Directors Report of Eskay Kn'IT (India) Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Twenty Eighth Annual Report of ESKAY K'N'IT (INDIA) LIMITED along with the Audited Statements of Accounts for the Financial Year ended 31st March, 2015.

FINANCIAL HIGHLIGHTS: (Rs. in Lacs)

Particulars 2014-15 2013-14

Revenue from operations 43,477.75 51,419.53

Finance Cost 4666.28 5,109.90

Depreciation and amortization Expense 3230.98 4,237.88

Profit/ (Loss) before exceptional and extraordinary items and tax (24,406.27) (14,838.84)

Exceptional items ---- ----

Extraordinary items ---- ----

Profit/ (Loss) before tax (24,406.27) (14,838.84)

Deferred Tax Assets/(Liabilities) (444.89) (20.15)

Provision for Taxation 0.00 0.00

Net Profit/(Loss) (23,961.38) (14,859.01)

COMPANY PERFORMANCE:

During the year, the Revenue from operations of the Company has substantially decreased to Rs. 43,477.75 Lacs as against Rs. 51,419.53 Lacs in respect of the previous Financial Year ended 31st March, 2014. The Company has suffered Loss before Tax Rs. 24,406.27 Lacs in the financial year ended 31st March, 2015 as against loss of Rs. 14,838.84 Lacs in the previous financial year ended 31st March, 2014. The Company has Net Loss of Rs. 23,961.38 Lacs after considering deferred tax of Rs. 444.89 Lacs as against Net Loss of Rs 14,859.01 Lacs in the previous financial year ended 31st March, 2014. However, there is no cash loss during the year.

The Company has incurred Substantial losses due to markets resulting in poor sales.

The company experienced that the efficiency of plant and machineries, especially Spinning Machines have gone down and set up an in house Expert Group to suggest measures for Technology up gradation and Modernization. As per their recommendations, old machines including Ring Frames, requiring expenditure towards repairs and maintenance consuming high power with low out put have been identified and shifted to workshop/godowns for appropriate action.

Further, the Company after incurring huge losses and eroding its net worth completely had made an application to be registered as a Sick Company with Board for Industrial and Financial Reconstruction vide a Resolution passed by the Board of Directors on 12th February, 2015. The Company has been registered as a Sick Company.

During the Year under review, the Company the Company does not have any subsidiary, associate or joint venture companies

DIVIDEND:

In view of Loss of the Current year, your Directors are unable to recommend any dividend on the equity shares for the year under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The Board of Directors of the Company had appointed Shri Suraj Singh (DIN: 06923815) and Ms. Manasi Indrajit Wadkar (DIN: 05309693) as an Additional Directors w.e.f. 14th August, 2014 and 14th November, 2014. Pursuant to the provisions of Section 161 of the Companies Act, 2013, Shri Suraj Singh and Ms.. Manasi Indrajit Wadkar shall hold office upto the date of ensuing Annual General Meeting. The Notice pursuant to Section 160 of the Companies Act, 2013, has been received from the Members proposing the candidature of Shri Suraj Singh and Ms. Manasi Indrajit Wadkar for appointment as Directors of the Company.

All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Clause 49 of the Listing Agreement entered into with the Stock Exchanges. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.

Further, as required under Section 203(1) of the Companies Act, 2013, Company has appointed Shri Vinay Goyal as a Chief

Financial Officer designated as a Key Managerial Personnel of the Company

Shri Narendra Saini has resigned as a Company Secretary of the Company w.e.f. 8th June, 2014.

Further, Shri Omesh Bohara has been appointed as a Company Secretary w.e.f. 07th July, 2014.

ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.

The Board's functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.

Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings. In addition, the Chairperson was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director.

Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairperson and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole.

The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors. The Chairperson of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The Directors are happy to state that the relations between the Company and its Employee remained cordial throughout the year. The Directors acknowledge and express their appreciation for the contributions made by the employees at all levels. Focused attention was given for knowledge updating and application of new technologies available to reduce costs and to meet the business challenges.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, none of the employees drew remuneration of Rs. 60,00,000/- or more per annum/ Rs. 5,00,000/- or more per month during the year or drew remuneration in excess of the remuneration drawn by Managing Director or Whole-time Directors or Manager and does not hold either by himself or through his spouse or dependent children 2 per cent or more equity shares of the company. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure -C forming a part of Annual Report.

In terms of the provisions of Section 136(1) read with its relevant proviso of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee and free of cost.

REPORT ON CORPORATE GOVERNANCE:

Your Company is fully compliant with the Corporate Governance guidelines, as laid out in Clause 49 of the Listing Agreement. All the Directors (and also the members of the Senior Management) have affirmed in writing their compliance with and adherence to the Code of Conduct adopted by the Company. The details of the Code of Conduct are furnished in the Corporate Governance Report attached to this Report. The Managing Director has given a certificate of compliance with the Code of Conduct, which forms part this Directors' Report, as required under Clause 49 of the Listing Agreement.

M/s. A. F. Khasgiwala & Co., Practicing Chartered Accountants, Statutory Auditor of the Company have examined the requirements of Corporate Governance with reference to Clause 49 of the Listing Agreement and have certified the compliance, as required under Clause 49 of the Listing Agreement. The Certificate in this regard is attached to this Report.

The Managing Director certification as required under Clause 41 of the Listing Agreement is attached to this Report.

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in form MGT.9 is annexed as Annexure A.

BOARD AND COMMITTEE MEETINGS:

A calendar of Board and Committee Meetings to be held during the year was circulated in advance to the Directors. 6 (Six) Board Meetings were convened and held during the year.

The Board has constituted an Audit Committee with Shri Naresh Sharma as Chairperson and Shri Shri Manmohan Ahluwalia and Shri Trivendra Singh as the Members. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board.

The Company has also constituted various other Committees viz. Nomination & Remuneration Committee, Stakeholder Relationship Committee, Risk Management Committee and Management and Finance Committee, Sexual Harassment Committee.

Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report Attached to this Directors' Report.

The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Agreement.

DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanations Obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a. that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date;

c. that 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 safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNAL IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE

There are no significant material orders passed by the Regulators / Courts / Tribunal which would impact the going concern status of the Company and its future operations. Hence, disclosure pursuant to Rule 8 (5) (vii) of Companies (Accounts) Rules, 2014 is not required.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in Note 2.3 of the Notes to the financial statements.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company familiarizes its Independent Directors with the Company, their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company etc. through various programmers.

The details of such familiarization programmed shall be disclosed on the Company's website at the following web link: http:// eskayknitindia.com /wp/

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the Chairman & Managing Director. The Internal Audit Department monitors and evaluates the efficiency and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviours of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Company's website www.eskayknitindia.com The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behaviour from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexure, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement.

RELATED PARTY TRANSACTIONS:

All transactions entered by the Company with Related Parties were in the Ordinary Course of Business and at Arm's Length pricing basis. There were no materially significant transactions with Related Parties during the financial year 2014-15 which were in conflict with the interest of the Company. Suitable disclosures as required under AS-18 have been made in Notes to the financial statements.

The Company has also adopted Related Party Transaction Policy as required under Clause 49 of the Listing Agreement.

The Board has approved the policy on Related Party Transactions and Material Subsidiary. The policies have been uploaded on the Company's website, under the web link: http:// eskayknitindia.com/wp/related-party-transactions/

Material changes and commitments affecting the financial position of the Company which have occurred between March 31,2015 and 5th August, 2015:

There were no material changes and commitments affecting the financial position of the Company between the end of financial year (March 31, 2015) and the date of the Report 5th August, 2015).

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure B to the Board's report.

CONSERVATION OF ENERGY:

a) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilisation and maximum possible savings of energy is achieved.

b) No specific investment has been made in reduction in energy consumption.

c) As the impact of measures taken for conservation and optimum utilisation of energy are not quantitative, its impact on cost cannot be stated accurately.

TECHNOLOGY ABSORPTION:

Company's products are manufactured by using in-house know how and no outside technology is being used for manufacturing activities. Therefore no technology absorption is required. The Company constantly strives for maintenance and improvement in quality of its products and entire Research & Development activities are directed to achieve the aforesaid goal.

FOREIGN EXCHANGE EARNINGS AND OUT-GO:

During the period under review there was no foreign exchange earnings or out flow.

REMUNERATION POLICY:

The Remuneration policy of the Company comprising the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other related matters has been provided in the Corporate Governance Report which is attached to this Report.

RISK MANAGEMENT:

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Clause 49 of the Listing Agreement. It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk.

The Internal Audit Department facilitates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. Through this programme, each Function and Unit addresses opportunities and risks through a comprehensive approach aligned to the Company's objectives. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status.

The Company has also constituted the Risk Management Committee to review and operate the Risk Management Policy from time to time.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairperson of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE:

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has not received any complaint of sexual harassment during the financial year 2014-15.

SAFETY, HEALTH AND ENVIRONMENT:

Sustained and meticulous efforts continue to be exercised by the Company at all plants of the Company, towards greener production and environment conservation. The Company perseveres in its efforts to indoctrinate safe and environmentally accountable behavior in every employee, as well as vendors, by rigid compulsory annual training and refresher courses, as well as frequent awareness programme. Mock drills of emergency preparedness are regularly conducted at all the plants showing Company's commitment towards safety, not only of its own men and plants, but also of the society at large.

Safety records, at all plants showed considerable improvement and accident statistics showed downward trend. This was made possible by strict adherence to laid down procedures and following of international guidelines. Involvement of workers in all safety matters has been encouraged by their participation in shop floor safety meetings. To achieve the goals, environment protection systems and processes are well in place. To meet the challenge of environment protection in a proactive manner, unavoidable wastes are dealt with in the most efficient and scientific way.

The health of employees and the environment in and around the Plant area have been given due care and attention. The Company continued to comply with the prescribed industrial safety environment protection and pollution control regulation at its production plant, through periodic checks of the system involved and constant monitoring to meet the standards set by the pollution control authorities, etc.

All the mills of the Company are eco-friendly and do not generate any harmful effluents. They have facilities for captive power generation as a stand-by arrangement, to meet any contingency. Safety devices have been installed wherever necessary, although both the spinning and knitting activities are known to be quite safe and free from usual hazards of water and air pollution.

INDUSTRIAL REALATIONS & HUMAN RESOURCES MANAGEMENT:

The Company is of firm belief that good Human Resource Management would ensure success through high performance. HR strategy and plans of the Company are deeply embedded with the organizational goals. In order to enhance the manpower productivity the goal is set to increase the production capacity of the various plants and rationalize the manpower through scientific study. All the operational goals of the top management emanate from the business plan. The goals of MD are shared with his subordinates who in turn share their goal with their respective subordinates and so on. Regular visits by HR team are being made to all the plants to meet the employees and also interaction meetings are conducted to get their feed back, based on which HR policies are improved continuously. The process has resulted in better employee relationship.

The Company lays due emphasis on all round development of its human resource. Hence training of the employees is aimed at systematic development of knowledge, skills, aptitude and team work. Training is designed for the development of personal skills necessary for the performance of the present job and to prepare them for future growth. Individual development is given top priority to groom high caliber manpower.

FIXED DEPOSITS:

The Company has not invited/received any Fixed Deposits from the Public during the year under report.

INSURANCE:

The properties / assets of your Company are adequately insured.

AUDITORS:

Statutory Auditors:

M/s. A. F. Khasgiwala & Co., Chartered Accountants, (Membership No. 006491, Firm Registration No. 105114W) had been appointed for a period of 3 (Three) consecutive years at the 27th Annual General Meeting of the Company held on 19th July, 2014, subject to ratification of such appointment by the Members at every subsequent Annual General Meeting.

Further, the Company has received the consent and eligibility of the Statutory Auditor under Sections 139 and 141 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 for continuing as the Auditors of the Company.

As required under Clause 41 of the Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Audit Committee and the Board of Directors have recommended the ratification of the appointment of the Statutory Auditors for the Financial Year 2015-16.

The necessary resolution is being placed before the shareholders for approval.

Internal Auditors:

Your Board had appointed M/s. Rakesh M. Agarwal & Co., Chartered Accountants as Internal Auditor of the Company for the Financial Year 2014-15 However, they had resigned from the Company. Therefore your Board had appointed M/s. Koshal Gupta & Co., Chartered Accountants as the Internal Auditor of the Company for the quarter starting from 1st January 2015 to 31st March, 2015.

Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Kothari Singhai & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2015. The Secretarial Audit Report is annexed as Annexure D.

ACKNOWLEDGEMENT:

The Directors have pleasure in recording their appreciation of the assistance, co-operation and support extended to your Company by the shareholders, all Government Authorities, Financial Institutions, Banks, Consultants, Solicitors and Customers.

For and on behalf of the Board of Directors Sd/-

Manasi Wadkar Place: Mumbai Chairperson Date: 5th August, 2015 (DIN: 05309693)

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Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Twentieth Seven Report of ESKAY K''N''IT (INDIA) LIMITED along with the Audited Statements of Accounts for the Financial Year ended 31st March, 2014.

FINANCIAL HIGHLIGHTS:

Particulars 2013-14 2012-13 (Rs in Lacs) (Rs in Lacs)

Revenue from operations 51,419.53 63,096.68

Finance Cost 5,109.90 5,228.86

Depreciation and amortization Expense 4,237.88 5,976.00

Profit/(Loss) before exceptional and extraordinary items and tax (14,838.84) (14,473.17)

Exceptional items — —

Extraordinary items — —

Profit/(Loss) before tax (14,838.84) (14,473.18)

Deferred Tax Assets/(Liabilities) (20.15) (277.68)

Provision for Taxation — —

Net Profit/(Loss) (14,859.01) (14,195.50)

DIVIDEND:

In view of Loss of the Current year, your Directors are unable to recommend any dividend on the equity shares for the year under review.

REVIEW OF OPERATIONS:

During the year, the Revenue from operations of the Company has substantially decreased to Rs 51,419.53 Lacs as against Rs 63,096.68 Lacs in respect of the previous Financial Year ended 31st March, 2013. The Company has suffered Loss before Tax Rs 14,838.84 Lacs in the financial year ended 31st March, 2014 as against loss of Rs 14,473.17 Lacs in the previous financial year ended 31st March, 2013. The Company has Net Loss of Rs 14,859.01 Lacs after considering deferred tax of Rs 20.15 Lacs as against Net Loss of Rs 14,195.50 Lacs in the previous financial year ended 31st March, 2013. However, there is no cash loss during the year.

The Company has incurred Substantial losses due to markets resulting in poor sales.

Further, the year ended 31.03.2014, the net worth of the Company has eroded and the Company has become Sick Industrial Company as per the provisions of the Sick Industrial Companies (Special Provision) Act, 1985 (SICA) and the Company is required to make reference with the Board for Industrial and Financial Reconstruction (BIFR), Necessary Compliances will be made in accordance with the provision of SICA.

DIRECTORS:

As per provisions of Section 149, 150, 152 and any other applicable provisions of Companies Act, 2013 and the rule made thereunder read with schedule IV to the Companies Act, 2013, Shri Narayan Ghumatkar, Shri Naresh Chandra Sharma and Shri Manmohan Balbir Ahluwalia, all existing Independent Directors of the Company, have been appointed as on Independent Directors of Company shall hold office from the date of this Annual General Meeting till 18th July, 2019. They shall not, henceforth be liable to determination by retirement of Directors by rotation.

During the year, Shri Anand Zawar, Shri Navin Kumar Tayal, have resigned from the Directorship of the Company w. e. f. 30th October, 2013, 26th February, 2014. The Board of Directors place on records the valuable services rendered by her and Contribution made by her during her tenure as a Director, in the growth of the Company.

On 30th October, 2013 the Board recorded the resignation of Shri Anand Zawar, Managing Director of the Company. Therefore The Board of Directors of the Company had appointed Shri Trivendra Singh, as a Managing Director in their Meeting held on 13th November, 2013 w.e.f. 13th November, 2013 and given their approval for the appointment of Shri Trivendra Singh as the Managing Director of the Company on the terms and conditions as mentioned in the Notice of AGM.

Further, the Board of Directors of the Company had appointed Shri Narayan Ghumatkar as an Additional Directors w.e.f. 27th February, 2014, respectively. Pursuant to the provisions of Section 160 of the Companies Act, 2013, Shri Narayan Ghumatkar shall hold office upto the date of ensuing Annual General Meeting. The Notice pursuant to Section 161 of the Companies Act, 2013, has been received from the Member proposing the candidature of Shri Narayan Ghumatkar for a appointed as Directors of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Director''s Responsibilities Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts for the financial year ended 31st March 2014, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(ii) That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the statement of Profit or Loss of the Company for the year under review;

(iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

(iv) That the Directors had prepared the accounts for the financial year ended 31st March 2014 on a ''going concern basis.''

(v) That the accounts have been prepared on the basis of Revised Schedule VI to the Companies Act. Accordingly the previous year''s figures have adjusted/regrouped/rearranged to confirm with the current year figures.

AUDIT COMMITTEE:

The composition of Audit Committee is in accordance with the clause 49 of the Listing Agreement and the detailed information is given in the Report on Corporate Governance.

SHARE TRANSFER AND INVESTOR GRIEVANCES COMMITTEE:

The composition of Shareholders''/Investor Grievance Committee is as given in the Report on Corporate Governance.

REPORT ON CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report and a Corporate Governance Report are made as a part of this Annual Report.

A Certificate from M/s. A. F Khasgiwala, Practicing Chartered Accountants regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreement is attached to this report.

SAFETY, HEALTH AND ENVIRONMENT:

Sustained and meticulous efforts continue to be exercised by the Company at all plants of the Company, towards greener production and environment conservation. The Company perseveres in its efforts to indoctrinate safe and environmentally accountable behavior in every employee, as well as vendors, by rigid compulsory annual training and refresher courses, as well as frequent awareness programme. Mock drills of emergency preparedness are regularly conducted at all the plants showing Company''s commitment towards safety, not only of its own men and plants, but also of the society at large.

Safety records, at all plants showed considerable improvement and accident statistics showed downward trend. This was made possible by strict adherence to laid down procedures and following of international guidelines. Involvement of workers in all safety matters has been encouraged by their participation in shop floor safety meetings. To achieve the goals, environment protection systems and processes are well in place. To meet the challenge of environment protection in a proactive manner, unavoidable wastes are dealt with in the most efficient and scientific way.

The health of employees and the environment in and around the Plant area have been given due care and attention. The Company continued to comply with the prescribed industrial safety environment protection and pollution control regulation at its production plant, through periodic checks of the system involved and constant monitoring to meet the standards set by the pollution control authorities, etc.

All the mills of the Company are eco-friendly and do not generate any harmful effluents. They have facilities for captive power generation as a stand-by arrangement, to meet any contingency. Safety devices have been installed wherever necessary, although both the spinning and knitting activities are known to be quite safe and free from usual hazards of water and air pollution.

INDUSTRIAL REALATIONS & HUMAN RESOURCES MANAGEMENT:

The Company is of firm belief that good Human Resource Management would ensure success through high performance. HR strategy and plans of the Company are deeply embedded with the organizational goals. In order to enhance the manpower productivity the goal is set to increase the production capacity of the various plants and rationalize the manpower through scientific study. All the operational goals of the top management emanate from the business plan. The goals of MD are shared with his subordinates who in turn share their goal with their respective subordinates and so on. Regular visits by HR team are being made to all the plants to meet the employees and also interaction meetings are conducted to get their feed back, based on which HR policies are improved continuously. The process has resulted in better employee relationship.

The Company lays due emphasis on all round development of its human resource. Hence training of the employees is aimed at systematic development of knowledge, skills, aptitude and team work. Training is designed for the development of personal skills necessary for the performance of the present job and to prepare them for future growth. Individual development is given top priority to groom high caliber manpower.

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

The particulars relating to energy conversation, technology absorption, 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 given in the Annexure forming part of this Report.

LISTING AGREEMENT:

Your Company is committed to the adoption of good Corporate Governance practices in letter and spirit. Under the revised Clause 49 of the Listing Agreement, your Directors are pleased to inform that Company has implemented all the mandatory stipulations prescribed under Clause 49, A Certificate from a Practicing Company Secretary in line with Clause 49 is annexed to end forms part of the Directors Report.

EMPLOYEES:

The Directors are happy to state that the relations between the Company and its Employee remained cordial throughout the year. The Directors acknowledge and express their appreciation for the contributions made by the employees at all levels. Focused attention was given for knowledge updating and application of new technologies available to reduce costs and to meet the business challenges.

None of the employees drew remuneration of Rs 60,00,000/- or more per annum/ Rs 5,00,000/- or more per month during the year. This information is furnished as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

FIXED DEPOSITS:

The Company has not invited/received any Fixed Deposits from the Public during the year under report.

INSURANCE:

The properties / assets of your Company are adequately insured.

AUDITORS:

M/s. A. F. Khasgiwala & Co., Chartered Accountants, the Statutory Auditor of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are being eligible for reappointment. The Company has received a letter from M/s. A. F. Khasgiwala & Co. to the effect that their reappointment as Statutory Auditors, if made, would be within the limits under Section 139 of the Companies Act, 2013.

ACKNOWLEDGEMENT:

The Directors have pleasure in recording their appreciation of the assistance, co-operation and support extended to your Company by the shareholders, all Government Authorities, Financial Institutions, Banks, Consultants, Solicitors and Customers.

By the order of the Board of Directors

Sd/- Place : Mumbai Trivendra Singh Date : 30th May, 2014 Chairman & Managing Director

---

Mar 31, 2013

To, THE SHAREHOLDERS,

The Board of Directors hereby presents the 26th Annual Report on the business and operations of your Company along with the Audited Statements of Accounts for the Financial Year ended 31st March, 2013.

FINANCIAL HIGHLIGHTS:

Particulars 2012-13 2011-12 (Rs. in Lacs) (Rs. in Lacs)

Revenue from operations 63,096.68 1,05,153.42

Finance Cost 5,228.86 4,960.97

Depreciation and amortization Expense 5,976.00 8,179.22

Profit/(Loss) before exceptional and extraordinary items and tax (14,473.18) (6,329.59)

Exceptional items

Extraordinary items

Profit/(Loss) before tax (14,473.18) (6,329.59)

Deferred Tax Assets (277.68) 703.45

Provision for Taxation

Net Profit/(Loss) (14,195.50) (5,626.14)

DIVIDEND:

In view of Loss of the Current year, your Directors are unable to recommend any dividend on the equity shares for the year under review.

REVIEW OF OPERATIONS:

During the year, the Revenue from operations of the Company has substantially decreased to Rs. 63,096.68 Lacs as against Rs. 1,05,153.42 Lacs in respect of the previous Financial Year ended 31st March, 2012. The Company has suffered Loss before Tax Rs. 14,473.18 Lacs in the financial year ended 31st March, 2013 as against loss of Rs. 6,329.59 Lacs in the previous financial year ended 31st March, 2012. The Company has Net Loss of Rs. 14,195.50 Lacs after considering deferred tax of Rs. 277.68 Lacs as against Net Loss of Rs. 5,626.14 Lacs in the previous financial year ended 31st March, 2012. However, there is no cash loss during the year.

Based on the recommendation of inhouse Expert Group, the Company has initiated the process of technology upgradation and modernization of plants and machineries, specially spinning machines, to improve the efficiency. Accordingly, machines including Ring Frames which are idle, requiring huge capital expenditure towards repairs and maintenance consuming high power with low output have been identified and shifted to workshop/godowns for appropriate action. The Company had raised unsecured loan in the earlier years. However, due to liquidity crunch, the Company was unable to pay interest and installments on time. These lenders had asked to either liquidate the loan or to provide some additional collateral security. In order to avoid litigation with these unsecured lenders, the promoters of the Company have pledged 145022278 shares held in the Company to these lenders. The promoters have also agreed to pledge balance 15950000 shares held in the Company with the banks as per CDR scheme.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri Navin Kumar Tayal and Shri Manmohan Ahluwaliya, Directors of the Company, retire by rotation and being eligible, have offered themselves for re-appointment.

During the year, Shri Mahesh Prasad Mehrotra, Shri Sanjeev Sharma and Shri Ajay Ramesh Gupta, have resigned from the Directorship of the Company w.e.f. 16th July, 2012, 7th August, 2012 and 20th December, 2012. The Board of Directors place on records the valuable services rendered by her and Contribution made by her during her tenure as a Director, in the growth of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Director''s Responsibilities Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts for the financial year ended 31st March, 2013, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(ii) That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the statement of Profit or Loss of the Company for the year under review;

(iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

(iv) That the Directors had prepared the accounts for the financial year ended 31st March, 2013 on a ''going concern basis.''

(v) That the accounts have been prepared on the basis of Revised Schedule VI to the Companies Act. Accordingly the previous year''s figures have adjusted/regrouped/rearranged to confirm with the current year figures.

AUDIT COMMITTEE:

The composition of Audit Committee is in accordance with the clause 49 of the Listing Agreement and the detailed information is given in the Report on Corporate Governance.

SHARE TRANSFER AND INVESTOR GRIEVANCES COMMITTEE:

The composition of Shareholders''/Investor Grievance Committee is as given in the Report on Corporate Governance.

REPORT ON CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report and a Corporate Governance Report are made as a part of this Annual Report.

A Certificate from M/s. A. F. Khasgiwala, Practicing Chartered Accountants regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreement is attached to this report.

SAFETY, HEALTH AND ENVIRONMENT:

Sustained and meticulous efforts continue to be exercised by the Company at all plants of the Company, towards greener production and environment conservation. The Company perseveres in its efforts to indoctrinate safe and environmentally accountable behavior in every employee, as well as vendors, by rigid compulsory annual training and refresher courses, as well as frequent awareness programme. Mock drills of emergency preparedness are regularly conducted at all the plants showing Company''s commitment towards safety, not only of its own men and plants, but also of the society at large.

Safety records, at all plants showed considerable improvement and accident statistics showed downward trend. This was made possible by strict adherence to laid down procedures and following of international guidelines. Involvement of workers in all safety matters has been encouraged by their participation in shop floor safety meetings. To achieve the goals, environment protection systems and processes are well in place. To meet the challenge of environment protection in a proactive manner, unavoidable wastes are dealt with in the most efficient and scientific way.

The health of employees and the environment in and around the Plant area have been given due care and attention. The Company continued to comply with the prescribed industrial safety environment protection and pollution control regulation at its production plant, through periodic checks of the system involved and constant monitoring to meet the standards set by the pollution control authorities, etc.

All the mills of the Company are eco-friendly and do not generate any harmful effluents. They have facilities for captive power generation as a stand-by arrangement, to meet any contingency. Safety devices have been installed wherever necessary, although both the spinning and knitting activities are known to be quite safe and free from usual hazards of water and air pollution.

INDUSTRIAL REALATIONS & HUMAN RESOURCES MANAGEMENT:

The Company is of firm belief that good Human Resource Management would ensure success through high performance. HR strategy and plans of the Company are deeply embedded with the organizational goals. In order to enhance the manpower productivity the goal is set to increase the production capacity of the various plants and rationalize the manpower through scientific study. All the operational goals of the top management emanate from the business plan. The goals of MD are shared with his subordinates who in turn share their goal with their respective subordinates and so on. Regular visits by HR team are being made to all the plants to meet the employees and also interaction meetings are conducted to get their feed back, based on which HR policies are improved continuously. The process has resulted in better employee relationship.

The Company lays due emphasis on all round development of its human resource. Hence training of the employees is imed at systematic development of knowledge, skills, aptitude and team work. Training is designed for the development of personal skills necessary for the performance of the present job and to prepare them for future growth. Individual development is given top priority to groom high caliber manpower.

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

Information in accordance with the provisions of 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, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are given in the Annexure forming part of this Report.

CORPORATE SOCIAL RESPONSIBILITY:

The Company, in keeping with its Corporate Social Responsibility policy, focuses on healthcare, education, and other social initiatives. We continue to strive for sustainability in our operations by promoting the integration of CSR into our business strategy as well as our everyday functioning. During the year under review, we focused on providing residence to our labourers along with school & educational facilities to their children and also maintaining consistent duty towards fellow employees of our organisation.

EMPLOYEES:

The Directors are happy to state that the relations between the Company and its Employee remained cordial throughout the year. The Directors acknowledge and express their appreciation for the contributions made by the employees at all levels. Focused attention was given for knowledge updating and application of new technologies available to reduce costs and to meet the business challenges.

None of the employees drew remuneration of Rs. 60,00,000/- or more per annum / Rs. 5,00,000/- or more per month during the year. This information is furnished as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

FIXED DEPOSITS:

The Company has not invited/received any Fixed Deposits from the Public during the year under report.

INSURANCE:

The properties / assets of your Company are adequately insured.

AUDITORS:

M/s. A. F. Khasgiwala & Co., Chartered Accountants, the Statutory Auditor of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are being eligible for reappointment. The Company has received a letter from M/s. A. F. Khasgiwala & Co. to the effect that their reappointment as Statutory Auditors, if made, would be within the limits under Section 224(1B) of the Companies Act, 1956.

ACKNOWLEDGEMENT:

The Directors have pleasure in recording their appreciation of the assistance, co-operation and support extended to your Company by the shareholders, all Government Authorities, Financial Institutions, Banks, Consultants, Solicitors and Customers. For and on Behalf of the Board of Directors

Sd/-

Place : Mumbai Navin Kumar Tayal

Date : 28th May, 2013 Chairman

---

Mar 31, 2012

The Board of Directors hereby presents the 25th Annual Report on the business and operations of your Company along with the Audited Statements of Accounts for the Financial Year ended 31st March, 2012.

FINANCIAL HIGHLIGHTS:

Particulars 2011-12 2010-11 (Rs in Lacs) (Rs in Lacs)

Revenue from operations 1,05,153.42 93,015.07

Finance Cost 4,960.97 3,943.67

Depreciation and amortization Expense 8,179.22 7,855.16

Profit/ (Loss) before exceptional and extraordinary items and tax (6,329.59) 31.65

Exceptional items - -

Extraordinary items - -

Profit/ (Loss) before tax (6,329.59) 31.65

Deferred Tax Assets 703.45 619.87

Provision for Taxation 0.00 6.31

Net Profit/(Loss) (5,626.14) 645.21

DIVIDEND :

In view of Loss of the Current year, your Directors are unable to recommend any dividend on the equity shares for the year under review.

REVIEW OF OPERATIONS :

During the year, the Revenue from operations of the Company has substantially increased to Rs 1,05,153.42 Lacs as against Rs 93,015.07 Lacs in respect of the previous Financial Year ended 31st March, 2011, registering a growth of around 13% over the previous Financial Year. The Company has suffered Loss before Tax Rs 6,329.59 Lacs in the financial year ended 31st March, 2012 as against profit of Rs 31.65 Lacs in the previous financial year ended 31st March, 2011. The Company has Net Loss of Rs 5,626.14 Lacs after considering deferred tax of Rs 703.45 Lacs as against Net Profit of Rs 645.21 Lacs in the previous financial year ended 31st March, 2011. However, there is no cash loss during the year.

CORPORATE DEBT RESTRUCTURING :

The Company has entered into the scheme of Debt Restructuring with the present Consortium Lenders, as the Company has suffered huge losses during the current year on account of volatility in the cotton prices, increase in power cost and heavy burden of Rate of Interest (Interest Rate increased from 11-12% to 15-17%) and the proposal for the same has been duly filed with Corporate Debt Restructuring Cell.

DIRECTORS :

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri Mahesh Prasad Mehrotra and Shri Naresh Chandra Sharma, Directors of the Company, retire by rotation and being eligible, have offered themselves for re-appointment.

During the year, Ms. Mrinal Tayal, has resigned from the Directorship of the Company w.e.f. 1st November, 2011. The Board of Directors place on record the valuable services rendered by her and Contribution made by her during her tenure as a Director, in the growth of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT :

Pursuant to requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Director's Responsibilities Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts for the financial year ended 31st March 2012, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(ii) That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the statement of Profit or Loss of the Company for the year under review;

(iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

(iv) That the Directors had prepared the accounts for the financial year ended 31st March 2012 on a 'going concern basis'.

(v) That the accounts have been prepared on the basis of Revised Schedule VI to the Companies Act. Accordingly the previous years figures have adjusted/regrouped/rearranged to confirm with the current year figures.

AUDIT COMMITTEE :

The composition of Audit Committee is in accordance with the clause 49 of the Listing Agreement and the detailed information is given in the Report on Corporate Governance.

SHARE TRANSFER AND INVESTOR GRIEVANCES COMMITTEE :

The composition of Shareholders'/Investor Grievance Committee is as given in the Report on Corporate Governance.

REPORT ON CORPORATE GOVERNANCE :

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report and a Corporate Governance Report are made as a part of this Annual Report.

A Certificate from M/s. A. F. Khasgiwala, Practicing Chartered Accountants regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreement is attached to this report.

SAFETY, HEALTH AND ENVIRONMENT :

Sustained and meticulous efforts continue to be exercised by the Company at all plants of the Company, towards greener production and environment conservation. The Company perseveres in its efforts to indoctrinate safe and environmentally accountable behaviour in every employee, as well as vendors, by rigid compulsory annual training and refresher courses, as well as frequent awareness programme. Mock drills of emergency preparedness are regularly conducted at all the plants showing Company's commitment towards safety, not only of its own men and plants, but also of the society at large.

Safety records, at all plants showed considerable improvement and accident statistics showed downward trend. This was made possible by strict adherence to laid down procedures and following of international guidelines. Involvement of workers in all safety matters has been encouraged by their participation in shop floor safety meetings. To achieve the goals, environment protection systems and processes are well in place. To meet the challenge of environment protection in a proactive manner, unavoidable wastes are dealt with in the most efficient and scientific way.

The health of employees and the environment in and around the Plant area have been given due care and attention. The Company continued to comply with the prescribed industrial safety environment protection and pollution control regulation at its production plant, through periodic checks of the system involved and constant monitoring to meet the standards set by the pollution control authorities, etc.

All the mills of the Company are eco-friendly and do not generate any harmful effluents. They have facilities for captive power generation as a stand-by arrangement, to meet any contingency. Safety devices have been installed wherever necessary, although both the spinning and knitting activities are known to be quite safe and free from usual hazards of water and air pollution.

INDUSTRIAL REALATIONS & HUMAN RESOURCES MANAGEMENT :

The Company is of firm belief that good Human Resource Management would ensure success through high performance. HR strategy and plans of the Company are deeply embedded with the organizational goals. In order to enhance the manpower productivity the goal is set to increase the production capacity of the various plants and rationalize the manpower through scientific study. All the operational goals of the top management emanate from the business plan. The goals of MD are shared with his subordinates who in turn share their goal with their respective subordinates and so on. Regular visits by HR team are being made to all the plants to meet the employees and also interaction meetings are conducted to get their feed back, based on which HR policies are improved continuously. The process has resulted in better employee relationship.

The Company lays due emphasis on all round development of its human resource. Hence training of the employees is aimed at systematic development of knowledge, skills, aptitude and team work. Training is designed for the development of personal skills necessary for the performance of the present job and to prepare them for future growth. Individual development is given top priority to groom high caliber manpower.

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

Information in accordance with the provisions of 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, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are given in the Annexure forming part of this Report.

CORPORATE SOCIAL RESPONSIBILITY:

The Company, in keeping with its Corporate Social Responsibility policy, focuses on healthcare, education, and other social initiatives. We continue to strive for sustainability in our operations by promoting the integration of CSR into our business strategy as well as our everyday functioning. During the year under review, we focused on providing residence to our labourers along with school & educational facilities to their children and also maintaining consistent duty towards fellow employees of our organisation.

EMPLOYEES :

The Directors are happy to state that the relations between the Company and its Employee remained cordial throughout the year. The Directors acknowledge and express their appreciation for the contributions made by the employees at all levels. Focused attention was given for knowledge updating and application of new technologies available to reduce costs and to meet the business challenges.

None of the employees drew remuneration of Rs 60,00,000/- or more per annum/ Rs 5,00,000/- or more per month during the year. This information is furnished as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

FIXED DEPOSITS:

The Company has not invited/received any Fixed Deposits from the Public during the year under report.

INSURANCE :

The properties / assets of your Company are adequately insured.

COST AUDIT :

The Central Government's Cost Audit Committee Order specifies audit of Cost Accounting Records for certain products of the company every year. The Board of Directors, subject to the approval of the Central Government, have appointed M/s J. K. Kabra & Co., Cost Accountants, as Cost Auditors to carry out this audit in respect of manufacture of textile products for the year ending 31st March 2012.

AUDITORS :

M/s. A. F. Khasgiwala & Co., Chartered Accountants, the Statutory Auditor of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are being eligible for reappointment. The Company has received a letter from M/s. A. F. Khasgiwala & Co. to the effect that their reappointment as Statutory Auditors, if made, would be within the limits under Section 224(1B) of the Companies Act, 1956.

ACKNOWLEDGEMENT :

The Directors have pleasure in recording their appreciation of the assistance, co-operation and support extended to your Company by the shareholders, all Government Authorities, Financial Institutions, Banks, Consultants, Solicitors, Customers.

By the order of the Board of Directors

Sd/-

Place: Mumbai Navin Kumar Tayal

Date: 27th April, 2012 Chairman

---

Mar 31, 2011

THE SHAREHOLDERS,

The Directors have pleasure in presenting 24th Annual Report on the business and operations of your Company and the Audited Statements of Accounts for the Financial Year ended 31st March 2011.

FINANCIAL HIGHLIGHTS

Particulars 2010-11 2009-10

(Rs. in Lacs) (Rs. in Lacs)

Sales 93000.95 81675.56

Other Income 14.12 1.31

Profit (Loss) Before Depreciation, Interest and Tax 11830.48 11011.32

Interest & Finance Charges 3943.67 2678.80

Depreciation 7855.16 8027.78

Profit (Loss) before Tax 31.65 304.74

Add: Deferred Tax Assets 619.87 727.42

Less: Provision for Taxation 6.31 51.81

Net Profit (Loss) after Tax 645.21 980.35

Balance brought forward from previous year 7526.22 6545.87

Surplus (Deficit) carried to Balance Sheet 8171.42 7526.22

DIVIDEND

In view of current year inadequate profits, your Directors do not recommend any dividend on the equity shares for the year under review.

REVIEW OF OPERATIONS

The Company has achieved Sales Turnover of Rs. 93000.95 Lacs in Financial Year 2010-11 as against Rs. 81675.56 Lacs in Financial Year 2009-10 registering a growth of 13.87%.

The Company has registered Net Profit of Rs. 645.21 Lacs in Financial Year 2010-11 as against Net Profit of Rs. 980.35 Lacs in Financial Year 2009-10. During the year 2010-2011 Interest outgo of the company has registered at Rs. 3943.67 Lacs as against Rs. 2678.80 Lacs for the previous year 2009-2010. The Depreciation has registered at Rs. 7855.16 Lacs for the year 2010-11 as against Rs. 8027.78 Lacs for the previous year 2009-10.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Navin Kumar Tayal and Mr. Ajay Ramesh Gupta, Directors of the Company, retire by rotation and being eligible, have offered themselves for re-appointment. The appointment / cessation of Directors during the year 2010-11 are as below.

Sr. Name of the Director Designation Appointment/ Date of Appointment/ No. Cessation Cessation

1. Mr. Subhash Chandra Bhargava Director Cessation 22.10.2010

2. Mr. Ram Bharosey Lal Vaish Director Cessation 04.02.2011

The Board of Directors record with appreciation the valuable services rendered by Mr. Subhash Bhargava, Mr. Ram Bharosey Lal Vaish during their tenure as Directors of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibilities Statement, it is hereby confirmed:

(i) That the applicable accounting standards had been followed along with proper explanation relating to material departures; if any, except revised AS-15 relating to accounting treatment for employee benefits in case of gratuity and leave encashment which have been accounted for on cash basis;

(ii) That the selected accounting policies were applied consistently and judgments and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit and Loss of the Company for the year under review;

(iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

(iv) That the annual accounts were prepared for the financial year ended 31st March 2011 on a ‘going concern basis.

AUDIT COMMITTEE

The composition of Audit Committee is in accordance with the clause 49 of the Listing Agreement and the detailed information is given in the Report on Corporate Governance.

SHARE TRANSFER AND INVESTOR GRIEVANCES COMMITTEE

The composition of Shareholders/Investor Grievance Committee is as given in the Report on Corporate Governance.

REPORT ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report and a Corporate Governance Report are made as a part of this Annual Report.

A Certificate from M/s. A. F. Khasgiwala, Practicing Chartered Accountants regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreement is attached to this report.

SAFETY, HEALTH AND ENVIRONMENT

Sustained and meticulous efforts continue to be exercised by the Company at all plants of the company, towards greener production and environment conservation. The Company perseveres in its efforts to indoctrinate safe and environmentally accountable behavior in every employee, as well as vendors, by rigid compulsory annual training and refresher courses, as well as frequent awareness programme. Mock drills of emergency preparedness are regularly conducted at all the plants showing companys commitment towards safety, not only of its own men and plants, but also of the society at large. Safety records, at all plants showed considerable improvement and accident statistics showed downward trend. This was made possible by strict adherence to laid down procedures and following of international guidelines. Involvement of workers in all safety matters has been encouraged by their participation in shop floor safety meetings.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure forming part of this Report.

EMPLOYEES

The Directors are happy to state that the relations between the Company and its Employee remained cordial throughout the year. The Directors acknowledge and express their appreciation for the contributions made by the employees at all levels. Focused attention was given for knowledge updating and application of new technologies available to reduce costs and to meet the business challenges.

None of the employees drew remuneration of Rs. 60,00,000/- Lacs or more per annum or Rs. 5,00,000/- Lacs or more per month during the year. This information is furnished as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

FIXED DEPOSITS

The Company has not invited/received any Fixed Deposits from the Public during the year under report.

INSURANCE

The properties / assets of your Company are adequately insured.

COST AUDITORS

The Company has re-appointed M/s. J. K. Kabra & Co., Cost Accountants, as Cost Auditors in respect of manufacture of textiles for the year ending 31st March 2011, as per the directives from Cost Audit Branch, Department of Company Affairs, Ministry of Industry, Government of India, New Delhi.

AUDITORS

M/s. A. F. Khasgiwala & Co., Chartered Accountants, the Statutory Auditor of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are being eligible for reappointment. The Company has received a letter from M/s. A. F. Khasgiwala & Co. to the effect that their reappointment as Statutory Auditors, if made, would be within the limits under Section 224(1B) of the Companies Act, 1956.

ACKNOWLEDGMENT

The Directors have pleasure in recording their appreciation of the assistance, co-operation and support extended to your Company by the shareholders, all Government Authorities, Financial Institutions, Banks, Consultants, Solicitors, customers

By the order of the Board of Directors

Sd/-

Place: Mumbai NAVIN KUMAR TAYAL

Date: 29th April, 2011 Chairman

---

Mar 31, 2010

The Directors have pleasure in presenting 23rd Annual Report on the business and operations of your Company and the Audited Statements of Accounts for the Financial Year ended 31st March 2010.

FINANCIAL HIGHLIGHTS

Particulars 2009-10 2008-09 (Rs. in Lacs) (Rs. in Lacs)

Sales 81675.56 71892.20

Other Income 1.31 58.60

Profit (Loss) Before Depreciation, Interest and Tax 11011.32 12027.30

Interest & Finance Charges 2678.80 2367.04

Depreciation 8027.78 8987.74

Profit (Loss) before Tax 304.74 672.52

Add: Deferred Tax Assets 727.42 1177.58

Provision for Taxation 51.81 76.20

Net Profit (Loss) after Tax 980.35 1766.42

Balance brought forward from previous year 6545.87 4779.45

Balance available for appropriations 7526.22 6545.88

Surplus (Deficit) carried to Balance Sheet 7526.22 6545.88

DIVIDEND

In view of inadequacy of profit in current year your Directors do not recommend any dividend on the equity shares for the year under review.

REVIEW OF OPERATIONS

The Company has achieved Sales Turnover of Rs. 81675.56 Lacs Financial Year 2009-10 as against Rs. 71892.20 Lacs in Financial Year 2008-09 registering a growth of 13.60%.

The Company has registered Net Profit of Rs. 980.35 Lacs in Financial Year 2009-10 as against Net Profit of Rs. 1766.42 Lacs in Financial Year 2008-09 registering a marginal decline due to higher interest outgo of Rs. 2678.80 Lacs from Rs.2367.04 Lacs in the year under review.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Manmohan Ahluwalia and Mr. Yashpal Agarwal, Directors of the Company retire by rotation and being eligible, have offered themselves for re-appointment. The appointment /cessation of Directors during the year 2009-10 are as below.

Sr. Name of the Director Designation Appointment/ Date of Appointment/ No. Cessation Cessation

1. Mr. Ramit Agarwal Managing Director Cessation 14th October, 2009

2. Mr. Sanjeev Sharma Managing Director Appointment 14th October, 2009

3. Ms. Mrinal Tayal Additional Director Appointment 15th January, 2010

4. Mr. Raj Narain Bharadwaj Independent Director Cessation 14th March, 2010

5. Mr. V. Sridar Independent Director Cessation 15th March, 2010

6. Mr. Mahesh Prasad Mehrotra Additional Director Appointment 16th March, 2010

7. Mr. Ram Bharosey Lal Vaish Additional Director Appointment 16th March, 2010

8. Mr. Subhash Bhargava Additional Director Appointment 25th May, 2010

The Board of Directors record with appreciation the valuable services rendered by Mr. Ramit Agarwal, Mr. Raj Narain Bharadwaj and Mr. V. Sridar during their tenure as Directors of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibilities Statement, it is hereby confirmed:

(i) That the applicable accounting standards had been followed along with proper explanation relating to material departures;

if any, except revised AS-15 relating to accounting treatment for employee benefits in case of gratuity and leave encashment which have been accounted for on cash basis;

(ii) That the selected accounting policies were applied consistently and judgments and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit and Loss of the Company for the year under review;

(iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

(iv) That the annual accounts were prepared for the financial year ended 31st March 2010 on a going concern basis.

AUDIT COMMITTEE

The composition of Audit Committee is in accordance with the clause 49 of the Listing Agreement and the detailed information is given in the Report on Corporate Governance.

SHARE TRANSFER AND INVESTOR GRIEVANCES COMMITTEE

The composition of Shareholders/Investor Grievance Committee is as given in the Report on Corporate Governance.

REPORT ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report and a Corporate Governance Report are made as a part of this Annual Report.

A Certificate from M/s. A. F. Khasgiwala, Practicing Chartered Accountants regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreement is attached to this report.

SAFETY, HEALTH AND ENVIRONMENT

Sustained and meticulous efforts continue to be exercised by the Company at all plants of the company, towards greener production and environment conservation. The Company perseveres in its efforts to indoctrinate safe and environmentally accountable behavior in every employee, as well as vendors, by rigid compulsory annual training and refresher courses, as well as frequent awareness programme. Mock drills of emergency preparedness are regularly conducted at all the plants showing companys commitment towards safety, not only of its own men and plants, but also of the society at large. Safety records, at all plants showed considerable improvement and accident statistics showed downward trend. This was made possible by strict adherence to laid down procedures and following of international guidelines. Involvement of workers in all safety matters has been encouraged by their participation in shop floor safety meetings.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure forming part of this Report.

EMPLOYEES

The Directors are happy to state that the relations between the Company and its Employee remained cordial throughout the year. The Directors acknowledge and express their appreciation for the contributions made by the employees at all levels. Focused attention was given for knowledge updating and application of new technologies available to reduce costs and to meet the business challenges.

None of the employees drew remuneration of Rs.24,00,000/- or more per annum or Rs.2,00,000/- or more per month during the year. This information is furnished as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

FIXED DEPOSITS

The Company has not invited/received any Fixed Deposits from the Public during the year under report.

INSURANCE

The properties / assets of your Company are adequately insured.

COST AUDITORS

The Company has re-appointed M/s. J. K. Kabra & Co., Cost Accountants, as Cost Auditors in respect of manufacture of textiles for the year ending 31st March 2010, as per the directives from Cost Audit Branch, Department of Company Affairs, Ministry of Industry, Government of India, New Delhi.

AUDITORS

M/s. A. F. Khasgiwala & Co., Chartered Accountants, the Auditor of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are being eligible for reappointment. The Company has received a letter from M/s. A. F. Khasgiwala & Co. to the effect that their reappointment as Auditors, if made, would be within the limits under Section 224(1-B) of the Companies Act, 1956.

AUDITORS REPORT

The observation of Auditors contained in their Report have been adequately dealt with in the Notes to the Accounts given in Schedule 20 which are self explanatory and therefore, do not call for any further comments.

DISCLOSURES

The Securities And Exchange Board of India has vide its Ad-Interim ex-parte Order dated 8th March 2010 has restrain the Company from accessing the securities market and further prohibited from buying, selling or dealing in securities in any manner whatsoever till further directions.

The Company has filed Writ Petition before the Honble Rajasthan High Court, Jaipur under D.B. Civil W.P. No.4582/2010 and the Hon ble the Chief Justice Mr. Jagdish Bhalla, Honble Mr. Justice M. N. Bhandari has passed the Order on 2nd April 2010 restraining SEBI to act against the petitioner pursuant to the impugned SEBI order dated 8th March 2010.

ACKNOWLEDGEMENT

The Directors have pleasure in recording their appreciation of the assistance, co-operation and support extended to your Company by the shareholders, all Government Authorities, Financial Institutions, Banks, Consultants, Solicitors, customers.

For and on Behalf of the Board of Directors

Sd/- Place:Mumbai Navin Kumar Tayal

Date : 25th May, 2010 Chairman