Directors Report of Evinix Industries Ltd.

Mar 31, 2011

The Directors have pleasure in presenting the Fifteenth Annual Report together with the Audited Statement of Accounts on the performance of the company for the financial year ended 31st March 2011.

FINANCIAL RESULTS

Rs in lacs Particulars Year Ended Year Ended March 31,2011 March 31, 2010

Total Income 22469.36 16574.41

Profit before Depreciation and Interest 1563.88 1726.94

Finance Cost 966.85 771.09

Depreciation 231.07 235.67

Provision for Tax *Including FBT 37.00 51.41

Profit from Operations 365.95 720.19

Deferred Tax 65.49 (62.32)

Profit after Tax 263.46 731.10

Prior Year Adjustment 4.45 4.45

Add: Surplus of last Year 3783.40 3056.76

Surplus available for appropriation 3884.58 3783.40 Appropriations

General Reserve 0.00 0.00

Proposed Dividend on Equity Shares 0.00 0.00

Surplus Carried to Balance Sheet 3884.58 3783.40

Surplus available for appropriation 3884.58 3783.40

PERFORMANCE OF YOUR COMPANY

Your Company is engaged in fashion accessories, apparels and fabric products. These product basket is such that all or one segment are always winning businesses across India & our traditional markets. The Company is growing on a consistent basis and year 2010-11 was not an exception to the same. The Gross income from operation was Rs. 20679.51 lacs in comparison to Rs. 16033.40 lacs during the previous year. Profit after Tax during the year decreased from Rs. 731.10 Lacs to Rs. 263.46 Lacs during the previous year.

The Operating profit was lower due to increase in input costs as available across various raw material categories, higher lease rentals on expanded retail space and prolonged pressure on realized prices as well discounting to help recessionary markets in Europe & USA. This year has been year of high cost of money, i.e. extended credits to buyer has also added to reduced profits.

DIVIDEND

Your Directors are of the view that in the current phase of expansion and the large opportunities of further growth available to the company, there will be a need to conserve the funds. Hence, your directors do not recommend dividend for the year financial year ended March 31, 2011.

CAPITAL STRUCTURE:

The authorised capital of the Company is Rs. 20,00,00,000/- comprising of 20,00,00,000 Equity shares having face value of Rs. 1 out of which the issued, subscribed and paid up capital is Rs. 10,70,00,000/- comprising of 10,70,00,000 Equity shares having face value of Rs. 1/- per share.

DIRECTORS

In accordance with the Provisions of the Companies Act, 1956, and the Articles of Association of the Company Dr. Ajeet Kumar Doshi and Mr. Mahabir Prasad Additional Directors of the company are being offered for regularization.

A brief note in terms of the requirement of the Corporate Governance on the aforesaid Director has been included at Part – I of Annexure – II.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, the Members of the Board confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation;

2. Prudent accounting policies have been selected and judgments 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 31st March 2011 and of the Profit of the Company for financial year ended 31st March 2011;

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 safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

4. Annual accounts have been prepared on a going concern basis.

REGISTRAR AND SHARE TRANSFER AGENT

Beetal Financial & Computer Services Private Limited is continued to act as Registrars and Share Transfer

Agents as common agency both for physical and dematerialized shares as required under Securities Contract (Regulation) Act, 1956.

The detail of RTA forms part of the Corporate Governance Report.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement, a Report on Corporate Governance along with Certificate on Corporate Governance confirming compliances with the conditions of Corporate Governance obtained from the Statutory Auditors of the Company is annexed to this Report. (Part - 2 of Annexure - II)

MANAGEMENT DISCUSSION AND ANALYSIS

The detailed review of operations, performance and future outlook of the Company is given separately under the head "Management Discussion and Analysis". (Part – 1 of Annexure - II)

LISTING AT STOCK EXCHANGE

The Equity Shares of the Company continue to be listed on Bombay Stock Exchange and National Stock Exchange. The Annual Listing Fees for the year 2011-12 have been paid to the Stock Exchanges.

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

Information in accordance with the provisions of Section 217(1)(e) of Companies Act, 1956, read with 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 is given in the statement annexed (Annexure – I) hereto and forms part of this report.

PUBLIC DEPOSITS

The Company has neither invited/ nor accepted any deposits during the year within the meaning of Section 58A of the Companies Act, 1956, read with Companies (Acceptance of Deposits) Rules, 1975.

PERSONNEL

Employee relations continued to be cordial during the year March 31, 2011. Your Company continued its thrust on Human Resource Department. Your Company has initiated various customized training programs viz. personality development, development of inter personal skills, communication skills, public speaking etc. for its employees that enhance both personal, as well as career growth of the employees. These programs are conducted round the year by professional trainers as well as by the human resource department of the Company. Your Company has also encouraged its employees to attend seminars and discussions conducted by professional institutions and trade bodies. The Board wishes to place on record its appreciation to all the employees in the Company for their sustained efforts and immense contribution to the high level of performance and growth of the business during the year.

PARTICULARS OF EMPLOYEES

As required by the provisions of section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, the name and other particular of the employee is set out in the Annexure I (Annexure to the Director's Report)

AUDITORS & AUDITORS' OBSERVATIONS

M/s. A.S. Patwa & Co., Chartered Accountants, the Statutory Auditors of the Company, retire at the forthcoming Annual General Meeting of the Company and have expressed their reluctance to continue, if appointed. M/s. Doggar & Company, Chartered Accountants, New Delhi have been shortlisted by the Board of Directors of the Company to take over as the Statutory Auditors of the Company for the financial Year 2011-12 .Your Directors recommend their re-appointment.

Observations in the Auditors' Report are dealt with in Notes to Accounts at appropriate places and being self-explanatory need no further explanation.

APPRECIATION

Your Director place on record their sincere gratitude to the continuing patronage of our valued customers, bankers and financial institutions, business associates, shareholders, suppliers and other statutory authorities who have extended their valuable sustained support and encouragement to your Company. Your Directors look forward to all of your continued support and undertaking in the years to come.

Your Managing Director, K. M. Gupta place special thanks to all of you associated with your company specially his colleagues, associates, bankers, statutory & regulatory authorities who have helped him in founding, promoting, steering your company to it's present position in this special categories of specially Fashion accessories.

Your directors wish to place on record, their sincere appreciation to the dedication and commitment of its employees for the growth of the Company. Which has understandably, been significant for the Company's success in meeting Targets during testing times as this year.

For and on behalf of the Board

Sd/- sd/-

Date: August 19, 2011 (K.M. Gupta) (Kamlesh Kumari)

Place: FARIDABAD Managing Director Director (Commercial &Administration)

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Mar 31, 2010

The Directors have pleasure in presenting the Fourteenth Annual Report together with the Audited Statement of Accounts on the performance of the company for the financial year ended 31st March 2010.

FINANCIAL RESULTS

Rs in lacs

Particulars Year Ended Year Ended March 31, 2010 March 31, 2009

Total Income 16574.41 12295.24

Profit before Depreciation and Interest 1726.94 1547.44

Finance Cost 771.09 582.11

Depreciation 235.67 169.29

Provision for Tax *Including FBT 51.41 84.72

Profit from Operations 720.19 711.32

Deferred Tax (62.32) 157.45

Profit after Tax 731.10 553.87

Prior Year Adjustment 4.45 24.43

Add: Surplus of last Year 3056.76 2527.36

Surplus available for appropriation 3783.40 3056.81

Appropriations

General Reserve 0.00 0.00

Proposed Dividend on Equity Shares 0.00 0.00

Surplus Carried to Balance Sheet 3783.40 3056.81

Surplus available for appropriation 3783.40 3056.81

PERFORMANCE OF YOUR COMPANY

Your Company is engaged in fashion accessories & apparels and fabric products. The Company is growing on a consistent basis and year 2009-10 was not an exception to the same. The Gross income from operation was Rs. 16033.40 lacs in comparison to Rs. 12192.82 lacs during the previous year. Profit after Tax during the year was Rs. 731.10 Lacs compared to Rs. 553.87 Lacs during the previous year.

The Operating profit was lower due to high lease rentals on expanded retail space and prolonged discounting. Your Company has made investments and incurred lease rentals in opening up of new stores, the full benefit of which will accrue in coming years.

DIVIDEND

Your Directors are of the view that in the current phase of expansion and the large opportunities of further growth available to the company, there will be a .need to conserve the funds. Hence, your directors do not recommend dividend for the year financial year ended March 31, 2010.

CAPITAL STRUCTURE:

The authorised capital of the Company is Rs. 20,00,00,000/- comprising of 20,00,00,000 Equity shares having face value of Re. 1 out of which the issued, subscribed and paid up capital is Rs. 10,70,00,000/- comprising of 10,70,00,000 Equity shares having face value of Re. 1/- per share.

DIRECTORS

In accordance with the Provisions of the Companies Act, 1956, and the Articles of Association of the Company Dr. Deepak Malhotra, Independent Director, would retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. ;

A brief note in terms of the requirement of the Corporate Governance on the aforesaid Director has been included at Part - I of Annexure - II.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 19.56, with respect to Directors Responsibility Statement, the Members of the Board confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation;

2. Prudent accounting policies have been selected and judgments 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 31st March 2010 and of the Profit of the Company for financial year ended 31st March 2010;

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 safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

4. Annual accounts have been prepared on a going concern basis.

REGISTRAR AND SHARE TRANSFER AGENT

Beetal Financial & Computer Services Private Limited is continued to act as Registrars and Share Transfer Agents as common agency both for physical and dematerialized shares as required under Securities Contract (Regulation) Act, 1956.

The detail of RTA forms part of the Corporate Governance Report.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement, a Report on Corporate Governance along with Certificate on Corporate Governance confirming compliances with the conditions of Corporate Governance obtained from the Statutory Auditors of the Company is annexed to this Report. (Part - 2 of Annexure - II)

MANAGEMENT DISCUSSION AND ANALYSIS

The detailed review of operations, performance and future outlook of the Company is given separately under the head "Management Discussion and Analysis". (Part - 1 of Annexure- II)

LISTING AT STOCK EXCHANGE

The Equity Shares of the Company continue to be listed on Bombay Stock Exchange and National Stock Exchange. The Annual Listing Fees for the year 2010-11 have been paid to the Stock Exchanges.

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

Information in accordance with the provisions of Section 217(l)(e) of Companies Act, 1956, read with 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 is given in the statement annexed (Annexure - I) hereto and forms part of this report.

PUBLIC DEPOSITS

The Company has neither invited/ nor accepted any deposits during the year within the meaning of Section 58A of the Companies Act, 1956, read with Companies (Acceptance of Deposits) Rules, 1975.

PERSONNEL

Employee relations continued to be cordial during the year March 31, 2010. Your Company continued its thrust on Human Resource Department. Your Company has initiated various customized training programs viz. personality development, development of inter personal skills, communication skills, public speaking etc. for its employees that enhance both personal, as well as career growth of the employees. These programs are conducted round the year by professional trainers as well as by the human resource department of the Company. Your Company has also encouraged its employees to attend seminars and discussions conducted by professional institutions and trade bodies. The Board wishes to place on record its appreciation to all the employees in the Company for their sustained efforts and immense contribution to the high level of performance and growth of the business during the year.

PARTICULARS OF EMPLOYEES

As required by the provisions of section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, the name and other particular of the employee is set out in the Annexure I (Annexure to the Directors Report)

AUDITORS & AUDITORS OBSERVATIONS

M/s. A.S. Patwa &. Co., Chartered Accountants, the Statutory Auditors of the Company, retire at the forthcoming Annual General Meeting of the Company and being eligible, have expressed their willingness to continue, if appointed. Your Directors recommend their re-appointment.

Observations in the Auditors Report are dealt with in Notes to Accounts at appropriate places and being self-explanatory need no further explanation.

APPRECIATION

Your Director place on record their sincere gratitude to the continuing patronage of our valued customers, bankers and financial institutions, business associates, shareholders, suppliers and other statutory authorities who have extended their valuable sustained support and encouragement to your Company. Your Directors look forward to all of your continued support and undertaking in the years to come.

Special thanks to outgoing Promoter Director, Mr. Sanjay Taneja, who has helped founding textile based accessories exports in caps, bags, scarves from India a first step in early 1990s till now. It is his relentless services to your company which shall always be bench mark for Team Evinix to look up to.

Your Managing Director , Raujeev Taneja places special thanks to all of you associated with your company specially his colleagues, associates, bankers, statutory & regulatory authorities who have helped him in founding, promoting/ steering your company to its present position in this special categories of specially Fashion accessories. This financial year shall be special as directors are being rotated, i.e. Mr. K.M. Gupta shall be taking over reins of the company as new Managing Director & special thanks as well congratulations to him on this new responsibility.

Your directors wish to place on record,/ their sincere appreciation to the dedication and commitment of its employees for the growth of the Company. Which has understandably, been significant for the- Companys success in meeting Targets during testing times as this year.

For and on behalf of the Board

Date: August 14, 2010 (Raujeev Taneja) (K.M. Gupta)

Place: FARIDABAD Managing Director Executive Director (F & A)