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Page 1: Gulf Oil Report
Page 2: Gulf Oil Report
Page 3: Gulf Oil Report

Gulf Oil Corporation Limited

1

Gulf Oil Corporation LimitedFORTY NINTH ANNUAL REPORT 2009-2010

Board of Directors(As on 14th May, 2010)

S. G. Hinduja, ChairmanR. P. Hinduja, Vice ChairmanK. N. Venkatasubramanian P. N. Ghatalia (till 13.8.2009)H. C. AsherM. S. RamachandranAshok Kini Prakash ShahKanchan Chitale (w.e.f. 5.10.2009)Vinoo S HindujaV. Ramesh RaoVinod K Dasari S. Pramanik, Managing DirectorA. K. Das, Alternate to S. G. HindujaA. V. Dujean, Alternate to R. P. HindujaPrabal Banerjee, Alternate to Vinoo S Hinduja

Committees of the Board:

Audit Kanchan Chitale, Chairperson H. C. Asher Ashok Kini

Share Transfer & Investors' Grievance Ashok Kini, Chairman S. Pramanik Vinod K. Dasari

Remuneration Prakash Shah, Chairman H. C. Asher M. S. Ramachandran Vinoo S Hinduja

Safety Review Vinod K. Dasari, Chairman Ashok Kini K.N. VenkatasubramanianInvestment Appraisal & Project Review M. S. Ramachandran, Chairman Vinoo S Hinduja Vinod K. Dasari

Ten Year Review ................................................................2Chairman's Letter ...............................................................4Notice .................................................................................6 Directors’ Report...............................................................10Corporate Governance Report .........................................22Shareholders’ Information ................................................27

CONTENTS

Bankers State Bank of India Andhra BankState Bank of Hyderabad IDBI Bank LtdOriental Bank of Commerce Bank of Bahrain & Kuwait B.S.C.ICICI Bank Limited HSBC Bank

Auditors Deloitte Haskins & Sells, Chartered Accountants, Secunderabad,Shah & Co., Chartered Accountants, Mumbai. (Branch Auditors)

Registered/Corporate Offi ce

Kukatpally,Hyderabad - 500 072Andhra Pradesh

Executive Team:Corporate S. Subramanian CFO & Company Secretary Y.V. Siva Reddy G.M. (Internal Audit)

Lubricants Division Ravi Chawla President (Lubricants) Amrish Kathane Sr. GM (Supply Chain)Y.P. Rao Sr. V.P. (Technical) Manish Gangwal G.M. (Finance & Accounts)R. Varadarajan Sr. V.P. (Sales & Business Development) Alok Mahajan G.M. (Marketing)

Explosives & Raman Gopal President (IDL Divisions) Dr. Mohan Kidambi Sr. GM (Explosives Operations)Contracts Divisions S. Chakrabarti Chief Operating Officer (Explosives) A. D. Sao Sr. GM (Marketing & Explosives)

T.T. Das General Manager - Consult A.M. Kazmi GM (Exports)

Auditors’ Report ................................................................32Balance Sheet ..................................................................36Profi t and Loss Account....................................................37Balance Sheet Abstract ....................................................64Consolidated Balance Sheet ............................................66Consolidated Profi t and Loss Account..............................67

Company SecretaryDeputy Company Secretary

S. Subramanian A. Satyanarayana

Page 4: Gulf Oil Report

2

A TEN YEAR REVIEW

(Rs. lakhs)

Year 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01

INCOME & DIVIDENDS

Turnover 106565.94 99588.84 83321.52 66865.64 50724.65 47340.47 41551.04 40534.71 25250.68 19569.69

Profi t Before Tax 5430.23 3875.41 2970.60 3183.37 2543.43 2215.07 2798.39 1132.93 978.55 6084.32

Profi t After Tax 4507.23 2904.38 2513.17 2300.59 2278.6 2003.07 2290.80 1531.52 769.55 5464.32

Profi t After Tax as percentage of Sales

4.23% 2.92% 3.02% 3.44% 4.49% 4.23% 5.51% 3.78% 3.05% 27.92%

Earnings Per Share (Rs.) 6.06# 3.91# 3.42 # 16.58 16.43 14.44 16.51 11.04 8.12 68.29

Dividend per fully paid Equity Share (Rs.)

1.80# 1.70# 1.50 # 7.50 7.00 6.50 6.00 5.00 3.00 5.00

Dividend 1338.46 1264.10 1115.38 1115.38 971.02 901.66 832.30 693.59 416.15 400.09

(Rs. lakhs)

Year 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01

CAPITAL EMPLOYED

Net Fixed Assets 58103.87 60676.59 200424.32 15647.14 11367.26 10560.95 8215.47 7943.98 8024.33 4196.39

Net Working Capital 11456.40 17835.12 22592.43 14451.81 9597.43 8130.11 9837.19 12593.26 17173.69 10046.86

Other Assets 3204.01 3595.94 6992.93 7980.24 5278.71 4839.49 2394.70 984.10 2211.82 1404.98

Total Capital Employed 72764.28 82107.65 230009.68 38079.19 26243.4 23530.55 20447.36 21521.34 27409.84 15648.23

(Rs. lakhs)

Year 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01

NETWORTH & LOANS

Shareholders’ Funds:

Capital 1487.17 1487.17 1487.17 1387.17 1387.17 1387.17 1387.17 1387.17 1387.17 800.17

Reserves 40789.77 39794.17 203901.39 14388.71 13393.06 12221.67 11246.72 10454.43 12943.00 9317.35

Tangible Networth 42276.94 41281.34 204717.18 15237.06 14284.78 12827.12 12045.21 11841.60 14330.17 10117.52

Secured Loans 17074.51 17122.63 13457.72 15547.27 8147.69 8243.71 6224.07 7593.02 11206.99 3965.37

No.of Shareholders at year end

61276 59476 56218 43790 43840 45893 47605 48945 46969 47393

Note: Sales figure includes Excise Duty

# Equity Shares of face value of Rs. 2 each. Previous years face value Rs. 10 each.

Gulf Oil Corporation Limited

Page 5: Gulf Oil Report

Gulf Oil Corporation Limited

3

Segment-wise Turnover

PAT, PBT and Dividend Payout

600

500

400

300

200

100

0

72

148

287

169214

420

211

277

507

308

563

194141

396

64

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

Employee Cost8%

Expenses on Operation

Contract15%

Other Expenses Net of Exceptional item

20%

Interest3%

Depreciation2%

Provision for Taxation

1%

Dividend & Dividend Tax

2%

Retained Earnings

3%

Cost of Material

46%

Disposal Of Revenue - F 2010

`

Dividend per share and EPS

1.40

3.29

1.50

3.32

1.50

3.423.91

6.06

1.70 1.80

6.00

4.00

2.00

0.002005-06 2006-07 2007-08 2008-09 2009-10

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

Number of Shareholders

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

23 23 2529

45

2532 30

39

54

Turnover

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

507

669

9961066

833

1200

60.00

50.00

40.00

30.00

20.00

10.00

0.00

1000

800

600

400

200

0

Mining & InfrastructureLubricants Explosives

Dividend PayoutPBT PAT EPSDividend per Share

( ` ` )( ` Crores )

( ` Crores ) ( ` Crores )

10 11 11 13 13

43840 43790

56218 59476 6127680000

60000

40000

20000

0

Page 6: Gulf Oil Report

4

Dear Shareholders,

The Indian economy continues to surge ahead registering a growth of 7.5% in 2009-10 with an 8.6% Y-o-Y growth in the 4th quarter. The growth has been driven by robust performance of the manufacturing sector on the back of Government and consumer spending and, incidentally, exceeded the Government’s own forecast for the year. Such a performance is conducive to business as a whole Thanks to this, your Company has crossed the Rs. 1000 crores turnover mark – a signifi cant milestone for the Company.

The Automobile industry reported a 26% growth in sales in 2009-10 whilst mining and quarrying grew by over 10% and electricity supply by 6.6%. Backed by this strong demand, all the three Divisions namely Lubricants, Industrial Explosives and Mining and Infrastructure Contracts of the Company showed growth in business.

The Lubricants business – the largest Division, performed well. Sales grew by 11% to Rs. 563 crores. Industrial Explosives performed well this year and also achieved a turnover of Rs. 308 crores, a growth of 11%. The Mining and Infrastructure Division was roughly at the same level as last year at Rs. 194 crores of service income, due to a major project having been completed in Q2 of the previous year.

NEW INITIATIVES

Lubricants

Our endeavour to continuously provide the best projects and applications to our customers has given us the impetus to develop several new initiatives during the year. In the Lubricants Division, we have taken further initiatives to continue with our brand building exercise which we started a few years ago and we have been able to increase our market share by breaking into new fl eets, construction equipment users, medium sized industries and OEMs. New product promotions aimed at 3-wheeler commercial segments and their commercial vehicles yielded encouraging results. Aggressive positioning in the bazaar markets in Northern and Western Regions achieved for the Division one of the highest growth rate as per the AC Nielson Retail Audit Report.

Industrial Explosives Business

The Explosives business had developed cartridged emulsion products which were being toll manufactured. With the growing requirement of the product and its specialised applications, the Division commissioned a packaged emulsion explosives facility at Rourkela which would be fully operative in the current year. The special quality explosives have found good acceptance in the civil infrastructure tunneling and trade sectors.

Chairman's Letter

Page 7: Gulf Oil Report

Gulf Oil Corporation Limited

5

At the same time new packaged explosives for underground coal mining were developed in collaboration with the Central Institute of Mining and Fuel Research, Dhanbad, and commercialised during the year. A new product range of fully fi eld programmable electronic detonators have been developed through the Division’s R&D efforts as part of the electronic detonator project started 3 years ago. These new fi eld programmable detonators are required for specialised applications by our customers especially for critical environmental requirements at their sites.

Contracts Business

The Mining and Infrastructure Contracts Division has been awarded a prestigious contract by the Uranium Corporation of India. This will be a major milestone for the business and will enhance its experience and capabilities further.

CONCERN AREAS

Overall input prices will remain a cause for concern. The high infl ation and fl uctuating global prices for crude could affect raw material prices and impact margins. Whilst our businesses are taking action to neutralise these likely increases by proactive steps, planned purchases and cost optimization in all areas, the rising input prices could impact margins in the current year.

EXPORTS

The exports by the Company increased to Rs. 68 crores from Rs. 51 crores. Our exports from Lubricants and Industrial Explosives Divisions are mainly to South East Asia, Middle East, Africa and Southern Europe. The Explosives Division has received the prestigious CAPEXIL Award for their efforts.

PROPERTY DEVELOPMENT

Property Development at Bangalore has now started as the demand for properties has revived. The development of 5.05 mn sq.ft. is being taken up and will cover hotel, retail outlets, commercial malls and serviced apartments. The construction work at Bangalore will commence in the current year. Further work on the Hyderabad property was held up due to the 100 ft. connector road being fi nalised by the GHMC. This issue has recently been resolved and architectural work and development has been commenced.

RIGHTS ISSUE

The formalities connected with Rights Issue announced last year have been completed and offer letters are being sent to all eligible shareholders shortly. The Board has as an appreciative gesture decided to price the Rights to recognize the co-operation and support received from the shareholders over the years.

As the Company enters its 50th year our outlook to the future continues to be optimistic and is driven by the growth story of India Inc. We will remain committed to growth, good governance and consistently enhancing shareholder value. I am sure with your support and commitment and energy of our employees, Gulf Oil will scale newer heights in the years ahead.

S. G. Hinduja

CHAIRMANAugust 2, 2010.

Page 8: Gulf Oil Report

Gulf Oil Corporation Limited

6

NOTICE OF THE FORTY NINTH ANNUAL GENERAL MEETING

NOTICE is hereby given that the Forty Ninth Annual General Meeting of the Company will be held at 2.30 p.m. on Thursday, the 23rd day of September, 2010 at Emerald-1, Hotel Taj Krishna, Banjara Hills, Hyderabad - 500034 to transact the following:

ORDINARY BUSINESS

1. To consider and adopt the Directors’ Report, the Auditors’ Report, the Balance Sheet as at 31st March 2010 and the Profi t and Loss Account for the year ended 31st March 2010.

2. To declare dividend for the fi nancial year ended 31st March 2010.

3. To appoint a Director in place of Mr. Ashok Kini, who retires by rotation under Article 122 of the Articles of Association of the Company and is eligible for re-appointment.

4. To appoint a Director in place of Mr. Vinod K Dasari, who retires by rotation under Article 122 of the Articles of Association of the Company and is eligible for re-appointment.

5. To appoint a Director in place of Ms. Vinoo S Hinduja, who retires by rotation under Article 122 of the Articles of Association of the Company and is eligible for re-appointment.

6. To appoint a Director in place of Mr. Ramesh V Rao, who retires by rotation under Article 122 of the Articles of Association of the Company and is eligible for re-appointment.

7. To consider, and if thought fi t, to pass, with or without modifi cation, the following Resolution as an Ordinary Resolution:

“RESOLVED that M/s Deloitte Haskins & Sells, Chartered Accountants, Secunderabad be and are hereby appointed Auditors of the Company from the conclusion of this meeting until the conclusion of the next Annual General Meeting on a remuneration to be negotiated and fi xed by the Audit Committee/Board of Directors of the Company in addition to actual out-of-pocket expenses incurred by them for the purpose of audit.”

8. To consider, and if thought fi t, to pass, with or without modifi cation, the following resolution as an Ordinary Resolution:

“RESOLVED that M/s. Shah & Co., Chartered Accountants, Mumbai be and are hereby appointed as Branch Auditors of the Company for its Lubricants Division at Mumbai from the conclusion of this meeting until the conclusion of the next Annual General Meeting on a remuneration to be negotiated and fi xed by the Audit Committee/Board of Directors of the Company in addition to actual out-of-pocket expenses incurred by them for the purpose of audit.”

SPECIAL BUSINESS:

9. To consider, and if thought fi t, to pass, with or without modifi cations, the following resolution as a Special Resolution:

“RESOLVED that in supersession of previous resolution passed by the Members of the Company at their Meeting held on 31st July 2009 and pursuant to the provisions of Section 81(1A) and all other applicable provisions, if any, of the Companies Act, 1956, the Foreign Exchange Management Act, 1999 (including any statutory modifi cation(s) or re-enactment thereof for the time being in force), and the applicable laws, Rules, Guidelines, Regulations, Notifi cations and Circulars, if any, issued by the Securities and Exchange Board of India (SEBI), Reserve Bank of India (RBI), the Government of India (GOI), the Foreign Investment Promotion Board (FIPB), and other concerned and relevant authorities, and other applicable Indian laws, rules and regulations, if any, and relevant provisions of Memorandum and Articles of Association of the Company and the Listing Agreement(s) entered into by the Company with the Stock Exchanges where the Shares of the Company are listed and subject to such approval(s), consent(s) permission(s) and/ or sanctions(s) as may be required from GOI, FIPB, RBI, SEBI and any other appropriate authorities, institutions or bodies, as may be necessary and subject to such conditions as may be prescribed by any of them while granting any such approval, consent, permission or sanction which may be agreed by the Board of Directors of the Company (“the Board”) (which term shall be deemed to include ‘Offering Committee’ or any other Committee constituted or hereafter be constituted for the time being exercising the powers conferred on the Board by this Resolution), which the Board be and is hereby authorized to accept, if it thinks fi t in the interest of the Company, the consent and approval of the Company be and is hereby accorded to the Board to create, issue, offer and allot, from time to time,

Page 9: Gulf Oil Report

Gulf Oil Corporation Limited

7

Securities (as defi ned below) in the form of Equity or other Shares, Warrants, Bonds or Debentures, Depository Receipts, (whether Global Depository Receipts (GDRs), American Depository Receipts (ADRs), Indian Depository Receipts (IDRs) or any other form of Depository Receipts), or any other debt instrument either convertible ornon-convertible into Equity or any other Shares whether optionally or otherwise, including Foreign Currency Convertible Bonds representing any type of securities (FCCBs), whether expressed in Foreign Currency or Indian Rupees (all or any of which are hereinafter referred to as “Securities”) whether secured or unsecured, and further the Board be and is hereby authorized, subject to applicable laws and regulations, to issue the Securities to investors (including but not limited to Foreign Banks, Financial Institutions, Foreign Institutional Investors, Qualifi ed Institutional Buyers, Mutual Funds, Companies, other Corporate Bodies, Non- Resident Indians, Foreign Nationals and other eligible investors as may be decided by the Board (hereinafter referred to as “Investors”) whether or not such Investors are members, promoters or directors of the company or their relatives or associates, by way of one or more private and/ or public offerings (and whether in any domestic and/ or international market(s), through a public issue(s), private placement(s), Qualifi ed Institutional Placement(s), preferential issue(s) or a combination thereof in such manner and on such terms and conditions as the Board deems appropriate at its absolute discretion provided that the issue size shall not exceed US$100 million or Rs.450 crores inclusive of such premium as may be payable on the Equity Shares or any other Security, at such time or times and at such price or prices and in such tranche or tranches as the Board in its absolute discretion deems fi t.

RESOLVED FURTHER THAT in the event the Company proposes to issue Securities through Preferential Issue, the ‘Relevant Date’ in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2009 shall be 23rd August, 2010, being the date 30 days prior to the date of this Annual General Meeting or such other date as may be prescribed.

RESOLVED FURTHER THAT without prejudice to the generality of the above, the aforesaid issuance of the Securities shall be subject to such terms or conditions as are in accordance with prevalent market practices and applicable Laws and Regulations, including but not limited to, the terms and conditions relating to payment of interest, dividend, premium on redemption, the terms for issue of additional Shares or variations in the price or period of conversion of Securities into Equity Shares or terms pertaining to voting rights or options for redemption of Securities.

RESOLVED FURTHER that the Board be and is hereby authorised to seek, at its absolute discretion, listing of Securities issued and allotted in pursuance of this resolution, on any Stock Exchanges in India, and/or Luxembourg/London/Nasdaq/New York Stock Exchanges and/or any other Overseas Stock Exchanges.

RESOLVED FURTHER that the Board be and is hereby authorised to issue and allot such number of Equity Shares as may be required to be issued and allotted upon conversion of any Securities referred above as may be necessary in accordance with the terms of offering, and that the Equity Shares so allotted shall rank in all respects pari passu with the existing Equity Shares of the Company.

RESOLVED FURTHER that subject to the approval(s), consent(s), permission(s) and/ or sanctions(s) stated above, the Company be and is hereby authorized to retain oversubscription/ green-shoe issue option up to 25% of the amount issued and the Board be and is hereby authorised to decide the quantum of oversubscription to be retained as also any other matter relating to or arising therefrom.

RESOLVED FURTHER that the Board be and is hereby authorised to do all such acts, deeds, matters and things as it may at its discretion deem necessary or desirable for such purpose including, if necessary, creation of such mortgages and/or charges in respect of the Securities on the whole or any part of the undertaking of the Company under Section 293(1)(a) of the Companies Act, 1956 or otherwise and to execute such documents or writings as it may consider necessary or proper and incidental to this Resolution.

“RESOLVED FURTHER that the Board be and is hereby authorised to do all such acts, deeds, matters and things and to decide upon, as it may at its discretion deem necessary, expedient or desirable in relation to all or any of aforesaid purpose including without limitation to the utilization of issue proceeds, fi nalizing the pricing, terms and conditions relating to the issue of aforesaid Securities including amendments or modifi cations thereto as may be deemed fi t by them, to sign, execute and issue consolidated receipt/s for the Securities, listing application, various agreements such as Subscription Agreement, Depository Agreement, Trustee Agreement, undertakings, deeds, declarations, Letters and all other documents or papers and to do all such acts, deeds, matters and things, and to comply with all formalities as may be required in connection with and incidental to the aforesaid offering of Securities or anything in relation thereto, including but not limited to the post issue formalities and with power on behalf of the Company to settle any question, diffi culties or doubts that may arise in regard to any such creation, issuance, offer or allotment of the Securities as it may in its absolute discretion deem fi t.

Page 10: Gulf Oil Report

Gulf Oil Corporation Limited

8

“RESOLVED FURTHER that the Board be and is hereby authorized to enter into and execute all such arrangements/agreements as may be required for appointing Managers (including lead managers), merchant bankers, underwriters, fi nancial and/or legal advisors, tax advisors, consultants, depositories, custodians, principal paying/transfer/conversion agents, listing agents, registrars, trustees and/ or all such agencies as may be involved or concerned in such offerings of Securities, whether in India or abroad, and to remunerate all such agencies including the payment of commissions, brokerage, fees or the likes, and also to seek the listing of such Securities or Securities representing the same in one or more stock exchanges whether in India or outside India, as it may be deem fi t.”

14th May 2010 By Order of the Board

Registered Offi ce: S. SUBRAMANIANKukatpally, Post Bag No.1 Chief Financial Offi cer &Sanathnagar (IE) PO Company SecretaryHyderabad - 500018

Notes:

1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER.

Proxies, in order to be effective, should be duly stamped, completed, signed and deposited at the Registered Offi ce of the Company not less than 48 hours before the meeting.

2. An Explanatory Statement pursuant to Section 173 of the Companies Act 1956, relating to the Special Business to be transacted at the meeting is annexed hereto.

3. The Register of Members and Share Transfer Books will be closed on 29th July, 2010 in connection with the ensuing Annual General Meeting and the payment of Dividend.

4. Dividend recommended by the Board and approved by the Members at the AGM, will be paid on or before22nd October, 2010. In respect of shares held in physical form, the dividend will be payable to those members whose names appear on the Register of Members on 29th July, 2010. In respect of shares held in electronic form, dividend will be payable to benefi cial owners of the shares as on 29th July, 2010 as per details furnished by the Depositories for this purpose.

5. In terms of Sections 205A and 205C of the Companies Act, 1956, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the date of transfer to the unpaid dividend account, is required to be transferred to the Investor Education and Protection Fund. Accordingly, in the year 2010-11, the Company would be transferring the unclaimed dividend for the year 2002-03 to the Investor Education and Protection Fund. Members who have not encashed their dividend warrant for the year ended March 31, 2003 or thereafter are requested to write to the Company/Registrars and Share Transfer Agents.

6. Members holding shares in dematerialized mode are requested to instruct their respective Depository Participants regarding Bank Accounts in which they wish to receive the dividend. However, the Bank details as furnished by the respective Depositories to your Company will be used for the purpose of distribution of dividend through Electronic Clearing Service (ECS) as directed by the Stock Exchanges. Your Company/Registrar and Share Transfer Agents will not act on any direct request from Members holding shares in dematerialized form for change/deletion of such Bank details.

7. Members holding shares in physical form are requested to inform the Company/ Registrars and Share Transfer Agents of any change in their addresses immediately for future communication at their correct addresses and Members holding shares in demat form are requested to notify to their Depository Participants.

8. Members holding shares in identical order of names in more than one folio are requested to write to the Company’s Share Transfer Agents to enable them to consolidate their holdings into one folio.

9. As required under Clause 49 of the Listing Agreement, brief information of Directors, being appointed/reappointed, is given in the Directors’ Report.

10. Members requiring any clarifi cation/information on any report/statements, are requested to send their queries to the Registered Offi ce of the Company, at least 10 days before the date of the AGM.

11. Members are requested to quote their folio numbers/ DP ID and Client ID numbers in all correspondence with the Company and the Registrar and the Share Transfer Agent.

Page 11: Gulf Oil Report

Gulf Oil Corporation Limited

9

ANNEXURE TO THE NOTICEExplanatory Statement pursuant to Section 173(2) of the Companies Act, 1956.

Item No.9

The global economy has been undergoing weakness in many parts of the developed world, though the Indian economy appears to be promising. In this background, conditions for raising of fi nancial resources from overseas markets have not been conducive. Hence, the Company could not raise any amounts based on the similar resolution approved by the shareholders at the last Annual General Meeting. The validity period of the shareholders resolution is one year and hence the need to pass the resolution once again.

With a view to augment long term fi nancial resources of the Company and to meet costs in connection with the expansion, diversifi cation projects and other permissible uses, it is proposed to raise an amount not exceeding US$ 100 millions or Rs.450crores through issue of Foreign Currency Convertible Bonds (FCCBs) and / or American Depository Receipts (ADRs) or Global Depository Receipts (GDRs) and/or Qualifi ed Institutional Placement and/or any other suitable fi nancial instruments as contained in the Resolution.

The FCCBs/ADRs/GDRs/any other fi nancial instruments including Qualifi ed Institutions Placement, would be listed on the London and/or any other Stock Exchange within or outside India.

The Special Resolution gives adequate fl exibility and discretion to the Board to fi nalise the terms of the issue at the relevant time in consultation with the lead managers, underwriters, legal advisers and experts or such other authorities as need to be consulted including in relation to the pricing of the issue.

The consent of the shareholders, is therefore, sought to authorise the Board to issue the securities in the manner mentioned in this Resolution.

The Directors may be deemed to be concerned or interested in the resolution to the extent any securities are issued, held or transferred to the Directors or any company in which any Director is directly or indirectly concerned or interested as a director or shareholder or to any fi rm in which he/she may be a partner or to any of his/her relatives or entities in which he/she or such relative is directly or indirectly concerned or interested.

14th May 2010 By Order of the Board

Registered Offi ce: S. SUBRAMANIANKukatpally, Post Bag No.1 Chief Financial Offi cer &Sanathnagar (IE) PO Company SecretaryHyderabad - 500018

Page 12: Gulf Oil Report

Gulf Oil Corporation Limited

10

REPORT OF THE BOARD OF DIRECTORS AND MANAGEMENT DISCUSSION AND ANALYSIS TO SHAREHOLDERS FOR THE YEAR ENDED 31ST MARCH, 2010

Your Directors have pleasure in presenting their Forty Ninth Annual Report and Audited Accounts for the year ended 31st March 2010.

1. FINANCIAL RESULTS2009-10

Rupees Lakhs2008-09

Rupees Lakhs

Profi t after providing for Depreciation of Rs.1700.79 lakhs (Rs. 1537.24 lakhs) and before extraordinary items and taxation 3845.62 3875.41

Exceptional Income 1584.61 -

Profi t Before Taxation 5430.23 3875.41

Taxation:

Current

Deferred

FBT

MAT Credit

541.00

382.00

-

-

509.00

387.01

116.02

(41.00)

Profi t After Taxation 4507.23 2904.38

Balance brought forward from previous year 5857.40 4801.95

Balance available for appropriation 10364.63 7706.33

Appropriations:

Proposed Dividend

Provision for tax on proposed dividend

1338.46

222.30

1264.10

214.83

Transfer to General Reserve 500.00 370.00

Balance carried to Balance Sheet 8303.87 5857.40

EPS 6.06 3.91

2. DIVIDEND

The Directors recommend the payment of Dividend of Rs. 1.80 per share (Rs.1.70 per share) on the paid up capital of the Company. The dividend of Rs. 13.38 crores (Rs.12.64 crores), if approved by the Shareholders at the Forty-Ninth Annual General Meeting, will be paid out of the profi ts for the current year to all Shareholders of the Company whose names appear on the Register of Members as on date of Book Closure.

Page 13: Gulf Oil Report

Gulf Oil Corporation Limited

11

(In ` Crores)

350

169

214

277308

300

250

150

200

100

50

0

Explosives Revenue

CAGR 20%

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

148

29%53%

18%

51%28%

21%

3. OPERATIONS

The total turnover of the Company increased to Rs.1065.66 crores (Rs.995.89 crores). The profi t before extraordinary items and taxation was Rs.38.46 crores (Rs.38.75 crores). The profi t before tax and exceptional income was Rs.54.30 crores (Rs.38.75 crores). The profi t after provision for tax of Rs. 5.41 crores and deferred tax of Rs.3.82 crores, was Rs.45.07 crores (Rs. 29.04 crores) resulting in an EPS of Rs.6.06 for the year (Rs.3.91).

DIVISIONAL PERFORMANCE

3.1 Business Operations

3.2 Industrial Explosives

The Explosives Division has three main business groups namely :

Industrial (Commercial) Explosives and Blast Initiation Systems Group manufactures and markets the full range of packaged & bulk explosive products and blasting accessories including cast boosters for the mining, civil infrastructure and oil exploration sectors.

Metal Cladding Group manufactures explosively bonded metals used in a number of industries such as ship building, electrical and chemicals. It has also developed deep surface hardening processes utilised by the mining equipment and railway sectors.

Special Products Group manufactures high energy materials, specialised products for defence, space and other specialized applications.

All operations of commercial explosives, blasting accessories and metal cladding are covered under ISO 9001-2000 quality systems. The Division has embarked on an ambitious plan to bring its activities under the Integrated Management System (IMS) comprising of ISO 9001-2008 Quality Management System, ISO 14001-2004 Environmental Management System and ISO 18001-2007 Occupation Health & Safety Management System over two years.

The Division achieved an overall turnover of Rs. 308 crores as against last year's turnover of Rs. 277 crores, representing a growth of 11%. Export turnover increased by 13% this year. Availability of Ammonium Nitrate, a major ingredient in explosives, continued to be critical, warranting import to supplement purchases from domestic sources.

Coal Production in India continued on a growth trajectory of around 9% per annum. The Division has achieved the growth of 15% with CIL business during the fi nancial year and to ensure this growth rate the Division secured confi rmed order from Coal India Limited valued at approximately Rs. 150 crores to be executed over the next year. Focus was also given to consolidate the Division’s position in the non-coal sector. This resulted in the increase of value added products turnover by 14%.

The Division has added a packaged emulsion explosives manufacturing facility to meet the growing requirement of this kind of product at Rourkela. The small diameter general purpose emulsion explosive has found good acceptance in the civil infrastructure, tunnelling and trade sectors. The product is being used for blasting in tunnels in the North and North-Eastern sectors of India and Bhutan. It has made a mark in the Southern Sector in the civil infrastructure segment.

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The Division’s indigenously designed electronic detonator e-DET has been the choice of many surface coal mines for carrying out cautious blasts to reduce ground vibrations. Taking a technical step, a ‘Fully Field Programmable’ electronic detonator was designed by the R&D laboratory of the Division to meet customer specifi c requirements.

A new P5 Permitted category explosive product developed for a Coal S&T project mooted by the Explosives & Explosion Laboratory of Central Institute of Mining & Fuel Research (CIMFR), a CSIR laboratory based in Dhanbad, has been commercialized during the year after successful trials in mines of Singareni Collieries Company Ltd, Monnet Ispat & Energy Ltd. and Coal India Limited.

Metal Cladding Group

Technology using explosives has been adopted for metallurgical bonding of dissimilar metals, like Nickel & Nickel alloys, various grades of HASTELLOY, Copper & Copper alloys, Titanium, Stainless steel, Niobium, Aluminum on carbon steel / alloy steel and other ductile metals. The economic slowdown that led to postponement / reduced capital investments during F 2010 adversely affected this business segment. The Metal Cladding Group posted a turnover of Rs. 585.72 lakhs (Rs. 1014.53 lakhs).

Special Products Group (SPG)

SPG was created to cater to the use of pyrotechnic and high energy materials for special applications mainly in the Space and Defense sectors. Development and production of new products within time-bound and cost effective parameters were carried out under strict confi dentially and under controlled environment. The Group executed orders of Rs. 136 lakhs (Rs. 290 lakhs).

3.3 Mining and Infrastructure (IDLconsult)

The Division ended the year with a turnover of Rs. 194 crores as against Rs. 211 crores in F 09. The reduction in business for the year was mainly on account of the completion of one large contract at Dudhichua Project of Coal India Limited in the middle of F10. The 36 months’ contract at Dudhichua was completed in 32 months. The project handled 30 million cubic meters of rock as per the contract successfully. The other large ongoing contract in F10 was at Nigahi Project under Coal India. 11 million cubic meters of rock has been handled during the year.

Mining services were successfully continued in the cluster of iron ore mines in the Barbil, Orissa region and two iron ore mines in Karnataka (NMDC). Manganese Mining is being carried out in the Koira sector of Orissa. The Division started operating its fi rst Uranium Ore Mining in Jharkhand under Uranium Corporation of India Limited from February 2010. However, strict check on implementation of environmental rules and licensing affected the operations in the iron ore mining areas in Orissa for a major part of the year.

Further progress was made in the large infrastructure Project under Aditya Birla Group for their Alumina Plant in Rayagada, Orissa, during the year.

The Division is equipped to handle large complex projects. The 3D Laser Scanning Survey equipment for mine planning and control along with VSAT network across the sites, online MIS and SAP linkages have helped improve operational effi ciency and scheduling.

3.4 Lubricants

The overall performance of the Lubricants Division has been positive for the fi nancial year 2009-10 in terms of volume growth and profi tability. The turnover of the Division was Rs. 563 crores, 11% over previous year.

The automobile industry started off on a sedate note in the beginning of the year, which saw decline or slow growth in sales of heavy commercial vehicles in the fi rst 2 quarters. The commercial vehicles market witnessed strong growth from Q3 onwards and was back on track from October 2009. Other vehicles (cars, 2-wheelers, tractors) grew well across the year and overall the automobile industry grew by over 25 %. Accordingly, demand conditions in the lube industry picked up from Q3 across automotive and industrial segments.

72 64

211194

CAGR 20%250

200

150

100

50

02005-06 2006-07 2007-08 2008-09 2009-10

141

Mining & Infrastructure Service Revenue (In ` Crores)

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The Lubricants Division had aimed to achieve higher volume growth than the industry and grew faster than competition. The key strategies, with a focus on segment wise approach backed by brand building initiatives, were successfully executed across core segments of New Generation Diesel Engine Oils, Motorcycle Oils (4T) and Passenger Car Motor Oils.

As part of brand building, in addition to signage and wall painting programs and the Gulf Cup covering the Dirt Track Championship for Motorbikes, which are held annually across India, another key initiative was the sponsorship of the Kings XI Punjab Cricket franchise for the Indian Premier League (IPL - 3). The association helped to build brand awareness/recall amongst the cricket loving as well as youth audiences across India. The various related ‘activation programs’ have enabled the Division to increase market share in the North, especially in Punjab and the Hindi speaking belt.

Innovative media campaigns on TV, airports and outdoor launched in December 2009 have further helped to increase the brand visibility and communicate the product benefi ts amongst retail and user industry target groups. The Division continued its ground level initiatives in terms of retailer, mechanic loyalty programs as well as consumer promotions in key product semi knocked-down units (SKUs).

The Division also increased sales and market share by breaking into new fl eet operators and construction customers, medium sized industries and OEMs. New products and promotions aimed at the 3-wheeler commercial segments, tractors and other commercial vehicles recorded increased sales volumes. The Division’s market share in the PCMO segment grew by 1 % with the launch of Gulf Max range of engine oils in the second half of the year.

The Division increased market share also in the bazaar market by aggressively growing volumes in North and West regions. Overall the growth in this important segment as per AC Nielsen Retail Audit Report has been one of the highest in the industry. The focus on secondary and tertiary sales with below-the-line initiatives in key geographies helped to achieve faster growth for the Gulf brand in India in 2009-10.

Prices of major raw materials like base oils started fi rming up from May 2009 onwards although at a slower pace after hitting lows in Quarter IV of 2008-09. However, the increasing trend fi rmed up in Q4. Costs of additives increased sharply due to global supply constraints for chemicals and pricing policy of additive majors.

In spite of increased competition, the Division continued to protect and grow its market share in the important segment of New Generation Diesel Engine Oils to retain the overall No. 2 position across India, in the bazaar market, a key segment.

Gulf Filters product line recorded excellent growth as the products gained better customer acceptance thanks to the increased distribution network.

3.5 Other Business Groups

The 4 Wind Mills (1 MW) located at Ramagiri in Andhra Pradesh generated 4,00,900 units (2,54,414 units). The Hyderabad factory received the benefi t of the generation through the APTRANSCO grid.

3.6 Exports

Explosives Division achieved a turnover of Rs. 46 crores from exports during the fi nancial year. The Company was also awarded the prestigious CAPEXIL Award for excellence in exports. The Company has an edge in the overseas market through its compre gious CE Marking accorded for products manufactured at Hyderabad and Rourkela Works has established the Company’s quality assurance and manufacturing practices.

During the year, the exports of the Lubricants Division increased to 3547 KL from 1593 KL in 2008-09, an increase of 122% over previous year. Exports turnover of Lubricant products was Rs. 22.26 crores against Rs.6.48 crores in 2008-09. The Division is exporting its products mainly to Africa and highly competitive Middle-East markets and exploring other regions such as South East Asia for further growth in exports.

600

500

400

300

200

100

0

Lubricants Revenue

CAGR 18%

287

396 420

507563

(In ` Crores)

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

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3.7 Property Development

Development work at the Bangalore property progressed at a slow pace during the year as the advantages of setting up of SEZ for IT and ITES was found diffi cult in view of the economic scenario. The Company had earlier obtained approval for setting up of the SEZ at 30 acres out of 40 acres proposed to be developed. The work related to development of land, clearing of old structures and setting up of a large site offi ce has been completed. The development of 5.05 milion sq.ft. will also cover hotel, retail outlets, commercial malls and service apartments. Construction work is likely to be commenced during the current year.

With regard to the Hyderabad property, GHMC has advised the Company that it proposes to lay a 100 ft. connector road to decongest NH9 (Hyderabad – Mumbai) Highway. In addition, the GHMC also wants to widen the existing road on the west side of the property to link Hi-tech City and Balanagar. For the development of the property, the Company is in discussion with GHMC for fi nalizing the alignment of the 2 roads and also the compensation for such acquisition. The Architects have made draft lay-outs which will be fi nalised on receipt of fi nal clearance from GHMC.

4. INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT

Internal Control System:

The Company has a well defi ned control environment and the internal control system provides reasonable assurance to the Company with regard to accomplishment of its business objectives through policies, procedures and guidelines.

As part of Company’s governance process, the Internal Audit Department provides facilitative and advisory role, on a continuous basis in developing and revising the policies and procedures for all signifi cant processes such as procurement, inventory management, sales and distribution, fi nance and accounting, HR, IT etc; in order to support business and operational needs.

The Internal Audit Department in consultation with senior executives develops and documents annual audit plan and coverage for signifi cant areas of operations in order to conduct the audit in an effi cient and timely manner. The Company, through its Internal Audit Department, carries out process reviews for critical functions at all locations in accordance with annual audit plan. The observations arising out of audits are periodically reviewed and compliance is ensured by the process owners. The internal audit reports with relevant process owner clarifi cations are submitted to Audit Committee for their review and suggestions. The implementation status of Action Taken Reports (ATR) is reviewed by the Committee on a regular basis and concerns, if any, are reported to the Board.

The Internal Audit Department provides facilitative and supportive role on a regular basis in implementing the risk management process and policies in the Company with emphasis to manage risks under changing business and operating conditions.

Further, risks identifi ed during the course of internal audits at any process level are properly addressed and reported to the management and steps are taken by the process owners for rectifi cation / mitigation as the case may be.

5. FIXED DEPOSITS

Fixed Deposits from the public and the shareholders as on 31st March 2010 amounted to Rs.510.69 lakhs (Rs.140.83 lakhs). At the end of 31st March 2010, 10 deposits amounting to Rs.7.70 lakhs (Rs.38.21 lakhs), which had matured, remained unclaimed.

6. TAXATION

Orissa Sales Tax

The Writ Petitions fi led in the Orissa High Court, impleading the other State Governments, Coal India Limited and its subsidiary Companies for grant of stay against the demand notices of the Orissa Sales Tax Authorities relating to 1976-77 to 1989-90 & 1990-91, were dismissed. The Review Petition against the aforesaid Order was also dismissed. The Company is taking necessary steps in consultation with legal counsels.

7. RESEARCH and DEVELOPMENT

A new plant for production of cartridged emulsion explosive was commissioned at Rourkela to service the tunneling sector, especially in North / North East sectors of the country. Trials of fi eld programmable e – DET were successful. A new explosive for underground coal mining applications has been commercialized. New products for explosive deep hardening and boostering application have been developed and undergone successful trials.

Signifi cant savings were achieved by cost optimization in bulk emulsion explosives. Several new products were developed for defence and metal cladding markets.

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The Research and Development Centre of the Lubricants Division at Silvassa developed formulations for high performance Passenger Car Motor Oils, Gear and Transmission Oils, and Motor Cycle Oil to meet current and future market requirements. High performance diesel engine oils were validated in commercial vehicles with different after treatment technologies meeting the latest BS IV emission norms. To strengthen the existing product portfolio of the fast growing Construction and Mining segment, tailor made hydraulic and transmission fl uids were developed. The Industrial portfolio was also expanded by developing metal working fl uids and rust preventives. R&D activities also continued in developing alternate formulations to improve the fl exibility in overall operations or to reduce costs.

Major achievements for the year include development of high performance Passenger Car Diesel Engine Oil, Gulf MAX TD 15W-40 meeting API CI-4/SL specifi cations and various hydraulic and transmission fl uids for Construction and Mining Segment, upgradation of Ashok Leyland-Gulf Oil co-branded Gear Oil, Gulf Gear XP Max 90 for extended drain interval and validation of high performance diesel engine oils in BS IV vehicles.

8. SUBSIDIARIES

Gulf Oil Bangladesh Limited reported a profi t of Rs. 97.51 lakhs (Rs.155.84 lakhs).

PT. Gulf Oil Lubricants Indonesia reported a profi t of Rs. 55.52 lakhs (45.26 lakhs).

Gulf Oil (Yantai) Co. Ltd. reported a profi t of Rs. 84.58 lakhs (Rs.151.96 lakhs).

Hinduja Infrastructure Limited reported a profi t of Rs. 0.07 lakhs (loss of Rs.0.54 lakhs).

IDL Buildware Limited incurred a loss of Rs. 180.74 lakhs (loss of Rs.136.10 lakhs) on closure of the factory at Vizag.

Gulf Carosserie India Limited reported a loss of Rs. 0.24 lakhs ( profi t of Rs.0.61 lakhs ).

During the year under review, the Company has fully disinvested the shareholding in IDL Speciality Chemicals Limited which was a 100% subsidiary of the Company, after transfer of the API and formulations businesses to two pharma companies.

9. HUMAN RESOURCES / INDUSTRIAL RELATIONS

Divisional HR Departments focused on conducting internal programmes for management personnel as well as workmen. The training programmes were related to areas of advanced product knowledge, creating a selling edge, leadership / competency development, safety and understanding of business process using SAP.

The HR focus has been to facilitate and start a number of key initiatives that provide enabling environment to enrich employee experience and enhance performance. To this end, during the year, improvement in the performance management process through sharper KRA / goal setting with long term goals and key strategies have been achieved for monitoring of performance.

During the year, 71 workmen availed VRS from Explosives Division at Hyderabad. However, the production levels were maintained by operations streamlining and manpower deployment, process improvement and outsourcing of certain activities.

A Wage Settlement was signed for regular workmen of Hyderabad Explosives Division, for a period of 3 years 4 months effective 1.1.2009. Major improvement in productivity is expected with the implementation of this Settlement.

During the year under review the employer-employee relations were cordial at all locations.

Safety

Accident-free man hours achieved by Hyderabad Works was 1.18 m (Previous Year : 1.33 m), Rourkela 1.55 m (Previous Year 1.23 m), Bulk Explosives locations 0.20 m (Previous Year 0.11 m).

In Hyderabad factory, Safety, HAZID AND HAZOP training was imparted to around 50 offi cers by DNV Energy (an associate of Norsk Veritas) for safe operations in the factories in the Explosives Division. Also several measures were undertaken by the Hyderabad factory to improve safety in operations through introduction of interlocking systems, trip relay system in automatic coil cutting machines and measures to reduce press fi res.

A campaign was initiated to upgrade safety in Bulk Emulsion manufacture and delivery by introducing further safety measures in pump operations. In this connection, audit of bulk manufacturing facilities at Singrauli and Rourkela was carried out by an expert from UK and his observations actioned.

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11. OUTLOOK FOR THE CURRENT YEAR, OPPORTUNITIES AND THREATS

The global economy which witnessed very high degree of uncertainty and volatility during 2008-09 recovered to a great extent in 2009-10. However, vestiges of some of the issues which led to the fi scal meltdown is still seen in many parts of Europe.

Although, our exports during the year declined, domestic markets have been steady if not buoyant in many sectors. The six infrastructure sectors – crude, petroleum refi nery products, coal, electricity, cement and fi nished steel – that constitute 26.68 per cent in IIP, recorded a growth of 5.3 per cent in the period April-February 2009-10, as against 2.9 per cent in the same period last year.

Overall the economy is expected to grow at 8 – 8.5% over the current year (2010 – 11).

In the automotive sector, the growth was 26.4% in sales riding on the Government’s stimulus packages. Sales in the domestic market were driven mainly by the car and 2-wheeler segment that posted 25.1% and 26% increases respectively. Ernst and Young forecast for the passenger car market in India is 12% CAGR over the next 5 years from the present fi gure of 1.89 m units to reach 3.75 m units by 2014.

The overall trend of mineral production indicates a growth of 7.9% for the year. The value of mineral production (excluding atomic minerals) during 2009-10 is estimated at Rs.1.28 lakh crores, an increase of 4.6% over the previous year. The total production comprised of fuel minerals 02.2%. Metallic minerals 21.6% and other minerals 16.2%.

Minerals play a very important role in the growth of Indian economy. India produces more than 80 minerals, which include fuels, metallic ores, non-metallic minerals, atomic minerals and other minor minerals. Mining and Quarry industry has a share of 1.9% of GDP and contributed signifi cantly in driving the economic and social growth in India. India at its current place in the development path, requires coal for energy; metal ores, limestone and other minor minerals for infrastructure. The growth is refl ected in the Index for Industrial production data for Mining industry. The year 2009-10 show a 8% growth over the previous year. As against a 4% CAGR over the last 16 years, we expect the growth rate to be in the range of 8-10% over the next few years.

In this background, the outlook of the activities of our Divisions is expected to be as follows:

11.1 Explosives

India is estimated to have around 2700 mines (570 : Coal, Metallic Minerals : 640, Non-metallic : 1500) with 90% of them concentrated in 11 states. The Company’s 50 years of long relationship, close geographical proximity with its multiple manufacturing locations and through active application support gives the Division a unique position as the “Supplier of Choice” with its customers.

The Division has envisaged a good growth in the coming year based on the ambitious targets set by Planning Commission. The huge requirement of coal, iron ore, limestone ( for cement and steel sectors ) and other strategic minerals, coupled with increased thrust in infrastructure sector will result in increased demand for explosives and blasting accessories as blasting with explosives continues to be the most economic method for excavating coal, minerals and overburden rock encountered in mining industry.

A Strategic review of the Explosives business with inputs from an external consultant was carried out. This study covered the size and composition of the market and identifi ed the high growth and high value areas of focus for growth of the business.

During the year 2010-11, the Explosives Division will focus on the fast growing Bulk explosives, specialized packaged explosives for niche segments, technologically advanced accessories to provide high value to our customers. The new products developed during 2009-10 will address the needs of increased productivity and safety besides customised blasting solutions to signifi cantly reduce ground vibrations in the tunneling segment for hydro electric projects and underground coal mines. These have already enhanced our technological leadership and we have started to commercialize these products.

The Special Products Group of Explosives Division designs and manufactures initiators and pyrotechnic devices for specialized applications in Defense, Space and other industries. A number of new niche products which have been recently developed are expected to be commercially manufactured after appropriate approvals and qualifi cations.

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11.2 Mining and Infrastructure (IDLconsult)

The Mining and Infrastructure Division (IDL Consult) engaged in contract mining and mining related infrastructure projects has segmented the market space and identifi ed several strategic initiatives.

A number of large mining opportunities are expected in the coal sector, with the private sector opening up the captive coal blocks as well as new PSU owned coal blocks coming for exploitation. The Division’s experience in handling large mines and the related qualifi cations positions it favourably for undertaking these projects.

The current stress levels in the Iron ore mining segment is expected to ease in the fi rst half of the year leading to opening up of new mines which have been long delayed. The Division’s offer of cost effective end to end mining solution covering mining and mineral processing is expected to get new customers from new mines in the metal segment.

The new mines which will open in the near future will require infrastructure such as roads, bridges, rail lines, buildings etc. The Division’s position as a One Stop Solution provider will give it a unique position in providing mining related infrastructure.

The Division has Rs. 322 crores of orders booked as at the end of F 10 to be executed in the next two to four years period comprising of coal mining, iron, manganese and uranium ore mining and mine related construction business.

With rising demand for coal, especially for thermal power generation, the Division foresees good opportunities in the coal sector for mining contracts with the coal majors like Singareni Collieries and Coal India who are planning more offl oading of their operations. Many coal mines in the private and joint venture sectors are also to start in the next two to three years. All these developments of new mines are expected to increase the demand for contract mining and the Division is working closely with the mine owners / lessees for undertaking these large projects in the coal sector. The Division looks forward to becoming a major 'Mine Developer cum Operator' (MDO).

Allocation of a large outlay for infrastructure development by the Government of India has directed the Division's attention to the opportunity in projects relating to the Road sector and other infrastructure Projects. The Division's expertise gained over the last eight years would be a major strength in increasing the business in these areas. The Division has already started a mining related infrastructure contract with the Aditya Birla Group for their new Alumina Project in Orissa.

11.3 Lubricants

With the growth trends in the automobile sector and steady demand for lubricants in the domestic market, the Division is looking at achieving double digit growth in volumes and consequent increase in market shares in the core segments. With increasing use of long drain lubricants, major volume growth prospects in the Lubes industry is likely to be limited. It is estimated that the overall volume growth for lubricants will be 2-3% in 2010-11. The Division's strategy is aimed at growing faster than industry and competition, to gain market share.

As mentioned above, the growth in longer drain interval products is expected to be higher and in line with the growing preference for products with superior benefi ts, the Division is planning to launch a number of products that deliver ‘longer life’ to strengthen its position in this area.

These introductions will be backed by increased investments in the brand and further upgrading of its bottom line. It is expected that competition levels will increase but opportunities to take market share will also be available. The Division plans to leverage its strengths and build on the recent successes in the core segments to increase market share with continuation of segment wise approach. .

The Division will also focus on prospecting more Automobile OEMs (Original Equipment Manufacturers) for factory and service-fi ll related opportunities.

As the industrial and infrastructure sectors are expected to witness growth, opportunities in the B2B segment with industries, fl eet/construction companies and marine will also be a focus area for the Division in 2010-11. The industrial segment is expected to grow well. The Division is planning to increase it’s presence with additional manpower and products to cater to this demand. The Lubricants Division will continue to strengthen its position with Ashok Leyland network and customers, with innovative programs and differentiated product offerings, which add value to the customers.

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Base oil and additive prices and other costs are expected to increase given the current trend in base commodity prices, which may necessitate price increases during the year.

12. RISKS AND CONCERNS

12.1 Environmental Risks

Regular safety audits are carried out by internal safety audit teams and at regular intervals by external teams. General Safety Directions (GSDs) are strictly enforced in all factories and plants within the factories to ensure minimisation of risk. During the year, a special safety audit has been carried out by a consultant specialising in Explosives at the Rourkela factory and some bulk explosives manufacturing units. All recommendations have been implemented and confi rmed by the Consultants. In addition, strict compliance of the requirements of the Explosives Act and Rules are ensured to protect the exposure of adjacent neighbourhoods to the explosives and accessories factories from undue risk. Operations are carried out to comply with emission, waste water and waste disposal norms of the local authorities of the respective factories.

12.2 Operational Risk

Licensing

The Explosives Division operates in a highly regulated and licensed industry and amendment / revision in licenses are required based on expiry of the licenses and change in production capacity and process. Amended / revised licenses for increase in license capacity for any of the explosives products may get delayed temporarily or for long periods thereby limiting our ability to cater to any increase in demand for these products from our customers. Non availability of licenses / approvals for expansion of new products could affect our future growth and expansion plans. The Division, therefore, ensures that approvals are applied for well in advance to avoid launch dates / export of products.

Location Risks

Manufacturing facilities, for our Industrial Explosives Division, are spread across six states. The optimum locations for packed explosives unit is determined by the customer location and the source of raw material. The advantage of the location of bulk explosives units is optimized to be close to the customer location. With changes in sources of raw material our location may not continue to be optimal in comparison with the competition. Moreover, if there is a consolidation in the industry, and the size of each manufacturing units go up, we may be disadvantaged by being sub-optimal.

Further since the lubricants are manufactured at one location and distributed throughout India, the cost of transportation and storage are higher in comparison to some of our competitors operations.

Raw Materials

Many of the inputs of the three major Divisions are imported, availability of which is affected by global market situations. Also, prices of such items are volatile. Increases in Base Oils due to increases in crude oil rates. Timely availability of raw materials is critical for continuous plant operations. The Company seeks to mitigate the risk by entering into long-term relationship with global raw material suppliers, with suitable escalation clauses to ensure regular supplies.

12.3 Market Risks:

Markets

All the Divisions of the Company operate in highly competitive markets where competition from all India players as well as regional players is high. Of which, two major divisions, namely Industrial Explosives and IDLconsult Divisions operate in tender-driven markets, sometimes with onerous and unreasonable performance clauses. In the Lubes Division, increased competition and entry level pricing by new entrants leading to price undercutting could affect revenues substantially. Therefore, there is a risk of cost increases, especially of petro product inputs, not possible to be passed on to ultimate consumers. The Company is in direct contact with the industry associations to ensure that there is a suitable consensus on pricing policies by the majority of the producers.

Any reversal in growth trend in the economy in general and weak monsoons in particular, could affect demand in the automobile industry and consequent deceleration in manufacturing industry. This is likely to have an adverse impact on the lube industry. In order to minimise such adverse impact, the Lubes Division is taking various product and marketing initiatives.

Since the Q4 of the previous year, the base oil prices have again seen signifi cant increases on account of high international rates. Given this trend of increasing base oils cost, if the cost increases cannot be passed on fully or recovered from the consumer, we may see an erosion of margins across the industry. Increased competition levels from the market leader to retain volumes and new entrants may lead to aggressive pricing and discounts.

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Concentration of Customers

The IDLconsult Division which currently undertakes mining services in coal, iron ore and limestone sectors, is exposed to business risks on account of non-availability of environmental clearances in time and lack of adequate infrastructure for dispatch of ores from the mine, especially during the rainy seasons. In view of this, detailed review of approvals and quality of infrastructure is carried out before undertaking mining service contracts. Both the Explosives and Contract Divisions are operating in the mining and infrastructure sectors, dominated by the PSUs, where the tendering system is in vogue, with the attendant risks. Missing L1 status in these tenders might result in loss of business opportunities for extended periods for the relevant tender(s).

12.4 Financial Risks:

Currency Value and Interest Rate Fluctuations

Financial risk management is done by the Finance Department at the various business Divisions and at Corporate Offi ce under policies approved by the Board of Directors. Policies for overall foreign exchange loss risks and liquidity are regularly reviewed based on emerging trends. Interests’ risks arising out of fi nancial debt, are normally done at fi xed rates or linked to LIBOR and appropriate Bank lending rates. Adverse movement of Rupee from current levels may further impact base oil and ammonium nitrate rates.

Credit Risk

The Company sells its products through the customary trade channels, with the attendant risk of payment delays and defaults. To mitigate the risk, a credit risk policy is also in place to ensure that sale of products are made to customers after evaluation of their ability to meet fi nancial commitments through allotment of specifi c credit limits to respective customers. Credit availability and Exposure (with the trade channels) is another area of risk.

Liquidity Risk

Liquidity conditions in the money market and the commercial interest rates may impact the capability of distribution channel of the Lubes Division to support growth in business. Steps are being taken up for tie–up with fi nancing partners to support distributors.

All the three major Divisions operate in working capital intensive industries. The Company realizes that its ability to meet its obligations to its suppliers and others is linked to timely collection of receivables and maintaining a healthy credit rating. Review of working capital constituents like inventory of raw materials, fi nished goods and receivables are done regularly by the respective Divisions and Corporate Finance.

12.5 Legal and Statutory Risks:

Contractual Liability

All major contracts are reviewed / vetted by the in-house Legal Department before the same are executed. In addition, the Company engages the services of reputed independent legal counsels, on need basis. In matters of tax law and other statutory obligations the outcome of litigation cannot always be predicted. Hence, appropriate fi nancial provisions, insurance policies and credit lines are taken to limit the risk for the Company.

12.6 IT Risks

The Company is dependent on intra-offi ce and inter-offi ce networks, as well as several business softwares operated from the Corporate Offi ce and the business Divisions. Failure of system networks and consequential loss of business is attempted to be minimised by critical systems being operated on secured servers with regular maintenance, regular back up and off-site storage of data, selection of suitable fi rewall and virus protection systems / software.

12.7 Other Risks

Various assets of the Company including plant and machinery, stocks, buildings, furniture, offi ce equipment and computer systems could suffer damages / loss owing to occurrences like fi re, accidental mishaps, etc. The Company has taken insurance covers to protect these assets from possible damage / loss.

While the Company undertakes regular review of remuneration structures, threat of poaching by competitors, especially, new entrants in the industry of key persons is possible. Such actions could lead to temporary drop in effi ciency and performance in the specifi c areas.

13. DIRECTORS

During the year, Mr. P. N. Ghatalia, Chiarman of the Audit Committee passed away on August 13, 2009. Your Board of Directors wishes to place on record its appreciation for the contributions made by late Mr. P. N. Ghatalia during his over 8 years tenure as Director and Chairman of the Audit Committee of the Board of the Company.

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The Board has during the year, appointed Ms. Kanchan Chitale w.e.f. 5th October, 2009, in the casual vacancy caused by the sad demise of Mr. P. N. Ghatalia. Ms. Kanchan Chitale has also been appointed as the Chairperson of the Audit Committee. Ms. Chitale is a Fellow Member of the Institute of Chartered Accountants of India ( ICAI ). She has experience of 20 years in internal and management audits of corporate enterprises and specialized / concurrent audits and other assignments of commercial banks and fi nancial institutions. She has been a governing body member of IIM-Ahmedabad Alumni Association ( 1990-95 ), Ex-Vice President of Association of Women Industrialists of Maharashtra ( 1992-93 ) and is a member of Bombay Chartered Accountants Society and Institute of Internal Auditors.

Mr. Ashok Kini, Mr. Vinod K. Dasari, Ms. Vinoo S. Hinduja and Mr. V. Ramesh Rao in accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, retire by rotation at the 49th Annual General Meeting of the Company and are eligible for reappointment.

Profi le of members of the Board of Directors being appointed / reappointed :

Ashok Kini

Mr. Ashok Kini graduated from Mysore University in 1965 majoring in Science and obtained a Master’s degree in English Literature from Madras Christian College, Chennai before joining State Bank of India ( SBI ) as Probationary Offi cer in 1967 and reached the position of Managing Director (National Banking) of SBI. During his career, Mr. Ashok Kini was responsible for the Bank’s IT plans, from concept and RFP to execution and vendor management, domestic distribution, retail business, consumer banking, marketing/brand management, etc.

Vinod K Dasari

Mr. Vinod K Dasari is Wholetime Director of Ashok Leyland Ltd., heading manufacturing, domestic marketing, strategic sourcing and corporate quality engineering divisions. Mr. Vinod K. Dasari commenced his career with General Electric Company, USA in 1986 and worked for companies such as Timken USA, Timken India, Cummins India Limited and is credited with bringing about signifi cant changes in these organizations and leading them into profi tability after a period of sustained losses.

Vinoo S Hinduja

Vinoo S Hinduja is a degreeholder in Business Administration from UK and a Diploma holder in Health Policy Management from USA. She has completed her internship and training in Finance and Banking at the Credit Suissee Bank, Geneva and Chase Manhattan Bank, London and in Hospital Administration and Management from Cromwell Hospital, London. She is also a member of the National Health and Education Society, Hinduja National Hospital in Mumbai.

V. Ramesh Rao

Mr.V.Ramesh Rao is a postgraduate in Mechanical Engineering with specialization in Industrial Tribology from IIT, Madras and is a President’s Gold Medalist. He has been working in the lubricants industry since 1984 in various companies such as Lubrizol India Limited, Gulf Lubricants Systems and in Gulf Oil International companies in China, Korea, Taiwan and Philippines. He is a member of the Gulf Oil Core Technical Team and assisted Gulf Oil’s international operations and handles the operations in the Asia Pacifi c Region.

Names of companies in which the Directors, proposed to be appointed / reappointed at the ensuing AGM, hold positions of directorship and the membership/chairmanship of committees of the Board, are as per the Annexure to the Report on Corporate Governance.

14. STATUTORY INFORMATION

Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo 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 and the Statement under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees ) Rules, 1975 as amended, are annexed to this full Report. However, as per the provisions of Sec.219 (1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company.

15. INFORMATION ON STOCK EXCHANGES

The Equity shares of the Company are listed on Bombay Stock Exchange Limited and the National Stock Exchange of India Limited and the Listing Fees have been paid to them uptodate.

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16. CORPORATE GOVERNANCE

A detailed report on the subject forms part of this report. The Statutory Auditors of the Company have examined the Company's compliance and have certifi ed the same as required under the SEBI Guidelines. Such certifi cate is reproduced in this Annual Report.

17. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors, on the basis of information and documents made available to them, confi rm that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b. They have selected such accounting policies and applied them consistently and made judgments 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 fi nancial year and of the profi t or loss of the Company for that period.

c. They have taken proper and suffi cient care for the maintenance of the 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.

d. They have prepared the annual accounts on a going concern basis.

18. SUBSIDIARY COMPANIES

The Report and Accounts of the Subsidiary Companies are annexed to this Report along with the statement pursuant to Section 212 of the Companies Act, 1956. However, in the context of mandatory requirement to present consolidated position of the Company including subsidiaries, at the fi rst instance, members are being provided with the Report and Accounts of the Company treating these as abridged accounts as contemplated by Section 219 of the Companies Act, 1956. Members desirous of receiving the full Report and Accounts of the subsidiaries will be provided the same on receipt of a written request from them.

19. AUDITORS

M/s Deloitte Haskins and Sells and M/s Shah and Co., Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received confi rmation that their appointment will be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation for the assistance and co-operation received from the fi nancial institutions, banks, Government of India and various State Government authorities and agencies, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of all employees of the Company.

For and on behalf of the Board of Directors

Place : Mumbai S. G. HINDUJADate : 14th May 2010 Chairman

CAUTIONARY STATEMENT

Statement in this Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions

may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from

those expressed or implied. Important factors that could make a difference to the Company's operations include global and Indian demand

supply conditions, fi nished goods prices, raw material availability and prices, cyclical demand and pricing in the Company's principal markets,

changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts

businesses and other factors such as litigation and labour negotiations. The Company assumes no responsibility to publicly amend, modify or

revise any forward looking statements, on the basis of any subsequent development, information or events or otherwise.

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REPORT ON CORPORATE GOVERNANCE

1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE

The Company will continue to be in the forefront of its diverse interests and sustain growth activities through emphasis on TQM, adoption of emerging technologies, innovation through research, good corporate governance, adherence to fair business practices and effective use of physical, technological, R & D, information and fi nancial resources, thus fulfi lling the aspirations of customers, shareholders, employees and fi nanciers.

2. BOARD OF DIRECTORS

(A) Composition: The Board of Directors of the company headed by a Non-executive Chairman consists of the following Directors as on 31st March, 2010 categorised as indicated below :

(i) Chairman (Non-executive) Mr. Sanjay G Hinduja

(ii) Non-Executive Directors:

(a) Promoter Group: Mr. Sanjay G HindujaMr. Ramkrishan P HindujaMs. Vinoo S HindujaMr. V.Ramesh RaoMr. Vinod K DasariMr. Abin K.Das Alternate Director to Mr. Sanjay G HindujaMr. Alain V Dujean Alternate Director to Mr. Ramkrishan P HindujaMr. Prabal Banerjee Alternate Director to Ms. Vinoo S Hinduja

(b) Independent : Mr. K N Venkatasubramanian Mr. H C Asher Mr. M.S.RamachandranMr. Ashok KiniMr. Prakash ShahMs. Kanchan Chitale *

(iii) Managing Director: Mr. Subhas Pramanik

* Appointed by the Board of Directors on 5th October 2009 in the casual vacancy caused by the sad demise of Mr.Pravin N Ghatalia, Independent Director and Chairman of the Audit Committee.

(B) Attendance of each director at the Board Meetings and the last AGM and details of membership of Directors in other Boards and Board Committees:

Name of the Director No. of Board Meetings Attended

Whether attended last AGM

No. of Memberships of

other Boardsas on 31/03/10@

No. of Memberships

of other Committees*

No. of Chairmanships

in other Committees*

Sanjay G Hinduja 6 Yes 10 - -

Ramkrishan P Hinduja 3 Yes 6 2 -

K N Venkatasubramanian 7 Yes 7 3 2

Pravin N Ghatalia(upto 13.8.2009)

4 Yes NA NA NA

Kanchan Chitale(since 5.10.2009)

4 NA 1 - -

Hemraj C Asher 8 Yes 19 5 3

M.S.Ramachandran 7 Yes 6 1 -

Ashok Kini 8 Yes 3 3 1

Prakash Shah 8 Yes 5 - -

Vinoo S Hinduja 4 No 3 - -

Vinod K Dasari 4 Yes 6 - -

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Name of the Director No. of Board Meetings Attended

Whether attended last AGM

No. of Memberships of

other Boardsas on 31/03/10@

No. of Memberships

of other Committees*

No. of Chairmanships

in other Committees*

V Ramesh Rao 5 Yes 3 - -

S Pramanik 8 Yes 4 - -

A K Das 2 NA 23 3 -

Alain Vincent Dujean 3 NA 11 - -

Prabal Banerjee 4 Yes 8 2 2

@includes private limited companies and companies registered outside India.*As per explanation to Clause 49.I(C), only Audit Committee and Shareholders’ Grievance Committee have been considered for the purpose.

Board Agenda

Meetings are governed by a structured agenda. The Board members, in consultation with the Chairman, may bring up any matter for consideration of the Board. All major agenda items are backed by comprehensive background information to enable the Board to take informed decisions. Agenda papers are generally circulated seven days prior to the Board Meeting.

Information placed before the Board

Apart from the items that are required to be placed before the Board for its approval, the following are also tabled for the Board’s periodic review / information:

Quarterly performance against plan, including business-wise fi nancials in respect of revenue, profi ts, cash fl ow, balance sheet, investments and capital expenditure.

Periodic summary of all long term borrowings and applications thereof.

Internal Audit fi ndings (through the Audit Committee).

Status of safety, security and legal compliance.

Status of business risk exposures, its management and related action plans.

Show Cause, demand and adjudication notices, if any, from revenue authorities, which are considered materially important.

Information on strikes, lockouts, retrenchment, fatal accidents, etc., if any

Write offs / disposals (fi xed assets, inventories, receivables, advances, etc.)

(C) Brief profi les of the Directors being appointed/reappointed have been given in the Directors’ Report.

(D) Details of Board Meetings held during the Year 2009-10:

Date of the Meeting Board Strength No. of Directors Present

17.04.2009 12 11

18.05.2009 12 10

25.06.2009 12 11

31.07.2009 12 12

05.10.2009 12 11

29.10.2009 12 11

28-29.1.2010 12 11

08.02.2010 12 8

(E) Code of Conduct

The Board of Directors has laid down Code of Conduct for all Board Members and Senior Management of the Company. The text of the Code of Conduct is uploaded on the website of the Company – www.gulfoilcorp.com. The Directors and Senior Management personnel have affi rmed compliance with the Code applicable to them during the year ended March 31, 2010. The Annual Report of the Company contains a Certifi cate duly signed by the Managing Director in this regard.

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(F) CEO & CFO Certifi cation

The Managing Director and the Chief Financial Offi cer have certifi ed to the Board of Directors of the Company that:

(a) They have reviewed the fi nancial statements and the cash fl ow statement for the year ended 31st March 2010 and that to the best of their knowledge and belief:

(i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading.

(ii) These statements together present a true and fair view of the Company’s affairs, and are in compliance with the 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 the year which are fraudulent, illegal or violative of the Company’s Code of Conduct.

(c) They accept responsibility for establishing and maintaining internal controls for fi nancial reporting and that they have evaluated the effectiveness of internal control systems of the Company pertaining to fi nancial reporting; and that they have disclosed to the Auditors and the Audit Committee, defi ciencies in the design or operation of internal controls, if any, of which they are aware and the steps they have taken or propose to take to rectify these defi ciencies.

(d) They have indicated to the Auditors and the Audit Committee:

(i) signifi cant changes in internal control over fi nancial reporting during the year;

(ii) signifi cant changes in accounting policies during the year and that the same have been disclosed in the notes to the fi nancial statements: and

(iii) instances of signifi cant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a signifi cant role in the company’s internal control system over fi nancial reporting.

(G) Shares held by non- executive Directors

Mr. H C Asher held 3750 (of Rs. 2/- each) equity shares of the Company as on 31.03.2010 and none of the other non-executive Directors holds any shares in the Company.

3. AUDIT COMMITTEE

The Audit Committee was constituted in February 1987. The current terms of reference are in full conformity with the requirements of Section 292A of the Companies Act, 1956.

Composition

Chairperson : Ms. Kanchan Chitale (since 5th October 2009)

Members : Mr. Hemraj C Asher Mr. Ashok Kini

Meetings and Attendance:

Audit Committee Meetings held during the year 2009-10 and attendance details:

Date of the Meeting Committee Strength No. of Directors present17.04.2009 3 318.05.2009 3 325.06.2009 3 310.07.2009 3 331.07.2009 3 329.10.2009 3 329.01.2010 3 308.02.2010 3 3

Company Secretary / Deputy Company Secretary / Assistant Company Secretary of the Company is the Secretary to the Committee.

Mr. S Pramanik, Managing Director was invitee for all the Audit Committee Meetings. Chief Financial Offi cer and Deputy General Manager (Internal Audit) attended all the meetings.

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The Statutory Auditors of the Company were invited to join the Audit Committee in all the meetings for discussing the quarterly unaudited fi nancial results and the Annual Audited Accounts before placing it to the Board of Directors. The Audit Committee held discussions with the Statutory Auditors on the yearly Audit Plan, matters relating to compliance of Accounting Standards, their observations arising from the annual audit of the Company’s Accounts and other related matters.

4. SUBSIDIARIES

There are no material non-listed Indian subsidiaries of the Company.

5. REMUNERATION COMMITTEE

The terms of reference are review of the compensation policy for the Executive Directors. Accordingly, they are authorised to negotiate, fi nalise and approve the remuneration for Managing Director/ Whole-time Directors on behalf of the Company.

Composition-

Chairman : Mr.Prakash Shah* (effective from 29th October 2009)

Member : Mr.H C Asher Mr. M S Ramachandran Ms.Vinoo S Hinduja

*Appointed by the Board of Directors consequent to the sad demise of Mr.Pravin N Ghatalia, Chairman of the Remuneration Committee.

Meetings and Attendance

Date of the Meeting Committee Strength No. of Directors present25.06.2009 4 4

Remuneration policy -

i) For Managing Director

The total remuneration subject to shareholders approval consists of:

- a fi xed component – consisting of salary and perquisites

- a variable component by way commission as determined by the Board within the limits approved by the shareholders.

ii) (a) For Non– executive Directors

An amount of Rs. 20,000/- for each Board Meeting, Audit Committee Meeting and Meeting of the Committee of Directors, Rs.5,000/- for each Remuneration Committee, Rs. 2,000/- for each Share Transfer Committee Meeting and Rs.12,000/- for each meeting of the Safety Review Committee and Investment Appraisal & Project Review Committee, Rights Issue Committee and Committee of Directors-Legal Issue, plus reimbursement of actual travel and incidental expenditure not exceeding Rs.1,500 for Share Transfer Committee Meetings and Rs.5,000/- for Meetings of the Board and other Committees, is paid (as per the provisions of Section 309, 310 of the Companies Act, 1956).

Non-executive Directors (Sitting Fees only) Rs. in lakhsMr. Sanjay G. Hinduja 1.32Mr. Ramkrishan P. Hinduja 0.60Mr. K. N. Venkatasubramanian 1.40Mr. Pravin N. Ghatalia (upto 13th August, 2009) 1.85Ms. Kanchan Chitale (since 5th October, 2009) 1.40Mr. H C Asher 3.61Mr. M.S.Ramachandran 1.81Mr. Ashok Kini 3.28Mr. Prakash Shah 1.60Ms. Vinoo S. Hinduja 0.92Mr. Vinod K. Dasari 0.94Mr. V.Ramesh Rao 1.00Mr. Abin K. Das 0.40Mr. Alain V. Dujean 0.60Mr. Prabal Banerjee 1.09Total 21.82

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(b) For Executive Directors(Rs. in Lakhs)

Managing Director

Salaries 56.63

Commission 9.84

Contribution to Provident Fund and Superannuation Fund 9.56

Benefi ts 3.47

Total 79.50

Having regard to the fact that there is a global contribution to Gratuity Fund, the amount applicable to an individual employee is not ascertainable and accordingly, contribution to Gratuity Fund has not been considered in the above computation.

Managing Director is under contract of employment with the company with 6 months’ notice period from either side. There is no severance fee payable to the Executive Directors. The Company does not have any stock option scheme.

6. SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE

Composition : 3 Directors

Chairman : Mr. Ashok Kini

Members : Mr. S Pramanik Mr. Vinod K Dasari

The Shareholders / Investors Grievance Committee specifi cally looks into redressing of shareholders/ investors complaints in matters such as transfer of shares, non-receipt of declared dividends and ensure expeditious share transfer process.

Number of Shareholders Complaints received so far: 79

Not solved to the satisfaction of the shareholders: NIL

7. GENERAL BODY MEETINGS

Location, time and venue where last three AGMs held :

Financial Year Location of AGM Date & Time of AGM

2008-09 ‘Kohinoor’, Hotel Taj Krishna, Banjara Hills, Hyderabad 31.07.2009, 3.30 p.m.

2007 - 08 Grand Ball Room, Hotel Taj Krishna, Banjara Hills, Hyderabad 25.09.2008, 2.30 p. m.

2006 - 07 The Emerald, Hotel Taj Krishna, Banjara Hills, Hyderabad 28.09.2007, 2.30 p. m.

Special Resolutions

Special resolutions were passed at the annual general meetings as under:

i) AGM held on 28th September 2007 – 5 Special resolutions

ii) AGM held on 25th September 2008 – 2 Special resolutions

iii) AGM held on 31st July 2009 – 2 Special Resolutions

No Special resolution that requires approval through postal ballot was passed in the previous year. No Special resolution which requires approval through postal ballot is proposed to be conducted at the ensuing AGM.

8. DISCLOSURES

Related Parties

There were no materially signifi cant related party transactions which may have potential confl ict with the interests of the Company at large. Confi rmation has been placed before the Audit Committee and the Board that all related party transactions during the year under reference were in the ordinary course of business and on arm’s length basis. Transactions with related parties are disclosed in Note. 22 of the Schedule 18 to the Accounts in the Annual Report.

BOARD DISCLOSURES - Risk Management

The Company has laid down procedures to inform the Board of the Directors about the Risk Management and its minimization procedures. The Audit Committee and the Board of Directors review these procedures periodically.

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9. STRICTURES AND PENALTIES

There were no strictures or penalties imposed on the Company by either Stock Exchanges or SEBI or any Statutory Authority for non-compliance on any matter related to Capital Market during the last three years.

10. MEANS OF COMMUNICATION

The quarterly and half yearly reports, are normally published in Business Standard and in the local newspaper – Andhra Prabha and are displayed on the Website of the Company www.gulfoilcorp.com. During the year no presentations were made to institutional investors or to the analysts.

The Management Discussion and Analysis Report forms part of the Directors’ Report.

11. GENERAL SHAREHOLDERS INFORMATION

Annual General Meeting :

Date - 23rd September, 2010

Venue - Emerald-1, Hotel Taj Krishna, Banjara Hills, Hyderabad - 500034.

Time - 2.30 P.M.

Financial Calendar :

- Unaudited results for 1st quarter of next Financial Year – by 14.08.2010

- Unaudited results for 2nd quarter of next Financial Year – by 15.11.2010

- Unaudited results for 3rd quarter of next Financial Year – by 15.02.2011

- Audited results for next Financial Year – by 30.05.2011

Date of Book Closure – 29th July, 2010

Date of Dividend Payment – By 22nd October, 2010

Listing of Equity Shares – Bombay Stock Exchange Limited – Code 506480

National Stock Exchange of India Ltd – Code GULFOILCOR

Market Price Data (in Rupees): in respect of the Company’s shares on BSE, monthly high and low during the last Financial Year

Month & Year High (Rs.) Low (Rs.)

April, 2009 44.90 27.40

May, 2009 60.95 36.85

June, 2009 77.30 50.55

July, 2009 62.95 45.75

August, 2009 78.15 58.95

September, 2009 88.80 73.00

October, 2009 89.05 71.15

November, 2009 122.30 71.05

December, 2009 114.50 93.65

January, 2010 112.75 86.00

February, 2010 101.00 84.00

March, 2010 97.00 82.20

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100

150

200

250

300

350

400

450

BSE SENSEX Vs GOCL SHARE PRICE(assuming base as on 1st April 2009 as 100)

BSE SENSEX vs SHARE PRICE OF GOCL

0

20

40

60

80

100

120

140

160

180

200

0

3000

6000

9000

12000

15000

18000

Distribution of Shareholding as on 31.03.2010

Paid up Share CapitalShareholders No. of Shares

No. % No. %

Up to 5000 60351 98.49 7593742 10.21

5001 – 10000 483 0.79 1757716 2.3610001 – 20000 207 0.34 1499162 2.0220001 – 30000 69 0.11 861697 1.1630001 – 40000 33 0.05 593448 0.8040001 – 50000 32 0.05 714263 0.9650001 – 100000 48 0.08 1825152 2.45

100001 and above 53 0.09 59513555 80.04

Total 61276 100.00 74358735 100.00

GOCL

BSE

GOCL

BSE

April

April

May

May

June

June

July

July

Augus

t

Augus

t

Septe

mbe

r

Septe

mbe

r

Octobe

r

Octobe

r

Novem

ber

Novem

ber

Decem

ber

Decem

ber

Janu

ary

Janu

ary

Febru

ary

Febru

ary

Mar

ch

Mar

ch

2009-10

2009-10

MO

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HLY

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F G

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MO

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Pattern of Shareholding as on 31.03.2010

Category No. of Holders No. of Shares % of Share-holding

Promoters 1

36460415 49.03

Public :

Institutional Investors:

Mutual Funds & UTI, Banks, Financial Institutions & Others

8 4398590 5.92

Private Corporate Bodies 871 15282701 20.55

Indian Public 60141 15525082 20.88

NRIs/ OCBs 249 2422151 3.26

FIIs 6 269796 0.36

GRAND TOTAL 61276 74358735 100.00

Dematerialisation of shares and liquidity – 71837247 shares were dematerialized amounting to 96.60% of the total paid up capital. Shares of the Company are listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited and frequently traded on both the Exchanges.

Details of Share Transfer System:

The authority relating to approval of share transfers has been delegated to the Share Transfer Committee consisting of Mr. Ashok Kini, Chairman, Mr. S Pramanik and Mr. Vinod K Dasari. The Committee has met four times during the year for approving transfers, transmissions, etc. Operations with regard to dematerialization are being complied with, in conformity with the regulations prescribed.

The name and designation of Compliance Offi cer : Mr. S Subramanian, CFO & Company Secretary

The Registrar and Share Transfer Agents are handling all the share transfers and related transactions.

As on March 31, 2010 there were no requests pending for demats / overdue beyond the due dates.

Plant Locations:

A. Explosives : Explosives Division, Hyderabad, AP. Explosives Division, Rourkela, Orissa. Bulk Plants at Singrauli, Korba, Rajrappa, Ramagundam Dhanbad and Udaipur.B. Lubricants : Lubes Division, Silvassa

Details of Addresses for Correspondence:

Registered Offi ce : Gulf Oil Corporation Limited Kukatpally, Sanathnagar (IE) PO HYDERABAD 500 018 Ph – 91 40 2381 0671 – 79 Fax – 91 40 2381 3860 E-mail : [email protected] www.gulfoilcorp.com

Registrar and Share Transfer Agents Sathguru Management Consultants Private Limited Plot No. 15, Hindi Nagar, Behind Saibaba Temple Panjagutta, Hyderabad 500 034 Ph – 91 40 2335 6507/ 6975 Fax – 91 40 2335 4042 [email protected]

ISIN for the Equity Shares IN E 077F01027

Dividend for the last three years 2009-10: 90% 2008-09: 85% 2007-08: 75%

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12. NON MANDATORY REQUIREMENTS

The Board has constituted a Remuneration Committee and the terms of reference of this Committee are given in para 5 above.

Whistle Blower Policy

The Company is in the process of establishing a structured mechanism for employees to report to the management, concerns about unethical behaviour or violation of the Code of Conduct.

ANNEXURE

DIRECTORSHIPS IN OTHER COMPANIES

List of outside Company Directorships:

Ashok Kini Vinod K Dasari Vinoo S Hinduja V. Ramesh Rao

1. UTI Trustee Company Pvt. Ltd.

1. Ashok Leyland Limited 1. Hinduja Ventures Ltd. 1. Jaykamal Coco Care Pvt. Ltd.

2. IndusInd Bank Limited 2. Automotive Coaches & Components Ltd.

2. Hinduja Group India Ltd.

2. Jaykamal Consultancy Services Pvt. Ltd.

3. Financial Information Network & Operations Limited

3. Gulf Ashley Motor Ltd.

4. Irizar – TVS Ltd

5. Lanka Leyland Limited

6. Ashok Leyland UAE LLC.

3. Hinduja Global Solutions Ltd.

3. Gulf Ashley Motor Ltd.

Chairman of the Board of Directors of other Indian Companies

-1) Automotive Coaches &

Components Ltd.2) Gulf Ashley Motor Ltd.

- -

Chairman/Member of the Committees of Directors of other Companies in which he/she is a Director*

Audit Committee:

1) IndusInd Bank Ltd.

2) UTI Trustee Company Pvt. Ltd.

3) Financial Information Network & Operations Limited

- - -

* As per explanation to Clause 49.I(C), only Audit Committee and Shareholders’ Grievance Committee have been considered for the purpose.

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DECLARATION ON CODE OF CONDUCT

This is to confi rm that the Board has laid down a Code of Conduct for all Board Members and senior management personnel of the Company. The code of conduct has also been posted on the website of the Company. It is further confi rmed that all Directors and Senior Management personnel of the company have affi rmed compliance with the Code of Conduct of the Company for the fi nancial year ended on March 31, 2010, as envisaged in Clause 49 of the Listing Agreement with stock exchanges.

Place : Hyderabad S. PRAMANIKDate : May 14, 2010 Managing Director

AUDITORS’ CERTIFICATE

To the Members of Gulf Oil Corporation Limited

1. We have examined the compliance of conditions of Corporate Governance by Gulf Oil Corporation Limited for the year ended 31st March, 2010 as stipulated in Clause 49 of the Listing Agreement of the said Company with the stock exchanges.

2. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring compliance of the conditions of the Certifi cate of Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the fi nancial statements of the Company.

3. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with conditions of the Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.

4. We state that such compliance is neither an assurance as to the future viability of the Company nor the effi ciency or effectiveness with which the management has conducted the affairs of the Company.

For Deloitte Haskins & Sells,

Chartered Accountants(Registration No.008072S)

K. RAJASEKHARPlace : Hyderabad. PartnerDate : May 14, 2010 M.No. 23341

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32

AUDITORS’ REPORT

To the members of Gulf Oil Corporation Limited

1. We have audited the attached Balance Sheet of Gulf Oil Corporation Limited (“the Company”) as at 31st March, 2010, the Profi t and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto, in which are incorporated the Returns from the Lubricants Branch audited by other auditors. These fi nancial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these fi nancial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and the signifi cant estimates made by the Management, as well as evaluating the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specifi ed in paragraphs 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 were necessary for the purposes of our audit;

(ii) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the Lubricants Branch audited by other auditors;

(iii) the reports on the accounts of the Lubricants Branch audited by other auditors have been forwarded to us and have been dealt with by us in preparing this report;

(iv) the Balance Sheet, the Profi t and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and the audited Branch Returns;

(v) in our opinion, the Balance Sheet, the Profi t and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(vi) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally 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 Profi t and Loss Account, of the profi t of the Company for the year ended on that date and

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

5. On the basis of the written representations received from the Directors as on 31st March, 2010 taken on record by the Board of Directors, we report that none of the Directors is disqualifi ed as on 31st March, 2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

For Deloitte Haskins & SellsChartered Accountants

(Registration No.008072S)

K. RAJASEKHARPlace: Hyderabad PartnerDate: 14th May 2010 (Membership No.23341)

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ANNEXURE TO THE AUDITORS’ REPORT(Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of Company’s business/activities/result, clauses (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of CARO are not applicable.

(ii) In respect of its fi xed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fi xed assets.

(b) The fi xed assets were physically verifi ed during the year by the Management in accordance with a regular programme of verifi cation which, in our opinion, provides for physical verifi cation of all the fi xed assets at reasonable intervals. In respect of assets physically verifi ed during the year we are informed that the management is in the process of reconciling the same with book records.

(c) The fi xed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fi xed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventories:

(a) As explained to us, inventories were physically verifi ed during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifi cation of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verifi cation.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, fi rms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fi xed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) As explained to us and according to the information and explanations given to us, there are no transactions that need to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956. Accordingly paragraph 4(v)(b) of the CARO is not applicable.

(vii) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(viii) In our opinion the Company has an adequate internal audit system commensurate with the size and nature of its business.

(ix) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 in respect of manufacture of lubricants and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

(x) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

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34

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2010 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on 31st March, 2010 on account of disputes are given below:

Name of the Statute

Natureof dues

Period to which theamount relates

Amount(Rs lakhs)

Forum where dispute isPending

CentralExcise Act, 1944

ExciseDuty

1980-87 6.12 Asst. CommissionerCentral Excise & Customs

1992-96 1.11 Commissioner Appeals,Central Excise & Customs

2003-04 4.61 High Court

2006-07 1658.90 Central Excise and Service Tax Appellate Tribunal

Sales Tax Act Sales Tax

1992-93, 1994-95,1995-96, 1998-99 & 2003-04

1369.49 Sales Tax Tribunal, Orissa

1977-78 to 1983-84, 1984-85, 1985-86, 1986-87, 1987-88, 1989-90 & 1990-91

1463.16 High Court, Orissa

1976-77 to 1983-84 927.37 Additional Commissioner Commercial Taxes

1976-77 to 1983-84 & 1997-98

233.32 Commissioner Commercial Taxes

2001-02, 2003-04 & 2004-05 9.26 Assistant Commissioner Commercial Taxes

2002-03, 2003-04, 2004-05, 2005-06 & 2006-07

256.95 Joint Commissioner

2005-06 & 2006-07 24.79 Deputy CommissionerService Tax Act, 1994

Service Tax

2004-06 2.25 Central Excise and Service Tax Appellate Tribunal

Income TaxAct, 1961

Income-Tax

2001-02 10.27 Income taxAppellate Tribunal

2005-06 719.27 Commissioner of Income Tax (Appeals)

Wealth Tax, 1957

Wealth Tax

2002-03 51.97 Commissioner of Income Tax (Appeals)

LubricantsCentral Excise Act,1944

Excise Duty

2007-08 16.04 Central Excise and Service Tax Appellate Tribunal , Mumbai

2009-10 22.09 Commissioner AppealsSalesTax Act

SalesTax

1994-95 & 1999-2000 318.21 High Court1995-96 & 1999-2000 8.54 Appellate Tribunal1999-2000, 2001-02 & 2003-04

89.52 Deputy Commissioner

2003-04 816.52 Joint Commissioner Sales Tax Appeals II

2004-05 1186.84 Joint Commissioner Sales Tax Appeals II

Income Tax Act,1961

Income Tax

1998-99,1999-2000 & 2000-01

32.97 Commissioner Appeals

Customs Act,1962

Customs Duty

2006-07 15.41 Central Excise and Service Tax Appellate Tribunal, Mumbai

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35

(xi) In our opinion and according to the information and explanations given to us having regard to roll over of buyer’s credit by bank, the Company has not defaulted in repayment of its dues to banks or fi nancial institutions during the year.

(xii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and fi nancial institutions are not prima facie prejudicial to the interests of the Company.

(xiii) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

(xiv) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xv) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.

For Deloitte Haskins & Sells Chartered Accountants

(Registration No.008072S)

K. RAJASEKHARPlace: Hyderabad PartnerDate: 14th May 2010 Membership No. 23341

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36

As at As atSchedule 31st March 2010 31st March 2009

Rupees Lakhs Rupees Lakhs

I. SOURCES OF FUNDS

1. Shareholders’ Funds

(a) Capital 1 1487.17 1487.17

(b) Reserves & Surplus 2 40789.77 39794.17

42276.94 41281.34 2. Loan Funds

(a) Secured Loans 3 17074.51 17122.63

(b) Unsecured Loans 4 13412.83 23703.68

30487.34 40826.31

TOTAL 72764.28 82107.65

II. APPLICATION OF FUNDS

1. Fixed Assets

(a) Gross Block 68689.33 69504.59

(b) Less : Depreciation 11818.98 10312.36

(c) Net Block 5 56870.35 59192.23

(d) Capital Work-in-Progress and advances on Capital Account 1233.52 1484.36

58103.87 60676.59

2. Investments 6 3057.74 3067.67

3. Deferred Tax Asset (Net) 146.27 528.27

4. Current Assets, Loans and Advances

(a) Inventories 7 12130.34 16399.40

(b) Sundry Debtors 8 11808.41 16546.89

(c) Cash and Bank Balances 9 8181.69 8580.61

(d) Loans and Advances 10 6428.88 7232.62

38549.32 48759.52 Less: Current Liabilities and Provisions

(a) Current Liabilities 11 14492.20 18728.78

(b) Provisions 12 12600.72 12195.62

27092.92 30924.40

Net Current Assets 11456.40 17835.12

TOTAL 72764.28 82107.65 Notes 18

Schedules 1 to 18 annexed hereto form part of these fi nancial statements

BALANCE SHEET AS AT 31ST MARCH, 2010

Per our report attached For Deloitte Haskins & Sells For and behalf of the Board of DirectorsChartered Accountants

K. RAJASEKHAR S. SUBRAMANIAN S. PRAMANIK S. G. HINDUJAPartner

Chief Financial Offi cer & Company Secretary

Managing Director Chairman

Place : HyderabadDate : 14th May 2010

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

Per our report attached For Deloitte Haskins & Sells For and behalf of the Board of DirectorsChartered Accountants

K. RAJASEKHAR S. SUBRAMANIAN S. PRAMANIK S. G. HINDUJAPartner

Chief Financial Offi cer & Company Secretary

Managing Director Chairman

Place : HyderabadDate : 14th May 2010

Year ended Year endedSchedule 31st March 2010 31st March 2009

Rupees Lakhs Rupees Lakhs

INCOME

Income from sales and other operations 106565.94 99588.84

Less: Excise duty 8959.69 8358.68

97606.25 91230.16

Income from Property Development - 1050.00

Other Income 13 2649.30 2544.52

100255.55 94824.68

EXPENDITURE

Cost of Materials 14 47049.18 44916.03

Other Operating Expenses 15 45108.89 42065.64

Interest Expenses 16 2551.07 2430.36

Depreciation 1700.79 1537.24

96409.93 90949.27

PROFIT BEFORE EXCEPTIONAL ITEMS AND TAXATION 3845.62 3875.41

Exceptional Item (Net) (Note 24 of Schedule 18) (1584.61) -

PROFIT BEFORE TAXATION 5430.23 3875.41

Provision for Taxation

Current Tax 541.00 509.00

MAT Credit - (41.00)

Deferred Tax 382.00 387.01

Fringe Benefi t Tax - 116.02

PROFIT AFTER TAXATION 4507.23 2904.38

Balance Brought forward from Previous Year 5857.40 4801.95

BALANCE AVAILABLE FOR APPROPRIATION 10364.63 7706.33

APPROPRIATIONS

Proposed Dividend 1338.46 1264.10

Dividend Tax 222.30 214.83

Transfer to General Reserve 500.00 370.00

Balance Carried to Balance Sheet 8303.87 5857.40

Earnings per share in Rs. (Note 20 of Schedule 18)

- Basic Rs. 6.06 Rs. 3.91

- Diluted Rs. 6.06 Rs. 3.91

Notes on Accounts 18

Schedules 1 to 18 annexed hereto form part of these fi nancial statements

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2009-2010 2008-2009 Rupees

Lakhs Rupees

Lakhs Rupees

Lakhs Rupees

Lakhs

(A) CASH FLOW FROM OPERATING ACTIVITIES

Net Profi t before tax and after exceptional items 5430.23 3875.41

Adjustments for:

Depreciation 1700.79 1537.24

Dividend received (1.42) (1.97)

Profi t on sale of Fixed Assets (2246.65) (2291.31)

Sale of Development Rights in Property - (1050.00)

Amount received against advances made and adjusted to Revaluation Reserve in earlier year (1973.25) -

Profi t on sale of long term Investments (46.92) -

Compensation under voluntary retirement Scheme adjusted to Revaluation Reserve - (703.01)

Campsite Expenses adjusted to revaluation reserve - (101.04)

Interest Income (200.28) (486.93)

Unrealised (Gain)/Loss on Exchange - Net (197.29) 1977.15

Interest expense 2751.35 (213.67) 2917.29 1797.42

Operating Profi t before working Capital changes 5216.56 5672.83

Adjustments for:

Trade and other Receivables - Increase/ (Decrease) 5531.28 (4518.62)

Inventories - Increase/ (Decrease) 4176.78 (7277.58)

Trade Payables - (Increase)/Decrease (3493.42) 6214.64 6417.48 (5378.72)

Cash generated from Operations 11431.20 294.11

Direct Taxes paid (net of refunds) (773.12) (735.16)

Fringe Benefi t Tax Paid - (97.43)

(773.12) (832.59)

NET CASH FROM / (USED IN) OPERATING ACTIVITIES 10658.08 (538.48)

(B) CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (1182.70) (6720.30)

Sale of Fixed Assets (including land) 2405.43 2391.06

Sale of Development Rights in Property - 1050.00

Purchase of Investments in Subsidiary Company - (5.00)

Sale of investments in subsidiary 50.00 -

Sale of long term investment 6.85 -

Advance to subsidiary Companies (0.09) (3228.37)

Advances to subsidiary company realised 1973.25 -

Interest Received 312.88 486.93

Dividend received 1.42 1.97

NET CASH FROM / (USED IN) INVESTING ACTIVITIES 3567.04 (6023.71)

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

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39

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

2009-2010 2008-2009 Rupees

Lakhs Rupees

Lakhs Rupees

Lakhs Rupees

Lakhs

(C) CASH FLOW FROM FINANCING ACTIVITIESProceeds from borrowings 30331.89 18221.07

Proceeds from Fixed Deposits (158.96) (131.23)

Repayment of borrowings (38902.80) (4458.73)

Loans from Companies 11506.39 4699.86

Repayment of Loans to Companies (13248.46) (2594.32)

Interest paid (2683.02) (2964.94)

Dividend paid (1254.25) (1097.81)

Dividend tax paid (214.83) (189.56)

NET CASH (USED IN) / FROM FINANCIAL ACTIVITIES (14624.04) 11484.34

Net increase/(decrease) in cash and cash equivalents (398.92) 4922.15

Cash and Cash Equivalents as at the commencement of the year - Cash and Bank Balances 8580.61 3778.80

Add: Cash and Cash Equivalents taken over from IDL Speciality Chemicals Limited (Note 2 of Schedule 18)

- 0.47

Less: Cash and Cash Equivalents transferred to IDL Speciality Chemicals Limited (Note 2 of Schedule 18)

- 120.81

8580.61 3658.46

Cash and Cash Equivalents as at the end of the year -Cash and Bank Balances * 8181.69 8580.61

* includes Rs.79.94 Lakhs (31.03.2009 Rs. 51.04 Lakhs) being the deposit made under Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975

Per our report attached For Deloitte Haskins & Sells For and behalf of the Board of DirectorsChartered Accountants

K. RAJASEKHAR S. SUBRAMANIAN S. PRAMANIK S. G. HINDUJAPartner

Chief Financial Offi cer & Company Secretary

Managing Director Chairman

Place : HyderabadDate : 14th May 2010

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40

As at As at31st March 2010 31st March 2009

Rupees Lakhs Rupees Lakhs

Schedule 1

SHARE CAPITAL

AUTHORISED 2500.00 2500.00

12,50,00,000 Equity Shares of Rs.2 each

ISSUED AND SUBSCRIBED

7,43,58,735 Equity Shares of Rs.2 each fully paid 1487.17 1487.17

Of the above(a) 4,65,025 shares represent 93,005 shares after sub-division of

shares of Rs.10 to Rs.2 each allotted as fully paid pursuant to contract without payment being received in cash

(b) 2,60,75,125 shares represent 52,15,025 shares after sub-division of shares of Rs.10 to Rs.2 each allotted as fully paid up bonus shares by capitalisation of Reserves.

(c) Pursuant to the merger scheme as approved by Board for Industrial and Financial Reconstruction, 15,18,735 shares represent 3,03,747 shares after sub-division of shares from Rs.10 to Rs.2 each, allotted effective 31st March, 1999 to the shareholders of erstwhile IDL Salzbau (India) Limited.

(d) 2,93,50,000 represent 58,70,000 after sub-division of shares from Rs.10 to Rs.2 each, allotted effective 1st January, 2002, consequent to the amalgamation of erstwhile Gulf Oil India Limited, to the shareholders of erstwhile Gulf Oil India Limited

Schedule 2

RESERVES AND SURPLUSa) SECURITIES PREMIUM ACCOUNT 4852.45 4852.45

b) CAPITAL RESERVE 0.75 0.75

c) EXPORT ALLOWANCE RESERVE 10.50 10.50

d) REVALUATION RESERVE

Per last Balance Sheet 18429.06 183896.69

Less: Adjustment on account of revaluation (Refer note 27 of Schedule 18)

- 140096.87

Less: Withdrawal of Reserve (Refer note 27 of Schedule 18) 1950.87 -

16478.19 43799.82

Less: Debit balance in the Profi t & Loss accounts of

IDL Speciality Chemicals Limited in accordance withScheme of Arrangement - 87.04

(Refer note 2.2 of Schedule 18) 16478.19 43712.78

Less: Adjustments as detailed in note 2.4 of Schedule 18 - 16478.19 25283.72 18429.06

e) GENERAL RESERVE

Per last Balance Sheet 10644.01 10339.05

Add : Transfer from Profi t & Loss Account 500.00 370.00

Less: Adjustment on account of exchange difference capitalised - 11144.01 65.04 10644.01

f) PROFIT & LOSS ACCOUNT

Per Account Annexed 8303.87 5857.40

40789.77 39794.17

SCHEDULES TO THE FINANCIAL STATEMENTS

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SCHEDULES TO THE FINANCIAL STATEMENTS

As at As at31st March 2010 31st March 2009

Rupees Lakhs Rupees Lakhs

Schedule 3

SECURED LOANS

A. From Banks

(i) Cash Credit (includes Working Capital Demand Loan) 6926.88 6994.57

(ii) Foreign Currency Working Capital Loan [USD 2.25 million (31.03.2009 USD 2.25 million)]

1015.65 1141.20

(iii) Term Loans

(a) State Bank of India 769.14 1478.36

(b) State Bank of Hyderabad 4754.49 2865.03

(c) ABN Amro Bank 215.46 815.93

(d) Oriental Bank of Commerce 35.58 124.49

(e) Andhra Bank 103.63 187.64

(f) Kotak Mahindra Bank Limited 264.27 366.25

(g) State Bank of Mauritius Limited 1960.00 -

B. From Others

SREI Infrastructure Finance Limited 404.12 781.80

Hinduja Ventures Limited 625.29 2367.36

17074.51 17122.63

Schedule 4

UNSECURED LOANS

Fixed Deposits [See note 14(f) of Schedule 18] 510.69 140.83

Deferred Hire Purchase Credits 422.47 291.58

ICICI Bank Limited - 283.73

Short Term Loan from IDBI Bank Limited 2000.00 1550.00

SREI Infrastructure Finance Limited 104.48 152.20

Dealers’ deposits 68.25 69.50

Buyers Credit - Long term - 675.04

- Short term 10306.94 20510.06

Inter Corporate Loans - Short term - 30.74

13412.83 23703.68

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Schedule 5FIXED ASSETS: Rupees Lakhs

ASSETS

COST DEPRECIATION NET BOOK VALUE

Cost/ Revaluation 31.03.2009

Additions on transfer of Agro

Undertaking(note 2 on

Schedule 18)

Transfer to IDL Speciality

Chemicals Ltd (Note 2 on Schedule 18)

Adjustment on revaluation

Additions DeductionsImpairment of Assets

Cost/ Revaluation 31.03.2010

31.03.2009

Additions on transfer of Agro

Undertaking(note 2 on

Schedule 18)

Transfer to IDL Speciality

Chemicals Ltd (Note 2 on Schedule 18)

For the yearOn

DeductionsImpairment of Assets

31.03.2010Cost/

Revaluation 31.03.2010

Cost/ Revaluation 31.03.2009

Land-Freehold 47,399.44 - - - - 1,952.50 - 45,446.94 - - - - - - - 45,446.94 47,399.44

Land-Leasehold 19.10 - - - - - - 19.10 4.78 - - 0.22 - - 5.00 14.10 14.32

Buildings 2,248.31 - - - 4.92 25.58 - 2,227.65 873.44 - - 58.42 1.15 - 930.71 1,296.94 1,374.87

Leasehold Improvements 6.80 - - - - - - 6.80 6.80 - - - - - 6.80 - -

Plant & Machinery Equipments etc. 17,681.53 - - - 1,175.54 199.48 - 18,657.59 8,235.78 - - 1,450.93 174.94 - 9,511.77 9,145.82 9,445.75

Furniture, Fixtures & Offi ce appliances 1,421.10 - - - 77.62 5.89 - 1,492.83 784.39 - - 126.28 2.78 - 907.89 584.94 636.71

Vehicles 728.31 - - - 138.20 28.09 - 838.42 407.17 - - 64.94 15.30 - 456.81 381.61 321.14

Technical Knowhow - - - - - - - - - - - - - - - - -

69,504.59 - - - 1,396.28 2,211.54 - 68,689.33 10,312.36 - - 1,700.79 194.17 - 11,818.98 56,870.35 -

31.03.2009 2,08,902.53 11.72 5,285.54 1,40,096.87 6,692.64 203.26 516.63 69,504.59 9,930.55 1.38 588.63 1,537.24 103.51 464.67 10,312.36 59,192.23

Notes:-1) Assets costing Rs. 948.57 lakhs (previous year Rs.270.70 lakhs) have been acquired on hire purchase, the legal ownership of which will be transferred to the Company after

the fi nal payment. (Refer note 22(b) of schedule 18)2) Additions to Plant & Machinery include Rs. 52.24 Lakhs (previous year Rs. 105.15 Lakhs) being difference in foreign exchane loan obtained for acquisition of fi xed assets

(Refer note 19(b) of schedule 18)3) Deduction under land includes Rs. 1950.87 Lakhs withdrawn from Revaluation Reserve. (Refer note 27 of schedule 18)

SCHEDULES TO THE FINANCIAL STATEMENTS

As at As at31st March 2010 31st March 2009

Rupees Lakhs Rupees Lakhs

Schedule 6

INVESTMENTSAt cost, unless otherwise stated

UNQUOTED- LONG TERM TRADEShares in subsidiary companies

IDL Speciality Chemicals Limited (formerly IDL Agro Chemicals Limited )2,40,000 Equity Shares of Rs.10 each - 24.00 Less: Diminution in value (Sold during the year) - - 24.00 -

IDL Buildware Limited (formerly IDL Finance Limited) 203.41 203.41 19,70,000 Equity Shares of Rs. 10 eachLess: Diminution in value 203.41 - 203.41 -

2,00,000 8% Redeemable Cumulative Preference Shares of Rs. 100 each

200.00 200.00

Less: Diminution in value 200.00 - 200.00 -

Gulf Oil Bangladesh Limited 71.91 71.91 1,77,939 Equity Shares of Bangladesh Taka 50 each fully paid

PT Gulf Oil Lubricants Indonesia 680.70 680.70 15,000 Shares of Indonesia Rp.8,61,900 each fully paidequivalent to US $ 1,500,000

Gulf Carosserie India Limited3,80,001 Equity Shares of Rs. 10 each fully paid 38.00 38.00Less: Diminution in value 38.00 - 38.00 -

Hinduja Infrastucture Limited50,000 Equity Shares of Rs. 10 each fully paid 5.00 5.00

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SCHEDULES TO THE FINANCIAL STATEMENTS

As at As at31st March 2010 31st March 2009

Rupees Lakhs Rupees Lakhs

Schedule 6 (Contd.)

Gulf Oil (Yantai) Co., Limited41,32,540 Equity Shares of US $ 1 each fully paid 2157.86 2157.86

IDL Speciality Chemicals Limited (formerly IDL Agro Chemicals Limited )97,60,000 Equity Shares of Rs.10 each to be allotted(Refer Note 2 of Schedule 18) - 6374.14 Less: Diminution in value - - 6374.14 -(Sold during the year)

OTHERS500 Shares of Rs.10 each in 0.05 0.05 IDL Chemicals Employees’ Co-operative Credit Society Limited, Hyderabad

500 Shares of Rs.10 each in 0.05 0.05 IDL Chemicals Employees’ Co-operative Credit Society Limited, Rourkela

27,978 units of Rs.10 each in 2.97 2.97 UTI Bond Fund of Unit Trust of India

Pachora Peoples Co-operative Bank Limited - -2 shares of Rs. 100 each

Gulf Ashley Motors Limited1,14,000 Equity Shares of Rs 100 each 114.00 114.00

Patancheru Enviro-Tech Limited - 3.00 58,460 Equity Shares of Rs 10 each

APDL Estate Limited (formerly IDL Arom International Limited)

23,62,000 10% Redeemable Cumulative Preference Shares of Rs. 100 each

2362.00 2362.00

Less: Diminution in value 2362.00 - 2362.00 -

QUOTED-LONG TERMOTHERS

Ashok Leyland Limited 24.23 24.23 1,00,000 Equity Shares of Rs. 1 each

Hinduja TMT Limited 0.06 0.06 96 Equity Shares of Rs. 10 each

Jammu & Kashmir Bank Ltd. 0.91 0.91 2,400 Equity Shares of Rs. 10 each

IndusInd Bank Limited - 6.93 14,623 Equity Shares of Rs. 10 each fully paid(Sold during the year)

3057.74 3067.67 Notes:1. Aggregate cost of quoted investments 25.20 32.13

2. Aggregate Market Value of quoted investments 55.56 30.34

3. Aggregate cost of unquoted investments 3032.54 3035.54

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44

SCHEDULES TO THE FINANCIAL STATEMENTS

As at31st March 2010

Rupees Lakhs

As at31st March 2009

Rupees Lakhs

Schedule 7

INVENTORIES

(At lower of cost and net realisable value)

Land / Building for Property development, at cost 25.63 117.91

Contract work - in - progress - 382.17

Stores & Spares 499.70 512.89

Packing Materials and Fuel 504.04 360.48

Raw Materials 6456.45 9035.97

Work-in-Process 805.97 828.14

Finished Goods 3838.55 5161.84

12130.34 16399.40

Schedule 8

SUNDRY DEBTORS - UNSECURED

a) Debts outstanding for a period exceeding six months:

Considered good 1204.70 1390.48

Considered doubtful 3595.70 3954.82

b) Other Debts :

Considered good * 10603.71 15156.41

15404.11 20501.71

Less : Provision for doubtful debts 3595.70 3954.82

11808.41 16546.89

* Includes dues from subsidiaries - Rs. 43.75 Lakhs (31.03.09 - Rs. 41.71 Lakhs)

Schedule 9

CASH AND BANK BALANCES

Cash / Cheques on hand # 1281.56 412.13

With Scheduled Banks :

Current Account 1294.76 1730.82

Fixed Deposits/Margin account * 5605.37 6437.66

8181.69 8580.61

# includes cheques on hand Rs.1254.40 lakhs (31.03.2009 Rs.389.82 lakhs)

* includes Rs.79.94 Lakhs (31.03.2009 Rs. 51.04 Lakhs) being the deposit made under Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975

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45

SCHEDULES TO THE FINANCIAL STATEMENTS

As at31st March 2010

Rupees Lakhs

As at31st March 2009

Rupees Lakhs

Schedule 10LOANS AND ADVANCES(Unsecured, considered good unless otherwise specifi ed)Advances to Subsidiary Companies (interest free) *

IDL Speciality Chemicals Ltd (IDL Agro Chemicals Limited) - 3103.97 Less : Provision for doubtful advances - - 3103.97 ** -

Gulf Carosserie India Ltd., 5.38 5.29 Less : Provision for doubtful advances 5.29 0.09 5.29 ** -

IDL Buildware Limited 440.89 447.26 Less : Provision for doubtful advances 440.89 - 447.26 ** -

Advances to Other CompaniesIDL Speciality Chemicals Ltd (IDL Agro Chemicals Limited) 1137.09 Less : Provision for doubtful advances 1137.09 - -

Advance tax (net of provision) 557.17 325.05

Advances recoverable in cash or in kind or for value to be received:Considered good 4391.36 5314.86 Considered doubtful 174.76 84.76

4566.12 5399.62 Less : Provision for doubtful advances 174.76 4391.36 84.76 5314.86

Balance with Excise Authorities 1480.26 1592.71 6428.88 7232.62

** Refer Note 2.4 of Schedule 18* Maximum amount outstanding during the year IDL Speciality

Chemicals Limited(formerly IDL Agro Chemicals Ltd) - Rs. 3103.97 Lakhs (31-03-2009 Rs.3103.97 lakhs) Gulf Carosserie India Limited-Rs. 5.38 lakhs (31-03-2009 Rs.5.29 lakhs) IDL Buildware Limited- Rs. 447.26 Lakhs (31-03-2009 Rs. 447.26 lakhs)

Schedule 11CURRENT LIABILITIES

Acceptances 404.21 3179.86 Sundry Creditors :

Due to Micro and Small Enterprises - - Others 12982.50 13122.79

Advance from Customers 917.21 2285.20 Interest accrued but not due on Loans 104.49 34.88 Liability towards Investors Education and Protection Fund underSection 205C of the Companies Act, 1956

Due(i) Unpaid Dividends - 0.04 (ii) Unclaimed Matured Deposits - -(iii) Interest accrued on (ii) above - -

Not due(i) Unpaid Dividends 75.29 65.40 (ii) Unclaimed Matured Deposits 7.77 38.21 (iii) Interest accrued on (ii) above 0.73 2.40

14492.20 18728.78

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46

SCHEDULES TO THE FINANCIAL STATEMENTS

As at31st March 2010

Rupees Lakhs

As at31st March 2009

Rupees Lakhs

Schedule 12

PROVISIONS

Employee benefi ts - Gratuity 1400.10 1134.37

- Compensated Absence 304.10 246.56

Indirect Taxes * 8394.10 8394.10

Others * 893.55 893.55

Fringe Benefi t Tax 48.11 48.11

Proposed dividend 1338.46 1264.10

Tax on dividend 222.30 214.83

12600.72 12195.62

* Refer Note 2.4 of Schedule 18

Year ended31st March 2010

Rupees Lakhs

Year ended31st March 2009

Rupees Lakhs

Schedule 13

OTHER INCOME

Dividend from Long Term Investment 1.42 1.97

Profi t on Sale of Property / Fixed Assets 2246.65 2291.31

Insurance Claims 10.57 45.28

Export Incentives (DEPB) 174.60 84.74

Provision no longer required written back - 41.00

Miscellaneous 216.06 80.22

2649.30 2544.52

Schedule 14

COST OF MATERIALS

Raw Materials Consumed :

Opening Stock 9035.97 *4183.81

Add : Purchase 36209.66 44146.42

45245.63 48330.23

Less : Closing Stock 6456.45 38789.18 9035.97 39294.26

Purchase of Finished Goods 3143.03 4661.60

(Increase)/Decrease in Finished Goods,

Work-in-Process and Contracts-in-Progress:

Closing Stock

Finished Goods 3838.55 5161.84

Work-in-Process 805.97 828.14

Contracts-in-Progress - 382.17

4644.52 6372.15

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47

SCHEDULES TO THE FINANCIAL STATEMENTS

Year ended31st March 2010

Rupees Lakhs

Year ended31st March 2009

Rupees Lakhs

Schedule 14 (Contd.)

Opening Stock :

Finished Goods 5161.84 4530.37

Work-in-Process 828.14 1484.11

Contracts-in-Progress 382.17 -

Add: Stocks taken over from IDL Speciality Chemicals Ltd - 16.16

Less: Stocks transferred to IDL Speciality Chemicals Ltd in terms of scheme of arrangement (Refer note 2 of Schedule 18) - (1833.38)

6372.15 4197.26

Less: Adjusted against Revaluation Reserve - 16.16 (Refer note 2 of Schedule 18)

6372.15 1727.63 4181.10 (2191.05)

Packing Materials Consumed 3612.16 3293.83

47272.00 45058.64

Less: Scrap realisation 211.77 188.89

47060.23 44869.75

Excise duties etc. on Increase/(Decrease) of Finished Goods (11.05) 46.28

47049.18 44916.03

* Excludes Rs. 534.50 Lakhs stocks transferred to IDL Speciality Chemicals Limited in terms of the Scheme of Arrangement (Refer Note 2 of Schedule 18)

Schedule 15

OTHER OPERATING EXPENSES

Payments to and provisions for Employees :

Salaries, Wages and Bonus 6560.02 5772.61

Contribution to Provident Fund, GratuityFund and other Funds 1007.41 871.65

Workmen and Staff Welfare Expenses 641.02 8208.45 607.87 7252.13

Stores, Spare Parts and Loose Tools consumed 299.92 235.14

Processing Charges 1192.35 826.99

Power, Fuel and Water 762.73 609.40

Rent 1514.04 1415.46

Rates and Taxes 410.35 381.01

Expenses on Operation Contracts 15515.58 15500.37

Insurance 284.09 251.77

Advertising 2344.39 1298.29

Distribution Expenses 4029.12 3182.25

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48

Commission on sales 285.04 202.28

Discount on sales 6154.56 5078.80

Repairs to Buildings 88.14 38.35

Repairs to Machinery 372.82 233.55

Travelling and Conveyance 687.21 572.57

Bank charges and other Financial charges 496.42 410.48

Directors’ Fees 21.82 16.40

Commission to non-wholetime Directors 9.84 16.70

Postage, Telephone and Telex 204.14 199.78

Legal & Professional charges 474.71 431.78

Provision for doubtful debts/advances 474.03

Bad Debts, advances etc written off 743.15

Less: Provision for doubtful debts written-back 743.15 - -

Royalty 498.91 467.26

(Gain) / Loss on Exchange Fluctuation (168.42) 2579.61

Miscellaneous 948.65 865.27

45108.89 42065.64

Schedule 16

INTEREST EXPENSES

Interest

On Term Loans 1700.90 1311.15

Others 1050.45 2751.35 1606.14 2917.29

Less: Interest on deposits with banks etc.(Tax deducted at source Rs. 41.05 Lakhs;Previous year Rs.9.34 Lakhs) 193.56 373.67

Interest on advance payment of taxes 6.72 200.28 113.26 486.93

2551.07 2430.36

SCHEDULES TO THE FINANCIAL STATEMENTS

Year ended31st March 2010

Rupees Lakhs

Year ended31st March 2009

Rupees Lakhs

Schedule 15 (Contd.)

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49

Schedule 17

CAPACITY, PRODUCTION, STOCKS, SALES AND CONSUMPTION:

(a) Quantitative information in respect of goods produced / purchased:

Item Unit

CAPACITY PER ANNUM

Licensed Installed * Production

2009-10 2008-09 2009-10 2008-09 2009-10 2008-09

Detonators Millon Nos 192.00 192.00 192.00 192.00 115.81 110.99

Detonating Fuse Millon Metres 45.00 45.00 22.50 22.50 25.51 21.53

Safety Fuse Millon Metres 87.78 # 87.78 # - - - -

Industrial Explosives- Tonnes 138000.00 138000.00 138000.00 138000.00 73727.34 62036.97

Cartridged, Bulk, Emulsion and ANFO

Boosters Tonnes 190.00 190.00 125.00 125.00 42.25 76.05

Penta Erythritol Tonnes 1440.00 1440.00 - - - -

Tetra Nitrate (PETN) @

Exploders Numbers 500.00 500.00 - - - -

Single or double or Sq.Metres 1122.11 2374.00

Multilayer clad plates $ Corresponding ! ! !! !! 70.96 101.35

to Tonnes

Lubricating Oils KL NA NA 75000.00 75000.00 47298.00 40844.00

* Installed Capacity is as certifi ed by the Managing Director and not verifi ed by the auditors, being a technical matter

Notes:

1. Licenced capacity includes letter of intent issued by Government of India and includes application for renewals

# As given in the licence, 12 million coils per annum which is equivalent to 87.78 million metres

@ Only Bhiwandi Plant for which a separate licence has been obtained, however, the plant has since been closed.

! 1,00,000 Sq metres corresponding to maximum tonnage of 25,000 tonnes of cladding plates

!! Installed Capacity is not estimatable as production can be increased substantially with the facilities available merely by increasing the size/weight of clad plates

$ Excludes product meant for development production of intermediate products captively consumed and products for which no separate licence was required, has not been included above.

SCHEDULES TO THE FINANCIAL STATEMENTS

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50

SCHEDULES TO THE FINANCIAL STATEMENTS

(b) Stock of Finished Goods / Sales, including income from other Operations:

Item Unit

Stock of Finished Goods Sales

31.03.2010 31.03.2009 31.03.2008 2009-10 2008-09

Qty Rupees Lakhs Qty Rupees

Lakhs Qty Rupees Lakhs Qty Rupees

Lakhs Qty Rupees Lakhs

Detonators Millon Nos 12.60 855.25 13.13 1076.05 17.41 1136.10 113.83 7398.51 114.93 7499.50

Detonating Fuse Millon Metres 1.70 64.49 1.62 65.44 3.37 121.75 26.46 1384.07 23.22 1303.92

Safety Fuse - Purchased Millon Metres 0.02 0.07 0.13 0.06 - - 0.79 32.42 1.36 65.25

Cartridged ANFO & NCN Tonnes 1144.62 403.29 1465.59 402.85 612.91 204.13 73736.54 20968.96 61314.16 17282.16(High Explosives)

Boosters Tonnes 19.17 44.41 29.24 66.23 11.81 20.00 52.16 137.50 59.48 150.18

Single or double or Sq.Metres 1122.11 565.57 2374.00 1014.55

Multilayer clad plates Corresponding - - - - - - 70.96 - 101.35 -to Tonnes

Lubricating Oils KL 4140.00 2420.60 3793.00 3379.05 2901.00 1645.03 49306.00 55685.75 45407.00 50123.65

Filters Nos 72972.00 50.44 191593.00 91.71 192279.00 94.49 932471.00 508.24 795672.00 434.13

Car Care Products KL - - 54885.00 66.59 43230.00 57.87 15888.00 31.70 33633.00 62.95

GRACO Nos - - 122.00 13.86 166.00 17.09 307.00 25.12 400.00 64.35

Bulk Drugs Tonnes - - - - 9.16 1220.56 0.30 29.81 - -

Formulations- Tablets Thousand Nos - - - - 461.00 13.35 - - - -

Income from Operation Contracts - - - - - - - 19368.96 - 21093.38

Income from Property- Rent - - - - - - - 102.06 - 138.95

Others - - - - - - - 327.27 - 355.87

3838.55 5161.84 4530.37 106565.94 99588.84

(c) Purchase of Finished Goods:

Item Unit2009-10 2008-09

Qty Rupees Lakhs Qty Rupees Lakhs

Safety Fuse M.Metres 0.48 14.34 1.04 20.90

Grease/Unprocessed Oils MT 2587.00 2702.01 5660.00 4267.45

Filters Nos 929046.00 342.70 800908.00 299.97

Car Care Products KL 3594.00 6.30 45288.00 44.28

GRACO Nos 185.00 15.76 356.00 29.00

D Cord M.Metres 1.12 32.90 - -

Formulations KG’s 300.00 29.02 - -

3143.03 4661.60

(d) Raw Materials Consumed:

Item Unit2009-10 2008-09

Qty Rupees Lakhs Qty Rupees Lakhs

Coating Materials Tonnes 825.83 553.18 925.41 533.30

Chemicals :

Explosives/ Detonators/ Acids Tonnes 59523.93 10375.69 53048.61 11217.59

Metals Tonnes 1223.86 1699.20 1122.05 1907.69

Yarn & Paper Tonnes 91.74 103.98 69.21 82.82

Base Oil Tonnes 39352.27 20160.43 36662.98 21383.52

Additives Tonnes 3060.61 4630.65 2404.86 3131.98

Miscellaneous 1266.05 1037.36

38789.18 39294.26

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51

18. NOTES ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010

1. ACCOUNTING POLICIES

The accounts have been prepared primarily on the historical cost convention and in accordance with the relevant provisions of the Companies Act, 1956 and the accounting standards notifi ed by the Companies (Accounting Standards) Rules, 2006. The signifi cant accounting policies followed by the company are stated below:

I. FIXED ASSETS:

Fixed assets are shown at cost / revalued amount less depreciation. Cost comprises the purchase price and other attributable expenses.

II. DEPRECIATION ON FIXED ASSETS:

(i ) The Company follows the straight-line method of charging depreciation on all its fi xed assets. The Depreciation has been provided in the manner and at the rates prescribed in Schedule XIV to the Companies Act, 1956 on all the assets except certain equipments which are depreciated over their estimated useful life.

(ii) Leasehold land is being amortised in equal instalments over the lease period.

(iii) Technical Know-how is amortised over a period of fi ve to seven years.

III. INVESTMENTS:

Current Investments are valued at lower of cost and fair value. Long Term Investments are valued at cost. Where applicable, provision is made if there is a permanent fall in valuation of long term Investments.

IV. INVENTORIES:

Inventories are valued at lower of cost and net realisable value. The method of arriving at cost of various categories of inventories is as below:

(a)

(b)

(c)

Stores and Spares, Raw and Packing material

Finished goods and work-In-process

Contracts-in-progress

Weighted Average method

Weighted average cost of production, which compris-es direct material costs, and appropriate overheads.

Represents expenses incurred on execution of con-tracts till balance sheet date

V. FOREIGN CURRENCY TRANSACTIONS:

Transactions made during the year in foreign currency are recorded at the exchange rate prevailing at the time of transaction. Assets and Liabilities related to foreign currency transactions remaining unsettled at the year end are translated at the contract rates when covered by forward cover contracts and at year-end rates in other cases. Realised gains and losses on foreign exchange transactions other than those relating to fi xed assets are recognised in the profi t and loss account except gain/loss on transaction of long term liabilities incurred to acquire fi xed assets is treated as an adjustment to the carrying cost of fi xed assets.

VI. REVENUE RECOGNITION:

a) Sale of goods is recognised at the point of despatch of fi nished goods to customers. Sales include amount recovered towards excise duty but exclude sales tax. Export incentive under the Duty Entitlement Pass Book scheme has been recognized on the basis of credits afforded in the passbook.

b) Income from services is recognized at the time of rendering the services.

c) Income from Property Development is recognised as soon as contract is entered with the Party and the consideration is received.

d) Contract revenue is recognised on percentage completion method as required under revised Accounting Standard -7 - Construction Contracts. The stage of completion is determined as a proportion that contract costs bear to the estimated total costs. When it is probable that any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognised immediately.

VII. RESEARCH AND DEVELOPMENT EXPENSES:

Research and Development expenditure of revenue nature is written off in the year in which it is incurred and expenditure of a capital nature is added to fi xed assets.

SCHEDULES TO THE FINANCIAL STATEMENTS

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52

VIII. EMPLOYEE RETIREMENT BENEFITS:

Retirement benefi ts to employees are provided for by means of gratuity, superannuation and provident fund.

The gratuity liability is determined based on the actuarial valuation as at the year end.

Payments in respect of superannuation are made to the fund administered by LIC.

Provision in respect of compensated absences is made based on actuarial valuation as at year end.

Contribution to Provident fund is based on defi ned contribution and expensed as incurred.

IX. TAXES ON INCOME:

Current tax is determined as the amount of tax payable in respect of taxable income for the year.

Deferred tax is recognised subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or subsequent periods.

X. SEGMENT REPORTING:

The accounting policy adopted for Segment Reporting is in line with the accounting policy of the Company with the following additional policy for Segment Reporting:-

Revenue and expenses have been identifi ed to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to the segments on a reasonable basis, have been included under “Unallocated Expenses”. Inter Segment transfers are at cost.

2. Demerger of Speciality Chemicals Division of the Company and merger of Agro Division of IDL Speciality Chemicals Limited with the Company. (“the Scheme”) in 2008-09.

2.1 Pursuant to a Scheme of Arrangement between the Company and IDL Speciality Chemicals Limited (IDL SC) and their respective shareholders, which was sanctioned by the Honourable High Court of Andhra Pradesh by its Order dated 24th March, 2009, the assets and liabilities of the Speciality Chemicals Division of the Company were transferred to and vested with IDL SC with effect from 1st April 2008 and the assets and liabilities of Agro Division of IDL SC were transferred and vested with the Company with effect from 1st April, 2008.

2.2 As provided in the Scheme, the debit balance of Rs.87.04 Lakhs in the Profi t & Loss Account as at 1st April, 2008 of Agro Division of IDL SC was adjusted against the Revaluation Reserve.

2.3 (a) Pursuant to the Scheme, 97,60,000 equity shares of Rs. 10 each of IDL SC were issued to the Company towards Rs. 6374.14 Lakhs, representing the excess of assets over liabilities of the Speciality Chemicals Division transferred to IDL SC. The shares were issued during the year.

(b) In accordance with the Scheme, the Company was required to discharge the obligations of IDL SC and IDL SC in turn would re-imburse the Company. Accordingly, the liabilities of IDL SC discharged/ to be discharged by the Company aggregating to Rs. 2699.59 Lakhs were included as part of Loans and Advances (Schedule 10). Such liability was discharged during the year.

2.4 The Board of Directors of the Company had, in pursuance of the scheme restated and / or revised certain assets and liabilities including intangibles as at 31st March 2009 and the net effect thereof was adjusted against Revaluation Reserve as detailed below :-

Adjustments to Revaluation Reserves Rs. Lakhs

Receivables which are subject matter of dispute 1679.12

Write down of Inventories taken over from IDL SC 16.16

Miscellaneous Expenditure 1475.45

Obsolete Fixed Assets 84.21

Doubtful Advances 3577.58

Diminution in value of long term investment 9163.55

Provision for Indirect Taxes 8394.10

Others 893.55

Total 25283.72

SCHEDULES TO THE FINANCIAL STATEMENTS

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53

SCHEDULES TO THE FINANCIAL STATEMENTS

2.5 The adjustment to Revaluation Reserve of (a) the debit balance in the profi t and loss account of IDL SC as at 1st April 2008, amounting to Rs.87.04 Lakhs (Refer Note 2.2 above) and (b) the effect of valuation / restatement / revision of certain assets and liabilities of the Company is Rs. 25283.72 Lakhs (Refer Note 2.4 above) which was in pursuance of the Scheme approved by the Hon’ble High Court of Andhra Pradesh, at Hyderabad in the previous year.

3. Managerial Remuneration under Section 198 of the Companies Act, 1956

2009-10 2008-09Rs. Lakhs Rs. Lakhs

Salaries 56.63 42.49Commission 9.84 16.70Contribution to Provident Fund and Superannuation Fund 9.56 7.17Benefi ts 3.47 2.86Commission to non-wholetime Directors 9.84 16.70

89.34 85.92

Note:

Having regard to the fact that there is a global contribution to Gratuity Fund, the amount applicable to an individual employee is not ascertainable and accordingly, contribution to Gratuity Fund has not been considered in the above computation.

4. Computation of Net Profi t and Directors’ Commission

2009-10Rs. Lakhs

2008-09Rs. Lakhs

Profi t before Taxation 5430.23 3875.41Add:Depreciation 1700.79 1537.24Directors Remuneration 89.34 85.92Provision for doubtful debts 474.03 2264.16 - 1623.16

7694.39 5498.57Less:Depreciation under Section 350 of the Companies Act, 1956 1700.79 1537.24Write off of Bad debts 743.15 -Profi t on sale of Fixed Assets 2246.65 2291.31Amounts received towards advance made and pro-vided against Revaluation Reserve 1973.25 -Net Profi t on sale of investment (long term) 46.92 6710.76 - 3828.55

983.63 1670.02Commission(a) Managing Director @ 1% 9.84 16.70(b) Non-Wholetime Directors @1% 9.84 16.70

Note:

The Company had been legally advised that the adjustments made to Revaluation Reserve in 2008-09, in accordance with the Scheme of Arrangement approved by the Honourable High Court of Andhra Pradesh, at Hyderabad, will not have any effect on the profi ts as determined under Section 349 of the Companies Act, 1956.

5. Payment to Auditors (Excluding Service Tax)

2009-10Rs. Lakhs

2008-09Rs. Lakhs

Audit Fees 14.50 14.50Tax Audit 3.00 2.50Other Services 9.20 8.35Reimbursement of Expenses 1.89 2.21

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54

SCHEDULES TO THE FINANCIAL STATEMENTS

6. Payments to Branch Auditors (Excluding Service Tax)

Audit Fees 7.50 7.50

Tax Audit 2.50 2.50

Other Services 5.25 4.50

Reimbursement of Expenses 1.60 1.02

7. Expenditure in Foreign Currency

Interest 475.60 1104.88

Commission on Exports 86.84 110.61

Other- travelling expenses, books & periodicals etc., 112.76 233.20

Royalty (inclusive of Tax Deducted at Source) 498.91 467.26

8. Earnings in Foreign Exchange

Export on F O B Basis 6029.34 4139.37

9. Amount remitted during the year in foreign currency on account of dividend

Number of non-resident Shareholders 1 1

Number of Shares held 36460415 6800980

Dividend remitted (Rupees Lakhs) 619.83 510.07

Dividend on account of year 2008-09 2007-08

10. Value of Imports of C I F Basis

Raw Materials 11005.90 20982.94

Capital Goods 36.85 1199.24

Traded Goods 147.98 1581.82

11. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account

29.57 42.21

12. Consumption of raw materials

(a) Raw material

2009-10 2008-09

Rs. Lakhs Percentage Rs. Lakhs Percentage

Imported 16587.26 42.76 19407.64 49.21

Indigenous 22201.92 57.24 19886.62 50.79

38789.18 100.00 39294.26 100.00

(b) Components and Spare Parts -

Note: Components and Spare Parts referred to in para 4 D (c) of Part II of Schedule VI to the Companies Act, 1956 are assumed to be those incorporated in goods produced and not those used for maintenance of Plant and Machinery.

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55

SCHEDULES TO THE FINANCIAL STATEMENTS

13. Contingent LiabilitiesAs at

31-03-2010Rs. Lakhs

As at31-03-2009

Rs. Lakhs(a) Corporate Guarantees * 397.80 441.00(b) Bills discounted - 311.46(c) Claims against the Company not acknowledged as debts (i) Income Tax Demands 923.10 875.31 (ii) Wealth Tax 51.97 - (iii) Sales Tax Demands 2115.53 86.02 (iv) Excise Demands 1305.65 20.66 (v) Service Tax 4.49 4.49 (vi) Additional Demands towards cost of land 3.81 3.81 (vii) Claims of workmen/ex-employees 75.50 83.99 (viii) Other Matters 108.67 87.82 (ix) Performance and Other Guarantees 178.02 171.72

(d) In terms of the agreement between IDL Speciality Chemicals Limited, Biocon Limited, and the Company for the sale of Active Pharma Ingredients (API) business to Biocon Limited, the Company would be responsible for guaranteeing to Biocon Limited claims upto a period of one year after the closing date i.e., 30th November, 2009 to the extent of purchase price of Rs.2200 Lakhs. As at 31st March, 2010, the Company has not received any such claims.

* The Company has given Corporate Guarantee of 60 Million Taka to South East Bank Ltd., on behalf of Gulf Oil Bangladesh Ltd., a subsidiary of Gulf Oil Corporation Ltd. The amount outstanding as on 31st March 2010 is 21.51 Million Taka (31st March 2009, 10.09 Million Taka)

14. SECURED LOANS:

(a) Cash Credit facilities including foreign currency demand loan from Bank of Bahrain & Kuwait B.S.C and working capital loan & corporate loan from consortium banks is secured by (i) hypothecation of all current assets of the Company including raw materials, fi nished goods, stocks-in-process, stores and spares (not relating to plant & machinery) and present and future book debts of the Company ranking pari-passu and collateral security by (i) fi rst pari passu charge by way of equitable mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to other term lenders.

(b) (i) Term loan for Capital Expenditure from State Bank of India is secured by fi rst charge on the fi xed assets created out of the loan, ranking pari-passu with other term lenders and collateral security by (i) fi rst pari passu charge by way of equitable mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to other term lenders.

(ii) Term Loan for Overseas Investment from State Bank of India is secured by collateral security (i) pari passu fi rst charge by way of equitable mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, and (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to other term lenders.

(c) (i) Term loan for Capital Expenditure from State Bank of Hyderabad is secured by fi rst charge on the fi xed assets created out of the loan, ranking pari-passu with the other term lenders and collateral security by (i) fi rst pari passu charge by way of equitable mortgage on land owned by the Company admeasuring Acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to other term lenders.

(ii) Term Loan for Overseas Investment from State Bank of Hyderabad is secured by collateral security (i) pari passu fi rst charge by way of equitable mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, and (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to other term lenders.

(d) The Term loan for Capital Expenditure from Oriental Bank of Commerce is secured by fi rst charge on the fi xed assets created out of the term loan, ranking pari-passu with the other term lenders and collateral security by (i) fi rst pari passu charge by way of Equitable Mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to the other term lenders.

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SCHEDULES TO THE FINANCIAL STATEMENTS

(e) The Term loan for Capital Expenditure from Andhra Bank is secured by fi rst charge on the fi xed assets created out of the loan, ranking pari-passu with other term lenders and collateral security by (i) fi rst pari passu charge by way of Equitable Mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to the other term lenders.

(f) Fixed Deposits to the extent of Rs 375.86 Lakhs were secured by a residual charge on all tangible movable property and fi xed assets including all movable machinery and plant & machinery, spares and stores, tools and accessories and other movables both present and future as approved by the Controller of Capital Issues vide his letter dated 1st November,1980.

(g) Term Loans from ABN Amro Bank NV, SREI Infrastructure Finance Limited, Kotak Mahindra Bank Limited are secured by way of fi rst charge on specifi c mining equipment of the Company

(h) Loan received from Hinduja Ventures Limited is secured by an exclusive charge on the Company’s land at Yelahanka, Bengaluru.

15. FIXED ASSETS

Buildings include:

(i) Rs. 7.09 Lakhs, which represents the cost of ownership fl ats Rs. 7.08 Lakhs and Rs. 0.01 Lakhs being the value of Share money in Sett Minar Co-operative Housing Society Limited.

(ii) Rs. 4.70 Lakhs, which, represents the cost of ownership fl ats Rs. 4.43 Lakhs and Rs. 0.27 Lakhs being the value of 270 ordinary shares of Rs. 100 each, fully paid up in Shree Nirmal Commercial Limited.

16. TAXATION

(i) Deferred tax31st March 2010

Rs. Lakhs31st March 2009

Rs. Lakhs

(a) Deferred tax assets arising on account of timing differences: Unabsorbed business loss/ depreciation - 512.34 Provision for doubtful debts/advances 687.17 794.62 Other timing differences 575.15 468.94

1262.32 1775.90(b) Deferred tax liabilities arising on account of timing

differences: Depreciation 1116.05 1247.63Net Deferred tax asset 146.27 528.27

(ii) Management has been advised that Rs.1973.25 Lakhs received against advances adjusted to Revaluation Reserve in the previous year, is not required to be considered in computing Minimum Alternate Tax (MAT).

(iii) By way of abundant caution, no deferred tax asset has been created in respect of the adjustments made to Revaluation Reserve as detailed in Note 2 of Schedule 18.

17. Disclosure in respect of Gratuity as required under Accounting Standard 15 – Employee Benefi ts

Rs. Lakhs

31st March 2010 31st March 2009Projected benefi t obligation at the beginning of the year 1418.86 1327.95Current service cost 124.20 90.39Transfer to IDL Speciality Chemicals Limited under Scheme of Arrangement (Note 2 of Schedule 18) - (9.76)Interest cost 101.40 94.50Actuarial (Gain) / Loss 252.82 209.11Benefi ts paid (302.71) (293.33)Projected benefi t obligation at the end of the year 1594.57 1418.86

Fair value of plan assets Beginning of the period 291.96 356.75Expected return on plan assets 19.46 25.95Contributions 201.48 207.69Benefi ts paid (302.71) (293.33)Actuarial Gain/(Loss) plan assets (15.71) (12.57)

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SCHEDULES TO THE FINANCIAL STATEMENTS

31st March 2010 31st March 2009Fair value of plan assets at the end of the period 194.47 284.49Total Actuarial Gain/(Loss) to be recognized (268.53) (214.20)

Amounts recognised in the balance sheetProjected benefi t obligation at the end of the year 1594.57 1418.86Fair value on plan assets at the end of the year (194.47) (284.49)Liability recognised in the balance sheet 1400.10 1134.37

Cost of the Retirement and Other Benefi ts for the yearCurrent service cost 124.20 87.48Interest cost 101.40 94.50Expected return on plan assets (19.46) (25.95)Net Actuarial (Gain) / Loss recognised in the year 268.53 214.20Net cost recognised in the Profi t and Loss Account 474.68 370.23

AssumptionsDiscount Rate (%) 8% 8%Long term rate of compensation increase (%) 4% 4%Mortality table L.I.C 1994-96

UltimateL.I.C 1994-96

UltimateAttrition rate 3% 3%The major categories of plan assets as a percentage of total plan funded with LIC

100% 100%

18. MISCELLANEOUS: (a) The net exchange gain / (loss), (i.e., difference between the spot rate on the dates of the transactions and the

actual rate at which the transactions are settled/appropriate rates applicable at the year end) credited to Profi t and Loss Account is Rs. 168.42 Lakhs (Previous year debit of Rs.2579.61 Lakhs).

(b) Exchange difference in respect of forward exchange contracts to be recognised in the Profi t and Loss Account in the subsequent accounting period is Rs. 35.39 Lakhs (Credit) (Previous year debit of Rs. 3.59 Lakhs).

(c) (i) The Company has entered into the following derivative instruments:

The following are the outstanding Forward Exchange Contracts entered into by the Company as on 31st March, 2010:

As on 31st March, 2010 As on 31st March, 2009Currency Amount Buy/Sell Cross

CurrencyCurrency Amount Buy/Sell Cross

CurrencyUS Dollar 16688970 Buy Indian

Rupees750000 Sell Indian

RupeesIndian

RupeesUS Dollar 310206 Sell Indian

Rupees22438022 Buy Indian

RupeesIndian

Rupees

ii) The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

Amounts receivable/(payable) in foreign currency on account of the following:

Amt. in Rs. LakhsCurrency

Amount in foreign currency31st March 2010 31st March 2009 31st March 2010 31st March 2009

Export of Goods 1614.12 2112.80 USD 3575792 4165121Export of Goods 162.19 - Euro 267820 -Import of Goods 2754.82 9505.01 USD 6185200 18740184Import of Goods 33.52 - Euro 55345 -FCNRB Loan 1015.65 1141.20 USD 2250000 2250000

(d) Sundry creditors (Schedule 11- Current Liabilities) include Rs nil due to Micro Enterprises and Small Enterprises as defi ned under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act 2006). The Company has not received any memorandum (as required to be fi led by the supplier with the notifi ed authority under the MSMED Act 2006) claiming their status as Micro or Small or Medium Enterprises.

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SCHEDULES TO THE FINANCIAL STATEMENTS

19. (a) Revenue Recognition

Disclosures required to be made under the Accounting Standard (AS-7) Construction Contracts:

Rs. Lakhs

2009-10 2008-09Contract revenue recognized as revenue during the year 870.86 NilAggregate amount of contract costs incurred in respect of on going contracts net of recognized profi ts (less recognized losses) up to 31st March 2010

1174.67 382.17

Advance payments received (net of recoveries from progressive bills) 572.22 581.11Retention Amount 76.74 NilGross amount due from customers for contract work 447.10 NilFor the Method used to determine the contract revenue and the stage of completion of contract in progress, Refer Note: 1 (vi) (d) above

- -

(b) In the previous year pursuant to the notifi cation GSR 225(E) issued by Ministry of Corporate Affairs relating to Accounting Standard 11 “Effect of changes in Foreign Exchange Rates”, the Company has exercised the option to capitalize exchange differences on translation of long term foreign currency monetary items on depreciable capital assets. Accordingly, the foreign exchange difference of Rs. 52.24 Lakhs (31.03.2009 Rs.105.15 Lakhs including foreign exchange gain of Rs. 65.04 Lakhs relating to the earlier year and adjusted to General Reserve as on 1st April, 2008) on translation of long term foreign currency monetary items relating to acquisition of fi xed assets has been capitalized and depreciated over the remaining useful life of the fi xed assets.

20. EARNINGS PER SHAREYear ended

31st March 2010Year ended

31st March 2009a. Profi t after Tax (Rs. Lakhs) 4507.23 2904.38b. Weighted average number of Equity Shares outstanding during the year

74358735 74358735

c. Weighted Average number of Equity Shares in computing diluted Earnings Per Share

74358735 74358735

d. Face value of each Equity Share (Rs.) 2 2e. Earnings Per Share - Basic (Rs.) - Diluted (Rs.)

6.066.06

3.913.91

21. RELATED PARTY DISCLOSURES:

(A) Information relating to Related Party transactions as per “Accounting Standard 18” notifi ed by the Companies (Accounting Standards) Rules, 2006.

Name of the Related Party Relationship

IDL Buildware Limited

Gulf Carosserie India Limited

Gulf Oil Bangladesh Limited

PT Gulf Oil Lubricants Indonesia

Gulf Oil (Yantai) Limited, China

Hinduja Infrastructure Limited

IDL Speciality Chemicals Limited(formerly IDL Agro Chemicals Limited)

Subsidiary

Upto 28th March, 2010

Gulf Oil International (Mauritius) Inc Entity holding more than 20% of the shareholding in the Company

Mr. S.Pramanik, Managing Director Key Management Personnel

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SCHEDULES TO THE FINANCIAL STATEMENTS

(B) Details of transactions between the Company and Related Parties and the status of Outstanding balances at the year end:

Rs. Lakhs

ParticularsSubsidiaries

Entity holding more than 20% of the shareholding in the Company

Key Management Personnel

2009-10 2008-09 2009-10 2008-09 2009-10 2008-09

Sales

PT Gulf Oil Lubricants Indonesia 17.06 0.36 - - - -

IDL Speciality Chemicals Limited - 0.85 - - - -

Gulf Oil (Yantai) Limited, China 0.57 - - - - -

Royalty

Gulf Oil International (Mauritius) Inc. - - 498.91 467.26 - -

Purchase & Other Services

IDL Speciality Chemicals Limited 41.66 10.59 - - - -

Advances given /(Received)

IDL Speciality Chemicals Limited (1966.88) 3103.97 - - - -

IDL Buildware Ltd., (6.37) 123.31 - - - -

Gulf Carosserie India Limited 0.09 - - - - -

Advances Received towards sale of land

IDL Speciality Chemicals Limited 160.00 - - - - -

Transfer of Undertaking

Transfer of Speciality Chemicals Division - 6374.14 - - - -

Transfer of Agro Undertaking - 87.04 - - - -

Investment in Equity Shares -

IDL Speciality Chemicals Limited - 6374.14 - - - -

Hinduja Infrastructure Limited - 5.00 - - - -

Dividend paid

Gulf Oil International (Mauritius) Inc. - - 619.83 510.07 - -

S.Pramanik - - - - 0.06 0.05

Provision for Diminution in value of Investments

IDL Speciality Chemicals Limited - 6398.14 - - - -

IDL Buildware Limited - 203.41 - - - -

Provisions made for Advances

IDL Speciality Chemicals Limited - 3103.97 - - - -

IDL Buildware Ltd., - 447.26 - - - -

Gulf Carosserie India limited - 5.29 - - - -

Directors’ Remuneration - - - - 79.50 69.22

Outstanding balances:

(a) Receivables

IDL Speciality Chemicals Limited - 15.38 - - - -

PT Gulf Oil Lubricants Indonesia 43.75 26.33 - - - -

(b) Payables

Gulf Oil International (Mauritius) Inc. - - 424.07 397.17 - -

(c) Corporate Guarantee (given)

Gulf Oil Bangladesh Limited 397.80 441.00 - - - -

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SCHEDULES TO THE FINANCIAL STATEMENTS

22. Disclosure as required by Accounting Standard 19, “Leases” notifi ed by the Companies (Accounting Standards) Rules, 2006 are given below:

(a) Operating Lease:

(i) Where the Company is a Lessee:

The Company’s signifi cant leasing arrangements are in respect of operating leases for premises (residences, offi ce, storage godowns for fi nished goods etc.). The leasing arrangements, which are not non-cancellable range generally between 11 months to 5 years and are usually renewable by mutual consent on agreed terms. The aggregate lease rents payable are charged as rent in the Profi t and Loss Account.

The Company has taken certain Plant and Machinery under non-cancellable leases Rs. Lakhs

31st March 2010 31st March 2009

Total

Payments not later than one

year

Payments later than one year

but not later than fi ve years

Total

Payments not later than one

year

Payments later than one year but not later

than fi ve yearsTotal of future minimum payments at the balance sheet date 3056.01 1225.53 1830.48 4211.43 1225.82 2985.61

Lease Rent on the aforesaid plant and machinery amounting to Rs. 1229.53 Lakhs. (Previous year Rs.1195.29 Lakhs) has been charged to Profi t and Loss Account under rent.

(ii) Where the Company is Lessor: Details in respect of assets given on operating lease: Rs.Lakhs

Gross BlockAccumulated

Depreciation as onDepreciation for the year

31st March 2010

31st March 2009

31st March 2010

31st March 2009

2009-10 2008-09

Building 71.09 71.09 7.14 5.86 1.28 1.28Plant & Machinery 80.32 80.32 54.46 50.64 3.82 3.82

The assets given on lease are not non-cancellable and range generally between 11 months to 5 years and are usually renewable by mutual consent, on agreeable terms. The aggregate lease rentals are recognised as income from property in the Profi t and Loss account.

Initial direct costs are recognised as an expense in the year in which these are incurred.

b) Hire Purchase:

(i) The Company has taken plant and machinery, motor vehicles under hire purchase arrangements for which the ownership will be transferred to the Company at the end of the hire purchase term.

(ii) Reconciliation between the total of minimum hire purchase payments at the balance sheet date and the present value: Rs. Lakhs

31st March 2010 31st March 2009Total Payments

not later than one

year

Payments later than one year but not

later than fi ve years

Total Payments not later than one

year

Payments later than

one year but not later than

fi ve years

Total of minimum hire purchase payments at the balance sheet date 468.33 259.29 209.04 322.14 211.44 110.70

Less: Future Finance Charges 45.86 32.60 13.26 30.56 22.11 8.45

Present value of minimum hire purchase payments at the balance sheet date 422.47 226.69 195.78 291.58 189.33 102.25

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23. SEGMENT INFORMATION FOR THE YEAR ENDED 31st MARCH 2010

(i) Primary Business Segments Rs. Lakhs

Explosives Mining &

Infrastructure Contracts

Property Development Lubricating Oils Others Unallocated Eliminations Total

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009

REVENUE

External 28739.14 25102.67 19565.12 21114.54 – 1050.00 49569.19 45100.07 29.82 11.41 2352.28 2445.99 – – 100255.55 94824.68

Inter-segment – – – – – – 140.56 143.03 – – – – (140.56) (143.03) – –

Total Revenue 28739.14 25102.67 19565.12 21114.54 – 1050.00 49709.75 45243.10 29.82 11.41 2352.28 2445.99 (140.56) (143.03) 100255.55 94824.68

RESULT

Segment result 2676.51 495.69 (1042.07) 1179.52 – 1050.00 3606.55 2333.97 0.80 (2.75) – – – – 5241.79 5056.43

Unallocated Corporate Income net of unallocated Expenses

1153.48 1247.37

Interest Expense (2751.35) (2917.29)

Interest Income 200.28 486.93

Dividend Income 1.42 1.97

Profi t before Taxation & Exceptional Expenditure

3845.62 3875.41

Exceptional Item (1584.61) –

Net Profi t 5430.23 3875.41

OTHER INFORMATION

Segment Assets 15646.64 16012.24 11672.55 13905.31 46840.14@ 47819.92 19600.60 27361.92 8.40 10.02 6088.87 7922.65 – – 99857.20 113032.06

Segment Liabilities 9212.86 9395.77 3966.19 5425.05 – – 12301.63 21224.99 6.01 13.01 32093.57 35691.90 – – 57580.26 71750.72

Capital Expenditure 507.49 311.18 471.96 1938.79 – 4328.82 167.57 272.06 – – 11.40 – – – 1158.42 6850.85

Depreciation 271.16 254.26 1161.72 1009.90 – – 202.59 204.07 – – 65.32 69.01 – – 1700.79 1537.24

@ includes Rs.41848.95 Lakhs (31.03.2009 Rs. 43799.82 Lakhs) arising on revaluation of fi xed assets (refer note 27 of Schedule 18).

(ii) Information about Secondary Business Segments Rs. Lakhs

India Outside India Total

2010 2009 2010 2009 2010 2009

Revenue by Geographical market on FOB basis 94226.21 90685.31 6029.34 4139.37 100255.55 94824.68

Inter Segment - - - - - -

Total 94226.21 90685.31 6029.34 4139.37 100255.55 94824.68

Carrying amount of segment assets 97940.86 110155.03 1916.34 2877.03 99857.20 113032.06

Additions to Fixed Assets 1158.42 6850.85 - - 1158.42 6850.85

(iii) Notes:

(a) Business Segment:

The Company has considered business segment as the primary segment for disclosure

Segments have been identifi ed and reported taking into account the Organisation structure, the nature of products and services, the deferring risks and returns of the segments

The business segments of the Company are (i) Explosives, (ii) Consult dealing in Mining & Infrastructure Contracts, (iii) Property Development (iv) Lubricating Oils, (v) Others

(b) Geographical Segment:

The Geographical segments considered for disclousure are as follows:

- Revenue within India includes sales to customers located within India and earnings in India

- Revenue outside India includes sales to customers located outside India and earnings outside India

SCHEDULES TO THE FINANCIAL STATEMENTS

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24. Exceptional items comprise: Rs. Lakhs

(a) Compensation under Voluntary Retirement Scheme (435.56)

(b) Amounts received from Subsidiaries against advances made and adjusted to Revaluation Reserve in pursuance of Scheme of Arrangement approved by the Honourable High Court of Andhra Pradesh, Hyderabad in 2008-09

1973.25

(c) Profi t on sale of long term investment (Net) 46.92

Total 1584.61

25. The Honourable Supreme Court vide its order dated 16.11.2007, held that the stock transfers constituted inter sale in respect of 10 years assessment year viz. 1976-77 to 1983-84,1989-90 & 1990-91 and also directed the authorities to examine the factual aspects and assess tax on the supplies made by the Company to the subsidiaries of Coal India Limited as inter state sale.

The Company has fi led writ petitions in the High Court of Orissa in August 2009 impleading other State Governments, CIL and its subsidiary Companies seeking directions for issue of C forms and transfer of local sales tax to the State of Orissa. The Company has been directed by the Honourable High Court of Orissa to approach the appropriate forum for redressal.

The Company has been legally advised that as per the settled cases, the Company is entitled for concessional sales tax rates as per Central Sales Tax and interest should be charged from recomputation order. However, necessary provision has been made and is included as Provision – Indirect Taxes and no further liability is expected on this account.

26. INCOME FROM PROPERTY DEVELOPMENT:

The Company in an earlier year entered into “Option for Development Rights” with Hinduja Reality Ventures Ltd., (HRVL), wherein HRVL has only the right to decide whether or not to exercise the option to acquire the development rights in respect of certain properties of the Company located at Hyderabad and Bengaluru. The offer of grant of the development rights in respect of the Bengaluru / Hyderabad properties was extended upto 30th June, 2009 and 31st December 2009 respectively. In consideration of the Company agreeing to keep such offer open, HRVL paid an amount of Rs. 1050 Lakhs in the previous year on a non refundable commitment amount, which has been included under “Income from Property Development” in the Profi t and Loss Account of fi nancial year 2008-09.

If the option for development is exercised by HRVL, Development Agreement for the respective properties would be entered with the Company, wherein the Company shall be entitled to share of gross sale proceeds (as determined in the agreement) realised from sale of buildings constructed on the said properties.

During the year, the option for development rights had expired and revised proposals are under consideration.

27. Land meant for property development situated at Bengaluru and Hyderabad had been revalued as at 31st March, 2008, based on a valuation by an approved valuer. The resultant surplus on such revaluation amounting to Rs. 183,896.69 Lakhs had been credited to Revaluation Reserve in the previous years. In view of steep recession in the realty sector, management has reassessed the valuation of the aforesaid properties as on 31st March, 2009 and based on the guidelines issued by the Registration and Stamps Department of Karnataka & Andhra Pradesh, the value of the subject lands has been reassessed and, the resultant surplus on revaluation amounted to Rs. 43799.82 Lakhs. The resultant write down aggregating to Rs. 140096.87 Lakhs has, in accordance with the requirement of Accounting Standard-10 “Accounting for Fixed assets” been debited to Revaluation Reserve in the previous year. During the year, the Company has entered into “Agreement to Sell” 4.75 acres of land to IDL Speciality Chemicals Limited. Since the aforesaid parcel of land is no longer meant for Property development, an amount of Rs. 1950.87 Lakhs has been withdrawn from Revaluation Reserve.

28. Loans and Advances, considered good include Rs. 813.89 Lakhs (31.03.2009 Rs. 813.89 Lakhs) in respect of Cenvat credit claimed on tippers and subsequently reversed on receipt of a show cause notice from the Excise Authorities. Management is of the view that the Company is entitled to avail such credits and the matter is being currently contested before the appropriate authorities.

29. Previous years fi gures have been regrouped / recast wherever necessary.

For and on behalf of the Board of Directors

Place : Mumbai S. SUBRAMANIAN S. PRAMANIK S. G. HINDUJADate : 14th May 2010 Chief Financial Offi cer &

Company SecretaryManaging Director Chairman

SCHEDULES TO THE FINANCIAL STATEMENTS

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STATEMENT UNDER SECTION 212 OF THE COMPANIES ACT, 1956

Rs. Lakhs

Name of the Subsidiary Financial Year ending of the

Subsidiary

Number of shares

Extent of Holding

For the Financial years of the Subsidiary For the previous Financial Years since it became a Subsidiary

Profi ts/(Losses) not dealt with in the Books of Accounts

of the Holding Company (Except to the extent dealt

with in Col.6)

Profi t/(Losses) dealt with in the

Books of Accounts of the Holding

Company

Profi ts/(Losses) not dealt with in the Books of Accounts

of the Holding Company (Except to the extent dealt

with in Col.8)

Profi t/(Losses) dealt with in the

Books of Accounts of the Holding

Company

(1) (2) (3) (4) (5) (6) (7) (8)

IDL BUILDWARE LIMITED 31.03.2010 1970000 100% (180.74) Nil (348.86) Nil

GULF CARROSSERIE INDIA LIMITED 31.03.2010 380001 95% (0.23) Nil (109.36) Nil

GULF OIL BANGLADESH LIMITED 31.03.2010 177939 51% 49.73 Nil (69.91) Nil

PT GULF OIL LUBRICANTS INDONESIA 31.03.2010 15000 75% 41.64 Nil (232.64) Nil

GULF OIL (YANTAI) COMPANY LTD. 31.03.2010 4132540 51% 43.15 Nil (21.46) Nil

HINDUJA INFRASTRUCTURE LIMITED 31.03.2010 50000 100% 0.07 Nil (0.54) Nil

For and on behalf of the Board of Directors

S.SUBRAMANIAN S.PRAMANIK S.G.HINDUJA Place: Mumbai Chief Financial Offi cer Managing Director ChairmanDate : 14th May 2010 & Company Secretary

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SCHEDULE – 1

Information pursuant to Part IV of Schedule VI of the Companies Act, 1956

BALANCE SHEET ABSTRACT & COMPANY’S GENERAL BUSINESS PROFILE

I. Registration DetailsRegistration No. State Code

8 7 6 0 1Balance Sheet Date

3 1 . 0 3 . 1 0

II. Capital raised during the year: (Amount in Rs. thousands)

Public Issue Rights IssueN I L N I L

Bonus Issue Private placementN I L N I L

III. Position of Mobilization and Deployment of Funds: (Amount in Rs. thousands)

Total Liabilities Total Assets9 9 8 5 7 2 0 9 9 8 5 7 2 0

Sources of fundsPaid up Capital Reserves & Surplus

1 4 8 7 1 7 4 0 7 8 9 7 7Convertible Warrants Unsecured Loans

N I L 1 3 4 1 2 8 3Secured Loans Current Liabilities

1 7 0 7 4 5 1 2 7 0 9 2 9 2Application of fundsFixed Assets Investments

5 8 1 0 3 8 7 3 0 5 7 7 4Current Assets Deferred Tax Asset (Net)

3 8 5 4 9 3 2 1 4 6 2 7Accumulated Losses Misc. Expenditure

N I L N I L

IV. Performance of Company: (Amount in Rs. thousands)Turnover Total Expenditure

1 1 0 7 9 9 8 5 1 0 5 3 6 9 6 2Profi t /Loss before Tax Profi t /Loss after Tax

5 4 3 0 2 3 4 5 0 7 2 3Earning per Share (Rs.) Dividend Rate %

6 . 0 6 9 0

V. General Name of principal products/ services of Company (As per monetary terms)

IDL DIVISIONS1. Ind Explosives Permitted Types 3 6 0 2 0 0 . 0 1

2. Other 3 6 0 2 0 0 . 0 9

3. Detonating Fuse 3 6 0 3 0 0 . 0 1

4. Detonators Containing and ExplosivesElectrically Ignited, Not-ordinance 3 6 0 3 0 0 . 1 1

5. Detonators, Plain Not-ordinance 3 6 0 3 0 0 . 1 2

6. Fresh (Cut Flowers) 0 6 0 3 1 3 . 1 1

LUBRICANTS DIVISIONS

7. Lubricating Oils 2 7 1 0 . 9 5

8. Brake Fluids 3 8 1 1 . 0 0

9. Coolant 3 8 1 9 . 0 0

10. 2T Oils 3 8 2 4 . 9 0

S. SUBRAMANIAN S. PRAMANIK S. G. HINDUJAPlace : Mumbai Date : 14th May 2010

Chief Financial Offi cer & Company Secretary

Managing Director Chairman

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CO

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AUDITORS’ REPORT TO THE BOARD OF DIRECTORS OF GULF OIL CORPORATION LIMITED

1. We have audited the attached Consolidated Balance Sheet of Gulf Oil Corporation Limited (“the Company”) and its subsidiaries (the Company and its subsidiaries constitute “the Group”) as at 31st March, 2010, the Consolidated Profi t and Loss Account and the Consolidated Cash Flow Statement of the Group for the year ended on that date, both annexed thereto. These fi nancial statements are the responsibility of the Company’s Management and have been prepared on the basis of the separate fi nancial statements and other fi nancial information regarding components. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and the signifi cant estimates made by the Management, as well as evaluating the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We did not audit the fi nancial statements of the subsidiaries whose fi nancial statements refl ect total assets of Rs.5944.90 lakhs as at 31st March, 2010, total revenues of Rs. 6743.28 lakhs and net cash fl ows amounting to Rs. 271.57 lakhs for the year ended on that date as considered in the Consolidated Financial Statements. These fi nancial statements have been audited by other auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts included in respect of these subsidiaries is based solely on the reports of the other auditors.

4. We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 (Consolidated Financial Statements), as notifi ed under the Companies (Accounting Standards) Rules, 2006.

5. Based on our audit and on consideration of the separate audit reports on individual fi nancial statements of the Company and its aforesaid subsidiaries and to the best of our information and according to the explanations given to us, in our opinion, the Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March, 2010;

(ii) in the case of the Consolidated Profi t and Loss Account, of the loss of the Group for the year ended on that date and

(iii) in the case of the Consolidated Cash Flow Statement, of the cash fl ows of the Group for the year ended on that date.

For Deloitte Haskins & SellsChartered Accountants

(Registration No. 008072S)

K. RAJASEKHARPartner

(Membership No.23341)Place: HyderabadDate: 14th May 2010

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ScheduleAs at

31st March 2010Rupees Lakhs

As at31st March 2009

Rupees Lakhs

I. SOURCES OF FUNDS

1. Shareholders’ Funds

(a) Capital 1 1487.17 1487.17

(b) Reserves & Surplus 2 40899.20 47390.56

42386.37 48877.73

2. Minority Interests 1852.50 1913.93

3. Loan Funds

(a) Secured Loans 3 17217.17 17196.85

(b) Unsecured Loans 4 13465.69 23767.91

30682.86 40964.76

TOTAL 74921.73 91756.42

II. APPLICATION OF FUNDS

1. Goodwill on Consolidation 473.28 230.48

2. Fixed Assets

(a) Gross Block 72469.05 78934.11

(b) Less : Depreciation 13630.98 12970.00

(c) Net Block 5 58838.07 65964.11

(d) Capital Work-in-Progress and advances on Capital Account 1233.04 1489.07

60071.11 67453.18

2. Investments 6 142.45 152.38

3. Deferred Tax Asset (Net) 211.57 1188.78

4. Current Assets, Loans and Advances

(a) Inventories 7 13513.27 18308.00

(b) Sundry Debtors 8 12877.27 18254.41

(c) Cash and Bank Balances 9 9474.25 10144.74

(d) Loans and Advances 10 6553.27 8092.62

42418.06 54799.77

Less: Current Liabilities and Provisions

(a) Current Liabilities 11 15784.58 19842.23

(b) Provisions 12 12610.16 12225.94

28394.74 32068.17 Net Current Assets 14023.32 22731.60

TOTAL 74921.73 91756.42

Notes on the Accounts 17

Schedules 1 to 17 annexed hereto form part of these fi anancial statements

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2010

Per our report attached For Deloitte Haskins & Sells For and behalf of the Board of DirectorsChartered Accountants

K. RAJASEKHAR S. SUBRAMANIAN S. PRAMANIK S. G. HINDUJAPartner

Chief Financial Offi cer & Company Secretary

Managing Director Chairman

Place : HyderabadDate : 14th May 2010

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ScheduleYear ended

31st March 2010Rupees Lakhs

Year ended31st March 2009

Rupees Lakhs

1. INCOME Income from sales and other operations 113302.57 107840.91 Less: Excise Duty 9032.56 8763.35 Net Income from sales and other operations 104270.01 99077.56 Income from Property Development - 1050.00 Other Income 13 2669.53 2565.85

106939.54 102693.41 2. EXPENDITURE Cost of Materials 14 52939.33 52246.65 Other Operating Expenses 15 47021.03 44564.62 Interest Expenses 15A 2625.94 2620.41 Depreciation 1983.29 2099.14

104569.59 101530.82 3. PROFIT BEFORE EXCEPTIONAL ITEMS AND TAXATION 2369.95 1162.59

4. PROFIT FROM CONTINUING OPERATIONS BEFORE EXCEPTIONAL ITEMS AND TAXATION 3988.36 4128.57

Less: Exceptional items 16 573.23 -

Less: Taxation 16A 1009.04 1007.14

PROFIT FROM CONTINUING OPERATIONS AFTER TAXATION 2406.09 3121.43

5. LOSS FROM DISCONTINUED OPERATIONS BEFORE LOSS ON SALE OF API UNDERTAKING AND TAXATION (1618.41) (2965.98)

Less: Loss on sale of API undertaking 2047.00 -

Less: Taxation 16B 562.32 (1006.56)

LOSS FROM DISCONTINUED OPERATIONS AFTER TAXATION (4227.73) (1959.42)

6. (LOSS)/PROFIT AFTER TAXATION BEFORE MINORITY INTEREST

(1821.64) 1162.01

Share of Minority Interest (103.09) (112.13)

7. (LOSS)/PROFIT FOR THE YEAR (1924.73) 1049.88

Balance Profi t brought forward from previous year 3092.69 3804.70 Adjustment of debit balance in respect of Agro undertaking in

terms of Scheme of Arrangement (Refer note 3.2 of Sch 17) - 87.04

1167.96 4941.62

8. BALANCE AVAILABLE FOR APPROPRIATION Proposed Dividend 1338.46 1264.10

Dividend Tax 222.30 214.83

Transfer to General Reserve 500.00 370.00

Balance Carried to Balance Sheet (892.80) 3092.69

Earnings per share (Note 12)

- Basic (Rs. 2.45) Rs. 1.56

- Diluted (Rs. 2.45) Rs. 1.56

Notes on the Accounts 17

Schedules 1 to 17 annexed hereto form part of these fi nancial statements

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

Per our report attached For Deloitte Haskins & Sells For and behalf of the Board of DirectorsChartered Accountants

K. RAJASEKHAR S. SUBRAMANIAN S. PRAMANIK S. G. HINDUJAPartner

Chief Financial Offi cer & Company Secretary

Managing Director Chairman

Place : HyderabadDate : 14th May 2010

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2009-2010 2008-2009Rupees

LakhsRupees

LakhsRupees

LakhsRupees

Lakhs

(A) CASH FLOW FROM OPERATING ACTIVITIES

Net Profi t/(Loss) before tax and after exceptional Items (250.28) 1162.59

Adjustments for:

Depreciation 1983.29 2099.14

Dividend received (1.42) (1.97)

Miscellaneous Expenditure written off - 21.47

Interest income (231.03) (529.90)

Profi t on sale of Fixed Assets (Net) (2190.94) (2294.75)

Loss on sale of Active Pharma Ingredients undertaking

2047.00 -

Sale of Development Rights in Property - (1050.00)

Loss on disposal of subsidiary company 134.59 -

Loss on sale of long term investment 3.08 -

Compensation under Voluntary Retirement Scheme adjusting to Revaluation Reserve

- (703.01)

Campsite Expenses adjusted to revaluation reserve - (101.04)

Interest expenses 2856.97 3150.31

Lease Equalisation Charge - (0.33)

Unrealised (Gain)/Loss on Exchange - Net (197.29) 4404.25 2191.56 2781.48

Operating Profi t before Working Capital changes 4153.97 3944.07

Adjustments for:

Trade and other Receivables - (Increase)/Decrease 5943.27 (3393.70)

Inventories - (Increase)/Decrease 4702.45 (6080.97)

Trade Payables - Increase/(Decrease) (3313.42) 5152.53

7332.30 (4322.14)

Cash generated from/(used in) Operations 11486.27 (378.07)

Direct Taxes paid (net of refunds) (838.38) (853.32)

NET CASH FROM / (USED IN) OPERATING ACTIVITIES

10647.89 (1231.39)

(B) CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (1259.18) (6815.60)

Sale of Fixed Assets (including land) 2433.42 2435.16

Sale of Development Rights in Property - 1050.00

Proceeds from sale of Active Pharma Ingredients undertaking

2200.00 -

Sale proceeds on disposal of investment in subsidiary 50.00 -

Sale of Investment- Long term 6.85 -

Interest Received 343.63 529.90

Dividend Received 1.42 1.97

NET CASH FROM/(USED IN) INVESTING ACTIVITIES

3776.14 (2798.57)

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

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

2009-2010 2008-2009Rupees

LakhsRupees

LakhsRupees

LakhsRupees

Lakhs

(C) CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from borrowings 30393.63 16154.56

Proceeds from Fixed Deposits (158.95) (131.23)

Repayment of borrowing (38903.14) (4478.95)

Loans from Companies 11506.39 4741.66

Repayment of Loans to Companies (13252.79) (2594.32)

Interest paid (2788.64) (3197.96)

Dividend paid (1254.25) (1097.81)

Dividend tax paid (214.83) (189.56)

NET CASH (USED IN)/ FROM FINANCING ACTIVITIES

(14672.58) 9206.39

Net increase/(decrease) in cash and cash equivalents (248.55) 5176.43

Cash and Cash Equivalents as at the commencement of the year- Cash and Bank Balances

10144.74 4968.31

Cash and Bank balance on disposal of subsidiary (421.94) -

9722.80 4968.31

Cash and Cash Equivalents as at the end of the year -Cash and Bank Balances * 9474.25 10144.74

* includes Rs.79.94 Lakhs (31.03.2009 Rs. 51.04 Lakhs) being the deposit made under Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975

Per our report attached

For Deloitte Haskins & Sells For and behalf of the Board of Directors

Chartered Accountants

K. RAJASEKHAR S. SUBRAMANIAN S. PRAMANIK S. G. HINDUJA

Partner

Chief Financial Offi cer & Company Secretary

Managing Director Chairman

Place : HyderabadDate : 14th May 2010

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As at31st March 2010

Rupees Lakhs

As at31st March 2009

Rupees Lakhs

1. SHARE CAPITAL

AUTHORISED

12,50,00,000 Equity shares of Rs.2 each 2500.00 2500.00

ISSUED AND SUBSCRIBED

7,43,58,735 Equity shares of Rs.2 each fully paid 1487.17 1487.17

Of the above

(a) 4,65,025 shares represent 93,005 shares after sub-division of shares from Rs.10 to Rs.2 each are allotted as fully paid pursuant to a contract without payment being received in cash

(b) 2,60,75,125 shares represent 52,15,025 shares after sub-division of shares from Rs.10 to Rs.2 each are allotted as fully paid up bonus shares by capitalisation of Reserves.

(c) Pursuant to the merger scheme as approved by Board for Industrial and Financial Reconstruction, 15,18,735 shares represent 3,03,747 shares after sub-division of shares from Rs.10 to Rs.2 each, allotted effective 31st March, 1999 to the shareholders of erstwhile IDL Salzbau (India) Limited.

(d) 2,93,50,000 represent 58,70,000 after sub-division of shares from Rs.10 to Rs.2 each allotted effective 1st January, 2002, consequent to the amalgamation of erstwhile Gulf Oil India Limited, to the shareholders of erstwhile Gulf Oil India Limited

2. RESERVES AND SURPLUS

CAPITAL RESERVE ON CONSOLIDATION 0.03 0.03

RESERVE ON CONSOLIDATION (Refer Note 3 of Schedule 17)

10358.07 10358.07

Less: transfer to General Reserve on sale of Investment in Subsidiary (Refer note 15(a) of Schedule 17)

8365.02 -

Less: transfer to provision for doubtful advance (Schedule 10)

1137.09 855.96 - 10358.07

CAPITAL RESERVE 0.75 8.25

SECURITIES PREMIUM ACCOUNT 4852.45 4852.45

EXPORT ALLOWANCE RESERVE 10.50 10.50

REVALUATION RESERVE

Per last Balance Sheet 18429.06 183896.69

Less: Adjustment on reassesment of revaluation (Refer Note 19 of Schedule 17)

- 140096.87

Less: Withdrawal from Revaluation Reserve (Refer Note 19 of Schedule 17)

1950.87 16478.19

-

43799.82

Less: Debit balance in the Profi t & Loss accounts of Agro undertaking in terms of the Scheme of arrangement

(Refer Note 3.2 of Schedule 17)-

16478.19 87.04

43712.78

Less: Adjustments as detailed in note 3.4 of Schedule 17 - 16478.19 25283.72 18429.06

SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As at31st March 2010

Rupees Lakhs

As at31st March 2009

Rupees Lakhs

2. RESERVES AND SURPLUS (CONTD.)

GENERAL RESERVE

At commencement of the year 10644.48 10339.52

Add: Transfer from Profi t and Loss Account 500.00 370.00

Add: Transfer from Reserve on consolidation on disposal of subsidiary

8365.02 -

(Refer note 15(a) of Schedule 17)

Less: Adjustment on account of exchange difference capitalised

- 19509.50 65.04 10644.48

FOREIGN CURRENCY TRANSACTION RESERVE 84.62 (4.97)

PROFIT AND LOSS ACCOUNT (892.80) 3092.69

40899.20 47390.56

3. SECURED LOANS

A. From Banks

(i) Cash Credit (includes Working Capital Demand Loan) 6926.88 6994.57

(ii) Bank Overdraft 80.92 39.02

(iii) Foreign Currency Working Capital Loan [USD 2.25 million (31.03.2009 USD 2.25 million)]

1015.65 1141.20

(iv) Term Loans

(a) State Bank of India 769.14 1478.36

(b) State Bank of Hyderabad 4754.49 2865.03

(c) Oriental Bank of Commerce 35.58 124.49

(d) ABN Amro Bank 215.46 815.93

(e) Andhra Bank 103.63 187.64

(f) Kotak Mahindra Bank Limited 264.27 366.25

(g) Southeast Bank Limited 61.74 35.20

(h) State Bank of Mauritius Limited 1960.00 -

B. From Others

SREI Infrastructure Finance Limited 404.12 781.80

Hinduja Ventures Limited 625.29 2367.36

17217.17 17196.85

4. UNSECURED LOANS

Fixed Deposits [ See note 7(f) of Schedule 17] 510.69 140.83

Deferred Hire Purchase Credits 429.66 304.81

ICICI Bank Limited - 283.73

Short Term Loan from IDBI Bank Limited 2000.00 1550.00

SREI Infrastructure Finance Limited 104.48 152.20

Buyers credit - Long term - 675.04

- Short term 10306.94 20510.06

Dealers’ deposits 76.45 78.70

Inter Corporate Loans - Short term 37.47 72.54

13465.69 23767.91

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SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

5. FIXED ASSETS Rupees Lakhs

Gross Block Depreciation Net Book Value

31.03.2009 Adjustment on Revaluation

Additions Deductions Impairment Currency Realignment

31.03.2010 31.03.2009 For the year

On Deduction

Impairment Currency Realignment

31.03.2010 31.03.2010 31.03.2009

Assets on Own Use:

Land-Freehold 47550.02 – – 2070.15 – – 45479.87 – – – – – – 45479.87 47550.02

Land-Leasehold 530.07 – – – – (66.75) 463.32 28.28 2.60 – – (3.10) 27.78 435.54 501.79

Buildings 4469.42 – 4.92 1145.36 – (112.44) 3216.54 1171.50 127.63 103.87 – (14.76) 1180.50 2036.04 3297.92

Leasehold Improvements 6.80 – – – – 6.80 6.80 – – – – 6.80 – –

Plant & Machinery Equipments etc.

23622.88 – 1231.10 4258.83 – (117.68) 20477.47 10185.61 1635.57 1105.25 – (33.72) 10682.21 9795.26 13437.27

Furniture, Fixtures & Offi ce appliances

1732.29 – 79.89 70.55 – (18.28) 1723.35 953.44 140.44 21.92 – (11.18) 1060.78 662.57 778.85

Vehicles 822.65 – 154.86 57.75 – (8.67) 911.09 445.70 74.28 23.53 – (4.39) 492.06 419.03 376.95

Technical Knowhow 144.08 – 0.67 – (1.36) 143.39 141.41 0.57 – – (0.37) 141.61 1.78 2.67

Live Stock 7.62 – 7.62 – – – – – – – – – – 7.62

78885.83 – 1471.44 7610.26 – (325.18) 72421.83 12932.74 1981.09 1254.57 – (67.52) 13591.74 58830.09 65953.09

Assets given on Lease

Vehicles 14.68 – – – – (1.06) 13.62 4.98 2.07 – – (0.22) 6.83 6.79 9.70

Furniture & Fixtures 33.60 – – – – – 33.60 32.28 0.13 – – – 32.41 1.19 1.32

48.28 – – – – (1.06) 47.22 37.26 2.20 – – (0.22) 39.24 7.98 11.02

78934.11 – 1471.44 7610.26 – (326.24) 72469.05 12970.00 1983.29 1254.57 – (67.74) 13630.98 58838.07 –

31-03-2009 212364.43 140096.87 6843.29 282.53 516.63 622.42 78934.11 11370.88 2099.14 142.14 464.67 106.79 12970.00 – 65964.11

Notes:-

(1) Assets costing Rs. 948.57 lakhs (previous year Rs.300.36 lakhs) have been acquired on hire purchase, the legal ownership of which will be transferred to the Company after the fi nal payment. (Refer Note 14 (b) of Schedule 17)

(2) Additions to Plant & Machinery include Rs. 52.24 Lakhs (previous year Rs. 105.15 Lakhs) being difference in foreign exchange loan obtained for acquisition of fi xed assets. (Refer Note 11 (b) of Schedule 17)

(3) Deduction under land includes Rs. 1950.87 Lakhs withdrawn from Revaluation Reserve. (Refer Note 19 of Schedule 17)

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SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As at31st March 2010

Rupees Lakhs

As at31st March 2009

Rupees Lakhs

6. INVESTMENTS

At cost, unless otherwise stated

LONG TERM

QUOTED

OTHERS

Ashok Leyland Limited 1,00,000 Equity Shares of Re.1 each

24.23 24.23

Hinduja TMT Limited 96 Equity Shares of Rs. 10 each

0.06 0.06

Jammu & Kashmir Bank Ltd. 2,400 Equity Shares of Rs.10 each

0.91 0.91

IndusInd Bank Limited 400 (31.03.2009 15,023 shares) Equity Shares of

Rs. 10 each fully paid

0.18 7.11

UNQUOTED

OTHERS

500 Shares of Rs.10 each in IDL Chemicals Employees’ Co-operative Credit Society Limited, Hyderabad

0.05 0.05

500 Shares of Rs.10 each in IDL Chemicals Employees’ Co-operative Credit Society Limited, Rourkela

0.05 0.05

27,978 units of Rs.10 each in UTI Bond Fund of Unit Trust of India

2.97 2.97

Pachora Peoples Co-operative Bank Limited 2 shares of Rs.100 each

- -

APDL Estate Limited (formerly IDL Arom International Limited)

Preference Shares of Rs. 100 each 2362.00 2362.00 Less: Diminution in value (Refer note 3.4 of

Schedule 17)2362.00 - 2362.00 -

Gulf Ashley Motors Limited 1,14,000 Equity Shares of Rs.100 each

114.00 114.00

Patancheru Enviro-Tech Limited 58,460 Equity Shares of Rs. 10 each

- 3.00

142.45 152.38

Notes:

1. Aggregate Carrying cost of quoted investments 25.38 32.31

2. Aggregate Market Value of quoted investments 56.24 30.47

3. Aggregate cost of unquoted investments 117.07 120.07

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SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As at31st March 2010

Rupees Lakhs

As at31st March 2009

Rupees Lakhs

7. INVENTORIES

(At lower of cost and net realisable value)

Land / Building for Property development, at cost 25.63 117.91

Contract Work-in-progress - 382.17

Stores & Spares 524.88 534.55

Packing Materials and Fuel 564.00 428.09

Raw Materials 7113.98 9645.52

Work-in-Process 897.00 1040.24

Finished Goods 4387.78 6159.52

13513.27 18308.00 8. SUNDRY DEBTORS - UNSECURED

(a) Debts outstanding for a period exceeding six months:

Considered good 1420.24 1941.99

Considered doubtful 3731.77 4060.55

(b) Other Debts :

Considered good 11457.03 16312.42

16609.04 22314.96

Less : Provision for doubtful debts 3731.77 4060.55

12877.27 18254.41 9. CASH AND BANK BALANCES

Cash / Cheques on hand # 1283.00 416.18

With Scheduled Banks :

Current Account 1814.40 2775.75

Fixed Deposits/Margin account * 6376.85 6952.81

9474.25 10144.74

# includes cheques on hand Rs. 1254.40 lakhs (31.03.2009 Rs. 389.82 lakhs)

* includes Rs. 79.94 Lakhs (Previous year : Rs. 51.04 Lakhs) being the deposit made under Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975

10. LOANS AND ADVANCES

(Unsecured, considered good unless otherwise specifi ed)

Advance to Companies

IDL Speciality Chemicals Limited (formerly IDL Agro chemicals Limited)

1137.09

Less: Provision for doubtful advances (refer note 15(a) of Schedule 17)

1137.09 - -

Advance Tax (net of Provisions) 560.03 316.04

Advances recoverable in cash or in kind or for value to be received:

Considered good 4512.85 5543.29

Considered doubtful 176.84 86.84

4689.69 5630.13

Less : Provision for doubtful advances 176.84 4512.85 86.84 5543.29

Balance with Excise Authorities 1480.39 2233.29

6553.27 8092.62

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SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As at31st March 2010

Rupees Lakhs

As at31st March 2009

Rupees Lakhs

11. CURRENT LIABILITIES

Acceptances 404.21 3216.37

Sundry Creditors

Due to Micro and Small Enterprises - -

Others 13969.69 14199.73

Advance from Customers 1222.40 2285.20

Interest accrued but not due on Loans 104.49 34.88

Liability towards Investors Education and Protection Fund under

Section 205C of the Companies Act, 1956

Due

(i) Unpaid Dividends - 0.04

(ii) Unclaimed Matured Deposits - -

(iii) Interest accrued on (ii) above - -

Not due

(i) Unpaid Dividends 75.29 65.40

(ii) Unclaimed Matured Deposits 7.77 38.21

(iii) Interest accrued on (ii) above 0.73 2.40

15784.58 19842.23

12. PROVISIONS

Employee benefi ts - Gratuity 1400.10 1162.40

- Compensated Absences 313.54 248.61

Indirect Taxes * 8394.10 8394.10

Others * 893.55 893.55

Fringe Benefi t Tax 48.11 48.35

Proposed dividend 1338.46 1264.10

Tax on dividend 222.30 214.83

12610.16 12225.94 * Refer Note 3.4 of Schedule 17

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SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended31st March 2010

Rupees Lakhs

Year ended31st March 2009

Rupees Lakhs

13. OTHER INCOME

Dividend from Long Term Investment 1.42 1.97

Profi t on Sale of Property / Fixed Assets 2246.84 2294.75

Insurance Claims 10.57 45.88

Export Incentives (DEPB) 174.60 86.73

Provision no longer required written back - 41.00

Miscellaneous 236.10 95.52

2669.53 2565.85

14. COST OF MATERIALS

Raw Materials Consumed :

Opening Stock 9645.53 4998.38

On acquisition of subsidiary during the year - -

Add : Purchase 38715.81 47938.13

48361.34 52936.51

Less : Closing Stock 7113.98 9645.52

Less : Stock transfer to Biocon Limited 0.70 41246.66 - 43290.99

Purchase of Finished Goods 6054.56 6880.81

(Increase)/Decrease in Finished Goods, Work-in-Process and Contracts-in-progress:

Closing Stock :

Finished Goods 4387.78 6159.51

Work-in-Process 897.00 1040.24

Contracts-in-Progress - 382.17

5284.78 7581.92 Opening Stock :

Finished Goods 6159.51 4911.74

Work-in-Process 1040.24 1526.88

Contracts-in-Progress 382.17 -

7581.92 6438.62

Less: (i) Stock transfer to Biocon Limited (refer note 15(b) of Schedule 17)

77.24 -

(ii) Adjusted against Revaluation Reserve - 16.16 (Refer note 3 of Schedule 17) 7504.68 2219.90 6422.46 (1159.46)

Packing Materials Consumed 3674.32 3518.42

53195.44 52530.76

Less: Scrap realisation 211.77 208.73

52983.67 52322.03

Excise duties etc. on Increase/(Decrease) of Finished Goods (44.34) (75.38)

52939.33 52246.65

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SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended31st March 2010

Rupees Lakhs

Year ended31st March 2009

Rupees Lakhs

15. EXPENSES

Payments to and provisions for Employees :

Salaries, Wages and Bonus 7045.05 6406.97

Contribution to Provident Fund, Gratuity Fund and other Funds 1048.66 898.98

Workmen and Staff Welfare Expenses 649.68 8743.39 630.45 7936.40

Stores, Spare Parts and Loose Tools consumed 319.50 325.69

Processing Charges 1192.35 862.74

Power, Fuel and Water 815.82 880.71

Rent 1578.35 1480.22

Rates and Taxes 473.75 413.24

Expenses on Operation Contracts 15532.41 15500.99

Insurance 298.57 279.14

Advertising 2430.64 1377.67

Distribution Expenses 4253.00 3271.28

Commission on Sales 300.09 275.96

Discount on Sales 6154.56 5084.24

Repairs to Buildings 91.87 54.77

Repairs to Machinery 382.12 271.28

Travelling & Conveyance 742.24 671.19

Bank charges and other Financial charges 512.14 487.27

Directors’ Fees 21.95 17.64

Commission to non- wholetime Directors 9.84 16.70

Postage, Telephone and Telex 227.78 230.46

Legal & Professional charges 508.19 476.21

Loss on sale of fi xed assets 55.90 -

Provision for doubtful debts/advances 672.51 67.29

Bad Debts, advances etc written off 812.16 6.07

Less: Provision for doubtful debts written-back 743.15 69.01 - 6.07

Miscellaneous expenditure written off :

Deferred Revenue expenses - 18.13

Software expenditure - 3.34

Royalty 593.66 560.90

(Gain) / Loss on Exchange Fluctuation (193.59) 2978.47

Miscellaneous 1234.98 1016.62

47021.03 44564.62

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SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended31st March 2010

Rupees Lakhs

Year ended31st March 2009

Rupees Lakhs

15A. INTEREST EXPENSES

Interest

On Term Loans 1712.20 1324.96

Others 1144.77 2856.97 1825.35 3150.31

Less: Interest on deposits with banks etc. (Tax deducted at source Rs. 41.21 Lakhs; Previous year Rs. 9.34 Lakhs)

224.31 416.64

Interest on advance payment of taxes 6.72 231.03 113.26 529.90

2625.94 2620.41

16. EXCEPTIONAL ITEMS

Compensation under Voluntary Retirement Scheme 435.56 -

Loss on sale of investment in subsidiary 134.59 -

Loss on sale of Long term Investments 3.08 -

573.23 -

16A. TAXATION

Current Tax 594.15 516.23

MAT Credit - (41.00)

Deferred Tax 414.89 415.65

Fringe Benefi t Tax - 116.26

1009.04 1007.14

16B. TAXATION IN RESPECT OF DISCONTINUED OPERATIONS

Deferred Tax 562.32 (1008.13)

Fringe Benefi t Tax - 1.57

562.32 (1006.56)

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17. NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010

1 (a) The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS 21) - “Consolidated Financial Statements” notifi ed by the Companies (Accounting Standards) Rules, 2006. The Consolidated Financial Statements have been prepared under historical cost convention and in an accrual basis. The accounting policies have been consistently applied by the Company and are in consistent with those used in the previous year.

(b) The subsidiaries (which along with Gulf Oil Corporation Limited, the Parent, constitute the Group) considered in the preparation of these consolidated fi nancial statements are:

Name Country of Incorporation

Percentage of ownership interest as

at 31st March 2010

Percentage of ownership interest as

at 31st March 2009

IDL Buildware Limited India 100.00 100.00

IDL Speciality Chemicals Limited (formerly IDL Agro Chemicals Ltd.,)

India 100.00(Upto 28th March, 2010)

100.00

Gulf Carosserie India Limited India 95.00 95.00

Hinduja Infrastructure Limited India 100.00 100.00

Gulf Oil Bangladesh Limited Bangladesh 51.00 51.00

PT Gulf Oil Lubricants Indonesia Indonesia 75.00 75.00

Gulf Oil (Yantai) Co. Limited China 51.02 51.02

The fi nancial statements of all the subsidiaries considered in the Consolidated accounts are drawn upto 31st March, 2010, except for IDL Speciality Chemicals Ltd., as disclosed above.

2. ACCOUNTING POLICIES

I. FIXED ASSETS:

Fixed assets are shown at cost / revalued amount less depreciation. Cost comprises the purchase price and other attributable expenses.

II. DEPRECIATION ON FIXED ASSETS:

(i ) The Group, except Gulf Oil Bangladesh Limited and P.T.Gulf Oil Lubricants, Indonesia and Gulf Oil (Yantai) Co. Limited follows the straight line method of charging depreciation on all its fi xed assets. Depreciation has been provided in the manner and at the rates prescribed in Schedule XIV to the Companies Act, 1956 on all the assets except certain equipments which are depreciated over their estimated useful life.

In respect of Gulf Oil Bangladesh Limited, depreciation on other than leased assets has been provided using straight line method over the estimated useful lives of the assets as summarized below:

Offi ce equipment 20% Computer/Computer software 25% Vehicles 20% Furniture and Fixtures 10%

In respect of leased assets: Offi ce equipment 20% Vehicles 50% Furniture and Fixtures 20%

In respect of P.T.Gulf Oil Lubricants, Indonesia, depreciation on furniture and equipment have been computed on a straight-line method, based on the estimated useful life of the related assets, for 4 years or at the rates of 25% p.a.

In respect of Gulf Oil (Yantai) Co., Limited, depreciation of fi xed assets is calculated to write off the cost of fi xed assets less 10% residual value on a straight-line basis over their anticipated useful lives. The respective anticipated useful lives of fi xed assets are as follows:

Building 20 Years Machinery and equipment 10 years Offi ce and other equipment 5 years Motor vehicles 5 years

SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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(ii) Leasehold land is being amortized in equal installments over the lease period.

(iii) Technical Know-how is being amortized over a period of fi ve to seven years.

III. INVESTMENTS:

Current Investments are valued at lower of cost and fair value, Long Term Investments are valued at cost. Where applicable, provision is made if there is a permanent fall in valuation of Long Term Investments.

IV. INVENTORIES:

Inventories are valued at lower of cost and net realisable value. The method of arriving at cost of various categories of inventories is as below:

(a) Stores and Spares, Raw and Packing material.

First – in – First – out method / Weighted average method.

(b) Finished goods and work- in-process – Manufactured

– Traded

Weighted average cost of production, which comprises direct material costs, direct wages and appropriate overheads.

First in – First – out method / Weighted average method.

(c) Contracts-in-progress Represents expenses incurred on execution of contracts till balance sheet date

V. FOREIGN CURRENCY TRANSACTIONS:

Transactions made during the year in foreign currency are recorded at the exchange rate prevailing at the time of transaction. Assets and Liabilities related to foreign currency transactions remaining unsettled at the year end are translated at the contract rates when covered by forward cover contracts and at year-end rate in other cases. Realised gains and losses on foreign exchange transactions other than those relating to fi xed assets are recognised in the profi t and loss account except gain/loss on transaction of long term liabilities incurred to acquire fi xed assets is treated as an adjustment to the carrying cost of fi xed assets.

Exchange differences arising on account of the assets or liabilities and income or expenditure of non-integral foreign operations are recorded in foreign currency translation reserve.

VI. REVENUE RECOGNITION:

(a) Sale of goods is recognised at the point of dispatch of fi nished goods to customers. Sales include amount recovered towards excise duty but exclude sales tax. Export incentive under the Duty Entitlement Pass Book scheme has been recognized on the basis of credits afforded in the passbook.

(b) Income from services is recognised at the time of rendering the services.

(c) Dividend income from investment is recognised when the owner’s right to receive payment is established.

(d) Income from property development is recognised as soon as the contract is entered with the party and the consideration is received.

(e) Contract revenue is recognised on percentage completion method as required under revised Accounting Standard -7 - Construction Contracts. The stage of completion is determined as a proportion that contract costs been to the estimated total costs. When it is probable that any stage of the contract that the total cost will exceed the total contract revenue, the expected loss is recognised immediately.

VII. RESEARCH AND DEVELOPMENT EXPENSES:

Research and Development expenditure of revenue nature is written off in the year in which it is incurred and expenditure of a capital nature is added to fi xed assets.

VIII. EMPLOYEE RETIREMENT BENEFITS:

Retirement benefi ts to employees are provided for by means of gratuity, superannuation and provident fund.

The gratuity liability is determined based on the actuarial valuation as at the year end.

Payments in respect of superannuation are made to the fund administered by LIC.

Provision in respect of compensated absences is made based on actuarial valuation as at year end.

Contribution to Provident fund is based on defi ned contribution and expensed as incurred.

SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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IX. TAXES ON INCOME: Current tax is determined as the amount of tax payable in respect of taxable income for the year.

Deferred tax is recognised subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or subsequent periods.

X. SEGMENT REPORTING:

The accounting policy adopted for Segment Reporting is in line with the accounting policy of the group with the following additional policy for Segment Reporting:-

Revenue and expenses have been identifi ed to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to the segments on a reasonable basis, have been included under “Unallocated Expenses”. Inter Segment transfers are at cost.

3. Demerger of Speciality Chemicals Division of the Parent Company and merger of Agro Division of IDL Speciality Chemicals Limited with the Parent Company (“the Scheme”) in 2008-09.

3.1 Pursuant to a Scheme of Arrangement between the Parent Company and its Subsidiary IDL Speciality Chemicals Limited (IDL SC) and their respective shareholders, which was sanctioned by the Honourable High Court of Andhra Pradesh by its Order dated 24th March, 2009, the assets and liabilities of the Speciality Chemicals Division of the Parent Company were transferred to and vested with IDL SC with effect from 1st April 2008 and the assets and liabilities of Agro Division of IDL SC were transferred and vested with the Parent Company with effect from 1st April, 2008.

3.2 As provided in the Scheme, the debit balance of Rs.87.04 Lakhs in the Profi t & Loss Account as at 1st April, 2008 of Agro Division of IDL SC has been adjusted against the Revaluation Reserve of the Parent Company.

3.3 (a) Pursuant to the Scheme, 97,60,000 equity shares of Rs. 10/- each of IDL SC are to be issued to the Parent Company towards Rs. 6374.14 Lakhs, representing the excess of assets over liabilities of the Speciality Chemicals Division (Subsidiary) transferred to IDL SC. The shares were issued during the year.

(b) In accordance with the Scheme, the Parent Company was required to discharge the obligations of IDL SC and IDL SC in turn would re-imburse the Parent Company. Accordingly, the liabilities of IDL SC discharged/ to be discharged by the Parent Company aggregating to Rs. 2699.59 Lakhs were included as part of Loans and Advances (Schedule 10). Such liability was discharged during the year.

3.4 The Board of Directors of the Parent Company have, in pursuance of the scheme restated and / or revised certain assets and liabilities including intangibles as at 31st March 2009 and the net effect thereof has been adjusted against Revaluation reserve as detailed below:-

Adjustments to Revaluation Reserve Rs. Lakhs

Receivables which are subject matter of dispute 1679.12

Write down of Inventories taken over from IDL SC 16.16

Miscellaneous Expenditure 1475.45

Obsolete Fixed Assets 84.21

Doubtful Advances 3577.58

Diminution in value of long term investment 9163.55

Provision for Indirect Taxes 8394.10

Others 893.55

Total 25283.72

3.5 The adjustment to Revaluation Reserve of (a) the debit balance in the profi t and loss account of IDL SC as at 1st April 2008, amounting to Rs.87.04 Lakhs (refer Note 3.2 above) and (b) the effect of valuation / restatement / revision of certain assets and liabilities of the Parent Company is Rs. 25283.72 Lakhs (refer note 3.4 above) which was in pursuance of the Scheme approved by the Hon’ble High Court of Andhra Pradesh, at Hyderabad in the previous year.

3.6 The excess of the net asset value over carrying cost of investment in the subsidiary companies viz., IDL Buildware Ltd., and Gulf Oil Carosserie India Ltd., amounting to Rs. 850.67 Lakhs and Rs. 5.29 Lakhs respectively has been treated as Reserve on Consolidation.

SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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4. MANAGERIAL REMUNERATION2009-10 2008-09

Rs. Lakhs Rs. LakhsSalaries 56.63 42.49Commission 9.84 16.70Contribution to Provident Fund and Superannuation Fund 9.56 7.17Benefi ts 3.47 2.86Commission to non-whole time Directors 9.84 16.70

89.34 85.92 Note:

Having regard to the fact that there is a global contribution to Gratuity Fund, the amount applicable to an individual employee is not ascertainable and accordingly, contribution to Gratuity Fund has not been considered in the above computation.

5. CONTINGENT LIABILITIESAs at As at

31st March 2010 31st March 2009Rs. Lakhs Rs. Lakhs

(a) Corporate Guarantees * 397.80 441.00(b) Bills Discounted - 330.74(c) Claims against the Company not acknowledged as debts

(i) Income Tax Demands 923.10 875.31(ii) Wealth Tax 51.97 -(iii) Sales Tax Demands 2119.85 90.34(iv) Excise Demands 1305.65 20.66(v) Service Tax 4.49 4.49(vi) Additional Demands towards cost of land 3.81 3.81(vii) Claims of workmen/ex-employees 75.50 83.99(viii) Other Matters 190.39 182.76(ix) Performance and Other Guarantees 178.02 171.72

(d) In terms of the agreement between IDL Speciality Chemicals Limited, Biocon Limited, and the Parent Company for the sale of Active Pharma Ingredients (API) business to Biocon Limited, the Parent Company would be responsible for guaranteeing to Biocon Limited claims upto a period of one year after the closing date i.e., 30th November, 2009 to the extent of purchase price of Rs. 2200 Lakhs. As at 31st March, 2010 the Parent Company has not received any such claims.

* The Parent Company has given Corporate Guarantee of 60 Million Taka to South East Bank Limited on behalf of Gulf Oil Bangladesh Limited. The amount outstanding as on 31st March 2010 is 21.51 Million Taka (31st March 2009, 10.09 Million Taka)

6. CAPITAL COMMITMENTS

2009-10Rs. Lakhs

2008-09Rs. Lakhs

Estimated amount of contracts remaining to beexecuted on capital account

29.57 42.21

7. SECURED LOANS:

(a) Cash Credit facilities including foreign currency demand loan from Bank of Bahrain & Kuwait B.S.C and working capital & corporate loan from consortium banks is secured by (i) hypothecation of all current assets of the Parent Company including raw materials, fi nished goods, stocks-in-process, stores and spares (not relating to plant & machinery) and present and future book debts of the Parent Company ranking pari-passu and collateral security by (i) fi rst pari-passu charge by way of equitable mortgage on land owned by the Parent Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari-passu charge on manufacturing buildings, plant and machinery charged to term lenders.

SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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(b) (i) Term loan for Capital Expenditure from State Bank of India is secured by fi rst charge on the fi xed assets created out of the loan, ranking pari-passu with other term lenders and collateral security by (i) fi rst pari-passu charge by way of equitable mortgage on land owned by the Parent Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad (ii) second pari-passu charge on manufacturing buildings, plant and machinery charged to other term lenders.

(ii) Term Loan for Overseas Investment from State Bank of India is secured by collateral security (i) pari-passu fi rst charge by way of equitable mortgage on land owned by the Parent Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad and second pari passu charge on manufacturing buildings, plant and machinery charged to the other term lenders.

(c) (i) Term loan for Capital Expenditure from State Bank of Hyderabad is secured by fi rst charge on the fi xed assets created out of the loan, ranking pari-passu with other term lenders and collateral security by (i) fi rst pari-passu charge by way of equitable mortgage on land owned by the Parent Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari-passu charge on manufacturing buildings, plant and machinery charged to other term lenders.

(ii) Term Loan for Overseas Investment from State Bank of Hyderabad is secured by collateral security (i) pari-passu fi rst charge by way of equitable mortgage on land owned by the Parent Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad and (ii) second pari-passu charge on manufacturing buildings, plant and machinery charged to other term lenders.

(d) The Term loan for Capital Expenditure from Oriental Bank of Commerce is secured by fi rst charge on the fi xed assets created out of the term loan ranking pari-passu with other term lenders and collateral security by (i) fi rst pari-passu charge by way of equitable mortgage on land owned by the Parent Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad (ii) second pari-passu charge on manufacturing buildings, plant and machinery charged to other term lenders.

(e) The Term loan for Capital Expenditure from Andhra Bank is secured by fi rst charge on the fi xed assets created out of the loan, ranking pari-passu with other term lenders and collateral security by (i) fi rst pari passu charge by way of Equitable Mortgage on land owned by the Company admeasuring acres 115.25 situated at Kukatpally, Hyderabad, (ii) second pari passu charge on manufacturing buildings, plant and machinery charged to the other term lenders.

(f) Fixed Deposits to the extent of Rs. 375.86 Lakhs were secured by a residual charge on all tangible movable property and fi xed assets including all movable machinery and plant & machinery, spares and stores, tools and accessories and other movables both present and future as approved by the Controller of Capital Issues vide his letter dated 1st November,1980.

(g) Term Loans from ABN Amro Bank NV, SREI Infrastructure Finance Limited, Kotak Mahindra Bank Limited are secured by way of fi rst charge on specifi c mining equipment of the Parent Company.

(h) Loan received from Hinduja Ventures Limited is secured by an exclusive charge on the Parent Company’s land at Yelahanka, Bengaluru.

(i) The short term loan taken by Gulf Oil Bangladesh Limited represents the letter of trust facility received from Southeast Bank Limited against the following securities:

(i) Primary Security:

Hypothecation of imported goods and stocks of fi nished lube oil/grease/related products.

(ii) Collateral Security:

First charge on fi xed and fl oating assets of the company

Lien on duly discharged fi xed deposit receipt of Rs. 110.97 Lakhs

(iii) Additional Comfort:

Insurance coverage on stock for fi re, fl ood, theft and pilferage

8. FIXED ASSETS

Buildings include:

(i) Rs.7.09 Lakhs, which represents the cost of ownership fl ats Rs.7.08 Lakhs and Rs.0.01 Lakhs being the value of Share money in Sett Minar Co-operative Housing Society Limited.

(ii) Rs.4.70 Lakhs, which, represents the cost of ownership fl ats Rs. 4.43 Lakhs and Rs.0.27 Lakhs being the value of 270 ordinary shares of Rs.100 each, fully paid up in Shree Nirmal Commercial Limited.

SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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9. TAXATION

(i) Deferred Tax: Rs. Lakhs

31st March 2010 31st March 2009

(a) Deferred tax assets arising on account of timing differences: Unabsorbed business loss/depreciation 55.89 1629.43 Provision for doubtful debts/advances 690.11 796.91 Other timing differences 576.70 468.94

1322.70 2895.08(b) Deferred tax liabilities arising on account of timing differences: Depreciation 1116.05 1720.73 Other timing differences (4.92) (14.43)

1111.13 1706.30 Deferred tax asset (Net) 211.57 1188.78

(ii) Management has been advised that Rs.1973.25 Lakhs received against advances adjusted to Revaluation Reserve in the previous year, is not required to be considered in computing Minimum Alternate Tax (MAT).

(iii) By way of abundant caution, no deferred tax asset has been created in respect of the adjustments made to Revaluation Reserve as detailed in note 3 of Schedule 17

(iv) In view of losses incurred by IDL Buildware Limited one of the subsidiaries and no taxable income in the current year, the aforesaid Company has not recorded the deferred tax liability as at 31st March 2009 arising on account of timing differences as stipulated in Accounting Standard-22 “Accounting for Taxes on Income”. Deferred tax liability/asset shall be provided in the books in the year the aforesaid Company starts making profi ts and is liable to tax.

10. MISCELLANEOUS:

a) Loans and Advances of IDL Buildware Limited one of the subsidiaries include Rs. 30.79 Lakhs (previous year Rs. 31.12 Lakhs) due from certain parties, which are outstanding from earlier years. The aforesaid Company is hopeful of recovering the dues in full and no provision has been considered necessary for this amount.

b) The net exchange gain / (loss), (i.e., difference between the spot rate on the dates of the transactions and the actual rate at which the transactions are settled/appropriate rates applicable at the year end) credited to Profi t & Loss Account is Rs. 193.59 Lakhs (Previous year exchange loss of Rs. 2978.47 Lakhs).

c) Exchange difference in respect of forward exchange contracts to be recognised in the Profi t and Loss Account in the subsequent accounting period is Rs. 35.39 Lakhs (credit) (Previous year Rs. 3.59 Lakhs (loss) ).

d) Gulf Carosserie India Limited one of the subsidiaries had entered into collaboration agreement with SIPAL, Arexons Spa, Italy, in terms of which it was agreed by the said collaborator to subscribe to 20% of the Capital of the Company for which a sum of Rs.10,00,000 had been received as share application money pending the fi nal approval of the Reserve Bank of India. As the fi nal approval of the Reserve Bank of India has not been forthcoming, the Company has decided to repay/remit the said amount with required approvals and till that time to consider the said share application money as current liability.

e) The fi nancial statements of IDL Buildware Ltd., one of the subsidiaries have been prepared on a going concern basis notwithstanding substantial erosion in the networth of the Company.

11. REVENUE RECOGNITION(a) Disclosures required to be made under the Accounting Standard (AS-7) Construction Contracts

Rs. Lakhs

2009-10 2008-09Contract revenue recognized as revenue during the year 870.86 NilAggregate amount of contract costs incurred in respect of on going contracts net of recognized profi ts (less recognized losses) up to 31st March 2010 1174.67 382.17Advance payments received (net of recoveries from progressive bills) 572.22 581.11Retention Amount 76.74 NilGross amount due from customers for contract work 447.10 NilFor the Method used to determine the contract revenue and the stage of completion of contract in progress, Refer Note: 2 (vi) (e) above - -

SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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(b) In the previous year pursuant to the notifi cation GSR 225(E) issued by Ministry of Corporate Affairs relating to Accounting Standard 11 “Effect of changes in Foreign Exchange Rates”, the Parent Company has exercised the option to capitalize exchange differences on translation of long term foreign currency monetary items on depreciable capital assets. Accordingly, the foreign exchange difference of Rs. 52.24 Lakhs (31.03.2009 Rs.105.15 Lakhs including foreign exchange gain of Rs. 65.04 Lakhs relating to the earlier year and adjusted to General Reserve as on 1st April, 2008) on translation of long term foreign currency monetary items relating to acquisition of fi xed assets has been capitalized and depreciated over the remaining useful life of the fi xed assets.

12. EARNINGS PER SHARE

Year ended31st March, 2010

Year ended31st March, 2009

a. Profi t / (Loss) for the year (Rs. Lakhs) (1924.73) 1049.88b. Weighted average number of Equity shares outstanding

during the year74358735 74358735

c. Weighted Average number of equity shares in computing diluted earnings per share

74358735 74358735

d. Face value of each Equity Share (Rs.) 2.00 2.00e. Earnings per Share - Basic (Rs.) - Diluted (Rs.)

(2.45)(2.45)

1.561.56

13. RELATED PARTY DISCLOSURES:

a) Information relating to Related Party Transactions as per “Accounting Standard 18” notifi ed by Companies (Accounting Standards) Rules, 2006.

Name of the Related Party RelationshipGulf Oil International (Mauritius) Inc. Entity holding more than 20% shareholding in the Company Mr. S. Pramanik, Managing Director Key Management Personnel

b) Details of transactions between the Company and Related Parties and the status of outstanding balance at the year end :

Rs. Lakhs

Particulars Entity holding more than 20% of the shareholding in the

company

Key Management Personnel

2009-10 2008-09 2009-10 2008-09RoyaltyGulf Oil International (Mauritius) Inc. 498.91 467.26 - -

Dividend paidGulf Oil International (Mauritius) Inc. 619.83 510.07 - -

Mr. S. Pramanik - - 0.06 0.05

Directors' Remuneration - - 79.50 69.22

Outstanding Balances :PayablesGulf Oil International (Mauritius) inc. 424.07 397.17 - -

14. DISCLOSURE AS REQUIRED BY ACCOUNTING STANDARD 19, “LEASES” NOTIFIED BY THE COMPANIES (ACCOUNTING STANDARDS) RULES, 2006 ARE GIVEN BELOW:

a) Operating Lease:

(i) Where the Company is a Lessee:

The Parent Company’s signifi cant leasing arrangements are in respect of operating leases for premises (residences, offi ce, storage godowns for fi nished goods etc.). The leasing arrangements, which are not non-cancellable range generally between 11 months to 5 years and are usually renewable by mutual consent on agreed terms. The aggregate lease rents payable are charged as rent in the Profi t and Loss Account.

SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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The Parent Company has taken certain Plant and Machinery under non-cancellable leases. Rs. Lakhs

31st March 2010 31st March 2009

Total

Payments not later than one

year

Payments later than one year but not

later than fi ve years

Total

Payments not later than one

year

Payments later than one year but not

later than fi ve years

Total of future minimum payments at the balance sheet date 3056.01 1225.53 1830.48 4211.43 1225.82 2985.61

Lease Rent on the aforesaid Plant and Machinery amounting to Rs. 1229.53 Lakhs. (Previous year Rs.1195.29 Lakhs) has been charged to Profi t and Loss Account under rent.

(ii) Where the Parent Company is Lessor:

Details in respect of assets given on operating lease: Rs. Lakhs

Gross BlockAccumulated

Depreciation as onDepreciation for the year

31st March 2010

31st March 2009

31st March 2010

31st March 2009

2009-10 2008-09

Building 71.09 71.09 7.14 5.86 1.28 1.28

Plant & Machinery 80.32 80.32 54.46 50.64 3.82 3.82

The assets given on lease are not non-cancellable and range between 11 months to 5 years generally and are usually renewable by mutual consent, on mutually agreeable terms. The aggregate lease rentals are recognised as income from property in the Profi t & Loss account.

Initial direct costs are recognised as an expense in the year in which these are incurred.

b) Hire Purchase:

(i) The Company has taken plant and machinery, motor vehicles under hire purchase arrangements for which the ownership will be transferred to the Company at the end of the hire purchase term.

(ii) Reconciliation between the total of minimum hire purchase payments at the balance sheet date and the present value:

Rs. Lakhs

31st March 2010 31st March 2009

Total Payments not later than one

year

Payments later than one year but not

later than fi ve years

Total Payments not later than one

year

Payments later than one year but not

later than five years

Total of minimum hire purchase payments at the balance sheet date 477.36 262.67 214.69 339.24 217.51 121.73

Less: Future Finance Charges 47.70 33.66 14.04 34.43 23.91 10.52

Present value of minimum hire purchase payments at the balance sheet date 429.66 229.01 200.65 304.81 193.60 111.21

SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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15. (a) As stated in note 3 of Schedule 17, in 2008-09 in pursuance of Scheme of Arrangement sanctioned by the Honourable High Court of Andhra Pradesh, the diminution in value of investment in IDL Speciality Chemicals Ltd (IDL SC) amounting to Rs.6398.14 Lakhs and advance given to IDL SC amounting to Rs. 3103.97 Lakhs was adjusted to Revaluation Reserve in the fi nancial statements of the Parent Company (refer note 3.4 of Schedule17). However in the consolidated fi nancial statements for the year 31st March, 2009 the said adjustments were refl ected as “Reserve on Consolidation” (refer Schedule 2). During the year an amount of Rs. 1966.88 Lakhs has been realized against the aforesaid advance.

On 29th March 2010, the Parent Company sold entire investment in IDL SC. Accordingly Rs. 9502.11 Lakhs has been withdrawn from Reserve on Consolidation. The cost of investment in IDL SC and the advances realised aggregating to Rs. 8365.02 has been transferred to General Reserve being the excess of net asset value over carrying cost of investment and the unrealized advance amounting to Rs. 1137.09 Lakhs has been adjusted against advance given to IDL SC (refer Schedule 10).

The loss on disposal of investment in IDL SC amounting to Rs. 134.59 Lakhs being the difference between the proceeds from disposal of investment in IDL SC and the carrying amount of its assets over liabilities as on date of disposal, has been recognised in the Profi t and Loss account and does not include the amount of Rs. 9502.11 Lakhs adjusted to Revaluation Reserve.

(b) Effective 30th November, 2009, IDL Speciality Chemicals Limited, one of the subsidiaries, sold its Active Pharmaceuticals Ingredients (API) business including fi xed assets, current assets and current liabilities to Biocon Limited (Biocon) on a going concern slump sale basis for a consideration of Rs. 2200.00 Lakhs. In terms of the agreement in addition to the aforesaid consideration Biocon would pay the amount realised out of current assets after adjusting for the current liabilities within the agreed period. The Company has incurred a loss of Rs.2047.00 lakhs on selling the API Undertaking.

(c) Disclosures as required under Accounting Standard 24 “Discontinuing Operations” are given as under:

(i) revenue, expenses, pre-tax profi t/(Loss) and Income tax expenses attributable to Continuing and Discontinued Operations :

Rs. Lakhs

Particulars

Continuing Operations

Discontinued Operations in

respect of IDL SCTotal

2010 2009 2010 2009 2010 2009

Total Income 106636.81 99914.47 302.73 2778.94 106939.54 102693.41

Less : Operating Expenses 100679.52 93382.71 1837.36 5527.70 102516.88 98910.41

Loss on sale of API undertaking - - 2047.00 - 2047.00 -

Pre-tax profi t from operating activities 5957.29 6531.76 (3581.63) (2748.76) 2375.66 3783.00

Less: Interest expense 2542.16 2403.19 83.78 217.22 2625.94 2620.41

Profi t /(Loss) before Tax 3415.13 4128.57 (3665.41) (2965.98) (250.28) 1162.59

Less : Taxation 1009.04 1007.14 562.32 (1006.56) 1571.36 0.58

Profi t /(loss) from operating activities 2406.09 3121.43 (4227.73) (1959.42) (1821.64) 1162.01

SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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ii) Cash fl ow attributable to Discontinued Operations i.e. IDL SCRs. Lakhs

Particulars

Discontinued Operations

2010 2009

Cash used in Operating activities (125.81) (3807.55)

Cash from/(used in) Investing Activities 2184.19 (5277.51)

Cash (used in)/from Finance Activities (1969.97) 9418.20

16. The Honourable Supreme Court vide its order dated 16.11.2007, held that the stock transfers constituted inter sale in respect of 10 years assessment year viz. 1976-77 to 1983-84, 1989-90 & 1990-91 and also directed the authorities to examine the factual aspects and assess tax on the supplies made by the Parent Company to the subsidiaries of Coal India Limited as inter state sale.

The Parent Company had fi led writ petitions in the High Court of Orissa in August 2009 impleading other State Governments, CIL and its subsidiary companies seeking directions for issue of C forms and transfer of local sales tax to the State of Orissa. The Parent Company has been directed by the Honourable High Court of Orissa to approach the appropriate forum for redressal.

The Parent Company has been legally advised that as per the settled cases, the Parent Company is entitled for concessional sales tax rates as per Central Sales Tax and interest should be charged from recomputation order. However, necessary provision has been made and is included as Provision – Indirect Taxes and no further liability is expected on this account.

17. INCOME FROM PROPERTY DEVELOPMENT:

The Parent Company in an earlier year entered into “Option for Development Rights” with Hinduja Reality Ventures Ltd., (HRVL), wherein HRVL has only the right to decide whether or not to exercise the option to acquire the development rights in respect of certain properties of the Company located at Hyderabad and Bengaluru. The offer of grant of the development rights in respect of the Bengaluru / Hyderabad properties was extended upto 30th June, 2009 and 31st December 2009 respectively. In consideration of the Parent Company agreeing to keep such offer open, HRVL paid an amount of Rs. 1050 Lakhs in the previous year on a non refundable commitment amount, which has been included under “Income from Property Development” in the Profi t and Loss Account of fi nancial year 2008-09.

If the option for development is exercised by HRVL, Development Agreement for the respective properties would be entered with the Parent Company, wherein the Parent Company shall be entitled to share of gross sale proceeds (as determined in the agreement) realised from sale of buildings contracted on the said properties.

During the year, the option for development rights had expired and revised proposals are under consideration.

SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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18. SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH, 2010

(i) Primary Business Segment Rs. Lakhs

Explosives Consult Speciality Chemicals Building Products Lubricating Oils Others Property Unallocated Eliminations Total

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009

REVENUE

External 28739.14 25102.67 19565.12 21114.54 288.90 2767.35 20.23 57.21 55942.40 50142.65 31.47 13.00 – 1050.00 2352.28 2445.99 – – 106939.54 102693.41

Inter-segment – – – – – – – – 46.65 143.03 12.64 10.59 – – – – (59.29) (153.62) – –

Total Revenue 28739.14 25102.67 19565.12 21114.54 288.90 2767.35 20.23 57.21 55989.05 50285.68 44.11 23.59 – 1050.00 2352.28 2445.99 (59.29) (153.62) 106939.54 102693.41

RESULT

Segment result 2676.51 495.69 (1042.07) 1179.52 (3576.07) (2736.20) (182.08) (136.95) 3922.54 2697.01 (4.83) (15.43) – 1050.00 – – – – 1794.00 2533.64

Unallocated Corporate Income net of unallocated Expenses

1153.47 1247.39

Interest Expense (2856.97) (3150.31)

Interest Income 231.03 529.90

Dividend Income 1.42 1.97

Profi t before Taxation & Exceptional Items

322.95 1162.59

Exceptional Item 573.23 –

Net Profi t (250.28) 1162.59

OTHER INFORMATION

Segment Assets 15646.64 16012.24 11672.55 13905.31 – 7257.79 397.23 591.56 25067.48 32347.49 26.06 35.98 46840.14 @47819.92 3666.37 5854.30 – – 103316.47 123824.59

Segment Liabilities 9212.86 9395.77 3966.19 5425.05 – 286.58 82.95 90.17 13688.42 22099.54 33.61 43.84 – – 32093.57 35691.98 – – 59077.60 73032.93

Capital Expenditure 507.49 311.18 471.96 1938.79 46.31 – 1.33 – 196.42 367.34 – – – 4328.82 11.40 – – – 1234.91 6946.13

Depreciation 271.16 254.26 1161.72 1009.90 93.44 377.25 58.37 58.30 333.28 330.41 – – – – 65.32 69.02 – – 1983.29 2099.14

@ includes Rs. 41848.95 Lakhs (Previous year Rs.43799.82 Lakhs) arising on revaluation of fi xed assets (refer note 19 of Schedule 17).

(ii) Information about Secondary Business Segments Rs. Lakhs

PaticularsIndia Outside India Total

2010 2009 2010 2009 2010 2009

Revenue by Geographical market on FOB basis 94490.35 93446.74 12449.19 9246.67 106939.54 102693.41

Inter Segment - - - - - -

Total 94490.35 93446.74 12449.19 9246.67 106939.54 102693.41

Carrying amount of segment assets 95933.26 116217.39 7383.21 7607.20 103316.47 123824.59

Additions to Fixed Assets 1205.69 6850.55 29.22 95.58 1234.91 6946.13

(iii) Notes:

(a) Business Segment:

The Company has considered business segment as the primary segment for disclosure

Segments have been identifi ed and reported taking into account the organisation structure, the nature of products and services, the deferring risks and returns of the segments

SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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The business segments of the Company are (i) Explosives, (ii) Consult dealing in Mining & Infrastructure Contracts, (iii) Speciality Chemicals dealing in Bulk Drugs & Pharma, (iv) Building Products (v) Property Development, (vi) Lubricating Oils, (vii) Others, Others include Agro.

(b) Geographical Segment:

The Geographical segments considered for disclousure are as follows:

- Revenue within India includes sales to customers located within India and earnings in India

- Revenue outside India includes sales to customers located outside India and earnings outside India

19. Land meant for property development situated at Bengaluru and Hyderabad had been revalued as at 31st March, 2008, based on a valuation by an approved valuer. The resultant surplus on such revaluation amounting to Rs. 183896.69 Lakhs had been credited to Revaluation Reserve in the previous years. In view of steep recession in the realty sector, management has reassessed the valuation of the aforesaid properties as on 31st March, 2009 and based on the guidelines issued by the Registration and Stamps Department of Karnataka & Andhra Pradesh, the value of the subject lands has been reassessed and, the resultant surplus on revaluation amounted to Rs. 43799.82 Lakhs. The resultant write down aggregating to Rs. 140096.87 Lakhs has, in accordance with the requirement of Accounting Standard-10 “Accounting for Fixed assets” been debited to Revaluation Reserve in the previous year. During the year, the Parent Company has entered into “Agreement to Sell” 4.75 acres of land to IDL Speciality Chemicals Limited. Since the aforesaid parcel of land is no longer meant for Property development, an amount of Rs. 1950.87 Lakhs has been withdrawn from Revaluation Reserve.

20. Loans and Advances, considered good include Rs. 813.89 Lakhs (31.03.2009 Rs. 813.89 Lakhs) in respect of Cenvat credit claimed on tippers and subsequently reversed on receipt of a show cause notice from the Excise Authorities. Management is of the view that the Parent Company is entitled to avail such credits and the matter is being currently contested before the appropriate authorities.

21. Previous years fi gures have been regrouped / recast wherever necessary.

For and on behalf of the Board of Directors

S. SUBRAMANIAN S. PRAMANIK S. G. HINDUJA

Place : MumbaiDate : 14th May 2010

Chief Financial Offi cer & Company Secretary

Managing Director Chairman

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ELECTRONIC CLEARING SERVICES (ECS) MANDATE FORM

(For Shares held in physical form)

From : Date :

To :

Dear Sirs,

Please fi ll-in the information in CAPITAL LETTERS in ENGLISH ONLY. Please TICK wherever is applicable.

Folio No.

I/we_________________________________________________ do hereby authorise Gulf Oil Corporation Limited to –

* Print the following details on my/our Dividend Warrant* Credit my dividend amount directly to my Bank account by ECS(* strike out whichever is not applicable)

Name of First Holder

_______________________________________________________________________________________________

Bank Name

_______________________________________________________________________________________________

Branch Name

(Address with pincode)

_______________________________________________________________________________________________

Bank & Branch Code : (9 Digits Code Number appearing on the MICR Band of the cheque supplied by the Bank. Please attach a Xerox copy of a cheque of your bank duly cancelled for ensuring accuracy of the bank name, branch name and code number)

Account Type Savings Current Cash Credit

A/c No. (as appearing in the cheque leaf)

I, hereby declare that the particulars given above are correct and complete. If any transaction is delayed or not effected at all for reasons of incompleteness or incorrectness of information supplied as above, the Company /Registrar will not be held responsible. I agree to avail ECS facility provided by Reserve Bank of India as and when implemented by the Company.

I further undertake to inform the Company / Registrar any changes in Bank /Branch and Account number.

Signature of the fi rst holder

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Promoters

Mutual Funds, UTI, Banks, FI & Others

Private Corporate Bodies

Indian Public

NRIs/OCBs

FIIs

Shareholding Pattern

Share Price Movement

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Gulf Oil Corporation LimitedRegd. Offi ce: Kukatpally, Sanathnagar (IE) PO, Hyderabad 500 018

ATTENDANCE SLIP

Folio No: .............................. DP ID: .................................. L F/ Client ID No. ........................................

Shareholders Names: Mr./ Mrs./Miss. ............................................................................................................................................

(in block letters)

E-mail*: ...........................................................................................................................................................................................

IN CASE OF PROXY

Name of the Proxy: Mr./Mrs./Miss. .................................................................................................................................................

(in block letters)

No. of shares held: ………………………………...............................................

I certify that I am a registered Shareholder/ proxy for the registered Shareholder of the Company.

I hereby record my presence at the 49th Annual General Meeting of the Company held on Thursday, the 23rd day of

September, 2010.

Signature of the Shareholder/ Proxy

Notes: 1. Please bring this Attendance Slip when coming to the Meeting. 2. Please do not bring with you any person who is not a member of the Company.

*For the purpose of updates by the Company, if any.

Gulf Oil Corporation LimitedRegd. Offi ce: Kukatpally, Sanathnagar (IE) PO, Hyderabad 500 018

PROXY

I/ We …………………………………………………………....................................................................………………………………

of ………….....................................…………………in the district of ……………......................................……………………………

being a member(s) of GULF OIL Corporation Limited hereby appoint …………...........................................................………..…

of…………………………in the district of…………………………… or failing him ……………………… of…………………………in

the district of ……………………as my/ our Proxy to vote for me/ us on my/ our behalf at the Forty-nineth Annual General Meeting

of the Company to be held on Thursday, the 23rd day of September, 2010 and at any adjournment there of.

As witness my/ our hand(s), this………………..day of ……………..2010.

Folio No. ............................... Signature of the Shareholder(s)

DP ID .......................................... Client ID No. ..........................................

Affi xRevenueStamp

Note : Proxies, in order to be effective, should be duly stamped, completed, signed and deposited at the Registered Offi ce of the Company not

less than 48 hours before the meeting.

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