS

The Company has not accepted any deposits from the public during the year.

PARTICULARS OF EMPLOYEES

The Company has no employee, therefore the details specified under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, are not applicable.

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

The Company has no manufacturing activity and therefore, the disclosure of particulars as required under Section 217(1 )(e) of the Companies Act, 1956, in so far as it relates to the conservation of energy, technology absorption is not applicable. There is no foreign exchange earnings and outgo during the year.

AUDITORS' REPORT

The observations made by the Auditors in their Report do not require any comments as the same are either self explanatory or have been fully explained in the notes attached to the Accounts.

APPOINTMENT OF AUDITORS

The retiring Auditor M/s. V.K. Beswal & Associates have furnished certificates to the Company to the effect that their appointment, if made, would be within the limits prescribed under the Companies Act, 1956. Shareholders are requested to appoint the Auditors and to fix their remuneration.

APPRECIATION

The Directors wish to place on record their appreciation of the co- operation received from the various departments of the Central and State Governments, Bankers and Financial Institutions.

On behalf of the Board of Directors

S. K. Sharma P. Sharma Mumbai,the 29th May,2012. Director Director

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Mar 31, 2010

The Directors hereby present the 60th Annual Report and Audited Accounts of the Company for the year ended 31 st March, 2010.

(Rs. in lacs)

FINANCIAL RESULTS Current Year Previous Year

(12Months) (12 Months)

After meeting all operating and administrative expenses, the working of the year shows a deficit of (8.01) (93.26)

Add:

Depreciation 1.58 1.62

Profit / (Loss) before taxation (9.59) (94.88)

Provision

Income Tax - 0.53

Fringe Benefit Tax - 0.10

Profit / (Loss) for the year (9.59) (95.51)

Extraordinary item (2.21) 9.79

(11.80) (85.72)

Profit / (Loss) brought forward from

the preyious year (669.59) (583.87)

Less: General Reserve transferred 501.00 (168.59) - (583.87)

Balance Carried to Balance Shee (180.39) (669.59)



PERFORMANCE

Your Company is an investment, leasing, finance and miscellaneous services Company.

REHABILITATION SCHEME

Your Company has taken necessary steps to fully implement the sanctioned Scheme.

The application is made to the Bombay Stock Exchange for re-listing of the new Equity Shares issued to the existing Shareholders, is still pending for approval.

AUDIT COMMITTEE

As per the requirement of Section 292A of the Companies Act, 1956 and also the Listing Agreements with Bombay Stock Exchange Limited, Mumbai an Audit Committee of the Board of Directors is already in place. During the year, the Committee held five meetings.

CORPORATE GOVERNANCE

Pursuant to Clause 49 (VI) of the Listing Agreement, a report on Corporate Governance and Certificate from the Companys Auditors confirming compliance is annexed hereto.

DIRECTORS

Shri Anil Kaul was appointed as a Special Director by BIFR w.e.f. 24th June, 2010, for a period of 3 years. S/Shri Suresh Sharma and Pramod Sharma retire by rotation and, being eligible, offer themselves for reappointment.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company state:

(i) that in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith 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 are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in aGcordance 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 annual accounts as on 31 st March, 2010, on a going concern basis.

DEPOSITS

The Company has not accepted any deposits from the public during the year.

PARTICULARSOFEMPLOYEES

During the period under review, none of the employees of the Company have drawn remuneration as specified under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

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

The Company has no manufacturing activity and therefore, the disclosure of particulars as required under Section 217(1 )(e) of the Companies Act, 1956, in so far as it relates to the conservation of energy, technology absorption is not applicable. There is no foreign exchange earnings and outgo during the year.

AUDITORSREPORT

The observations made by the Auditors in their Report do not require any comments as the same are either self explanatory or have been fully explained in the notes attached to the Accounts.

APPOINTMENT OF AUDITORS

The retiring Auditor M/s. V.K. Beswal & Associates have furnished certificates to the Company to the effect that their appointment, if made, would be within the limits prescribed under the Companies Act, 1956. Shareholders are requested to appoint the Auditors and to fix their remuneration.

APPRECIATION

The Directors wish to place on record their appreciation of the co- operation received from the various departments of the Central and State Governments, Bankers and Financial Institutions. The Directors also wish to thank all the employees for their sincerity, hardwork and efforts.

On behalf of the Board of Directors

S.K. Sharma M.S.Sanganeria

Mumbai, the 12th August, 2010. Director Director