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Reckitt Benckiser

Report & Accounts 2008

Reckitt Benckiser (India) Limited

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RECKITT BENCKISER (INDIA) LIMITED

BOARD OF DIRECTORS

Chancier Mohan Sethi, Chairman & Managing Director Alfred Kurt Gaspers, Won Executive Director Colin Day,l\lon Executive Director David Walter Poulter,Non Executive Director Jose Joaquin Camera Gonzalez,Non Executive Director(w.e.f. 17.12.2008) Manish Dawar, Executive Director, CFO & Company Secretary Sreenivas Rao IMandigam, Executive Director (w.e.f. 17.12.2008) AUDITORS Price Waterhouse BANKERS The Hongkong and Shanghai Banking Corporation Limited CitiBankN.A. R E G I S T E R E D OFFICE 227, Okhla Industrial Estate, Phase III, Okhla, New Delhi-110020. C O R P O R A T E OFFICE Enkay Centre, 2nd Floor, Vanijya Nikunj, Udyog Vihar, Phase V, Gurgaon-122016. Haryana REGISTRARSAND SHARE TRANSFER AGENTS C B Management Service (Private) Limited P-22, Bondel Road, Kolkata-700019. West Bengal

CONTENTS
Directors' Report Annexure to Directors' Report Auditors' Report Balance Sheet Profit and Loss Account Cash Flow Statement Schedules to the Accounts Balance Sheet Abstract and General Business Profile Subsidiary Company
2
4 7 10 11 12 13 33 34
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Reckitt Benckiser
BOARD OF DIRECTORS

Chander Mohan Sethi

(60, Indian) Chairman & Managing Director Chairman Reckitt Piramal Pvt. Ltd. Other Directorships Reckitt Benckiser (Bangladesh) Ltd. PT Reckitt Benckiser Indonesia Reckitt Benckiser (Lanka) Ltd.

Colin Day (54, British) Non-Executive Director Other Major Directorships Flyglass Ltd. Lancaster Square Holdings S.L. Optrex Ltd. Reckitt Benckiser pic Reckitt Benckiser Healthcare International Ltd. WPP Group pic Cadbury pic

Manish Dawar (43, Indian) Executive Director, CFO and Company Secretary Other Directorships Reckitt Benckiser (Bangladesh) Ltd. Reckitt Benckiser (Lanka) Ltd. Reckitt Piramal Pvt. Ltd.

Alfred Kurt Caspers (48, German) Non-Executive Director Other Directorship Reckitt Benckiser (Lanka) Ltd.

David W Poulter (46, British) Non-Executive Director Other Directorships Reckitt Benckiser Pakistan Ltd.

Sreenivas Rao Nandigam (40, Indian) Executive Director

Jose Joaquin Camero Gonzalez (53, Colombian) Non-Executive Director Other Directorships Reckitt Benckiser Espana S.L. Lancaster Square Holdings S.L. Optrex S.L.
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RECKITT BENCKISER (INDIA) LIMITED

DIRECTORS' REPORT
The Directors present the Annual Report together with the Statement of Accounts for the year ended December 31, 2008: Rs. Lakhs Financial Results Sales Less: Excise duty Net sales Other income Total income Expenditure Profit before tax Provision for taxation Profit after tax Profit brought forward Total profits available for appropriation Appropriations: Interim dividend Final dividend Corporate dividend tax Transfer to general reserve Balance carried forward Performance
2008 156,182 (3,221) 152,961 4,130 157,091 124,910 32,181 (4,211) 27,970 3,669 31,639 25,623 788 2,416 2,797 15 2007 133,475 (2,165) 131,310 7,132 138,442 110,237 28,205 (3,014) 25,191 11,743 36,934

Export Performance In the year 2008, the Company's F.O.B. value of exports stood at Rs. 275 lakhs. Audit Committee During the year 2008, the Audit Committee of the Board of Directors comprised of the following members: Mr. Colin Day Mr. C M Sethi Mr. David Poulter Non Executive Director Executive Director Non Executive Director

Mr. Manish Dawar, Executive Director, was a permanent invitee to the Audit Committee. Directors

26,280 4,466 2,519 3,669

During the year 2008, Mr. Sreenivas Rao Nandigam was appointed as an Additional Director by the Board of Directors at their meeting held on December 17,2008. Further, subject to the consent of the members, he was appointed as a Whole Time Director for a period of 5 years on such terms and conditions as have been detailed in the notice to the ensuing Annual General Meeting, an abstract of which was also sent to the members. Your Board recommends his appointment as a Whole Time Director.

The net sales for the year 2008 grew to Rs.152,961 lakhs from Mr. Daniel C. Martinez ceased to be a member of the Board w.e.f. Rs.131,310 lakhs in 2007, an increase of about 17%. There was September 26, 2008. The Board of Directors at their meeting held an increase of about 14% in the total income which resulted in the on December 17, 2008 filled in the casual vacancy by appointing profit before tax increasing by the same percentage. The profit Mr. Jose Joaquin Camero Gonzalez. before tax for the year 2008 stood at Rs.32,181 lakhs and the In accordance with the Companies Act, 1956 and the Articles of profit after tax was Rs.27,970 lakhs. Association of the Company, Mr. Colin Day, retires by rotation at the ensuing Annual General Meeting and being eligible, offers The Company continued with the trend of launching new and innovative products in the market which has ensured that its himself for re-appointment. Your Board recommends his reproducts enjoy the patronage of the consumers. The Company's appointment. approach to the market and its investment in the brands has Subsidiary Company resulted in good growth numbers, even in current difficult market Particulars of M/s. Reckitt Piramal Private Limited, a subsidiary of conditions. the Company as required under Section 212 of the Companies Dividend Act, 1956 are attached and forms part of this Report. The Board of Directors declared an Interim Dividend of Rs. 757- Details of Energy Conservation, Technology & Foreign Exchange per share on 1st Nov. 2008 and further declared 2nd Interim Dividend of Rs. 22.507- per share on 23rcl Jan. 2009. Considering the Details of conservation of energy, technology absorption, foreign Company's performance for the year, your Board recommends a exchange earnings and outgo as required to be made pursuant to final dividend of Rs. 37- per share which shall be subject to approval clause (e) of sub-section (1) of Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in of the members at the ensuing Annual General Meeting. the Report of Board of Directors) Rules, 1988 are given as an Reserves and Provisions annexure to this Report. A sum of Rs. 2,797 lakhs has been transferred to general reserve Particulars of Employees and after appropriation of Rs. 25,623 lakhs towards interim dividends and Rs. 788 lakhs towards final dividend and the Information in accordance with sub-section (2A) of Section 217 corporate dividend tax thereon, the balance carried forward in the of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 for the year 2008, forms part of this profit and loss account is Rs 15 lakhs.

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> Reckitt .
DIRECTORS' REPORT (Continued)
Report and is given in the annexure. Auditors M/s. Price Waterhouse, Auditors of the Company, retire at the ensuing Annual General Meeting in accordance with the provisions of the Companies Act, 1956 and being eligible, have indicated their willingness to continue in office and are recommended for reappointment as the auditors of the Company for the year 2009. Directors' Responsibility Statement Pursuant to provisions of sub-section (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm that: i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period. On behalf of the Board
(Chander Mohan Sethi) Chairman and Managing Director

Benckiser

preventing and detecting fraud and other irregularities, iv) They have prepared the accounts on a going concern basis Acknowledgements The Board thanks all its stakeholders, including its shareholders, bankers, customers, suppliers and its employees for the support given by them to the Company and its management.

ii)

Gurgaon February 28, 2009

(Manish Dawar) Executive Director, CFO and Company Secretary

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for

Registered Office: 227, Okhla Industrial Estate, Phase III, Okhla, NewDelhi-110020.

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RECKITT BENCKISER (INDIA) LIMITED

ANNEXURE TO DIRECTORS' REPORT

Report on Conservation of Energy, Technology Absorption, Consumption per unit of production: Foreign Exchange Earnings and Outgo [Section 217 (1) (e) of Particulars the Companies Act, 1956] 1 Electricity (Units/ MT) A. CONSERVATION OF ENERGY (a) Energy conservation measures taken: i) At Mysore Factory, there has been a reduction in the consumption of energy due to optimizing the utilization of the equipments. ii) At Hosur Factory, on account of further streamlining the PCMX operations and optimizing the utilization of the equipments, there has been a reduction in the consumption of energy. (b) Impact of the above measures: There has been marginal decrease in the per unit consumption of energy. Moreover, energy conservation measure is an on-going process, which is undertaken in all the units. Total energy consumption and energy consumption per unit of production is as under:
FORMA 2008 2007

Drugs Pharmaceuticals 2 Furnace Oil (Litres/ MT) Drugs Pharmaceuticals

1137.87 102.56

978.30 95.76

385.89
-

393.66
-

Note: There exists no specific standard as the consumption per unit depends on the product mix.
B. TECHNOLOGY ABSORPTION :

(c)

a. Research and Development (R&D) 1. Specific areas in which R&D was carried out by the Company: The benefits flowing from the Global R&D activities have been a contributing factor for new product development and up-gradation of existing products. The R&D work is being carried out on behalf of Category Development Centre by the Company's Scientific Services Group. Several global formulations were modified to adopt them to Indian conditions. 2. Benefits derived as a result of the above R&D initiatives: a) Product innovation and new product launches; b) Cost reduction; c) Formula optimization; d) Substitution of imported raw materials with indigenous raw materials; e) Packaging design optimization. 3. Future plan of action:

Particulars Power and Fuel Consumption 1 . Electricity : Purchased : Unit (lakhs) Total amount (Rs. lakhs) Rate/ unit (Rs) Own Generation Through Diesel Generator : Units (lakhs) Units per litre of diesel oil Cost/ unit (Rs.) 2. Furnace Oil : Quantity (kiloliters) Total amount (Rs. lakhs) Average rate (Rs/ litre)

2008

2007

42.88 168.51
3.93

24.43 111.41
4.56

36.56
3.10 10.96

28.68
3.19 10.09

1174.50 349.58 29.76

196.83 29.83
15.15

The Global R&D benefits will be available on continuous basis conforming to international standards. a) for the existing products; b) for introducing new products and packaging;
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Reckitt Benckiser ANNEXURE TO DIRECTORS' REPORT (Continued)

c) improved and more efficient manufacturing processes and technologies; 2. Benefits derived as a result of the above: Efforts from Research & Development and Scientific Services Group have yielded following benefits: a) b) c) d)
Rs. 37.56 lakhs Rs. 458.59 lakhs Rs. 496.15 lakhs
0.32 %

d) replacement of raw material for improved safety of consumers and the environment; e) f) development of formulae and products for meeting the specific needs of the developing markets; improved product designs for reducing carbon emissions.

Substitution of imported raw materials with indigenous ones; Improved product quality and safety; Quicker technology absorption and transfer from global R&D labs; Smooth transition of technologies and processes from pilot plants to factories for commercial production; Improved performance by way of better shelf life and product stability in local conditions.

4. Expenditure on R&D : Capital Recurring Total Total R & D expenditure as a % of total turnover

e)

3. Details of imported technology: b. Technology absorption, adaptation and innovation: 1. Efforts in brief, made towards technology absorption, adaptation and innovation: Working with Global Lead Technical Centres, the Company has been able to absorb and adapt inputs received from such centres through Scientific Services Group to improve the quality, performance and new product launches. Pilot plant facilities were set up for personal care products like Veet, Clearasil to help fast track the technology absorption. No technology has been imported during the period under review. C. FOREIGN EXCHANGE EARNINGS AND OUTGO: The foreign exchange earnings of the Company amounted to Rs. 274.90 lakhs during the period under review, whereas, the outgo was Rs. 57,887.50 lakhs mainly on account of raw and packing materials, royalty and payment of dividend to non-resident shareholders.

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ANNEXURE TO THE DIRECTORS' REPORT Statement of Particulars of Employees Forming Part of the Directors Report Employed for full year and were in receipt of remuneration exceeding Rs. 24,00,OOO/- per annum
SI No
Name Abhishek Prasad Amit Kumar Bhattacharya Anil Dhamija Anup Dhingra Anuradha Sehgal Aseem Chhiber Ashish Pande C M Sethi Dimple Sidhar Govindan Sankunny Guru Mounagurusami Harmeet Bhalla Jaideep A Jaishree Kasliwal K Ravishankar Manish Dawar Manoj Sahay Mohit Marwaha N Padmanabhan Nandita Johar Neeraj Pant Nitish Bajaj Prahlad Mishra Pritesh Talwar Pronoy Kumar Roy Radha Mohan Gupta Rajesh Jha Ratanjit Das S N Kannan Sekhar Rai Choudhuri Stefan Gaa Sudhir Dtiawan Suvamoy Roy Ctioudhury T Ganesh Tom Thomas

Age

Designation Marketing Manager Production Manager Factory Manager Head of Manufacturing Marketing Manager Market Research Manager Regional Manager Managing Director Marketing Manager Head of Talent Management Factory Manager Trade Marketing Head Procurement Manager R & D SSG Manager Packaging Development Manager Executive Director, CFO & Company Secretary Marketing Manager Brand Manager Regional Manager Supply Controller Head of Regulatory and Medical Affairs Marketing Manager Regional Manager Regional Manager Head of Global Service Centre Head of Procurement Head of Legal Sales Director - India Head of Tax Vice President - IS Regional Marketing Director R&D SSG Director Vice President - HR Marketing Manager National Key Accounts Manager

Total Remuneration 3,538,379 2,429,421 3,797,242 4,897,875 3,745,409 4,356,275 2.657,153 54,680,109 3,918,921 4,044,796 3,434,933 3,171,545 3,507,284 3,423.420 3,441,253 28,394,191 3,794,273 2,591,192 3,188,870 3,520,353 4,396,909 3,711,178 5,128,628 3.993,231 5,123,964 4,471,565 3,469,850 17,276,270 3,191,590 13,875,086 23,646,717 17,968,030 13,792,576 3,977,272 7,325,949

Qualification

Total Experience

Date of Joining 2-Jun-97 7-Dec-94 1-Nov-07 1-Nov-07 24-Jun-04 3-Dec-07 22-May-07 16-NOV-84 6-Oct-04 2-Dec-91 3-Jan-05 16-Nov-04 18-Aug-Q4 6-Mar-01 4-May-06 1-Apr-02 1-Aug-01 1-Aug-01 1-Jul-85 10-Jun-02 3-Dec-07 8-May-06 16-Mar-94 22-May-06 19-Sep-01 31-Dec-04 24-May-07 17-Dec-01 13-Dec-07 3-Sep-01 1-Sep-06 1-Apr-07 2-Jan-07 2-Jun-97 11-Dec-06

Previous Employment Manager (Technical Services), ABEE Engineering Corporation Unit Head, Dabur India Ltd. Director Operations-Ethicon, Johnson & Johnson Ltd. Marketing Manager, Whirlpool of India Limited General Marketing Manager, Johnson & Johnson Ltd. Dabur Foods Ltd. Branch Manager, SmithKline Beecham Brand Manager, Nestle India Divisional Sales Manager, Berger Paints India Ltd. General Manager-Plant, Pepsico India Holdings Ltd. Area Sales Manager, Britannia Industries Ltd. Manager(PSO), Godrej Sara Lee Ltd. Head of General Laboratory, SGS India Ltd. Delhi Manager, Glaxosmithkline CH Ltd. Chief Financial Officer, Reebok India Area Sales Manager, Britannia Industries Ltd. Area Sales Manager, Agrotech Foods Ltd. Medical Representative, Serum Institute of India Assistant Manager, Price Waterhouse Director RA, Johnson & Johnson Ltd. Sr. Brand Manager, Ranbaxy Labs Ltd. Assistant Manager, William Sons. India Ltd. GM, Pepsico India Holding Pvt. Ltd. IT Manager, ICI India Ltd. Resource Planning Manager, Tropicana Bevereages Co. Legal Counsel, Britannia Industries Ltd. General Manager, Gillete Ltd. Manager Taxation, Britannia Industries Ltd. Chief Information Officer, Indian Explosives Limited Brand Manager, UHU GmbH Bolton Group, New Initiatives Chief Execuitve, Arvind Mills Ltd. GM HR , Baxter (I) Ltd. Sales Manager, PSG Oman

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

35 49 41 41 36 37 36 60 34 53 45 32 39 58 35 43 38 33 46 34 41 36 54 35 47 39 41 44 44 51 41 58 46 35 41

MBA B.E
B.E, MBA B.Tech

MBA
B.E, MBA B.E. MBA

MBA
PGDM (Marketing) B.Com B.Tech PGDM (Marketing) B.Tech, MBA P.Hd B.Sc, PGD (Packaging Technology) B.Com (Hons), ACA, ACS

MBA
B.Com, PGDM B.Sc (Applied Science)

CA
M.Pharma, MBA B.Tech, MBA B.Sc B.Tech, MBA M.Sc B.Tech. PGDM LL.B

MBA CA
M.Sc M.A - Business & Engineering B.Sc M.A - P M SIR

MBA MBA

10 22 18 18 12 12 9 37 10 30 22 9 16 33 10 18 11 10 23 9 15 10 28 11 21 17 10 16 21 25 11 35 20 10 16

Employed for part of the year and were in receipt of remuneration exceeding Rs. 200,0007- per month
SI No
Name Abhishek Singh Ajay Thukral Alok Mehrotra Amit Kumar Bajla Atul Chandra Jha Biiju M Padmanabhan Kashinath Jha Mahendra Singh Shekhawat Martand Singh Monoj Chakraborty Ravi Gupta S Ravi Kumar Sreenivas Rao Sundeep Kohli Umesh Naik Vikram Mohan Sharma

Age
30 38 41 28 40 45 40 42 34 41 44 48 40 38 44 35

Designation Regional Trade Marketing Manager Financial Controller Head of Quality Factory Accountant Supply HR Manager GM - Procurement Production Manager (Soap) Factory Manager Zonal Sales Manager Regional Manager NPS Manager VP Supply Executive Director Commercial Controller General Manager - Quality Regional Manager

Total Remuneration 710,668 4,127,219 3,070,972 1,133,169 2,905,005 3,924,776 628.796 1,614,306 1,869,747 508,481 1,313.615 4,933,903 8,998,552 1,326,050 1,032,913 2,418,190

Qualification

Total Experience

Date ol Joining 26-Sep-08 2-Jan-08 3-Apr-08 18-Aug-08 17-Jan-08 6-Jan-03 1-Dec-08 16-Jun-08 7-May-08 16-Apr-04 7-Aug-08 19-May-04 30-Jun-08 19-Sep-08 16-Jan-06 29-Sep-03

Previous Employment Area Sales Manager, Hindustan Coca Cola Beverages Pvt.Ltd. India Group Lead (Finance), Hewitt Associate India Pvt. Ltd. India Quality Services Manager, Pepsi Foods Pvt. Ltd. Sales Accounts Manager, Pepsico India Holdings Pvt. Ltd. Factory HR Manager, Cadbury India Ltd. General Manager, Whirlpool of India Limited Manufacturing Manager, Unilever India Ltd. Factory Manager, Berger Paints India Ltd. Regional Sales Manager, Kellogs India Pvt. Ltd. Branch Manager, Perfetti India Ltd. Sr. Purchasing Manager, Gillettte India Ltd. Director 8. Business Head Supply Chain, Dart Manufacturing India Pvt Ltd. Regional Supply Chain Director-Asia (Skin Category), Unilever India Ltd. Finance Head, Ranbaxy API Division Corporate Quality Manager, Cadbury India Limited Area Sales Manager, Cargill Foods Pvt Ltd.

36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

MBA CA
M.Tech

CA
LLB, PGD (PM&IR) B.Tech B.Tech M.Sc, M.A, PGD in Administration

MBA
B.E, PGDM B.E, PGDMM, DIE B.Tech, MBA M.Tech

CA
B.Sc (Food Technology) PGDM

4 13 16 6 12 21 17 20 14 16 22 21 16 11 18 10

Remuneration received/ remuneration relates to the year ended December 31, 2008 and has been calculated in compliance with the relevant provisions of the Companies Act, 1956. All appointments are/ were contractual. Other terms and conditions are as per Company's rules. No employee is a relative of any director of the Company.

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> Reckitt ,
AUDITORS' REPORT
TO THE MEMBERS OF RECKITT BENCKISER (INDIA) LIMITED

Benckiser

1. We have audited the attached Balance Sheet of Reckitt Benckiser (India) Limited, as at December 31, 2008 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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. 3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we further report that: (i) (a) The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. (b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of two years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. (c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the company during the year.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. (c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material. (iii) (a) The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses iii (b), iii (c), iii (d) of paragraph 4 of the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 are not applicable. (b) The company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses iii (f) and iii (g) of paragraph 4 of the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 are not applicable. (iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system. According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year to be entered in the register required to be maintained under that Section. Accordingly, commenting on

(v)

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RECKITT BENCKISER (INDIA) LIMITED

AUDITORS' REPORT (Continued)

transactions made in pursuance of such contracts or arrangements does not arise. The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the Rules framed there under. In our opinion, the company has an internal audit system commensurate with its size and nature of its business. (viii) We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of subsection (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. during the year. (xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. The provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to the company. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments. In our opinion, and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year. The company has not obtained any term loans. On the basis of an overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. The company has not issued any debentures during the year. The company has not raised any money by public issues during the year. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

(xiii)

(xiv)

(xv)

(xvi) (xvii)

(ix) (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues including provident fund, sales tax, cess, employees' state insurance, income-tax, wealth tax, service tax, customs duty, excise duty and other material statutory dues as applicable, with the appropriate authorities. There are no amounts outstanding which are due for more than six months as at December 31,2008.
(b) According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess as at December 31, 2008 which have not been deposited on account of a dispute are given in Note 5 (ii) on Schedule 17 of Notes to Accounts. (x)

(xviii)

(xix) (xx) (xxi)

The company has no accumulated losses as at December 31,2008 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year. According to the records of the company examined by us and the information and explanations given to us, the company has not taken any loans from financial institution or bank or debenture holders

4. Further to our comments in paragraph 3 above, we report that: (a) 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;
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(xi)