LKP Finance Limited

26TH ANNUAL REPORT 2009-2010

LKP FINANCE LiMiTeD

Board of Directors :
Mr. M. V. Doshi Mr. M. S. Bhise Mr. V. N. Suchanti Mr. Hariharan Padmanabhan Mr. P. M. Doshi Mr. Sayanta Basu Executive Chairman

Company Secretary :
Mr. G. B. Innani

Auditors :
Ford, Rhodes, Parks & Co., Sai Commerical Building, 312 / 313, 3rd Floor, BKS Devshi Marg, Govindi (East), Mumbai - 400 088.

COnTenTs
Page Nos. Notice. ....................................................................... 1 Directors Report. .................................................2 - 3

Registered Office :
203, Embassy Centre, Nariman Point, Mumbai - 400 021. Tel. : 40024785 / 4002 4786 Fax : 2287 4787

Management Discussion and Analysis .................... 4 Corporate Governance Report.............................5 - 9 Auditors Report..............................................10 - 11 Balance Sheet. ......................................................... 12 Profit and Loss Account. ........................................ 13 Schedules to Accounts.....................................14 - 21 Cash Flow Statement.............................................. 22 Statement Relating to Subsidairy Company....23 - 35 Consolidated Financial Statements..................36 - 40

Registrar & Shares Transfer Agent :

Adroit Corporate Services Pvt. Ltd. 19, Jaferbhoy Industrial Estate, 1st Floor, Makavana Road, Marol Naka, Andheri (East), Mumbai - 400 059. Tel. : 28590942 / 28594060

Annual General Meeting on Monday, 12th July 2010 at 11.00 a.m. at M. C. Ghia Hall, Hargovindas Building, 18/20, Kaikhushru Dubash Marg, Mumbai - 400 001.

LKP Finance Limited

DIRECTORS REPORT
The Directors present the Twenty Sixth Annual Report and Audited Accounts of the Company for the year ended March 31, 2010. FINANCIAL RESULTS Profit / (Loss) before tax Less/(Add): Provision for Tax & Fringe Benefit Tax Profit / (Loss) after tax Add: Previous year Items Profit/(Loss) brought forward from previous year Amount available for appropriation APPROPRIATIONS: Proposed Dividend Tax on Dividend Transfer to Capital Redemption Reserve Account Transfer to General Reserve Transfer to Special Reserve Fund Balance carried to Balance Sheet DIVIDEND 2009 2010 2008 2009 (Rs. in lacs) (Rs. in lacs) 2099.70 9267.54 178.07 726.32 1921.63 16.94 3133.98 5072.55 915.42 155.58 36.13 200.00 2092.57 1672.85 8541.22 --642.64 9183.86 889.79 151.22 8.87 5000.00 --3133.98 On March 31, 2010 the Company has allotted 7,27,489 equity shares of Rs. 10/- each, at a premium of Rs. 110/- per share in full conversion of 7,27,489 11 % Compulsorily Convertible Debentures of Rs. 120/each fully paid-up to Agrud Captal Pte. Ltd., Singapore, in term of Special Resolution dated 27th August 2009 passed by members through Postal Ballot. The paid up equity share capital of the company as on March 31, 2010 stands at Rs. 13,07,74,890/- divided into 1,30,77,489 equity shares of Rs. 10/- each fully paid- up. ESOP With a view to motivating the employees of the Company and its subsidiary (LKP Securities Limited) by rewarding performance, retaining best talents and to enable them to participate in the future growth and success of the Company, the Board has considered it prudent to introduce Employees Stock Option Scheme 2010 (ESOP). The said ESOP has been formulated in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999. The said ESOP could give rise to the issue of equity shares not exceeding 9,05,000 equity shares of Rs. 10/- each at such price, in one or more tranches and on such terms and conditions, as may be fixed or determined by the Board in accordance with the Guidelines or other provisions of the law as may be prevailing from time to time. The consent of members for the said ESOP has been obtained by special resolutions passed on 17th March 2010, as per Section 192A of the Companies Act, 1956, read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001. The Compensation Committee has granted 5,99,500 Stock Options to the eligible employees in terms of the said Plan during the financial year 2010-2011. FIXED DEPOSITS The Company has no public deposits as of date and will not accept any deposits without prior approval of the Statutory Authorities concerned. SUBSIDIARIES Your Companys subsidiary, LKP Securities Ltd. has reported improved results. LKP Securities Ltd. has expanded its geographical reach and now has 414 outlets across 147 cities in India. During the year under review M/s Gayatri Cement and Chemical Industries Pvt. Ltd. became Wholly Owned Subsidiary of the Company. Pursuant to Section 212 of the Companies Act,1956, the relevant Statement along with the Directors Report and the Audited Statement of Accounts of subsidiaries of the Company are appended to this report. STATUTORY DISCLOSURE The Particulars of Employees falling within the scope of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this report. However, as per Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts is being sent to all shareholders of the Company excluding the above Statement. Any shareholder interested in obtaining a copy of the said Statement may write to the Company at its Registered Office. The provisions of Section 217(1)(e) of the Companies Act, 1956, relating to conservation of energy and technology absorption do not apply to your Company. There is no foreign exchange earnings

The Board of Directors are pleased to recommend a dividend @ Rs. 7/- per equity share of the Company for the financial year ended 31st March 2010. The total cash outflow on account of dividend & tax thereon Rs. 1,071.00 lacs. PERFORMANCE REVIEW The Companys total income decreased from Rs. 10,283.42 lacs to Rs. 3,612.25 lacs and profit after tax Rs.1,921.64 lacs from Rs. 8541.22 lacs in the previous year. The figures of the year under review are not strictly comparable with those of the previous year. During the previous year, the Company had divested major portion of its holdings in the shares of Thomas Cook (India) Ltd. received pursuant to the merger of LKP Forex Limited with Thomas Cook (India) Limited by tendering them under the open offer announced by Thomas Cook (UK) Limited. The efforts of the Fixed Income Market team to develop trading in debt papers and development of retail clients like PF/Pension/ Gratuity trust etc. has yielded good results. The Company continues its efforts to generate non-fund based business. Also your Company continues to make all efforts to recover over-dues from the clients by negotiations or by resorting to legal recourse. SHARE CAPITAL In term of consent of the Members which was obtained by way of a special resolution passed on 22nd January 2009, as per Section 192A of the Companies Act, 1956, read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001, the buy-back of equity shares of the Company under Section 77A of the Companies Act, 1956, was commenced on February 24, 2009 and was closed with effect from July 17, 2009. The Company had bought-back and extinguished in aggregate 4,50,000 equity shares from the Open Market on the Bombay Stock Exchange Limited at an average price Rs. 77.70 per equity Share. The total amount expended in the buy back is Rs. 349.65 lacs, being 37% of the maximum authorized buy back amount.

LKP Finance Limited

during the year under report. The detail of outgo is mentioned in point no. 10 of Notes to Accounts under Schedule 16. DIRECTORS Mr. Mahendra V. Doshi retires by rotation and being eligible offers himself for reappointment. Mr. Mahendra V. Doshi is re-appointed with revised remuneration as an Executive Chairman of the Company for a period of 5 years with effect from April 1, 2009 by a Special Resolution passed by members through postal ballot on March 17, 2010. At the Board Meeting held on October 26, 2009, Mr. Hariharan Padmanabhan and Mr. Pratik M. Doshi were appointed as additional Directors on the Board. Resolutions for their re-appointment as Directors are placed in the Notice for consideration of the members. The Directors recommend these Resolutions for acceptance. Mr. Sayanta Basu is appointed on October 26, 2009 as a Nominee Director on the Board by the strategic equity investor Agrud Captal Pte. Ltd., Singapore. AUDITORS REPORT M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. The Company has received a letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1-B) of the Companies Act, 1956. Your Directors recommend their re-appointment. DIRECTORS RESPONSIBILITY STATEMENT As required under Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that : i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii) the Directors have selected such accounting policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period ; iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities to the best of their knowledge and ability ; iv) the Directors have prepared the annual accounts on a going concern basis. CONSOLIDATED FINANCIAL STATEMENTS In accordance with Accounting Standard AS-21, the Consolidated Financial Statements are furnished herewith and form part of this Report and Accounts. These statements have been prepared on the basis of audited financial statements received from the Subsidiary Companies as approved by their Board of Directors. CORPORATE GOVERNANCE The Report on Corporate Governance along with a Certificate of compliance from the Auditors and Management Discussion and Analysis Report forms part of this Report. ACKNOWLEDGEMENT Your Directors would like to place on record their sincere appreciation to Shareholders, Bankers , Institutions and Employees for their cooperation and support. For and on behalf of the Board of Directors Mumbai Date: April 28, 2010 ( M. V. Doshi ) Executive Chairman

Statement Pursuant to Section 212 of the Companies Act, 1956 Giving Requisite Particulars of its Subsidiary Companies
1. Name of the Subsidiary Company 2. Financial Year ending 3. Date from which the Company bacame a subsidiary. 4. Extent of Holding Companys interest in the subsidiary Company's Shareholding (in %) 5. Net aggregate amount of the Subsidiarys profits after deducting its losses or vice versa so far it concerns members of the Holding Company. - Profits /Losses not dealt with in the Holding Company Accounts a. for the financial year of the subsidiary b. for the previous financial years since it became the Holding Company's Subsidiary Profits dealt with or (Losses) provided for in the holding Company Accounts. a. for the financial year of the Subsidiary b. for the previous financial years since it became the holding Companys subsdiary LKP Securities Ltd 31.3.2010 1.4.95 97.69 Rs in Lacs Gayatri Cement & Chemial Industries P Ltd 31.3.2010 31.3.2010 100 Rs in Lacs

130.55 630.65 --

(27.77) 0.00 --

--For and on behalf of the Board of Directors Mumbai Date: April 28, 2010 ( M. V. Doshi ) Executive Chairman

LKP Finance Limited

MANAGEMENT DISCUSSION AND ANALYSIS
Industry structure and developments Financial year 2009-10 marks a partial recovery year which came on the heels of the depression that had gripped the markets in 2008-09. The possibility of a recovery after a bleak 2008-09 is attributable to the massive stimuli announced by countries worldwide to minimize the impact of the depression and get their economies back on track, though the results are not as yet so significant and the economies of some of the European countries are still under doldrums. The movements of the stock markets impact your company being an Investment Company. The Indian stock market is up 110% from the lows it made in March 2009, though reported earnings growth is still moderate, and reforms are moving more slowly than expected. Indias inflation rates remain at an all time high despite various economic and other measures been taken by the Government and RBI from time to time to curb the same. Crude oil prices are a constant threat with the potential for negative consequences for Indias macro outlook. India was among the top three performing markets globally in 2009-10 and is expected to hold its position in the coming year also. Investments are back in the country and there is a flood of IPOs in the market. However, global sentiments continue to affect the markets. Opportunities and Threats Your Company being an investment Company seeks opportunities in the capital market. The volatility in the stock indices in the financial year under report represents both an opportunity and challenge for the Company. The business of subsidiary company i.e. LKP Securities Ltd. is affected by the sentiments prevailing in the stock markets. The Company is one of the reputed broking houses of the country, having a network of 414 outlets across India. The Company is empanelled with most of the reputed domestic financial institutions including life and non insurance companies, mutual funds, foreign financial institutions and corporates, apart from having large number of HNI and retail clients. The likely increase in capital mobilisation from the primary market, increase in resource mobilisation by mutual funds, phenomenal growth in secondary market volumes, introduction of new products like mini derivative contracts & Securities Lending & Borrowing Scheme, introduction of new instruments in the F & O segment, trading in Mutual Funds through exchanges etc. provide significant business opportunities for the Company. The Indian Capital Market has a very high growth potential. The macroeconomic fundamentals are sound to allow the economy to make rapid strides. Economic expansion will result in greater disposable incomes and larger number of investors. There is a significant growth opportunity for subsidiary Company in this scenario. Segment-wise Performance The Company being a holding Company is engaged in investment activities and other financial services during the year under review, hence the requirement of segment-wise reporting is considered irrelevant. Outlook The outlook for the Companys business, depend on the performance of the Stock Markets, which is very difficult to comment upon. The stock markets, which had seen a sharp fall in the year 2008-2009, rose back to ~17,500 levels by 2009-10. If the growth continues we can look forward to a good year. The political stability is essential to restore the confidence of Investors and FIIs which would result in substantial increase in the volume of business in stock markets. Risks and Concerns The stock broking industry has recently witnessed intense competition, falling brokerage rates and the entry of several big players. The Companys Subsidiary Company continues to achieve cost efficiencies through the application of technology. However with the availability of financial resources, we are hopeful that the said Company will be able to take the opportunities of the expanding business opportunities. The Capital market industry in which your Company is operating is subject to extensive regulation. The Company evaluates the technological obsolescence and the associated risk and makes investment accordingly Internal Control Systems and their adequacy The Company has satisfactory internal control system. LKP Securities Ltd. has an adequate system of internal controls to ensure accuracy of accounting records, compliance with all laws & regulations and compliance with all rules, procedures & guidelines prescribed by the management. An extensive internal audit is carried out by independent firms of Chartered Accountants in branches and head office. An internal team of inspection also regularly visits branches for ensuring regulatory compliance. Post audit reviews are also carried out to ensure follow up on the observations made. Financial Performance with respect to Operational Performance Share Capital The Company had made a preferential issue of 7,27,489 11% Compulsorily Convertible Debentures of Rs. 120/- each aggregating to Rs. 8,72,98,680/- during the year to Agrud Capital Pte. Ltd., Singapore. The said 7,27,489 debentures have been converted in 7,27,489 equity shares of Rs. 10/- each at a premium Rs.110/- per share. The Company has bought-back from the Open Market on the Bombay Stock Exchange Limited further 361,263 equity shares in 2009-10 in continuation of its buyback announcement made in 2008-09 which have been extinguished till March 31, 2010. The paid up equity share capital of the Company as on March 31, 2010 stands at Rs. 130,774,890 divided into 13,077,489 equity shares of Rs. 10/- each fully paid up. Reserve and Surplus The Reserves and Surplus increased from Rs. 10,956.32 lacs to Rs. 12,553.12 lacs. The upfront payment of Rs. 194 lacs received upon allotment of 10 lac warrants was forfeited during the year and transferred to the Capital Reserve. Investments The total investment increased to Rs. 7,352.20 lacs as at March 31, 2010 against Rs. 6,288.73 lacs at the end of the previous year. Loan Secured loan decreased to Rs. 1,732.91 lacs from Rs. 5,323.64 lacs. . Total Income During the year under consideration total income was Rs. 3,612.25 lacs as against Rs. 10,283.42 lacs in the previous year. Other Income During the year under consideration other income was Rs. 435.70 lacs as against Rs. 72.01 lacs in the previous year. Interest and Finance Charges During the year under consideration total interest and finance charges were Rs. 623.12 lacs as against Rs.334.20 lacs in the previous year. Provision for Tax During the year under consideration the provision for tax, was Rs. 178.01 lacs as against Rs. 727.32 lacs in the previous year. Human Resources There has been no material development on the Human Resource/ Industrial Relations front during the year. As on 31st March 2010 the Company had 59 employees. The Company believes in sharing based on performance & potential. Hence the company has approved ESOP for its Key Employees in recognition of their performance and as a measure of retention. LKP Securities Ltd. places significant importance to its human capital. As on 31st March 2010 there are 396 employees employed by the Company. The company has also provided medical insurance for its employees and family members as a welfare measure. The company has been paying special attention to improve the skill set of the employees through various training programs. All employees are encouraged and motivated to get themselves certified in relevant industry standard certifications such as CFP, NCFM, BSEC & AMFI. For and on behalf of the Board of Directors Mumbai Date: April 28, 2010 ( M. V. Doshi ) Executive Chairman

LKP Finance Limited

REPORT ON CORPORATE GOVERNANCE
1. Companys philosophy on Corporate Governance The LKP Group to which the Company belongs is committed to ethical values and self discipline through standards of good governance aiming at efficient conduct of the business in meeting its obligations to the shareholders. The Board of Directors of the Company has adopted the Code of Conduct for its members and senior management executives. Board of Directors Composition The composition and category of Directors as on 31st March 2010 are as follows: Designation Executive Chairman Independent Mr. Milan S. Bhise Director Independent Mr. Vineet N. Suchanti Director Independent Mr. Hariharan Padmanabhan Director Promoter Mr. Pratik M. Doshi Director Nominee Mr. Sayanta Basu Director The Board has accordingly optimum combination of Executive and Non-Executive Directors and Independent and Non-Independent Directors. Non-Executive Independent Directors of your Company have no pecuniary relationship or any transaction with your Company. Mr. Sayanta Basu represents Agrud Capital Pte Ltd., Singapore, a strategic equity investor in the Company. Attendance at Board Meetings and last Annual General Meeting. Directors 1. Mr. M. V. Doshi 2. Mr. Milan S. Bhise 3. Mr. Vineet N. Suchanti 4. *Mr. Hariharan Padmanabhan 5. *Mr. Pratik M. Doshi 6. *Mr. Sayanta Basu (* Appointed w.e.f. October 26, 2009) No. of Board Meetings Attended 5 4 5 2 2 2 Whether Attended last AGM Yes Yes Yes Not Applicable Not Applicable Not Applicable
Chairman / Member of Committee of the Board of the Companies on which he is a Director as on 28th April 2010. Expertise Mr. Mahendra V. Doshi is the promoter of the Company and is associated with Company since inception. He was appointed as Executive Chairman w.e.f. 26th July, 2001. He has over 33 years vast experience in the field of Finance, Capital Market and Business Administration. Mr. M. V. Doshi retires by rotation at the ensuing Annual General Meeting and is proposed to be reappointed as the Director of the Company. 1. Nilkamal Ltd. 2. Graviss Hospitality Limited 3. LKP Securities Ltd. 4. MKM Share and Stock Brokers Ltd. 5. Bhavana Holdings Pvt. Ltd. 6. LKP Holdings Pvt. Ltd. 7. Peak Plastonics Pvt. Ltd. 8. Sea Glimpse Investment Pvt. Ltd. 9. SolarEx P V Solution Pvt. Ltd. LKP Finance Ltd. i. Share Transfer Committee-Chairman ii. Compensation Committee -Chairman iii. Audit CommitteeMember Graviss Hospitality Limited i. Audit Committee Chairman ii. Shareholders & Investors Grievance Committee Member Nilkamal Ltd. i. Audit Committee Member ii. Remuneration Committee - Member Mr. Hariharan Padmanabhan is a serial entrepreneur, a global corporate board level executive, mentor and angel investor. Approximately 7 years experience in the field of Foreign Exchange, Stock Market and Commodity Market.

2.

Category Promoter

Name of Directors Mr. M. V. Doshi

Other Directorships

Prime Focus Ltd.

1. MKM Share and Stock Brokers Ltd. 2. Bhavana Holdings Pvt. Ltd. 3. LKP Holdings Pvt. Ltd. 4. SolarEx P V Solutions Pvt. Ltd. 5. Alpha Commodity Pvt. Ltd.

Nil

Nil

Other Board or Committee in which each Director is a member or chairman Directorship in other companies Mr. M. V. Doshi 9 Mr. Milan S. Bhise -Mr. Vineet N. Suchanti 9 Mr. Hariharan Padmanabhan 1 Mr. Pratik M. Doshi 5 Mr. Sayanta Basu 2 Profile of Director being Re-appointed:
Name Mr. Mahendra V. Doshi

Name of Director

No of committees in which Chairman / Member 1 3 ----------Mr. Pratik M. Doshi 29 Years 26th October 2009 B. A. In EconomicsUK

Age 61 Years Date of 5th May 1984 Appointment Qualification MBA U. S. A.

Mr. Hariharan Padmanabhan 57 Years 26th October 2009 B.Tech-IIT Kanpur PGDM-IIM Calcutta

Board Meeting In financial year 2009-2010, the Board met five times. The Board meetings were held on 5th May 2009, 27th July 2009, 5th September 2009, 26th October 2009 and 21st January 2010. Audit Committee The Board has set up Audit Committee having two Independent Directors Mr. Milan S. Bhise and Mr. Vineet N. Suchanti. Mr. Vineet N. Suchanti is the Chairman of the Audit Committee and was present at the last Annual General Meeting. Mr. M. V. Doshi is also a member of Audit Committee. Audit Committee meetings were held on 5th May 2009, 27th July 2009, 26th October 2009 and 21st January 2010. All the members have attended the aforesaid meetings. The Statutory Auditors were the invitees to the above meetings. The scope of activities and powers of Audit Committee includes the areas prescribed under the Clause 49 of the Listing Agreement and section 292A of the Companies Act, 1956.

LKP Finance Limited

Remuneration of Directors During the year under review the Company has paid Rs. 96.65 lacs towards remuneration (details of which are provided in Schedule 16 of the Notes to Accounts) to Mr. Mahendra V. Doshi, Executive Chairman of the Company pursuant to the special resolution passed by members through postal ballot on March 17, 2010. At present, Independent Directors are not paid any remuneration. Professional Fees to Director The Board of Directors has approved the payment of professional fees of Rs. One Crore p.a. to Mr. Sayanta Basu for rendering professional services to the Company, pursuant to Special Resolution dated 17th March 2010 passed by members through postal ballot. Sitting Fees paid to Directors for attending Board Meetings 1. Mr. Milan S. Bhise Rs. 20,000/2. Mr. Vineet N. Suchanti Rs. 25,000/3. Mr. Hariharan Padmanabhan Rs. 10,000/4. Mr. Pratik M. Doshi Rs. 10,000/5. Mr. Sayanta Basu Nil 6. Mr. M. V. Doshi Nil 5. Shareholders Grievance Committee The Board has set up Shareholders Grievance Committee having two Independent Directors, Mr. Milan S. Bhise and Mr. Vineet N. Suchanti as members. Mr. Milan S. Bhise is the Chairman of the said Committee. Mr. Girish Innani, Company Secretary of the Company is compliance officer. During the year 23 shareholders complaints were received. There is no complaint which has remained un-addressed. No transfer of shares is pending as on date. M/s. V. R. Associates, Practicing Company Secretaries is conducting Secretarial Audit for the Company. 6. Buy-Back Committee To implement the process of buy-back of equity shares of the Company under Sections 77A, 77AA, 77B and all other applicable provisions of the Companies Act, 1956 and in compliance with the requirements of the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 the Board of Directors in their meeting held on 15th December 2008, constituted Buy-Back Committee of Directors consisting Mr. M. V. Doshi and Mr. Milan S. Bhise as the Members of said Committee. The said Committee was dissolved on 20th July 2009 after the completion of bought back and extinguishment of 4,50,000 equity shares of the Company. 7. Compensation Committee The Board of Directors in their meeting held on 26th October 2009, constituted Compensation Committee of Directors consisting Mr. M. V. Doshi as Chairman and Mr. Milan S. Bhise and Mr. V. N. Suchanti as Members of said Committee for administration and superintendence of Companys Employees Stock Option Plan 2010 (ESOP). The said Committee is entrusted with the authority and power to formulate the detail terms and conditions of the ESOP including the matters as stated in Clause 5 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. 8. General Body Meetings The particulars of last three years Annual General Meetings are as under: Financial Year Day Date Time 2008-2009 Tuesday 2nd June 2009 10.30 a.m. 2007-2008 Saturday 9th August, 2008 10.30 a.m. 2006-2007 Monday 6th August, 2007 10.30 a. m. Location: All the above Annual General Meetings of the Company were held at M. C. Ghia Hall, Bhogilal Hargovindas Building, 18/20, K. Dubash Marg, Mumbai 400 001. Business Year Special Resolution passed. 2008-2009 No Special resolution passed. 2007-2008 To approve Change of Name of the Company as LKP Finance Limited. 2006-2007 To approve the payment of Remuneration to Shri M. V. Doshi, Executive Chairman. 4. During the last year the following business had been conducted through postal ballot and for which Special Resolutions were passed. 1. Postal Ballot Notice dated July 27, 2009. Pursuant to the provisions of Section 81(1A) and all other applicable provisions, if any, of the Companies Act, 1956 in respect to create, offer, issue and allot in one or more tranches, on preferential allotment basis, not exceeding 7,27,500 ( Seven Lacs Twenty Seven Thousand Five Hundred only ) 11 % Compulsorily Convertible Debenture of Rs. 120/- each fully paid-up to be converted in to one number of equity share of the Company of Rs. 10/- each, at a premium of Rs. 110/- per share, within a period not earlier than 6 (Six ) months but not exceeding 18 (Eighteen) months from the date of issue of such Debentures, to Agrud Capital Pte. Limited, Singapore (Strategic Investor). Details of voting pattern: Sr. Particulars No. a) No. of No. of Postal Shares Ballot Forms 54 78,63,763 % of Total Votes cast --

Total Postal Ballot Forms received b) Less: Invalid Postal Ballot 3 210 -Forms c) Net Valid Postal Ballot 51 78,63,553 100.000 Forms d) Postal Ballot Forms with 48 78,63,153 99.995 assent for the Special Resolution e) Postal Ballot Forms with 3 400 0.005 dissent for the Special Resolution 2. Postal Ballot Notice dated January 21, 2010. 1. Alteration in the Other Objects Clause of the Memorandum of Association. To alter the Other Objects Clause i.e. III C, of the Memorandum of Association of the Company by inserting the following new clause 45 after the existing clause 44 : 45. To carry on business of trading in commodities and commodity derivatives / spot through any Commodity Exchange/s. Details of voting pattern: Sr. Particulars No. No. of Postal Ballot Forms Total Postal Ballot Forms 145 received and scrutinized Less: Invalid Postal Ballot 4 Forms Total valid Postal Ballot 141 Forms received and scrutinized Less: Postal Ballot Forms 3 received not voted Net Valid Postal Ballot Forms 138 Postal Ballot Forms with 135 assent for the Special Resolution Postal Ballot Forms with 3 dissent for the Special Resolution No. of Shares % of Total Votes cast ----

a) b) c)

6925932 18847 6907085

d) e) f)

329

--

6906756 100.000 6906306 99.993

g)

450

0.007

LKP Finance Limited

2. To Commence and carry on all or any of the new business and activities as amended above. Details of voting pattern: Sr. Particulars No. a) No. of Postal Ballot Forms 145 No. of Shares % of Total Votes cast Total valid Postal 141 6907085 -Ballot Forms received and scrutinized d) Less: Postal Ballot 2 15948 -Forms received not voted e) Net Valid Postal 139 6891137 100.00 Ballot Forms f) Postal Ballot Forms 134 6890487 99.991 with assent for the Special Resolution g) Postal Ballot Forms 5 650 0.009 with dissent for the Special Resolution (c) To approval of grant of options not exceeding 3,90,000, under Employees Stock Option Scheme 2010 to Identified Eligible Employee within overall limit as mentioned in (a) above. Details of voting pattern: Sr. Particulars No. of No. of % of No. Postal Shares Total Ballot Votes Forms cast a) Total Postal Ballot Forms 145 6925932 -received and scrutinized b) Less: Invalid Postal 4 18847 -Ballot Forms c) Total valid Postal Ballot 141 6907085 -Forms received and scrutinized d) Less: Postal Ballot Forms 3 15968 -received not voted e) Net Valid Postal Ballot 138 6891117 100.00 Forms f) Postal Ballot Forms with 134 6890567 99.992 assent for the Special Resolution g) Postal Ballot Forms with 4 550 0.008 dissent for the Special Resolution 4. Re-appointment of Mr. Mahendra V. Doshi as an Executive Chairman of the Company with revised remuneration. Details of voting pattern: S r . Particulars No. No. of No. of Postal Shares Ballot Forms 145 6925932 4 18847 % of Total Votes cast ---c)

Total Postal Ballot 6925932 -Forms received and scrutinized b) Less: Invalid Postal 4 18847 -Ballot Forms c) Total valid Postal 141 6907085 -Ballot Forms received and scrutinized d) Less: Postal Ballot 3 15968 -Forms received not voted e) Net Valid Postal Ballot 138 6891117 100.000 Forms f) Postal Ballot Forms 134 6890567 99.992 with assent for the Special Resolution g) Postal Ballot Forms 4 550 0.008 with dissent for the Special Resolution 3. (a) Pursuant to the provisions of Section 81(1A) read with Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 to approve Employees Stock Option Scheme 2010 of the Company which could give rise not exceeding 9,05,000 equity shares of Rs. 10/- each. Details of voting pattern: Sr. Particulars No. of No. of % of No. Postal Shares Total Ballot Votes Forms cast a) Total Postal Ballot Forms 145 6925932 -received and scrutinized b) Less: Invalid Postal 4 18847 -Ballot Forms c) Total valid Postal Ballot 141 6907085 -Forms received and scrutinized d) Less: Postal Ballot Forms 2 15943 -received not voted e) Net Valid Postal Ballot 139 6891142 100.000 Forms f) Postal Ballot Forms with 134 6890367 99.989 assent for the Special Resolution g) Postal Ballot Forms with 6 775 0.011 dissent for the Special Resolution (b) To approve grant of options under Employees Stock Option Scheme 2010 to eligible employees of the Subsidiary Company within overall limit as mentioned in (a) above. Details of voting pattern: S r . Particulars No. a) b) Total Postal Ballot Forms received and scrutinized Less: Invalid Postal Ballot Forms No. of Postal Ballot Forms 145 4 No. of Shares 6925932 18847 % of Total Votes cast ---

a) b) c)

d) e) f)

g)

Total Postal Ballot Forms received and scrutinized Less: Invalid Postal Ballot Forms Total valid Postal Ballot Forms received and scrutinized Less: Postal Ballot Forms received not voted Net Valid Postal Ballot Forms Postal Ballot Forms with assent for the Special Resolution Postal Ballot Forms with dissent for the Special Resolution

141 6907085

15963

-100.000 99.988

139 6891122 133 6890267

855

0.012

LKP Finance Limited

5. Payment of Professional Fees to Mr. Sayanta Basu a Non Executive Director of the Company. Details of voting pattern: Sr. Particulars No. No. of Postal Ballot Forms 145 No. of Shares % of Total Votes cast -11. General Shareholder Information

Total Postal Ballot Forms 6925932 received and scrutinized 4 18847 -b) Less: Invalid Postal Ballot Forms c) Total valid Postal Ballot 141 6907085 -Forms received and scrutinized d) Less: Postal Ballot Forms 3 15968 -received not voted e) Net Valid Postal Ballot 138 6891117 100.000 Forms f) Postal Ballot Forms with 134 6890567 99.988 assent for the Special Resolution g) Postal Ballot Forms with 4 550 0.012 dissent for the Special Resolution Mr. Nishant Jawasa, Proprietor of M/s Nishant Jawasa & Associates, Practicing Company Secretary, Mumbai, had acted as scrutinizer for conducting the postal ballot exercise. The Company had adopted the procedure for postal ballot as prescribed in Section 192A of the Companies Act, 1956, read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001. The results of the voting by Postal Ballot were announced on August 27, 2009 and March 17, 2010 respectively, at 5.00 p.m. at the Registered Office of the Company at 203, Embassy Centre, Nariman Point, Mumbai 400 021, and were also intimated to Bombay Stock Exchange Limited . At present, the Company does not have any resolution to be decided by the members by postal ballot. 9. Disclosure 1. There are no related party transactions made by the Company with its Promoters, Directors or Management, their subsidiaries or relatives other than that mentioned in notes to the accounts. The Register of Contracts containing the transactions in which Directors are interested is regularly placed before the Board for its approval. 2. During the last three years, there were no strictures or penalties imposed either by Securities and Exchange Board of India or the Stock Exchanges or any regulatory authority for non-compliance of any matter related to the capital market. 3. No personnel have been denied access to the Chairman or members of the Audit Committee. The mechanism of Whistle Blower Policy is not established. 4. To the extent possible, the Company has complied with the mandatory requirement of this clause. 10. Means of Communication 1. The financial results of all four quarters were published in The Financial Express and Mumbai Lakshyadeep dailies. These were not sent individually to the shareholders. 2. The Companys results or official news are not displayed on a web site. There were no presentations made to the institutional investors or to the analysts. 3. The Management, Discussion and Analysis Report forms a part of this Annual Report.

a)

Monday, 12th July 2010 at 11.00 a.m. at M. C. Ghia Hall, Bhogilal Hargovindas Building,18/20, K. Dubash Marg, Mumbai 400 001. Financial Calendar April to March Announcement of Audited / Un-audited Results (tentative) 1st Quarter - Last week of July 2nd Quarter - Last week of October 3rd Quarter - Last week of January 4th Quarter - Last week of June Book Closure July 5, 2010 to July 12, 2010 (both days inclusive) Dividend payment date On or after July 13, 2010 Listing on Stock The Stock Exchange, Mumbai Exchange (Code-507912). The Company has paid the listing fees for the period from 1st April 2010 to 31st March 2011. The Company is taking up the matter with appropriate authority of the Stock Exchange, Ahmedabad subsequent to their refusal for accepting voluntary delisting application. Demat ISIN No. for INE 724A01017 Depositories
Market Price Data and Performance in comparison to BSE Sensex Month April 09 May 09 June 09 July 09 August 09 September 09 October 09 November 09 December 09 January 10 February 10 March 10 High Low Price Price 82.70 105.00 98.00 92.90 114.00 164.10 121.00 117.80 137.80 142.30 122.40 140.00 No. of No. of Shares Trades BSE Sensex High 11,492.10 14,930.54 15,600.30 15,732.81 16,002.46 17,142.52 17,493.17 17,290.48 17,530.94 17,790.33 16,669.25 17,793.01 Low 9,546.29 11,621.30 14,016.95 13,219.99 14,684.45 15,356.72 15,805.20 15,330.56 16,577.78 15,982.08 15,651.99 16,438.45

AGM Date, Time and Venue

57.00 1,97,134 406 77.10 1,43,121 936 87.00 1,12,584 413 70.00 1,00,144 293 80.00 1,14,286 788 94.00 18,96,348 16,443 100.00 5,32,250 5,453 100.50 2,35,788 2,325 113.25 3,36,358 4,070 110.10 2,96,234 3,298 105.00 1,20,763 1,122 106.50 7,69,173 1,942

LKP Finance Limited

Registrar and Share Transfer Agent M/s. Adroit Corporate Services Private Limited 19, Jafarbhoy Industrial Estate, 1st Floor, Makawana Road, Marol Naka, Andheri ( East), Mumbai 400 059. Tel. No.022- 28590942 Share Transfer System The Companys Shares are traded on Bombay Stock Exchange Limited compulsorily in the dematerialized form. However, all requests received for transfer of shares in physical form are processed by the Registrar and Transfer Agents and are approved by Share Transfer Committee, which normally meets twice in a month. The Share Transfers are registered and returned within period of 22 days from the date of lodgment, if documents are complete in all respect. Distribution of shareholding as on 31st March 2010 Shares slab UPTO - 500 501 - 1000 1001 - 2000 2001 - 3000 3001 - 4000 4001 - 5000 5001 -10000 10001 & Above Total : Share Holders 5431 335 181 64 28 24 44 64 % 88.01 5.43 2.93 1.04 0.45 0.39 0.71 1.04 Total Shares 752432 260703 273124 163598 99934 109843 281365 11136490 Amount (Rs.) 7524320 2607030 2731240 1635980 999340 1098430 2813650 111364900 % 5.75 1.99 2.09 1.25 0.76 0.84 2.15 85.16 100 .00 Share holding pattern as on 31st March 2010 Category No. of shares held 1 Indian Promoters/ Persons acting in 70,45,277 concert 2 Mutual Funds and UTI 1,400 3 Banks, Financial Institutions and 2,750 Insurance Companies 4 FIIs 4,59,164 5 Private Corporate Bodies 23,91,697 6 Indian Public 22,16,501 7 Foreign Corporate Bodies 7,27,489 8 NRIs / OCBs 2,33,211 Total 1,30,77,489 Dematerialization of equity Shares and liquidity % of share holding 53.87 00.01 00.02 03.51 18.29 16.96 5.56 1.78 100.00

As on 31st March 2010, 90.42 % of the Companys total shares represented by 1,18,24,407 shares were held in dematerialized form. Out standing GDR/Warrants/Convertible Instruments In terms of special resolution passed in Extra-Ordinary General Meeting of the members held 4th February, 2008 and SEBI Guidelines for Preferential Issues as stated at Chapter XIII of the SEBI (Disclosure and Investor Protection) Guidelines, 2000, the Company had issued and allotted on 25th February 2008, 10,00,000 (Ten Lacs) warrants to the promoters group. The said warrants holder had not exercised their right to apply for and seek allotment of equity shares within the stipulated period of 18 months from the date of issue of the said warrants. Accordingly the right of the warrant holders had expired. The said 10 lac warrants stand cancelled and the Board of Directors of the Company had forfeited the upfront payment of Rs. 1.94 Cr. received upon allotment in respect of the said warrants. Address for correspondence LKP Finance Limited 112A, Embassy Centre, Nariman Point, Mumbai 400 021 Mumbai Date: April 28, 2010

6171 100.00

13077489 130774890

For and on behalf of Board of Directors (M. V. Doshi) Executive Chairman

AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE To the Members, LKP Finance Limited We have examined the compliance of conditions of Corporate Governance by LKP Finance Limited for the year ended on 31st March, 2010, as stipulated in Clause 49 of the Listing Agreement of the said Company with Bombay Stock Exchange Limited. The Compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination has been limited to a review of the procedures and implementation thereof adopted by the Company for ensuring compliance with the conditions of the Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us and based on the representations made by the Directors and the Management, we certify that the Company has complied with conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement, except that appointment of at least one common independent director of the holding Company on the Board of subsidiaries of the Company as required under sub-clause i of the item at paragraph III of Clause 49 of the Listing Agreement. We state that in respect of investor grievances received during the year ended 31st March, 2010, no investor grievances are pending/unaddressed by the Company as on 28th April, 2010, as per the records maintained by the Company and presented to the Shareholders Grievance Committee. We state that such compliance is neither an assurance as to future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company. For Ford, Rhodes, Parks & Co., Chartered Accountants Firm Registration No.102860W Place: Mumbai Date: April 28, 2010 (A. D. Shenoy) Partner Membership No. 11549

LKP Finance Limited

AUDITORS REPORT TO THE MEMBERS OF LKP FINANCE LIMITED
We have audited the attached Balance Sheet of LKP Finance Limited (formerly known as LKP Merchant Financing Limited) as at 31st March 2010 and the Profit & Loss Account of the Company for the year ended on that date annexed thereto and also the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 1. As required by the Companies (Auditors Report) Order, 2003 (as amended), issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956 (the Act) and on the basis of such checks, as we considered appropriate, we give in Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in paragraph 1 above: a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. b) In our opinion proper books of accounts as required by law have been kept by the company so far, as appears from our examination of the books. c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account. Mumbai Date: 28th April, 2010. d) In our opinion, the Balance Sheet and the Profit and Loss Account dealt with by the report are in compliance with the accounting standards referred to in section 211(3C) of the Companies Act, 1956. e) On the basis of written representations received from the directors of the Company, as on 31st March, 2010 and taken on record by the Board of Directors of the Company, none of the directors of the Company is disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of the sub-section (1) of Section 274 of the Companies Act, 1956. 3. In our opinion and to the best of our information and according to the explanations given to us the accounts read together with notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view: (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 Profit and Loss Account of the profit for the year ended on that date. (c) In the case of Cash Flow Statement of the Cash Flows for the year ended on that date. For FORD, RHODES, PARKS & CO. Chartered Accountants Firm Registration No.102860W A. D. Shenoy Partner Membership No.11549

2.

10

LKP Finance Limited

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF THE AUDITORS REPORT
1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) The fixed assets have been physically verified by the management during the year. As explained to us no discrepancies were noticed on such verification. (c) During the year the company has not disposed off any substantial part of its fixed assets so as to affect the going concern. Nature of dues pending Amount Forum where dispute is Income Tax Not Quantified Appellate Tribunal (Asst year 2003-2004) Mumbai. Income Tax (Asst year 2004-2005) Income Tax (Asst year 2005-2006) Not Quantified Not Quantified Appellate Tribunal Mumbai. Appellate Tribunal Mumbai.

2. The company does not have any stock of raw materials, stores, spare parts, finished goods and therefore clause ii (a), (b), (c) (of the Order) are not applicable. 3. The company has neither taken nor granted any loans, secured or unsecured from Companies, firms or any other parties covered in the register maintained under Section 301 of the Companies Act, 1956. 4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for services provided. During the course of our audit, we have neither come across nor have we been informed of any major weaknesses in the aforesaid internal control procedures. 5. (a) On the basis of our examination of the books of account and according to the information and explanations provided by the Management, we are of the opinion that the transactions that need to be entered into the register in pursuance of Section 301 of the Act have been so entered in the said register. (b) In our opinion and according to the information and explanations given to us there are no transactions aggregating in value during the year to more than Rs. 5 lacs.

10. Based on ou r audit procedures and the information and explanations given to us by the Management, we are of the opinion that the Company has not defaulted in repayment of its dues to a Financial Institution. 11. As per the books and records of the company examined by us, the Company has granted a loan to two corporates against security of shares against which adequate records have been maintained. 12. Clause (xiii) of the Order is not applicable as the company is not a Chit Fund company or nidhi /mutual benefit fund /society. 13. In our opinion the Company has maintained proper records of transactions and contracts in respect of dealing and trading in shares, securities, debentures and other investments during the year and timely entries have been generally made therein. All shares, debentures and other investments have been held by the company in its own name. 14. The Company has given a guarantee to a Bank for Rs 5.00 crores on behalf of its Subsidiary, where the terms and conditions are not prejudicial to the interests of the company. 15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. 16. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis have been used for long term investments. 17. The Company has not made any preferential allotment of shares during the year and therefore, paragraph 4 (viii) of the Order is not applicable. 18. During the year the company has issued Compulsory Convertible Debentures (CCD) which have been converted into equity shares. 19. The Company has not raised any money by way of public issue during the year and therefore paragraph 4(xx) of the Order is not applicable. 20. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of the audit. For FORD, RHODES, PARKS & CO. Chartered Accountants Firm Registration No.102860W A. D. Shenoy Partner Membership No.11549

6. The company has not accepted any deposits from the public within the meaning of the provision of Section 58A and 58AA of the Act. 7. The company has no Internal Auditor however the Companys internal control procedures, which, in our opinion, are commensurate with its size and nature of its business. 8. The Company is a Loan and Investment Company hence clause (viii) of the Order is not applicable. 9. (a) According to the information and explanations given to us by the Management and on the basis of the examination of the books of account carried out by us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, and other statutory dues with the appropriate authorities. There were no undisputed arrears of statutory dues outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us by the Management and the records of the company examined by us there were disputes with Income Tax Authorities which are listed below. However there are no demands pending in the said cases:

Mumbai Date: 28th April, 2010.

11

LKP Finance Limited

BALANCE SHEET AS AT 31ST MARCH, 2010
I SOURCES OF FUNDS : 1. Shareholders Funds a. Share Capital b. Share Warrants. b. Reserves and Surplus 2. Loan Funds Secured Loans TOTAL II APPLICATION OF FUNDS : 1. Fixed Assets a. Gross Block b. Less : Depreciation / Amortisation c. Net Block 2. 3. 4. Defferred Tax Asset Investments Current Assets, Loans & Advances a. Stock on hand b. Sundry Debtors c. Cash & Bank Balances d. Loans & Advances Less : Current Liabilities and Provisions a. Liabilities b. Provisions Net Current Assets TOTAL 15 16 17 Schedule Rupees Rupees As at 31-3-2009 Rupees

1 2

130,774,890 1,255,312,758 1,386,087,648

127,112,630 19,400,000 1,095,632,321 1,242,144,951

173,290,744

173,290,744 1,559,378,392

532,363,803 1,774,508,753

4 55,354,054 44,188,239 11,165,815 47,297,000 735,219,853 118,730,949 984,537 376,905,527 691,609,500 1,188,230,513 84,737,016 337,797,773 422,534,789 765,695,724 1,559,378,392 584,712,000 569,115,000 15,597,000 30,104,000 628,872,988 109,964,982 2,748,864 750,211,183 652,976,174 1,515,901,202 116,167,927 299,798,510 415,966,437 1,099,934,766 1,774,508,754

5 6 7 8 9

10 11

ACCOUNTING POLICIES NOTES TO THE ACCOUNTS BALANCE SHEET ABSTRACT & COMPANY'S GENERAL BUSINESS PROFILE SCHEDULES 1 TO 17 ANNEXED HERETO FORM PART OF THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT As per our Report attached. For FORD, RHODES, PARKS & CO., Chartered Accountants Firm Registration No.102860W A. D. Shenoy Partner Membership No 11549 Mumbai Dated : 28th April, 2010

Executive Chairman Director Director

M. V. Doshi V. N. Suchanti M. S. Bhise

Mumbai Dated : 28th April, 2010

12

LKP Finance Limited

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010.
INCOME : Net Income from Operations Other Income EXPENDITURE : Establishment Charges Administrative and other expenses Schedule Rupees Rupees 317,654,384 43,570,990 361,225,374 29,166,559 59,171,204 88,337,763 272,887,611 Interest and Finance charges. Depreciation. AMORTISATION OF TRADE MARK TRANSFER FROM TRADE MARK RESERVE Operating Profit / (Loss) PROFIT/(LOSS) BEFORE TAXATION PROVISION FOR TAXATION-CURRENT PROVISION FOR DEFERRED TAX NET PROVISION FOR FRINGE BENEFIT TAX PROFIT AFTER TAXATION EXCESS DIVIDEND AND TAX ADDED BACK PROFIT / (LOSS) BROUGHT FORWARD FROM LAST YEAR AMOUNT AVAILABLE FOR APPROPRIATION : APPROPRIATION: TRANSFERRED TO GENERAL RESERVE CAPITAL REDEMPTION RESERVE ACCOUNT SPECIAL RESERVE FUND PROPOSED DIVIDEND TAX ON PROPOSED DIVIDEND PROFIT CARRIED TO BALANCE SHEET EARNINGS PER SHARE BASIC (Note 7 on Schedule 16) EARNINGS PER SHARE DILUTED (Note 7 on Schedule 16) ACCOUNTING POLICIES NOTES TO THE ACCOUNTS BALANCE SHEET ABSTRACT & COMPANY'S GENERAL BUSINESS PROFILE SCHEDULES 1 TO 17 ANNEXED HERETO FORM PART OF THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT As per our Report attached. For FORD, RHODES, PARKS & CO., Chartered Accountants Firm Registration No.102860W A. D. Shenoy Partner Membership No 11549 Mumbai Dated : 28th April, 2010 Executive Chairman Director Director Mumbai Dated : 28th April, 2010 M. V. Doshi V. N. Suchanti M. S. Bhise 62,318,168 598,728 Previous Year Rupees 1,021,141,520 7,201,335 1,028,342,855 25,498,263 40,976,081 66,474,344 961,868,511 33,419,567 1,694,000 926,754,943 2,000,000 2,000,000 926,754,943 926,754,943 102,500,000 (30,104,000) 236,000 854,122,943 64,264,000 918,386,943 500,000,000 887,370 88,978,841 15,121,954 313,398,778 67.19 62.29

12

13 14

62,916,896 209,970,715 209,970,715 35,000,000 (17,193,000) 192,163,715 1,693,734 313,398,778 507,256,227 20,000,000 3,612,630 209,257,350 91,542,423 15,557,635 167,286,190 14.69 14.69

15 16 17

13

LKP Finance Limited

SCHEDULES FORMING PART OF THE ACCOUNTS AS AT 31ST MARCH, 2010.
Rupees SCHEDULE 1 - SHARE CAPITAL Authorised (i) 2,00,00,000 Equity Shares of Rs 10/- each. (ii) 10,00,000 Redeemable Cumulative Preference Shares of Rs.100/-each Issued,Subscribed & Paid Up : 1,27,11,263 Equity Shares of Rs 10/- each Add : 7,27,489 Equity Shares issued Less : 3,61,263 Shares extinguished during the year on buy back (Previous Yr 88,737) TOTAL Note: 1. The above equity shares include 22,50,000 Equity shares allotted as Bonus Shares by capitalization of Share Premium Account. SCHEDULE 2- RESERVES & SURPLUS Capital Reserve Share Warrants monies forfieted during the year. Share Premium Account Balance as per last Balance Sheet. Add : Premium amount on 7,27,489 Equity Shares Less: Amount paid in excess of face value on buy back. Capital Redemption Reserve Account Balance as per last Balance Sheet. Add: Transferred from Profit & Loss account. Special Reserve Fund Transferred from Profit & Loss account during the year General Reserve Balance as per last Balance Sheet. Add: Transferred from Profit & Loss account. Balance in Profit & Loss Account TOTAL SCHEDULE 3 - SECURED LOANS Term Loan from Housing Development Finance Corp Ltd (secured against mortgage of properties and pledge of shares) Loan from a Corporate against pledge of shares. Vehicle Loan (Secured against hypothecation of the Vehicle) Bank Overdraft (secured against pledge of Fixed Deposit Receipts) TOTAL As at 31-3-2009 Rupees

200,000,000

200,000,000

100,000,000 300,000,000 127,112,630 7,274,890 3,612,630 130,774,890 130,774,890

100,000,000 300,000,000 128,000,000 887,370 127,112,630 127,112,630

19,400,000 221,552,221 80,023,790 26,500,744 275,075,267 887,370 3,612,630 4,500,000 4,500,000 209,257,350 559,793,951 20,000,000

225,516,125 3,963,904 221,552,221 887,370 887,370 59,793,951 500,000,000 559,793,951 313,398,778 1,095,632,321

579,793,951 167,286,190 1,255,312,758

120,000,000 53,019,233 271,511 173,290,744

120,000,000 478,295 411,885,507 532,363,803

14

LKP Finance Limited

SCHEDULES FORMING PART OF THE ACCOUNTS AS AT 31ST MARCH, 2010 - (Contd.)
SCHEDULE 4 - FIXED ASSETS
Description of Assets As at 1st April 2009 13,849,000 10,621,000 14,344,299 2,494,127 20,046,000 776,548 62,130,974 607,560,000 Gross Block (At Cost) Additions Deductions 6,800,745 As at 31st March, 2010 7,048,255 10,621,000 14,344,299 2,494,127 20,069,825 776,548 55,354,054 584,712,000 Depreciation As at Depreciation Deductions 31st March, for the year for the year 2009 1,408 2,947,299 6,620,000 279,084 4,396,000 43,297 14,215,000 14,138 2,392,000 161,798 18,849,000 99,003 64,810 598,728 2,947,299 46,536,810 As at 31st March, 2010 3,674,109 4,675,084 14,258,297 2,406,138 19,010,798 163,813 44,188,239 569,115,000 As at 31st March, 2010 3,374,146 5,945,916 86,002 87,989 1,059,027 612,735 11,165,815 15,597,000

Rupees
Net Block As at 31st March 2009 7,229,000 6,225,000 129,000 105,000 1,197,000 711,737 15,596,737

Office Premises Premises Furniture & Fixtures Air Conditioners Office Equipment's Vehicle Grand Total Previous Year

23,825 23,825 777,000 6,800,745 23,625,000

Notes : 1) Cost of office premises includes cost of shares of Rs.250/- in Embassy Center Premises Co-operative Society Ltd and cost of shares of Rs 250/- in Great Eastern Gardens Condominium.

SCHEDULE 5 - INVESTMENTS (at Cost) Quoted Equity Shares Fully Paid (at Cost)

Quantity

NAME OF THE COMPANY Garware Polyester Ltd. I C I C I Bank Ltd. 8 Tata Motors Ltd 30,000 Maharashtra Polybutane Ltd 47 JSW Steel ltd 583 D S Kulkarni Developers Ltd 25,000 Central Bank of India 11,282,110 Thomas Cook (India) Ltd 131,910 NHPC Ltd 52,000 Reliance Industries Ltd (Includes 36,000 Bonus Shares) Larsen & Toubro 4 8.95% IDBI UPPER TIER II 2024 BONDS SUB-TOTAL UNQUOTED & FULLY PAID UP: 319,765 Thomas Cook (India) Ltd 0.001% Class B Preference Shares 271,800 Thomas Cook (India) Ltd 0.001% Class C Preference Shares (Class B & C Preference Shares are Convertible into Equity Shares within a period of seven years on Thomas Cook (India) Limited achieving certain levels of EPS) 1,005 The Saraswat Co-op Bank Ltd. (Equity Shares) 5,600 The Hindustan Times Ltd. (Equity Shares) 7,600 LKP Holdings Pvt Ltd (Equity Shares) 20,000,000 Hemavathy Power & Light Pvt Ltd. (Equity Shares) SUB-TOTAL INVESTMENT IN MUTUAL FUNDS : JP Morgan Aalpha Fund. 147.342 BenchMark Mutual Fund. SUB-TOTAL INVESTMENT IN SUBSIDIARY COMPANIES : 25,635,000 LKP Securities Ltd.-Equity Shares 1,100,000 LKP Securities Ltd-Preference Shares 21,000 Gayatri Cement & Chemicals Industries Pvt.Ltd -Equity Shares SUB-TOTAL TOTAL i. Aggregate of quoted investments - At Cost - Market Value ii. Aggregate of unquoted investments - At Cost.

Face Value

Cost Rupees 3,061 666,189 1,280 64,130 797,750 365,040,758 4,748,760 17,401,939 4,219,047 392,942,914 5,062,680 4,303,274

Quantity 100 10 8 701,349 47 583 25,000 14,282,010 49,000

As at 31-3-2009 Face Cost Value Rupees 10 6,800 10 1,700 10 3,061 10 701,709 10 1,280 10 64,130 10 797,750 10 470,034,354 10 471,610,784 10 10 5,062,680 4,303,274

10 10 10 10 10 1 10 10 1000000 10 10

319,765 271,800

10 10,050 10 1,256,500 10 76,000 5 100,000,000 110,708,504 1000 14,735 14,735

1,005 5,600 7,600

10 10 10

10,050 1,256,500 76,000 10,708,504 10,000,000 10,000,000

2 105,153,700 10 110,000,000 100 16,400,000 231,553,700 735,219,853 392,942,914 763,067,616 346,495,986

25,635,000 250,000 10,000

2 105,153,700 10 25,000,000 100 6,400,000 136,553,700 628,872,988 471,610,784 482,340,000 157,262,204

15

LKP Finance Limited

SCHEDULES FORMING PART OF THE ACCOUNTS AS AT 31ST MARCH, 2010 - (Contd.)
SCHEDULE 6 - STOCK ON HAND a. In Shares - Valued at cost or market value whichever is lower TOTAL SCHEDULE 7 - SUNDRY DEBTORS (Unsecured, Considered Good) a. Lease Rentals - At agreement values (All debts due and outstanding for more than 6 months.) Less: Provision for Non-Performing Assets b. Other Debtors (includes Rs NIL outstanding for more than 6 months (Previous year NIL) TOTAL SCHEDULE 8 - CASH AND BANK BALANCES Cash on hand Balance with Scheduled Banks: in Current Account in Fixed Deposit Balance with Co-op Bank: in Current Account TOTAL SCHEDULE 9 - LOANS & ADVANCES (Considered Good) Advances to Companies and others Due from Subsidiary Companies Advances recoverable in cash or in kind or for value to be received Advance Tax, Self Assesment Tax & TDS Deposits TOTAL SCHEDULE 10 - LIABILITIES Sundry Creditors Advances Received Due to Subsidiary Company Unclaimed Dividend (FY 07-08 ) Unclaimed Dividend (FY 08-09) Investor Education and Protection Fund Small Scale Industries TOTAL 2,109,178 81,234,594 322,062 1,071,182 84,737,016 1,790,532 99,127,735 14,918,234 331,426 116,167,927 Rupees 118,730,949 118,730,949 As at 31-3-2009 Rupees 109,964,982 109,964,982

--

12,874,332 12,874,332 --

984,537 984,537

2,748,864 2,748,864

8,724 33,442,802 343,450,000 4,001 376,905,527

6,131 10,251,050 739,950,000 4,001 750,211,183

35,601,857 11,359,201 441,414,157 202,535,965 698,320 691,609,500

59,880,510 442,873,276 149,732,068 490,320 652,976,174

16

LKP Finance Limited

SCHEDULES FORMING PART OF THE ACCOUNTS AS AT 31ST MARCH, 2010 - (Contd.)
SCHEDULE 11 - PROVISIONS Provision for Income Tax Provision for Fringe Benefit Tax Proposed Dividend (including Tax) TOTAL SCHEDULE 12 - OTHER INCOME Profit on Sale of Assets Provision for NPA no longer required Bad Debts recovered Miscelleneous Income TOTAL 26,146,554 12,874,332 3,400,000 1,150,104 43,570,990 Rupees 230,000,000 697,715 107,100,058 337,797,773 As at 31-3-2009 Rupees 195,000,000 697,715 104,100,795 299,798,510 (Previous Year) 7,176,835 24,500 7,201,335 (Previous Year) SCHEDULE 13 - ESTABLISHMENT CHARGES Salary and Allowances. Directors Remuneration Contribution to Provident Fund/ESIC. Other Allowances Staff Welfare TOTAL SCHEDULE 14 - ADMINISTRATIVE EXPENSES Rent, Rates & Taxes Repairs - Others Advertisement Directors Fees Travelling & Conveyance Postage, Telegram & Telephones Legal and Professional Charges Printing & Stationery Auditors Remuneration : Audit fees Tax audit fees Irrecoverable Lease rentals Written off Loans Irrecoverable Written off Old Leased Assets Written off Brokerage Donation Miscellaneous Expenses TOTAL 137,875 27,575 12,463,218 27,717,180 101,000 3,087,401 59,171,204 93,755 16,545 15,000,000 934,729 9,444,550 5,000 4,429,971 40,976,081 350,104 315,509 309,917 65,000 5,025,076 877,583 8,362,832 330,934 656,369 142,786 66,315 53,000 3,276,072 825,356 5,881,803 149,830 Rupees 18,140,607 9,673,960 896,573 385,164 70,255 29,166,559 Rupees 19,964,476 3,600,000 1,442,926 246,239 244,622 25,498,263

17

LKP Finance Limited

SCHEDULE 15 SIGNIFICANT ACCOUNTING POLICIES 1. The accounts have been prepared on historical cost convention. The Company follows the accrual basis of accounting. The financial statements are prepared in accordance with the accounting standards specified in the Companies (Accounting Standards) Rules,2006 notified by the Central Government, in terms of section 211 (3C) of the Companies Act,1956. 2. a) In respect of lease and hire purchase agreement it is the Companys general policy to accrue income as per the terms of the Agreement entered into with the lessees / hirers from time to time. In respect of disputed lease agreement, which is contested in court the lease rentals will be accounted as and when received. Hire purchase and service charges are accounted on equated basis over the period of contracts. b) In respect of other heads of income the Company follows the practice of accounting for such Income on accrual basis except delayed payment charges and interest income on loans and advances, which are accounted on the basis of certainty of collection, and/or receipt basis. 8 Short Term Employee Benefits: (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered. Contributions towards Provident Fund are recognized as expense. Provident Fund contributions in respect of all employees are made to Provident Fund Authorities. Liability towards Gratuity covering eligible employees is contributed to Group Gratuity Scheme of Life Insurance Corporation of India based on the annual premium payable to them. Contribution to Central Government Employees State Insurance Scheme for eligible employees is recognized as charge for the year

9 a. Contingent Liabilities are disclosed by way of a note to the financial statements after careful evaluation by the management of the facts and legal aspects of the matters involved. b. Contingent Assets are neither recognized nor disclosed. SCHEDULE 16 - NOTES TO THE ACCOUNTS: 1. Contingent Liabilities: a) Guarantee given to a Bank -- Rs 5.00 crores.(Previous Year Rs 5.00 crores) b) Claim against the Company not acknowledged as Debt Rs 33.99 lacs (full amount deposited in the Mumbai High Court) (Previous Year Rs 33.99 lacs) 2. On 25th February 2008 the Company had issued 10,00,000 Share Warrants to the Promoters at a price of Rs 194 per warrant and received 10% of the issue price (i.e Rs 19.40 per Warrant). The option of conversion of warrants into Equity Shares was to be exercised within a period of 18 months from the date of issue of these warrants. As the warrants holders have not exercised their option for conversion within 18 months period the amounts received towards these share warrants were forfeited during the year and transferred to Capital Reserve. 3. The company after obtaining shareholders approval announced buy back of its Equity Shares (pursuant to the provisions of the Companies Act, 1956 (Act) and in compliance of the Securities and Exchange Board of India (Buy back of Securities) Regulations, 1998) on 10th February, 2009. The shareholders approved a buy back for a maximum amount of Rs 945 lacs and a maximum price of Rs 90/- per equity share. The scheme was operative upto July 2009.The company bought back 3,61,263 Shares during April / July 2009 and the total shares purchased during the full period ( i.e. February 2009 to July 2009) were 4,50,000 Equity Shares. These equity shares have been extinguished. The company expended Rs 301.63 lacs for purchase of 3,61,263 equity shares (at an average price of Rs 83.35 per share (previous year 88,737 shares at an average price of Rs 54.67 per share). The excess amount paid over the face value of equity shares has been drawn from Share Premium Account.

3. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenue and expenses during the reporting periods. Difference between the actual results and estimates are recognized in the period in which the results are known materialized. 4. All Fixed Assets including assets given on lease are capitalized at cost inclusive of legal and/or installation and incidental expenses, less accumulated depreciation. 5. The Company provides depreciation as under: a) On assets for own use : On written down value method at the rates and in the manner specified in Schedule XIV to the Companies Act 1956 as amended on 16th December, 1993. b) On assets acquired and leased: On straight line method at the rates so as to write off the assets over the period of lease.

6. Investments are capitalized and accounted at the cost plus brokerage and stamp charges. Provision for diminution in value is made in case the same is other than temporary. Profit or losses on investments are accounted as and when realized. 7. a. Current Tax: Provision for current tax is made on the estimated taxable income at the rate applicable to the relevant assessment year. b. Deferred Tax : In accordance with the Accounting Standard 22-Accounting for Taxes on the Income, issued by the Institute of Chartered Accountants of India, the deferred tax for the timing difference is measured using the tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date. Deferred tax assets arising from timing difference are recognized only on the consideration of prudence.

18

LKP Finance Limited

4. During the year the company has issued 7,27,489 11% Compulsorily Convertible Debentures (CCDs) to a Corporate at a price of Rs120/- convertible into equal number of equity shares to be converted between 5th March 2010 to 4th March 2011.The said CCDs have been converted into 7,27,489 equity shares on 31.03.2010.The money received has been utilized for meeting the working capital requirements of the Company. 5. The company has contributed towards its gratuity liability for employees to Life Insurance Corporation of India - Group Gratuity Scheme based on the annual contribution as intimated by Life Insurance Corporation of India. I) Reconciliation of opening and closing balances of the present value of the obligation 31.03.2010 31.03.2009 Rs. in lacs Rs. in lacs a. Present value of obligation 39.48 34.92 at the beginning of the year b. Current service cost 3.91 5.70 3.16 c. Interest Cost 2.79 (10.49) d. Benefits paid (1.54) e. Actuarial (Gain)/Loss 6.59 1.16 f. Present value of the obligation 42.65 43.03 at the end of the year II) Reconciliation of opening and closing balances of the fair value of Plan Assets 31.03.2010 31.03.2009 Rs. in lacs Rs. in lacs a. Fair value of Plan Assets at 44.45 26.52 the beginning of the year b. Expected return on Plan 3.84 2.92 Assets c. Contributions 9.01 16.53 (10.49) d. Benefits paid (1.54) Nil e. Actuarial (Gain)/Loss on Nil plan assets f. Fair value of the plan assets 46.81 44.45 at the end of the year III) Reconciliation of present value in I above and the fair value of Plan Assets in II above 31.03.2010 31.03.2009 Rs. in lacs Rs. in lacs a. Present value of Obligation 42.65 43.03 as at the end of the year b. Fair value of Plan assets at 46.81 44.45 the end of the year c. Excess of Fair Value of Plan 4.16 1.42 Asset over Present Value of Obligation 31.03.2010 31.03.2009 Rs. in lacs Rs. in lacs IV) Expenses charged to Profit & 9.01 16.53 Loss account As at As at 31.03.2010 31.03.2009 (Rs. in Lacs) (Rs. in Lacs) 6. Managerial Remuneration under Section198 of the Act to Executive Chairman Salary House Rent Allowance Commission Contribution to Provident Fund Perquisites Computation of net profits in accordance With Section 198 read with Section 309(5) of the Act. Profit before Taxation as per Profit and Loss Account Add: Remuneration to Director Directors Fees Depreciation as per Profit and Loss Account Profit on sale of Fixed Assets as per Section 349 of the Act Less: Depreciation as per Section 350 of the Act Profit on sale of Fixed Assets as per books Net Profit as per Section 198 of the Companies Act, 1956 Maximum permissible remuneration to to Executive Chairman restricted as per Shareholders approval to 5% of the net Profits of the company. Directors Sitting Fees

36.00 18.00 42.00 0.09 0.65 96.74

36.00 --0.09 -36.09

2099.71 96.74 0.65 5.99 29.47 132.85

5.05 261.47 266.52 1966.04

98.30 0.65

Note: Commission to Executive Chairman was approved by the shareholders through postal ballot (17th March,2010). No Commission was due in the previous year. 7. Particular with respect to Earnings per share is calculated as follows: Profit after Taxation (Rs in lacs) Number of Shares Outstanding Earnings per shares (Basic) Earnings per shares (Diluted) Face Value of Share 2009-10 2008-09 1,921.64 8,541.22 13,077,489 12,711,263 Rs. Ps. Rs. Ps. 14.69 67.19 14.69 62.29 10 10

19

LKP Finance Limited

8 Taxation : a. The company has made adequate provision for Income Tax based on the current years taxable income. As the tax under Minimum Alternative Tax is higher than the tax computed under the normal provisions of the Income Tax Act, 1961 provision for current tax has been made as per Minimum Alternative Tax provisions of the Income Tax Act, 1961. b. Deferred Tax Asset / (Liability) As at 31.03.2010 (25.03) Written down value differential 498.00 Brought forward losses 472.97 (Rs. in lacs) For the As at year 31.03.2009 13.93 (38.96) 158.00 171.93 340.00 301.04 (ii) Transaction with related parties. Subsidiary Company Associate Key Company Managerial Personnel ----96.74 Total (Rs. In Lacs) 10.32 --96.74

Rent 10.32 --Income Interest ----Income Directors ----Remuneration 10. Expenditure in Foreign Currency Foreign Travel

For the Previous Year Year (Rs. In lacs) (Rs. In lacs) 5.87 NIL

11. Prudential Norms of the Reserve bank of India (RBI): The Company has not changed its accounting policy for income recognition (which is on accrual basis). The Prudential Norms of the RBI require the company to derecognize certain income and make provisions for non-performing assets. As the market value of the quoted shares as at 31.03.2010 was higher as compared to the cost, no provision is required.

c. Assessments have been completed upto Asst. Year 2007-2008. Appeal has been filed with CIT (A) for Assessment Year 20042005, which is pending and the demand is NIL. 9. As per the Accounting Standard 18, disclosures of transactions with the related parties as defined in the Accounting Standards are given below: (i) List of related parties with whom transactions have taken place and relationships. Name of the Related Party LKP Securities Ltd. Gayatri Cement & Chemical Industries Pvt. Ltd. Peak Plastonics Pvt. Ltd. MKM Share & Stock Brokers Ltd. Sea Glimpse Investments Pvt. Ltd. Bhavna Holdings Pvt. Ltd. M/s. L.K. Panday Mr. M V Doshi Relationship Subsidiary Company Subsidiary Company Associate Company Associate Company Associate Company Associate Company Partnership Key Managerial Personnel

12. In compliance with Section 45IC of the Reserve Bank of India Act, the company has appropriated 20% of the Net Profit to Special Reserve Fund. (including for the financial year 2008-2009 Rs 1708.25 lacs) 13. Tax Deducted at Source on income: Rs. 110.77 lacs (Previous Year Rs. 190.16 lacs) 14. The company has no amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act] as at 31st March, 2010. 15. There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at 31st March, 2010 16. Previous Years Figures are regrouped / reclassified wherever necessary.

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LKP Finance Limited

SCHEDULE 17 - BALANCE SHEET ABSTRACT AND COMPANYS GENERAL BUSINESS PROFILE
I. II III Registration Details CIN No. State Code Balance Sheet Date Capital Raised during the year (Amount in Rs.Thousands ) Public Issue Rights Issue Bonus Issue Private Placement Positions of Mobilization and Deployment of Funds (Amount in Rs.Thousands) Total Liabilities Total Assets Sources of Funds : Paid-Up Capital Reserves & Surplus Secured Loans Unsecured Loans Application of Funds : Net Fixed Assets Investments Nett.Current Assets Misc.Expenditure Accumulated Losses. L65990MH1984PLC032831 11 31.03.2010

NIL NIL NIL NIL

1,981,913 1,981,913 130,775 1,255,313 173,291 11,166 735,220 765,696 -

IV. Performance of Company (Amount in Rs. Thousands) Turnover Total Expenditure Profit/(Loss) Before Tax Profit/(Loss) After Tax Earning Per Share in Rs. (Basic) Earning Per Share in Rs. (Diluted) Dividend rate in Rs. V. General Names of Three Principal products /services of Company (as per monetary terms) Product Description : N.A. As per our Report attached. For FORD, RHODES, PARKS & CO., Chartered Accountants Firm Registration No.102860W A. D. Shenoy Partner Membership No 11549 Mumbai Dated : 28th April, 2010 Executive Chairman Director Director

361,225 151,255 209,971 435,078 14.69 14.69 7.00

M. V. Doshi V. N. Suchanti M. S. Bhise

Mumbai Dated : 28th April, 2010

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LKP Finance Limited

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH,2010
As at 31.3.2010 A. Cash Flow From Operating Activities: Net Profit/(Loss) before tax and Extraordinary Items and Interest. Adjustments for: Depreciation Dividend Received Interest Paid Profit on sale of investments Profit on sale of assets Advances Written off Leased Assets Written off Operating Profit before Working Capital Changes Adjustments for working capital changes Cash Generated from operations Interest paid Direct taxes paid Cash flow before extraordinary items Net cash from operating activities Cash flow from investing activities Purchase of fixed assets Sale of fixed assets (net) Purchase of Investments Sale of Investments Dividend received Net cash used in investing activities Cash flow from financing activities Redemption of Preference shares and buy back of equity shares. Proceeds from long term borrowings Dividend paid Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents. (opening) Cash and cash equivalents. (closing) As per our Report attached. For FORD, RHODES, PARKS & CO., Chartered Accountants Firm Registration No.102860W A. D. Shenoy Partner Membership No 11549 Mumbai Dated : 28th April, 2010 Executive Chairman Director Director M. V. Doshi V. N. Suchanti M. S. Bhise 3,352.06 5.99 (97.65) (623.18) (2,250.18) (261.47) 124.63 -(3,101.86) 250.20 107.38 357.58 (623.18) (528.04) (1,151.22) (793.64) (793.64) (334.20) (890.16) 16.94 (270.56) (334.20) (14,695.20) (71.77) 150.00 9.37 (15,195.42) (5,242.54) (1,774.51) (7,017.05) (1,224.36) (8,241.41) (8,241.41) 9,952.88 (Rs In Lacs) As at 31.3.2009

(0.24) 300.00 (2,213.84) 2,919.96 97.65 1,103.53 571.85 (3,590.73) (1,024.07) (4,042.95) (3,733.06) 7,502.12 3,769.06

(7.77) 228.21 (4,785.32) 15,007.04 270.56 10,712.72 (298.52) 5,323.64 (299.39) 4,725.73 7,197.04 305.08 7,502.12

Mumbai Dated : 28th April, 2010

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LKP SECURITIES LTD.

DIRECTORS REPORT
The Directors present the Sixteenth Annual Report and Audited Accounts of the Company for the year ended 31st March 2010. FINANCIAL RESULTS 2009 - 2010 Rupees (In Lacs) 4847.55 93.47 4941.02 304.00 51.47 9.40 (51.47) (153.15) 447.75 130.54 578.29 2008 - 2009 Rupees (In Lacs) 3388.62 406.84 3795.46 (640.10) 30.00 (670.10) 170.00 630.64 130.54 SHARE CAPITAL During the year, under review the Board of Directors has issued and allotted in aggregate 8,50,000 9% Non-cumulative Redeemable Preference Shares of Rs. 100/each for cash at par to holding Company M/s. LKP Finance Limited to augment the long term working capital requirement of the Company. DIRECTORS In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. M. V. Doshi retires by rotation and being eligible offers himself for reappointment. The Directors recommend the resolutions for acceptance in respect of appointment of Mr. H. P. Doshi as whole-time Director as set out in the Notice. DIRECTORS RESPONSIBILITY STATEMENT As required under Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that: in the preparation of the Annual Accounts, the applicable accounting standards has been followed along with proper explanation relating to material departures; the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the period; the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities to the best of their knowledge & ability; the Directors have prepared the annual accounts on a going concern basis. STATUTORY INFORMATION The Particulars of Employees falling within the scope of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this report. However, as per Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts is being sent to all shareholders of the Company excluding the above Statement. Any shareholder interested in obtaining a copy of the said Statement may write to the Company at its Registered Office. The provisions of Section 217(1)(e) of the Companies Act, 1956, relating to conservation of energy and technology absorption do not apply to your Company. There is no foreign exchange earnings during the year under report. The detail of Outgo is mentioned in point no. 8 of Notes to Accounts under Schedule No. 16. AUDITORS M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. The Company has received a letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1-B) of the Companies Act, 1956. Your Directors recommend their re-appointment. ReGistrar and Share Transfer AGent Shareholders are requested to intimate any change concerning to the shares held by them to M/s. Adroit Corporate Services Private Limited, who is acting as a Registrar and Share Transfer Agent for the Company . M/s. Adroit Corporate Services Private Limited 19, Jafarbhoy Industrial Estate, 1st Floor, Makawana Road, Marol Naka, Andheri ( East), Mumbai 400 059. Tel. No.022- 28590942 ACKNOWLEDGMENT Your Directors place on record their sincere gratitude for the support received from the Bombay Stock Exchange Ltd., National Stock Exchange of India Ltd., other govt. & regulatory agencies, our esteemed clients and Banks and look forward to receive their continued support. Your Directors also greatly appreciate the commitment and dedicated efforts of all employees. Mumbai April 28, 2010 For and on behalf of the Board of Directors (M. V. Doshi) Director (Dinesh Waghela) Director

Income from Operation Other Income Profit / (Loss) before Tax Less: Provision for Taxation Provision for earlier years Taxation Provision for Fringe benefit tax Add: MAT Credit Entitlement Provision for Deferred Tax Asset Profit / (Loss) after tax Transfer from General Reserve Profit brought forward from previous year Balance carried to Balance Sheet DIVIDEND

The Company has decided to retain the profits for business purposes and not declare any dividend for the year. OPERATIONS During the year under review the income from operations increased from Rs. 3388.62 lacs to Rs. 4847.55 lacs. The Company has made a profit before tax of Rs. 304 lacs as against loss of Rs. 640.10 lacs in the previous year. a) Capital Market Division Global recession hit the markets in FY08-09 and stimulus packages were announced by various countries. Though markets have not fully recovered and there have been new surprises thrown up like the current Greece crisis, there is some hope that Indian markets would be able to continue their strong growth trend. The primary as well as secondary markets have picked up and a lot of new IPO offerings are in the fray. In the primary market, your company has a wide network for the distribution of IPOs and is strengthening its position by tying up with subbrokers and agents across the country to cover up untapped potential centres. In the secondary market segment your Company is dealing very actively with various FIs, FIIs, Mutual Funds, Corporates, Banks & High Net-worth Individuals and retail clients. The Company has been expanding its branch/sub-broker network. During the year under review, your Company strengthened its branch network to 414 over 147 cities and towns in India. Mutual fund advisory service LKP Mutual Fund Advisory Service has geared up to offer comprehensive Investment Advisory service to all class of investors with a strength of qualified, trained and experienced investment advisors who have in-depth knowledge of the financial markets. Continuous efforts are made to provide unbiased and independent advice backed by extensive product research. Mutual fund advisory division derives its strength from widespread network of Direct Clients, Independent Financial Advisors and Corporate/Institution. Also online trading in Mutual Funds is expected to contribute to revenues. During the year under review your Company has made its significant presence as an Arranger for many primary issuances of Bonds and NCDs by Corporates, Banks and PSUs. The Company managed the bond issuances by leading PSUs and others. The Company has been rated by Prime League table as one of the top 11 long-term debts Arranger and as No.2 Arranger for short-term debt placement.The Company has emerged as one of the top intermediaryof Non-SLR debt papers in WDM segment of NSE/BSE.

b) Wholesale Debt Market Division

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LKP SECURITIES LTD.

AUDITORS REPORT TO THE MEMBERS OF LKP SECURITIES LIMITED
We have audited the attached Balance Sheet of LKP Securities Limited as at 31st March 2010 and the Profit & Loss Account of the Company for the year ended on that date annexed thereto and also the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 1. As required by the Companies (Auditors Report) Order, 2003 (as amended), issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956 (the Act) and on the basis of such checks, as we considered appropriate, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order. 2. Further to our comments in paragraph 1. a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit. b) In our opinion proper books of accounts as required by law have been kept by the company so far, as appears from our examination of the books. c) The Balance Sheet, Profit and Loss Account and Cash flow statement dealt with by this report are in agreement with the books of account. d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash flow statement dealt with by the report are in compliance with the accounting standards referred to in section 211(3C) of the Companies Act, 1956. e) On the basis of written representations received from the directors of the Company, as on 31st March, 2010 and taken on record by the Board of Directors of the Company, none of the directors of the Company is disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of the sub-section (1) of Section 274 of the Companies Act, 1956. 3. In our opinion and to the best of our information and according to the explanations given to us the accounts read together with notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view: (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 Profit and Loss Account of the profit for the year ended on that date and (c) In the case of the Cash Flow statement of the cash flows for the year ended on that date. For Ford, Rhodes, Parks & Co. Chartered Accountants Firm Registration No.102860W A.D.Shenoy Partner Membership No.11549 Mumbai Date: 28th April,2010 5. (a) On the basis of our examination of the books of account and according to the information and explanations provided by the Management, we are of the opinion that the transactions that need to be entered into the register in pursuance of Section 301 of the Act have been so entered in the said register. (b) In our opinion and according to the information and explanations given to us there are no transactions aggregating in value during the year to more than 5 lakh rupees with parties referred to in the aforesaid register.

6. The company has not accepted any deposits from the public within the meaning of the provision of Section 58A and 58 AA of the Act. 7. The company has an internal audit system, which, in our opinion, is commensurate with its size and nature of its business. 8. The Company is a Stock and Debt Broking Company hence clause (viii) of the Order is not applicable. 9. (a) According to the information and explanations given to us by the Management and on the basis of the examination of the books of account carried out by us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, and the statutory dues with the appropriate authorities. There were no undisputed arrears of statutory dues outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us by the Management and the records of the company examined by us there were disputes with Income Tax Authorities which are listed below. Nature of dues pending Income Tax (Asst year 2004-05) Amount 23.05 lakhs Forum where dispute is Tribunal

Income Tax (Asst year 2006-07) 5.40 lakhs CIT (Appeals) 10. The Company has no accumulated losses as at 31st March,2010. However the Company has not incurred cash losses in the current financial year. However it has incurred cash losses in the immediately preceding financial year. 11. Based on our audit procedures and the information and explanations given to us by the Management, we are of the opinion that the Company has not defaulted in repayment of its dues to Financial Institutions or Debenture holders. 12. As per the books and records of the company examined by us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities. 13. Clause (xiii) of the Order as amended is not applicable as the company is not a Chit Fund company or nidhi / mutual benefit fund /society. 14 In our opinion the Company has maintained proper records of transactions and contracts in respect of dealing and trading in shares, securities, debentures and other investments during the year and timely entries have been generally made therein. All shares, debentures and other investments have been held by the company in its own name. 15 According to the information given to us and managements representation the Company has not given guarantee for the loans taken by others from banks or Financial Institutions during the year. 16. During the year the company has not taken any term loans from banks / institutions and there are no outstanding term loans as at 31st March,2010 17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis have been used for long term investments. 18. The Company has not made any preferential allotment of shares to parties and companies covered under Section 301 of The Companies Act, 1956. 19. The Company has not issued any debentures during the year and therefore paragraph 4(ix) of the Order is not applicable. 20. The Company has not raised any money by way of public issue during the year and therefore paragraph 4(xx) of the Order is not applicable. 21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of the audit. For Ford, Rhodes, Parks & Co. Chartered Accountants Firm Registration No.102860W A.D.Shenoy Partner Membership No.11549

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) The fixed assets have been physically verified by the management during the year. As explained to us no discrepancies were noticed on such verification (c) During the year the company has not disposed off any substantial part of fixed assets so as to affect the going concern. 2. The company does not have any stock of raw materials, stores, spare parts, finished goods and therefore clause ii (a), (b), (c) (of the Order) are not applicable. 3. The Company has neither granted nor taken loans, secured or unsecured to / from companies, firms or other parties covered in the register maintained under section 301 of the Act. 4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for providing services. During the course of our audit, we have neither come across nor have we been informed of any major weaknesses in the aforesaid internal control procedures in respect of these areas.

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF THE AUDITORS REPORT

Mumbai Date: 28th April,2010

24

LKP SECURITIES LTD. BALANCE SHEET AS AT 31st March, 2010

Schedule I SOURCES OF FUNDS : 1 SHARE HOLDERS' FUNDS a b c Share Capital Preference Share Application Money Reserves & Surplus 1 2 162,482,000 57,829,425 220,311,425 168,181,183 5,600,000 173,781,183 394,092,608 77,482,000 50,000,000 13,054,628 140,536,628 51,466,023 5,600,000 57,066,023 197,602,652 As at 31/3/2010 Rupees As at 31/3/2009 Rupees

2 LOAN FUNDS a Secured Loans b Unsecured Loans TOTAL II APPLICATION OF FUNDS : 1 FIXED ASSETS a Gross Block b Less : Depreciation c Net Block 2 INVESTMENTS 3 CURRENT ASSETS, LOANS & ADVANCES a Stock In Trade b Sundry Debtors c Cash & Bank Balances d Loans & Advances LESS : CURRENT LIABILITIES & PROVISIONS a Current Liabilities b Provisions NET CURRENT ASSETS Deferred Tax Asset (net) TOTAL Notes to the accounts & Accounting Policies Schedule 1 to 17 Annexed hereto form part of the Balance Sheet and Profit & Loss A/c As per our Report attached. For FORD, RHODES, PARKS & CO., Chartered Accountants Firm Registration No.102860W A. D. Shenoy Partner Membership No 11549 Mumbai Dated : 28th April, 2010

3 4

6 7 8 9 10

203,403,443 118,035,109 85,368,334 21,872,111 11,284,881 277,707,602 202,194,192 210,625,369 701,812,043 397,228,780 29,316,434 426,545,214 275,266,829 11,585,334 394,092,608

201,801,647 97,277,625 104,524,022 26,809,582 167,197,162 103,100,412 427,030,236 697,327,810 603,622,446 23,706,967 627,329,413 69,998,398 (3,729,350) 197,602,652

11

16

Director M. V. Doshi Director D. K. Waghela

Mumbai Dated : 28th April, 2010

25

LKP SECURITIES LTD. PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st March, 2010
Schedule INCOME Income from Operations Other Income 12 484,754,925 9,347,380 494,102,305 EXPENDITURE Establishment Charges Administration & Other Expenses Interest & Finance Charges Depreciation Extra-ordinary items - net credit NET PROFIT / (LOSS ) FOR THE YEAR BEFORE TAXATION Provision for taxation (MAT) Short Provision for Tax for Earlier Years Mat Credit Entitlement Provision for Deferred Tax Asset Fringe Benefit Tax NET PROFIT FOR THE YEAR AFTER TAXATION TRANSFER FROM GENERAL RESERVE BALANCE BROUGHT FORWARD FROM LAST YEAR BALANCE CARRIED FORWARD TO BALANCE SHEET Basic and Diluted Earnings per Share (in Rupees) (Refer note no 10 of Schedule 16) Notes to the accounts & Accounting Policies Schedule 1 to 16 Annexed hereto form part of the Balance Sheet and Profit & Loss A/c 16 44,774,796 13,054,629 57,829,425 1.71 13 14 15 149,239,239 269,231,316 20,939,875 24,291,613 30,400,263 5,147,320 940,151 (5,147,320) (15,314,684) 3,000,000 (67,010,078) 17,000,000 63,064,706 13,054,628 (2.55) 126,405,410 268,721,503 18,554,521 29,874,405 (64,010,078) 338,861,694 40,684,067 379,545,761 2009-10 Rupees 2008-09 Rupees

As per our Report attached. For FORD, RHODES, PARKS & CO., Chartered Accountants Firm Registration No.102860W A. D. Shenoy Partner Membership No 11549 Mumbai Dated : 28th April, 2010 Director M. V. Doshi Director D. K. Waghela

Mumbai Dated : 28th April, 2010

26

LKP SECURITIES LTD.

SCHEDULES FORMING PART OF THE ACCOUNTS AS AT 31/3/2010
As at 31/3/2010 Rupees SCHEDULE 1 - SHARE CAPITAL AUTHORISED CAPITAL 3,00,00,000 Equity Shares of RS. 2/- each 12,50,000 Preference Shares of Rs. 100/- each ISSUED, SUBSCRIBED & PAID-UP : 2,62,41,000 Equity Shares of Rs. 2/- each (LKP Finance Ltd, (the Holding Company) holds 97.69% (Previous Year 97.69%) of the Paid up Equity Share Capital of the Company) 11,00,000 9% Redeemable Preference Shares of Rs.100/- each (Previous Year 2,50,000 Redeemable Preference Shares of Rs. 100/- each) (All the above Redeemable Preference Shares are held by LKP Finance Ltd the Holding Company) 162,482,000 SCHEDULE 5 - FIXED ASSET 77,482,000 110,000,000 25,000,000 52,482,000 52,482,000 60,000,000 125,000,000 185,000,000 60,000,000 125,000,000 185,000,000 As at 31/3/2009 Rupees SCHEDULE 2 - RESERVES & SURPLUS GENERAL RESERVES Balance as per last Balance Sheet Less : Transfer to Profit & Loss Account Balance in Profit & Loss Account SCHEDULE 3 - SECURED LOAN a) Bank Overdraft (Secured by pledge of Fixed Deposit Receipts (including that of holding company of Rs.15 Crore) b) Vehicle Loan (Secured by hypothecation of Vehicle) SCHEDULE 4 - UNSECURED LOAN Loan From Companies As at 31/3/2010 Rupees As at 31/3/2009 Rupees

57,829,425 57,829,425 165,128,540

17,000,000 (17,000,000) 13,054,628 13,054,628 45,314,485

3,052,643 168,181,183 5,600,000 5,600,000

6,151,538 51,466,023 5,600,000 5,600,000

Particulars As at April 1, 2009 3,63,88,109 4,63,76,026 2,98,51,984 12,18,204 43,96,978 2,58,54,958 5,77,15,388 20,18,01,647

Cost Additions Deletions

FURNITURE & FIXTURE COMPUTERS COMPUTER SOFTWARE ELECTRICAL FITTING LEASEHOLD IMPROVEMENT VEHICALS OFFICE EQUIPEMENT Total

22,56,574 13,08,063 5,21,543 1,72,540

42,531 7,56,995

As at March 31, 2010 3,86,02,152 4,69,27,094 3,03,73,527 13,90,744 43,96,978 2,19,47,792 5,97,65,155 20,34,03,442

As at April 1, 2009 1,53,84,706 3,53,07,613 1,75,03,439 3,93,996 5,15,827 92,69,890 1,89,02,155 9,72,77,625

Accumulated Depreciation Depreciation Deletions for C.Y 39,43,996 47,60,405 50,37,889 1,23,752 7,02,488 40,87,202 56,35,880 2,42,91,612 21,562 6,57,174

As at March 31, 2010 1,93,07,140 3,94,10,844 2,25,41,328 5,17,747 12,18,315 1,07,49,212 2,42,90,521 11,80,35,108

Net Book Value As at As at March March 31, 2010 31, 2009 1,92,95,012 2,10,03,403 75,16,251 78,32,199 8,72,996 31,78,662 1,11,98,580 3,54,74,633 8,53,68,334 1,10,68,414 1,23,48,545 8,24,208 38,81,150 1,65,85,069 3,88,13,233 10,45,24,022

27,43,976 70,02,696

39,07,166 6,94,209 54,00,901

26,07,880 2,47,513 35,34,129

SCHEDULE 6 - INVESTMENTS Long Term Investments Quoted Shares (Fully Paid) At Cost As at 31.3.2010 Name of Scrip Liquid Benchmark units D.S.Kulkarni Developers Ltd. Gold Crest Finance (I) Ltd. Infra Industries Ltd. Axis IT & T Ltd ONGC Roopa Industries Ltd. TCI Finance Ltd Geodesic Information Systems Ltd Reliance Power Ltd Central Bank Of India LIC Mutual Fund Number 1090.6644 149 10000 149000 500 72 8900 8300 6792 17440 26205 100000 Cost (Rs.) 1,090,710 7,390 100,000 4,470,000 40,500 36,000 89,000 249,000 1,199,920 6,481,117 3,568,597 1,000,000 18,332,234 As at 31.3.2009 Number 6028.1353 149 10000 149000 500 72 8900 8300 6792 17440 26205 100000 Cost (Rs.) 6,028,181 7,390 100,000 4,470,000 40,500 36,000 89,000 249,000 1,199,920 6,481,117 3,568,597 1,000,000 23,269,705 Market Value of Quoted Shares Unquoted Shares (Fully Paid) Gobind Sugar Ltd Bombay Stock Exchange Ltd (Includes bonus shares 10524 received during the year) Sub Total Total 3,539,877 21,872,111 10,404,779 Sub Total 3,539,877 26,809,582 9,752,692 11200 11401 1,785,000 1,754,877 11200 11401 1,785,000 1,754,877

27

LKP SECURITIES LTD.

SCHEDULES FORMING PART OF THE ACCOUNTS AS AT 31/3/2010
As at 31/3/2010 As at 31/3/2009 Rupees Rupees SCHEDULE 7 - STOCK IN TRADE Bonds (cost or Mkt Value whichever is lower) SCHEDULE 8 - SUNDRY DEBTORS (UNSECURED, CONSIDERED GOOD) More than six months Others Less: Provision for doubtful debts SCHEDULE 9 - CASH & BANK BALANCES Cash Balance Balance with Schedule Banks : In Current Account In Fixed Deposit A/c SCHEDULE 10 - LOANS & ADVANCES (UNSECURED, CONSIDERED GOOD) Deposits Loans & Advances Staff Loan Advance Tax ,TDS & FBT Advances Recoverable in Cash or Kind Margin with Exchange / Clearing Member Prepaid Expenses SCHEDULE 11 - LIABILITIES a CURRENT LIABILITIES Sundry Creditors & Other Dues Margin & Deposits Outstanding expenses A b PROVISIONS Provision for Taxation / FBT Provision for Gratuity B A+B SCHEDULE 12 - OTHER INCOME Dividend Interest Profit on sale of shares Insurance Claim Received Other Income SCHEDULE 13 - ESTABLISHMENT CHARGES Salary and Allowances Director's Remuneration Bonus and Incentives Contribution to Provident Fund Contribution to ESIC Staff Welfare Medical Gratuity 102,111,666 2,454,260 34,612,769 3,424,776 537,056 2,548,535 1,814,867 1,735,311 149,239,239 101,835,264 2,656,400 8,590,919 3,995,621 636,684 3,481,161 2,090,130 3,119,230 126,405,410 113,002 8,817,938 39,000 377,440 9,347,380 388,912 10,350,432 27,656,285 2,140,902 147,535 40,684,067 SCHEDULE 15 - INTEREST & FINANCE CHARGES Bank Charges Interest 5,159,703 15,780,172 20,939,875 2,546,853 16,007,667 18,554,521 23,847,688 5,468,746 29,316,434 426,545,214 19,723,532 3,983,435 23,706,967 627,329,413 363,368,982 7,465,497 26,394,301 397,228,780 441,573,714 145,828,304 16,220,428 603,622,446 75,463,025 5,831,268 1,511,691 49,383,010 8,639,469 64,103,276 5,693,630 210,625,369 126,943,041 7,093,000 1,290,151 39,164,744 12,229,805 234,394,532 5,914,964 427,030,236 94,081,382 107,929,163 202,194,192 53,002,525 49,891,021 103,100,412 183,647 206,866 17,174,555 265,967,439 (5,434,392) 277,707,602 14,168,745 158,462,809 (5,434,392) 167,197,162 11,284,881 11,284,881 Commission Advertisement Exps Business Promotion and entertainment Books & Periodicals Computer Expense Conveyance Demat & CDSL Expenses Donation Electricity Expenses Company law expenses General & Misc Chgs Loss on sale of assets Insurance Motor Car Expenses Office Expenses Postage and Courier expenses Printing & Stationery Profession Tax Professional and Legal Charges Rent , Rates & Taxes Service tax , stamp duty and transaction charges paid Audit Fees Repairs & Maintenance Franking charges Vsat Charges SEBI Fees Stock Exchange Expenses Seminars and conference Subscription & Membership Fees Telephone and Mobile expenses Travelling (Domestic and Foreign) Operational loss Bad Debts Sundry balances written off As at 31/3/2010 As at 31/3/2009 Rupees Rupees SCHEDULE 14 - ADMINISTRATIVE EXPENSES 112,330,219 3,832,549 3,769,936 139,871 5,660,429 4,039,533 3,156,655 12,202 6,838,085 3,800 262,040 501,271 1,810,059 3,665,651 4,604,164 7,848,895 9,630,122 13,878 21,084,417 34,104,316 5,481,651 257,700 9,816,113 1,349,913 1,827,120 1,496,455 1,876,011 3,489,457 1,797,741 13,304,882 2,578,779 2,291,413 355,991 269,231,316 90,315,946 2,799,854 4,601,761 194,603 7,877,910 4,486,686 4,362,238 66,501 7,607,908 704,500 290,670 740,890 1,956,778 4,314,489 7,856,094 6,514,744 10,273,900 7,050 15,053,393 29,585,674 16,512,672 220,000 12,553,887 3,187,431 941,412 961,959 3,610,830 8,773,048 3,245,055 12,861,618 3,774,285 1,506,174 654,592 306,953 268,721,503

28

LKP SECURITIES LTD.

Schedule 16 - Accounting Policies and Notes to the Accounts Significant Accounting Policies : 1. The accounts have been prepared on historical cost convention. The Company follows the accrual basis of accounting.The financial statements are prepared in accordance with the accounting standards specified in the Companies (Accounting Standards) Rules, 2006 notified by the Central Government, in terms of Section 211 (3C) of the Companies Act, 1956. 2. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenue and expenses during the reporting periods. Difference between the actual results and estimates are recognized in the period in which they are known/ materialised. 3. All fixed assets are stated at cost inclusive of legal and / or installation and incidental expenses less accumulated depreciation. 4. The company provides depreciation on written down value method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. 5. Investments are stated and accounted at the cost plus brokerage and stamp charges. Current investments are stated at lower of cost and market value. Long term investments are stated at cost. Provision for diminution in value is made in case the same is other than temporary. Profits or losses on investments are accounted as and when realized. 6. Short Term Employee Benefits: (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered. Contribution towards Provident Fund are recognized as expense. Provident Fund contributions in respect of all employees are made to Provident Fund Authorities. Liability towards Gratuity covering eligible employees is partly contributed to Group Gratuity Scheme of Life Insurance Corporation Of India based on the annual premium payable to them. Contribution to Central Government Employees State Insurance Scheme for eligible employees is recognized as charge for the year. 7. a) Current Tax: Provision for current tax is made on the estimated taxable income at the rate applicable to the relevant assessment year. b) Deferred Tax: In Accordance with Accounting Standard 22"Accounting for Taxes on Income",the deferred tax for timing differrence is measured using the tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date. c) Fringe Benefit Tax: Provision for Fringe Benefit Tax is made in accordance with provisions of the Income Tax Act, 1961. 8 a) Contingent Liabilities are disclosed by way of note to the financial statements after careful evaluation by the management of the facts and legal aspects of the matters involved. b) Contingent Assets are neither recognized nor disclosed. Notes to Accounts 1) CONTINGENT LIABILITIES : a) Total Bank Guarantee issued on behalf of company as at 31st March 2010 is Rs. 2135 lacs (Previous year - Rs 1735 lacs) b) Claims Not Acknowledged as Debts Rs. 28.46 Lakh (Previous Year - Rs. 17 lakhs) Paid Up Capital

2) SHARE CAPITAL: During the year the Company has issued 8,50,000 Preference Shares of Rs. 100/ each to the Holding Company M/s LKP Finance Limited 3) Gratuity During the year the company has adopted Accounting Standard 15 (AS-15 Revised). The Company has contributed its gratuity liability to Life Insurance Corporation of India - Group Gratuity Scheme based on annual contribution as worked out by Life Insurance Corporation of India. I) Reconciliation of opening and Closing balance of the present value of the obligation Rs. In lacs a) Present Value of obligation at the beginning of the year b) Current Service Cost c) Interest Cost d) Benefits Paid e) Actuarial (Gain)/Loss f) Present Value of the obligation at the end of the year 71.76 9.91 5.74 (5.34) (15.20) 66.87

II) Reconciliation of opening and closing balanes of the fair value of plan Assets Rs. In lacs
a) Fair Value of Plan Assets at the beginning of the year b) Expected return of plan Asssets c) Contributions d) Benefits Paid e) Actuarial (Gain)/Loss on plan assets f) Fair Value of the Plan Assets at the end of the year 14.46 1.14 1.92 (5.34) 12.18

III) Reconciliation of present value in I above and the fair value of plan Assets in II above Rs. In lacs
a) Present Value of obligation as at the end of the year b) Fair Value of Plan Assets at the beginning of the year c) Excess of Fair Value of Plan Asset over Present Value of Obligation 66.87 12.18 (54.70)

Rs. In lacs IV) Expenses Charged to Profit & Loss Account

17.35

29

LKP SECURITIES LTD.

4) Provision for Taxation : Provision for Minimum Alternate Tax has been made in view of set off of Current year's income against Brought Forward Losses as per Income Tax Act, 1961. The said provision for MAT is also recognised as an asset and is reflected under Loans and Advances. Assesments have been completed upto A.Y. 2007-2008. Appeal has been filed with Tribunal for A.Y. 2004-05 & A.Y. 2006 - 2007, which is pending the demand for the same is Rs. 28.45 Lakh. However no provision for the said is made in view of the appeal filed. 9) Remuneration to Auditors : Particulars Audit fees Tax audit fees Service tax Other fees (including certification fees for earlier years) 10) Earnings per share: Net Profit after Taxation No. of Equity shares (post Split) Basic & Diluted earning per share 2009-10 2008-09 44,774,796 (67,010,078) 26,241,000 26,241,000 1.71 (2.55) 2009-10 Rs. 200,000 20,000 20,600 6,200 246,800 2008-09 Rs. 200,000 20,000 27,579 39,800 287,379

5) Deferred Tax (Asset) / Liability - Net as at 31st March, 2010 a) The Company has made adequate provision for Income Tax based on the current years taxable income. b) Deferred Tax Asset / (Liability) As at 31.03.2010 Rs. In lacs On account of: Written Down Value Differential Brought Forward Losses Disallowed Gratuity (725,715) 10,621,207 1,689,843
11,585,334

11) As per the Accounting Standards 18, issued by the Institute of Chartered Accountants of India,disclosures of transaction with the related parties as defined in the Accouting Standards are gven below: i) List of Related Parties alongwith the nature of related party relationships. Name of the Related Party LKP Finance Limited Sea Glimpse Investments Pvt Ltd Bhavna Holdings Limited M/s L.K.Panday Mr M.V. Doshi Mr Hitesh P Doshi Mr Dinesh Waghela Mr Pratik Doshi Particulars Rent Expense Directors Remuneration Salary Associate Company Relationship Holding Company Associate Company Associate Company Associate Company Key Management Personnel Key Management Personnel Key Management Personnel Relative Total (Rs. In Lakhs) 120,000 2,902,186 1,616,000

Previous Years figures with respect to Deferred Tax Asset /(Liability) is not given as the same had not been considered in the accounts in view of uncertainty about the future earnings. Particulars 1 2 3 4 Salary Contribution to Provident Fund Incentive to directors Sitting Fees 2009-10 Rs. 2,490,500 18,720 385,966 7,000 2,902,186 2008-09 Rs. 2,656,400 18,720 216,524 21,500 2,913,144

6) Remuneration to Wholetime Directors

ii) Transactions with Related Parties Key Relative Management Personnel 120,000 2,902,186 1,616,000

No computation of remuneration to directors u/s 198 read with Section 349 of the Companies Act, 1956 has been given, as no commission is payable to them.

7) The amounts shown against the sundry debtors and loans and advances is considered as good and recoverable by the management. 8) Expenditure in Foreign Currency : Particulars Foreign Travel Professional Fees Others 2009-10 Rs. 1,479,396 968,482 1,161,458 2008-09 Rs. 592,172 1,183,130 2,271,755

12) As per the information available with the Company as at 31st March 2010, the data in respect of Micro Small & Medium Enterprises that are covered under the Micro Small & Medium Enterprises Development Act, 2006 are not available. Hence, details regarding principal amount and interest paid/due thereon is not given. 13) There are no dues to Small Scale Industries and Investor Education and Protection Fund as at 31st March 2010 (Previous Year: Nil) 14) Previous year's figures have been regrouped wherever necessary.

30

LKP SECURITIES LTD.

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
As at 31.3.2010 Rs. In lacs As at 31.3.2009 Rs. In lacs

SCHEDULE 17: BALANCE SHEET ABSTRACT AND COMPANYS GENERAL BUSINESS PROFILE
1 Registration Details Registration No. State Code Balance Sheet date 2 Capital Raised During the Year Public Issue Rights Issue Preferential Issue u/s 81(1A) Bonus Issue Private Placement of Mobilisation 3 Positions Deployment of Funds Total Liabilities Total Assets Sources of Funds Paid-up Capital Reserves & Surplus Secured Loans Unsecured Loans Application of Funds Net Fixed Assets Investments Net Current Assets Deferred Tax Asset Accumulated Losses 4 Performance of Company 1,624.82 578.29 1,681.81 56.00 853.68 218.72 2,752.67 115.85 NIL 4,941.02 4,637.02 304.00 447.75 1.71 Share Broking N.A. and 3,940.93 3,940.93 U67120MH1994PLC080039 11 31/03/2010 Rs. In lacs NIL NIL 350.00 NIL NIL

A. Cash flow from Operating activities : 513.40 Net Profit / (Loss) before tax and (454.56) Extraordinary items and Interest Adjustments for : 242.92 Depreciation 298.74 5.01 Loss on sale of assets 7.41 (89.31) Interest / Dividend Received / Misc (107.39) (0.39) 158.23 (276.56) (77.80) Profit on sale of shares 671.63 Operating Profit before Working (532.36) capital changes Adjustments for : (112.85) Inventories 1,161.13 Trade and other receivables 1,556.40 (2,049.08) (1,000.81) (2,432.57) (876.17) Trade payables (329.17) Cash generated from operations (1,408.53) (209.40) Interest & Bank Charges paid (185.55) (70.34) (279.74) Direct taxes paid (49.64) (235.19) (608.92) Cash flow before extraordinary items (1,643.72) Net cash from operating activities (608.92) (1,643.72) B. Cash flow from Investing Activities Purchase of fixed assets Sale of fixed assets Purchase of investments Profit On sale of Shares Sale of investments Interest received Dividend received Net cash from investing activities C. Cash flow from financing activities Proceeds from issue of share capital , including Increase in Secured Loans (Decrease) / Increase in Unsecured Loans Net cash used in financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents (opening) Cash and cash equivalents (closing) 350.00 1,167.15
1,517.15

(70.03) 13.66 0.39 49.37 88.18

1.13

(304.66) 11.88 (3.89) 276.56 0.50 103.50

3.89

82.70

87.78

Turnover Total Expenditure Profit Before Tax Profit After Tax Dividend Rate % Earning per Share in Rs. 5 Products of the Company Item code No.:

509.82 460.61
(639.63)

330.81

1,517.15 990.94 1,031.00 2,021.94

330.81 (1,225.13) 2,256.14 1,031.00

Notes: The above particulars should be read alongwith the Balance Sheet as at 31st March, 2010 the Profit & Loss Account for the year ended on that date and the schedules forming part thereof.

As per our Report attached. for Ford, Rhodes, Parks & Co. Chartered Accountants Firm Registration No.102860W A.D.SHENOY Partner Mumbai Dated : 28th April, 2010

Director Director

M.V.DOSHI D.K.WAGHELA

Mumbai Dated : 28th April, 2010

31

Gayatri Cement & Chemical Industries Private Limited

DIRECTORS REPORT
The Directors hereby present their Twenty-eighth Annual Report along with the Audited Accounts for the year ended 31st March 2010. Financial Results : The company has made a loss of Rs. 27,27,968/- for the year under review compared to the loss of Rs. 6,29,586/- for the previous accounting year ended 31.3.2009. After adjusting the carried forward loss there is still carried forward losses of Rs 1,58,83,857/-. The Company became wholly owned subsidiary of LKP Finance Limited with effect from March 31, 2010. Dividend : In view of loss during the year under review, your Board of Directors do not recommend any Dividend. Directors Responsibility Statement: As required under Section 217 of the Companies Act, the Directors hereby confirm that: i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii) the Directors have selected such accounting policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the company for that period ; iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities to the best of their knowledge and ability ; iv) the Directors have prepared the annual accounts on a going concern basis. Auditors: You are requested to appoint M/s. Ford, Rhodes, Parks & Co., Chartered Accountant as Auditors. They have given their consent to act as the Auditors of your company. Statutory Information : The company did not have any employees falling within the scope of SubSection (2A) of Section 217 of the Companies Act, 1956. The Board has obtained a Compliance Certificate from Company Secretary in Practice pertaining to the financial year ended 31st March, 2010 in pursuant to the requirement s of Section 383A(1) of The Companies Act, 1956 read with The Companies (Compliance Certificate) Rules, 2001. The Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 require the disclosure of particulars regarding conservation of energy in Form A and Technology Absorption in Form B prescribed by the Rules. As no manufacturing activities were carried out during the year under report, it is advised that Forms A & B are not applicable. As regards foreign exchange, there were no earnings or outgo. For and on behalf of the Board Mumbai, Date: 28th April,2010. B M Baldawala Director J.A.Shah Director

AUDITORS REPORT TO THE MEMBERS OF GAYATRI CEMENT & CHEMICAL INDUSTRIES PRIVATE LIMITED
We have audited the attached Balance Sheet of Gayatri Cement & Chemical Industries Private Limited as at 31st March, 2010 and also the Profit and Loss account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 1. The company is a private limited company which fulfills all the conditions specified in paragraph 2(iv) of the Companies Auditors Report Order 2003 (as amended) issued by the Central Government in terms of section 227 (4A) of the Companies Act, 1956 and as such the requirements of the said Order is not applicable. 2. Further to our comments in the Annexure referred to in para 1 above, 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 the books; iii) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account; iv) In our opinion the Balance Sheet and Profit and Loss Account dealt with by this report comply with the mandatory Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; v) On the basis of written representations received from the directors of the Company as on 31st March, 2010 and taken on record by the Board of Directors of the Company, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 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 Balance Sheet and the Profit and Loss Account read together with notes thereon 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. (i) in so far as it relates to Balance Sheet, of the state of affairs of the Company as at 31st March, 2010 and (ii) in so far as it relates to Profit & Loss Account, of the loss of the Company for the year ended on that date. For Ford, Rhodes, Parks & Co. Chartered Accountants Firm Registration No. 102860W Mumbai, Date: 28th April, 2010 A.D.Shenoy Partner Membership No.11549

32

Gayatri Cement & Chemical Industries Private Limited

BALANCE SHEET AS AT 31ST MARCH, 2010.
As at 31.3.2009 Rupees 2,100,000 304,817 2,404,817 11,249,300 13,654,117

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010.
Schedule INCOME : Income from Share Investments. 7,650 7,650 EXPENDITURE : Administrative & Other Expenses 10 421,530 2,209,525 153,564 2,784,618 Profit/(Loss) before Taxation (2,776,968) ---(2,776,968) (13,106,889) (15,883,857) 11 538,873 -96,263 635,136 (629,586) -66,422 (367,095) (1,063,103) (12,043,786) (13,106,889) 5,550 5,550 Rupees Previous Year Rupees

I. SOURCES OF FUNDS : 1 Shareholders Funds a) Share Capital b) Reserves & Surplus

Schedule 1 2

Rupees 2,100,000 304,817

Rupees

2,404,817 2 Loan Funds : II. 1 2 3 Unsecured Loans Total : APPLICATION OF FUNDS : Fixed Assets a. Gross Block b. Less : Depreciation c. Net Block Investments Current Assets, Loans & Advances a) Sundry Debtors b) Cash & Bank Balances c) Loans & Advances 3 2,404,817

4 5,870,011 4,492,147 5 1,377,864 621,899 5,870,011 4,338,582 1,531,429 679,448

Loss on F&O Depreciation

-6 7 8 3,035 240,771 243,806 15,722,610 (15,478,804) 9 15,883,857 2,404,817

-243,188 2,671,319 2,914,508 4,578,156 (1,663,649)

Provision for Taxation Tax Relating to Earlier Years (Net) Provision for Diminution in value of investments Profit/(Loss) for the year Loss Brought Forward from Last year

Less : Current Liabilities & Provisions Net Current Assets 4 Miscellenous Expenditure Profit & Loss Account-Debit Balance Total :

13,106,889 13,654,117

Balance Carried to Balance Sheet Notes to the Accounts & Accounting Policies Balance Sheet Abstract And Company's General Business Profile Schedules 1 to 12 annexed hereto form part of the Balance Sheet and Profit & Loss account. 12

Notes to the Accounts & 11 Accounting Policies Balance Sheet Abstract And Company's General Business Profile 12 Schedules 1 to 12 annexed hereto form part of the Balance Sheet and Profit & Loss account.

As per Our Report attached For Ford,Rhodes,Parks & Co. Chartered Accountants Firm Registration No. 102860W A.D.Shenoy Partner Membership No :11549 Mumbai Date : 28th April, 2010

Director B M Baldawala Director J.A.Shah

Mumbai Date : 28th April, 2010

33

Gayatri Cement & Chemical Industries Private Limited

SCHEDULES FORMING PART OF THE ACCOUNTS AS AT 31ST MARCH,2010.
SCHEDULE 1 - SHARE CAPITAL Authorised,Issued,Subscribed & Paid up : 21,000 equity shares of Rs.100/- each SCHEDULE 2 - RESERVES & SURPLUS Subsidy from Jilla Udyog Kendra, Balance as per last Balance Sheet SCHEDULE 3 - UNSECURED LOANS From Body Corporate : Rupees 2,100,000 As at 31.3.2009 Rupees 2,100,000

304,817 -

304,817 11,249,300

SCHEDULE 4 - FIXED ASSETS Sr. Description of Assets Original Purchase Total cost Total Depr. Depreciation Total Depr. Net value Net value as on during the as on No. cost as on during the as on as on as on year 1.4.2009 year 31.3.2010 31.3.2009 31.3.2010 31.3.2010 31.3.2009 1 Embassy Center Building,Mumbai. 5,770,056 4,247,040 152,302 1st floor 5,770,056 4,399,342 1,370,714 1,523,016 99,955 1,262 7,150 2 Furniture Embassy Bldg. 99,955 91,543 92,805 8,412 Mumbai. 153,564 Total : 5,870,011 - 5,870,011 4,338,583 4,492,147 1,377,864 1,531,428 Notes: (I) Cost of office premises includes cost of shares of Rs.250/- in Embassy Centre Premises Co-operative Society Ltd. (2) Registration & Stamp duty charges paid. SCHEDULE 5 - INVESTMENTS No. of shares Quoted Everlon Synthetics Ltd Indus Network Ltd IDBI Ltd Idea Cellular Ltd Sanghi Polyester Ltd Power Grid Corporation Ltd Ispat Industries Ltd IFCI Ltd Unquoted MKM Shares & Stock Brokers Ltd Seaglimpse Investments Pvt Ltd Dean Finance & Investments Pvt Ltd Peak Plastonics Pvt Ltd 14000 2300 1500 1500 10000 1500 8000 Face Value Rupees 10 10 10 10 10 10 10 As at 31/3/2010 Cost Rupees As at 31/3/2009 Cost Rupees

No of Shares 14000 2300 1500 1500 10000 1500 8000 1000

Face Value Rupees 10 10 10 10 10 10 10 10

140,000 59,320 244,005 200,475 124,484 214,050 567,318 0 1,549,652 6,200 49,000 49,000 49,000 153,200 1,702,852 1,080,953 621,899 1,549,652 803,138 153,200

140,000 59,320 244,005 200,475 124,484 214,050 567,318 57,549 1,607,201 6,200 49,000 49,000 49,000 153,200 1,760,401 1,080,953 679,448 1,607,201 526,248 153,200

2000 4900 4900 4900 Total

10 10 10 10

2000 4900 4900 4900

10 10 10 10

Provision for diminution in value of investments Aggregate of quoted investments Aggregate of Unquoted investments

-At Cost -Market Value -At Cost

34

Gayatri Cement & Chemical Industries Private Limited

SCHEDULES FORMING PART OF THE ACCOUNTS AS AT 31ST MARCH,2010.
SCHEDULE 6 - CASH & BANK BALANCES Balance with scheduled banks in Current account SCHEDULE 7 - LOANS & ADVANCES Advances recoverable in cash or in Kind or for value to be received SCHEDULE 8 - LIABILITIES & PROVISIONS Others Due to Holding Company SCHEDULE 9 - PROFIT & LOSS ACCOUNT-DEBIT BALANCE. Balance as per last Balance Sheet (Add)/Less: Profit/(Loss) for the year SCHEDULE 10 - ADMINISTRATIVE & OTHER EXPENSES Legal & Professional Filing Fees Auditor's Remuneration. Bank Charges Demat Charges General & Miscelleneous Expenses Interest Expenses Profit / Loss on sale of shares As at 31/3/2009 243,188 243,188 Earnings per shares are calculated by dividing the profit attributable to the Equity Shareholders by the weighted average number of Equity Shares outstanding during the year. The number used in calculating basic and diluted earnings per equity shareholders are as stated below: As at 31.3.2010 Profit/(Loss) after Taxation 240,771 2,671,319 Weighted Average number of shares (2,776,968) 21,000 As at 31.3.2009 (1,063,103) 21,000

3,035 3,035

4,443,309 11,279,300 15,722,610 23,018,455 (2,776,968) 25,795,423 6,000 900 16,545 187 588 396,001 1,309 421,530

4,578,156 4,578,156 21,955,352 (1,063,103) 23,018,455 22,495 1,500 16,545 469 600 2,520 369,698 125,046 538,873

(0.01) (0.02) Earnings Per share: 6. Provision for Diminution in value of investments:The Company has provided for the diminution in the value of quoted investments. 7. Figures of the previous year have been re-grouped so as to make them comparable with the figures for this year. SCHEDULE 12 - BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE I Registration Details 115063 Registration No 11 State Code 31.3.2010 Balance Sheet Date (Rs in '000) II Capital Raised During The Year NIL Public Issue NIL Rights Issue NIL Bonus Issue NIL Private Placement III Position Of Mobilisation And Deployment Of Funds 18,127 Total Liabilities 18,127 Total Assets Sources Of Funds: 2,100 Paid-up Capital 305 Reserves And Surplus - Secured Loans - Unsecured Loans Application Of Funds: 1,378 Net Fixed Assets 622 Investments (15,479) Net Current Assets 15,884 Miscellaneous Expenditure IV Performance Of Company 8 Turnover 2,785 Total Expenditure 2,785 Profit/(loss) Before Tax (2,777) Profit/(loss) After Tax NIL Earnings Per Share(In Rs) NIL Dividend Rate % V Generic Names Of Three Products/Service Of Company Item Code No Product Description N.A N.A As per Our Report attached For Ford,Rhodes,Parks & Co. Chartered Accountants Firm Registration No. 102860W A.D.Shenoy Partner Membership No :11549 Mumbai Date : 28th April, 2010 Mumbai Date : 28th April, 2010 Director B M Baldawala Director J.A.Shah

SCHEDULE 11 - ACCOUNTING POLICIES & NOTES TO THE ACCOUNTS Accounting policies: 1. Accounting Methodology:The accounts have been prepared on historical cost convention. The company follows the accrual basis accounting.The financial statements are prepared in accordance with the accounting standards speciifed in the Companies (Accounting Standards) Rules,2006 notified by the Central Government, in terms of section 211(3C) of the Companies Act, 1956 2. The Company has not provided the depreciation on assets as per rates given in schedule XIV of the Companues Act,1956 It has provided the same as per the provision of Income Tax Act,1961 on WDV basis. 3. Investments are capitalised and accounted at the cost plus brokerage and stamp charges. Profits or losses on investments are accounted as and when realised. 4. All Fixed Assets are capitalised at cost inclusive of legal and/or installation and incidental expenses, less accumulated depreciation. Notes to the accounts: 1. The Company has no manufacturing activity since 1992-93 and hence additional information regarding licenced capacity, installed capacity, actual production and quantitative details of production, sales and closing stock in respect of previous year is not given. 2. There are no employees employed in the company and hence the details regarding the emoluments is not applicable. 3. The company has filed appeal against certain disallowables by the Income Tax Authorities.The company has during the year followed the Accounting Standard 22 of the Institute of Chartered Accountants of India in providing taxes on the income of the company.Defferred Tax Assets has not been considered in the accounts in view of uncertainities of future activities of the company. 4. No provision for taxation is considered in view of loss for the year. There is no certainity of the company earning profits which will offset the lossess in future years. 5. Earnings per share:

35

LKP Finance Limited

AUDITORS REPORT TO THE BOARD OF DIRECTORS OF LKP FINANCE LTD ON THE CONSOLIDATED FINANCIAL STATEMENTS OF LKP FINANCE LTD, AND ITS SUBSIDIARIES.
1. We have audited the attached Consolidated Balance Sheet of LKP Finance Ltd (formerly known as LKP Merchant Financing Ltd. (the company) and its subsidiaries as at 31st March 2010, the Consolidated Profit and Loss Account for the year ended on that date annexed thereto, and the Consolidated Cash Flow Statements for the year ended on that date, which we have signed under reference to this report. Our responsibility is to express an opinion on this consolidated statement based on our audit. 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 whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework and are free of material misstatements. An audit includes, examining on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The financial statements of the subsidiary LKP Securities Ltd have been audited by us whose financial reflect total assets of Rs 3,940.93 lacs as at 31st March, 2010 and total revenues of Rs 4,941.03 lacs for the year ended on that date. The financial statements of the subsidiary Gayatri Cement & Chemical Industries Pvt Ltd have been audited by us whose financials reflect total assets of Rs 24.05 lacs as at 31st March, 2010 and total revenues of Rs 0.07 lacs for the year ended on that date. 4. We report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India and on the basis of the separate audited financial statements of the Company and its subsidiaries included in the consolidated financial statements. On the basis of the information and explanation given to us and on the consideration of the separate audit reports on individual audited financial statements of the Company, and its subsidiary, we are of the opinion that the said consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: (a) In the case of the consolidated Balance Sheet, of the consolidated state of affairs of the Company and its subsidiaries as at 31st March 2010. (b) In the case of the consolidated Profit and Loss Account, of the consolidated results of operations of the Company and its subsidiaries for the year then ended and (c) In the case of the consolidated Cash Flow Statement, of the consolidated Cash Flows of the Company and its subsidiaries for the year then ended. For FORD, RHODES, PARKS AND CO Chartered Accountants Firm Registration No.102860W Place : Mumbai Date : 28th April, 2010 A .D.Shenoy Partner. Membership No 11549

5.

2.

3.

36

LKP Finance Limited

CONSOLIDATED BALANCE SHEET OF LKP FINANCE LIMITED AND ITS SUBSIDIARY COMPANIES AS AT 31ST MARCH, 2010
As at 31.3.2009 Schedule Rs in Lacs Rs in Lacs I SOURCES OF FUNDS : 1. Shareholders Funds a. Share Capital 1 1,307.75 2 12,975.62 14,283.37 2 Loan Funds a. Secured Loans b. Unsecured Loans 3 4 3,414.72 56.00 3,470.72 TOTAL II APPLICATION OF FUNDS : 1. Fixed Assets a. Gross Block b. Less : Depreciation c. Net Block d. Goodwill on consolidation 6 5 2,646.27 1,667.15 979.12 670.77 588.82 5,261.61 7,865.14 6,663.94 1,201.20 526.72 263.75 5,255.31 17,754.09 5,838.30 56.00 5,894.30 18,446.30 1,271.13 194.00 11,086.87 12,552.00 b. Partly Paid Convertible Warrants c. Reserves and Surplus Rs in Lacs INCOME : Income from Operations Income from Broking Activities Other Income EXPENDITURE : Establishment Charges Administrative and other expenses Interest and Finance charges. Depreciation. AMORTISATION OF TRADE MARK TRANSFER FROM TRADE MARK RESERVE Operating Profit / (Loss) PROFIT BEFORE TAXATION PROVISION FOR DEFERRED TAX NET PROVISION FOR TAXATION PROVISION FOR FRINGE BENEFIT TAX

CONSOLIDATED PROFIT & LOSS ACCOUNT OF LKP FINANCE LIMITED AND ITS SUBSIDIARY COMPANIES FOR THE PERIOD ENDED 31ST MARCH, 2010.
Previous Year Schedule Rs in Lacs Rs in Lacs Rs in Lacs 3,166.22 4,847.55 529.25 8,543.02 1,784.06 3,296.05 5,080.11 836.54 250.44 1,086.98 2,375.93 2,375.93 315.68 (350.00) 10,496.60 3,410.54 94.91 14,002.05 1,519.03 3,020.13 4,539.16 519.75 315.69 835.44 20.00 (20.00) 8,627.45 8,627.45 301.04 (1,025.00) (32.36) 7,871.13 7,871.13 1,273.29 9,144.42

13

14 15

2. Deferred Tax Asset (Net) 3. Investments 4. Current Assets, Loans & Advances a. Stock on hand b. Sundry Debtors c. Cash & Bank Balances d. Loans & Advances 7 8 9 10 1,300.14 2,786.98 5,791.03 8,910.86 18,789.01 Less : Current Liabilities and Provisions a. Liabilities b. Provisions Net Current Assets TOTAL NOTES TO THE ACCOUNTS, ACCOUNTING POLICIES & CASH FLOW STATEMENT As per our Report attached For FORD, RHODES, PARKS & CO. Chartered Accountants Firm Registration No.102860W A.D. Shenoy Partner Membership No 11549 Mumbai Dated : 28th April,2010. 16 11 12 4,864.09 3,671.15 8,535.24

1,099.62 1,699.46 8,757.62 10,650.89 22,207.59

7,773.22 3,235.05 11,008.27 10,253.77 17,754.09 11,199.32 18,446.30

2,341.61 PROFIT AFTER TAXATION 2,341.61 EXCESS DIVIDEND AND TAX 16.94 ADDED BACK PROFIT BROUGHT FORWARD 3,133.46 FROM LAST YEAR AMOUNT AVAILABLE FOR 5,492.01 APPROPRIATION APPROPRIATIONS: TRANSFERRED TO GENERAL 200.00 RESERVE CAPITAL REDEMPTION 36.13 RESERVE ACCOUNT SPECIAL RESERVE FUND 2,092.57 PROPOSED DIVIDEND 915.42 TAX ON PROPOSED DIVIDEND 155.58 PROFIT CARRIED TO BALANCE 2,092.31 SHEET NOTES TO THE ACCOUNTS, ACCOUNTING POLICIES & CASH 16 FLOW STATEMENT SCHEDULES 1 TO 16 ANNEXED HERETO FORM PART OF THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT As per our Report attached For FORD, RHODES, PARKS & CO. Chartered Accountants Firm Registration No.102860W A.D. Shenoy Partner Membership No 11549 Mumbai Dated : 28th April,2010.

4,830.00 8.87 889.79 151.22 3,264.54

Executive Chairman Director Director

M. V. Doshi V. N. Suchanti M. S. Bhise

Executive Chairman Director Director

M. V. Doshi V. N. Suchanti M. S. Bhise

Mumbai Dated : 28th April,2010

Mumbai Dated : 28th April,2010

37

LKP Finance Limited

SCHEDULES TO THE CONSOLIDATED ACCOUNTS AS AT 31ST MARCH, 2010.
As at 31.3.2009 Rs in Lacs Capital Redemption Reserve Account 2,000.00 1,000.00 3,000.00 2,000.00 1,000.00 3,000.00 Balance as per last Balance Sheet. Add : Transferred from Profit & Loss account. Special Reserve Fund Transferred from Profit & Loss account. General Reserve Balance as per last Balance Sheet. Add : Transferred from Profit & Loss account. Balance in Profit & Loss Account TOTAL 5,800.99 5,800.99 2,092.31 12,975.62 8.87 8.87 As at 31.3.2009 Rs in Lacs

Rs in Lacs SCHEDULE 1 - SHARE CAPITAL Authorised (i) 2,00,00,000 Equity Shares of Rs 10/- each. (ii) 10,00,000 Redeemable Cumulative Preference Shares of Rs.100/-each

Rs in Lacs

36.13

45.00 2,092.57

Issued,Subscribed & Paid up : 127,11,263 Equity Shares of Rs.10/each Add : 7,27,489 Equity Shares issued Less : 3,61,263 Shares extinguished under Buy back (Previous Year 88,737) TOTAL 1,271.13 72.75 36.13 1,307.75 1,307.75 1,280.00 8.87 1,271.13 1,271.13

767.94 4,830.00 5,597.94 3,264.54 11,086.87

SCHEDULE 2- RESERVES & SURPLUS Capital Reserve Share warrants monies forfieted during the year. Share Premium Account Balance as per last Balance Sheet. Add : Premium amount on 7,27,489 Equity Shares Less : Premium paid on 3,61,263 Shares under buy back scheme. 2,215.52 800.24 265.01 2,750.75 194.00 -

SCHEDULE 3 - SECURED LOANS Term Loans from Financial Institutions Loan from Corporate against pledge of shares Vehicle Loan A/c Working Capital Loans From Banks TOTAL SCHEDULE 4 - UNSECURED LOANS Inter Corporate Deposit TOTAL 56.00 56.00 56.00 56.00 1,200.00 530.19 33.24 1,651.29 3,414.72 1,200.00 66.30 4,572.00 5,838.30

2,215.52

SCHEDULE 5 - FIXED ASSETS

Description of Assets Gross Block (At Cost) As at ADDITIONS 1st April 2009 I. OWN ASSETS Office Premises Premises Furniture & Fixtures Air Conditioners Office Equipment's Vehicles Leasehold Improvements 138.49 106.21 507.32 24.97 1,552.07 266.32 43.98 2,639.36 4,711.07 128.93 312.45 122.02 289.16 47.66 23.57 0.43 14.51 39.07 57.70 68.01 128.18 106.21 530.46 24.97 1,585.22 227.25 43.98 2,646.27 4,734.36 108.67 43.96 296.92 23.92 909.56 93.35 5.16 1,481.54 3,280.89 1.53 2.79 39.88 0.14 157.20 41.87 7.02 250.43 335.69 29.47 0.22 9.05 26.08 0 64.82 83.43 80.73 46.75 336.58 24.06 1,057.71 109.14 12.18 1,667.15 3,533.15 47.45 59.46 193.88 0.91 527.51 118.11 31.80 979.12 1,201.21 DEDUCTIONS As at 31st March, 2010 As at 31st March, 2009 Depreciation For the Year Deductions for the year As at 31st March, 2010 Net Block As at 31st March, 2010

(Rs in lacs) As at 31st March, 2009 72.29 62.25 211.32 1.05 642.51 172.97 38.82 1,201.21

Total PREVIOUS YEAR

38

LKP Finance Limited

SCHEDULES TO THE CONSOLIDATED ACCOUNTS AS AT 31ST MARCH, 2010.
SCHEDULE 6 - INVESTMENTS (at Cost) Qouted Equity Shares Fully Paid (at Cost), Quantity Face Value Cost Rs in Lacs 0.03 6.66 0.01 10.91 0.71 1.00 44.70 0.41 0.36 0.89 2.49 12.00 64.81 43.67 3,650.41 47.49 174.02 1.40 0.59 2.44 2.01 1.24 2.14 5.67 42.19 4,118.25 50.63 43.03 319,765 271,800 10 10 Quantity As at 31.3.2009 Face Cost Rs in Value Lacs 10 0.07 10 0.02 10 0.03 10 7.02 10 0.01 1000 60.28 10 0.71 10 1.00 10 44.70 10 0.41 10 0.36 10 0.89 10 2.49 10 12.00 10 64.81 10 43.67 1 4,700.35 4,938.82 50.63 43.03

SCHEDULE 7 - STOCK ON HAND a. In Shares - Valued at cost or whichever is lower a. In Bonds - Valued at cost or whichever is lower TOTAL market market value value

Rs in Lacs 1,187.31 112.85 1,300.16

Rs in Lacs 1099.62 1,099.62

NAME OF THE COMPANY Garware Polyester Ltd. I C I C I Bank Ltd. 8 10 Tata Motors Ltd 30,000 10 Maharashtra Polybutane Ltd 47 10 JSW Steel Ltd 1,090.6644 1000 Liquid Benchmark Units 732 10 D S Kulkarni Developers Ltd 10,000 10 Gold Crest Finance (I) Ltd 149,000 10 Infra Industries Ltd 500 10 Axis IT & T Ltd 72 10 ONGC Ltd 8,900 10 Rupa Industries Ltd 8,300 10 TCI Finance Ltd 4,528 10 Geodesic Information Systems Ltd 17,440 10 Relaince Power Ltd 51,205 10 Central Bank of India Ltd 11,282,110 1 Thomas Cook (India) Ltd Equity Shares 131,910 10 NHPC Ltd 52,000 10 Reliance Industries Ltd (includes 36,000 bonus shares) 14,000 10 Everlon Synthetics Ltd 2,300 10 Indus Network Ltd 1,500 10 IDBI Ltd 1,500 10 Idea Cellular Ltd 10,000 10 Sanghi Polyster Ltd 1,500 10 Power Grid Corporation Ltd 8,000 10 Ispat Industries Ltd 4 1000000 8.95% IDBI Upper Tier I I 2024 bonds SUB-TOTAL UNQUOTED & FULLY PAID UP: 319,765 10 Thomas Cook (India) Ltd 0.001% Class B Preference Shares 271,800 10 Thomas Cook (India) Ltd 0.001% Class C Preference Shares (Class B & C Preference Shares are Convertible into Equity Shares within a period of seven years on Thomas Cook (India) Limited achieving certain levels of EPS) 1,005 10 The Saraswat Co-op Bank Ltd. (Equity Shares) 350 10 The Hindustan Times Ltd. (Equity Shares) 7,600 10 Doshi Holding Pvt Ltd. (Equity Shares) 20,000,000 5 Hemavathy Power & Light Pvt Ltd. (Equity Shares) 11,200 10 Gobind Sugar Ltd. (Equity Shares) 11,401 Bombay Stock Exchange Ltd. (Equity Shares) 2,000 10 MKM Shares & Stock Brokers Ltd. (Equity Shares) 4,900 10 Seaglimpse Investments Pvt Ltd. (Equity Shares) 4,900 10 Dean Finance & Investments Pvt Ltd. (Equity Shares) 4,900 10 Peak Plastonics Pvt Ltd. (Equity Shares) SUB-TOTAL INVESTMENT IN MUTUAL FUNDS: 147.342 1000 Bench Mark Mutual Fund JP Morgan Alpha Fund Shriram Interval Fund 97 100,000 LIC Mutual Fund SUB-TOTAL TOTAL Provision for diminution in value of investments i. Aggregate of quoted investments - At Cost - Market Value ii. Aggregate of unquoted investments - At Cost.

100 10 8 35,067 47 6,028 732 10,000 149,000 500 72 8,900 8,300 4,528 17,440 51,205 14,282,010

SCHEDULE 8 - SUNDRY DEBTORS (Unsecured, Considered Good) b Other debts TOTAL SCHEDULE 9 - CASH AND BANK BALANCES Cash on hand ( Including cheques on hand Rs NIL lacs (Previous Yr Rs NIL lacs) Balance with Scheduled Banks: in Current Account in Fixed Deposit Cooperative Bank : TOTAL

2,786.98 2,786.98

1,699.46 1,699.46

1.93 1,275.27 4,513.79 0.04 5,791.03

2.14 857.03 7,898.41 0.04 8,757.62

SCHEDULE 10 - LOANS & ADVANCES (Considered Good) Deposit with Companies and others Advances recoverable in cash or in kind or for value to be received Tax Deducted at Source & Self Assesment Tax Fringe Benefit Tax-advance Trade Deposits TOTAL SCHEDULE 11 - LIABILITIES Sundry Creditors TOTAL

356.02 6,080.14 2,460.35 7.37 6.98 8,910.86 4,864.09 4,864.09 2,538.48 6.98 1,071.00 54.69 3,671.15 261.47 128.74 34.00 15.66 439.87

1,719.04 7,037.98 1,796.25 92.72 4.90 10,650.89 7,773.22 7,773.22 2052.48 101.73 1041.01 39.83 3,235.05 71.77 23.14 94.91

0.10 12.57 0.76 1,000.00 17.85 17.55 0.06 0.49 0.49 0.49 1,144.02 0.15 10.00 10.15 5,272.42 10.80 5,261.62 4,128.40 7742.76 1,144.02

1,005 350 7,600

10 10 10

0.10 12.57 0.76 17.85 17.55 0.00 0.00 142.49 100.00 0.50 10.00 110.50 5,191.80 0.00 5,191.80 4,938.82 4,920.93 252.99

9,600 877

10 0

SCHEDULE 12 - PROVISIONS Provision for Income Tax Provision for Fringe Benefit Tax Provision for Dividend Provision for Gratuity TOTAL SCHEDULE 13 - OTHER INCOME Profit on sale of assets Provision for NPA no longer required Bad Debts recovered Miscellaneous Income TOTAL SCHEDULE 14 - ESTABLISHMENT CHARGES Salary and Allowances Directors Remuneration Contribution to Provident Fund/ESIC. Other Allowances Staff Welfare TOTAL

5,000 100,000

1,584.16 121.28 48.59 3.84 26.19 1,784.06

1,355.99 62.56 60.76 2.46 37.26 1,519.03

39

LKP Finance Limited

SCHEDULE 15 - ADMINISTRATIVE EXPENSES Rent, Rates & Taxes Repairs - Others Electricity Advertisement Directors Fees Traveling & Conveyance Postage, Telegram & Telephones Legal and Professional Charges Printing & Stationery Auditors Remuneration : Audit fees Tax audit fees Vehicle Maintenance Insurance Irrecoverable lease rentals written off Loans Irrecoverable written off Loss on sale of fixed assets Brokerage Donation Miscellaneous Expenses TOTAL 334.22 101.32 68.38 41.43 0.72 116.44 220.32 294.53 99.60 4.13 0.28 36.66 18.10 124.63 3.56 5.01 277.17 1.13 1,548.42 3,296.05 298.10 126.97 76.42 28.65 0.53 115.37 202.02 209.35 104.24 3.14 0.17 43.14 19.57 168.99 7.40 0.72 1,615.35 3,020.13
(i) List of related parties with whom transactions have taken place and relationships. (Relationship : Subsidiary Company, Associate, Key Managerial Personnel)

Name of the Related Party 1. LKP Securities Ltd. 2. Gayatri Cement & Chemical Industries Pvt Ltd 3. Peak Plastonics Pvt. Ltd. 4. MKM Share & Stock Brokers Ltd. 5. Sea Glimpse Investments Pvt. Ltd. 6. Bhavna Holdings Pvt. Ltd. 7. M/s. L.K. Panday 8. Mr. M V Doshi Subsidiary Company Rent income Interest Income Directors Remuneration 10.32 -----

Relationship Subsidiary Company Subsidiary Company Associate Company Associate Company Associate Company Associate Company Partnership Key Managerial Personnel Key Total Managerial (Rs.in Lacs) Personnel --10.32 ----96.74 96.74

(ii) Transaction with related parties.

Associate -------

SCHEDULE 16 SIGNIFICANT ACCOUNTING POLICIES. 1. Basis of Accounting 1. The accounts have been prepared on historical cost convention. The Company follows the accrual basis of accounting. The financial statements are prepared in accordance with the accounting standards specified in the Companies (Accounting Standards) Rules,2006 notified by the Central Government, in terms of section 211 (3C) of the Companies Act,1956. 2. Principles of Consolidation (a) The consolidated financial statements relate to LKP Finance Ltd (formerly known as LKP Merchant Financing Limited (the Company) and its Subsidiary Companies. The consolidated financial statements have been prepared on the following basis. -- The financial statements of The Company and its Subsidiary Companies have been combined on a line-by-line basis by adding together income and expenses, after fully eliminating intra-group balances and intragroup transactions. -- The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Companys separate financial statements. -- The excess of cost to the company of its investments in the Subsidiary Companies is recognised in the financial statements as goodwill. -- No disclosure has been made for share of profit and share in net assets of the subsidiary, LKP Securities Ltd in respect of Minority interest (2.31% of the Subsidiarys Equity Capital). (b) The Subsidiary Companies in the consolidated financial statements are:

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH,2010
As at 31.3.2010 Rs in Lacs Rs in Lacs As at 31.3.2009 Rs in Lacs

Name of the Company 1. LKP Securities Limited 2. Gayatri Cement & Chemical Industries Pvt Ltd

Country of Incorporation India India

% of voting power held as at 31st March,2010. 97.69 100.00

(c) Other Significant Accounting Policies These are set out in the notes to accounts under Statement of Accounting Policies of the financial statements of the Company and Subsidiaries LKP Securities Limited & Gayatri Cement & Chemical Industries Pvt Ltd. 3. Segment reporting and related information is not given, as the same is not applicable to the Company and its Subsidiaries as there is only one segment. 4. Particular with respect to Earnings per share is calculated as follows:

Profit after Taxation (Rupees in Lacs) Number of Shares Outstanding Earnings per shares (Basic) Earnings per shares (Diluted) Face Value of Share

5) As per the Accounting Standard 18, issued by the Institute of Chartered Accountants of India, disclosures of transactions with the related parties as defined in the Accounting Standards are given below:

2009-10 2,341.61 1,30,77,489 Rs. Ps. 17.96 17.96 10

2008-09 7,871.13 1,27,11,263 Rs. Ps. 61.92 57.41 10

A. Cash Flow From Operating Activities: Net Profit/(Loss) before tax and Extraordinary Items and Interest. Adjustments for: Depreciation Dividend Received Interest Paid Profit on sale of investments Profit on sale of assets (net) Advances and leased assets w/off Operating Profit before Working Capital Changes Adjustments for working capital changes Cash Generated from operations Interest paid Direct taxes paid Net cash from operating activities B. Cash flow from investing activities Purchase of fixed assets Sale of fixed assets Purchase of Investments Sale of Investments Dividend / interest received Net cash used in investing activities C. Cash flow from financing activities Proceeds from long term borrowings Redemption of Preference shares and buy back of equity shares. Dividend paid Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents. (opening) Cash and cash equivalents. (closing)

3,158.80 250.44 (97.72) (782.87) (2,185.68) (256.46) 128.19 315.68 (274.45) (437.70) (14,971.76) (64.36) 159.37

9,498.32

(2,944.10) 214.70 (1,422.68) (1,207.98) (1,266.87) (2,474.85)

(15,273.22) (5,774.90) (2,650.68) (8,425.58) (1,459.55) (9,885.13)

(782.87) (484.00) (128.93) 318.67 (1,280.87) 3,377.47 97.72 (2,423.58) 571.85 (1,024.07)

(519.75) (939.80) (312.43) 240.09 (4,789.19) 15,284.10 377.95 5,056.54

2,384.06

10,800.52

(2,875.80) (2,966.60) 8,757.62 5,791.03

5,056.54 5,971.93 2,785.69 8,757.62

As per our Report attached For FORD, RHODES, PARKS & CO. Chartered Accountants Firm Registration No.102860W A.D. Shenoy Partner Membership No 11549 Mumbai Dated : 28th April,2010.

Executive Chairman Director Director

M. V. Doshi V. N. Suchanti M. S. Bhise

Mumbai Dated : 28th April,2010

40

R/F No. .......................................................... Proxys Name in Block Letters R/F No.

Registered Office : 203, Embassy Centre, Nariman Point, Mumbai - 400 021.

LKP Finance Limited

ATTENDANCE SLIP

26th Annual General Meeting on Monday, 12th July, 2010 DP/ID NO. Mr./Mrs./Miss.................................................................................................................................................................................... I certify that I am a registered shareholder/proxy for the registered shareholder of the Company I hereby record my presence at the 26th Annual General Meeting of the Company held at M. C. Ghia Hall, Hargovindas Building, 18/20, Kaikhuskru Dubash Marg, Mumbai - 400 001, at 11.00 a. m. on Monday, 12th July 2010 .......................................................... Members/Proxys Signature

NOTES : 1. This Meeting is of Members only and you are requested not to bring with you any person who is not a Member. 2. Shareholders/Proxy holders are requested to bring the attendance slips with them when they come to the Meeting and hand over at the entrance after affixing their signature on them. 3. Shareholders are requested to bring their copy of the Annual Report alongwith them to the Annual General Meeting, as copies of the Report will not be distributed again at the Meeting, in view of the increasing cost of the Annual Report. 4. If it is intended to appoint a proxy, the Form of Proxy should be completed and deposited at the Registered Office of the Company at least 48 hours before the Meeting.

Registered Office : 203, Embassy Centre, Nariman Point, Mumbai - 400 021.

LKP Finance Limited

PROXY

DP/ID NO.

I/We..................................................................................................of............................................................................................... ..................................................................................in the district of. .................................................................................. being a member/members of LKP Finance Ltd. 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 26th Annual General Meeting of the Company to be held on Monday, 12th July 2010 and at any adjournment thereof. As witness my hand this .............................................................. day of.............................................................................2010. Signed Affix 1 Re. Revenue Stamp

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LKP Finance Limited 112A, Embassy Centre, Nariman Point, Mumbai - 400 021.

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