18th Annual Report 2007-2008 SKS Report 2007-08.pdf · 2012-05-23 · 2 SKS LOGISTICS LTD. 18th Annual Report 2007-2008 CHAIRMAN’S STATEMENT Dear shareholders, I take this opportunity

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S K SLOGISTICS LTD.

18th Annual Report 2007-2008 S K SLOGISTICS LTD.

18th Annual Report 2007-2008

Contents Page

Board of Directors ................................ 1

Chairman’s Statement ......................... 2

Notice .................................................... 3

Directors’ Report .................................. 7

Management Discussion,Analysis and Review ........................... 10

Report on Corporate Governance ...... 12

Auditors’ Report ................................... 21

Balance Sheet ...................................... 24

Profit & Loss Account ........................... 25

Cash Flow Statement ........................... 26

Schedules ............................................. 27

Notes to Accounts ................................ 33

Balance Sheet Abstract ....................... 36

Auditors’ Report on consolidatedFinancial Statements ........................... 37

Statement Pursuant to Section212 of Companies Act, 1956 ............... 49

SKS Logistics (Singapore) Pte. Ltd.. ... 50

Shahi Shipping (BD) Ltd. ..................... 57

Details of Fleet ...................................... 62

BOARD OF DIRECTORSMr. S. K. Shahi Chairman & Managing Director

Mr. F. M. Koli Wholetime Director

Capt. Walter Gonsalves Wholetime Director

Mr. R. V. Iyer IDBI Nominee Director

Cmde. M. Bhada I. N. (Retd.) Director

Mr. B. B. Bhawsar Director

Mr. Tony Adam Director

COMPANY SECRETARYMr. A. Thanthoni Rao

BANKERSState Bank of Indore, Mumbai

HDFC Bank Ltd., Mumbai

AUDITORSM/s. N. D. Heda & Co.Chartered Accountants

REGISTERED OFFICE404, Abhay Steel House,Baroda Street, Mumbai - 400 009.Tel. : 2373 0713 / 14 / 15 / 16Fax : 91 (22) 2371 0362 / 2374 0219Website : www.shahiship.com / www.shahilogistics.comE-mail : [email protected]

CORPORATE OFFICEShahi Marine HousePlot No. 11 & 11/1, Sector-26Near Grain Market, Vashi,Navi Mumbai - 400 703.Tel. : 2784 3047-49 / 2784 3051-53Fax : 91 (22) 2784 3041 & 2784 3044E-mail : [email protected]

REGISTRAR & SHARE TRANSFER AGENTSystem Support Services209, Shivai Industrial Estate,89, Andheri Kurla Road,Sakinaka, Mumbai - 400 072.Tel. : 2850 0835 / 3940Fax : 2850 1438E-mail : [email protected]


SKS LOGISTICS LIMITED

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CHAIRMAN’S STATEMENT

Dear shareholders,

I take this opportunity to welcome you all on the occasion of the 18th Annual General Meeting of yourcompany.

As you must have observed from the Annual Report for the financial year ended 31st March 2008 thecompany is continuing to perform well and earn profit. Income from operations during the current yearhas registered a growth of 13% over the previous year. The gross profit was 19.33 Crores as againstthe previous year of 16.97 Crores. I am glad to state that your directors are pleased to recommend theDividend of 9.5% to the shareholders. This is considered significant as during the current year theinterest and finance charges have increased significantly by 1.86 Crores.

The overall economic scenario in the country and particularly of shipping sector continues to look upand poised for major growth. During the current year the growth rate has been at 9% which indicates avery healthy sign of our country’s progress and economy.

During the year the company has consolidated its existing resources and has applied them effectivelyfor achievement of our goals. It has strengthened the fleet by enhancing maintenance efforts andincrease in crew efficiency through continuous process of training. As a result, our fleet has beenperforming exceptionally well in all fronts such as Containers, Bulk Cargo and Liquid Cargotransportation and has won the confidence and appreciation from all our clients. Our businessdevelopment group is continuously on the look out to tap new opportunities which arise in differentsectors around the Indian Coast. You will be glad to know that your company has entered into a JointVenture with M/s. Erria Denmark, for coastal transportation of cargo, around Indian Coast M. V. ErriaVietnam, a newly built vessel, is the first vessel which is being deployed under this Joint Venture. Inaddition, two new companies have been incorporated i.e., Royal Logistics (Ship) Limited and SKSWaterways Limited as a result of joint venture of your company with the Inland Waterways Authority ofIndia for operating in National Waterways No. 1 and National Waterways No. 2 respectively. For thispurpose we are required to construct 14 vessels which will commence shortly.

I assure you that the initiative we have undertaken and our vision for the future will enable the companyto achieve sustained growth. I am glad to state that the Government of India has realised the greatpotential of transportation through waterways and is also providing immense support to the shippingcompanies to enable them enhance their activities.

I wish to place on record my sincere appreciation for the continued support and co-operation of all theGovernment Agencies, Banks and Financial Institutions and our clients. I also express my sincerethanks to all our officers and staff both ashore and at sea for their sustained dedication and hard work.On behalf of the Board of Directors and Management I thank all the shareholders for their continuedtrust and confidence reposed in the company and its management and look forward to the same in the

future also.

Place : Mumbai Sarvesh Kumar Shahi

Date : 20th August 2008 Chairman & Managing Director

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NOTICE

Notice is hereby given that the Eighteenth Annual General Meeting of the members of SKS LOGISTICS LIMITED willbe held on Friday, 26th September, 2008, at 11.30 a.m. at Walchand Hirachand Hall, Indian Merchants’ ChamberBuilding (4th Floor), Churchgate, Mumbai – 400 020, to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March 2008, the Profit and Loss Accountfor the year ended on that date, together with the Reports of the Board of Directors and the Auditors thereon.

2. To declare dividend on equity shares.

3. To appoint a Director in place of Mr. Tony Adam, who retires by rotation and, being eligible, offers himself forreappointment.

4. To appoint a Director in place of Mr. B. B. Bhawsar, who retires by rotation and, being eligible, offers himself forreappointment.

5. To appoint auditors and to fix their remuneration and in this regard to consider and if thought fit, to pass, with orwithout modification(s), the following resolution as an Ordinary resolution.

Ordinary Resolution

“RESOLVED THAT M/s N D Heda and Co, Chartered Accountants, be and are hereby appointed as Auditors of thecompany, to hold office from the conclusion of this Annual General Meeting until the conclusion of the next AnnualGeneral Meeting of the company on such remuneration as shall be fixed by the Board of Directors of the company”

SPECIAL BUSINESS: -

6. To approve the revised remuneration payable to Mr. S. K. Shahi, as per Board Resolution dated 29-4-2008.

The remuneration committee, at its meeting held on 17th March 2008 has approved revision in the managerialremuneration to Mr. S. K. Shahi, CMD effective from April 2008. The remuneration is as per the applicable provisionsof the Companies Act and Schedule XIII thereto and based on effective capital as on 31st March 2007. The same isrequired to be approved by the Board of Directors and also by members at their meeting. The same is enclosedherewith for approval of the members.

“RESOLVED THAT pursuant to provisions of section 198, 269, 309, 310, 311, schedule XIII and other applicableprovisions, if any of the Companies Act, 1956 or any statutory modification(s) or re enactment thereof, approval of thecompany be and is hereby accorded to the revision in the remuneration of Shri S K Shahi, Chairman and ManagingDirector to a sum of Rs 3.50 lacs per month with effect from April 01, 2008 on the terms and conditions as set out in thedraft agreement to be entered into between the company and Mr. S. K. Shahi a copy whereof initialed by Mr. B. B.Bhawsar, Director of the company for the purpose of identification is placed before this meeting.

RESOLVED FURTHER THAT the authority be and is hereby given to the Board of Directors (hereinafter referred to asthe “Board” which term shall be deemed to include any committee of the Board constituted to exercise its powersincluding the powers conferred by this resolution) to alter and vary the terms and conditions of remuneration subjectto the same not exceeding the limits specified under Schedule XIII to the Companies Act, 1956 or any statutorymodification(s) or re enactment thereof.

RESOLVED FURTHER THAT the Board be and is hereby authorized to take all such steps as may be necessary,proper or expedient to give effect to this resolution”

By order of the Board of Directors,

Place : Mumbai S. K. ShahiDate : 12th August 2008 Chairman and Managing Director

Registered Office404, Abhay Steel House,Baroda Street, Mumbai - 400009

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Notes:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY ORPROXIES TO ATTEND AND VOTE AT THE MEETING INSTEAD OF HIM/HER SELF AND THE PROXY NEEDNOT BE A MEMBER OF THE COMPANY.

2. Proxies in order to be effective must be lodged with the Company at its Registered Office, not later than 48 hoursbefore the commencement of the meeting.

3. A body corporate being a member shall be deemed to be personally present at the meeting, if represented inaccordance with the provisions of Section 187 of the Companies Act, 1956.

4. Register of Members and Share Transfer books will be closed from 19th September 2008 to 26th September 2008(both days inclusive) for the purpose of declaration of dividend.

5. All correspondence regarding shares of the Company should be addressed to the Company’s Registrar andTransfer Agent (RTA) viz. System Support Services, 209, Shivai Industrial Estate, 89, Andheri Kurla Road,Sakinaka, Mumbai 400 072. Members who hold shares in physical form and wish to make/change a nominationin respect of their shareholding in the Company, as permitted under Section 109A of the Companies Act, 1956,may submit the prescribed Form 2B to System Support Services.

6. Members who wish to obtain any information on the Company as regards the accounts for the financial year 31stMarch 2008 are requested to write to the Company at least 10 days before the Annual General Meeting.

7. For convenience of the members and for proper conduct of the meeting, entry to the place of meeting will beregulated by the attendance slip, which is annexed to the Proxy Form. Members are requested to sign at the placeprovided on the attendance slip and hand it over at the entrance of the Meeting.

8. In case of joint holders attending the meeting, only such joint holder who is higher in the order of names will beentitled to vote.

9. Members/Beneficial Owners are requested to quote their full name as per the Company’s record, Folio No. / DPand Client ID Nos., as the case may be, in all correspondences with the Company.

10. Members who hold shares in dematerialized form are requested to bring their depository account number foridentification.

11. Pursuant to Section 205A(5) of the Companies Act, 1956, the Company has transferred all unclaimed / unpaiddividends on their respective due date to the Investor Education and Protection Fund established by the CentralGovernment pursuant to Section 205 C of the Companies Act, 1956. Shareholders who have not so far encashedthe dividend warrant(s) are requested to seek issue of duplicate warrant(s) by writing to the Registrar andTransfer Agents, M/s System Support Services. Shareholders are requested to note that no claims shall lieagainst the said fund or the Company in respect of any amount of unclaimed dividend once the same is transferredto the above fund.

12. Details of Directors seeking Re-appointment at the forthcoming Annual General Meeting in pursuance of Clause49 of the Listing Agreement.

1. Name of Director Mr. Tony Adam Mr. B. B. Bhawsar

2. Date of Birth 12-2-1958 4-11 –1944

3. Experience in Specific Mr. Tony Adam has to his credit Mr. B. B. Bawsar has a careerFunctional area and vast and rich experience in the spanning 30 years and has widePosition Held: area of Business Restructuring, range of experience in areas of

Team Bu i l d i ng , Change accounts, costing and execution ofmanagement enhancement of multifarious activities. He has beenshareho lders weal th , e tc . associated with the company for theMr. Tony Adam has served in the last 10 years. He has served insenior positions in various several senior positions withcompanies He was the Managing various companies in manufactur-Director GEA energy system ing sector. He is a non-executive(India) Ltd. SICAL & Act India Ltd. independent director and member

of the Audit, Remuneration &Shareholder investor GrievanceCommittees.

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Name of Director Mr. Tony Adam Mr. B. B. Bhawsar

4. Qualification B.Com M.Com

5. Directorship in other Adam & Coal Resources Private NilCompanies (Excluding foreign Ltd.Companies)

6. Shareholding NIL NIL

13. Corporate Members intending to send their authorized representative are requested to send a duly certifiedcopy of the Board Resolution authorizing their representatives to attend and vote at the Annual GeneralMeeting.

14. Members are requested to bring their copies of the annual Report to the meeting.



EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956

The following Explanatory Statement sets out all material facts relating to the Special business mentioned in theaccompanying Notice.

Item No 6

Shri S. K. Shahi has been the Chairman and Managing Director of the company. The present proposal is to seekapproval of the members to the revision in the remuneration payable to Mr. S. K. Shahi as Chairman and ManagingDirector of the company.

In this connection, the remuneration committee at its meeting held on March 17, 2008 has approved the revision inthe remuneration of Mr. S. K. Shahi subject to the approval of the Board of directors and the shareholders. The Boardat its meeting held on 29th April 2008 has approved the revision in the remuneration subject to the approval of themembers.

The Broad particulars of the remuneration payable to Mr. S. K. Shahi are contained in the agreement, copy whereofduly initialed by Mr. B. B. Bhawsar, Director, is available for inspection of the members at the registered office of thecompany on all working days during office hours. The details of the remuneration and other terms and conditions areas follows.

Salary: Total remuneration of Rs. 3.50 lacs per month including the perquisites as mentioned in category A belowplus the perquisites as mentioned in category B and C below.

CATEGORY A

a. Housing:(1) Fully furnished Residential accommodation or HRA @ 60% of salary.(2) Company shall provide such furniture and furnishing as may be required by the Chairman and Managing

Director.(3) The expenditure on gas, electricity, water and other utilities shall be borne/reimbursed by the company.

b. Medical Reimbursement:

Reimbursement of actual medical expenses incurred in India and/or abroad including hospitalization, nursinghome and surgical charges, for self and family as per company rules.

c. Leave Travel Concession:Leave Travel Concession for self and family once in a year to and from any place in India or outside India.

d. Club Fees: Reimbursement of Membership for maximum of two clubs.e. Insurance: Accident insurance for an amount, the all inclusive premium for which shall not exceed Rs

25,000/ per annum.

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f. Children Education Allowance:In case of children studying in or outside India, allowance/actual expenses incurred to be borne/reimbursedby the company.

g. Other perquisites:Subject to overall ceiling on remuneration mentioned hereinabove, the Chairman and Managing Directormay be given any other allowances, benefits, perquisites as the Remuneration Committee and the Boardof Directors may decide and approve.Explanation: Perquisites shall be evaluated as per the Income Tax Rules, 1962 wherever applicable andin the absence of any such rule, perquisites shall be evaluated at cost.In the event, the approval of the shareholders is received for an amount of less than Rs 3.50 lacs, permonth, such amount as may be approved by the shareholders and banks and financial institutions if any,by way of special resolution, will be payable to the Chairman and Managing Director.

CATEGORY Ba. Company’s contribution to the Provident Fund/Superannuation Fund/Annuity Fund: The Company’s contribution

to the Provident Fund/Superannuation Fund/Annuity Fund shall be as per the rules of the company applicableto senior executives.

b. Gratuity: Gratuity in accordance with the Rules and Regulations in force in the company from time to time.c. Conveyance facility: Car and driver for official purpose.d. Telephone and Fax: The Company shall provide Telephone, Fax and other communication facilities at the

residence of the Chairman and Managing Director.

CATEGORY C

Commission:

Such remuneration by way of commission, in addition to salary and perquisites and allowances payable to Mr. S KShahi, Chairman and Managing Director calculated with reference to the net profits of the company in a particularfinancial year as may be determined by the Board of Directors of the company at the end of each financial year subjectto the overall ceiling stipulated in section 198, 309 and other applicable provisions of the Companies Act, 1956.

OTHER TERMSa. Earned Leave: One month’s leave with full pay and allowances for every 11-month’s completed service.

However, leave accumulated and not availed during his tenure as Chairman and Managing Director may beallowed to be en cashed at the end of his tenure.

b. Reimbursement of Expenses: Reimbursement of Traveling, Entertainment and other expenses incurred by Mr.S. K. Shahi during the course of the business of the company.

c. Sitting Fees: Mr. S. K. Shahi shall not be entitled to any sitting fees for attending the meetings of the Board or thecommittee of the Board.

OTHER CONDITIONS:1. Over all remuneration.

The aggregate of the salary, perquisites and commission in any financial year shall not exceed the limitsprescribed from time to time under section 198, 309 and other applicable provisions of the Companies Act,1956 read with schedule XIII to the said Act as may be in force from time to time.

2. For all other terms and conditions not specifically stated above, the Rules and orders of the company shallapply.

Shri S K Shahi is interested in this resolution set out at item No 6 of the Notice which pertains to revision in theremuneration payable to him.

Save and except the above, none of the directors of the company is, in any way, concerned or interested in thisresolution.

The Board recommends the resolution set out in item No 6 of the Notice for the approval of the Members.



Registered Office

404, Abhay Steel House,Chairman and Managing DirectorBaroda Street, Mumbai - 400009

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DIRECTORS’ REPORT

To

The Members of SKS Logistics Limited

Your directors have pleasure in presenting the 18th Annual Report together with the Audited accounts of the companyfor the financial year ended on 31st March 2008.

1. FINANCIAL RESULTS:

The summary of financial results of the company for the year ended 31st March 2008 is furnished below.

2007-2008 2006-2007Rs. In Lacs Rs. In Lacs

Gross Profit 1933 1697

Less: Interest and Finance Charges 674 488

Less: Provision for Depreciation 806 615

Profit before Tax 453 594

Less: Provision for Taxation:

Current Tax 135 110

Deferred Tax 46 76

Fringe Benefit Tax 11 8

Profit After Tax 261 400

2. DIVIDEND:

Your Directors are pleased to recommend dividend 9.5% (Rs.0.95 per share) on 1,44,94,874 equity shares ofRs 10/- each for the year ended 31st March 2008. The total payout on dividend (including dividend tax thereon)will be Rs 1,61,10,364 as against Rs 1,27,18,707 in the previous year.

3. PERFORMANCE:

Income from operations during the current year was Rs. 45.93 Crores as against Rs. 40.62 crores in theprevious year registering a growth of about 13% over the previous year. The gross profit of Rs. 19.33 croresregistered an increase of about 14% over previous year’s Rs. 16.97 crores. This is considered significant inview of the fact that during the current year the Interest and Finance Charges have increased by Rs. 1.86 crores.

Indian Economy has been poised for major growth. It expanded by an impressive 9.2% growth during2006-2007 and by 9% during 2007-2008. With all sectors of the economy including services sector registeringrobust growth rates, the Government is now targeting a sustained 9% future growth. This definitely augurs wellfor shipping and logistics industry as well.

The Government has also been giving boost to shipping industry and accordingly has undertaken variousmeasures such as encouraging public and private investment in development and improvement of ports,tonnage tax, dedicated freight corridors, 100% FDI in shipping etc.

4. FIXED DEPOSITS:

The company has not accepted any deposits from the public within the meaning of section 58A of the CompaniesAct, 1956 during the year under review.

5. POLLUTION, ENVIRONMENT AND SAFETY:

The conservation of Energy and Technology Absorption under the Companies (Disclosure of Particulars in thereport of the Board of Directors) Rules, 1988 are not applicable to your company. However all measures aretaken by your company to ensure that conservation of energy takes place at all stages of operations of thevessels as well as onshore activities.

There is no import of technology during the current year. The details of Foreign exchange earned and out goare separately given in this report.

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6. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

(1) In the preparation of the annual Accounts, the applicable accounting standards have been followed withexplanatory notes relating to material departures.

(2) Appropriate accounting policies have been selected and applied consistently and judgments and estimatesmade are reasonable and prudent so as to give true and fair view of the state of affairs of the company atthe end of the financial year and the profit and loss account of the company for that year.

(3) Proper and sufficient care has been taken for maintaining adequate accounting records in accordancewith the provisions of the Companies Act, 1956 for safeguarding the assets of the company and forpreventing and detecting fraud and other irregularities.

(4) The annual accounts have been prepared on a going concern basis.

7. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS:

Pursuant to clause 49 of the listing agreement with the stock exchange, Management Discussion and AnalysisReport and a report on the corporate governance are given as annexure “A” and “B” to this report. A certificatefrom the statutory auditors of the company regarding compliances of conditions of corporate governance is alsoenclosed hereto.

8. PARTICULARS REGARDING THE EMPLOYEES:

The information required under section 217(2A) of the Companies Act, 1956 read with companies (Particularsof Employees) Rules 1975, as amended, forms part of this report. However as per section 219 (1) (b) (iv) of theCompanies Act, 1956, the report and accounts are being circulated to all the shareholders excluding theaforesaid information. Shareholders interested in obtaining this information may write to Compliance Officer ofthe Company.

9. PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORTOF THE BOARD OF DIRECTORS) RULES, 1988

Pursuant to the notification No GSR 1029 dated 31-12-1988; companies are required to furnish prescribedinformation regarding conservation of energy and technology absorption. However this does not apply to yourcompany as the shipping industry is not included in the schedule to the relevant rules. The details, however, asregards Foreign exchange earnings and out go are given below.

(a) Foreign Exchange Earned Rs. NIL

(b) Foreign Exchange Outgo Rs. 27.88 lacs

10. SUSBSIDIARIES:

As required under section 212 of the Companies Act, 1956, we are required to attach to the directors Report, theBalance sheet and Profit and loss account of our subsidiary companies. Accordingly these have been appendedto this report.

11. DIRECTORS:

Mr. Tony Adam and Mr. B. B. Bhawsar retire by rotation and being eligible offer themselves for reappointment.The Board recommends their reappointment.

12. AUDITORS:

You are requested to appoint auditors for the financial year 2008-2009 and authorize the Board to fix theirremuneration. The retiring auditors M/s N. D. Heda & Co, Chartered Accountants, Mumbai being eligible offerthemselves for reappointment.

13. OTHER NOTABLE DEVELOPMENTS:

During the year under review, Shareholder Agreement have been signed by your company for joint venturewith Inland Waterways Authority of India Limited, for acquisition, operation, management and /or maintenanceof barges/ vessels on National Waterway No. 1 viz Kolkata - Pandu stretch and National Waterways No.2 viz

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Kolkata – Mongla stretch and Companies, Royal Logistics (Ship) Ltd. and SKS Waterways Ltd. were incorporated.The Company has also signed a Joint Venture Agreement with a Norwegian Party.

14. ACKNOWLEDGEMENTS:

Your directors take this opportunity to place on record the appreciation of the technical, commercial andfinancial teams of the company for their untiring efforts. Your directors also wish to thank the officials of DirectorateGeneral of Shipping, Indian Registry of Shipping, Mercantile Marine Deptt, Financial institutions and Banks fortheir continued support during the year. Your directors are also thankful to the shareholders and other businesspartners for the trust reposed in them. Your directors also thank the employees at all the levels without whosesupport the growth levels achieved by the company would never have been possible.

For and on behalf of the Board of Directors

Place: Mumbai S. K. ShahiDate: 12-8-2008 Chairman and Managing Director

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ANNEXURE - A

MANAGEMENT DISCUSSION, ANALYSIS AND REVIEW(a) INDUSTRY STRUCTURE AND DEVELOPMENT

The overall economic growth coupled with removal of trade barriers resulted in growth for the Indian shipping industry.Statistics reveals that the shipping industry in general is expected to grow at 11% in the next few years. The shippingindustry can be generally classified into wet bulk, dry bulk and liners. Your Company is in the coastal shipping business andoperates within the territorial waters of Indian ports and provides a variety of support services. The activities in this segmentcan broadly be classified into providing liquid cargo lighterage operations of petroleum and chemical products, lighterageoperations of bulk cargo, tug services, supply of bunkers to vessels, container feeder service on Indian coasts, watersupply services and port services. The need for such services primarily is a result of ships needing to anchor away from theharbour on account of the shallow coastal waters and non availability of berths inside the port thereby needing a variety ofsupport services. Your company specialises in transportation of container, bulk and liquid cargo in sea. The Indian freighttransport system carries more than 1000 billion tonne-kilometers in India. The share of coastal shipping in this is barely 6-7% and bulk of transport takes place through rail/road transportation means. The share of coastal shipping in westerncountries is more than 40%. With Indian economy registering a growth of more than 9%, the freight transport demand is likelyto grow to 2000 billion tonne-km in next 8-10 years. As such, there is a need for integrated transport planning accompaniedby modal shifts in favour of cost efficient mode such as coastal shipping.

With a view to give much needed fillip to Indian shipping industry, the government is formulating a comprehensive NationalMaritime Policy, which will facilitate enhanced private investment, improve service quality and promote competitiveness.With this objective, the Department of Shipping has taken up the preparation of National Maritime Development Programme(NMDP) to complement the National Maritime Policy by implementing time bound schedule for schemes/projects for enhancingcapacity and transport efficiency. The NMDP would also include a major drive for promotion of coastal shipping throughvarious schemes such as Coastal Shipping Development Fund (CSDF) for soft lending for the purpose of acquisition ofcoastal vessels and Centrally Sponsored Scheme (CSS) for development of coastal shipping infrastructure.

(b) OUTLOOK ON OPPORTUNITIES

As India continues to pursue liberalized economic regime, it is expected that industry would post a healthy growth rate in thecoming years. Continuous robust economic growth accompanied by increase in domestic consumption would lead to vibrantgrowth especially for shipping industry in container, bulk cargo both in liquid and dry cargo segments.

The government, with a view to give boost to shipping industry, is undertaking various initiatives such as encouraging privateand public investments in development of ports, tonnage tax, dedicated freight corridors, 100% FDI in shipping etc. As perthe draft NMDP, the government proposes to invest Rs. 1,00,000 Crores in NMDP in the next 10 years.

All these initiatives coupled with the economic growth would translate into better opportunities for Indian Shipping Industryincluding the Coastal Shipping.

With certain inherent advantages i.e. mixed fleet with a focus on coastal shipping, efficient utilization of fleet, experiencedpersonnel and innovation and diversification, that your Company has, it is expected to be benefited from this emergingscenario.

(c) THREATS, RISKS AND CONCERNS

Amongst the cyclical industries, the shipping industry is considered to be most cyclical with shortest buoyancy and longestrecessionary periods. This is reflected in volatile freight rates. Thus, aligning with the international trends, the shippingindustry in India is also exposed to perceived risks of decline in charter/freight rates from time to time.

India’s shipping industry is governed by the Ministry of Shipping and thus is exposed to risks arising from political instabilityand changes in government policies from time to time.

Shipping Industry being highly capital intensive, there is no assurance that additional resources would be available whenneeded.

The substantial upsurge in fuel costs world over in the past year has created a hindrance in the growth of the profitability ofthe company since fuel forms a major part of operating costs for ships.

The Company in its endeavor to minimize the risks associated with its type of business is employing competent team ofprofessionals and is focused towards implementation of modern shore based management practices. Manning scalestandards, levy of duty on oil bunkers and spares continue to be a concern.

In order to mitigate the risks the Company has taken various steps to limit the various factors that emanate risks. Thesefactors include:

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� Insurance

� Proper credit check of the client portfolio

� A judicious mix of time and voyage charters to hedge spurt in the freight rates.

� Supporting customers, growth and competitiveness

� Engaging in long term charter hires.

(d) SEGMENT WISE PERFORMANCE

The Company operates in only one segment i.e. shipping, and therefore, has no separate reportable segments. Yourcompany continued to provide services in the areas of Container Liquid Cargo lighterage operations of Petroleum &Chemical Products, lighterage operations of Bulk Cargo, Tug services for port related activities, supply of bunkers tovessels and Container Feeder Service on Indian Coasts through its fleet of 36 vessels. The Industry being seasonal innature, operations close during rains for a period of three/four months. The lean period provides an opportunity for repairsand maintenance. The fleet utilisation during the period under review has been efficient.

(e) OUTLOOK

The Indian Shipping industry is poised for growth in the next few years. Your Company, with some inherent advantages suchas low operational costs, committed professional manpower and proper upkeep of vessels, is expected to cash on theopportunities provided.

Your Company has since last few years taken initiatives to broaden its fleet base to minimize the risks and maximize thegains. In its effort in this regard, the Company is in talks to acquire two more vessels for international charter. With expansionof fleet the Company would be in a better position to maximize its gains from the buoyant markets.

(f) PROJECT

The process of setting up dry-dock facility at Alibaug, in the state of Maharashtra, is in its final stage and the commencementof work will take place soon. The project is spread over 35 Acres of land.

The Company is converting one of the dumb barge into offshore accommodation vessel, which will accommodate nearly 500persons and will have helipad and crane to carry out various support services in offshore field.

(g) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Much of the success of your company is attributed to the quality of its people, their dedication and contribution. Thededicated team of shore and floating staff provides continuous support to the operations of the company, which is reflectedin the operational efficiency. Voyage operations are managed professionally, ensuring high productivity levels, thus increasingthe revenues. Your Company employs skilled personnel to monitor and maintain its oil-spill and other emergency responseplans.

(h) QUALITY & SAFETY

Your company continues to focus on the safety, training and development of the employees. The company also conductsfrequent training sessions including onboard drills to enhance the effectiveness of the safety of the staff. Your companyfirmly believes that pursuit of excellence is one of the critical components for competitive success in the global market. YourDirectors take pleasure in informing you that your company continues to have the prestigious ISO 9001-2000 Certificationand is on continuous journey towards continual improvement to make its Quality Management System more effective.

(i) HUMAN RESOURCES

The Company considers its employees as partners in growth. They have played a significant role and enabled the Companyto deliver superior performance year after year.

(j) ADEQUACY OF INTERNAL CONTROLS

The Company has adequate and effective internal control systems commensurate with the size of its operations. Theinternal control system provides for well-documented policies, guidelines, authorizations and approval procedures andensures optimal use of resources at its disposal.

Internal audit is being carried out extensively throughout the year in areas such as Income, Expenditure, Financial Accountingand Statutory Compliances. The primary objective of such audit is to test the adequacy and effectiveness of all internalcontrols laid down by the Management and to suggest improvements.

(k) CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Company’s strategies on business, projections andestimates are forward looking statements. The actual results may vary from those expressed or implied, depending uponeconomic conditions, Government policies, regulations, tax laws and other incidental factors.

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ANNEXURE - B

CORPORATE GOVERNANCE REPORT

INTRODUCTION

Corporate Governance has become an integral part of the business at your company aligning the organization to thebest national and international practices of good governance. This encompasses the value systems of integrity, fairness,transparency and adoption of the highest standards of business ethics which aims to benefit the stake holders.

1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE

SKS Logistics Limited (SKS) is committed to good corporate governance in order to enhance the shareholders’value and promote national interest.

In order to achieve the objectives of good corporate governance, SKS follows the principles of transparency,disclosure, fairness, independent supervision, healthy competition, provision of equal opportunity in employment,political non alignment, promotion of health, safety and welfare, generation of quality service, compliance withall the relevant laws, regulations, improvement in quality of life and meeting social responsibility.

It is expected that good corporate governance by SKS would protect and enhance the trust of shareholders,customers, suppliers, financiers, employees, government agencies and the society at large.

2. BOARD OF DIIRECTORS

The company has Executive Chairman. The number of independent directors is more than fifty percent of thetotal number of Directors.

None of the Directors on the Board is a member of more than 10 committees and Chairman of more than fivecommittees (as specified in clause 49) across all the companies in which he is a director. The necessarydisclosures regarding committee positions have been made by the Directors.

The names and categories of the Directors on the Board, their attendance at Board Meetings during the yearand at the last Annual General Meeting as also the number of Directorships and Committee Memberships heldby them in other companies is given in separate tables below.

Name of Directors Category No. of other No. of Board No. of otherDirectorships committees B o a r d

(other than SKS committeesLogistics Ltd.) (other than

where Chairman SKS LogisticsLtd.) where

M e m b e r

Mr. S. K. Shahi Promoter, Executive 5 - -Chairman and ManagingDirector

Mr. F. M. Koli Promoter, Executive 2 - -Whole time Director

Capt. Walter Gonsalves Non Promoter, Executive 1 - -Whole time Director

Cmde. M. BhadaI. N. (Retd.) Non Promoter, Non Executive 2 - -Independent Director

Mr. B. B. Bhawsar Non Promoter, Non Executive - - -Independent Director

Mr. Tony Adam Non Promoter, Non Executive 1 - -Independent Director

Mr. R. V. Iyer Non Promoter, Non Executive - - -Independent Director(Nominee of IDBI)

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Note:

*This includes directorships in private limited companies but excludes directorships held in Foreign Companiesand Companies formed under section 25 of the Companies Act, 1956.

ATTENDANCE OF EACH DIRECTOR AT THE BOARD MEETINGS AND THE LAST ANNUAL GENERALMEETING

A total of five meetings of the Board of Directors were held during the year under review on 27-04-07, 30-07-07,14-08-07, 29-10-07 and 29-01-08.

The maximum time gap between two board meetings was less than four months.

Attendance of each director at the Board meetings and the last Annual General Meeting (AGM) is as under.

Name of Directors Meeting held during Meeting Attendance at the Generalthe tenure of the Attended Body Meeting

said director

EGM 29-05-07 AGM 27-09-07

Mr. S. K. Shahi 5 5 YES YES

Mr. F. M. Koli 5 2 NO YES

Capt. Walter Gonsalves 5 5 YES YES

Cmde. M. Bhada I. N. (Retd.) 5 5 YES YES

Mr. B. B. Bhawsar 5 5 YES NO

Mr. Tony Adam 5 3 NO NO

Mr. R. V. Iyer 5 4 (out of which NO NOone through

representative)

3. AUDIT COMMITTEE

BROAD TERMS OF REFERENCE

The composition of the audit committee meets the requirements of section 292A of the Companies Act, 1956and Clause 49 of the Listing Agreement. The Company Secretary is the Secretary to the Audit Committee. Theprimary objective of the audit committee is to monitor and effectively supervise the company’s financial reportingprocess with view to providing accurate, timely and proper disclosures and integrity and quality of the financialreporting. The terms of reference of the audit committee are in accordance with Clause 49 of the ListingAgreement and inter alia covers the following:

� To investigate any activity within its terms of reference.

� To seek information from any employee/records of the company.

� To obtain outside legal or other professional advice.

� To secure attendance of outsiders with relevant expertise, if it considers necessary.

� Overseeing Company’s financial reporting process and the disclosure of its financial information toensure that the financial statements are correct, sufficient and credible.

� Recommending the appointment and removal of external auditor, fixation of audit fees and also approvalof payment for any other services.

� Reviewing with management quarterly/half yearly/annual financial statements before submission to theBoard.

� Reviewing the adequacy of internal audit function including discussions with internal auditor any significantfindings and follow up thereon.

� Discussion with external auditors before the commencement of audit, the nature and scope of audit andalso to discuss the areas of concern on basis of audit findings.

� Reviewing the company’s financial and risk management policies including any other item referred to itby the Board of directors.

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The audit committee inter alia has following powers:

� To investigate any activity within its terms of reference.

� To seek information from any employee/records of the company.

� To obtain outside legal or other professional advice.

� To secure attendance of outsiders with relevant expertise, if it considers necessary.

The Chairman of the audit committee Cmde. M Bhada I. N. (Retd) was present at 17th Annual General Meetingheld on 27th Sept 2007.

COMPOSITION

Composition, name of members and Chairperson and attendance details of the Audit Committee are as under:

Name of Director Designation Status No. of meeting No. of meetingheld attended

Cmde. M. Bhada I. N. (Retd) Chairman Non Execuitive, 5 5Independent Director

Mr. B. B. Bhawsar Member Non Execuitive, 5 5Independent Director

Capt. W. Gonsalves Member Execuitive, Whole 5 5Time Director

During the year 2007-2008 five meetings of the Audit Committee were held on the following dates:

27th April 2007, 30th July 2007, 14th August 2007, 29th October 2007 and 29th January 2008.

4. REMUNERATION COMMITTEE

TERMS OF REFERENCE

The terms of reference of the Remuneration Committee are:

(1) Reviewing the overall compensation policy, service agreements and other employment conditions ofManaging / Whole Time Director(s).

2) Reviewing the performance of the Managing/Whole time director(s) and recommending to the Board thequantum of annual increments and annual commission.

COMPOSITION, MEETINGS AND ATTENDANCE

The Remuneration committee comprises of 3 directors, all of whom are Independent Non Executive Directors.The Chairman of the committee is an Independent Non Executive Director nominated by the Board.

The Composition of the Remuneration Committee is as follows.

Name of Director Designation Status

Cmde. M. Bhada I. N. (Retd) Chairman Independent, Non Executive

Mr. B. B. Bhawsar Member Independent, Non Executive

Mr. Tony Adam Member Independent, Non Executive

During the year 2007-2008, the committee met once viz. on 17th March 2008.

REMUNERATION POLICY

(A) REMUNERATION TO NON-EXECUTIVE DIRECTORS

The Non Executive Directors are paid sitting fees @ Rs 2500/ for each meeting of the Board or anycommittee thereof attended by them.

The compensation of Non Executive Directors is approved unanimously by the Board.

None of the Non Executive Directors has any material pecuniary relationship or transactions with thecompany.

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B) REMUNERATION TO CHAIRMAN AND MANAGING AND WHOLE TIME DIRECTOR(S)

The appointment of Chairman and Managing Director and whole time director(s) is governed byresolutions passed by the Board of directors and shareholders of the company which covers the terms ofsuch appointment and remuneration read with service rules of the company. Payment of remuneration toChairman and Managing Director and whole time Director(s) is governed by the respective agreementsexecuted between them and the company. Remuneration paid to Chairman and Managing Director andWhole time Director(s) is recommended by the Remuneration committee, approved by the Board and iswithin the limits set by the shareholders at the Annual General Meetings.

The remuneration package of Chairman and Managing Director and whole time Director(s) comprises ofsalary, perquisites and allowances, commission and contribution to Provident and other retirementbenefit funds as approved by the shareholders at the Annual General Meetings. Annual increments arelinked to performance and are decided by the Remuneration Committee and recommended to the Boardfor approval thereof.

The remuneration policy is directed towards rewarding performance, based on review of achievements,it is aimed at attracting and retaining high caliber talent.

There is no separate provision for payment of severance fees under the resolutions governing theappointment of Chairman and Managing Director and whole time Director(s).

Presently the company does not have a scheme for grant of stock options or performance linked incentivesfor its Directors.

Details of Remuneration paid to all Directors:

Name of Directors Category/Status Sitting Salary & Bonus/ ServiceFees Perquisites Commission Contract(Rs.) (Rs.) (Rs.)

Mr. S. K. Shahi Promoter, Executive - 31,80,000 645,773 5 years w.e.f.Chairman and Managing 1st June, 2003Director

Mr. F. M. Koli Promoter, Executive - 184,600 14,994 5 years w.e.f.Whole time Director 1st June, 2003

Capt. Walter Gonsalves Executive Whole time - 8,97,500 38,485 3 years w.e.f.Director 1st Feb, 2005

Cmde M Bhada I. N. (Retd.) Non Executive Independent 27,500 No Service contractDirector

Mr. B. B. Bhawsar Non Executive Independent 27,500 No Service contractDirector

Mr. Tony Adam Non Executive Independent 10,000 No Service contractDirector

Mr. R. V. Iyer Non Executive Independent 10,000 N.A.Director

5. SHAREHOLDERS’ / INVESTORS’ GRIEVANCES COMMITTEE

The Share holders / Investors’ Grievance Committee consists of the following:-

Name of Directors Designation Status

Mr. B. B. Bhawsar Chairman Independent, Non-Executive

Cmde. M. Bhada I. N. (Retd.) Member Independent, Non-Executive

Capt. Walter Gonsalves Member Executive, Whole Time Director

The committee met 24 times during the year to discuss various matters relating to:

� Transfer/transmission/transposition of shares

� Consolidation/splitting of folios

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� Issue of share certificates for lost, sub divided, consolidated, rematerialized, defaced shares

� Review of shares dematerialized and all other related matters

� Investors’ grievances and redressal mechanism and recommend measures to improve the level of investorservices

The share department of the company and the Registrar and Share Transfer Agent (RTA) System SupportServices attend to all grievances of the shareholders and investors received directly or through SEBI, StockExchange, Registrar of Companies, Ministry of Corporate affairs etc.

The minutes of the shareholders’/investors’ grievances committee are noted by the Board of Directors at theireach meeting.

Continuous efforts are made to ensure that grievances are redressed expeditiously to the fullest satisfaction ofthe shareholders and investors. Shareholders are requested to forward their telephone numbers and e-mailIDs to facilitate prompt action.

COMPLIANCE OFFICER

The Board has designated Mr. A. Thanthoni Rao, Company Secretary as the compliance officer.

DETAILS OF SHAREHOLDERS’ COMPLAINTS RECEIVED, NOT SOLVED AND PENDING SHARETRANSFERS.

Number of Shareholders complaints received during the year: 7

Number of complaints not solved to the satisfaction of shareholders: NIL

Number of pending share transfer NIL(Except those rejected on technical grounds)

CEO/CFO CERTIFICATION

The requisite CEO/CFO certification pursuant to Sub- clause V of the Clause 49 of the Listing Agreement hasbeen placed before the board at the meeting of Directors held on 12th August 2008.

RISK MANAGEMENT

The Company has set in motion a system for management of risks associated with the orderly functioning of theCompany. The audit committee has been mandated the accountability for integration of risk managementpractices into day to day activities

6. GENERAL BODY MEETINGS

The venue and time where last three Annual General Meetings were held is given below.

Financial Year Meeting Date Time Location

2004-05 EOGM 31.05.2004 11:30 AM Corporate Office, Vashi, Navi Mumbai.

2004-05 AGM 28.09.2005 11:30 AM Walchand Hirachand Hall,Churchgate, Mumbai.


2006-07 EOGM 09.01.2007 11:00 AM Corporate Office, Vashi, Navi Mumbai

2007-08 EOGM 29.05.2007 11.00 AM Corporate office, Navi mumbai


1) At the last Extra Ordinary General Meeting held on 09.01.2007 the company obtained approvals of shareholders by passing Special Resolutions (a) for change of name of the Company from SKS (Ship) Limitedto SKS LOGISTICS LIMITED. (b) for revision in the remuneration payable to Capt. Walter Gonsalves,Whole time Director.

2) At the EGM held on 29th May 2007, an amendment to object clause by addition of the following object“acquisition of barges with power plants”

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2) At the 17th Annual General Meeting held on 27.09.2007, Cmde M. Bhada and Capt. Walter Gonsalveswere reappointed as Directors.

3) At the 16th Annual General Meeting held on 22.09.2006 the company obtained approval of share holdersby passing Special Resolution for revision in the remuneration payable to Mr. S.K. Shahi, Chairman &Managing Director.

4) At the 15th Annual General Meeting held on 28.09.2005 the following Special Resolutions were passed(a) amending the Main Object Clause of Memorandum of Association of the Company (b) appointingCapt. Walter Gonsalves as a Whole Time Director. The Resolution at (a) was passed with requisitemajority through Postal Ballot and resolution at (b) was passed unanimously.

5) At the 14th Annual General Meeting held on 29.09.2004 the following Special Resolutions were passed(a) Increasing the Authorised Share Capital (b) Alteration of Articles of Association consequent to increasein the Authorized Share Capital (c) Enabling resolution for issue of further shares. The said resolutionswere passed unanimously.

7. SUBSIDIARIES

The company has made investments in various entities in the past as a result of which subsidiaries have beencreated. The details of the same are provided in Directors’ Report.

There is however no material non listed Indian subsidiary whose turnover or net worth (paid up capital and freereserves) exceeds 20% of the consolidated turnover or net worth respectively of the listed holding companyand its subsidiary companies in the immediately preceding accounting year.

8. DISCLOSURES

During the last three years, no penalty or strictures have been imposed on the Company by the Stock Exchange/SEBI/Statutory Authorities on matters related to capital markets.

There are no materially significant related party transactions i.e. transactions of the Company of materialnature, with its promoters, directors or the management, their subsidiaries or relatives etc. that may havepotential conflict with the interests of the Company at large, except as reported elsewhere in the report/accounts.

The Company has not issued any GDRs/ADRs/Warrants or any convertible instruments during the year andthere are no such instruments which are outstanding as of the date of this Report.

The Company has complied with the mandatory requirements and has not adopted any non-mandatoryrequirement of Clause 49 of the Listing Agreements.

9. INSIDER TRADING

The Securities and Exchange Board of India (SEBI) has, effective February 20, 2002, introduced amendmentsto the existing Insider Trading Regulations of 1992 which require new action steps by the corporate and marketintermediaries for the purpose of prevention of Insider Trading.

Pursuant to the above requirements of SEBI (Prohibition of Insider Trading) Regulations, 1992 as amended,the company has adopted a “Code of Conduct for Prevention of Insider Trading”. The code is applicable to allthe Directors and such designated employees who are expected to have access to unpublished price sensitiveinformation relating to the company.

Mr. A. Thanthoni Rao, Company Secretary is the compliance officer for adherence to the Regulations.

10. CODE OF CONDUCT

The Board of Directors have adopted a Code of Business Conduct and Ethics for Directors and SeniorManagement. The said code has been communicated to the directors and Senior Management. The code isalso uploaded on the company’s website www.shahilogistics.com.

11. MEANS OF COMMUNICATION

The approved financial results are forthwith sent to the Listed Stock Exchange and are published in the leadingnational news papers namely Free Press Journal and Navshakti (Marathi) within forty-eight hours of approvalthereof. These results and other official releases are also available at the company’s websitewww.shahilogistics.com and of the Bombay Stock Exchange Ltd, Mumbai at www.bseindia.com. (TheManagement Discussion and Analysis Report forms part of the Annual Report.)

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12. COMPLIANCE CERTIFICATE OF THE AUDITORS

The statutory auditors have certified that the company has complied with the conditions of Corporate Governanceas stipulated in clause 49 of the listing agreement with the stock exchange and the same is annexed to theDirectors Report and Management Discussion and Analysis.

The certificate from the auditors will be sent to the stock exchange where company’s shares are listed.

13. GENERAL SHAREHOLDER INFORMATION

(a) ANNUAL GENERAL MEETING:

Date and time : Friday, September 26, 2008 at 11.30 a.m.

Venue : Walchand Hirachand Hall, 4th Floor, Indian Merchants’,Chamber, Churchgate, Mumbai – 400 020

(b) FINANCIAL CALENDAR

Financial reporting for

Quarter ending 30th June 2008 : July 2008

Quarter ending 30th September 2008 : October 2008

Quarter ending 31st December 2008 : January 2009

Year ending 31st March 2009 : April 2009

(c) DATE OF BOOK CLOSURE : 19th September 2008 to 26th September 2008

(d) DIVIDEND PAYMENT DATE : On or after 26-09-2008.

(e) Listing of Equity shares : Bombay Stock Exchange Limited

The Company has paid listing fees to the Bombay Stock Exchange Limited for the financial year 2008-09.

(f) Scrip code : 526508 SKS LOGISTICS LIMITED

(g) Demat ISIN No. : INE 825 D 01016

(h) Stock market data:

The month-wise movement (High & Low) of the equity shares of the Company at the Bombay StockExchange Limited, Mumbai, during each month for the year ended 31st March 2008 is as under:

Month High (Rs.) Low (Rs.)

April 2007 26.00 20.75

May 2007 27.90 22.50

June 2007 28.80 22.60

July 2007 30.85 22.50

August 2007 31.50 23.60

September 2007 35.30 26.10

October 2007 34.00 26.20

November 2007 56.50 26.40

December 2007 80.65 50.00

January 2008 81.75 37.90

February 2008 44.45 35.60

March 2008 42.20 27.55

(i) Registrar and Share Transfer Agent: System Support Services 209, Shivai Industrial Estate, 89,Andheri Kurla Road, Sakinaka, Mumbai – 400 072.Telephone: 28500835. Fax 2850143 E.mail: [email protected]

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(j) Distribution of shareholding as on 31st March 2008

Shareholding No of Share % to no of Share Amount % to paidholders holders Rs. up Capital

Up to 500 4751 87.078 93,01,280 6.417

501 – 1000 365 6.690 30,10,400 2.077

1001 – 2000 155 2.841 24,88,860 1.717

2001 – 3000 43 0.788 11,20,490 0.773

3001 – 4000 30 0.550 11,17,520 0.771

4001 – 5000 20 0.367 9,41,920 0.650

5001 – 10000 33 0.605 25,98,710 1.793

10001 and above 59 1.081 12,43,69,560 85.802

Total 5456 100.00 14,49,48,740 100.00

(k) Shareholding Pattern as on 31 March 2008

Category No. of Shares Percentage

Promoters 85,14,372 58.740

Mutual fund 200 0.001

Bank /Financial / Institutions 200 0.001

Corporate bodies 19,19,248 13.230

FII / NRI / OCB 139,318 0.960

Indian Public 39,21,536 27.068

Total 144,94,874 100.000

(l) Dematerialization of shares

The Company’s shares are compulsorily traded in dematerialized form. As on 31st March 2008, 95,59,711shares were in dematerialization form with the NSDL & CDSL. This work out to 65.95 % of the totalnumber of shares.

(m) Share Transfer System

Share transfer in physical form are processed and returned to the shareholders within stipulated time.Half yearly Transfer Audit and Quarterly Secretarial Audits are carried out by a Practicing CompanySecretary.

(n) Plant locations

The Company does not have any plant since it is engaged in the business of Shipping.

(o) Investors Correspondence

System Support Services,209 Shivai Industrial Estate89, Andheri Kurla Road, Sakinaka,Mumbai- 400072.E.mail: [email protected]

Mr. A. Thanthoni Rao, Company Secretary & Compliance Officer404, Abhay Steel House, Baroda Street,Mumbai – 400 009E.mail: [email protected]

Place : Mumbai S. K. ShahiDate : 12th August 2008 Chairman & Managing Director

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AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

To,

The Members ofSKS LOGISTICS LIMITEDMumbai

We have examined the compliance of the conditions of Corporate Governance by SKS Logistics Limited (the Company)for the year ended 31st March 2008, as stipulated in clause 49 of the Listing Agreement of the Company with the StockExchange.

The compliance of the conditions of Corporate Governance is the responsibility of the Management. Our examinationwas limited to procedures and implementation thereof, adopted by the company for ensuring the compliance of theconditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statement ofthe company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that thecompany has complied with the conditions of Corporate Governance as stipulated in the above mentioned ListingAgreement.

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

For N. D. HEDA & COChartered Accountants

N. D. HEDAPlace : Mumbai ProprietorDate : 12th August 2008 Membership No. 32450

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AUDITORS’ REPORT

TO THE MEMBERS OF SKS LOGISTICS LIMITED

1. We have Audited the attached Balance Sheet of SKS LOGISTICS LIMITED as at 31st March, 2008 and also theannexed Profit and Loss Account of the Company for the year ended on that date annexed thereto and CashFlow Statement of company for the year ended on that date. These financial statement are the responsibility ofthe Company’s management. Our responsibility is to express an opinion on these financial statements basedon our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by the management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Governmentof India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, astatement of the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above :

a) We have obtained all the information and explanations which to the best of our knowledge and beliefwere 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 asappears from our examination of such books.

c) The Balance Sheet and Profit and Loss Account and Cash Flow Statement dealt with by this report are inagreement with books of accounts.

d) In our opinion, and to the best of our information the Balance Sheet and Profit and Loss Account and CashFlow Statement dealt with this report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act 1956, to the extent applicable.

e) On the basis of written representations received from the directors as on 31st March, 2008 and taken onrecord by the Board of Directors, none of the Directors is prima-facie disqualified as on 31st March, 2008from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the CompaniesAct, 1956

f) Disclosure of Deferred Tax Liability is made under the head “Reserve and Surplus” for the reasons statedin note 24 of schedule 19.

g) In our opinion and to the best of our information and according to the explanations given to us the saidaccounts read with the Significant Accounting Policies and other Notes thereon, give the informationrequired by the Companies Act, 1956 in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India:

I. In the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2008.

II. In the case of the Profit and Loss Account of the Profit for the year ended on that date, and

III. In the case of Cash Flow Statement of the Cash Flow for the year ended on that date.



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ANNEXURE TO THE AUDITOR REPORT:

(Referred to in paragraph 3 of our Report of even date on the accounts of SKS Logistics Limited for the yearended 31st March, 2008)

1. (a) The Company has maintained on year to year basis the records showing particulars including quantitativedetails of fixed assets and company is in process of updating the fixed assets register.

(b) Some fixed assets have been physically verified by the management during the year in accordance withphased programme of verification adopted by the company. No material discrepancies between the bookrecords and physical inventory were noticed in respect of assets physically verified during the year.

(c) The company has not disposed off substantial part of its fixed assets during the year.

2. The Company is in Shipping business, therefore clauses (ii) (a), (ii) (b) and (ii) (c) of para 4 of the abovementioned order regarding inventory and its physical verification, etc., do not apply in its case. The Companydoes purchase stores and spare parts for its ships & barges which are directly treated as consumed as and whensupplied to its ships & barges.

3. (a) The Company has not given any Loans, secured or unsecured to companies, firm or other parties listed inthe register maintained under section 301 of Companies Act, 1956. The company has taken unsecured loanfrom Companies and Directors listed in the registered maintained under section 301 of the Companies Act,1956. The maximum balance outstanding during the year is Rs. 171.00 Lakh. (Previous Year Rs. 224.30lakh).

(b) In our opinion and according to the information and explanation given to us the unsecured loans taken bythe company are interest free, the same are repayable on demand and therefore question of overdueamount does not arise.

4. In our opinion and according to the information and explanation given to us, there are adequate internal controlprocedures commensurate with the size of the company and the nature of its business with regards to purchasesof stores, spare parts, fixed assets and services rendered. During the course of our audit, no major weakness hasbeen noticed in the internal controls.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided bythe management, we are of the opinion that the transactions that need to be entered in to the registermaintained under Section 301 have been so entered.

b) In our opinion and according to the information and explanations given to us, there are no transactions inpursuance of contracts or arrangements entered in the register maintained under Section 301 of theCompanies Act, 1956 aggregating during the year to Rs. 5,00,000/- (Rupees Five Lacs Only) or more inrespect of any party.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted anydeposits from the public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and the rulesframed there under.

7. In our opinion the company has internal Audit system commensurate with the size and nature of its business.

8. As informed to us the maintenance of cost records has not been prescribed by the Central Government underclause (d) of sub section (1) of Section 209 of the Companies Act, 1956, in respect of activities carried on by thecompany.

9. (a) According to the information and explanations given to us and according to the books and records asproduced and examined by us, in our opinion, the undisputed statutory dues in respect of provident fund,

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investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, customsduty, excise duty, cess and other material statutory dues as applicable, have been generally regularlydeposited by the Company during the year with the appropriate authorities. According to the information andexplanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax,custom duty and excise duty were outstanding, as at 31.03.2008 for a period of more than six months fromthe date they become payable.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax,Custom Duty, Wealth Tax, Excise Duty or Cess Outstanding on account of any dispute.

10. The Company does not have any accumulated losses nor has it incurred any cash losses during the financialyear covered by our audit and the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of theopinion that the Company has not defaulted in repayment of dues to any financial institution, bank or debentureholders, as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares etc.

13. In our opinion, considering the nature of activities carried on by the Company during the year, the provisions ofany special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to theCompany.

14. The Company is not dealing or trading in shares, securities, etc.

15. The Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanations given to us and on an overall examination, theterm loans have been applied for the purpose for which they were raised.

17. Based on our examination and the information and explanation given to us, we report that the Company has notutilised any funds raised on short term basis for long term investments and vice-versa.

18. The Company has not made any preferential allotment of shares to parties and companies covered in theregister maintained under Section 301 of the Act.

19. In our opinion, the Company has created securities in respect of debentures issued and outstanding at the yearend.

20. The company has not raised any money by public issue during the year.

21. During the course of our examination of the books of account carried out in accordance with the generallyaccepted auditing practices in India, and according to the information and explanations given to us, we haveneither come across any instance of fraud on or by the Company, noticed or reported during the year, nor havewe been informed of such case by the management.



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BALANCE SHEET AS AT 31ST MARCH, 2008

Sch As At As AtNo. 31st March 31st March

2008 2007

SOURCES OF FUNDS

Share Capital 1 144,948,740 144,948,740

Reserves & Surplus 2 289,117,316 274,517,397

Secured Loans 3 518,436,000 531,467,115

Unsecured Loans 4 10,600,000 3,630,300

963,102,056 954,563,552

APPLICATION OF FUNDS

Fixed Assets 5 781,929,181 785,412,035

Investments 6 192,560 192,560

CURRENT ASSETS, LOANS & ADVANCES

Sundry Debtors 7 163,605,572 134,522,799

Cash & Bank Balances 8 4,535,261 9,134,047

Other Current Assets 9 68,515,109 64,601,951

Loans & Advances 10 75,843,491 64,020,385

312,499,433 272,279,182

LESS: CURRENT LIABILITIES & PROVISIONS

Current Liabilities 11 57,201,206 46,200,350

Provisions 12 75,455,662 58,257,625

132,656,868 104,457,975

NET CURRENT ASSETS 179,842,565 167,821,207

MISCELLANEOUS EXPENDITURE 13 1,137,750 1,137,750(to the extent not written off or adjusted)

963,102,056 954,563,552

SIGNIFICANT ACCOUNTING POLICIES AND

NOTES TO THE ACCOUNTS 19

The Schedules referred to above form an integral part of Balance Sheet

As per our report of even date FOR AND ON BEHALF OF THE BOARD

For N.D.HEDA & CO. S.K.SHAHI Capt. W.GONSALVESChartered Accountants Chairman & Managing Director Wholetime Director

N.D.HEDA A.T.RAOProprietor Company SecretaryMembership No.32450

Place : MumbaiDated : 12th August 2008.

25

S K SLOGISTICS LTD.







PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2008.

Sch As At As AtNo. 31st March 31st March

2008 2007

INCOME

Income from Operations 14 459,340,495 406,153,332

Other Income 15 7,711,866 3,675,544

Profit on sale of Assets 89,598 381,441

467,141,959 410,210,317

EXPENDITURE

Direct Operation expenses 16 188,984,816 172,342,133

Administrative expenses 17 82,998,852 67,743,247

Finanncial expenses 18 67,460,896 48,821,027

Depreciation 80,561,802 61,483,227

Loss on sale of Assets 1,869,471 436,013

421,875,837 350,825,647

Profit before Taxation 45,266,122 59,384,670

Less: Current Tax 13,461,000 10,970,000

Less: Deferred Tax 4,627,000 7,560,000

Less: Fringe Benefit Tax 1,094,839 832,918

Profit after Tax 26,083,283 40,021,752

Less: Tonnage Tax Reserve under - 1,550,000Section 115VT of Income Tax Act,1961

Add: Surplus from Previous Year 111,234,126 110,481,081

Profit available for Appropriations 137,317,409 148,952,833

APPROPRIATIONS:

Transfer to General Reserve 2,500,000 25,000,000

Proposed Dividend 13,770,130 10,871,155

Income Tax on Proposed Dividend 2,340,234 1,847,552

BALANCE CARRIED FORWARD 118,707,045 111,234,126

Earnings per share (Rs.) (Basic & Diluted) 1.80 2.76

SIGNIFICANT ACCOUNTING POLICIES AND

NOTES TO THE ACCOUNTS 19

The Schedules referred to above form an integral part of Profit & Loss Account

26

S K SLOGISTICS LTD.







CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2008

(Rs. In’000s) (Rs. In’000s)2007-2008 2006-2007

I. CASH FLOW FROM OPERATING ACTIVITIESNet Profit Before Tax & Extraordinary Items 45,266 59,385Adjustment forDepreciation 80,562 61,483Loss /( Profit) on sale of Assets (Net) 1,779 55Dividend Income (6) (9)Interest Income (510) (727)Interest Expenses 66,366 148,191 44,980 105,782

Opearting Profit before working Capital Changes 193,457 165,167Adjustmetnt forTrade & Other receivables (44,408) (2,880)Trade Payables 11,001 (33,407) (8,533) (11,413)

Cash genearated from operation 160,050 153,754Direct Taxes paid (466) (4,674)Fringe Benefit tax paid (749) (953)Interest paid (66,366) (44,980)

Net cash from operating Activities 92,469 103,147

II. CASH FLOW FROM INVESTMENT ACTIVITIESPurchase of Fixed Assets (82,855) (271,359)Sale of Fixed Assets 3,996 1,076Dividend Received 6 9Interest Received 565 690

Net Cash used in Investing Activities (78,288) (269,584)14,181 (166,437)

III. CASH FLOW FROM FINANCING ACTIVITIESProceeds from Borrowings (6,061) 168,128Dividend paid (12,719) (8,263)

Net Cash used in Financing Activities (18,780) 159,865Net Changes in cash & cash equivalents (4,599) (6,572)

Cash & cash equivalents in - opening Balance 9,134 15,706Cash & cash equivalents in - Closing Balance 4,535 9,134

4,599 6,572Note:1. Purchase of Fixed Assets are stated inclusive of capital work- in progress and aAdvances for capital goods ,between

beginning and end of the year and is treated as part of investing activities.2. Proceeds from borrowings are shown as net of repayments.3. Figures in brackets indicates cash outflow

27

S K SLOGISTICS LTD.



SCHEDULES ANNEXED TO AND FORMING PART OF BALANCE SHEET AS AT 31ST MARCH 2008

As At As At31st March 31st March

2008 2007

SCHEDULE :1

SHARE CAPITAL

AUTHORISED SHARE CAPITAL

300,00,000 EQUITY SHARES OF RS.10/- EACH 300,000,000 300,000,000(Previous year 300,00,000 Equity Shares of Rs.10/-each )

ISSUED,SUBSCRIBED & PAID UP

1,44,94,874 EQUITY SHARES OF RS.10/- EACH FULLY PAID 144,948,740 144,948,740(Previous year 1,44,94,874 Equity Shares of Rs.10/- each fully paid)(Out of the above 72,47,437 Equity Shares of Rs.10/- each was allottedas fully paid-up bonus shares by capitalisation of general reserve)

SCHEDULE :2

RESERVES & SURPLUS

GENERAL RESERVE

AS PER LAST BALANCE SHEET 104,479,421 79,479,421

Add : Transferred from Profit & Loss A/C 2,500,000 25,000,000

106,979,421 104,479,421

RESERVES U/S 115VT OF THE INCOME TAX ACT,1961

AS PER LAST BALANCE SHEET 2,461,850 911,850

Add : Transferred from Profit & Loss A/C - 1550000

2,461,850 2,461,850

DEFERRED TAX RESERVE

AS PER LAST BALANCE SHEET 56,342,000 48,782,000

Add : Transferred from Profit & Loss A/C 4,627,000 7,560,000

60,969,000 56,342,000

PROFIT AND LOSS ACCOUNT 118,707,045 111,234,126

289,117,316 274,517,397

28

S K SLOGISTICS LTD.





2008 2007

SCHEDULE :3

SECURED LOANS

11% SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURE 16,500,000 38,500,000(Privately placed with the Financial Institution .Secured by hypothecationof charges on specific barges and personal guarantee of certain Directors as per deedof hypothecation redeemable in 20 quarterly instalments commenced from April,2004)

IDBI 5,868,639 13,680,639(Secured by hypothecation of specific barges & assignment of receivable of specificbarges and Personal guarantee of some of the Directors)

SREI INFRASTRUCTURE FINANCE LTD 89,842,348 -(Secured by hypothecation of specific barges & assignment of receivable of specificbarges and Personal guarantee of some of the Directors)

DENA BANK - SHORT TERM LOAN 49,988,720 -(Secured by hypothecation of specific barges &Personal guarantee of certain Directors)

DENA BANK -TERM LOAN 57,900,666 98,990,073(Secured by hypothecation of specific barges &Personal guarantee of certain Directors)

CASH CREDIT FACILITY FROM STATE BANK OF INDORE 53,032,408 52,089,594(Secured by Book Debts, hypothecation of specific barges & personal guaranteeof certain Directors)

STATE BANK OF INDORE-TERM LOAN 35,092,991 43,499,682(Secured by hypothecation of specific barges & personal guaranteeof certain Directors)

UNITED BANK OF INDIA - TERM LOAN 38,438,417 40,469,048(Secured by hypothecation of specific barges & personal guaranteeof certain Directors)

PUNJAB NATIONAL BANK-CORPORATE LOAN 18,743,379 43,743,698(Secured by hypothecation of specific barges & personal guaranteeof certain directors.

DENA BANK -TERM LOAN-ROYAL PISCES 121,900,565 133,400,000(Secured by hypothecation of specific barges &Personal guarantee of certain Directors)

HDFC BANK LTD 11,074,667 13,301,106(Secured by deposit of title Documents of Vashi Site)

STATE BANK OF HYDERABAD-CORPORATE LOAN 12,499,172 49,970,204(Secured by hypothecation of specific barges & Personal guarantee of certain Directors)

CAR LOAN-HDFC BANK 5,540,403 3,823,071(Secured by hypothecation of Motor vehicles).

CAR LOAN-STATE BANK OF INDORE 2,013,625 -(Secured by hypothecation of Motor vehicles).

TOTAL 518,436,000 531,467,115

SCHEDULE :4

UNSECURED LOANS

From Corporate Bodies 9,400,000 2,430,300

From Director 1,200,000 1,200,000

TOTAL 10,600,000 3,630,300

29

S K SLOGISTICS LTD.



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30

S K SLOGISTICS LTD.





2008 2007

SCHEDULE :6INVESTMENTS.Investments in quity Shares (at cost)Quoted:Other Than Trade 85,000 85,000Equity Shares of Bank of Baroda(1000 Equity Shares of Rs.10/- each Fully Paid)(Market Value Rs.2,83,900/-)Unquoted:I. Other Than Trade

Equity Shares of Shamrao Vithal Co-op Bank 10,000 10,000(400 Equity Shares of Rs.25/- each Fully Paid)Equity Shares of Saraswat Co-op Bank Ltd. 10,050 10,050(1005 Equity Shares of Rs.10/- each Fully Paid)

II. TradeIn Subsidiary Companies :Equity Shares of SKS Logistics (Singapore) Ltd. 27 27(1 Equity Share of 1 Singapore $ each)Equity Shares of Shahi Shipping (Bangladesh) Ltd. 87,483 87,483(997 Equity Shares of 100 Bangladesh Taka each)

192,560 192,560

SCHEDULE :7SUNDRY DEBTORS (Considered Good)Debts outstanding for a period exceeding six months* 76,592,432 60,467,184Other Debts 87,013,140 74,055,615

163,605,572 134,522,799

*includes Rs. 33,181/- (Previous year Rs.60,890/-) due from a companyunder the same management.

SCHEDULE :8CASH & BANK BALANCESCash balance on hand 327,350 145,274Foreign Currency in hand 59,706 84,127Bank balances with Scheduled Banks:Margin Money Deposit against Guarantees 461,623 1,906,545Current Accounts 2,964,152 6,240,098Dividend Accounts 702,430 479,573Cheques on hand 20,000 278,430

4,535,261 9,134,047

SCHEDULE :9OTHER CURRENT ASSETSInterest accrued on Bank FDR’s 23,684 78,807Interest Subsidy Receivable 64,523,144 64,523,144Receivable from Bank in respect of foreign exchange contract 3,968,281 -

68,515,109 64,601,951

31

S K SLOGISTICS LTD.





2008 2007

SCHEDULE :10LOANS & ADVANCES (Considered good)Tax paid (including TDS) 60,257,517 47,816,765Deposit with Statutory bodies 1,306,226 2,259,304Deposit with others 5,494,219 5,404,219Advances Recoverable in Cash or in kind for value to be received * 8,785,529 8,540,097* Includes Rs.29,56,070/- (Previous year Rs.29,42,555/-)dues fromsubsidiaries and Rs.26,43,420(Previous year Rs.24,14,456/-)dues from companies where directors are interested. 75,843,491 64,020,385

SCHEDULE :11CURRENT LIABILITIESSundry Creditors 54,918,123 42,723,483Trade Deposits 1,583,360 1,750,000Advance from Customers - 1,250,000Unclaimed Dividend* 699,723 476,867*(There are no amount due and outstanding to be credited to 57,201,206 46,200,350Investor Protection Fund)

SCHEDULE :12PROVISIONSFor Taxation 58,167,000 44,706,000For Fringe Benefit Tax 1,178,298 832,918For Proposed Dividend 13,770,130 10,871,155For Tax on Proposed Dividend 2,340,234 1,847,552

75,455,662 58,257,625

SCHEDULE :13MISCELLANEOUS EXPENDITUREExpenditure incurred for Public Isssue 1,137,750 1,137,750(To the extent of not written off or adjusted) 1,137,750 1,137,750

SCHEDULE :14INCOME FROM OPERATIONSIncome from Operations 459,340,495 406,153,332

459,340,495 406,153,332

SCHEDULE :15OTHER INCOMEInterest from Banks 510,119 726,692Vat Refund from UK - 30,075Dividend 6,000 8,800Insurance Claim Received 416,375 241,714Rebate and discount received 242,850 164,835Sundry balances written back (Net) 6,527,522 -Misc.Income 9,000 2,503,428

7,711,866 3,675,544

32

S K SLOGISTICS LTD.



SCHEDULES ANNEXED TO AND FORMING PART OF PROFIT & LOSS ACCOUNT FOR THE YEARENDED 31ST MARCH 2008


2008 2007

SCHEDULE :16DIRECT OPERATION EXPENSESHire, Transportation & Water Charges 10,230,301 13,976,816Barge Voyage expenses 915,955 772,324Agency fees 12,918,037 6,838,784Crane Charges 3,737,310 2,760,381Repairs & Maintainance (Fleet) 28,403,784 32,694,251Barge Operation Expenses 47,360,951 27,076,710Port Dues 15,076,222 17,843,982Fuel & Oil 58,681,203 61,236,641Insurance Charges 8,987,745 6,765,071Survey Charges 2,673,308 2,377,173

188,984,816 172,342,133

SCHEDULE :17ADMINISTRATIVE EXPENSESSalary& Bonus & Gratuity etc. 27,836,883 21,911,528Contribution to PF & other Funds 1,723,904 1,233,381Staff welfare 1,607,005 1,675,354Rent,Rates & taxes 1,307,697 1,312,757Insurance charges 292,563 490,077Travelling expenses 5,049,734 4,421,236Telephone,Telex ,Fax Expenses 2,567,702 2,536,664Auditors remuneration 422,453 352,374Advertisement & publicity expenses 1,490,279 2,156,543Bad debts written off 201,518 80,100Directors remuneration 4,781,352 4,759,410Directors sitting fees 75,000 85,000Electricity charges 1,201,074 1,114,168Printing & Stationery expenses 967,493 869,841Legal,professional & consultancy charges 9,097,852 7,126,360Secretarial expenses 212,839 98,856Conveyance expenses 955,151 1,011,856Other expenses 8,699,428 7,238,552Rebates & discounts 9,826,529 5,631,980Repairs & maintenance - Building 39,733 74,470Repairs & maintenance (others) 4,642,663 3,562,740

82,998,852 67,743,247

SCHEDULE :18FINANCE EXPENSESInterest to Banks & Financial Institution 66,365,686 44,980,124Bank charges & Commission 1,095,210 3,840,903

67,460,896 48,821,027

33

S K SLOGISTICS LTD.



SCHEDULE: 19

Significant Accounting Policies and Notes to the Accounts: -

1. Method of Accounting:

The accounts are prepared under historical cost convention and are based on the accrual basis of accounting except thatliability for bonus, leave encashment and receipt of insurance claims, which are accounted on cash basis.

2. Fixed Assets:

Fixed assets are stated at cost of acquisition including interest during construction period, if any, less accumulated depreciation.

3. Capital Work in Progress and Advances for Capital Goods:

Capital work-in-progress and Advances for capital goods includes advances for projects and advances for capital goods.

4. Depreciation:

(i) Depreciation is provided on the Written Down Value Method at rates specified in the Schedule XIV of the Companies Act,1956

(ii) Depreciation on addition to Assets and sale of Assets is calculated pro-rata, from the date of such addition and up to thedate of such sale respectively.

(iii) Cost of lease-hold land is amortised over the period of lease.

5. Investments:

All Investments are considered as long term Investments and are stated at cost.

6. Revenue Recognition:

Income from operation consists of vessel hire charges on time charter and spot charter basis. In certain cases, time charterhire charges are billed at a composite rate, which includes reimbursement of incidental expenses.

7. Retirement Benefits:

Company’s contribution to Employees’ Provident Fund and Employees State Insurance are being charged to the Profit & LossAccount. Liability for gratuity in case of shore staff is determined on accrual basis and is provided in the books of accounts.In case of crew members, gratuity is accounted for on cash basis.

8. Treatment of major repairs:

Major repairs including survey expenses carried out on vessels are written off to revenue in the year the expenses areincurred. However, in the opinion of the management if such expenses are of a capital nature, the same are added to the costof the respective vessels.

9. Stores & Spares:

Stores & Spares purchased are directly issued to the Barges and the values of such purchases are charged to the Revenueand are included in Repairs and Maintenance Account.

10. Taxes on Income

Provision for current tax including tonnage tax is made, based on tax payable under Income Tax Act 1961, The Company hasprovided for Deferred Tax Liability which arises due to the timing difference between accounting income and taxable incomeexcept on income under tonnage tax scheme. Deferred Tax assets are recognized only to the extent that there is reasonablecertainty of realisation.

11. Issue expenses:

Issue expenses pertaining to the projects are capitalized.

12. Contingent liability not provided for:

On account of guarantees executed by the company’s Bankers for Rs. 43.22 lacs (previous year Rs. 58.44 lacs), which ispartly secured by the Margin Money amounting to Rs. 4.62 lacs (previous year Rs. 19.06 lacs) retained by the Bank.

13. Debtors include Rs. 22.67 lacs (Previous year Rs. 22.67 lacs) in respect of cases which are under arbitration/ dispute. In theopinion of the management the said debts are considered good.

14. On account of being a shipping company, details in connection with Para 3 of Part II of Schedule VI of the Companies Act, 1956have not been given.

15. The other current assets in schedule 9 includes ( i )Rs. 645.23 lacs (Previous year Rs. 645.23 lacs) of interest subsidyreceivable from Central Government Inland Waterways Authority. The amount outstanding is considered good by themanagement, (ii) Rs. 39.68 lacs (Previous year Rs. NIL) recoverable from Dena Bank on account of Loss on ForeignExchange Contract in respect of FCDL loan liability. As per the opinion of the Management the same is good and recoverable.

16. The Sundry Debtors, Sundry Creditors, Loans, Deposits and Loans & Advances are subject to confirmation/ reconciliation.The management does not expect any material difference affecting the current financial statements.

17. In the opinion of the Board, Current Assets, Loan and Advances have a value on realisation in the ordinary course of businessat least equal to the amount at which they are stated in the Balance Sheet.

34

S K SLOGISTICS LTD.



18. The company is engaged only in the business of shipping and as such there is no separate reportable segment as perAccounting Standard 17.

19. (a) Sundry Creditors include amounts due to small scale Industrial undertakings – Rs.1.57 lacs (previous year Rs. 2.07lacs).

(b) The party being small scale /ancillary industrial undertaking to whom amount exceeding Rs. 100,000/- is outstanding formore than 30 days but not overdue: Dipti Fire Services.

(c) There were no amounts overdue to Small Scale and/or Ancilliary Industrial suppliers on account of principal and / orinterest as at the close of the year.

(d) The above disclosure is based on the information/ documents available with the company.

20. Previous year’s figures have been regrouped and rearranged wherever necessary to confirm to those of the current year.

21. Expenditure in Foreign Currency:

31stMarch 2008 (Rs) 31stMarch 2007 (Rs)

Traveling 10,67,978 6,78,785Subscription 23,863 7,620Purchase of Vessels NIL 20,98,14,718Interest NIL 18,14,153Purchase of Spares 16,85,672 NILLegal Fees 10, 606 NIL

22. Earnings in Foreign Currency:

From Operations NIL 2,915,545

23. Auditors’ Remuneration includes:

For Company Law Audit 1,40,450 1,18,125For Tax Audit 44,944 39,375For Taxation 28,090 28,125For Certification 2,00,115 1,49,417For Reimbursement of Expenses 8,854 17,332

24. The break-up of net Deferred Tax Liability is as under, except on income under tonnage tax scheme:

Deferred Tax Assets NIL NILDeferred Tax LiabilityDifference between Book &Tax Depreciation 609.69 563.42Net deferred tax liabilityon account timing differences 609.69 563.42

As in the past years the accumulated credit balance in the Deferred Tax Account has been shown under the head “Reserves& Surplus “, as in the opinion of the management the liability for deferred tax does not exist on the date of the Balance Sheet.

25. There was no impairment loss on fixed assets on the basis of review carried out by the management in accordance with theAccounting Standard 28 issued by the Institute of Chartered Accountants of India.

26. Earnings per Share

31stMarch 2008 31stMarch 2007

Profit after taxation as perProfit & Loss Account 2,60,83,283 4,00,21,752Number of equity shares outstanding for basic and diluted EPS 14494874 14494874Basic & diluted EPS Rs. 1.80 Rs. 2.76Face value per share Rs.10/- Rs.10/-

27. Prior period expenses debited during the year was Rs. 2.73 lac (previous year was Rs. 1.05 lac).

28. A. Remuneration to Directors including Managing Director & Whole-time Directors.

Rs. In Lacs Rs. In Lacs2007-08 2006-07

Salary,Bonus & Perquisites 42.60 41.08Contribution to Provident Fund and other funds 1.80 1.80Commission to Managing Director 5.21 6.51

49.61 49.39

35

S K SLOGISTICS LTD.



B. Computation of Net Profit under section 349 of the Companies Act,1956 (Rs. In Lacs)

2007-08 2006-07

Net Profit before Tax as per Profit & Loss Account 452.66 600.36

Add: (i) Managerial Remuneration 49.61 49.39

(ii) Directors sitting Fees 0.75 0.85

(iii) Loss on Sale of Fixed Assets 18.69 4.36

LESS: (i) Profit on Sale of Asset 0.90 3.81

Net Profit under section 349 of the Companies Act, 1956 520.81 651.15

Commission Payable to Managing Director @ 1% of Net Profit 5.21 6.51

29 Related Party Disclosures:

RELATED PARTY RELATIONSHIPS:

a) Where control exists: SKS Logistics (Singapore) Pte LimitedShahi Shipping (BD) LimitedIndia First Logistics LimitedShahi Gasol LimitedSKS Shipyard Pvt.Ltd.Royal Logistics ( Ship ) Ltd.

b) Key Management Personnel: Mr. S. K. ShahiChairman & Managing DirectorMr. F. M. KoliWholetime DirectorCapt. W. GonsalvesWholetime Director

c) Other Related Parties: Shahi Finance Pvt.LimitedAce Pharmaceutical Pvt. Ltd.Aryan Transport Company Pvt Ltd.Royal Cruise Liners LimitedKoli Finance Pvt. LimitedAryan Transport Co

TRANSACTIONS WITH RELATED PARTIES DURING THE YEAR:

Rs. In Lacs Rs. In Lacs

AMOUNT AMOUNT

TYPE OF RELATED PARTY NATURE OF TRANSACTIONS 2007-08 2006-07Where control exists Advance given 2.44 12.56

Loans Taken 55.00 35.00Loans Repaid 30.00 52.90

Key Management Personnel Remuneration paid to Key Management Personnel 49.60 49.39Purchase of Fixed Assets 0.00 39.60Loans Taken 55.00 45.00Loans Repaid 55.00 56.00

Other related parties Loans taken 150.00 36.50Loans Repaid 105.00 102.40

OTHER BALANCES OUTSTANDING AS AT THE YEAR END1. Where Control Exists Debtors 0.33 0.61

Advances given 56.00 53.56Unsecured Loans taken 25.00 NIL

2. Key Management Personnel Unsecured Loans taken 12.00 12.003. Other Related Parties Unsecured Loans taken 69.00 24.00

Creditors 0.00 0.20Trade Deposit 14.50 14.50

36

S K SLOGISTICS LTD.



30. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. Registration Details

Registration Number State Code

0 5 8 6 8 0 1 1

Balance Sheet Date

3 1 0 3 2 0 0 8

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

Pubic Issue Right Issue

N I L N I L

Bonus Issue Private Issue

N I L N I L

III. Position of Mobilisation and deployment of funds ( Amount in Rs. Thousands)

Total Liabilities Total Assets

1 0 9 5 7 5 9 1 0 9 5 7 5 9

Source of FundsPaid up Capital Reserves & Surplus

1 4 4 9 4 9 2 8 9 1 1 7

Secured Loans Unsecured Loans

5 1 8 4 3 6 1 0 6 0 0

Application of FundsNet Fixed Assets Investments

7 8 1 9 2 9 1 9 3

Net Current Assets Misc. Expenditure

1 7 9 8 4 3 1 1 3 7

Accumulated Losses

N I L

IV. Performance of Company ( Amount in Rs Thousands)

Turnover ( Gross Revenue) Total Expenditure

4 6 7 1 4 2 4 2 1 8 7 6

Profit(+)/ Loss(-) before Tax Profit(+)/ Loss(-) after Tax

4 5 2 6 6 2 6 0 8 3

Earning per Share in Rs. Dividend Rate (%)

1. 8 0 9. 5

V. Generic Names of Three principal Products/ Services of the Company ( as per Monetary Terms)

Item Code No. ( ITC Code) N I L

Product Description S H I P P I N G





37

S K SLOGISTICS LTD.LOGISTICS LTD.

Consolidated Annual Report 2007-2008

REPORT OF THE AUDITORS ON CONSOLIDATED FINANCIAL STATEMENTS

Auditors Report to the Board of Directors of SKS Logistics Limited on the ConsolidatedFinancial Statements of SKS Logistics Limited and its subsidiaries SKS Logistics(Singapore) Pte Ltd. And Shahi Shipping (BD) Ltd.

We have examined the attached Consolidated Balance Sheet of SKS Logistics Limited and its subsidiaries, as at 31stMarch, 2008 and also the related Consolidated Profit & Loss Account and Consolidated Cash Flow Statement asdescribed in Note 1 to the consolidated financial statements, for the year ended on that date, annexed thereto. Theseconsolidated financial statements are the responsibility of the management of the SKS Logistics Limited. Ourresponsibility 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. These standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by the management, as well as evaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

We did not audit the financial statement of the subsidiaries, whose financial statements reflect total Assets of Rs.1,93,331/- as at 31st March 2008 and total loss of Rs 94,853/- for the year then ended. These financial statementshave been audited by other auditors whose reports have been furnished to us, and our opinion, in so far as it relatesto the amounts includes in respect of the subsidiaries, is based solely on the report of the other auditors.

We report that the consolidated financial statements have been prepared by the Company in accordance with therequirements of Accounting Standard ( AS) 21, “ Consolidated financial statements” issued by the Institute of CharteredAccountants of India and on the basis of the separate audited financial statements of SKS Logistics Ltd. and itssubsidiaries 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 onthe individual audited financial statements of SKS Logistics Ltd. and its aforesaid subsidiaries, we are of the opinionthat:

(a) The Consolidated Balance Sheet gives a true and fair view of the consolidated state of affairs of SKS LogisticsLtd. and its subsidiaries as at 31st March 2008

(b) The Consolidated Profit & Loss Account gives a true and fair view of the consolidated results of operations ofSKS Logistics Ltd. and its subsidiaries for the year then ended; and

(c) The Consolidated Cash Flow Statement gives a true and fair view of the Cash Flow of SKS Logistics Ltd and itssubsidiaries for the year ended on that date.



38



CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH 2008

SCH No. As at As at31st March 2008 31st March 2007

Rs. Rs.

SOURCES OF FUNDSShare Capital 1 144,948,740 144,948,740Reserves & Surplus 2 287,545,644 272,995,742Secured Loans 3 518,436,000 531,467,115Unsecured Loans 4 10,600,000 3,630,300Minority Interest 4A (1,535,268) (1,455,799)

959,995,116 951,586,098

APPLICATION OF FUNDSFixed Assets 5 781,929,181 785,432,725Investments 6 105,050 105,050CURRENT ASSETS,LOANS & ADVANCESSundry Debtors 7 163,605,572 134,522,799Cash & Bank Balances 8 4,544,018 9,146,641Other Current Assets 9 68,515,109 64,601,951Loans & Advances 10 72,847,757 61,084,854

309,512,456 269,356,245

LESS: CURRENT LIABILITIES & PROVISIONSCurrent Liabilities 11 57,354,653 46,300,392Provisions 12 75,455,662 58,257,625

132,810,315 104,558,017NET CURRENT ASSETS 176,702,141 164,798,228

MISCELLANEOUS EXPENDITURE 13Preliminary expenses 1,258,744 1,250,095(to the extent not written off or adjusted)

959,995,116 951,586,098

SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE ACCOUNTS 19The Schedules referred to the above form an integral part of Balance Sheet


For N.D.HEDA & CO. S. K. SHAHIChartered Accountants (Chairman & Managing Director)

N.D.HEDA Capt. W. GONSALVESProprietor (Whole time Director)Membership No. 32450

Place: Mumbai A.T.RAODated: 12th August 2008 ( Company Secretary )

39



CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED31ST MARCH, 2008

SCH Year Ended Year EndedNo. 31st March 2008 31st March 2007

Rs. Rs.

INCOMEIncome from Operations 14 459,340,495 406,153,332Other Income 15 7,711,866 3,675,544Profit on sale of Assets 89,598 381,441

467,141,959 410,210,317

EXPENDITUREDirect Operation expenses 16 188,984,816 172,342,133Administrative expenses 17 83,060,507 68,744,773Financial expenses 18 67,471,589 48,836,237Depreciation 80,584,344 61,505,489Loss on Sale of Assets 1,869,471 436,013

421,970,727 351,864,645Profit before Taxation 45,171,232 58,345,672Less : Current Tax 13,461,000 10,970,000Less : Deferred Tax 4,627,000 7,560,000Less : Fringe Benefit Tax 1,094,839 832,918Less : Taxation of Earlier Years - -Add : Share of Minority Interest in Losses of Subsidiaries 44,873 511,210Profit after Tax 26,033,266 39,493,964Less: Reserve U/S 115VT of Income Tax Act,1961 1,550,000Add: Surplus from Previous Year 109,712,471 109,487,214Add: Excess provision of Income Tax Written back - -Profit available for Appropriations 135,745,737 147,431,178APPROPRIATIONS:Transfer to General Reserve 2,500,000 25,000,000Proposed Dividend 13,770,130 10,871,155Income Tax on Proposed Dividend 2,340,234 1,847,552BALANCE CARRIED FORWARD 117,135,373 109,712,471Earnings per share (Rs.) (Basic & Diluted) 1.80 2.72SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO THE ACCOUNTS 19The Schedules referred to the above form an integral part of Profit & Loss Account





40



CONSOLIDATED STATEMENT OF SKS LOGISTICS LTD AND ITSSUBSIDIARY COMPANIES FOR THE YEAR ENDED 31ST MARCH 2008

(Rs. In’000s) (Rs. In’000s)2007 - 2008 2006 - 2007

I. CASH FLOW FROM OPERATING ACTIVITIESNet Profit Before Tax & Extraordinary Items 45,171 58,346Adjustment forDepreciation 80,584 61,505Loss /(Profit) on sale of Assets (Net) 1,779 55Dividend Income (6) (9)Interest Income (510) (727)Interest Expenses 66,366 148,213 44,980 105,804

Opearting Profit before working Capital Changes 193,384 164,150Adjustmetnt forTrade & Other receivables (44,368) (2,048)Trade Payables 11,055 (33,313) (8,550) (10,598)Cash Generated from operation 160,071 153,552Direct Taxes paid (466) (4,674)FBT Paid (749) (953)Interest paid (66,366) (44,980)Net cash from operating Activities 92,490 102,945

II. CASH FLOW FROM INVESTMENT ACTIVITIESPurchase of Fixed Assets (82,855) (271,359)Sale of Fixed Assets 3,996 1,076Dividend Received 6 9Pre operative Expenses of Bangladesh Subsidiary (16) (17)Interest Received 565 690Net Cash used in Investing Activities (78,304) (269,601)

14,186 (166,656)

III. CASH FLOW FROM FINANCING ACTIVITIESProceeds from Borrowings (6,061) 168,128Increased in Misc. Expenditure (9) -Dividend paid (12,719) (8,263)

Net Cash used in Financing Activities (18,789) 159,865Net Changes in cash & cash equivalents (4,603) (6,791)

Cash & cash equivalents in - opening Balance 9,147 15,938Cash & cash equivalents in - Closing Balance 4,544 9,147

4,603 6,791Note:1. Purchase of Fixed Assets are stated inclusive of capital work- in progress and advances for capital goods, between

beginning and end of the year and is treated as part of investing activities.2. Proceeds from borrowings are shown as net of repayments.3. Figures in brackets indicates cash outflow





41



SCHEDULE ANNEXED TO AND FORMING PART OF CONSOLIDATEDBALANCE SHEET AS AT 31ST MARCH 2008

As at As at31st March 2008 31st March 2007

Rs. Rs.

SCHEDULE : 1

SHARE CAPITAL

AUTHORISED SHARE CAPITAL300,00,000 EQUITY SHARES OF RS.10/-EACH 300,000,000 300,000,000(Previous year 3,00,00,000 Equity Shares of Rs.10/- each )

ISSUED, SUBSCRIBED & PAID UP1,44,94,874 EQUITY SHARES OF RS.10/-EACH FULLY PAID 144,948,740 144,948,740

(Previous year 1,44,94,874 Equity Shares of Rs.10/-each fully paid-up)

(Out of the above 72,47,437 Equity Shares of Rs.10/-each was allottedas fully paid-up bonus shares by capitalisation of General reserve)

SCHEDULE : 2

RESERVES & SURPLUS

GENERAL RESERVE AS PER LAST BALANCE SHEET 104,479,421 79,479,421Add: Transferred from Profit & Loss Account 2,500,000 25,000,000

106,979,421 104,479,421

RESERVES U/S 115 VT OF THE INCOME TAX ACT,1961

As per Last Balance Sheet 2,461,850 911,850Transferred from Profit & Loss A/C - 1,550,000

2,461,850 2,461,850

DEFERRED TAX RESERVE

As per last Balance Sheet 56,342,000 48,782,000Add : Transferred from Profit & Loss A/C 4,627,000 7,560,000

60,969,000 56,342,000

PROFIT AND LOSS ACCOUNT 117,135,373 109,712,471

287,545,644 272,995,742

42




SCHEDULE :3SECURED LOANS11% SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURE 16,500,000 38,500,000(Privately placed with the Financial Institution .Secured by hypothecationof charges on specific barges and personal guarantee of certain Directorsas per deed of April 2004)IDBI 5,868,639 13,680,639(Secured by hypothecation of specific barges & assignment of receivable of specificbarges and Personal guarantee of some of the Directors)SREI INFRASTRUCTURE FINANCE LTD 89,842,348 -(Secured by hypothecation of specific barges & assignment of receivable of specificbarges and Personal guarantee of some of the Directors)DENA BANK - SHORT TERM LOAN 49,988,720 -(Secured by hypothecation of specific barges & Personal guarantee of certain Directors)DENA BANK -TERM LOAN 57,900,666 98,990,073(Secured by hypothecation of specific barges & Personal guarantee of certain Directors)CASH CREDIT FACILITY FROM STATE BANK OF INDORE 53,032,408 52,089,594(Secured by Book Debts, hypothecation of specific barges & personal guaranteeof certain Directors)STATE BANK OF INDORE-TERM LOAN 35,092,991 43,499,682(Secured by hypothecation of specific barges & personal guaranteeof certain Directors)UNITED BANK OF INDIA - TERM LOAN 38,438,417 40,469,048(Secured by hypothecation of specific barges & personal guaranteeof certain Directors)PUNJAB NATIONAL BANK - CORPORATE LOAN 18,743,379 43,743,698(Secured by hypothecation of specific barges & personal guaranteesof certain directors.DENA BANK -TERM LOAN-ROYAL PISCES 121,900,565 133,400,000(Secured by hypothecation of specific barges &Personal guarantee of certain Directors)HDFC BANK LTD 11,074,667 13,301,106(Secured by deposit of title Documents of Vashi Site)STATE BANK OF HYDERABAD-CORPORATE LOAN 12,499,172 49,970,204(Secured by hypothecation of specific barges &Personal guarantee of certain Directors)CAR LOAN-HDFC BANK 5,540,403 3,823,071(Secured by hypothecation of Motor vehicles).CAR LOAN-STATE BANK OF INDORE 2,013,625 -(Secured by hypothecation of Motor vehicles).TOTAL 518,436,000 531,467,115SCHEDULE :4UNSECURED LOANSFrom Corporate Bodies 9,400,000 2,430,300From Director 1,200,000 1,200,000

10,600,000 3,630,300SCHEDULE :4AMINORITY INTERESTShare Capital 206 218Share in the losses of subsidiaries (1,535,473) (1,456,017)(To the extent not written off or adjusted)

(1,535,268) (1,455,799)

43



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44




SCHEDULE : 6

INVESTMENTS

Investments in Equity Shares (at cost)

Quoted :

Other than Trade

Equity Shares of Bank of Baroda 85,000 85,000(1000 Equity Shares of Rs.10/- each fully paid)(Market Price Rs.2,83,900/- )

Unquoted :

Other than Trade

Equity Shares of Shamrao Vithal Co-op Bank 10,000 10,000(400 Equity Shares of Rs.25/- each Fully Paid)

Equity Shares of Saraswat Co-op Bank Ltd. 10,050 10,050(1005 Equity Shares of Rs.10/- each Fully Paid)

105,050 105,050

SCHEDULE : 7

SUNDRY DEBTORS (Considered Good) *

Debts outstanding for a period exceeding six months 76,009,546 60,467,184

Other Debts 87,596,026 74,055,615

163,605,572 134,522,799

* includes Rs.33,181/- (Previous year Rs.60,890-) due from a Company under the same management.

SCHEDULE : 8

CASH & BANK BALANCES

Cash balance on hand 327,350 145,274Cheques on hand 20,000 278,430Foreign currency in hand 59,706 84,127Bank balances with Scheduled Banks :Margin Money Deposit against Guarantees 461,623 1,906,545Current Accounts 2,972,909 6,252,692Dividend Accounts 702,430 479,573

4,544,018 9,146,641SCHEDULE : 9

OTHER CURRENT ASSETS

Interest accrued on Bank FDR’s 23,684 78,807

Interest Subsidy Receivable 64,523,144 64,523,144

Receivable from bank in respect of foreign exchange contract 3,968,281 -

68,515,109 64,601,951

45




SCHEDULE :10

LOANS & ADVANCES (Considered good)Tax paid (including TDS) 60,257,517 47,816,765Deposit with statutory bodies 1,369,806 2,321,850Deposit with others 5,494,219 5,404,219Advances Recoverable in Cash or in kind for value to be received * 5,726,215 5,542,020* Includes Rs.26,43,420(Previous year Rs.24,14,456/-)due from companies where directors are interested.

72,847,757 61,084,854

SCHEDULE :11

CURRENT LIABILITIESSundry Creditors 55,071,570 42,823,525Trade Deposits 1,583,360 1,750,000Advance from Customers - 1,250,000Unclaimed Dividend* 699,723 476,867(*There are no amount due and outstanding to be credited to Investor 57,354,653 46,300,392education and Protection Fund)

SCHEDULE : 12

PROVISIONSFor Taxation 58,167,000 44,706,000For Fringe Benefit Tax 1,178,298 832,918For Proposed Dividend 13,770,130 10,871,155For Tax on Proposed Dividend 2,340,234 1,847,552

75,455,662 58,257,625

SCHEDULE : 13

MISCELLANEOUS EXPENDITURE

Expenditure incurred for Public issue 1,137,750 1,137,750Preliminary/Preoperative Expenses 120,994 112,345

1,258,744 1,250,095(To the extent of not written off or adjusted)

SCHEDULE : 14

INCOME FROM OPERATIONSIncome from Operations 459,340,495 406,153,332

459,340,495 406,153,332

SCHEDULE : 15

OTHER INCOMEInterest from Banks & Others 510,119 726,692Dividend 6,000 8,800Vat Refund from UK - 30,075Rebate and discount received 242,850 164,835Insurance Claim Recd. 416,375 241,714Sundry Balances written back (net) 6,527,522 -Misc. Income 9,000 2,503,428

7,711,866 3,675,544

46



SCHEDULE ANNEXED TO AND FORMING PART OF CONSOLIDATEDPROFIT AND LOSS ACCOUNT AS AT 31ST MARCH 2008

SCHEDULE : 16

DIRECT OPERATION EXPENSESHire, Transportation & Water Charges 10,230,301 13,976,816Voyage Expenses 915,955 772,324Agency fees 12,918,037 6,838,784Crane Charges 3,737,310 2,760,381Repairs & Maintainance (Fleet) 28,403,784 32,694,251Barge Operation Expenses 47,360,951 27,076,710Port Dues 15,076,222 17,843,982Fuel & Oil 58,681,203 61,236,641Insurance Charges 8,987,745 6,765,071Survey Charges 2,673,308 2,377,173

188,984,816 172,342,133

SCHEDULE : 17

ADMINISTRATIVE EXPENSESSalary & Bonus & Gratuity etc 27,836,883 22,230,456Contribution to P.F. & other Funds 1,723,904 1,262,891Staff Welfare 1,607,005 1,675,354Rent,Rates and taxes 1,307,697 1,469,122Insurance Charges 292,563 490,077Travelling expenses 5,049,734 4,421,236Telephone, Telex, Fax expenses 2,575,967 2,658,458Auditors remuneration 463,416 392,956Advertisement & publicity expenses 1,490,279 2,164,333Bad debts written off 201,518 80,100Directors remuneration 4,781,352 4,759,410Directors Sitting Fees 75,000 85,000Electricity charges 1,201,074 1,114,168Printing & stationery expenses 967,493 869,841Legal, Professional & Consultancy charges 9,110,242 7,403,989Secretarial Expenses 212,839 98,856Conveyance expenses 955,151 1,011,856Other expenses 8,699,428 7,263,457Rebates & Discounts 9,826,529 5,631,980Repairs & Maintenance - Building 39,733 74,470Repairs & Maintenance - Others 4,642,663 3,562,740Currency conversion difference 37 24,023

83,060,507 68,744,773

SCHEDULE : 18

FINANCE EXPENSESInterest to Banks & Financial Institution 66,365,686 44,980,124Bank Charges 1,105,903 3,856,113

67,471,589 48,836,237

47



SCHEDULE: 19

Notes to Consolidated Financial Statements

1. The consolidated financial statements comprise financial statements of SKS Logistics Limited and itssubsidiaries viz. SKS Logistics (Singapore) Pte Limited and Shahi Shipping (BD) Limited.

2. The consolidated financial statements have been prepared in accordance with Accounting Standard 21“Consolidated Financial Statements” issued by the Institute of Chartered Accountants of India.

3. Related Party Disclosures

RELATED PARTY RELATIONSHIPS:

a) Where control exists: India First Logistics Limited

Shahi Gasol Limited

SKS Shipyard Pvt.Ltd.

Royal Logistics ( Ship ) Ltd.

b) Key Management Personnel: Mr. S. K. Shahi

Chairman & Managing Director

Mr. F. M. Koli

Wholetime Director

Capt. W. Gonsalves

Wholetime Director

c) Other Related Parties: Shahi Finance Limited

Ace Pharmaceuticals Pvt.Ltd.

Aryan Transport Co. Pvt. Ltd.

Royal Cruise Liners Limited

Koli Finance Pvt. Limited

Aryan Transport Co.

TRANSACTIONS WITH RELATED PARTIES

Rs. In Lacs Rs. In LacsAMOUNT AMOUNT2007-08 2006-07

TYPE OF RELATED PARTY NATURE OF TRANSACTIONS

Where Control Exists Advance given 2.29 4.75

Loans Taken 55.00 35.00

Loans Repaid 30.00 52.90

Key Management Personnel Remuneration paid to Key ManagementPersonnel 49.60 49.39

Loans Taken 55.00 45.00


Purchase of Fixed Assets 00.00 39.60

Other Related Parties Loans taken 150.00 36.50


48



OTHER BALANCES OUTSTANDING AS AT THE YEAR END

1. Where Control Exists

Debtors 0.33 0.61

Advances Given 26.44 24.14

Unsecured Loans Taken 25.00 NIL

2. Key Management Personnel

Unsecured Loans taken 12.00 12.00

3. Other Related Parties

Unsecured Loans Taken 69.00 24.00

Trade Deposit 14.50 14.50

Creditors 0.00 0.20

4. Earnings per Share 31ST March 31st March2008 2007

Profit after taxation as per Profit & Loss Account 2,60,33,265 3,94,93,964

Number of equity shares outstanding for basic and diluted EPS 1,44,94,874 1,44,94,874

Basic & diluted EPS Rs. 1.80 Rs. 2.72

Face value per share Rs.10/- Rs.10/-

5. Other significant Accounting Policies

These are set out under the section “Significant Accounting Policies & Notes to the Accounts” of SKSLogistics Ltd and under the section “Notes to the Financial Statements” of SKS Logistics (Singapore)Pte. Ltd. Singapore and Shahi shipping (BD) Ltd., Bangladesh.





49



STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT,1956

1. Name of the Subsidiaries : SKS Logistics (Singapore) Pte Ltd Shahi Shipping (BD) Ltd

2. Financial year ended : March 31,2008 March 31,2008

3. Date from which it become a : 18th November 1999 7th October 2001Subsidiary

4. Extent of interest of the Holding : 50% 99.70%Company in the Capital of theSubsidiary

5. Net Aggregate Amount of the : Current Year : Singapore ( $ 1368) Bangladesh Taka: NilSubsidiary’s profit (loss) not dealtwithin the Holding Company’s Previous Year: Singapore ($ 17,554) Bangladesh Taka: NilAccounts so far as they concernmembers of the Company.

6. Net aggregate amount of the : Current Year: Nil NilSubsidiary’s profits (loss) dealtwithin the Holding Company’s Previous Year: Nil NilAccounts.

FOR AND ON BEHALF OF THE BOARD

S. K. SHAHI(Chairman & Managing Director)

Capt. W. GONSALVES(Whole time Director)


50


SKS Logistics (Singapore) Pte Ltd.[ Formerly known as Shahi Shipping (Singapore) Pte. Ltd. ]

STATEMENT BY DIRECTORS

In the opinion of the directors, the accompanying financial statements are drawn up so as to give a true and fair viewof the state of affairs of the company as at 31 March 2008 and of the results of the business and changes in equity ofthe company for the financial year then ended and at the date of this statement there are reasonable grounds tobelieve that the company will be able to pay its debts as and when they fall due.

Sarvesh Kumar Shahi Gomez CarmaelDirector Director

Singapore, 08 August,2008

SKS LOGISTICS (SINGAPORE) PTE. LTD.REPORT OF THE DIRECTORS

The directors present their report to the member together with the audited financial statements of the company for thefinancial year ended 31 March 2008.

1. DIRECTORS

The directors of the company in office at the date of this report are:-

Gomez Carmael

Sarvesh Kumar Shahi

2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES OR DEBENTURES

Neither at the end of the financial year nor at any time during the financial year was the company a party to anyarrangement whose object is to enable the directors of the company to acquire benefits by means of theacquisition of shares or debentures of the company or any other body corporate.

3. DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

The directors of the company holding office at the end of the financial year had no interests in the share capitalof the company as recorded in the Register of Directors’ Shareholdings kept by the company under Section 164of the Companies Act except as follows:-

Name of directors and companies At beginning At endin which interest are held of year of year

Ultimate holding company:SKS LOGISTICS LTD.

Ordinary shares of Ind Rs 10 each

Sarvesh Kumar Shahi 250,184 500,368

By virtue of Section 7 of the Companies Act, Mr. Sarvesh Kumar Shahi is deemed to have an interest in thecompany.

4. DIRECTORS’ CONTRACTUAL BENEFITS

Since the end of the last financial year, no director has received or become entitled to receive a benefit whichis required to be disclosed under Section 201(8) of the Companies Act, by reason of a contract made by thecompany with the director or with a firm of which he is a member, or with a company in which he has asubstantial financial interest.

5. AUDITORS

The auditors, K K Wong & Associates, have expressed their willingness to accept re-appointment.

Sarvesh Kumar Shahi Gomez CarmaelDirector Director

Singapore, 08,August ,2008

51



REPORT OF THE AUDITORS TO THE MEMBERS OFSKS LOGISTICS (SINGAPORE) PTE. LTD.

We have audited the accompanying financial statements of SKS Logistics (Singapore) Pte Ltd. set out on 6 to 17,which comprise the balance sheet of the Company as at 31st March, 2008, the statement of changes in equity of theCompany, the profit and loss account and cash flow statement of the Company for the year then ended, and asummary of significant accounting policies and other explanatory notes.

Directors’ Responsibility for the Financial Statements

The Company’s directors are responsible for the preparation and fair presentation of these financial statements inaccordance with Singapore Financial Reporting Standards. This responsibility includes : designing, implementingand maintaining internal control relevant to the preparation and fair presentation of financial statements that are freefrom material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies,and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our auditin accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance whether the financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statementsin order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressingan opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriatenessof accounting policies used and the reasonableness of accounting estimates made by directors, as well as evaluatingthe overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for your auditopinion.

In our opinion,

(i) The financial statements of the Company and the balance sheet and statement of changes in equity of theCompany are properly drawn up in accordance with the provisions of the Singapore Companies Act,Cap. 50 (the Act) and Singapore Financial Reporting Standards so as to give a true and fair view of thestate of affairs of the Company as at 31 March 2008 and the result, changes in equity and cash flows of theCompany as at 31 March 2008 and the results, changes in equity and cash flows of the Company for theyear ended on that date; and

(ii) the Accounting and other records required by the Act to be kept by the Company have been properly keptin accordance with the provisions of the Act.

K K WONG & ASSOCIATES

Certified Public Accountants

Singapore, August 8, 2008

52



SKS LOGISTICS (SINGAPORE) PTE. LTD.BALANCE SHEET AS AT 31ST MARCH 2008

Note 2008 2007

$ $

(CAPITAL DEFICIENCY)/SHARE HOLDER’SEQUITY AND LIABILITIES

Share capital 3 2 2

Accumulated losses (105,976) (103,240)

Capital deficiency (105,974) (103,238)

Current liabilities:-Accruals 3,900 2,600Sundry creditors 30 30Amount due to holding company 4 104,547 104,031

Total current liabilities 108,477 106,661

Total equity and liabilities 2,503 3,423

ASSETS

Non-current assets:-

Plant and equipment 5 - 780

Total non-current assets - 780

Current assets:-Deposit 2,200 2200Prepayments - -Cash and cash equivalents 6 303 443

Total current assets 2,503 2,643

Total assets 2,503 3,423

PROFIT AND LOSS STATEMENT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008

Note 2008 2007$ $

Other income Nil Nil

Other operating expenses ( 2,736) ( 35,108)

Loss before taxation 7 (2,736) ( 35,108)

Taxation 8 - -

Loss after taxation ( 2,736) ( 35,108)

STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008

ShareCapital Accumulated losses Total$ $ $

Balance at 31 March 2006 2 ( 68,132) ( 68,130)Net loss for the year - ( 35,108) ( 35,108)Balance at 31 March 2007 2 ( 103,240) ( 103,238)Net loss for the year - ( 2,736) ( 2,736)Balance at 31 March 2008 2 ( 105,976) ( 105,974)

See accompanying notes to the finanical statements

53



SKS LOGISTISCS (SINGAPORE) PTE. LTD.CASH FLOW STATEMENT

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008

2008 2007$ $

Cash flow from operating activities:-Loss before taxation ( 2,736) (35,108)

Adjustment for:Depreciation 780 783Operating loss before working capital change ( 1,956) ( 34,325)Deposit - -Prepayments - 1,100Accrued expenses 1,300 1,300Sundry creditors - (2,550)Amount due to holding company 516 26,538

Net cash generated from/(used in) operating activities (140) ( 7,937)

Cash flow from investing activitiesPurchase of plant and equipment - -

Net cash used in investing activities - -

Net (decrease)/increase in cash and cash equivalents (140) (7,937)Cash and cash equivalents brought forward 443 8,380

Cash and cash equivalents carried forward 303 443

Cash and cash equivalent comprisesCash and bank balances 303 443

These notes form an integral part of and should be readin conjunction with the accompanying financialstatements.

1. GENERAL

The company is a private limited companyincorporated in the Republic of Singapore.

The company’s principal activities are thoserelating to the business of shipping agent in thefreight and shipping line and providing shipbrokingservice.

Its registered office is at 190 Middle Road FortuneCentre, #11-02, Singapore 188979.

No income was derived from such activities duringthe financial year.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of accounting

The financial statements, expressed inSingapore dollars, have been prepared

under the historical cost convention and arein accordance with Singapore Statements ofAccounting Standard.

The financial statements have beenprepared on a normal going concern basis,on the assumption that financial supportfrom the ultimate holding company willcontinue to be available. In the event thatthere is no such financial support, the goingconcern basis would be invalid andprovision would have to be made for anyfurther costs which might arise. Thedirectors are satisfied that financial supportfrom the ultimate holding company will beavailable when required.

(b) Property, plant and equipment anddepreciation

Depreciation is calculated to write off the costof the assets over their estimated useful livesby the straight-line method. The annual ratesof depreciation are as follows:-

NOTES TO THE FINANCIAL STATEMENTS – 31st MARCH 2008

54



Computer 3 years

Office equipment 3 years

Office furniture 3 years

Fully depreciation assets still in use areretained in the financial statements.

(c) Taxation

Income tax on the profit or loss comprisescurrent and deferred tax. Income Tax isrecognized in the income statement exceptto the extent that it relates to items recognizeddirectly to equity, in which case it isrecognised in equity.

Current tax is the expected tax payable onthe taxable income for the year, using the taxrates enacted or substantially enacted at theBalance Sheet date, and any adjustment totax payable in respect of previous years.

(d) Impairment of assets

Property, plant and equipment andintangible assets are reviewed for impairmentwhenever events or changes incircumstances indicate that the carryingamount of the asset may not be recoverable.Whenever the carrying amount of an assetexceeds its recoverable amount, animpairment loss is recognized in the profitand loss statement for items of property, plantand equipment and intangible assets carriedat cost. The recoverable amount is the higherof an asset’s net selling price and value inuse. The net selling price is the amountobtainable from the sale of an asset in anarm’s length transaction. Value in use is thepresent value of estimated future cash flowsexpected to arise from the continuing use ofan asset and from its disposal at the end ofits useful life.

Recoverable amounts are estimated forindividual assets or, if it is not possible, forthe cash-generating unit.

Reversal of an impairment loss recognizedin prior years is recorded when there is anindication that the impairment lossrecognised for an asset no longer exists orhas decreased. The reversal is recorded inprofit and loss statement or as a revaluationincrease.

(e) Cash and Cash equivalents

Cash and cash equivalents comprise cashin bank which readily convertible to cash andwhich are subject to insignificant risk ofchanges in value, net of bank overdraft whichare repayable on demand and which forman integral part of the company’s cashmanagement.

(f) Trade payables and other payables

Trade payables and other payables, whichare generally settled on 60-90 days terms,are carried at cost which is the fair value ofthe consideration to be paid in the future forgoods and services received, whether or notbilled to the company.

Payable to holding company are carried atcost.

(g) Provisions

Provisions are recognised when theCompany has a present obligation (legal orconstructive) as a result of a past event, it isprobable that an outflow of resourcesembodying economic benefits will berequired to settle the obligation and a reliableestimate can be made of the amount of theobligation.

(h) Financial instruments

Financial assets and financial liabilitiescarried on the balance sheet include cashand cash equivalents and other accountspayable. The accounting policies onrecognition and measurement of these itemsare reflected in the respective accountingpolicies found in this Note.

(i) Cash flow statement

Cash for the cash flow statement includescash and cash equivalents.

3. SHARE CAPITAL

2008 2007$ $

Authorised:100,000 ordinary shares of $1 each 100,000 100,000

Issued and fully paid:2 ordinary shares of $1 each 2 2

55



4. AMOUNT DUE TO HOLDING COMPANY

The amount due to holding company is unsecured,free of interest and has no fixed repayment terms.

5. PLANT AND EQUIPMENT

2008

Office OfficeComputer Equipment Furniture Total

$ $ $ $

Cost:

At beginning 1400 446 500 2,346of year

Accumulateddepreciation:


Charge 466 148 166 780

At end of year 1,400 446 500 2,346

Net book value - - - -

2007

Office OfficeComputer Equipment Furniture Total

$ $ $ $

Cost:


Accumulateddepreciation:

At beginning 467 149 167 783of year

Charge 467 149 167 783

At end of year 934 298 334 1,566

Net book value 466 148 166 780

6. CASH AND CASH EQUIVALENTS

2008 2007$ $

Cash and bank balances 303 443

7. LOSS BEFORE TAXATION

2008 2007$ $

This is determined after charging:-Auditors’ remuneration 800 800Depreciation of plant and equipment 780 783

8. TAXATION

2008 2007$ $

Current taxation - -

A reconciliation between the tax expenses andthe product of accounting profit multiplied by theapplicable tax rate to income from the company’soperations are as follows:-

2008 2007

$ $

Loss before taxation ( 2,736) ( 35,108)

Tax at statutory rate at 18 % (492) (6,319)(2007:18 %)

Other items 492 6,319

- -

9. HOLDING COMPANY

The company is a wholly owned subsidiary ofSKS Logistics Ltd , Incorporated in India, which isalso the company’s ultimate holding company.

10. STAFF COSTS

2008 2007$ $

Staff costs - 12,256

Total number of persons employed excluding directorsat the end of the financial year:

2008 2007

Full time staff - 1

11. FINANCIAL RISK MANAGEMENT OBJECTIVESAND POLICIES

The main risks arising from the company’sfinancial instruments are liquidity risk and creditrisk. The board reviews and agrees policies formanaging each of these risks and they aresummarised below:

Liquidity risk

Liquidity risk arises in general funding of thecompany’s operating activities. It included in therisk of not being able to fund operating activitiesat settlement dates and liquidates position intimely manner at a reasonable price.

Short term funding is obtained from holdingcompany.

Credit risk

The carrying amounts of cash and cashequivalents represent the company’s maximumexposure to credit risk.

56



Surplus cash is placed with reputable financialinstitutions.

Fair value of financial instruments

Fair value is defined as the amount at which theinstrument could be exchanged in a currenttransaction between knowledgeable willingparties in an arm’s length transaction, other thana forced or liquidation sale. Fair values areobtained from quoted market prices anddiscounted cash flow models as appropriate.

The following methods and assumptions are usedto estimate the fair value of each class of financialinstruments:

Cash and cash equivalents

The carrying amount approximates fair value dueto the relatively short-term maturity of thesefinancial statements.

Other current payables

The carrying amount approximates fair valuebecause of the short period to maturity.

12. AUTHORISATION OF FINANCIAL STATEMENTS

The financial statements for the year ended 31March 2008 were authorised for issue inaccordance with a resolution of the director on 8August 2008.

DETAILED PROFIT AND LOSS STATEMENTFOR THE FINANCIAL YEAR ENDED 31 MARCH 2008

2008 2007

$ $

OTHER INCOME - -

Less: EXPENSES

Advertising Expenses - 274

Auditors’ remuneration 800 800

Bank charges 370 535

CPF - 1038

Depreciation of plant & equipment 780 783

General expenses - 50

Office expenses - 826

Printing and stationery - -

Professional fees - 9,300

Rent - 5,500

Salary - 11,218

Tax fees 500 500

Telephone / Telex 286 4,284

Net loss 2,736 35,108

57


Shahi Shipping (BD) Ltd.

SHAHI SHIPPING (BD) LIMITEDREPORT OF THE DIRECTORS

The directors present their report to the members together with the audited financial statements of the company for thefinancial year ended 31 March 2008.

1 DIRECTORS

The Directors of the Company in office at the time of this Report are:

Mr. S. K. Shahi

Mr. R. K. Mukherjee

2 BUSINESS

The principal activities of the Company, iter alia, are relating to the business of shipping agent in the freight andshipping line and providing ship broking services. The Company is yet to commence its operations.

3 CAPITAL

The capital of the Company is Taka 100,000 divided into1,000 ordinary shares of Taka 100 each. The Companyhas not issued any shares during the year under review.

4 ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the support received from its business associates.

S. K. SHAHI R. K. MUKHERJEE(Director) (Director)

DhakaDated : August 3, 2008

58



SHAHI SHIPPING (BD) LIMITED

AUDITORS’ REPORT TO THE MEMBERS OF


We have audited the accompanying Balance Sheet of SHAHI SHIPPING (BD) LIMITED as of March 31, 2008 and therelated Profit & Loss account for the period then ended together with the annexed notes thereto. These financialstatements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

We conducted our audit in accordance with International Standards on auditing as adopted by the Institute of CharteredAccountants of Bangladesh. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. An audit includes examining ona test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief werenecessary for the purpose of our audit;

b) In our opinion, the annexed Balance Sheet and Profit and Loss Account are drawn up in conformity with theLaw;

c) Such Balance Sheet and Profit and Loss Account exhibit a true and fair view of the state of the affairs of thecompany as of March 31, 2008 and of the results of its operations for the period then ended according to theinformation and explanations given to us and as shown by the books of accounts of the company;

AND

In our opinion, proper books of account as required by law have been kept by the company so far as it appearedfrom our examination of those books.

Dhaka AYUB & MAHMOODDated : August 03, 2008 Chartered Accountants

59



SHAHI SHIPPING (BD) LIMITEDBALANCE SHEET AS AT MARCH 31, 2008

NOTE 2007-2008 2006-2007TAKA TAKA

SOURCE OF FUNDS

Share Capital 4.2 100,000 100,000

Unappropriated profit / (loss) (26,750) (26,750)

73,250 73,250

APPLICATION OF FUNDS

ASSETS

Preliminary Expenses 3.2 26,090 26,090

Pre-Incorporation expense 3.3 18,485 18,485

Deferred cost 5 160,500 133,750

205,075 178,325

Current liabilities:

With Ayub & Mahmood 6 67,577 40,827

Amount due to Holding co. 7 64,248 64,248

131,825 105,075

Net Current Asset (131,825) (105,075)

73,250 73,250

The accompanying notes form an integral part of these Financial Statements.

S. K. SHAHI R. K. MUKHERJEE(DIRECTOR) (DIRECTOR)Signed as per our annexed report of same date.

AYUB & MAHMOODChartered Accountants

Dated : August 03, 2008

60




PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED MARCH 31, 2008

2007-2008 2006-2007

NOTE TAKA TAKA

INCOME

2.2 - -

EXPENSE

Administrative Expense - -

Net Profit/ (loss) for the period - -

Net loss transferred to Balance Sheet - -

S. K. SHAHI R. K. MUKHERJEE(DIRECTOR) (DIRECTOR)Signed as per our annexed report of same date.

AYUB & MAHMOODChartered Accountants

Dated : August 03, 2008

61



Notes to the Financial Statement For the periodended March 31, 2008

1 The Company

The company was incorporated in Bangladesh inOctober, 2001 as a Private Company limited byshares under the provisions of Companies Act.1994.

2 General

2.1 Principal Activities :

Principal activities of the company are thoserelating to the business of shipping agent inthe freight and shipping line and providingship broking service.

2.2 Commercial Operation :

Company has not started commercialoperations as of the Balance Sheet date andalso the company has no employee inemployment as of the same date.

2.3 Currency:

Unless otherwise stated, Currency used inthese financial statements is BangladeshTaka.

3 Significant Accounting Policies.

3.1 Basis of Accounting

The accounts are compiled and presentedmainly in accordance with the relevantrequirements of the Companies Act 1994,following Generally Accepted AccountingPrinciples, consistently.

3.2 Preliminary expense:

Preliminary expense will be written off fromthe period of commercial operations equallyat five annual sums.

3.3 Pre-incorporation Expenses:

Pre-incorporation expense will be written offfrom the period of commercial operationsequally at five annual sums.

3.4 Deferred Cost :

Deferred cost will be written off from theperiod of commercial operations equally at

five annual sums. All expenses beforecommercial operations are booked toDeferred Cost.

2007-2008 2006-2007

4 Share Capital : TAKA TAKA

4.1 Authorised1,00,000 ordinaryshares ofTk. 100 each 1,000,000 1,000,000

4.2 Subscribed and paid up capital:1000 ordinaryshares ofTk. 100 each 100,000 100,000

5 Deferred cost – Taka. 160,500

This is as follows :

Opening Balance 133,750 107,000

Add: Audit fees 5,750 5,750

Add: Professional 21,000 21,000fees(tax andsecretarial filing)

26,750 26,750

Less: Written off /Amortized - -

160,500 133,750

6 Current Account with Ayub &Mahmood – Taka 67,577

This is as follows :

Operating Balance 40,827 14,077

Add: Deferredcost (note -7) 26,750 26,750

67,577 40,827

Less: Remittancereceived from India - -

Balance 67,577 40,827

7 Amount due to Holding company – Taka 64,248

7.1 The amount due to the Holding company isfree of interest

7.2 This is as follows :

Opening Balance 64,248 64,248

Add: Remittance - -received from India

64,248 64,248

S. K. SHAHI R. K. MUKHERJEE(Director) (Director)

Dated: August 03, 2008

62



DETAILS OF FLEET

NAME OF VESSELS TYPE OF VESSELS LOADED DRAFT METERS DEAD WEIGHT TONNES

BULK CARGO CARRIERS

1. M.V. ROYAL AMBA BULK CARRIER 3.20 2458

2. M.V. YAMUNA BULK CARRIER 3.20 2458

3. M.V. ROYAL SARASWATI BULK CARRIER 3.20 2458

4. M.V. ROYAL TAPI BULK CARRIER 3.20 2458

5. M.V. ROYAL SHARYU BULK CARRIER 3.20 2458

6. M.V. ROYAL KAVERI BULK CARRIER 3.20 2458

7. M.V. ROYAL SHARAVATI BULK CARRIER 3.20 2458

8. M.V. ROYAL GANGA BULK CARRIER 3.20 2450

9. M.V. ROYAL GOA BULK CARRIER 3.20 2450

10. M.V. ROYAL VIKRANT BULK CARRIER 3.16 1804

11. M.V. ROYAL KALI BULK CARRIER 3.11 1804

12. M.V. VISHAL LUXMI BULK CARRIER 2.80 1150

13. B.B.S.BHILAI BULK CARRIER 2.40 710

14. M.V. ROYAL ADITI BULK CARRIER 2.40 1000

15. M.V. SCREEVANI BULK CARRIER 1.00 210

16. M.V. PARVATI BULK CARRIER 1.75 250

LIQUID CARGO CARRIERS

17. M.V. ROYAL GOMATI CHEMICAL CARRIER 3.20 2450

18. D.B. ROYAL PETROL (CHEMICAL) DUMA BARGE 3.10 2800

19. D.B. MAHANADI DUMA BARGE 1.25 200

20. D.B. PRIYABANDHU DUMA/FLOATING BARGE 2.50 650

21. M.V. SHASTHA OIL TANKER 1.80 450

22. M.V. KRISHNA OIL TANKER 1.60 310

23. M.V. ROYAL GANDAK TANKER 2.40 710

24. M.V. SUPER TANKER 1.50 300

25. M.V. ROYAL PAMBA TANKER 2.00 350

26. M.V. ROYAL JOSNA TANKER 1.70 200

27. ROYAL VIJAY DUMA BARGE 5.20 9508

MULTIPURPOSE VESSELS (BCD/CONTAINER)

28. M.V. ROYAL SUTLEJ MPV (BCD/CONTAINER) 4.20 3600

29. M.V.ROYAL BRAHMPUTRA MPV (BCD/CONTAINER) 4.20 3600

30. M.V. ROYAL HUGLI MPV (BCD/CONTAINER) 4.20 3600

31. M.V. ROYAL INDIA MPV (BCD/CONTAINER) 3.85 1161

OTHER

32. M.T.ROYAL GODAVARI TUG (TOWING) 3.10 121*

33. M.T. VIMLA TOG 4.00 428*

34. M.V. ROYAL SEWREE MOTOR LOUNCH 1.50 9.30*

35. M.V. ROYAL OCEANPRIDE MOTOR LOUNCH 2.12 31.59*

36. M.V. ROYAL PISCES MPP CONTAINER 5.97 4562

* Denotes the Gross Registered Tonnage

S K SLOGISTICS LTD.



SKS LOGISTICS LTD.Regd. Office: 404, Abhay Steel House, Baroda Street, Mumbai - 400 009

PROXY FORM

DP ID * ________________________ Master Folio ______________________

Client ID * ________________________ No. of Shares _____________________

I/We_____________________________________________________________________________________of

_________________________________________________________________________________________

being a member / members of SKS LOGISTICS LTD. hereby appoint _______________________________________________________________________________of____________________________________________________________________________________________________________________________________or falling him / her __________________________________of______________________________________

as my / our proxy to vote for me / us on my / our behalf at the EIGHTEENTH ANNUAL GENERAL MEETING of theCompany be held on Friday the 26th September 2008 at 11.30 a.m. and at any adjournment thereof.

Signed this ______________ day of _______________2008 Signature _________________

Notes: The form duly completed and signed must be deposited at the Registered Office of the Company not less than48 hours before the time fixed for holding the aforesaid meeting.

SKS LOGISTICS LTD.Regd. Office: 404, Abhay Steel House, Baroda Street, Mumbai - 400 009

ATTENDANCE SLIP

(To be handed over at the entrance of the meeting hall)

18th ANNUAL GENERAL MEETING - Friday the 26th September, 2008

I hereby record my presence at the EIGHTEENTH ANNUAL GENERAL MEETING of the Company at WalchandHirachand Hall, 4th Floor, Indian Merchants’ Chember, Churchgate, Mumbai - 400 020. on Friday the 26th September,2008 at 11.30 a.m.

Full Name of the Member :_______________________________________________________________(in BLOCK LETTER)

DP ID * : ________________________ Master Folio: ______________________

Client ID * : ________________________ No. of Shares: _____________________

Full Name of proxy :_______________________________________________________________

(in BLOCK LETTER)Member’s / Proxy’s Signature :_______________________________________________________________

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RevenueStamp

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