Directors Report of Shri Gang Industries and Allied Products Ltd.

Jun 30, 2010

To the Members,

The directors hereby present their Twenty First Annual Report along with the Audited Statements of Account for the year ended June 30, 2010.

FINANCIAL RESULTS

Financial Results for the year's operations and the comparative figures of the previous year are summarised below: (Rs. In Lacs)

Yearended Year ended June 30, June 30, 2010 2009

Sales 8066.69 16877.69

Profit before Financial Charges & Depreciation (583.55) (1068.49)

Financial Charges 42.84 76.01

Depreciation 51.51 94.35

Extra Ordinary Expenses :

Prior period Expenses — 20.03

Net Profit/(Loss) before Tax (677.91) (1258.90)

Income Tax (Fringe Benefit Tax) — (2.17)

Net Profit (Loss) for the year (677.91) (1261.06)

APPROPRIATIONS

Dividend — —

Transfer to General Reserve — — Provision for Leave Encashment - - revered under transitional provision as per AS 15

Loss brought forward (5648.90) (4387.82)

Transfer from Investment allowance reserves

Balance in profit & Loss Account carried to Balance sheet (6326.81) (5648.88)

DIVIDEND

In view of Company's Financial Position, the Directors are unable to recommend any dividend. The company's shares are listed at Mumbai.

OPERATIONS

During the year under review the company has incurred a loss of Rs 677.91 Lacs. Huge capacity plants near ports, having logistic advantages & economies of scale has made plants in hinterland unviable and uncompatative.This has affected the operations of yours company.

DEPOSITS

During the year the company has not accepted any public deposits. However, the company has accepted the deposits from the specified persons in earlier years and the statement in lieu of advertisement has been filed with the Registrar of Companies for those years. However there is no default in repayment of any deposit.

DIRECTORS

Shri Gopal Das Aggarwal, Director retire by rotation and being eligible offer himself for re-appointment. Further the Board has recommended the reappointment of Shri Gopal Das Aggarwal as Whole Time Director.

During the year Shri Rajesh Kumar Gupta and Shri Gyan Chand Jain was appointed as an additional director w.e.f. 01.01.2010 and Shri Narender Singh was appointed as an additional Director w.e.f. 13.03.2010 respectively. The Board recommend their appointment as Directors of the Company.

Shri Inder Mani Mittal and Shri Sanam Gambhir have resigned from the post of the Directors with effect from 01.01.2010. The Board places on record its deep appreciation for the valuable guidance provided by them during their tenure on the Board of the Company.

The Board has recommended the appointment of Shri J K Jain as Whole Time Director

Your company has taken sufficient steps to appoint the Company Secretary but the position could not be filled as the Company is registered with BIFR as sick industrial company and production has been suspended on account of Non availability of orders as compared to the Production capacity. Thereforexandidates interviewed have not shown their interest to join the Company. However your Company is taking the services of the practising Company Secretary to look after the Compliances of the Companies Act, 1956

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions contained in section 217(2AA) of the Companies Act, 1956, the Directors of your company confirm:

a. That in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same.

b. That they 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 2009-10 and of the loss of the company for that period.

c. That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company for preventing and detecting fraud and other irregularities.

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

AUDIT COMMITTEE

Pursuant to the provisions of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement for Corporate Governance your company has constituted the Audit Committee. As on date the Audit Committee comprises of the following Directors:

1. Shri Gopal Das Aggarwal

2. Shri Rajesh Kumar Gupta

3. Shri Gyan Chand Jain

Shri Rajesh Kumar Gupta & Shri Gyan Chand Jain has been nominated as member of Audit Committee with effect from 01.01.2010 in place of Shri Inder Mani Mital & Shri Sanam Gambhir who have resigned as Director of the Company. This committee has reviewed the Accounts for the year ended June 30, 2010.

CORPORATE GOVERNANCE

Your Company continues to function in a transparent manner with the basic philosophy to create wealth, besides taking care of the interest of all stakeholders including shareholders, banks, Financial Institutions, customers, Employees and the society at large.

Your company gives due emphasis on the adaptability to such procedures so as to ensure transparency, accountability & integrity in all respect. A separate section on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of conditions of corporate governance as stipulated under clause 49 of the Listing Agreement with the stock exchanges from part of the Annual Report.

AUDITORS

M/s Tas Associates, Chartered Accountants, Auditors of the company hold office until the conclusion of ensuring Annual General Meeting and your directors recommended their re-appointment. The company has received the requisite certificate from M/s Tas Associates, Chartered Accountants to the effect that their re-appointment of effected, would be within the limits prescribed u/s 224(1 -B) of the Companies Act, 1956.

AUDIT REPORT

The Auditor's reports are self-explanatory and do not require any comments from the Board of Directors.

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

The information as regards conservation of energy, technology and outgo required u/s 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Directors) Rules, 1988 is annexed hereto as per annexure and forms an integral part of the report.

PARTICULARS OF EMPLOYEES

During the year under review, no employees, whether employed for the whole or part of the year, was drawing remuneration exceeding the limits as alaid down u/s 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended. Hnce the Details required under section 217(2A) are not given.

INSURANCE

All the insurable interest of the company including inventories, building and plant & machinery under legislative enactments are adequately insured.

INDUSTRIAL RELATIONS

The Industrial Relations have continued to be stable and harmonious during the course of the year. Your company has made sustained efforts to improve manpower productivity and employer-employee relations.

During the year under consideration production at the Company's factory has been suspended w.e.f. 25.03.2010 due to non availability of orders as compared to production capacity and the lay-off was declared w.e.f. of 25.03.2010 in terms of provisions of UP Industrial Dispute Act, 1947 till further orders. The production has not resumed till date..

ACKNOWLEDGEMENT

We wish to place on record our sincere appreciation of the continued valuable, co-operation, guidance and support provided to the company by its bankers Punjab National Bank, Directorate of Vanaspati, Government of Uttar Pradesh and the local authorities.

The Directors also express their thanks to the large number of customers and associates for their patronage.

In the end, your directors wish to place on record their deep appreciation of the enthusiasm, initiative and hard work put in by the staff and workers of the company at all levels.

For and on behalf of the Board For Shri Gang Industries & Allied Products Limited

Sd/- Sd/- J.K.Jain Gopal Das Aggarwal (Whole Time Director) (Whole Time Director)

Place : New Delhi Date : 26.11.2010

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Jun 30, 2009

The directors have pleasure to presenting their Twentieth Annual Report along with the Audited Statements of Account for the year ended June 30, 2009.

Financial Results

Financial Results for the years operations and the comparative figures of the previous year are summarised below:

(Rs. In Lacs) Year ended Year ended June 30,2009 June 30, 2008

Sales 16877.69 18463.75

Profit before Financial Charges & Depreciation (1068.49) (662.49)

Financial Charges 76.01 79.77

Depreciation 94.35 93.08

Extra Ordinary Expenses :

Prior period Expenses 20.03 14.80

Net Profit/(Loss) before Tax 1258.70 847.26

Income Tax (Fringe Benefit Tax) 2.17 2.88

Net Profit (Loss) for the year (1261.06) (850.14)

APPROPRIATIONS

Dividend - -

Transfer to General Reserve - -

Provision for Leave Enchasment revered under transitional provision as per AS 15 - 4.30

Loss brought forward (4387.82) (3541.98)

Transfer from Investment allowance reserves

Balance in profit & Loss Account carried to Balance sheet (5648.68) (4387.82)



Dividend

In view of Companys Financial Position, the Directors are unable to recommend any dividend. The companys share are listed at Mumbai and the company has deposited the listing fee to the Stock Exchange for the year 2009- 2010 pursuant to clause 38 of the listing agreement.

Operations

During the year under review the company has incurred a loss of Rs 1261.06 Lacs. The major factor was sluggishness in the market resulting out of global meltdown last year. Due to general recession worldwide there was a steep decline in the prices of edible oils which also affected the business.

Deposits

During the year the company has not accepted any public deposits. However, the company has accepted the deposits from the specified persons in earlier years and the statement in lieu of advertisement has been filed with the Registrar of Companies for those years. However there is no default in repayment of any deposit.

Directors

Shri Sanam Gambhir Director retire by rotation and being eligible offer himself for re-appointment. During the year, Shri S.K. Jain resigned from the Directorsship of the company. The expertise and invaluable guidance of Shri S.K. Jain has helped the company to a greater extent in forging ahead. The Board places on record its deep appreciation and gratitude for the valuable advise, guidance, assistance and service rendered by him during his tenure on the board.

Shri J.K. Jain was appointed as Additional Director under section 260 of the Companies Act, 1956 and Whole Times Director of the Company on 31.10.2009. The company has received the notice from member under section 257 of the Companies Act, 1956 proposing the appointment of Shri J.K. Jain as regular director of the company.

Directors Responsibility Statement

Pursuant to the provisions contained in section 217(2AA) of the Companies Act, 1956, the Directors of your company confirm:

a. That in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same.

b. That they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonablearid 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 2008-09 and of the loss of the company for that period.

c. That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of mis Act for safeguarding the assets of the company for preventing and detecting fraud and other irregularities.

d. That they have prepared the annual accounts on a going concern basis. Audit Committee

Pursuant to the provisions of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement for Corporate Governance your company has constituted the Audit Committee of the Board of Directors with the following composition as on 30th June 2009 :

1. Shri Sanam Gambhir

2. Shri S.k. Jain

3. Shri Inder Mani Mittal

The audit committee was re-constituted on 31st July 2009 by inducting Shri Gopal Dass Agarwal in place Shri S.K. Jain who has resigned from the Directorship and membership of the audit Committee.

This committee has reviewed the Accounts for the year ended June 30, 2009.

Corporate Governance

SGIAPL continues to function in a transparent manner with the basic philosophy to create wealth, besides taking care of the interest of all stakeholders including shareholders, banks, Financial Institutions, customers, Employees and the society at large.

Your company gives due emphasis on the adaptability to such procedures so as to ensure transparency, accountability & integrity in all respect. A separate section on Corporate Governance and a certificate from the Practising Company Secretary regarding compliance of conditions of Corporate governance as stipulated under clause 49 of the Listing Agreement with the stock exchanges from part of the Annual Report.

Auditors

M/s Tas Associates, Chartered Accountants, Auditors of the company hold office until the conclusion of ensuring Annual General Meeting and your directors recommended their re-appointment. The company has received the requisite certificate from M/s Tas Associates, Chartered Accountants to the effect that their re-appointment of effected, would be within the limits prescribed u/s 224(1-B) of the Companies Act, 1956.

Insurance

All the insurable interest of the company including inventories, building and plant & machinery under legislative enactments are adequately insured.

Disclosure of Particulars

As required by the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, the relevant information and data is given in Annexure I to this Report.

Industrial Relations

The Industrial Relations have continued to be stable and harmonious during the course of the year. Your company has made sustained efforts to improve manpower productivity and employer-employee relations.

As required under the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (particulars of Employees) Rules, 1957 as amended, the names and other particulars of the employees are set out in Annexure II hereto forming part of this report.

Acknowledgement

We wish to place on record our sincere appreciation of the continued valuable, co-operation, guidance and support provided to the company by its bankers Punjab National Bank, Directorate of Vanaspati, Government of Uttar Pradesh and the local authorities.

The Directors also express their thanks to the large number of customers and associates for their patronage.

In the end, your directors wish to place on record their deep appreciation of the enthusiasm, initiative and hard work put in by the staff and workers of the company at all levels which enables your company to make all round progress.

For and on behalf of the Board For Shri Gang Industries & Allied Products Limited Sd/- J.KJain Place : NOIDA Chairman Date : November 27, 2009