Directors Report of Birla Cotsyn (India) Ltd.

Mar 31, 2015

The Directors have pleasure in presenting the Seventy Third Annual Report along with the Audited Accounts of the Company for the year ended 31st March, 2015.

1. Financial Results

(Amt in Rs)

Particulars Consolidated

Year ended 9 month period 31-03-2015 ended 31.03.2014

Revenue from Operations 1,522,074,110 1,274,180,226

Other Income 31,898,534 39,840,969

Total Income 1,553,972,644 1,314,021,195

PBDIT (986,589,524) (119,441.341)

Interest and Finance Expenses 535,100,355 364,962,878

PBDT (1,521,689,879) (484,404,219)

Depreciation 137,393,177 75,284,470

PBT (1,659,083,056) (559,688,689)

Less: Deferred Tax Liability/(Asset) 2,918,260 -

PROFIT AFTER TAX (PAT) (1,662,001,316) (559,688,689)

Profit transferred to Reserves (1,662,001,316) (559,688,689)

Standalone

Year ended 9 month period 31-03-2015 ended 31.03.2014

Revenue from Operation 1,124,502,678 936,275,688

Other Income 31,898,534 39,833,321

Total Income 1,156,392,646 976,109,009

PBDIT (969,303,670) (105,632,866)

Interest and Finance Experses 534,623,811 364,658,179

PBDT (1,503,927,482) (470,291,045)

Depreciation 137,264,583 75,185,782

PBT (1,641,192,335) (545,476,827)

Less: Deferred Tax Liability / (Assets) 2,918,260 -

PROFIT AFTER TAX (PAT) (1,644,110,595) (545,476,827)

Profit transferred to Reserve (1,644,110,595) (545,476,827)

2. Operating and Financial Performance

Since last few years textile industry is passing through very difficult business conditions. The general business environment continued to be challenging due to the uncertain global economic scenario. The major challenge of textile industry is facing by increasing cost of production arising out of rising wages, high power cost etc and excess capacity installed in the cotton yarn industry. This led to lower margins as the Company could not pass on higher costs to customers. The exports during the year ended are not significant since the ruling prices of export continued to be non remunerative for our type of products and China all of sudden stopped buying cotton yarn from India. Further during the year ended the cotton yarn scenario continues to remain in pressure due to weak domestic textile market which has further resulted into severe pressure on the margins. During the year under review, turnover of your Company is Rs. 1,124,502,678/- as compared to the turnover of Rs.936,275,688/- during previous accounting period of 9 months. The loss of your Company has increased to Rs.1,641,192,335/- during the year under review compared to net loss of Rs. 545,476,827 in previous accounting period of 9 months due to adverse market conditions and global recession and also due to provision of unrecoverable capital advances / writing off capital work in progress in respect of projects which could not take off. Your company is relentlessly putting all its efforts to reduce the cost and improve the operating margins but the profit of the company is still negative during the current financial year. However, despite all adverse features, Company is continuing its efforts to explore opportunities for its products in overseas markets but insufficient resources is not allowing to reap the benefits to its fullest extent.

3. Erosion of Net-Worth – Reference to BIFR

Due to continuous losses the audited accounts for the financial year 2014-15 shows a total accumulated losses of Rs.1,641,192,335/- which exceeds the entire net worth of Rs.246,770,632/- of the Company. As, the net–worth of the Company has eroded at the end of the Financial year 31st March, 2015, the Company has become a Sick Industrial Company in term of section 3(1)(0) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Accordingly, the Board of Directors of the Company has opinion to make a reference to the Board for Industrial and Financial Reconstruction (BIFR) as required under the provisions of SICA for determination whether the Company is a sick industrial company or not.

4. Dividend

In view of loss suffered by the Company, your Directors have not recommended any dividend for the financial year ended 31st March, 2015.

5. Increase in Share Capital

There has been no change in the Share Capital of the Company.

6. Employee Stock Options Plan

The Company had authorized an Employee Stock Option Plan 2007 (ESOP) in their Extraordinary General Meeting held on 6th December, 2007. No shares have been allotted under the ESOP till date. The Company has not granted any stock options during the financial year ended 31st March, 2015.

7. Listing

The Equity Shares of the Company continue to remain listed with Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

8. Subsidiary Company

The Company has one wholly owned subsidiary at UAE in the name of Birla Cotsyn (India) Limited FZE which has been setup to develop the overseas market for the Company.

The Audited Accounts for the wholly owned Subsidiary Company, Birla Cotsyn (India) Ltd FZE have been received by the Company and a statement pursuant to section 129 of the Companies Act, 2013, forms part of this Annual Report. Your Directors have pleasure in enclosing the consolidated financial statements of the Company in accordance with the listing agreement and Accounting standards issued by the Institute of Chartered Accountants of India.

In compliance with the general circular issued by Ministry of Corporate Affairs (MCA), Government of India, the Balance Sheet, Statement of Profit & Loss and other documents of the subsidiary are not attached hereto. As per the general exemption, a statement containing brief financial details of the Company's subsidiary for the year ended 31st March, 2015, is included in this Annual Report. The Annual Accounts of the subsidiary and the related detailed information will be made available to any Member of the Company/its subsidiary seeking such information at any point of time and are also available for inspection by any Member of the Company/its subsidiary at the Registered Office of the Company/its subsidiary.

9. Management Discussion and Analysis and Corporate Governance Report

In compliance with Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited and National Stock Exchange of India Limited, a separate section on Management Discussion and Analysis Report which also includes further details on the state of affairs of the Company and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from the Practicing Company Secretary confirming the compliance with the requirements of Clause 49 forms part of this Annual Report.

10. Corporate Governance Report

A report on Corporate Governance along with the Compliance Certificate from the Auditors is annexed hereto and forms part of this report.

11. Directors Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors of the Company state as under that:

1. In the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

2. The selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company for the financial year ended 31st March, 2015 and the Loss of the Company for the financial year ended 31st March, 2015.

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The annual accounts have been prepared on a 'going concern' basis;

5. Internal financial controls had been laid down to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

6. Proper systems had been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

12. Board of Directors, Evaluation Etc.

Appointment / Resignation of Directors

Shri Sanjay Rane and Smt. Nirmala Mathur are appointed as Additional Directors by the Board of Directors of the Company at its meeting held on 27th May, 2015. Their office expires at the ensuing Annual General Meeting and the Company has received notice under section 160 of the Companies Act, 2013 proposing their candidature for Directorship along with the deposit as prescribed thereunder. They are eligible for being appointed as Directors at the ensuing Annual General Meeting and it is proposed to appoint Shri Sanjay Rane as an Independent Director with a fixed tenure of 5 (five) years subject to approval of shareholders at the ensuing general meeting in term of Section 149 of the Companies Act, 2013. Further it is proposed to appoint Smt. Nirmala Mathur as Non-Independent Non- Executive Director liable to retirement by rotation subject to approval of shareholders at the ensuing general meeting in term of Section 160 of the Companies Act, 2013.

Shri Rakesh Kumar Dixit, Director of the Company, retires by rotation and being eligible offers himself for re-appointment.

Shri Jignesh Mehta, Shri Ram Prakash Mishra and Shri Vinod Kumar Kapur, resigned as Independent Directors of the Company. The Board noted their resignation w.e.f 27th May, 2015 and placed on record their sincere appreciation of the service rendered by them during their tenure with the Company.

Company's Policy on Directors Appointment and Remuneration etc.

The Company has prepared a policy on Director's appointment and remuneration pursuant to Section 178 of the Act. The Company has also laid down criteria for determining qualifications, positive attributes and independence of Director.

Formal Annual Evaluation

The Formal Annual Evaluation has been made as follows:

a. The Company has laid down evaluation criteria separately for Board, Independent Directors, Directors other than Independent Directors and various committees of the Board. The criteria for evaluation of Directors included parameters such as willingness and commitment to fulfill duties, high level of professional ethics, contribution during meetings and timely disclosure of all the notice/details required under various provisions of laws. Based on such criteria, the evaluation was done in a structured manner through peer consultation & discussion.

b. Evaluation of the Board was made by a Separate Meeting of Independent Directors held under Chairmanship of Shri. Satyanarayan Baheti, Independent director (without attendance of non - Independent Director and members of management).

c. The performance evaluation of all committees were done by the Board of Directors namely:

i. Audit Committee

ii. Nomination and Remuneration Committee iii. Stakeholders Relationship Committee

d. Performance evaluation of non - Independent Directors was done by Separate meeting of Independent Directors.

e. Evaluation of Independent Directors was done (excluding the Director who was evaluated) by the Board of Directors of the Company.

f. In addition, the Nomination and Remuneration Committee has carried out evaluation of every Director's performance as required under Section 178 (2) of Companies Act, 2013.

g. The Directors expressed their satisfaction with the evaluation process.

Key Managerial Personnel

During the year, Shri. Vipin Varkhawat, Chief Financial Officer of the Company was designated as Key Managerial Personnel under Section 203 of the Companies Act, 2013.

Further, Shri Satya Kishore Mathur who was already a Manager of the Company and Ms. Vineeta Shah who was working as the Company Secretary were designated as Key Managerial Personnel's (KMPs) of the Company under the above mentioned provisions of Companies Act, 2013 in their respective positions.

In compliance with the Clause 49 IV (G) of the Listing Agreement, brief resume of the aforesaid Directors, their expertise and other details of Directors proposed to be appointed/ re-appointed are provided in the Corporate Governance Report. Appropriate resolutions for appointment/ re-appointment of the aforesaid Directors are being placed for approval of the members at the ensuing Annual General Meeting.

13. Fixed Deposits

1. Deposits Accepted during the year NIL

2. Deposits remained unpaid or unclaimed as at end of the year Rs. 70,856,978/-

3. Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the Principal Interest total amount involved:

i. At the beginning of the year Rs. 22,957,000 Rs. 16,130,872

ii. Maximum during the year Rs. 43,329,363 Rs. 19,426,451

iiii. At the end of the year Rs. 43,329,363 Rs. 19,426,451

4. The details of deposits which are not in compliance with the requirements Not Applicable of Chapter V of the Act

The Company has filed a petition for sanctioning the scheme for rescheduling the period of repayment of Fixed Deposits and payments of interest before the Company Law Board, Western Region, Mumbai and the Company Law Board has passed order dated 19th May, 2015 for rescheduling the repayment of Fixed Deposits for a specified period under Section 58A(9) of the Companies Act, 1956 read with Section 74(2) of the Companies Act, 2013. The Company is now making payment to the Fixed Deposit holders as per the order dated 19th May, 2015 passed by the Company Law Board and also pursuant to orders passed by the Company Law Board from time to time to whom Fixed Deposit holders have approached for making payment of their Fixed Deposits. Further Company is also making payment on compassionate ground to all Fixed Deposit holders, who are approaching the Company looking to their genuine needs.

14. Related Party Transactions

There are no related party contracts, arrangements or transactions of the nature mentioned in sub-section (1) of Section 188 of the Companies Act, 2013 which are not at arm's length and during the year under review the Company did not enter into any related party contracts, arrangements or transactions which are at arm's length.

15. Extract of Annual Return

Extract of Annual Return in Form MGT – 9 is attached as 'Annexure A' to this Report.

16. Vigil Mechanism

The company has a vigil mechanism named Whistle Blower Policy to deal with instances of fraud and mismanagement.

17. Significant and Material Orders Passed by the Regulators or Courts

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

18. Auditors

Statutory Auditors

M/s. Samria & Co., Chartered Accountants, Mumbai, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from M/s. Samria & Co., Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 139 & 141 of the Companies Act, 2013.

Members are requested to re-appoint M/s. Samria & Co., Chartered Accountants as the Statutory Auditors of the Company.

Cost Auditors

The Board has subject to the approval of Central Government approved the appointment of M/s. M. Goyal & Co., Cost Accountants as Cost Auditors of the Company for conducting Cost Audit of Malkapur Textile unit for F. Y. 2015-16 as required pursuant to section 148 of the Companies Act, 2013 read with the rules made there under and the order No. F. No. 52/26/CAB/2010 dated 24th January, 2012 of the Government of India, Ministry of Corporate Affairs and for issuance of Compliance Report, pursuant to the Companies (Cost Accounting Records) Rules, 2011.

Secretarial audit

Secretarial Audit Report dated 30th June, 2015 by Roy Jacob & Co., Practicing Company Secretary (CP no.8220) is attached herewith as 'Annexure B' to this Report. The report does not contain any qualification.

19. Auditors Remarks

Explanation for the Qualified Opinion of the Auditors report.

1. The Company has not obtained the confirmation from all the ICD parties as all the ICD parties have filed legal cases against the Company including winding up petitions for recovery of their dues. The Company is contesting all the legal cases and also trying for out of court settlement by way of reschedulement, concessions or one time settlement.

2. The Company is in process of getting confirmation of dues of related parties.

3. Over the past few years the Company has been providing for interest receivable on loans given to related parties. However none of the related party has paid the interest amount to the Company resulting in unrealized income which further increases the receivable amount from the parties. Similarly, the Company has not been paying interest on loan taken from related parties in view of its default on repayment of dues to financial institutions and the need to preserve the scarce working capital resources. As such, the management has decided that it is prudent and conservative to not provide for such interest receivable and payable from the related parties till such time as they are settled in cash.

4. The Company has filed a petition before the Company Law Board, Mumbai for reschedulement of re-payment of fixed deposits and interest thereon. The Hon'ble Company Law Board has passed an order dated 19th May, 2015 for rescheduling the repayment of the fixed deposits and interest thereon for a specified period. The Company is now making payments as per order dated 19th May, 2015.

5. The Company has made provision for capital advances given to various equipment suppliers and other parties mainly towards implementing the Weaving Project and other projects which have not taken off. The parties are neither giving confirmation of outstanding amount nor repaying the advance amount. The Company is pursuing with the vendors for recovery of such advances. Pending such recovery, o ut of prudence the Company has decided to make provision for such advances totaling to Rs.94,32,23,851/-

In addition the Company had also incurred certain expenses for the above weaving project which had been capitalized. Given that the Company does not plan to pursue the project, such expenses amounting to Rs.4,62,00,730/- have been written off.

6. The Company is trying to obtain confirmation / reconciliation of such loans. The Company is confident of recovery of the loan amount from all the related parties.

7. One factory unit of the Company is operating at low capacity due to shortage of need based working capital as bankers have stopped providing working capital facility as their working capital accounts have become Non Performing Assets. As per valuation carried out by bankers, there is no diminution in the value of fixed assets of this unit.

Other observations made in Auditors' Report together with relevant notes are self explanatory and hence do not call for any further comments under section 134 of the Companies Act, 2013.

20. Particulars of Loans, Guarantees and Investments

During the year under review, the Company has not given loans, guarantees or investments under Section 186 of the Companies Act, 2013. The details of the investments made by the Company are provided in the accompanying financial statements.

21. Employees' Safety

The Company is continuously endeavoring to ensure safe working conditions for all its employees.

22. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition And Redressal) Act, 2013

The Company has in place a Policy for Prevention Prohibition and Redressal of Sexual Harassment at work place which is in line with the requirements of the Sexual Harassment of women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder. All employees (permanent, contractual, temporary and trainees) are covered under this policy. The Company has constituted an Internal Complaint Committee for its Head Office and branch/sales offices under Section 4 of the captioned Act. No complaint has been filled before the said committee till date.

23. Disclosure under Rule 5(1) of the Companies (Appointment And Remuneration), Rules, 2014

The information required pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration), Rules, 2014 in respect of employees of the Company and Directors is attached as 'Annexure C'.

24. Particulars of Employees

There were no employees receiving remuneration above the prescribed limit in terms of Rule 5(2) of the Companies (Appointment and Remuneration) Rules, 2014 during the year ended 31st March, 2015.

25. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo

The particulars relating to energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, are provided in 'Annexure D' to Directors Report.

26. Personnel

Your Directors place on the record their appreciation of the contribution made by the employees at all levels who, through their competence, diligence, solidarity, co-operation and support, have enabled the Company to achieve the desired results during the period.

27. Acknowledgements

The Board of Directors wishes to acknowledge the invaluable support extended to the Company by the Government of Maharashtra, Bankers, Vendors, Suppliers, Shareholders and Customers.

For and on behalf of the Board of Directors

Place: Mumbai S. N. BAHETI R. K. DIXIT

Date : 22nd July, 2015 Director Director

---

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Seventy Second Annual Report along with the Audited Accounts of the Company for the 9 months period from 1st July 2013 to 31st March, 2014.

1. Financial Results

(Amt in Rs)

Particulars Consolidated 9 month period 15 month period ended 31.03.2014 ended 30.06.2013

Revenue from Operations 127,21,93,640 5,762,203,955

Other Income 3,98,40,924 44,135,398

Net Income 131,20,34,564 5,806,339,353

PBDIT (11,93,60,159) (733,733,784)

Interest and Finance 36,49,61,086 535,615,473 Expenses

PBDT (48,43,21,245) (1,269,349,256)

Depreciation 7,52,83,890 124,132,189

PBT (55,96,05,135) (1,393,481,445)

Less: Deferred Tax - (112,708,814) Liability/(Asset)

Less : Fringe Benefit - - Tax (FBT)

Less: Current Year - - Tax (MAT)

Prior Period Tax - - Adjustment

PROFIT AFTER TAX (PAT) (55,96,05,135) (1,280,772,631)

Profit transferred to (55,96,05,135) (1,280,772,631) Reserves

(Amt in Rs)

Particulars Standalone 9 month period 15 month period ended 31.03.2014 ended 30.06.2013

Revenue from Operations 93,62,95,688 3,436,912,592

Other Income 3,98,33,321 44,135,398

Net Income 97,61,09,009 3,481,047,990

PBDIT (10,56,32,866) (850,048,638)

Interest and Finance 36,46,58,179 535,562,578 Expenses

PBDT (47,02,91,045) (1,385,611,216)

Depreciation 7,51,85,782 124,043,486

PBT (54,54,76,827) (1,509,654,702)

Less: Deferred Tax - (112,708,814) Liability/(Asset)

Less : Fringe Benefit - - Tax (FBT)

Less: Current Year - - Tax (MAT)

Prior Period Tax - - Adjustment

PROFIT AFTER TAX (PAT) (54,54,76,827) (1,396,945,888)

Profit transferred to 54,54,76,827 1,396,945,888)] Reserves

2. Operating and Financial Performance:

Since last few years textile industry is passing through very difficult business conditions. The general business environment continued to be challenging due to the uncertain global economic scenario. The major challenge of textile industry is facing by increasing cost of production arising out of rising wages, high power cost etc and excess capacity installed in the cotton yarn industry. This led to lower margins as the Company could not pass on higher costs to customers. The exports during the period under review are not significant since the ruling prices of export continued to be non remunerative for our type of products and China all of sudden stopped buying cotton yarn from India. Further during the period under review the cotton yarn scenario continues to remain in pressure due to weak domestic textile market which has further resulted into severe pressure on the margins. During the period under review i.e.in 9 months, turnover of your Company is Rs. 97.61 crores as compared to the turnover of Rs. 348.10 crores during previous accounting period of 15 months. Your Company is able to reduce its net loss to Rs.56 crores during the period under review compared to net loss of Rs.156 crores in previous accounting period of 15 months despite adverse market conditions and global recession. Ybur company is relentlessly putting all its efforts to reduce the cost and improve the operating margins but the profit of the company is still negative during the current financial year. However, despite all adverse features, Company is continuing its efforts to explore opportunities for its products in overseas markets but insufficient resources is not allowing to reap the benefits to its fullest extent.

3. Dividend

In view of loss suffered by the Company, your Directors have not recommended any dividend for 9 months period from 1st July, 2013 to 31st March, 2014.

4. Increase in Share Capital

There has been no change in the Share Capital of the Company.

5. Employee Stock Options Plan

The Company had authorized an Employee Stock Option Plan 2007 (ESOP) in their Extraordinary General Meeting held on 6th December, 2007. No shares have been allotted under the ESOP till date nor are any stock options granted during the 9 months period from 1st July, 2013 to 31st March, 2014.

6. Listing

The Equity Shares of the Company continue to remain listed with Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

7. Subsidiary Company

The Company has one wholly owned subsidiary at UAE in the name of Birla Cotsyn (India) Limited FZE which has been setup to develop the overseas market for the Company.

The Accounts for the wholly owned Subsidiary Company, Birla Cotsyn (India) Limited FZE have been received by the Company and a

statement pursuant to section 212 of the Companies Act, 1956, forms part of this Annual Report. Your Directors have pleasure in enclosing the consolidated financial statements of the Company in accordance with the listing agreement and Accounting standards issued by the Institute of Chartered Accountants of India.

In compliance with the general circular issued by Ministry of Corporate Affairs (MCA), Government of India, the Balance Sheet, Statement of Profit & Loss and other documents of the subsidiary are not attached hereto. As per the general exemption, a statement containing brief financial details of the Company''s subsidiary for the year ended 31st March, 2014, is included in this Annual Report. The Annual Accounts of the subsidiary and the related detailed information will be made available to any Member of the Company/its subsidiary seeking such information at any point of time and are also available for inspection by any Member of the Company/its subsidiary at the Registered Office of the Company/its subsidiary.

8. Management Discussion and Analysis and Corporate Governance Report

In compliance with Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited and National Stock Exchange of India Limited, a separate section on Management Discussion and Analysis Report which also includes further details on the state of affairs of the Company and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from the Practicing Company Secretary confirming the compliance with the requirements of Clause 49 forms part of this Annual Report.

9. Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors of the Company state as under that:

i. In the preparation of the annual accounts, applicable Accounting Standards had been followed along with proper explanation relating to material departure;

ii. The selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company for the 9 months period from 1st July, 2013 to 31st March, 2014 and the Loss of the Company for the 9 months period 1st July, 2013 to 31st March, 2014.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv. The annual accounts have been prepared on a ''going concern'' basis.

10. Directors

Shri Satyanarayan Baheti is appointed as an Additional Director by the Board of Directors of the Company at its meeting held on 30th May, 2014. His office expires at the ensuing Annual General Meeting and the Company has received notice under section 160 of the Companies Act, 2013 proposing his candidature for Directorship along with the deposit as prescribed thereunder. He is eligible for being appointed as Director at the ensuing Annual General Meeting.

Pursuant to the provisions of Articles of Association of the Company, Shri Rakesh Kumar Dixit, Director of the Company, retires by rotation and being eligible, offers himself for re-appointment.

Shri Jignesh Mehta and Shri Ram Prakash Mishra, Directors of the Company, were originally appointed as Non-Executive Independent Directors, liable to retire by rotation, under the erstwhile applicable provisions of the Companies Act, 1956. It is proposed to appoint them as Independent Directors, with a fixed tenure of five (5) years each at the ensuing Annual General Meeting of the Company, subject to approval of shareholders in terms of Section 149 of the Companies Act, 2013 ("The Act"). The Company has received separate notices under section 160 of the Companies Act, 2013 proposing their candidature for Directorship along with the deposit as prescribed thereunder.

In compliance with the Clause 49 IV (G) of the Listing Agreement, brief resume of the aforesaid Directors, their expertise and other details of Directors proposed to be appointed/ re-appointed are provided in the Corporate Governance Report. Appropriate resolutions for appointment/ re-appointment of the aforesaid Directors are being placed for approval of the members at the ensuing Annual General Meeting. The members are requested to appoint Shri Satyanarayan Baheti as Director, whose office shall not be liable to retirement by rotation and to re-appoint Shri Rakesh Kumar Dixit as Director of the Company.

11. Fixed Deposits

During the period under review, as on 31st March, 2014, the Company has outstanding fixed deposit of Rs.79,216,040/-. There is default in payment of interest and repayment of matured deposits.

Company has filed a petition on for sanctioning the scheme for rescheduling the period of repayment of Fixed Deposits and payments of interest before the Company Law Board, Western Region, Mumbai and the same is under consideration. Fixed Deposit holders have approved the scheme of rescheduling the period of repayment of fixed deposits and interest thereon. In the meantime, Company is making payment to all the Fixed Deposit holders pursuant to order passed by the Company Law Board from time to time to whom Fixed Deposit holders have approached for making payment of their Fixed Deposits. Further Company is also making payment on compassionate ground to all Fixed Deposit holders, who are approaching the Company looking to their genuine needs.

12. Accounting Period

The Company had extended its previous Accounting Period for 15 Months i.e. from 1st April, 2012 to 30th June, 2013. Accordingly, the present accounting year shall commence from 1st July, 2013 and ends on 31st March, 2014 i.e. the current financial year under review shall be for 9 months.

13. Auditors Statutory Auditors

M/s. Samria & Co., Chartered Accountants, Mumbai, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from M/s. Samria & Co., Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 139 & 141 of the Companies Act, 2013.

Members are requested to re-appoint M/s. Samria & Co., Chartered Accountants as the Statutory Auditors of the Company.

Cost Auditors:

The Board has subject to the approval of Central Government approved the appointment M/s. M. Goyal & Co., Cost Accountants as Cost Auditors of the Company for conducting Cost Audit of Malkapur Textile unit of the Company''s'' Cotton Spinning unit, Synthetic Spinning unit, Cotton open end unit and Ginning unit for FY 2014-15 as required pursuant to section 148 of the Companies Act, 2013 read with the rules made thereunder and the order No. F No. 52/26/CAB-2010 dated 24th January, 2012 of the Government of India, Ministry of Corporate Affairs and for issuance of Compliance Report, pursuant to the Companies (Cost Accounting Records) Rules, 2011.

14. Corporate Governance Report

A report on Corporate Governance along with the Compliance Certificate from the Auditors is annexed hereto and forms part of this report.

15. Auditors Remarks

Explanation for the Qualified Opinion of the Auditors report.

1. The Company has not obtained the confirmation as all the ICD parties have filed legal cases against the Company for recovery of the amount. The Company is contesting all the legal cases filed by ICD parties and also trying for out of court settlement by way of reschedulement, concessions or one time settlement.

2. The Company is in process of getting confirmation of dues of related parties.

3. The Company has sought balance confirmations from various parties reflected under Capital Advances but no party has responded to the company''s request. The Company is pursuing with the parties for recovery of the advances given as the projects have been dropped. The Company is hopeful of recovery of the advances given.

4. The Company is trying to obtain confirmation/reconciliation of such loans. The Company is confident of recovery of the entire amount.

5. Most of the debtors are not cooperating with the Company for possible legal action against them. Company has stopped dealing with all these parties. Most of the parties have raised their quality claims/delay in supply etc. In view of this Board of Directors has decided to make provision of doubtful debts. In case of receivables outstanding for less than 6 months, the Company is confident of their recovery.

6. Due to shortage of need based working capital and no working capital facility from the working capital bank(s), one factory unit of the Company is operating at low capacity. As per recent valuation carried out by the lenders, there is no diminution in the value of plant and machinery of this unit

16. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo

The particulars relating to energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided in Annexure I to Directors Report.

17. Particulars of Employees

There were no employees receiving remuneration above the prescribed limit in terms of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 during the period ended 31st March, 2014.

18. Personnel

Your Directors place on the record their appreciation of the contribution made by the employees at all levels who, through their competence, diligence, solidarity, co-operation and support, have enabled the Company to achieve the desired results during the period.

19. Acknowledgements

The Board of Directors wishes to acknowledge the invaluable support extended to the Company by the Government of Maharashtra, Bankers, Vendors, Suppliers, Shareholders and Customers.

For and on behalf of the Board of Directors

Place: Mumbai Date: 1st June, 2014 Director

---

Jun 30, 2013

To the Members,

The Directors have pleasure in presenting the Seventy First Annual Report along with the Audited Accounts of the Company for the 15 months period 1st April 2012 to 30th June 2013.

1. Financial Results

(Amt in Rs)

Particulars Consolidated Standalone

15 month period Year ended 15 month period Year ended ended 30.06.2013 31.03.2012 ended 30.06.2013 31.03.2012

Revenue from Operations 5,762,203,955 10,033,880,316 3,436,912,592 7,596,442,442

Other Income 44,135,398 66,003,843 44,135,398 66,003,843

Net Income 5,806,339,353 10,099,884,159 3,481,047,990 7,662,446,285

PBDIT (733,733,784) 661,996,449 (850,048,638) 593,298,242

Interest and Finance Expenses 535,615,473 397,023,898 535,562,578 396,782,278

PBDT (1,269,349,256) 264,972,551 (1,385,611,216) 196,515,964

Depreciation 124,132,189 96,420,470 124,043,486 96,341,855

PBT (1,393,481,445) 168,552,081 (1,509,654,702) 100,174,109

Less: Deferred Tax Liability/ (Asset) (112,708,814) 59,709,963 (112,708,814) 60,373,604

Less : Fringe Benefit Tax (FBT) - - - -

Less: Current Year Tax (MAT) - 20,550,000 - 20,550,000

Prior Period Tax Adjustment - - - -

PROFIT/ (LOSS) AFTER TAX (1,280,772,631) 88,292,118 (1,396,945,888) 19,250,505

~Profit/ (Loss) transferred to Reserves (1,280,772,631) 88,292,118 (1,396,945,888) 19,250,505

2. Operating and Financial Performance:

During the period under review, net income decreased by 54.57% over the previous year, i.e. from Rs. 7,662,446,285 to Rs.3,481,047,990. Profit before tax has decreased over the previous year PBT. The fall is mainly due to the deteriorating conditions prevailing in the global economy scenario and also the interest rates hikes by the Banks. Moreover the erratic price behavior due to the government interventions have also stretched the cash flows.

3. Dividend

In view of loss suffered by the Company, your Directors have not recommended any dividend for 15 months period 1st April 2012 to 30th June 2013.

4. Increase in Share Capital

There has been no change in the Share Capital of the Company.

5. Employee Stock Options Plan

The Company had authorized an Employee Stock Option Plan 2007 (ESOP) in their Extraordinary General Meeting held on 6th December, 2007. No shares have been allotted under the ESOP till date nor are any stock options granted during the 15 months period 1st April 2012 to 30th June 2013.

6. Listing

The Equity Shares of the Company continue to remain listed with Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the stipulated listing fees for the year 2013-14 have been paid to both the Stock Exchanges.

7. Subsidiary Company

The Company has one wholly owned subsidiary at UAE in the name of Birla Cotsyn (India) Limited FZE which has been setup to develop the overseas market for the Company.

During the period under review the Company sold all the shares held in Birla Integrated Textile Park Limited on 18th March, 2013; therefore Birla Integrated Textile Park Limited is no longer a subsidiary of the Company and the Company has only one subsidiary i.e Birla Cotsyn (India) Limited FZE.

The Accounts for the wholly owned Subsidiary Company, Birla Cotsyn India Ltd FZE have been received by the Company and a statement pursuant to section 212 of the Companies Act, 1956, forms part of this Annual Report. Your Directors have pleasure in enclosing the consolidated financial statements of the Company in accordance with the listing agreement and Accounting standards issued by the Institute of Chartered Accountants of India.

In compliance with the general circular issued by Ministry of Corporate Affairs (MCA), Government of India, the Balance Sheet statement, Statement of Profit & Loss and other documents of the subsidiaries are not attached hereto. As per the general exemption, a statement containing brief financial details of the Company''s subsidiaries for the year ended 31st March, 2013, is included in this Annual Report. The Annual Accounts of these subsidiaries and the related detailed information will be made available to any Member of the Company/its subsidiaries seeking such information at any point of time and are also available for inspection by any Member of the Company/its subsidiary at the Registered Office of the Company/its subsidiary.

8. Management Discussion and Analysis and Corporate Governance Report

In compliance with Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited and National Stock Exchange of India Limited, a separate section on Management Discussion and Analysis Report which also includes further details on the state of affairs of the Company and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from the Practicing Company Secretary confirming the compliance with the requirements of Clause 49 forms part of this Annual Report.

9. Directors Responsibility Statement

Pursuant to Section 2I7(2AA) of the Companies Act, 1956, the Directors of the Company state as under that:

1. In the preparation of the annual accounts, applicable Accounting Standards had been followed along with proper explanation relating to material departure;

2. The selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company for the 15 month period Ist April 2012 to 30th June, 2013 and the Loss of the Company for the 15 month period Ist April 2012 to 30th June, 2013.

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

10. Directors

Shri Ram Prakash Mishra, Shri Jignesh Bipin Mehta and Shri R. K. Dixit are appointed as Additional Directors by the Board of Directors of the Company at its meeting held on 14th January, 2013 and 27th August, 2013 respectively. Their office expires at the ensuing Annual General Meeting and the Company has received notices under section 257 of the Companies Act, 1956 proposing their candidature for Directorship along with the deposit of five hundred rupees each. They are eligible for being appointed as Directors at the ensuing Annual General Meeting.

Pursuant to section 256 of the Companies Act, 1956 and Articles of Association of the Company, Shri Vinod Kumar Kapur, Director of the Company, retire by rotation and being eligible, offer himself for re-appointment.

In compliance with the Clause 49 IV (G) of the Listing Agreement, brief resume of the aforesaid Directors, their expertise and other details of Directors proposed to be appointed/ re-appointed are provided in the Corporate Governance Report. Appropriate resolutions for appointment/ re-appointment of the aforesaid Directors are being placed for approval of the members at the ensuing Annual General Meeting. The members are requested to appoint Shri Ram Prakash Mishra, Shri Jignesh Bipin Mehta and Shri R. K. Dixit as Directors, whose office shall be liable to retirement by rotation and re-appoint Shri Vinod Kumar Kapur as Director of the Company.

Shri PB. Bhardwaj (Chairman), Shri Yashovardhan Birla (Co-Chairman), Shri P V. R. Murthy (Managing Director), Shri Om Prakash Jain (Managing Director), Shri Mohan Jayakar (Director), Shri Suresh Kumar Gupta (Managing Director), Shri Upkar Singh Kohli (Director) and Shri G. L. Lath (Director), Shri Mohandas Shenoy Adige (Director) have resigned with effect from IIth January, 2013, 29th December,

2012, 30th September, 20I2, I7th December, 20I2, I2th January, 20I3, I5th May, 20I3 and 29s* August, 20I3 respectively. The Board places on record their sincere appreciation of the services rendered by them during their tenure with the Company.

11. Fixed Deposits

During the period under review, as on 30th June, 20I3, the Company has outstanding fixed deposit of Rs. 83,I6I,500. There is default in payment of interest and repayment of matured deposits.

Company has filed petition on for sanctioning the scheme for rescheduling the period of repayment of Fixed Deposits and payments of interest. In the meantime, Company is making payment to all the Fixed Deposit holders pursuant to order passed by the Company Law Board from time to time to whom Fixed Deposit holders have approached for making payment of their Fixed Deposits. Further Company is also making payment on compassionate ground to all Fixed Deposit holders, who are approaching the Company looking to their genuine needs.

12. Extension of Accounting Period

The Company was in process of getting its loan restructured from lenders and required extension to assess its financial implications. In view of the same it was decided by the management to extend the financial year of the Company upto I5 Months i.e. from 3Ist March, 20I3 to 30th June, 20I3. Accordingly, the present accounting period is from Ist April, 20I2 to 30th June, 20I3.

13. Auditors Statutory Auditors

M/s. Kanu Doshi Associates, Chartered Accountants, Mumbai, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from M/s. Kanu Doshi Associates, Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 224(IB) of the Companies Act, I956.

Members are requested to re-appoint M/s. Kanu Doshi Associates, Chartered Accountants as the Statutory Auditors of the Company. Cost Auditors:

The Board has subject to the approval of Central Government approved the appointment M/s. M. Goyal & Co., Cost Accountants as Cost Auditors of the Company for conducting Cost Audit from Malkapur Textile unit to the Company''s Cotton Spinning unit, Synthetic Spinning unit, Cotton open end unit and Ginning unit for FY 20I3-I4 as required pursuant to section 233B of the Companies Act, I956 read with the rules made thereunder and the order No. F No. 52/26/CAB/20I0 dated 24th January, 20I2 of the Government of India, Ministry of Corporate Affairs and for issuance of Compliance Report, pursuant to the Companies (Cost Accounting Records) Rules, 20II.

14. Auditors Remarks

Explanation for the Qualified Opinion of the Auditors report.

1. The Company Management is under process of getting the confirmations and reconciling the same, while for the ICD parties, who have filed cases it is trying to resolve this amicably by way of reschedulement, concessions or one time settlement.

2. The Company Management is under process of getting the confirmation and reconciling the same for the related parties.

The Company has observed some quality complaints and accordingly trying to negotiate the settlements with the creditors. To strengthen our case, the Company has not sought confirmations from creditors.

3. In respect of balances confirmation sought by the Company from various parties reflected under Capital Advances, no party has responded to the request of the Company and such balances are taken as appearing in books and the same are subjected to confirmations and reconciliation, consequential impact if any, will be considered as and when determined.

4. The Company is ratifying the same.

5. The Company is taking up individually and exploring possibility of legal options. However due to certain Quality issues and delays, the Company is treading with caution.

6. In view of unvaibility the Company is operating at a very low capacity.

15. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo

The particulars relating to energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed under Section 2I7 (I)(e) of the Companies Act, I956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, I988, are provided in Annexure I to Directors Report.

16. Particulars of Employees

There were no employees receiving remuneration above the prescribed limit in terms of Section 2I7 (2A) of the Companies Act, I956 read with Companies (Particulars of Employees) Rules, I975 during the period ended 30th June, 20I3.

17. Personnel

Your Directors place on the record their appreciation of the contribution made by the employees at all levels who, through their competence, diligence, solidarity, co-operation and support, have enabled the Company to achieve the desired results during the period.

18. Acknowledgements

The Board of Directors wishes to acknowledge the invaluable support extended to the Company by the Financial Institutions, Bankers, Vendors, Suppliers, Shareholders and Customers.

For and on behalf of the Board of Directors

Place: Mumbai

Date: 29th August, 2013 Director Director

---

Mar 31, 2012

The Directors have pleasure in presenting the Seventieth Annual Report along with the Audited Accounts of the Company for the year ended 31st March, 2012.

1. Financial Results

(Amount in Rs.)

Particulars Consolidated

Year ended Year ended 31.03.2012 31.03.2011

Revenue from Operations 10,033,880,316 5,946,566,609

Other Income (inc. exceptional items) 66,003,843 13,364,804

Net Income 10,099,884,159 5,959,931,413

PBDIT 661,996,449 549,749,504

Interest and Finance Expenses 397,023,898 307,923,294

PBDT 26,497,2551 241,897,196

Particulars Consolidated

Year ended Year ended 31.03.2012 31.03.2011

Depreciation 96,420,468 83,441,667

PBT 168,552,083 158,455,529

Less: Deferred Tax Liability 59,709,963 4,037,436

Less : Fringe Benefit Tax (FBT) - -

Less: Current Year Tax (MAT) 20,550,000 29,000,000

Prior Period Tax Adjustment - -

PROFIT AFTER TAX (PAT) 88,292,121 125,418,093

Profit transferred to Reserves 88,292,121 125,418,093

Standalone

Year ended Year ended 31.03.2012 31.03.2011

Revenue from Operations 7,596,442,442 5,406,191,677

Other Income (inc. exceptional items) 66,003,843 13,364,804

Net Income 7,662,446,285 5,419,556,481

PBDIT 593,298,242 532,412,718

Interest and Finance Expenses 396,782,278 307,923,294

PBDT 196,515,964 224,489,424

Depreciation 96,341,855 83,441,667

PBT 100,174,109 141,047,757

Less: Deferred Tax Liability 60,373,604 4,037,436

Less : Fringe Benefit Tax (FBT) - -

Less: Current Year Tax (MAT) 20,550,000 29,000,000

Prior Period Tax Adjustment - -

PROFIT AFTER TAX (PAT) 19,250,505 108,010,321

PROFIT AFTER TAX (PAT) 19,250,505 108,010,321

2. Operating and Financial Performance:

During the year under review, net income (standalone) increased by 41.38% over the previous year, i.e. from Rs. 5,419,556,481 to Rs. 7,662,446,285. Profit before tax (standalone) has decreased by 28.97% over the previous year Profit before tax. The fall is mainly due to the deteriorating conditions prevailing in the global economy scenario and also the interest rates hikes by the Banks. Moreover, the fluctuations in the prices due to change in government guidelines have also stretched the cash flows.

3. Dividend

In view of the Company going in for expansion, your Directors have not recommended any dividend for the financial year ended 31st March 2012.

4. Increase in Share Capital

The Committee of Directors of the Company at its meeting held on 28th March, 2012 allotted 5,63,72,750 Equity Shares of Re. 1/- each at a premium of Re. 0.13 per share to the promoter companies, upon conversion of balance 5,63,72,750 Equity Share Warrants allotted on preferential allotment basis. The said equity shares have been listed with Bombay Stock Exchange Limited and National Stock Exchange of India Limited w.e.f 2nd July, 2012 and shall remain locked - in for a period of three years till 27th March, 2015. As on 31st March, 2012 there are no outstanding warrants pending for conversion.

Consequent to the aforesaid allotment, the paid up share capital of the Company as on March 31, 2012 stands increased from 261,22,62,404 equity shares of Rs.1/- each to 266,86,35,154 equity shares of Rs.1/- each. The amount raised from allotment of the aforesaid equity shares is utilized for meeting the working capital requirements of the Company.

5. Industrial Housing Complex Project

The Company has housed 400 workers and staff at the Industrial Housing Complex. The housing complex has benefited the company through reduction on overtime, better attendance, reduced employee turnover and increase in productivity.

6. Expansion and Modernization Project

Your Company is now embarking on an expansion program by setting up another 84,864 spindles of Cotton Yarn spinning facility at Malkapur, Maharashtra in the existing premises of the Company. The total Project Cost is Rs.33,300 Lacs. The project has been financially appraised by SBI Capital Market Ltd and Technical Evaluation study by Gherzi Eastern India Ltd.

7. Employee Stock Options Plan

The Company had authorized an Employee Stock Option Plan 2007 (ESOP) in their Extraordinary General Meeting held on 6th December, 2007. No shares have been allotted under the ESOP till date nor are any stock options granted during the financial year ended 31st March, 2012.

8. Listing

The Equity Shares of the Company continue to remain listed with Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the stipulated listing fees for the year 2012-13 have been paid to both the Stock Exchanges.

9. Subsidiary Company

The Company has one wholly owned subsidiary at UAE in the name of Birla Cotsyn (India) Limited FZE. During the year, Birla Integrated Textile Park Limited became a Subsidiary of the Company.

Birla Cotsyn (India) Limited FZE has been setup to develop the overseas market for the Company. Birla Integrated Textile Park Limited has been setup to develop the Integrated Textile Park, which has been sanctioned by the Ministry of Textile, Government of India under the SITP guidelines.

The Accounts for the wholly owned Subsidiary Companies, Birla Cotsyn India Ltd FZE and Birla Integrated Textile Park Limited have been received by the Company and a statement pursuant to section 212 of the Companies Act, 1956, forms part of this Annual Report. Your Directors have pleasure in enclosing the consolidated financial statements of the Company in accordance with the listing agreement and Accounting standards issued by the Institute of Chartered Accountants of India.

In compliance with the general circular issued by Ministry of Corporate Affairs (MCA), Government of India, the Balance Sheet statement, Statement of Profit and Loss and other documents of the subsidiaries are not attached hereto. As per the general exemption, a statement containing brief financial details of the Company's subsidiaries for the year ended March 31, 2012, is included in this Annual Report. The Annual Accounts of these subsidiaries and the related detailed information will be made available to any Member of the Company/its subsidiaries seeking such information at any point of time and are also available for inspection by any Member of the Company/its subsidiaries at the Registered Office of the Company/its subsidiaries.

10. Management Discussion and Analysis and Corporate Governance Report

In compliance with Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited and National Stock Exchange of India Limited, a separate section on Management Discussion and Analysis which also includes further details on the state of affairs of the Company and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from the Statutory Auditors confirming the compliance with the requirements of Clause 49 forms part of this Annual Report.

11. Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors of the Company state as under that:

1. In the preparation of the annual accounts, applicable Accounting Standards had been followed along with proper explanation relating to material departure;

2. the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at March 31, 2012 and the profit of the Company for the year ended on that date;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. the annual accounts have been prepared on a 'going concern' basis.

12. Directors

Shri Vinod Kumar Kapur is appointed as Additional Directors by the Board of Directors of the Company at its meeting held on 13th August, 2012. His office expires at the ensuing Annual General Meeting and the Company has received notice under section 257 of the Companies Act, 1956 proposing his candidature for Directorship along with the deposit of five hundred rupees. He is eligible for being appointed as Director at the ensuing Annual General Meeting.

Pursuant to section 256 of the Companies Act, 1956 and Articles of Association of the Company, Shri Mohandas Shenoy Adige and Shri Upkar Singh Kohli, Directors of the Company, retire by rotation and being eligible, offer themselves for re-appointment.

In compliance with the Clause 49 IV (G) of the Listing Agreement, brief resume of the aforesaid directors, their expertise and other details of Directors proposed to be appointed/ re-appointed are provided in the Corporate Governance Report. Appropriate resolutions for appointment/ re-appointment of the aforesaid directors are being placed for approval of the members at the ensuing Annual General Meeting. The members are requested to appoint Shri Vinod Kapur as Director, whose office shall be liable to retirement by rotation and re-appoint Shri Mohandas Shenoy Adige and Shri Upkar Singh Kohli as Directors of the Company.

Shri Navinchandra Shah (Director), Shri Sanjay Agarwal (Director) and Shri Alok Bhardwaj (Alternate Director) have resigned with effect from 29th March, 2012, 31st March, 2012 and 2nd August, 2012 respectively. The Board places on record their sincere appreciation of the services rendered by them during their tenure with the Company.

13. Fixed Deposits

During the year under review, the Company has invited fresh Fixed Deposits from its shareholders and general public. As on 31st March 2012, the Company has outstanding fixed deposit of Rs. 561.98 Lacs and unclaimed fixed deposits of Rs. Nil. There is no default in payment of interest and repayment of matured deposits.

14. Auditors Statutory Auditors

M/s. Kanu Doshi Associates, Chartered Accountants, Mumbai , Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from M/s. Kanu Doshi Associates, Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956.

Members are requested to re-appoint M/s. Kanu Doshi Associates, Chartered Accountants as the Statutory Auditors of the Company. Cost Auditors:

The Board has subject to the approval of Central Government approved the appointment M/s. Goyal & Co., Cost Accountants as Cost Auditors of the Company for conducting Cost Audit of Malkapur Textile unit of the Company for F.Y. 2012-13 as required pursuant to section 233B of the Companies Act, 1956 read with the rules made thereunder and the order No. F. No. 52/26/CAB/2010 dated 24th January, 2012 of the Government of India, Ministry of Corporate Affairs and for issuance of Compliance Report, pursuant to the Companies (Cost Accounting Records) Rules, 2011.

15. Auditors Remarks

As regards the Auditors remark at Para 3 clause (vi), no fresh loan was taken from an individual in contravention of sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder during the financial year ended 31st March, 2012. The Loan from an Individual that was outstanding was within the limits specified in Rule 3 of the Companies (Acceptance of Deposit) Rules, 1975. The loan was repaid during the financial year ended 31st March, 2012

16. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo

The particulars relating to energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided the Annexure I to Directors Report.

17. Particulars of Employees

There were no employees receiving remuneration above the prescribed limit in terms of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 during the financial year ended 31st March, 2012.

18. Personnel

Your Directors place on the record their appreciation of the contribution made by the employees at all levels who, through their competence, diligence, solidarity, co-operation and support, have enabled the Company to achieve the desired results during the year.

19. Acknowledgements

The Board of Directors wishes to acknowledge the invaluable support extended to the Company by the Financial Institutions, Bankers, Vendors, Suppliers, Shareholders and Customers.

For and on behalf of the Board of Directors

Yashovardhan Birla Co-Chairman



Place : Mumbai

Date : 13th August, 2012

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Mar 31, 2011

To the Members,

The Directors have pleasure in presenting the Sixty-Ninth Annual Report along with with the Audited Accounts of your Company for the year ended 31st March, 2011.

I. Financial Results

(Amount in Rs.) Financial Results Year ended Year ended 31.03.2011 31.03.2010

Net Sales 5,319,755,841 3,440,057,034

Other Income 102,271,841 36,699,738

Net Income 5,422,027,682 3,476,756,772

PBDIT 534,883,839 359,834,553

Interest and Finance Expenses 307,923,294 192,863,007

PBDT 226,960,545 166,971,546

Depreciation 83,441,667 51,545,204

PBT 143,518,878 15,426,342

Less: Deferred Tax 4,037,436 21,133,717 Liability

Less : Fringe Benefit - - Tax (FBT)

Less: Current Year Tax (MAT) 29,000,000 19,616,707

Prior Period Tax Adjustment 2,471,121 (790,616)

PROFIT AFTER TAX (PAT) 108,010,321 75,466,534

2. Operating and Financial Performance:

During the year under review net income increased by 55.95%overthe previousyear, i.e. from Rs.Rs.3,476,756,772to Rs. 5,422,027,682. Profit after tax has increased by 24.34% over the previous year profits. Even though the Government has imposed ban on the export of yarn in the latter half of current year, your Company was able to clock an export turnover of Rs. 265,772,974 as against the turnover of Rs. 84,009,067 in previous year.

3. Dividend

In view of the Company going in for Expansion of doubling the present spindling capacity, your Directors have not recommended any dividend for the financial year ended 3 1st March 2011.

4. Increase in Share Capital

The Company has during the year issued 426,981,554 Bonus Shares in the proportion of ONE new fully paid equity share of Re. 1/- each for every FIVE equity shares of Re. 1 /- each held in the Company as on the Record Date (i.e. 1st October, 2010) by capitalizing the securities premium account. The said equity shares have been listed with Bombay Stock Exchange Limited and National Stock Exchange Limited w.e.f. 7th October, 2010.

The Company has also issued 106,745,500 Convertible Equity Share Warrants on 12th October, 2010 to the Promoters of the Company at an issue price of Rs. 1.13 per warrant. On 15th March, 2011 the Company has partly converted 50,372,750 convertible share warrants into Equity Shares of the Company aggregating to Rs. 569,212,075. The said equity shares have been listed with Bombay Stock Exchange Limited and National Stock Exchange Limited w.e.f. 1st July, 2011 and 4th July, 2011 respectively. As on 31st March, 2011, 56,372,750 Convertible Equity Share Warrants are outstanding.

The Share Capital of the Company as on March 31, 2011 stands increased from Rs. 2,134,908,100/- to Rs. 2,612,262,404/- The Equity Shares of the Company continue to remain listed with Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the stipulated listing fees for the year 2011 -12 have been paid to both the Stock Exchanges

5. Industrial Housing Complex Project

Your Company has commenced the construction of Industrial Housing Complex for its workers and staff and is likely to complete the same by September 2011. Further to expedite the work process, your Company has appointed two contractors for each wing so that 500 workers could be housed at the earliest.

6. Expansion and Modernization Project

Your Company is now embarking on an expansion cum modernization program as under:

- Synthetic unit Khamgaon - Modernization plan by installing balancing equipments to improve efficiency, saving labour cost, saving power. This is underway and expected to be completed in the current year.

- Open End Unit Khamgaon - In order to achieve 33% hike in capacity, your Company is in the process of installing two more Rotor machines, out of which one machine has already been shipped from Europe.

- Ring Frame Spinning Malkapur - In order to increase in production capacity by 20%, your Company is in the process of installing 6000 spindles. This would increase the capacity from the present 36000 to 42000 spindles. All the major equipments and civil work has already arrived/ completed and the entire process of installation is expected to complete in the current year.

7. Employee Stock Options Plan

The Company had authorized an Employee Stock Option Plan 2007 (ESOP) in their Extraordinary General Meeting held on 6th December, 2007. No shares have been allotted under the ESOP till date nor are any stock options granted during the financial year ended 31 st March, 2011.

8. Subsidiary Company

The Company has incorporated one wholly owned subsidiary Company i.e Birla Cotsyn (India) Limited FZE Dubai on 8th December, 2010.

The Accounts for the wholly owned Subsidiary Company, M/s Birla Cotsyn India Ltd FZE, have been received by the Company and a statement pursuant to section 212 of the Companies Act, 1956, forms part of this Annual Report.

9. Management Discussion and Analysis and Corporate Governance Report

In compliance with Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited and National Stock Exchange of India Limited, a separate section on Management Discussion and Analysis which also includes further details on the state of affairs of the Company and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from the Statutory Auditors confirming the compliance with the requirements of Clause 49 forms part of this Annual Report.

10. Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors of the Company state as under that:

1. In the preparation of the annual accounts, applicable Accounting Standards had been followed along with proper explanation relating to material departure;

2. the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at March 31, 2011 and the profit of the Company for the year ended on that date;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. the annual accounts have been prepared on a 'going concern' basis.

11. Auditors Remarks

A regards the Auditors remark at Para 3 clause (vi), no fresh loans was taken from an individual in contravention of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under during the financial year ended 31st March, 2011. The Loan from an Individual that is outstanding is within the limits specified in Rule 3 of the Companies (Acceptance of Deposit) Rules, 1975. The same will be repaid shortly.

12. Directors

Shri Sanjay Agarwal and PVR. Murthy Directors of the Company, retires by rotation and being eligible, offer themselves for re- appointment. The Board of Directors have subject to the approval of members and such other regulatory authorities, as may be required appointed Shri PVR. Murthy as Managing Director of the Company for a period of three years w.e.f 10th August, 2011.

In compliance with the Clause 49 IV (G) of the Listing Agreement, brief resume of the aforesaid directors, their expertise and other details of Directors proposed to be appointed/ re-appointed are provided in the Corporate Governance Report. Appropriate resolutions for re-appointment/ appointment of the aforesaid directors are being placed for approval of the members at the ensuing annual general meeting. The members are requested to re-appoint Shri Sanjay Agarwal and Shri PVR. Murthy as Directors of the Company and appoint Shri PVR Murthy as Managing Director of the Company.

Shri Debhashis Poddar resigned from the position of Manager with effect from 31st March 2011. The Board places on record their sincere appreciation of the services rendered by him during his tenure with the Company.

14. Fixed Deposits

During the year under review, the Company has invited fresh Fixed Deposits from its shareholders and general public. As on 31st March 2011, the Company has outstanding fixed deposit of Rs.234.56 Lacs. There is no default in payment of interest and repayment of matured deposits.

15. Auditors

M/s. Kanu Doshi & Co, Chartered Accountants, Mumbai Statutory Auditor of the Company, holds office until the conclusion of the ensuing Annual General Meeting and is eligible for re-appointment. The Company has received a letter from M/s. M/s. Kanu Doshi & Co, Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 224( I -B) of the Companies Act, 1956.

Members are requested to appoint M/s Kanu Doshi & Co., Chartered Accountants as the Statutory Auditors of the Company.

16. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo

The particulars relating to energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed under Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided in the Annexure to Directors Report.

17. Particulars of Employees

There were no employees receiving remuneration above the prescribed limit in terms of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 during the financial year ended 31st March, 2011.

18. Personnel

Your Directors place on the record their appreciation of the contribution made by the employees at all levels who, through their competence, diligence, solidarity, co-operation and support, have enabled the Company to achieve the desired results during the year.

19. Acknowledgements

The Board of Directors wishes to acknowledge the invaluable support extended to the Company by the Financial Institutions, Bankers, Vendors, Suppliers, Shareholders and Customers.

For and on behalf of the Board of Directors

Yashovardhan Birla Co-Chairman

Place : Mumbai Date : 10th August, 2011

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Mar 31, 2010

The Directors have pleasure in presenting the Sixty-Eighth Annual Report together with the Audited statements of Accounts of your Company for the year ended 31st March, 2010.

DIRECTORS REPORT

1. Financial Results (Amount in Rs.)

Financial Results Year ended 31.03.2010 Year ended 31.03.2009

Net Sales 3,440,057,034 1,937,744,003

Other income 36,699,738 58,235,900

Net Income 3,525,284,680 1,995,979,903

PBiT 300,793,235 134,219,355

interest and Finance Expenses 133,821,690 49,880,218

PBDiT 166,971,545 84,339,137

Depreciation 51,545,203 51,215,990

PBT 115,426,342 33,123,147

Less: Deferred Tax Liability 21,133,717 7,610,545

Less : Fringe Benefit Tax (FBT) - 473,453

Less: Current Year Tax (MAT) 19,616,707 3,860,000

Prior Period Tax Adjustment (790,616) -

PROFIT AFTER TAX (PAT) 75,466,534 21,179,149

2. Operating and Financial Performance:

During the year under review net income increased from Rs. 1,995,979,903 to Rs. 3,476,756,772 i.e. increased by 74.18% over the previous year. Profit after tax has increased from Rs.21,179,149 to Rs. 70,998,696. Your Company continues to remain a leading exporter of synthetic yarn to other countries. Your Company has increased the Exports turnover by 36.43 % i.e. from Rs. 61,573,146 to Rs.84,009,067 during the year under review. The Company continues to remain net earner of the valuable foreign exchange.

3. Dividend

in view of the improved performance of the Company, your Directors are pleased to recommend dividend of 4.5% per share on the paid up equity share capital of Company as on 31st March, 2010.

4. Issue of Global Depository Receipts (GDRs):

Pursuant to the approval of the shareholders by way of Postal Ballot on 14th December, 2009, the Company has allotted 96,890,000 GDRs underlying 968,900,000 Equity Shares issued at a premium i.e. Rs.0.20 per share. The GDRs are listed on Luxembourg Stock Exchange and the underlying shares are listed on both Bombay Stock Exchange and National Stock Exchange.

Due to the issue of 96,890,000 GDRs underlying 968,900,000 Equity Shares as on 15th March, 2010 the paid up capital of the Company raised upto 2,134,908,100 Equity Shares from 1,166,008,100 Equity Shares.

5. Expansion Project

During the year, as part of the set up of the integrated Textile Plant, the Company has commissioned the Weaving unit, while the Synthetic unit, Open End Unit and the Cotton Spinning units are fully operational.

The Company also envisages to set up an Wind Mill Project of adequate capacity. While keeping up its pace with the integrated Textile Plant Project, the Company is setting up and an industrial Housing Complex for its workers and staff at Malkapur.

7. Employee Stock Options Plan

The Company has authorized an Employee Stock Option Plan 2007 (ESOP) in their Extraordinary General Meeting held on 6th December, 2007. Along with the other procedural part a trust is to be formed for ESOP operations. The resolution for the same was passed in the last Annual General Meeting. No shares have been allotted under the ESOP till date.

8. Subsidiary Company

Your Company does not have any Subsidiary Company.

9. Management Discussion and Analysis Report

in terms of Clause 49 of the Listing Agreement with the Stock Exchange, the Management Discussion and Analysis Report is appended to this report.

10. Corporate Governance

As required by Clause 49 of the Listing Agreement, a report on Corporate Governance is enclosed. A certificate from the auditors of the Company regarding compliance of corporate governance guidelines as stipulated by the said clause is attached to this report. The Chief Executive Officer (CEO) and Chief Financial Officer (CFO) have certified to the Board on financial statements and other matters in accordance with Clause 49(v) of the Listing Agreement for the financial year ended 31st March, 2010.

11. Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors of the Company state as under that:

1. in the preparation of the annual accounts, applicable Accounting Standards had been followed along with proper explanation relating to material departure;

2. that the selected accounting policies were applied consistently and the Directors made judgements and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at March 31, 2010 and the profit or loss of the Company for the year ended on that date;

3. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. that the annual accounts have been prepared on a ‘going concern’ basis.

12. Auditors Remarks

The notes to the Accounts and the remarks referred to in the Auditors’ Report are self-explanatory and therefore do not call for any further comments.

13. Directors

Shri Navinchandra Shah and Shri Mohan Jayakar, Directors of the Company, retire by rotation and being eligible, offer themselves for re-appointment.

The brief resume of the aforesaid directors and other information have been detailed in the Corporate Governance Report convening Sixty-Eighth annual general meeting of the Company. Appropriate resolutions for their re-appointment are being placed for approval of the members at the ensuing annual general meeting.

Shri Upkar Singh Kohli was appointed as an Additional Director of the Company with effect from 10th August, 2010 and holds office upto the date of the ensuing Annual General Meeting. The Company has received a notice in writing under Section 257 of the Companies Act, 1956 from the member signifying his intension to propose the appointment of Shri Upkar Singh Kohli as a Director of the Company.

Your Directors recommend his appointment.

Shri Y. P. Trivedi resigned from the Board of Directors on 30th June, 2010. The Directors place on record their sincere appreciation of the valuable services rendered by Shri Y. P. Trivedi during his tenure as a Director.

Shri K. K. Baheti, Chief Executive Officer of the Company expired unexpectedly on 30th August, 2009. The Board offers its condolences to his Family and acknowledges the valuable services rendered by Shri K. K. Baheti.

14. Fixed Deposits

Your Company has not accepted any fixed deposit from the public during the period under review. As such, no amount of principal or interest is outstanding as on the Balance Sheet date.

15. Auditors

M/s. Dalal & Shah, Chartered Accountants, auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from M/s. Dalal & Shah, Chartered Accountants, expressing their unwillingness to be re- appointed as Auditors.

Based on the recommendation of the Audit Committee, the Board of Directors proposes the appointment of M/s. Kanu Doshi & Co., Chartered Accountants, as the Statutory Auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting.

M/s. Kanu Doshi & Co., Chartered Accountants, have expressed their willingness to act as Statutory Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956.

16. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo

The information relating to energy, technology absorption and foreign exchange earnings and outgo required to be disclosed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure to Directors Report.

17. Particulars of Employees

As required under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees receiving remuneration above the prescribed limit are set out in the Annexure appended to this report.

18. Personnel

Your Directors place on the record their appreciation of the contribution made by the employees at all levels who, through their competence, diligence, solidarity, co-operation and support, have enabled the Company to achieve the desired results during the year.

19. Acknowledgements

The Board of Directors wishes to acknowledge the invaluable support extended to the Company by the Financial institutions, Bankers, Vendors, Suppliers, Shareholders and Customers. The Directors are pleased to place on record their appreciation for the valuable contribution made by the employees of the Company.

For and on behalf of the Board of Directors

Sd/- Place: Mumbai Yashovardhan Birla Date: 10.08.2010 Co-Chairman